of Your Revenue Cycle
How does the chargemaster drive your revenue cycle? The chargemaster is where everything begins, from fee schedules and claims submission to reimbursement. Without an accurate and reasonable chargemaster, financials for your practice can be thrown off by high adjustments or inaccurate pay rates from your insurance reimbursements.
What is the chargemaster? It may have many different names, but the chargemaster is the full list of all services your office provides. It includes:
- • Item number – this may be a number generated based on your GL numbers, department numbers, or auto-assigned by your system.
• CPT Code
• CPT Description
• Item Charge
Additionally, items like NDC numbers and revenue codes may be set up on the chargemaster as well, depending on your facility and billing system.
Updating your Chargemaster
There should be an annual process in place to review your chargemaster and ensure that your practice is charging enough for each service listed. Take this in small chunks. The best practice is to start in the fourth quarter of your fiscal year and take one department at a time. For example, start with your imaging services, then your labs, then your office visits, in-office procedures, etc. Breaking this down will make the process more manageable. Set deadlines for each department and ensure department heads are involved as they are probably more familiar with the costs involved in each procedure. The goal is to have the new chargemaster ready to load on the first day of your next fiscal year.
Comparing your Chargemaster
Another vital step is to compare your chargemaster to your fee schedules. Why is this so key? Payors are going to pay up to their associated fee for the procedure or service. However, if your chargemaster does not represent the full reimbursement rate for that service or procedure, you could be leaving money on the table. For example, say you charge $85 for a 99212, established patient office visit. However, your top payor will reimburse a 99212 at $92. Since you are sending them a claim for $85, that is the maximum they will reimburse. You are losing $7 for each 99212 you charge. And if this is a highly used code, and this is one of your top payors, that can quickly add up to lost money.
How long has it been since you have updated the charges on your chargemaster? Feeling lost as to where to begin? It can be an intimidating process, but firms like Legacy can help review your current fees, compare your current fees to all of your fee schedules and even recommend a price for each service. Contact us to learn more.