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November 6, 2006

Step by Step — Chargemaster Review
Radiology Today
By Barbara Bosler, MS, RHIA
Vol. 7 No. 22 P. 60

OK, so it’s not Dancing With the Stars, but partner up with your CDM and you could waltz all the way to the bank.

Editor’s note: For more information on CDM review in interventional radiology, see the “Interventional Update” department in this issue.

When was the last time your facility reviewed its charge description master (CDM)? It’s not everyone’s favorite task, but it needs to be done to ensure that:

• the chargemaster file designed for a particular clinical area was completed with correct status indicators to identify reimbursable items;

• charges driven by the CDM were set at appropriate prices and mapped to the correct revenue codes;

• charges driven by the CDM did not collide with Current Procedural Terminology (CPT) codes assigned by health information management (HIM) staff; and

• payments from the carrier are consistent with contracted agreements.

Reviewing as few as 10 claims in each clinical area can reveal opportunities for refining the CDM and uncovering revenue opportunities that include billing items currently not being charged and reviewing payments for services that have been billed.

Conducting a CDM Review
The first step in reviewing the CDM is ascertaining which services and procedures are driven by CPT codes assigned by the HIM staff and which items are driven by the CDM (usually HCPCS [Healthcare Common Procedure Coding System] Level II codes). You may get different answers to those questions and find that your biggest opportunity for revenue enhancement lies in learning that the CDM is designed differently than what you thought.

A relatively recent CDM review at a major medical center resulted in mixed answers about which services are coded HIM and which are driven through the CDM. The result: lost revenue. How it happens: codes colliding on the bill, charges not populating the bill for documented and coded services, and chargeable items set at prices below the relative weight value assigned to the service.

Step 1: Interview the Process
Who owns your facility’s CDM? Are there many process owners? If so, who are they? Who has the final authority to make changes on what the CDM will contain for a clinical service?

Is the CDM set up consistently for each clinical service? Is it clear which services are driven through charge entry? How is the CDM maintained to reflect revisions, deletions, and additions to the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) and HCPCS coding classifications?

Conclusion: Interview all the CDM process owners and take control of what it is to contain. Decide whether the CDM will be standardized for all clinical services within a healthcare facility. Progress past this step only after knowing what the CDM will contain to capture facility charges and how this differs from services captured from coders assigning HCPCS codes.

Step 2: Work With the CDM Process Owners by Clinical Service
What does the CDM look like for a particular clinical service? Is it inclusive of equipment, supplies, and materials pertinent to that specialty? Are items appropriately bundled to ensure that charges are not duplicated or inappropriately entered? Are items appropriately unbundled to ensure that all charges are properly reimbursed? Is the status indicator properly set for each charge item? Is each item set at an appropriate price? Is there a clear distinction between procedures and services to be coded with a CPT code and items to be captured as facility charges? How is the chargemaster maintained to ensure that new items are added and others are revised or deleted as directed by regulation and carrier information?

Are the charges showing up on the UB-92 correctly? Are they linked to the proper revenue code? Are they linked to the correct HCPCS code? How are CDM additions tested to ensure the bill mapping is correct?

Conclusion: Each clinical area should review the scope of their practice and review the services and procedures provided. These services should be linked to HCPCS and/or revenue codes to ensure that the procedures performed and facility resources used can be reimbursed.

The underlying questions that should be answered are: Is everything performed by this clinical service being charged appropriately? Are the resources used to deliver these services being charged appropriately? Does medical record documentation support the charges entered for delivering a service or performing a procedure? What resources should be used in setting the prices for chargeable items? When was the last time prices were reviewed for ongoing charge items in the CDM to ensure that they are still competitive?

In reviewing the overall CDM for a clinical area, it should be clear that there is a method to how the CDM is designed. Multiple entries for similar items with inconsistent pricing suggest that it is time for some CDM maintenance. Each clinical service should have at least one person who is sufficiently knowledgeable about the CDM for their area. This person keeps track of the overall CDM organization and completes ongoing maintenance for item updates, bundling and unbundling classification, and price setting. CDM review should take place no less than annually; however, it’s recommended to occur more frequently to coincide with quarterly and biannual code changes and fee schedule updates.

Step 3: Review Patient-Specific Charge Records Against the CDM
Are the charge documents (encounter records, preference lists) completed from a specific patient encounter current? Do they include all the services, procedures, and facility resources pertinent to a clinical specialty? Are the clinicians writing in items because they are not on the charge document? Are these “write-in” items contained in the CDM? Are all the write-in items being reimbursed?

Conclusion: Now is the time to switch your review’s focus from general to specific. Take the charge forms from any day in a single month. Pull 10 and see what you can learn from working the process backward. Were the charges entered for all the checked items on an encounter record? Did those items appear on the bill correctly? What happened to handwritten entries?

A review of randomly chosen preference lists for 10 patients at one facility showed that:

• charge entry staff missed more than one billable charge for one encounter;

• a charge was correctly entered for a supply item, but the status indicator was incorrectly set as nonbillable, resulting in no charges on the bill;

• two handwritten items on one encounter were not in the CDM because they were borrowed supplies from another department. No charges were entered.

Working the CDM process in reverse feeds Step 2 by identifying specific areas to flag for maintenance and CDM refinement. Auditing cases concurrently lets staff know problems are being handled in a manner that prevents charges and potential reimbursement from being lost.

Step 4: Review Patient-Specific UB-92s
Are the charges being mapped to the correct revenue codes? Do charges correctly roll up under a revenue code? Do the charges appear on the bill? Is there any duplication between what is driven by the CDM and what is coded?

A review of UB-92 bills at a healthcare facility showed that the revenue code for the emergency department (ED) was not mapped correctly. Observation and procedure charges all rolled up under the ED line item and corresponding revenue code. Insurance carriers were paying the organization only for the ED visit. Thousands of dollars were being lost because observation services and procedures were not listed as separate line items carrying separate reimbursement.

Additionally, reviewing the UB-92s for procedure-specific clinical services showed that the CDM was not set up correctly for procedures regularly coded by HIM. Even though the procedures were being coded, no charges were populating the bill. This, of course, also resulted in lost reimbursement and ineffective effort.

What does this tell us? Assume nothing. Know what charges are driven by the CDM. Know how procedures and services coded by HIM map to the charges that should appear on the bill. Test everything placed in the CDM to ensure the mapping is correct on the UB-92. Lastly, set up an ongoing audit program to monitor a small number of bills weekly to ensure they are going out correctly.

Step 5: Review Payments Received From the Insurance Carrier
Are you confident that the payment you are receiving from a carrier is correct? Does it match the billable charges? Is it consistent with the agreed amount identified in the contract? Is the contract set up at a reasonable rate?

A recent review of an organization’s payments revealed some interesting errors. One carrier had incorrectly set its Internal Revenue Service indicator and was subtracting a withholding tax from each payment. Asking a question about one encounter resulted in the carrier identifying all the cases where this had been done. The carrier issued a check to reimburse the organization retroactively for these withholdings.

Another case identified a problem with the contract itself. The carrier’s own administrative manual indicated that it reimbursed medically necessary ancillary services performed in the ED separately. The organization agreed to be paid only for the ED visits and the contract is in the process of being changed.

Conclusion: Don’t be happy just to be paid for an encounter. Be happy when the payment is correct. Make sure the accounts receivable staff is knowledgeable when it comes to carrier manuals and the contracts between its organization and third-party payors. Encourage staff to question payments and take the time to research them when the reimbursement is not right for a specific account. Find an easy method to trend third-party payor problems and issues so contracts can be reviewed when they come up for renewal.

Step 6: Set Up Systemwide Indicators to Monitor the CDM
The steps previously listed came from reviewing the CDM at different organizations. Once the main problems have been identified and an action plan developed, it is important to establish ongoing indicators to monitor the CDM’s continuing effectiveness. Indicators should measure the following elements:

• ongoing maintenance of the CDM for new, revised, and deleted ICD and HCPCS codes;

• appropriate price setting for all items in the CDM;

• proper revenue and HCPCS code mapping on the UB-92 bills;

• correct payments for services billed to carriers; and

• appropriate contracts between third-party payors and healthcare organizations to reflect fair price reimbursement and reimbursement consistent with the payor’s own policy.

— Barbara Bosler, MS, RHIA, is a Michigan-based consultant in business practice healthcare functions.