chargemaster consulting

health care finance leadership

For more information, please contact: 

T. T. Mitchell Consulting, Inc. 
P. O. Box 2514
Liverpool, NY 13090 
(315)622-5922 Office

Misperceptions And Expectations Of The
Charge Master / Revenue Review Process

When one is contracted to do charge master projects, whether it's a quick review or a lengthy contract, there are misperceptions and expectations about the charge master or revenue review process that clients sometimes have that can either impede the process, or shut it down before it even begins. Most often it's because there's a misunderstanding of what charge master processes entail. This article will address a few of these things.

First, procedure codes are procedure codes, and revenue codes are revenue codes, regardless of where you are in the world. CPT-4 and HCPCS codes are used by medical professionals in every country in the world, and they're the same everywhere. In general, it doesn't matter what the insurance company is, they pretty much use the same code.

I say in general because there are some differences every once in awhile. For instance, Medicare has some specific HCPCS codes that they want to see for certain procedures instead of the CPT-4 code. In many areas, Medicaid will set up specific HCPCS codes for services they want specifically identified, often for programs that only they have.

In some areas, a facility may negotiate a certain rate if a provider sends them a claim with a certain revenue code as opposed to a more general one. Even if you have a charge master company providing services right in your hometown, unless they've worked with you before they're not going to know all the specific insurance contracts until you give them that information. Charge master companies code based on national regulations, but obviously there are often differences.

This leads to the second issue; just because a charge master company has recommended something doesn't mean you have to accept it, and it doesn't mean they're wrong either. For instance, in a state like North Dakota, the fiscal intermediary is the same as the local Blue Cross. Because of this, both will accept the same CPT or HCPCS codes for services, whether they're specifically for Medicare or not. That won't work in a state like New York, where the Medicare fiscal intermediary is Empire Blue Cross but the local Blue Cross is Excellus.

Another example might be with clinics, where a charge master company might recommend a revenue code for an area that does not indicate it's a clinic, because it's not, but a contract with a local insurance carrier might indicate that it will cover that service with the clinic revenue code. Recommendations for this sort of thing should be made as just that, a recommendation, rather than as a "must change" item, and only the people at the hospital would know anything extra, unless they share insurance contract information with the charge master company.

The next issue is about computer systems. There are a lot of different computer systems for hospitals across the United States and the world. Some hospitals go for the large companies, whereas others go for someone a bit more intimate, or less costly.

Hospital computer systems are pretty much the same; if you've worked on a couple of different systems, you can pretty much pick up how to work on any system. Sometimes hospital administrators feel that anyone who's coming in from the outside needs to know how their computer system works in order to be effective. This might have more bearing if someone is coming in to do billing projects, but overall, computer systems aren't much of a distraction for people working on charge master issues.

Charge entry is usually very cut and dry; the most complicated system our organization has ever dealt with had us entering changes to the charge master, then sending those same changes to the IS department so they could add the same information into a service master; most hospitals don't have both. We could have entered that information also, but at this hospital, service master access was only given to IS personnel.

The final issue is about why charge master companies charge what they do. There are many components to charge master projects, and the facility or physicians get to determine just how much they want to have performed.

A charge master company might be asked to only do a quick review of the charge master; that doesn't cost a lot of money, but the fees will vary depending on the type of report you get back. If a facility adds in revenue numbers, the fees will increase. If a facility wants a lot of information coming back to them, the fee will increase. If a facility wants pricing recommendation; if charge master personnel have to come for a visit; or if your facility offers a major diversity of services, the fees will increase.

Fees are based on time. The more time a project is projected to take, the higher the fees are going to be. Having someone review your charge master and sending you back a list of changes that need to be made is fairly easy; most companies will charge a flat fee for that. If you want the results back in a slightly more detailed report, that flat fee might cost a little bit more.

Doing a full review of revenue numbers to make a determination as to how much your revenue could possibly increase will take some calculation time. Having your fees compared to different pricing fee structures (most charge master companies will initially compare your fees to Medicare APC or fee schedule rates, depending on the service) to see if you're charging enough will take some calculation time.

Interviewing department heads takes time, and that time could be divided between bodies if a facility is looking to speed up the process some. Doing the most thorough review, which now includes an onsite review of the charge capture process for each department, takes the most time of all.

Of course, the benefits on the back end can be phenomenal. It's easily possible for a hospital of even 200 beds to pay $50,000 - $100,000 for a full charge master / revenue review and reap million dollar benefits on the back end. At one facility, a discussion with one department that took four hours ended up finding almost $2 million in yearly revenue that was being missed. At another facility, three meetings and two phone conversations found almost $5 million in under reported revenue. To add to this, at one facility that brought us in for a year increased their revenue by $730 million; that's not too shabby!

Of course, there are no guarantees. One hospital we reviewed had some confusing charges in odd places, but overall their charge master wasn't bad. This was because they had an experienced charge master person on hand. If you have qualified people working for you, bringing in a company to do an extensive review might not reap the benefits you're looking for. However, if you don't have someone experienced, or don't have anyone at all, you can be pretty certain that your revenue will improve to some degree once you've had a professional look at it.

Misperceptions and incorrect expectations probably keeps most hospitals from going through with having their charge masters and charge processes reviewed. Sometimes it's hard to understand the positive benefits when the costs can seem so high. In the end, it comes down to numbers and knowledge, and hopefully this article has lent some insight as to what you might want to consider while trying to make your decisions.