The charge description master (CDM) is the backbone of a well-functioning revenue cycle. Financial success, compliance, and clinical accuracy all rely on an accurate and complete CDM. Advances in technology have changed the way hospitals maintain the CDM. From flagging incorrect codes to providing pricing benchmarks, technology makes the day-to-day management more streamlined.
Oftentimes, however, organizations rely too heavily on the technology and miss out on opportunities to optimize and supplement the tools with experienced revenue integrity resources. Below are three reasons to consider utilizing qualified revenue integrity professionals to enhance CDM technology and drive additional ROI.
Validating Recommendations to Ensure Accuracy
CDM management technology is designed to evaluate the CDM and make recommendations for changes within the patient account systems (PAS). These are typically related to quarterly/annual CMS updates, but there are other best practice and pricing flags built in as well. Recommendations are placed in a work queue for evaluation, and someone is expected to evaluate each flag for validity and make the changes. Many times, qualified revenue integrity resources are stretched thin or there isn’t a person dedicated to reviewing the flags, so the recommended changes are not evaluated in a timely manner. This can cause a delay in updating the charges within the PAS and create the possibility of non-compliance or missed net revenue.
Each recommendation should be thoroughly evaluated by an experienced CDM professional to ensure any changes made are compliant and align with the services being performed at the organization. Integration with the PAS is often minimal, and the changes must be manually keyed in. This task is sometimes handled by a data management or IT resource that does not have the revenue integrity knowledge to identify issues with the changes or understand how a change could affect revenue and compliance. As a best practice, experienced charge integrity resources should be utilized for the entire process to ensure accuracy.
Charge Additions and Best Practice Charge Capture
CDM technology does a great job identifying compliance issues within the existing charges, but it does not find missing revenue opportunities or charges that should be evaluated for removal based on best practice. It’s imperative that an open line of communication is kept with clinical departments to identify new services that do not have a charge in the CDM or common activities that aren’t appropriately captured in the charge entry process. The best practice approach is to set up regularly scheduled meetings 1-2 times per year with the clinical departments to discuss the charges in the CDM and any services that pose a charge capture opportunity.
Often there are billable services that clinicians perform multiple times a day that are not being captured because the education/awareness was not provided. In addition to the department interviews, an annual line-by-line deep dive into the CDM is also recommended to identify line-item issues that may have been missed by
the technology. This also provides a great opportunity to remove or inactivate any items/services from the CDM that have not been used in more than two years, which promotes a more efficient and streamlined charge-capture process. The cleanup process and identification of charge capture opportunities can lead directly to increased revenue on the bottom line.
On the flipside, there are situations where charges are being captured and billed separately that should not be based on best practice or regulatory guidance. For example, CMS guidelines for supplies are vague and open to interpretation for providers. It’s important to develop a supply charging policy for your organization that minimizes confusion and streamlines the charge capture process. Many organizations are opting for a minimum cost threshold anywhere from $25-$150 that classifies low-dollar supplies without a dedicated Current Procedural Terminology (CPT) code as non-billable.
There are also supplies and equipment that should not be billed based on regulatory guidance that need to be considered in the policy. Removing these charges will also require a pricing evaluation to ensure any gross/net revenue associated with the inactivated charges is reallocated to other services. CDM technology is not going to provide the guidance for establishing a defensible charging structure, so utilizing highly experienced revenue integrity professionals is imperative.
Strategic Pricing for Strong Financial Outcomes
CDM technology often has functionality built in to assist with setting prices for items and services. This is usually limited to providing benchmark pricing from public CMS data and/or very limited price modeling functionality. This data can be useful for setting prices for new charges or making ad hoc adjustments, but it requires someone familiar with revenue integrity to appropriately evaluate the information and determine how to utilize it. As a best practice, organizations should develop a comprehensive charge-setting policy that dictates how prices are set, the process for annual adjustments, and approval workflow for any additions or changes.
When performing annual price adjustments, it’s important to step back and evaluate the overall goals of the organization. Are you trying drive additional net revenue? Secure market share in a particular service line? Are there certain shoppable services that need to be priced at a lower rate to drive volume? Are the prices defensible and based on a well-documented pricing policy?
Answers to these questions and many others will dictate the best way to strategically adjust the CDM charges to achieve the organization’s goals. CDM technology can assist with this process, but oftentimes it does not have adequate modeling tools built in to calculate the net/gross revenue impact, and the breadth of benchmark data does not adequately provide insight into the true market landscape. Pure reliance on technology for strategic pricing can significantly limit financial benefits to the organization.
Combining Experienced Experts with CDM Technology
CDM technology is a highly useful component of a well-designed revenue integrity program. The data, insight, and recommendations it offers are invaluable for building a complete and accurate CDM. However, it is only a piece of the puzzle, and hospitals should not rely on the technology as the primary source of truth for all things related to revenue integrity. Organizations will get the most ROI out of their technology if they utilize high-quality, experienced revenue integrity experts to not only use the tools effectively, but also supplement the technology with their own expertise.
Kyle Sherseth
Kyle Sherseth is Vice President of Revenue Cycle Solutions at Savista.
