What is a Chargemaster?
The Chargemaster is the communication mechanism between your facility and payers. All services must be conveyed using the most appropriate 5 character procedure code, either numeric CPT or alphanumeric HCPCS, linked to the appropriate Revenue Code for the service billed. Compliant, accurate and complete billing and reimbursement is dependent on the chargemaster.
The chargemaster must maintain all CPTs and HCPCS used within the facility and provide accurate differentiation between codes for proper identification. There can be multiple CPT codes that reference the same service with subtle differences. For example, if you review the codes for Esophagoscopy (43200-43232), there are 19 codes to choose from depending on the additional service performed during the session. Try to be specific and concise in the descriptions of the services in your chargemaster. The better the description, the easier it is for the servicing provider to choose the correct code. Good descriptions will also allow customer service to respond quickly and accurately to patient and payer inquiries.
Chargemaster Reminders & Common Issues
We recommend that facilities outline a process of checks, balances and continuous auditing to ensure a healthy and compliant chargemaster. Departmental leadership, in conjunction with the Business Office and Medical Records, should identify all CPT/HCPCS codes added into CDM along with the appropriate revenue code(s). These selections should be examined carefully as revenue code and CPT/HCPCS mismatches often result in automatic denials.
The revenue code assignment should represent the MOST specific code available. We often see services in the general revenue code 0XX0 when a more specific code is the better choice. For example, when billing for a head CT we often see revenue code 0350 CT Scan General used instead of 0351 CT Scan Head scan which is a more accurate code for the service performed.
When was the last time the facility reviewed if they have deleted codes still listed as active in the chargemaster? This can be corrected with a review of CPT and HCPCS codes annually at a minimum. These codes should not be deleted as you may need them for claim corrections.
We have seen many cases of duplicate Chargemaster item numbers with different rates. The charge for a CPT/HCPCS code should be the same no matter the department or service area.
There are many instances of CPT codes in a chargemaster being identified as right/left while having different process. We see this most commonly with radiology services.
Conclusion
Lutz recommends that at least every 2 to 2 1/2 years facilities have a complete review of the chargemaster. This will help identify compliance and pricing issues that may be impacting your facility. Lutz can also help with pricing reviews to ensure the facilities annual price increase remains competitive within your local market and have the greatest positive impact on your bottom line. This is also helpful during the annual budgeting process.
Source: Stroudwater Associates; Rural Hospital Performance Improvement Project November 7, 2012