A Clean CDM: Three Ways to Overcome Chargemaster Review Roadblocks
From the largest health system to the smallest critical access hospital – the maintenance of the Charge Description Master (also known as the CDM or chargemaster) plays a critical role in the financial health of every U.S. hospital. The CDM translates the care provided by clinical departments into the language of codes and charges required by commercial and government payors. As the source of truth for all billable services provided by the hospital, an absent or error-prone CDM process can lead to missed reimbursement, incorrect bills and compliance risks.
If you manage the CDM at your hospital, we recommend that you perform a review regularly.
At least once a year, you should meet with the clinical departments and ensure that the CDM is accurate. More frequent reviews may be needed for high-dollar and high-volume areas with lots of charge items or changes. Other common triggers for a CDM review include addition of a new hospital or department, conversion to a new hospital EMR or patient financial system, annual coding changes, or staffing changes.
Reviewing thousands of charge line items can be a daunting process, so let’s examine three common roadblocks to completing a CDM review, and best practices to ensure your next CDM review is success
Roadblock #1: CDM Clutter and Bad Data
Getting correct, comprehensive CDM data is not always easy depending on your hospital’s patient financial system. Before taking the time to analyze your CDM data, take the precaution of performing a“sanity check” to ensure the data you review is accurate and complete.
Standard CDM Data Extract
- Service Code – A unique, facility-specific number that identifies the individual charge
- Charge Description – Description created by the facility for a procedure, drug or
- Revenue Code – Standardized by the National Uniform Billing Committee (NUBC), revenue codes identify types of service and are used in cost reporting.
- CPT or HCPCS codes – Standardized coding systems used for services and
- A CPT code is a five digit numeric code that is used to describe medical, surgical, radiology, laboratory, anesthesiology, and evaluation/ management services of physicians, hospitals, and other health care
- Level II and III HCPCS are alphanumeric codes used primarily to identify products, supplies, and services not included in the CPT procedural codes.
- Price – The charge for a service, drug or device, set by the financial department.
- Modifier(s) – If included in the CDM, hard-coded to individual Service Code charge
- Multiplier(s) – If included in the CDM, based on the Billing Units for the CPT/HCPCS and the quantity in the Charge Description for accurate billed
Additional Data Needed
- 12-18 months of volume from Revenue and Usage reports
- Formulary and Item Master
- Alternate payor revenue codes, CPT/HCPCS codes, modifiers, or other payor-specific data elements in the CDM fields/alternate fields
As a first step, carefully examine your reported volumes in conjunction with charge line item in the CDM and verify that they are accurate. A few standard charge line comparisons include:
- Comparing vaccines to vaccines administration
- Comparing radiology studies with contrast to contrast volumes
- Comparing ER visit levels to total annual ER visits
- Comparing blood product to blood administration
You might need a Finance department report to get the volumes for merging with your CDM file, but. it’s definitely worth the trouble. Ask your clinical department leaders –“Here’s what I’m seeing for your volume, does this match your activity?” If not, take a deeper dive into the data. Is there a problem with the report that was produced by IT? Or, is there a true glitch in the charge capture from the department to the financials?Identify and Remove Unused Charge Lines
While you are asking clinical areas to verify charge line usage, be sure to ask particularly about those charges that haven’t been used. Why are they in the CDM if they’re not being used? In some cases, reviewing zero volume line items can help uncover a charge capture problem where the service is actually being performed, but the charge isn’t making it to the claim. However, most of the time, the charge line is not being used simply because it is no longer needed.
For example, the radiology team may have moved on to using a different modality, or there is a duplicate entry with the same CPT code. Deactivate these unneeded charge lines. Getting rid of the clutter from your CDM will make ongoing maintenance easier and reduce the risk of incorrect charges. Don’t forget to remove the corresponding unneeded charge lines from the order entry system or charge entry sheet when you deactivate them in your CDM.
Roadblock #2: Lack of Time and Tools to Do the Job Right
Analysis is where chargemaster automation software can save CDM coordinators and revenue cycle staff a lot of time by systematically identifying and prioritizing issues. Manually performing a CDM review without a CDM management tool is doable, but more labor-intensive and prone to human error. If you conduct a CDM review manually, be sure to download and cross reference your necessary resources from CMS such as Addendum B updates and Status Indicator changes. Another advantage of using a tool is that you may be able to export CDM changes back into the hospital information system rather than keying them in manually, further reducing the risk of human error.
Whether you’re reviewing the CDM manually or using a CDM management tool, the following areas will need time and attention to ensure a clean CDM.
Missing Charges and Incorrect Descriptions
A clean CDM includes all billable services. Is there anything that is being done that does not have a charge? Are there any new services that haven’t been added? Sometimes there’s a misunderstanding of what’s included in the order entry. For example, if a tetanus vaccine is given in the ER, how do both the vaccine itself and the administration of the vaccine get charged and where are the charge lines for these? Identify those services where there are separately billable components and compare the volumes for all components.
Next, verify the charge descriptions. Does the description match what’s actually being performed? Ask if there is anything that is being charged with a description that does not match the CDM. Pay special attention to charge lines for services with a number, quantity or measurement (e.g., minutes, views, number of uses, or dosage strength).
Your descriptions should be in line with CMS descriptions when it comes to quantities and measurements. What you don’t want to hear is somebody say, “Well it says X, but what we really do is Y. We picked X because it was the closest description could find.”
For multipliers that are part of the CDM, a check of the calculation should be done. Since the multiplier creates the billed quantity based on the CDM charge line description and the CPT/HCPCS billable units, it is important that it is accurate. Use the expertise of the department to ensure that these elements match the current clinical practice.
Often small discrepancies can put your organization at compliance risk. For example, a common charge in lab is a Complete Blood Count (CBC) with auto- differential. If this is the lab test performed and charged, the order entry system needs to specify CBC with Auto-Diff. If the order only states CBC, CMS and other payors could retroactively recoup their payment for a CBC with Auto-Diff as an overpayment.
Again, it’s important to go the step beyond the CDM and look at your charge capture tools and perform charge reconciliation. Whether you’re using paper, an order entry system or documentation-based interfaces, you want to ensure there’s a 1:1 alignment between the systems.
Code Sets, Revenue Codes, Modifiers, or Alternate Codes
The CPT and HCPCS code sets are the key data elements for defining hospital services. They are crucially important for correct payment and compliance. For each charge line, determine if the CPT/HCPCS code is correct. Is the code out-of-date because it has been deleted or replaced? If so, can the code be changed or does your system require a new charge line? Are there charge lines without a CPT/ HCPCS code that should have one?
Next, check the revenue code. Does it align with the CPT-CMS code set table when a revenue code is specified? For example, an EKG must be assigned to revenue code 730, regardless of where it’s done. For other services, the revenue code should indicate the hospital location where performed, such as wound closures in the Emergency Room in revenue code 450. If done in a different hospital department, another revenue code such as 761 may be used.
If modifiers are hard-coded into the CDM, ensure that they are compliant and used correctly. Anatomical modifiers, such as –LT or –RT for left and right, or credential designations, such as –GP, -GO, and –GN for physical, occupational, or speech therapists, may be hard-coded for efficiency in charging. Modifiers that override payment restrictions by defining a special circumstances, such as -59 for a distinct procedural service, would be a compliance risk when hard-coded, since the entire encounter must be evaluated to determine if the modifier is applicable.
When the CDM has alternate codes based on payor- specific requirements, confirm the alternate codes are accurate and current. Determine if the payors have identified any new alternate codes or if new payors have been added that need alternate codes.
Special Use Charge Lines
Panel charge lines, also sometimes called exploding or parent charges, require a different approach to review than standard patient charge lines. This type of charge line creates two or more individual patient charges from one CDM charge line. The standard data elements such as a valid revenue code or CPT/HCPCS may not be in the CDM, or a special non-standard value may be used to identify these charge lines.
Check that the panel or exploding charges are still accurate and that each individual charge line is always performed in conjunction with each other when the panel charge is entered. The data elements of the individual charge lines must be active, accurate, and up to date to avoid missed reimbursement.
A best practice recommendation is to minimize using the CDM for productivity or other statistical measurements, since these add to the annual CDM maintenance process without generating patient revenue or reimbursement. When the CDM has statistical charge lines, verify that the statistical measurement still has value and requires tracking. Assign statistical charges a $0 price and a non- standard revenue code or CPT/HCPCS to prevent inadvertently posting a statistical charge line as a patient charge.
Increasingly, healthcare organizations and payors are evaluating the value of the services patients receive. Since the CDM generates the charge lines for claims data used in analysis for value, pricing in the CDM needs to be accurate and in accordance with your hospital policy, which in turn should be defensible and transparent. As part of your CDM review, it’s wise to take steps to identify exceptions to your hospital pricing policy. CDM tools can allow you to compare how your facility’s prices compare to state averages and other nearby hospitals or other organizations similar to your own.
Although pricing policy is set by the Finance department, clinical representatives can identify issues with prices that might not be apparent to someone without a clinical background. They may spot prices that are out of alignment with each other, like when one treatment is much more complex and expensive, but it’s being charged at a lower price than a less resource-intensive alternative.
For hospital systems with multiple facilities in different geographic locations, pricing is usually specific to each hospital. A compliance risk can occur when a hospital has different charges for the same services performed in different departments within the same facility. If there are pricing discrepancies based on the performing department, be sure there is a documented, legitimate reason such as an actual difference in cost. We recommend pricing your hospital’s services consistently with the same price for the same CPT code, regardless of the performing department. This practice helps to prevent confusion on a patient’s bill and supports pricing transparency.
Roadblock #3: Busy Clinical Department Representatives and CDM Misunderstandings
A CDM review is not only a technical review of the CDM file, but more importantly, an open discussion with each department representative to learn how they interact with the CDM. Your preparation and analysis should generate a working list of questions to discuss with each clinical area. When these questions are addressed, the end result should be a clean, up-to-date CDM for each department.
However, getting clinical department representatives engaged with the CDM review and maintenance process can be a challenge.
Many don’t understand the CDM, or their role in its upkeep. The single biggest roadblock you may face is an attitude of “the CDM is not my responsibility, but yours” from the department. There are also common misunderstandings – sometimes, clinical representatives have heard that payments are based on DRGs, leaving them to believe incorrectly that charges have no value or impact, and they don’t have to be diligent in capturing them. Or they may see a charge for something they do and think that the hospital is making money hand over fist.
One of the most common misunderstandings is the assumption that somebody else somewhere else is entering charges when it is really the responsibility of the department.
Take the following steps to help promote a clear understanding of accountabilities across all stakeholders in setting the CDM foundation for complete and compliant billing.
CDM 101 and “What’s In It for Me?”
Make sure your clinical leaders understand why and how the CDM is important to the financial health of your organization. Be sure they understand that the C-suite expects their involvement with their departmental CDM.
Clinical knowledge of the services, supplies, and pharmaceuticals offered is important to validate the codes that are part of the CDM. The CDM and billing teams don’t know what clinical leadership does about the department’s operations and procedures in the same thorough and technical detail. Every hospital needs success with financial margins to continue to provide the quality patient care to the communities they serve. Clinical leaders are accountable for their resources. Capturing accurate, complete, and compliant charges is essential to know the true cost of their services and to analyze the value they provide.
Schedule Enough Time
Consider blocking two hours for large complex departments like the Lab, OR, Cardiology, or ER. For other departments, an hour or so is probably sufficient. And if you need more time, schedule a follow-up session.
Include the Appropriate Stakeholders
The actual CDM review meetings with each department should be as small as possible for good discussion. Key participants are the department leader and the primary departmental charge resource.
In preparation for the annual CDM review and throughout the year, a CDM task force can be a great ally. Include participants from key areas, such as HIM and Coding, Finance and Reimbursement, Auditing and Managed Care Contracting, Patient Financial Services. Even post-acute care managers at organizations with their eyes on bundled payments and cost analytics have a place at the planning table to identify revenue integrity concerns with roots in the CDM.At monthly or quarterly meetings of the CDM task force, the following questions will help identify issues for the departmental CDM review:
- What are concerns related to claims generation/ processing?
- What issues are related to follow up/denials?
- Can something in the CDM/claim logic be adjusted to make processes more efficient?
- Is there anything the biller has to do“to make the claim go through” to a specific payor?
- Are there new payor contract terms related to elements of the CDM such as revenue codes?
Give Them What They Need to Do the Job
When a CDM review is conducted, it is the responsibility of the CDM owner to give the clinical area sufficient time, tools and detailed information to look at their charge lines and validate that they are accurate. Be sure you provide the individual department with detailed CDM reports in advance, especially including the usage. If you haven’t produced individual reports in the past, check with your IT department as they may know how to do it department-by-department.
Organization policies and procedures related to charges and charge capture processes should be in writing and accessible to clinical department leaders. Among the important policies are the following:
- Separately Chargeable Patient Supplies
- Criteria to Determine Visit Levels (Emergency and Clinic)
- Charge Capture and Reconciliation Procedures
Make the Process Faster and Easier
Whether we like to admit it or not, convenience plays a surprisingly powerful role in our day-to- day decisions and habits. Automation and shared platforms can vastly improve the convenience of CDM workflow and response times by creating open lines of communication between financial and clinical staff. Shared online regulatory references, for example, can save clinical areas time by replacing coding books and making the process of understanding billable services more user friendly. With a shared CDM management tool, clinical areas can easily submit their CDM additions, modifications, and deactivations. When clinical leadership sees the turn-around-time from the CDM team drop from over a week to having the change completed in a day, trust and engagement with the CDM team improves.