The Big Payoff

April 1, 2009

Standardizing charge description masters across six hospitals results in an estimated $1.6 million annually in higher reimbursements and cost savings, plus easier compliance and reduced staff workload.

Caritas Christi Health Care is the second largest health system in New England with six acute care hospitals. With more than 1,500 beds, Caritas Christi serves 55 communities and is a comprehensive, integrated healthcare delivery network providing community-based medicine and tertiary care in eastern Massachusetts, southern New Hampshire and Rhode Island.

Standardizing charge description masters across six hospitals results in an estimated $1.6 million annually in higher reimbursements and cost savings, plus easier compliance and reduced staff workload.

Caritas Christi Health Care is the second largest health system in New England with six acute care hospitals. With more than 1,500 beds, Caritas Christi serves 55 communities and is a comprehensive, integrated healthcare delivery network providing community-based medicine and tertiary care in eastern Massachusetts, southern New Hampshire and Rhode Island.

Improving Processes

At Caritas Christi, we were manually managing each of our six hospitals’ charge description masters (CDM) at an individual facility level at the beginning of 2007. The result was a decentralized process that made it impossible to standardize codes and descriptions across the enterprise, which challenged our attempts to be proactive on compliance. Moreover, when there were coding updates, the CDM team had to individually update each facility’s CDM with new current procedural terminology (CPT) codes. Needless to say, this was an inefficient and time-consuming process.

In addition to the aforementioned challenges, we knew there were revenue opportunities on which we were not capitalizing. For example, when the proper procedure code was missing from the CDM, clinical staff would have to make a “best effort” guess to decide which code to use. Not only did this further expose us to compliance risks, but it also often meant that we might not capture the full reimbursement available. Without centralization, we were also unable to compare prices across facilities, to help ensure fair, consistent pricing in support of greater pricing transparency. It also meant that we were unable to validate strategic pricing policies. It became increasing clear that finding software that would allow us to automate and centralize the CDM process would be necessary to improve efficiency and optimize revenue.

In early 2007, we decided it was time to automate chargemaster management processes and focus on the CDM to get it in order and under control. Beyond simply automating processes, we wanted to create a corporate standardized CDM to align the codes and descriptions used across the enterprise. Additionally, improving charge capture processes after successfully merging our six CDMs under one umbrella was another priority. We knew that by taking this three-pronged approach we would ultimately improve workflow, operate more efficiently, better support compliance and optimize reimbursement opportunities.

Solving the CDM Dilemma

We formed a taskforce that would evaluate chargemaster system. It consisted of the chief revenue officer, the vice president of Revenue Management, the director of Revenue Management and the corporate director of CDM. We had been previously contacted by several chargemaster software vendors and were aware of the options available to us. We invited several competitors to present and conduct demos at our office so that we could gain a better understanding of the capabilities of each solution. We then made site visits to see the systems in action. This gave us the opportunity to ask specific questions of experienced users, such as how the hospital set up the staff’s roles. We had frank discussions with them about what worked well and about any limitations they’d experienced.

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Craneware RCM solutions

In the end, we concluded that Craneware’s Chargemaster Corporate Toolkit would be the best solution for us to centralize our CDM management. Its online reference tools compiled the latest coding and regulatory information, which could be shared with clinical and health information management (HIM) staff to further enhance compliance. The system includes an active code book feature and a browser-based, cross-reference toolkit that enables users to research coding, regulations and pricing information. Both products would enable multiple staff members to access resource information and assist individuals who need to be involved in the coding process stay up to date. The system also enables hospital personnel to stay abreast of changes and provides an audit trail to ensure visibility into the decision-making process behind any changes that are made.

The new solution would enable us to automate and maintain a master CDM for the entire enterprise, while accommodating coding variations from different facilities based on individual hospital needs. It could also optimize legitimate revenue by updating codes and reconciling a department’s charges against the claims. Moreover, we would be able to see the immediate impact of every line item creation or modification; the potential issues each may create elsewhere, and how to correct any such problems in the future.

Implementation and Training

In order to quickly standardize CDMs across the enterprise, we decided the best way to tackle the project would be to divide it into three phases. First, we linked all the hospital departments to the master chargemaster; and we engaged our clinicians and individually reviewed codes with each department manager to identify unused codes and ensure that no charges were missing. Our second step was a best practice review where we met with each department to examine its billable services, determine how to properly bill for services rendered and identify additional reimbursement opportunities that may have been overlooked. The third and final step involved training department managers on how to make changes using the new system to ensure that we had a maintenance process in place moving forward.

We trained more than 200 Caritas users and provided them with access to Craneware’s online reference toolkit. They included individuals from CDM, Fiscal & Clinical Integration, HIM, PFS and clinical departments. This tool has become a primary resource to many of these individuals for researching CPT and HCPCS codes, as well as related billing rules, regulations and compliance issues.

In early 2007, we decided it was time to automate chargemaster management processes and focus on the CDM to get it in order and under control. Beyond simply automating processes, we wanted to create a corporate standardized CDM to align the codes and descriptions used across the enterprise.

After completing this initial phase of the project, we moved on to analyzing our charge capture processes. We reviewed each department’s approach to charge capture and realized that many did not have a uniform process for handling charge capture interdepartmentally. As part of this, we worked with the vendor to examine two months worth of charges in order to identify potential areas of risk and areas where we were missing revenue. Through this process, we discovered that some departments were not charging for particular services (contrast material, recovery and anesthesia time, for example) and added new procedure charges to several departments’ CDMs to capture these overlooked revenue sources. We also were able to identify and correct charge capture issues, where procedures in ITS were mapped to the incorrect billing number in BAR. Over the course of the implementation, we moved from manual entry of CDM changes into an Excel spreadsheet to automated audit trails of CDM change, which allows for easy reference to details about whom, why and when changes were made to procedure line items. We also found that standardizing the process improved communications between the budget, DSS, resource management, IS, PFS, HIM and clinical departments, regarding the revenue cycle process and impact across the system.

The benefits of a standardized CDM across the enterprise are threefold: efficiency, accuracy for compliance, and pricing transparency. It provides us with the ability to make changes to the master CDM and automatically push them down to each hospital CDM, a major boost to our overall efficiency. We also now have the visibility to identify and delete outdated codes, which enables us to align codes across all of our facilities, making compliance much easier. And, finally, we can compare and contrast price and service comparisons across our six facilities to ensure accurate and consistent charges.

The Result

Through our corporate standardization and charge capture project, we estimate $1.6 million annualized net revenue as a result. During the standardization process we found more than 10,550 codes to be deactivated and 790 codes to be added in the process — both improving accuracy for optimal reimbursement and minimizing compliance risk by eliminating the majority of our coding issues. The project also served as a launch pad to improve charge capture and enable us to create and agree upon a new charging structure for soft-coded services across the system including OR, ambulatory surgery and endoscopy, anesthesia, recovery and pain management.

In addition, the process has resulted in time savings for CDM staff, reducing their workload by about 15 percent, since they now have centralized management of the entire enterprise’s CDM. This gives them more time to focus on charge capture and proactively educate staff about new regulations. Today, clinical staff better understands the important roles they play in helping to ensure optimal reimbursements for services.

Miles Coverdale is chief revenue officer for Caritas Christi Health Care. Angela Confoey is corporate director, CDM, for Caritas Christi Health Care. Contact them at [email protected] and [email protected].

April 2009

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