Charge Description Master
Plays Vital Role in a Hospital’s Successful Survival
By Arlene Trowbridge-Baril, MS, ART
AS A CONSULTANT WHO PERFORMS NUMEROUS charge description master (CDM) projects, I always find different and interesting challenges in each facility I visit. One of the common things I observe is that many times not enough people within the organization truly know what a CDM is or what purpose it serves.
The CDM is a “master” table file that contains the basic elements for identifying, coding and pricing any item that may be provided to patients, including procedures, services and supplies. The charging of these items for a patient’s bill is handled through the CDM. Billing guidelines, coverage issues, revenue codes and CPT/HCPCS coding guidelines are published in the Hospital Information Manual (HIM 10) for Medicare patients. Medicaid and other payers also publish their own coverage manuals. Many of the commercial payers and managed care contracts stipulate payment of services within their contracted agreements. This information is assimilated and incorporated into the facility’s CDM.
CDM Elements
The CDM is also known as the service item master or the procedure master. The CDM consists of the following elements:
* Department number. This number is a unique identifier that identifies the department of the hospital or health care facility within the CDM.
* Service Item Number. This is an internal code that references the procedure, supply or service. It’s keyed to trigger the charge to post on a patient’s bill.
* Service Item Description. This is a brief narrative description of the procedure, service or supply. It is suggested to utilize a narrative description that closely matches the narrative defined in the CPT-4 and HCPCS coding manuals.
* General Ledger Number. This is a numerical identifier that ties the CDM item to the hospital internal record keeping system.
* UB92 Revenue Code. This is a three-digit number that identifies the CDM item by service or specialty. These codes show up on the UB-92 billing form when the hospital bills the insurance company for services rendered. Some examples of revenue codes are:
300- Laboratory
320- Diagnostic Radiology
250- Pharmacy
270- Central Supply
360- Operating Room
450- Emergency Room
The above revenue codes are the general codes for their category. Depending on the rules and regulations of your fiscal intermediary, the third digit may have to be further defined when billing for services. An example of this is Sterile Supply Items. These items would be placed under revenue code 272.
* HCPCS/CPT code. These are codes published by the American Medical Association (AMA) and the Health Care Financing Administration (HCFA) to define services and supplies. There are three levels of HCPCS/CPT codes. Not all services or supplies require an accompanying HCPCS/CPT code. This is dependent on the revenue code that is used and the type of service or supply being defined. For example, Central and Sterile Supply items such as cotton rolls, tongue depressors and drill bits do not require the use of a CPT/HCPCS code. Pharmacy items that fall under revenue code 250 also do not require a CPT/HCPCS code. Special pharmacy items such as anti-neoplastic drugs are reported under revenue code 636 with an accompanying “J” HCPCS code. Both local Level II HCPCS codes and national Level III HCPCS codes are used within the CDM.
* Price. The price is determined by a number of factors. Procedures, supplies and services are reimbursed based on ASC payment groups (there are eight levels of payment); fee schedules, cost to charge ratios or blended payment rates.
See the accompanying table for an example of radiology items found in a CDM.
Why is a CDM important?
There are a several reasons why an accurate and timely CDM is important. First, it helps to ensure that hospitals and other health care facilities are receiving proper reimbursement for the services rendered. It also ensures valid and consistent charging and billing of services rendered. In addition, it helps to track revenues by volume of items charged. This aids department managers and administration plan operating budgets and perform strategic planning for new or additional services.
Reviewing the CDM
The CDM should be updated on a minimum annual basis. Both HCPCS and CPT codes change annually. The fiscal intermediary implements CPT (Level I) changes on January 1 of each year with a 90-day grace period.
Level II HCPCS codes are five digit alpha-numeric codes that are recognized nationally by HCFA and are used to report services and supplies that are not contained in CPT (Level I). All Medicare and most Medicaid carriers require the use of HCPCS codes. These codes are updated annually by HCFA on March 1 of each year.
Level III HCPCS codes are five digit alpha-numeric codes developed by the local Medicare carrier beginning with W, X, Y or Z. These codes are assigned to procedures, services and supplies not included in Level I or Level II. Local codes must be approved by HCFA. These codes are published within the carrier’s newsletters and are updated periodically. Not all regions utilize Level III HCPCS codes.
The following resources should be utilized when updating the CDM: current CPT manual, current HCPCS Level II manual, current Level III HCPCS listing from your Medicare fiscal intermediary (if applicable), Medicare/Medicaid bulletins, manuals and newsletters, UB-92 Editor for revenue codes and other payer contracts.
Who Performs the Review?
The team approach is an optimal method for performing an annual review of the CDM. This allows staff to utilize their expertise where needed. For example, the nursing or ancillary department manager supplies the information regarding the services and supplies provided to patients and identifies any new equipment, tests, procedures or technology that they plan to implement within their departments. The business office manager supplies information regarding billing rules, coverage issues and revenue codes. The health information management (HIM) coding staff supplies the proper CPT and HCPCS codes for the tests, supplies and procedures provided. Financial staff assigns the appropriate charges and identifies any cost report ramifications. The information systems staff implements the changes and additions made to the CDM. They also ensure that any new service items are added to all of the various hospital systems and that they are incorporated into the charging screens utilized by staff within the ancillary departments and nursing units.
One person from the team should be responsible for the overall integrity of the CDM, including all additions, deletions, changes and revisions.
It is also recommended that a periodic review by an external consulting firm with expertise in billing, coding and regulatory issues be instituted. They can assist your CDM team in their update efforts.
Financial Implications
The impact of an improperly designed CDM is substantial. The major financial implication is that it increases the cost of doing business.
* The costs of rebilling claims, postage, patient statements, long distance telephone calls, electronic submittals and staff time to prepare these documents can be staggering to an institution.
* Increased dollars are delayed in accounts receivable.
* Incorrect financial information for the institution exists.
* Liability is increased. There is greater exposure to increased regulatory scrutiny (False Claims Act, lab unbundling issues, etc.).
* There could be possible expulsion from the Medicare/Medicaid programs.
* Your fiscal intermediary could institute increased utilization review and focused claims audits.
* Inaccurate data are also being reported to national databases, which play a part in the reimbursement rates for services and supplies. HCPCS/CPT and UB-92 codes determine a facility’s outpatient reimbursement. Incorrect and inaccurate coding and pricing may cost a facility full and fair reimbursement for the services they provide.
Review Benefits are Numerous
The benefits of an annual CDM review are numerous. A proper and timely CDM review:
* Increases net revenues;
* Decreases claim rejections;
* Decreases days in accounts receivable;
* Improves billing practices;
* Assists the hospital in regulatory compliance efforts; and
* Helps hospitals prepare for ambulatory payment classifications (APCs).
Maintaining/Updating the CDM
The following steps are a basic guideline when utilizing the team approach. Keep in mind that the best method is the one that works for your facility.
1. Review each department within your CDM.
2. Compare the CPT manual’s description against your current service item description. The closer they match the less chance of denial from your fiscal intermediary.
3. Reassign or add CPT codes that most accurately reflect the service performed.
4. Verify that the correct UB-92 revenue code is mapped with the CPT code/service item description.
5. Review the coverage guidelines issued by the fiscal intermediary and other payers.
6. Review the pricing. Ensure that it is at least equal to or greater than Medicare reimbursement for the service.
7. Identify services and supplies provided to patients that are not currently on the CDM.
8. Implement all new changes and communicate these changes to the various nursing and ancillary departments. Edu-cate staff on all changes, additions, deletions and revisions.
9. Monitor changes through the business office. Perform a manual review on a sample of claims to validate the new changes. Validate payments received through ongoing review of the remittance advice statements.
10. Follow up with department managers and their staffs. Keep the lines of communication open.
11. Perform the above on a minimum annual basis.
Arlene Trowbridge-Baril is a manager in the health care regulatory services group of Coopers & Lybrand LLP. She is based in Dallas.
