Top 4 Hospital Chargemaster Management Challenges

October 16, 2020 - The hospital chargemaster is key to optimal reimbursement. The collection of standard prices for services and items used by a hospital determines how much providers should bill payers and patients for services rendered.

Yet, hospitals typically dedicate few resources to chargemaster management and optimization, and the resources that are allocated to the tasks are generally patchworked efforts to correct glaring problems with a hospital’s pricing strategy.

As result, chargemasters can become outdated, incomplete, or inaccurate, leading to revenue leakage and possibly payment recoupment if prices are not compliant with payer contracts and agreements.

New hospital price transparency rules are also putting pressure on providers to maintain and optimization their chargemasters. Per CMS orders, hospitals must publish their chargemasters on their websites, and soon the facilities will need to display in a consumer-friendly format the prices of 300 “shoppable” services.

With hospital chargemasters out there for all to see, overcoming the top challenges with management and optimization are crucial not only to proper reimbursement but also patient satisfaction.

Challenge #1: Lack of resources for chargemaster maintenance

READ MORE: The Role of the Hospital Chargemaster in Revenue Cycle Management

Hospital chargemaster management is a resource-intensive process that many facilities may not have the people or time to undertake. But failing to engage in regular chargemaster maintenance, regardless of the hospital’s size and resources, can lead to lost reimbursement and serious compliance risks.

Hospitals can lean on automation to streamline hospital chargemaster management, according to Rita Sullivan, the manager of revenue integrity at Valley Presbyterian Hospital in California.

“If you're lucky, your software will show you whether your codes are current or not, or if they have been deleted and what the replacement might be,” Sullivan said in a recent RevCycleIntelligence interview.

Valley Presbyterian Hospital invested in a single chargemaster tool that integrates data from the various systems that feed into the hospital chargemaster. The tool also assists the revenue integrity team with running reports to inform department heads about code updates and streamlines new code or code update requests, getting approved codes and final prices into the EHR quicker.

Many chargemaster management solutions are out there. The best according to market research firm KLAS, however, are from Vitalware, Craneware, and nThrive.

READ MORE: Exploring Hospital Chargemaster Management Best Practices

When selecting a company, though, Sullivan suggested that hospitals seek a vendor with robust customer support.

Challenge #2: Missing charges

Missing charges is a frequent issue hospitals can run into with chargemaster management, and it is a significant one. Without charges for the full scope of what services are provided to patients, providers cannot accurately capture charges and hospitals lose out on reimbursement for those services.

Hospitals should review the chargemaster at least once a year to stay abreast of changing CMS regulations although quarterly reviews are ideal, says Tina Rosier, director of revenue integrity at Community Health Network.

“When reviewing your chargemaster, check that new HCPCS/CPT® code sets are in the system and being used correctly,” Rosier stated in a report for the National Association of Healthcare Revenue Integrity (NAHRI).

“Another strategy for identifying missing charged capture is through on-site visits,” Rosier added. “Observing patient and staff workflow firsthand to see what’s been documented and charged can help your facility to see what’s missing on the front end. Take note of what supplies or procedures clinicians have trouble documenting. When you see an issue, go back and educate them to fix the issues on the front end, and avoid claims later down the line. Address the root cause of the problem.”

Challenge #3: Price transparency

READ MORE: Top Hospital Chargemaster Management Vendors by Hospital Use

Price transparency is a top challenge with hospital chargemaster management, according to a recent analysis from consulting firm ADVI. In the analysis, the firm looked at chargemaster documents from the top 25 hospitals by total revenue and found that chargemaster data is not uniform.

While the firm did not expect chargemaster data to be exactly the same, a lack of uniformity may impact the effectiveness of hospital price transparency and put hospitals at risk of not meeting patient and government demands for accessible pricing information.

The firm advised hospitals to review the following chargemaster elements to advance price transparency:

• Data elements. Hospitals should review the chargemaster to ensure all services and items are listed and that the chargemaster makes it clear whether the price is for a service or item and for drugs, the HCPCS code and dosage. The best hospital chargemasters also ensure chargemaster items are easy to comprehend for patients (e.g., avoids technical terms, uses layperson language).
• File format. Hospital chargemasters should be machine-readable so that it be easily imported or read into a computer system, as well as user friendly so patients can access it. More advanced hospitals also use tools that auto-populate or suggest search terms.
• Location and accessibility. Hospital chargemasters should be posted either on the hospital’s homepage or displayed prominently on the hospital’s billing page. It should also be accessible without any barriers, such as the required submission of a name and/or email.
• Updates. There should be a clear date on the hospital chargemaster to indicate when the last update was made.
• Applicability. The best hospital chargemasters clearly label whether the list of prices is applied to the full hospital system or just an individual hospital within the system.

Challenge #4: Lack of ownership, clinical participation

Management of the chargemaster is a vital process for hospitals considering its implications on billing. However, ownership of the process can be a challenge since the chargemaster can live in different departments depending on facility.

A hospital chargemaster management best practice, however, is to involve all stakeholders in the process.

A multi-disciplinary team with representation from finance, patient financial services, health information management, and compliance, as well as each ancillary department (e.g., lab, radiology, pharmacy)  is important, Robert M. Gilbert, FHFMA, COC, a senior manager of healthcare consulting at Baker Newman Noyes, recently said at an AAPC event. Representation from the latter is especially key because of the variety of systems that feed into the chargemaster, Gilbert stressed.

To get clinicians on board though, hospitals need to engage them with the chargemaster.

“When we hire new people, they have to sit with me. That wasn’t the case at other places I've worked. But it’s important to start at the bottom to make sure new providers are picking the right charges and that they're posting the right charges,” Valley Presbyterian Hospital’s Sullivan said. “They need to be paying attention to all this and other chargemaster duties all the way up through compliance.”

Sullivan also noted that she works with each department individually to establish a chargemaster management workflow that works for them.

“Each department has a different way. You have to work it out with them to determine how to make sure the chargemaster works everyone,” said Sullivan.