June/July 2019

Through the Cracks
By Sarah Elkins
For The Record
Vol. 31 No. 6 P. 10

Is your organization’s charge capture process allowing revenue to escape? Becoming familiar with common missteps can help.

Hospitals are busy places. It is expected that care be administered quickly and efficiently—often reflexively—in response to an acute need. The focus is on patients and best possible outcomes.

We all like the stories of recovery and healing, dodged bullets, and clean reports, but behind each story is a detailed list of the actual care administered. It’s less romantic, but for the system to work, providers must capture the charges for each happy story they deliver.

It is a tall order to ensure each procedure, each incidental, each consult makes its way downstream to billing. Yet, the modern health care system demands it.

With that in mind, those tasked with improving charge capture at their facility should ask one question: How can I make this as easy as possible? Easy is the key word for Lisa Nolan, director of product management at PatientKeeper, who talks with physicians on a daily basis to help them complete documentation and minimize the number of clicks needed to capture a charge.

“As a patient, I care very little as to whether my physician gets their charge in. I care how well they take care of me and how they interact with me,” says Nolan, who keeps that credo in mind when working with clients. She encourages a little creative thinking when it comes to helping providers generate charges.

“Look at ways you can get charges generated, ways that are not what you would expect, [including] having interfaces coming in from order systems where [providers] can generate the charge while placing an order for meds,” she says.

It also helps to be familiar with the common barriers to effective charge capture, of which there are plenty. However, ineffective charge capture can be boiled down to two basic issues: imperfect technology and imperfect humans.

The following are some of the most common ways those imperfections manifest.

Training and Tools
John Lawhorn, a senior advisor who manages charge capture and revenue optimization projects with Impact Advisors, points to the lack of overall training at the department level for those responsible for charge entry. He hears complaints such as, “I don’t get much guidance,” “I don’t have resources to reference,” and “The tools aren’t there for me.”

It’s one thing to have tools and another to have the right tools, Nolan says. “If [providers] do have tools, they’re often tools that aren’t geared toward them,” she notes.

According to Vickie McElarney, RN, MBA, FACHE, COC, a consultant with Craneware, getting the right tools in the right hands can be as simple as having the right conversation.

“What you need to do is partner with the department directors and ask them what tools they need to ensure their charges are appropriate. If they can have input into what reports are fed back to them, that is helpful,” she says.

Documentation Errors
In the absence of proper tools to help providers capture charges, human error occurs in various ways. Lawhorn cites common issues with nursing documentation, including a failure to note a stop time for IV therapy and not checking off medications administered. In other instances, a backlogged physician may be completing open notes from two or three days prior. In those cases, it’s difficult to recall every detail of the encounter, and charges are missed.

“It’s the little things,” Lawhorn says, “the administrations, tubing, the supplies if they’re on a sticker system.”

Nolan is surprised by the pervasiveness of paper in an increasingly digital environment. “I would have thought by now paper would not be on the table as an item that causes issues,” she says.

Nolan finds physicians still have good reason to carry around paper with notes that may or may not make their way into the EHR. “In the academic medical center or in the community hospitals where physicians are employed and they have access to all the systems, paper use probably decreases a little bit,” she explains. “But the hospitalist groups that provide obstetrics support at community hospitals don’t have access to all the systems that employed physicians have, so they are making paper copies or taking pictures of notes, or keeping a piece of paper they write the charge code on.”

Incompatible Systems and Conversions
Even when tools are in place and the human element is controlled, technology is frustratingly limited in its ability to improve the charge capture process.

“There are so many different systems involved to capture charges,” says McElarney, who ticks off laboratory, radiology, operating room, and radiation oncology information systems, just to name a few.

“And then you’ll have no information system. You have to rely on people to manually go into the system to charge people,” she says, adding that achieving synchronicity between so many disparate systems can be challenging.

Another struggle McElarney notes is conversion factors for drugs. One drug may be billed per milligram while another might be billed per 10 milligrams. It’s easy for a busy person to miss the conversion and underreport the units administered, she says.

Constant Change
The Centers for Medicare & Medicaid Services (CMS) publishes new rules and updates on a quarterly and annual basis. The changes are typically widespread across many specialties.

“It really encourages coding in the middle of the road,” Nolan says. As a result, coders may avoid an audit but they also miss out on quality programs.

McElarney highlights another issue caused by ever-evolving rules. “Sometimes, in patient financial services, they’ll have a scrubber. They will build claims logic so that things don’t have to be touched by a million billers every day, which is good,” she says. Unfortunately, claim scrubbers cease to help if someone in the department isn’t continually checking the logic against any new rules.

“All of a sudden, you get something on the bill that doesn’t make sense anymore because the rules have changed but nobody’s gone back [to correct the claims scrubber],” McElarney says.

No Feedback Loop
Charge entry staff and providers are frequently accused of lacking awareness of the downstream impacts of poor charge capture, but Lawhorn says feedback from revenue integrity or finance is often inadequate.

“These teams don’t report back budgetary issues. There’s no monitoring of the budget,” he says, which means errors made at the point of charge entry are never illuminated or corrected.

Impact of Lost Charges
The impact of lost charges is obvious: a decrease in reimbursements. It doesn’t take an accounting degree to understand that leaving money on the table when margins are razor thin is a poor financial strategy. What’s less obvious is how significant the losses can be.

Nolan says consults are a frequent pain point when it comes to missed charges. “Physicians will either get ordered consults or fly-by consults or message-to-consult requests [that never get charged]. That’s significant dollars to an organization,” she stresses.

Failure to accurately capture charges impacts more than the facility’s bottom line—physicians are also negatively affected.

“We see more and more at our client organizations that [physicians are] compensated, at least partially, on RVU [relative value unit] values,” Nolan says, adding that when physicians forget to note administer fees or don’t enter the right charge, they lose salary supplements they would otherwise receive.

While lost revenue is the most obvious and substantial impact of inadequate charge capture, it’s not the only effect. Failure to properly capture charges is a sign documentation is lacking, which creates a medical record that isn’t accurately reflecting patient acuity and the services being provided.

As a result, what was a financial problem may also leak over into becoming a quality issue due to an inability to prove patient care was administered. “If the documentation isn’t there, it becomes more than a financial concern,” Lawhorn says.

Auditing the Charge Description Master
Maintaining the accuracy and completeness of the charge description master (CDM)—the comprehensive catalog that contains all procedures, services, and goods for which a hospital can charge and the latest prices—is a daunting feat. It’s made all the more difficult by CMS’ revolving door of updates and changes.

Therefore, it’s imperative to have someone charged with regular review of the CDM. However, how best to accomplish this task depends on the size and complexity of the organization. “There are a lot of clients that will just do annual reviews, which is good, but I recommend quarterly,” Lawhorn says.

Meeting with each department and reviewing its unique chargemaster to ensure everything is accurate is also important, Lawhorn says, adding that these get-togethers often provide valuable insights. For example, he recalls countless times when a department head said they’re delivering a service that doesn’t exist in the chargemaster. Often this is the result of an overwhelmed CDM manager who simply can’t work through the backlog of tickets.

In that case, Lawhorn recommends “trying to prioritize the modification or update based on the price of the procedure and service and the frequency.” At least then, the big-ticket items get added to the CDM first.

In other cases, as McElarney points out, smaller hospitals don’t have the bandwidth to have a CDM manager. She recommends those hospitals invest in a tool to help alleviate some of the research work.

“A tool is really helpful. Most people in this day and age really need one. The way you have to bill for drugs now, you need NDC [National Drug Code] numbers; it would be almost impossible to do that manually,” she says.

Hospital System Mergers
Merging hospital systems face a unique challenge when it comes to accurately capturing charges. Most merging systems are not on the same financial platform; therefore, charges may be issued a little bit differently.

“Nothing is right or wrong,” McElarney says. “My hospital might include all supplies in their room and board, but another hospital might charge for the incidental supplies because they have a way to do it. Some people charge OR by the minute, some people by 15 minutes, some by hour or half-hour.”

What’s important is that the merging hospital systems establish a charge capture rule and stick to it to avoid later revenue loss due to conversion errors.

Daily Reconciliation
Most experts agree that daily reconciliation is a necessary component of effective charge capture. It’s less a matter of how you reconcile charges than it is a matter that it gets done and by the right person.

“Well, it’s what you make it,” McElarney says.

Nolan finds success by examining note activity. “Physicians are highly motivated to get their notes in,” she explains. When both the patient care team and billing team members have access to the notes, the teams are able to work together to make sure the notes and associated charges make sense and accurately reflect the care that was delivered.

“Daily reconciliation can be widely varied among departments and providers. The key is that every department should be reconciling their charges daily and equipped with the appropriate tools and training to effectively do so,” Lawhorn says.

He notes that reconciliation breaks down when the daily check is completed by an individual at a higher level outside of the department. “The department leaders are the ones that really know what’s going on in the day-to-day activity,” Lawhorn says.

McElarney recommends coordinating with the data team to run daily reports on what was charged by each of the departments, particularly the high-dollar departments. Ensuring the report is sortable, like an Excel file, makes it easier for each department to audit charges and find discrepancies. For high-volume departments, such as the emergency department, for which a thorough daily reconciliation would be too time consuming, she recommends daily spot checks.

Staying Up to Date
The secret to maintaining successful charge capture over time is staying on top of the continual changes issued by CMS and the private sector and then communicating these updates to the appropriate personnel.

For many of Lawhorn’s clients, the compliance and charge master teams work closely together and make use of external resources such as CMS and the Healthcare Financial Management Association to receive routine updates. However, he notes that simply acknowledging the changes isn’t enough. “[You need someone] who can articulate and speak to the reasoning behind the change and what the change requires of staff to effectively adhere to whatever is being requested,” he says.

McElarney says toolkits to dissect the transmittals and identify which departments need to review which information can be of great benefit. However, that’s only if they’re put to use. “How do you make people read them? That’s a whole other story,” she says.

While having a tool can take a lot of the legwork out of understanding the updates, it’s not imperative. A small facility with limited resources can stay abreast of charge capture changes by signing up for e-mails from CMS and their Medicare Administrative Contractor.

— Sarah Elkins is a West Virginia­–based freelance writer.