Setting up for success: Chargemaster governance

Revenue integrity professionals know that the chargemaster is more than just a list of items and services, charges, and CPT^® and HCPCS codes. It’s a key part of processes across departments, and its data can help a hospital develop sophisticated insights into its operations. To keep the chargemaster in top shape, don’t stop at CPT/HCPCS code updates.

An effective chargemaster governance program goes beyond the basics to keep the chargemaster in order while gaining the maximum value from charge data. Start the new year off with a fresh look at your chargemaster policies and procedures and consider how you can deploy charge data to ensure revenue integrity.

Top considerations

A chargemaster governance program should be built around key considerations and processes, said NAHRI Advisory Board member John D. Settlemyer, MBA, MHA, CPC, CHRI, assistant vice president of revenue cycle at Atrium Health in Charlotte, North Carolina, during the session “CDM Governance: Best Practices and Processes” on day two of Revenue Integrity and Reimbursement Strategies: A NAHRI Virtual Event, held October 6–8, 2020. Settlemyer co-presented the session with fellow NAHRI Advisory Board members Sarah L. Goodman, MBA, CHCAF, COC, CHRI, CCP, FCS, president/CEO and principal consultant for SLG, Inc., in Raleigh, North Carolina, and Kay Larsen, CHRI, CRC, revenue integrity specialist at Adventist Health Glendale in Glendale, California.

Keep the following key considerations in mind when reviewing your program:

• Operational workflow and approval
• Audit trail
• Archiving
• Annual and ongoing process for CPT/HCPCS updates
• Managed care payer policies
• Modifier management
• Ongoing and annual price changes
• Partnership with operational departments and billing operations
• Standing committee with revenue cycle representation

 

Approval, audit trail, and archiving

When looking at your workflow approval process, ensure that you have a defined process for moving requests through the system, Settlemyer said. Most major software vendors offer embedded workflow tools that can support request processing.

“Within that, you can build various routing hierarchies so that the appropriate level of approval is obtained for finalization,” he said.

That consideration dovetails into the next: audit trails. Requests should be timestamped so that you can easily reference when someone added an item to the chargemaster or changed a field on a charge code, Settlemyer explained.

The audit trail should include clear documentation. Chargemaster compliance tools often allow file attachments. If you don’t have access to a compliance tool, explore your options for building one internally, Settlemyer recommended. Depending upon your organization’s capabilities, you could build an internal form within the information services system or use an email process to track chargemaster changes.

Then, support your audit trail efforts by regularly archiving your chargemaster. Aim to generate and archive an electronic copy at least once a month, if not once a week, Settlemyer said.

“You [should] always have an electronic copy to go back to and be able to track changes over time,” he said. “Also if you have, for instance, a rebilling project that you need to look at historical data, you would easily be able to access the information that you were looking for if you have these archive files.”

Code updates, modifier management, and price changes

Along with the annual tradition of major year-end CPT/HCPCS updates, ensure you have a process for ongoing code updates, such as quarterly code updates, Settlemyer said. Monitor CMS regulations and transmittals, OPPS quarterly updates, and I/OCE quarterly updates.

Along with government payers, include managed care payer policies in your monitoring efforts. Most major payers publish monthly network bulletins that cover payer-specific code updates and changes, Settlemyer said.

“It’s very important for you to be cognizant of those bulletins and review them to ensure those payer-specific coding information or coding changes are being taken into account in your chargemaster management and update process,” he explained.

When you’re reviewing code update policies, take a look at how you’re managing the application of modifiers. Missing modifiers are a common source of billing edits, but modifiers can’t simply be applied to satisfy an edit. From a chargemaster standpoint, a best practice is to limit hard coding of modifiers, Settlemyer noted. Unless you can show through documentation that a particular modifier will always be appropriate, it shouldn’t be automatically included.

“A perfect example of this is modifier -59,” he said. “You would never want to hard code modifier -59 within your chargemaster unless you had some sort of documented workflow process that proved it was always true that [modifier -59] was always appropriate when that charge code was used.”

Supply markups and pharmacy markups should be supported with policies that document their basis and process, Settlemyer said. The policies should also detail the methodology used to determine procedure pricing.

Pricing policies should address what items and services are separately chargeable. For example, to support its inpatient room rate, an organization should create a policy that documents what’s included in the room rate as well as what can and should be charged separately, Settlemyer explained.

Partnerships and committees

Revenue integrity should take proactive steps to build relationships with other departments, Settlemyer recommended. Key departments to reach out to include billing, compliance, and operational departments such as radiology and laboratory. Ensure that all appropriate stakeholders are included in discussions about chargemaster changes and that they sign off on finalized changes. Schedule regular meetings to secure a dedicated time to talk through routine issues such as process and workflow changes, billing issues, and other common items.

“I have a standing biweekly meeting with my billing operations office. We can talk through any issues that either of us are having with claims so that we can determine what the appropriate resolution to those are, whether that be an amendment or an alternate update within the chargemaster itself or some type of claim edit that might need to be placed somewhere downstream,” Settlemyer said.

Don’t let your revenue cycle committee meetings fall off the calendar. If revenue integrity isn’t represented on the committee, make it one of your goals for the year to claim a seat at the table. A revenue cycle committee brings together representatives from registration, billing, HIM, case management, and other key departments involved in coding, billing, and charging. This committee is a crucial part of chargemaster governance because it provides a platform for cross-functional discussion of revenue cycle issues and an opportunity to address concerns before they cause problems, Settlemyer said.

Charge analysis

Daily charges are a wealth of information and can yield crucial, actionable data simply through a daily charge download, Larsen said.

“When we first transitioned to our financial management system, we didn’t have quite as many reports in place,” she said. “So, I learned that my best source of information was just downloading my charges each day.”

That’s still Larsen’s preferred method for analyzing charge data. She downloads charges to a spreadsheet and reviews and sorts the information, helping her spot patterns of charge errors  as well as other various issues that might delay claims.

The charge download includes data such as who posted the charge and whether the charge was automatic or manual. That allows Larsen to track charge errors to their source, whether it’s an individual or a system error.

Missing charges are a common issue, and Larsen keeps an eye out for them when reviewing her daily charge download. Be vigilant for charges that should come in pairs, such as a blood product charge and a blood transfusion charge or a vaccine charge and a vaccine administration charge, she advised.

Manual charge entry can lead to typos, particularly if the department has been busy and staff are entering daily charges late in their shift, Larsen said. Watch out for date errors or data appearing in the wrong field—such as an account number in the quantity field—and other simple errors.

Price transparency

January 1 ushered in expanded price transparency requirements and a new reality for chargemaster governance. Traditionally, hospital chargemasters haven’t received much external attention, but today, their greater visibility makes a sound chargemaster governance plan more critical than ever.

Hospitals need to brace for public scrutiny, Goodman, Larsen, and Settlemyer agreed. Healthcare remains a hot-button issue for the public and policymakers. Efforts to address the cost and accessibility of healthcare will likely continue, and hospitals must be ready to participate in the discussion and help find a good solution.

“I think the posting of the comprehensive chargemaster machine-readable file with the line item detail, with the payer-negotiated rates, I really believe it’s going to bring about a tremendous amount of external scrutiny from the media, from payers,” Settlemyer said.

Tips and best practices

To wrap up the presentation, Goodman shared some field-tested tips and best practices.

Overall, your chargemaster design should encompass coding and payer differences in a compliant fashion, according to Goodman.

“Sometimes you’ll have things behind the scenes. You’ll have your default CPT code and then maybe a HCPCS for Medicare, or [sometimes] Medicaid has their own set of codes for certain things,” she said. “So, make sure your chargemaster is as up to date as possible.”

Take a look at how your reimbursement methodologies and NCCI edits affect your chargemaster structure, Goodman advised. This will help ensure charges are set up correctly to account for covered and noncovered services, modifiers, and other considerations.

Review pricing at least annually. You should know what your organization’s pricing strategy is and how price changes are handled, Goodman said. Consider what services are included and excluded from pricing increases and who makes that determination.

Create a data dictionary to ensure consistency, Goodman recommended. A data dictionary is a list of abbreviations used in the chargemaster. Although some abbreviations are universal, some chargemasters may need to use alternate abbreviations due to character limitations. A data dictionary will serve as a key and avoid the creation of multiple alternate abbreviations for the same term. See the figure on p. x for an example data dictionary.

Analyze chargemaster updates to determine whether they require new charge codes or whether a minor update can be made. If there’s a significant change, such as to time or quantity, Goodman recommended creating a new line item so the old one can be retained for reference and historical billing purposes.

Don’t neglect charge capture, Goodman cautioned. A sound chargemaster maintenance program will go to waste if charges aren’t correctly captured.

Take a team approach to chargemaster management. This should include the CFO and other finance staff, the chargemaster coordinator, compliance, revenue integrity, ancillary department managers, HIM, coding, and outside consultants as necessary, Goodman said.

Organizations must be prepared to face a challenging year. By fine-tuning their chargemaster governance program, revenue integrity professionals can do their part to ensure their organizations keep their footing.