Reclaiming Lost Charges

Vol. 18 •Issue 2 • Page 20
Reclaiming Lost Charges

Some hospitals are improving their charge capture procedures and seeing revenue gains across the board.

Hospitals are well aware that ineffective charge capture represents a sizable hit to their revenue streams. Yet even though missing charges can cost the average provider 3 percent to 4 percent of revenue, surprisingly few health systems have implemented programs focused on reclaiming lost fees.

Many health care administrators at the director and manager level recognize the upside to a systematic, organization-wide pursuit of missing charges, but the fact that improving charge capture can be a towering challenge prevents many from focusing resources. For starters, anyone taking on a large charge capture improvement initiative will have to sell the idea to upper management. The big hurdle there? Projecting a return on investment, because missing charges are by nature invisible and therefore difficult to benchmark. Moreover, an effective charge capture program requires buy-in and cooperation from employees at all levels, across the organization.

Yet there is cause for hope. Some hospitals have successfully implemented effective charge capture procedures and have seen revenue gains across the board.

Making the Case to Management

In any hospital or health system, charge capture improvement is likely to be one of many priorities competing for limited resources; to get top management’s attention, focus on how reclaiming lost charges can be a uniquely efficient means of boosting revenue. Improved charge capture typically generates incremen-tal revenue increases, but it is important to put those gains into context: in terms of re-turn on investment, it is more efficient and more likely to be successful than, for example, increasing patient volume.

Once upper management has signed off, these first steps will make it clear that charge capture is an institutional priority:

  • Assign “ownership” of charge cap-ture management to a detail-oriented employee who has a hands-on understanding of the process;
  • Make the designated charge capture specialist a direct-line report to the chief financial officer, helping the specialist gain influence with managers; and
  • Appoint a broad-based steering committee including members from clinical operations, business office, finance and the charge description master (CDM) team. This combined group will be able to focus on charge capture in the shared context of clinical operations and revenue optimization.

    Formalize the Process

    Although most hospital departments already have charge capture procedures in place, they are often ineffective. The causes include out-of-date CDMs; complex charge entry procedures that vary widely across departments; inadequate reconciliation of services provided with charges; and inconsistent training.

    What does it take, then, to optimize charge capture?

  • Make CDMs complete and accurate;
  • Streamline charge capture procedures;
  • Perform automated analysis of claims using bill-analyzing software;
  • Educate department managers and clinical staff on the impact effective charge capture processes may have; and
  • Engage staff who enter charges and members of the finance team to learn more about the clinical side, resulting in a better understanding of the overall process.

    Admittedly, the tasks outlined above add up to a tall order. But there is a road map for reaching the goal of optimized charge capture.

    Begin with a detailed study of each department’s current procedures by documenting every step of the procedures, from first contact with a patient through entering all the charges. This will help to identify if there are missing controls within the process that could prevent lost revenue. Next, study each employee’s involvement in charge capture. Pay attention to how each employee’s participation can improve the process. For example, does the charge entry person ask for clarification on a new procedure or just make a best guess on what should be billed? Finally, determine whether each department is receiving new charge codes and other updates that accurately reflect the services provided.

    Once the charge capture specialist finalizes these steps, he or she is ready to help departments identify areas at risk for losing fees, make corrections to the procedures, and implement formalized, accepted procedures.

    Leverage the Right Tools

    Conventionally, many hospitals rely on manual chart audits and payer denials to identify omissions, neither of which allows them to see the overall state of their charge capture processes. Manual chart audits, for example, are labor-intensive, time-consuming and expensive. They rarely identify underlying trends and procedural issues. Moreover, audits typically exclude small-scale charges that, when overlooked, can add up quickly.

    Relying on payer denials to identify missing charges is equally problematic: payers neither call attention to missing charges, nor do they return claims in which the provider’s fee is lower than the contracted rate.

    However, newly developed software tools are uniquely successful at finding missing charges, tracking the frequency of specific errors and identifying trends. These applications streamline the process and compare a hospital’s claims data against other hospitals’ historical claims databases, searching for expected charging patterns and flagging claims that may have missing charges.

    Regardless of the method used, charge capture reviews should be conducted regularly to ensure optimal performance.

    Education and Communication

    Ongoing education and communication is essential for building the broad-based support required by a successful program.

    Monthly educational sessions will give operational staff a clear understanding of their charge capture responsibilities and why they are important to the hospital’s bottom line. Don’t assume that employees will understand their impact on revenue. Instead, make the issue relevant to them by showing how higher revenue in their own departments raises productivity, which can lead to more resources for their team.

    Bear in mind always that clinical staff are integral to the accurate recording of charges. Without regular communication and timely reminders, however, clinicians are likely to view charge capture as a very distant second to their first responsibility: patient care. Emphasize through words and actions that charge capture and clinical care can coexist harmoniously.

    Implementing systematic charge capture management is indeed a daunting challenge, but there is a defined path toward achieving that goal: obtain institutional commitment, identify and quantify procedural issues, implement procedural enhancements, track progress, and keep staff informed and engaged. The resulting revenue growth will make the process worth the effort.

    Kelley Blair is a senior consultant with the Craneware Business Solutions Group, Craneware Inc., Orlando, FL.