Managing the Chargemaster

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Managing Your Charge
Description Master
MdHIMA Annual Meeting
Baltimore Convention Center; Baltimore, Maryland
June 5, 2008
HP3
A part of Navigant Consulting

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Table of Contents
Section 1 »Definitions and Uses
Section 2 »Maintenance and Review
Section 3 » Integration
Section 4 » Charge Capture Review
Section 5 » Questions?
Section 6 » About Your Speaker & NCI

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Definition and Uses
Section 1

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Charge Description Master Definition
»A hospital-specific file that includes billing rates for all procedures,
services, supplies and drugs on hospital bills and claims.
›Therapeutic Examinations and Procedures
›Diagnostic Examinations and Procedures
›Pharmaceuticals
›Radiopharmaceuticals
›Blood Products
›Supplies
›Implants
»It is the hospital’s “price book” and “menu of services”.
»Also referred to as the “CDM” or “chargemaster”.

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Charge Description Master Structure
»Each line item can have several corresponding data elements.
›Billing Description
›Revenue Code
›CPT/HCPCS Codes
›Modifiers
›Multiplier Units
›RVUs (i.e. HSCRC)
›Charge Amount
»Each item in file is assigned a unique identification code.
»Description of service, recognizable by billing staff.
»Hospitals use their own unique methodologies to code, capture, calculate
and update their charges.
›Time-based vs. Procedure-based
›Hard-coded vs. Not coded

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Charge Description Master Example
Dual Chamber AICD System Implant Procedure
Procedure-Based/Hard-Coded in CDM
Time-Based/Not-Coded in CDM
The above example is for demonstration purposes only. All codes, RVUs, multipliers may not be accurate for a hospital based on their specific needs.

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Importance of the Charge Description Master
Accurate CDM and
Charge Capture Practices
Clean Claims
Data IntegrityBilling Compliance

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Maintenance and Review
Section 2

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Charge Description Master Maintenance
»Hospital-Specific CDM Structure Rules
›Use of statistical or no-charge items
›Determination of allowable items
›Use of duplicate CPTs
›Use of charge explosions
›Standardized charge description master
»Policies and Procedures
›Maintenance Roles, Responsibilities and Expectations
‒CDM Coordinator
‒CDM Committee
›Requesting CDM Revisions
‒Standard form
‒Review and feedback
›Frequency of reviews and updates

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Maintenance Roles, Responsibilities and Expectations
»CDM Coordinator
›Designee for hospital to coordinate activities involving the CDM.
›Level within hospital may differ based on hospital size, needs, etc.
›Gatekeeper for final revisions.
›Knowledge of regulatory requirements and revenue cycle processes.
›Ability to communicate timely and effectively.
›Leader of CDM Committee.

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Maintenance Roles, Responsibilities and Expectations
»CDM Committee
‒Lead by CDM Coordinator.
‒Other members can include representatives of clinical and support departments
◦Required
▫Reimbursement
▫Patient Financial Services
◦As-Needed
▫Clinical Services
▫Information Services
▫Compliance
▫Internal and External Auditors
‒Meet on a regular basis.
◦Bi-weekly
◦At least quarterly
‒May report up through a higher committee.
◦Corporate Compliance
◦Finance and Audit
‒May discuss operational charge capture issues, potential new services and
service lines, internal and external audit requests and results.
‒May determine need for internal and external audits.

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Requesting CDM Revisions
»Who?
›Clinical Departments
›Patient Financial Services
›CDM Coordinator/Committee
»What?
›Type of Revision
‒New Test, Procedure or Service
‒Correction
‒Regulatory Update
›Data Elements
»When?
›There is NEVER a wrong time for a revision!
»Where and How?
›On-line request
›Paper request
›Standardized form(s)

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Sample Request Form

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OIG Expectations for Maintenance
»Office of the Inspector General - The enforcement arm of CMS
›Civil monetary penalties
›Sanctions
»Compliance Guidance for Hospitals
›http://www.oig.hhs.gov/fraud/complianceguidance.html
›02/23/98 Compliance Program Guidance for Hospitals
›01/27/05 Supplemental Compliance Program Guidance for Hospitals 
Because the Healthcare Common Procedure Coding System (HCPCS) codes and APCs are
updated regularly, hospitals should pay particular attention to the task of updating the
CDM to ensure the assignment of correct codes to outpatient claims. This should include
timely updates, proper use of modifiers, and correct associations between procedure codes
and revenue codes.

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Real Life Consequences . . .
SCENARIO
Hospital bills and is reimbursed for services performed outside of the hospital. The
staff performing the services did not indicate the patient location or type of service to
charge entry staff. Similar services are provided within the hospital therefore billing
staff do not question claims. The services are billed as if they were performed within
the hospital walls. The hospital is reimbursed at a higher rate and benefit than would
have been if the services were billed appropriately.
CAUSE
De-centralized CDM maintenance processes.
Lack of charge capture knowledge within clinical department.
Lack of participation of CDM Committee in creation of new service line.
CONSEQUENCES
The hospital is fined over $1 million and is placed under a corporate integrity
agreement with the OIG for 5 years. Required training and annual external review cost
the hospital hundreds of thousands of dollars that are exempt from cost reporting.
New positions are created and better controls in place as required under agreement.

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Integration
Section 3

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Charge Description Master Integration
»Charges are often not captured by the “billing system” alone.
›Order entry and clinical subsystems can generate the charge.
›The CDM revision process should include a check and balance of any
changes that would also change the use of any systems.
Example Order Entry Mapping Report
»The CDM can also be used to define additional tasks
›HIM workload
›Basis for billing rules
›Collect data for decision support
›Calculate RVUs for HSCRC compliance

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Charge Capture Review
Section 4

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Performing a Charge Capture Review
»The CDM can be coupled with a usage report to review for potential billing
compliance issues and to identify potential lost revenue/RVUs.
»Preliminary steps of a charge capture review
›Review departments separately
›Look for high volume items, tests and procedures
›Look for items, test and procedures that compliment each other
‒Examples
◦Cardiology
▫Echocardiogram
▫Holter Monitor
◦Interventional Cardiology/Radiology
▫AICD and Pacer Implantation
▫Radiology Guided Organ Biopsies
▫Cardiac Catheterization Injections/Imaging
◦Nuclear Imaging
▫Nuclear Stress Tests
▫Radiopharmaceutical Usage

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Performing a Charge Capture Review
»Charge Capture Review Steps
›Step 1.Identify the area for review
›Step 2.Identify all stakeholders
›Step 3.Initiate Review
›Step 4.Interviews
›Step 5.CDM Review
›Step 6.Develop Charging Guide
›Step 7.Exit Interview
›Step 8.Staff In-Service
›Step 9.Post Implementation Audit

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Questions
Section 5

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About Your Speaker &
Navigant Consulting
Section 6

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Speaker
Caroline Rader, MBA, MSHCA, CHC
»Associate Director, Coding/Documentation
»Baltimore, Maryland
»Experience
›10+ years of billing compliance, charge description master and
revenue cycle experience
‒Industry and Consulting
‒Maryland HSCRC and APC
»Contact Information:
›Email: [email protected]
›Phone: [phone]
›Fax: [phone]

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NCI Healthcare
Provider Practice Group
»Our comprehensive services to healthcare providers include:
›Performance improvement
›Strategic advisory
›Revenue performance improvement
›Financial advisory
›Supply chain management
›Interim management

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Our Values
Responsive – we anticipate and respond quickly to client needs. We are experts in
highly regulated environments, and our deep industry knowledge enables us to
develop innovative and practical solutions to our clients’ business challenges.
Resourceful – as an integrated company, we are able to leverage the diverse skills and
industry expertise of our professionals to help clients overcome the challenges of
uncertainty, risk, distress and significant change. We work seamlessly, drawing from
an array of resources, to help clients transform ideas in actions.
Trustworthy – clients count on us for effective solutions, accurate answers and honest
responses. We approach every task in a straightforward manner, providing
independent and objective advice in which clients can have confidence.
Innovative – we have a history of helping clients identify and implement innovative
solutions to complex and challenging business issues. Our entrepreneurial culture
encourages all professionals to be innovative exploring new ideas and methods to help
clients address their business challenges.

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Our Unique Approach
»Integration – We believe it is imperative to integrate a strategic and
operational focus. Linkages to financial and clinical performance are
critical.
»Experience – Our consultants have on average 10+ years of operational
and/or consulting experience.  Our senior resources work on the project –
not just lead the project.
»Flexibility – We are a consulting group consisting of highly experienced
consultants. We bring methodology but tailor efforts to meet the clients
needs and success factors.
»Size – We are not too big…not too small. With over 300 employees serving
the healthcare industry, we can leverage our operational, clinical, financial,
regulatory and technical capabilities depending on the client’s needs.
We believe there are key differentiators that drive Navigant Consulting’s
unique approach to assisting our clients.