In an era of escalating costs and declining reimbursements, hospitals are recognizing the growing importance of charge integrity, the formalized process that focuses on protecting revenues by proactively monitoring the charging and reimbursement for all services delivered in every department. Many have responded by establishing charge integrity departments. Whether part of a large healthcare system or a community hospital, the most effective charge integrity departments are built on a foundation of four pillars: quality, people, process, and revenue.
Quality is vital to reducing or eliminating charging errors and, in turn, protecting revenues. Evolving internal and external forces contribute to an atmosphere that is difficult to adapt to: Hospital financial- and clinical-support systems are constantly changing, commercial payers may have charge-related requirements that are different from those of governmental payers, and each state’s Medicaid program may follow guidelines different from those of Medicare. The charge integrity program should manage those differences and proactively monitor the charging processes used by individual departments to verify that those departments are adhering to each of the guidelines. This will assist in establishing high-quality charge integrity processes.
Hospitals should take steps to actively manage Centers for Medicare & Medicaid Services (CMS) regulation updates that will affect the charge description master (CDM) and may also affect each of the clinical department charging systems. Extensive monitoring is required to account for these types of updates, their effects on clinical areas, and how they will be communicated. If these updates are not implemented appropriately, the accuracy of the charges is compromised.
Significant and unexpected changes in these trends require further investigation. Reports on such metrics should be provided to both the C-suite and individual departments on a regular basis.
The charge integrity department also should be responsible for evaluating the knowledge and understanding of basic charge capture concepts by the end users – the clinical departments. To do this, a hospital should ask the following three questions:
- Does the hospital employ staff with the necessary qualifications to maintain charge integrity?
- Are these employees properly deployed?
- Do they have the tools necessary to do their jobs efficiently and effectively?
Charge integrity requires teamwork. The proper integration of the various clinical departments with the charge integrity department is critical to process performance; charge integrity doesn’t exist in a vacuum. The charge integrity department needs to build seamless relationships with clinicians and department directors and help those individuals easily identify and communicate charge-related issues they encounter.
RevenueQuality, people, and processes greatly influence a hospital’s financial performance – particularly whether charges are converted into the expected net revenues. With financial performance being vital to a hospital’s survival, regular monitoring and reporting are essential, and the charge integrity department is responsible for evaluating these reports to identify potential issues as soon as possible.
Metrics commonly monitored by charge integrity departments will allow for an expeditious identification of anomalies. Suggested elements to monitor include:
- Overall gross charge activity in the department – major spikes up or down
- Detailed edit reports from the charge capture and billing systems
- Revenue changes in the core business using the 80/20 rule (looking closely at the top 20 procedures that account for 80 percent of a department’s revenue)
- Charge submission reports indicating the number of charges passed from the departmental subsystems to the billing and accounts receivable system
- Reports from the charge master maintenance tool
- Clinical department charge capture subsystem work queue reports
Collaboration Is Everything
The four pillars discussed here provide indispensable support for a strong, operationally effective charge integrity function that includes not just the formal charge integrity department but also clinical, financial, and other relevant departments. Hospitals that take a casual or poorly supported approach to charge integrity are putting their revenue at risk.