What Is A Charge Master?
Posted by Mitch Mitchell on Sep 15, 2011
No, we’re not talking fishing here, which means we’re not talking about fishing poles. We’re talking health care, and something most people have no real clue about is this item called a “charge master“. I actually gave a one paragraph explanation about charge masters 3 years ago, but it’s not really sufficient. Since I wrote my post about inpatient hospital charges I felt like I needed to give a better explanation, being a charge master consultant, so here it is.
A charge master is a list of things that a hospital or physician can or will charge you for. I say it that way because they “can” charge you for almost anything, though they shouldn’t. On a charge master, or CDM for short, you will have procedures, supplies, pharmaceuticals and different room charges. Overwhelmingly they will be priced; some hospitals or physicians will use their CDM as a tracking device, which I don’t like but since those items aren’t priced I feel if they’re labeled properly then it’s all good.
Why will medical entities have something like this? There are many reasons:
- It helps with capturing charges. People don’t have to constantly research the code books and pricing list to see what they did and figure out how to charge for it.
- There are literally thousands of items that can “legitimately” be charged for. There are nearly 3,000 procedure codes, more than 10,000 different pharmaceuticals, and unlimited numbers of supply items.
- Each has a chance to clean up or modify what they do easier. With a list of charges and other such things they can have someone like me come in to help them figure out how to do it easier and better.
- It helps with billing. This is actually the biggie. With charges come charge codes, procedure codes, revenue codes, sometimes modifiers, general ledger codes, and descriptions. In total it’s a bit much to have to go over on a daily basis.
Depending on the types of services a hospital provides, the CDM can be anywhere from 5,000 line items up to more than 25,000 line items; ouch! If a hospital never eliminates old procedures and supplies, it will definitely be huge. And yet I love working on these things; maybe I’m the sick one.
Now, if you’re not in health care this is probably all you want to know about the technical part of it. You now want to know how all of this impacts you; why should you care.
The reason consumers need to know about these things is because it gives you knowledge that if you call the hospital to ask how much something costs, there’s a document, even if it’s online, that can give the right person that amount so they can clue you in.
Now, finding the right person might be harder than you think, but at least you know the information is there. Truth be told, most hospitals don’t have someone who’s specifically over the charge master. This means that you can call to ask how much something is and you might get passed around from person to person. Many departments that provide services don’t keep this on hand, though they should. Billing departments don’t normally keep it on hand because the price of items has nothing to do with the billing process; yes, that’s true. Many billing people don’t have access to a charge master.
But you do. At least in some states. You can request an entire copy of the charge master, or you can at least see all the prices for whatever it is you need to have done. Surgery is kind of a red herring in that no hospital can definitely tell you how long a physician will need in performing surgery on you, and you don’t want physicians rushing your surgery just to save you money so if you’re told to estimate an hour and it takes two, just make sure all your parts are working when you get home and be happy with it. You never know what’s going on during a surgery.
In some states hospitals are required to send charge masters to them for some type of review, like Pennsylvania, which means you could get your information from the state. They’re not happy about that though. Many hospitals will put their CDMs online, and some even hire a person to respond to all calls asking about pricing.
But the reality is that most people don’t call to ask for any of this information. Even with all the outcry’s about being overcharged many people don’t check on price before they get procedures done. Having insurance mutes a lot of those worries, and knowing you have to have something done anyway scares a lot of people from wanting to know.
Anyway, I hope I’ve given enough information to the layman about charge masters. If you have any questions for me I’m happy to answer them; that is, unless you’re looking for CDM advice. Then I have to charge you; I am a consultant after all. 😉