Blog, The Hospital Finance Podcast®

How much revenue is your chargemaster costing you? [PODCAST]

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Hospital_Finance_Podcast smallIn this episode, Kristi Morris, Director of Revenue Integrity Services at BESLER, discusses the keys to maintaining an accurate chargemaster.
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Resources related to this episode

Paper: “Five steps to a compliant and accurate charge description master (CDM)”


Mike Passanante: Hi, this is Mike Passanante. Welcome back to the Hospital Finance Podcast. Today, I’m joined by Kristi Morris. Kristi is the Director of Revenue Integrity Services here at BESLER Consulting.

And she’s joined us to talk about the topic, how much revenue is your charge master costing you?

Kristi, welcome back to the show.

Kristi Morris: Well, thank you. I’m glad to be here.

Michael: Kristi, let’s jump right in. How do you even begin to tackle the task of maintaining an accurate charge master?

Kristi: Well, the first step is identifying a team of individuals that are responsible for approving all the additions, deletions and revisions to your provider’s charge master. This would be a group of individuals, of course, with thorough knowledge regarding CPTs, HCPCS, and rev codes.

But in addition, they also need a deeper knowledge into the department processes. And they need access to resources such as online systems and coding books.

The second step is prioritization. Many years of neglect can create a mountain of issues that will need to be addressed, and prioritization is the key. My suggestion is that supplies be the number one focus. This is normally a quick win for the organization.

Now, once that has been addressed, then move to your more commonly incorrectly charged service lines, such as your cardiac cath lab, your AP labs, specials, neuro, oncology, and even your infusion clinics.

Now, be patient because this will take time. It took years for your charge master to become a mess, so expect for it to take at least several months to clean it up correctly.

Michael: Kristi, in the first step you mentioned a minute ago, you suggested that a process is needed for additions and deletions to the charge master. How would you suggest going about creating this process?

Kristi: Well, a thorough assessment of the current process needs to be completed first. Now, once that is completed, then I would identify what’s working well, and then what steps need some adjustments.

My recommendation is that this process takes place completely electronically. It’s easier to keep track of.

Now, whether that be an Excel spreadsheet that is e-mailed to a server box, and process forms that are maintained on a drive, or a more sophisticated process of a charge master platform that is built to electronically maintain approvals and deletions for future compliance audits, either process works fine.

The main key is that you make sure you have access to all previously submitted requests, and a way to track all approvals, additions and deletions for your organization’s charge master.

Michael: Why is it important to track chargemaster requests?

Kristi: Your organization’s chargemaster is one of the most influential contributors to their overall success. Aside from the fact that these processes are needed for audits, it just makes good business sense.

Although we, as leaders, attempt to complete the diligence in hiring the right individuals, sometimes we do make mistakes. Whether it would be an individual trying to get their friend or family member a reduced price on a procedure at their provider’s expense or a careless employee that just doesn’t pay attention and enters the wrong information in your system, they both have a definite impact on your organization’s overall performance.

Michael: What about smaller organizations that do not have the human capital to make a separate department to oversee their chargemaster? How do they manage that process?

Kristi: Well, that’s a great question, and it applies to not only small providers, but also larger providers that are stretched to the max on human capital. It is not a necessity to have an individual or a group of individuals whose only task are chargemaster functions.

We live in a world of multitasking. And the chargemaster function can be added into an individual’s daily task as long as it is executed properly.

They key is that you have a clear separation of duties when it comes to your chargemaster processes.

For example, the person making a request should not be the same person that approves, keys the entry, or audits the daily chargemaster revision report. These functions need to be separate and distinct from each other—not only to eliminate potential unethical behavior, but to serve as a quality check.

The size of the organization should not be used as an excuse for not having a solid process for chargemaster maintenance. Lack of a formal process could cost your organization thousands of dollars.

Previous researches are shown that a yearly review of your organization’s chargemaster has shown to create at least six figures of additional revenue.

Michael: Kristi, how much time, in your opinion, should be dedicated to maintaining an organization’s charge master?

Kristi: Well, that’s a two-fold question.

If you are just beginning this process, be prepared to dedicate 100% to the project for the clean-up and creation of process flow. Reports will need to be built and tested. Permission control across organization will need to be reviewed, and more than likely revised—decrease the number of individuals with edit access.

Daily monitoring, numerous meetings, creations of policies and procedures and education will need to take place.

Now, education will not only be a one-way communication. It will be a two-way communication with your chargemaster staff being educated on procedures that are performed at your provider. Review of physician dictation practices, and a review of the processes regarding what images are captured and maintained in the medical record.

This is very crucial. Make sure you understand the image requirements for codes, especially in your vascular labs and obstetric areas.

Michael: Kristi, can you talk about some of the areas that are commonly overlooked when maintaining a chargemaster?

Kristi: Yes. Strategic pricing and appropriate yearly increases by far are the most common.

Organizations should have a consistent process for how pricing is determined all the way from your supplies to your lucrative OR procedures. And they need to be reviewed yearly to ensure that they’re still in line with the industry costs. Consider your staff wages, your price to acquire supplies, and your maintenance of the areas. Algorithms are the most commonly used process.

An important aspect of setting pricing is that your organization needs to be able to speak to how they apply the pricing strategy. This is especially important if your organization is ever scrutinized publicly on their pricing strategy.

Now, in addition, ongoing review of pricing is a must. A solid process and review will also help your CFO in determining what procedures or service lines your organization may want to add or remove.

Michael: Kristi, is there outside training available for individuals tasked with chargemaster functions?

Kristi: Yes. There are various organizations that offer webinars, articles and books on chargemaster training throughout the year. I would suggest that an organization invest in sending at least one to two individuals to a seminar or workshop that focuses on the yearly CPT updates, your final rule updates and appropriate use of revenue codes and modifiers.

This is vital to their individual success and industry growth.

Michael: Kristi, any closing comments for our audience on this topic?

Kristi: Yes. Creating a process for chargemaster maintenance can be a daunting task. Plan for how you would like to address it, seek out experts in the arena to assist, and then be prepared to make adjustments in the beginning.

Policies and procedures are keys to consistency. They are time-consuming to a create, but well worth it from the consistency standpoint.

Don’t just expect all impacted team members to be enthusiastic about jumping on board. Change is very hard in the beginning. Be consistent with your message on why it’s important to the organization’s overall success and own the process.

I promise you, your organization will thank you for years to come.

And one final important note is to not forget about updating and maintenance of your clinical modules. If you charge to a clinical module, then you must ensure that it mirrors your current chargemaster, and then implement a schedule for ongoing maintenance for your clinical modules.

It doesn’t make a difference if your chargemaster is completely correct if your clinical modules are not accurate. So, don’t forget that important note.

Michael:  Kristi, that’s some great advice. For those who are listening, we’ll have some additional information that can be downloaded on this topic on our website, Besler.com. Just look for the Revenue Integrity page.

Kristi, thank you so much for stopping by and helping us understand more about the chargemaster today.

Kristi: Alright! Thank you, Mike.


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