Right Size Patient Billable Charges to Streamline Revenue Cycle Outcomes

Despite the significant financial impact of the Covid-19 pandemic, US healthcare providers and hospital organizations continue to implement strategic and tactical measures in order to manage financial challenges while ensuring optimal patient care and health promoting missions. Many innovative operational and service modifications have been adapted by the industry since March 2020. However, there are other fundamental changes that can improve the Revenue Cycle process and outcomes should be considered by providers and hospitals.

Efforts to ensure accurate and timely charge capture and subsequent claims scrubbing (e.g., charge review) can be labor intensive with less than optimal returns. Reasons hindering this costly process are due, in part, to the complexity of charge created by providers and hospitals and ever growing third party insurance (governmental and commercial) billing and coding requirements. Providers and hospitals can minimize their exposure by streamlining the charge structure and smart claims generation process thereby lessening chances for third party rejection and denial of claims.

For years, the exploration of revenue opportunities was tied to expanding billable services listed in the Charge Description Master (CDM) and improving coding qualities. As a result, there are many low impact charges in each CDM that are creating process inefficiencies and delays in payments. Below are just a few primary examples:

• Increased the need to develop Revenue Integrity SMRs to manage CDM and charge capture accuracy
• Increased frequency of claim edits that are costing hospital FTEs and delays in payments
• Provided additional opportunities for third party payers to reject or deny claims when reporting low impact patient charges
• Created challenges for hospitals to efficiently use claims data for meaningful trend analysis, quality control and process improvement activities

Streamlining CDM and charge structure will enable hospitals to achieve the following improvements:

• Improved AR when there is a reduction in reporting of low impact patient charges (e.g. Streamlining Pharmacy charges that decreased outpatient denials by 35% with no impact on payments)
• Enabled resources to focus charge capture accuracy and timeliness on meaningful patient billable charges (Modifying patient billable charges can improve daily claim processing and routing CDM maintenance up to 40%)
• Improved efficiencies of data analytics once the low impact charges were removed from charging
• Will enable the ability to publish meaningful charges in light of January 1, 2021 Price Transparency requirements
• Improves the ability to adapt to various future Revenue Cycle related automation measures

Making major CDM and charge structure changes will not be a small task as this initiative will impact an organization's operations, finance, and managed care contract negotiations. It will require a coordinated effort by several departments and use data analytics to support the final decisions. Once the decisions are finalized, the implementation can be carried out in a staggered fashion to improve success rate. But given that the benefits outweigh the efforts, it is a good idea for healthcare organizations to start streamlining their CDM and charge structure to reap the rewards.