At its most basic level, the chargemaster acts as the communicator of medical bills to payors and patients. The chargemaster is an internal, comprehensive list of charges for all existing billable services and items rendered by laboratory providers. This list can include procedures, services, supplies, and any additional fees. Here’s how it works in the laboratory billing cycle:
When a patient receives services from a laboratory, the services are documented in the EHR/EMR
The health information management staff or coding team assigns codes to the services rendered for claims submissions
These codes are translated to chargemaster rates that are used to bill the patient or create a claim for payors
Unquestionably, the chargemaster is the core of the revenue cycle, playing a critical role in the financial health of any healthcare organization. With the legislative push for medical billing transparency, chargemasters have recently taken center stage. As a result, revenue cycle leaders should reexamine their chargemaster management to ensure no money is being left on the table. If your laboratory is experiencing an uptick in edit requests or claims denials, you may have a discrepancy between your orderables and chargemaster. Thus, maintaining an accurate chargemaster is critical to preventing revenue leakages and maximizing profitability.
Challenges in chargemaster management
If a chargemaster is not properly maintained, the organization suffers from underpayment, claims denials, compliance violations, and backlash from payors for overcharges. However, maintaining a chargemaster does not come without challenges:
- Private payors continuously change reimbursement rates, rules, and codes, making it difficult for organizations without a dedicated RCM or coding team to keep up.
- Changing legislative restrictions challenges organizations’ ability to keep their chargemasters both competitive and transparent.
- Medicaid/Medicare yearly modifications can affect budgetary decisions and projections and also tend to change processes.
Best practices for chargemaster management teams
Aligning your orderables and chargemaster and considering the market value of allowable rates ensures that your laboratory receives correct reimbursement and optimizes revenue. Here are our insights on how to achieve this alignment and get the most out of your chargemaster rates:
1. Clear communication pathways among internal teams
The chargemaster team or coordinator should maintain open communication with clinicians to ensure the chargemaster contains all billable services and prices are accurate. The chargemaster team should also build a strong partnership with coders and billers to make sure clinical documentation and coding practices align with the chargemaster. Inadequate coding could result in missing charges and leaked revenue.
2. Review descriptions in your chargemaster
A regular line-by-line review of your chargemaster ensures clinical descriptions and CPT/HCPCS or revenue codes are accurate. This review of all laboratory charges often reveals entry errors, mismatches, or inaccurate CPT codes with services that have already been rendered. While your organization can conduct this process with automated software, we recommend a deeper, manual dive into your descriptions.
3. Ensure system interoperability
Confirming that your LIS and providers’ EHR/EMR systems communicate effectively can help your laboratory billing team avoid errors in code pairs, ensure pre-auth accuracy, and avoid exceeding daily unit values. Accounts reflecting these errors (and potential errors) should be suspended to avoid leaking revenue– interoperability between systems guarantees this happens on time. In addition, educate your staff on how to navigate system fixes and rule changes.
4. Regularly reconcile your orderables and the chargemaster
A manual reconciliation between your LIS orderables and the chargemaster is a critical part of the compliance process. This process should validate the LIS description and/or chargemaster description to the CPT code assigned. In doing so, your organization will be able to identify discrepancies in the missed orderables or missed chargemaster lines.
5. Audit your processes and personnel
Periodic audits help to identify potential gaps between the LIS/chargemaster and the finalized charges for claims submission. Expertise, understanding, and responsibilities among your billing team members may vary, making it challenging to resolve denied claims and errors. Make sure your personnel are on the same page about your billing process, federal regulations, payor rules, and coding guidelines. A cohesive team minimizes disparities and errors between steps in your revenue cycle.
6. Keep your eye on the competition (and on the market)
Most critically, undercharging for services can be detrimental to your lab’s success. With new legislation requiring chargemaster transparency for all healthcare organizations, it is easier than ever to compare rates with your competitors. We recommend making sure that your chargemaster reflects the current market and the margins that will keep you in the black. Don’t be crippled by low, self-imposed allowable rates.
Partner with Credence Global Solutions, watch your laboratory thrive
The experts at Credence Global Solutions can help your organization maximize profitability by minimizing avoidable errors and decreasing claims denials. Moreover, we help to ensure your chargemaster rates remain competitive and that you are getting the most out of the services you provide. We have the track record to prove it. If we can increase billables by 20% or more by just re-evaluating your chargemaster, imagine the profitability with us at the helm of your revenue cycle. Ready for financial transformation? Get in touch with our team today!
