When did You have Your Last Charge Description Master Check-up?

Vol. 13 •Issue 18 • Page 18
When did You have Your Last Charge Description Master Check-up?

As an increasing portion of hospital services move from the traditional inpatient setting to alternative settings, health information management (HIM) professionals are faced with new challenges and the need for new strategies to meet the challenges. The best opportunity to improve your facility’s bottom line is within the four walls of your facility. The accuracy, quality and efficiency of your internal operations can produce significant financial gains.

From scheduling and registration through billing and collection, the accuracy and quality of information and the efficiency of operations impact the financial well being of the hospital both currently and in the future. The performance of the hospital currently is understandable but the accuracy and quality builds the profile of the hospital and is used for future regulatory changes and managed care contracting.

One of the most important documents in today’s market with more services migrating to the outpatient arena is the charge description master (CDM). Maintaining the CDM in a timely, accurate fashion is not only a formidable task but a critical component of a sound financial program in all medical facilities.

How healthy is your CDM? Take a few minutes of your time and see if you know the answers to the following questions:

•When was the last time you reviewed your CDM?

•Is it current and compliant?

•Do you have sufficient staff members necessary to maintain your CDM?

•Have you updated all CPT-4 codes, modifiers and HCPCS Level II codes?

•Have you taken full advantage of APCs?

•Are you losing money to rejected claims?

•Have you maximized all revenue opportunities in your CDM?

•.Is your CDM reflective of the services you provide?

•Is your CDM a liability — is it losing you money?

•Are you confident in the accuracy of your CDM?

Central to the financial health and well being of your facility is the performance of a periodic check-up of your CDM for its accuracy, compliancy and integrity. Some of the items necessitating a periodic review of the CDM can include, but are not limited to:

•Managed care contract requirements/”Carve-outs;”

•Regulatory requirements;

•Decreased reimbursement and greater oversight by payers;

•Change in service site (an ever-growing increase in services moving to an “outpatient” setting); and

•Building accurate profiles based on coding.

At least annually, a formal review of the CDM needs to be performed. This can be done either internally or externally, but it should be a solid commitment from management to ensure that this is done. Changes in payer contracts and governmental requirements added to staff reductions and the availability of trained, knowledgeable staff only underscores the importance of this “CDM check-up.”

Symptoms of an ailing CDM include:

•Increased days in accounts receivable;

•Increased bad debt expense;

•Increased staffing cost due to rework and customer service;

•Increased compliance issues;

•Increased customer service complaints; and

•Decreased profitability.

A thorough review of the current state of your CDM is essential in identifying areas for change. It’s like the old saying, “If you don’t know where you are; how do you know where you’re going.” This review of the current state can be accomplished by performing an analysis of the CDM, coding accuracy and process analysis.

The primary objective of this analysis is to assist the hospital in determining the appropriateness and accuracy of its CDM. An important secondary objective is to review select processes surrounding key CDM inputs and outputs. An inaccurate CDM and sub-optimal processes can result in a negative impact on revenue and may cause compliance concerns.

The primary benefit to the hospital is the generation of accurate, increased revenues for outpatient services. A secondary benefit is to have an assessment of meeting various compliance requirements placed on hospitals for documentation, coding and reimbursement for outpatient services. Further, this analysis will assess the status of the CDM in regard to the Centers for Medicare and Medicaid Services (CMS) Outpatient Prospective Payment System (OPPS) coding and the presence of the appropriate codes designated for additional reimbursement. To achieve the desired outcomes and reap the benefits of a comprehensive CDM analysis, a multi-faceted evaluation must include a number of work steps (see accompanying table).

The time and effort put into this activity is well spent and should allow you to put into place the processes that are most efficient; identify training needs of staff to help them be more efficient; and identify inaccuracies in the CDM impacting appropriate reimbursement and exposing the hospital to potential compliance issues.

The combination of well-trained, knowledgeable staff following well defined “best practice” processes armed with the right technological tools create a strategy for the integrity of the CDM.

For this “CDM check-up” to be successful, management must be committed to supporting the results; the implementation of the recommended changes; and, most importantly support the post-implementation by making the “CDM check-up” part of the strategy for the future.

Chester (Chet) Kendall was previously the vice president of marketing for Healthcare Concepts Inc.

Steps to a Comprehensive CDM Analysis

Coding Based Activities

•Review the accuracy of CPT-4/APC/HCPCS Level I, II and III codes.

•Verify the accuracy of charge/text descriptions.

•Verify the accuracy of revenue center code assignment.

•Identify procedures/services that are being performed but are not currently reflected in the CDM.

•Check for CPT-4/APC/HCPCS and revenue center code correlation.

•Review current policies and procedures in place to ensure the CDMs accuracy.

•Correct, add or delete appropriate line items for CPT-4/APC/HCPCS codes, revenue codes and text descriptions.

•Identify all inactive codes.

•Identify and code all drugs with appropriate Level I and II HCPCS.

Financially Based Activities

•Identify revenue opportunities from all payer sources.

•Investigate the correlation of CPT-4/APC/HCPCS to National Billing Codes.

•Check for consistent and reasonable charges based upon existing mark-up formulas.

•Investigate charge explosion reporting (if any).

•Evaluate bundling/unbundling charging practices, e.g. laboratory panels.

•Identify select Medicare non-covered and allowable but not billable charges residing in the CDM.

Compliance Based Activities

•Determine extent of completeness of documentation of charging protocols.

•Ascertain if current Compliance Education programs include Operational/CDM related topics in their curriculum.

•Discuss and review with Compliance Officer extent of charging protocols into Compliance Plan.

•Identify any line items in the CDM that can be categorized as “routine.”

•Identify any line items in the CDM that can be categorized as “reusable” equipment/instruments.

•Review and identify any line item being used for set-up charge or other charges that include “staff” time related charges.

•Review practices associated with any after hours type charges.

•Determine if there are issues in pharmacy related to take home or self-administered drugs.

•Determine if there are issues within supplies related to take home equipment and supplies.

•Identify any line items currently being billed as a miscellaneous item:

•Review Volume


•Provide a limited assessment of existing mark-up formulas and the current application to ensure “reasonableness” or consistent pricing for like items.

Operations/Systems Based Activities

•Standardize CPT-4 charging practices among departments.

•Examine the overall structure, design and categorization of the CDM.

•Review charging protocols and evaluate procedures to sustain the CDM (if applicable).

•Develop a written project summary with recommendations and specific CDM revisions.

About The Author