Modernizing your chargemaster

Sept. 24, 2014

In 2008, University Medical Center (UMC), a 413-bed teaching hospital in Lubbock, TX, (Level 1 trauma center with 50+ percent of billings in Medicare and Medicaid) embarked upon a revenue integrity journey. We knew we had a problem with missed revenue that needed to be fixed. Charges weren’t being captured for all injections and infusions. The three-day window for capturing diagnostics frequently closed before these charges were captured. There was also general confusion among providers and staff regarding what clinical procedures could and could not be charged.

The problem was that our chargemaster needed maintenance. Adding to the problem was a laborious and time-consuming manual workflow. Our nurses were filling out pieces of paper and physically giving them to a coordinator, who then gave them to a courier who drove them to our business center five miles away, where we had a college kid keying in charges. The critical first step I took was to establish a Revenue Integrity Department. The new department had two interrelated, primary goals: increasing revenue and eliminating silos of activity that caused disconnects throughout the organization.

In addition to our chargemaster issues, we were also dealing with an influx of RAC audits. My team realized we needed an enterprise-wide chargemaster to replace our manual processes and to fully harness our ability to ensure compliance and improve charge-capture accuracy. 

To ensure maximum benefit from chargemaster automation, the Revenue Integrity Department undertook significant efforts to maximize its value. Training sessions for clinical and financial staff explored how revenue could be conceivably doubled in many areas, and they encouraged all stakeholders to do their part in helping the department charge fully for the care provided. Staff members were then ready to automate and take control of chargemaster management, Medicare coding compliance and chargemaster maintenance.

UMC’s chargemaster had never been thoroughly audited; with tens of thousands of lines of code, a comprehensive manual assessment wasn’t possible. The Revenue Integrity Department’s first task was to automatically update the UMC chargemaster with current rules and regulations – a continual task to keep the chargemaster perpetually current, with automatic error correction to ensure that incorrect charges don’t multiply. As an added safeguard, UMC leveraged the chargemaster software to track all changes, showing who made them and who approved.

With all these changes, UMC has decreased data entry errors and non-compliant billing by immediately identifying associated items missing from the CDM and maintaining a centralized audit trail. In just the Emergency Department alone, $1.2 million in net revenue was identified in the first year of use.

To further enhance our revenue integrity efforts, UMC has also adopted an automated bill analyzer solution that performs a charge-capture audit on claims, calculates how much revenue may be leaking and determines if detected issues are systemic.

By automating chargemaster management, improving communications and keeping the chargemaster up to date, we’re now confident with our revenue and compliance position, even in the face of ever-increasing audit activity affecting hospitals nationwide. There is always room for more gains, and it’s imperative that you keep making sure you’re getting all revenue that is due to you with minimum compliance risk. Going forward, comprehensive and compliant charge capture is needed to survive.