Increased Transparency Necessitates Chargemaster, Revenue Integrity

The Patient Protection and Affordable Care Act is greatly impacting how leadership — both inside and outside of healthcare organizations — view healthcare data. To promote transparency, on May 8, 2013, HHS published hospital charge data to the public, with no context for understanding that data. Charge data is the information used in hospital and healthcare claim documents, a central part of the revenue cycle. In effect, the publishing of hospitals' charge data served to fan the flames of controversy. This unprecedented action intensifies the urgency that healthcare organizations ensure their data is ready for prime-time examination. The requirement of greater visibility and data governance in healthcare organizations of all sizes is driven by regulations, reductions and reform, coupled with the need to mitigate serious compliance risk from data errors. All in all, this presents an extraordinary opportunity for healthcare leaders to drive change by improving their organizations' data quality and integrity.

All healthcare leaders know they must find ways to increase operational efficiency and optimize appropriate revenue while remaining competitive and compliant. Understandably, leaders are challenged in how to best achieve these reform goals, particularly in a transparent way.


Where to start? Charge data is an excellent place to begin. Charges reside in the chargemaster, which is the central control point in the revenue cycle. Charge data must be current, correct, normalized and compliant. If not managed on an ongoing basis by a dedicated team supported by current reference information and software tools, healthcare organizations face considerable risks; and not just market share and public relations risks arising from misunderstanding of hospitals' published charge data. Charge compliance penalties and consequences are already very serious, and they continue to ramp up. The Medicare Recovery Auditor program began in October 2009. Since then, $4.5 billion has been recouped from hospitals and providers in Medicare overpayments according to the newest RAC figures from CMS through April 2013.

Without a reliable charge capture and verification process, poor coding and missed charges continue to cost organizations a fortune, not only in compliance risk and lost reimbursement, but also in the major administrative expense of reworking claims, managing denials and audits, and communicating with payors about data issues and errors. Being prepared for external audits encompasses ensuring that the strategy, process and team are in place for peak revenue integrity performance. Leading an effective revenue integrity initiative will mitigate compliance risk while delivering greater operational efficiency, and optimal appropriate reimbursement.

Revenue integrity — Turning data challenges into opportunities
In today's healthcare landscape, in order to manage the challenges presented by historic industry change, while providing quality care and improving financial performance, it is vital that healthcare organizations implement a well-developed revenue integrity process. This process engages teamwork across hospital departments, and its physician groups, in order to ensure accurate data management and effective documentation. Now is the time to ensure that the cross-functional team, strategic process, and tools needed for effective data management are in position for ensuring revenue integrity. 

Don't sink, get in sync. How? First, determine the right questions to ask and the insights needed from your data.

To improve performance, you need to define the data reports needed, obtain a prioritized list of action items, and engage a multi-disciplinary team with clear processes and accountability supported by reference, workflow and automated data normalization tools.

Examples of key tools needed are software programs that enable healthcare provider organizations to score their health data progress. And, software that produces reports that can be used to show physicians and clinicians how they can improve their documentation for compliance with evolving rules and regulations.

Effective use of such data reports enables the building of greater alignment among clinicians and physicians, which enhances an organization's agility for successfully adapting to a rapidly changing payment environment.

Missed charges are a primary source of revenue leakage. The lack of accountability and understanding of the compliance impact of these errors are key roadblocks to ensuring all legitimate reimbursement is captured and accurately converted into charges. Successful organization-wide process improvements for charge capture, not only uncover data that enables physicians and clinicians to clearly see the impact of their actions, and how to improve their clinical documentation that is required to defend revenue in an audit; it also improves communication and accountability organization-wide to achieve revenue integrity excellence.

The more thorough the data and workflow analysis, the greater the value that can be uncovered while providing a clearer picture of what's working, what's not or what needs to be addressed before it turns into a problem for the organization. From clean data, with current, informed, localized context, business insights can be readily derived to support better decisions and apply resources more efficiently.

Organizing a data and revenue integrity team
The drive for data and revenue integrity requires a cross-functional team with a broad-range of knowledge. Because of different roles and expertise, a member from each department should be included in the workflow analysis. Engaging diverse staff members in the process, and communicating executive leadership's support behind the team's initiative, is vital for success. Consider including representatives from the clinical departments, materials management, patient access, pharmacy, revenue cycle, compliance and insurance/payment specialists who can work together as a multidisciplinary team. 

Data analysis using workflow
To help ensure the most effective data analysis possible, there are industry best practices that can be followed:


  • Approach the analysis from a goal-achieving perspective, using established goals at the outset, each one with a specific measure of success. Data analysis can help identify where breakdowns are occurring. When initial goals are reached, analysis can help determine ways to reach greater goals.

  • Support your team with an effective automated workflow. Workflow helps ensure that correct data are being collected, and that the person collecting and verifying each set of data is the appropriate person. Ensure each participant is accountable for their role and that they have access to current reference information and tools for their particular task.

  • Check data flow. An important aspect of workflow analysis is ensuring that data are being moved to the right people at the right time, using the right process. It is important to verify that this transfer of data is taking place. Especially with today's electronic health records, the validation of data for accuracy and charge compliance using software is critical. Without an automated review and validation, for example, how would anyone find a typographical error in a dispensing cabinet, or a lab machine with data capture problems? Both of these issues result in data not making their way into the patient record. Without a reconciliation and verification process supported by software tools, no one inside the healthcare organization will know about the recurring errors; yet, when external auditors perform their automated and semi-automated reviews, they will spot missing or error-ridden charges by comparing common procedure charges across multiple healthcare organizations. This results in compliance issues for healthcare organization that are often expensive to manage.


Success now and into the future requires people, processes and technologies that are focused on preventing data errors, reducing revenue leakage, and ensuring data and revenue integrity. Revenue leakage is the difference between the amount of revenue that providers are entitled to and the amount of reimbursement they eventually receive. Overall, the inconsistencies, inaccuracies and inefficiencies in outdated business processes are causing revenue leakage.

To ensure that business processes follow the current, industry-defined best practices, it is vital to support people with tools they can efficiently use to prevent data capture errors, and ensure data and revenue integrity. Tools that enable staff and managers to show their results in terms of reduced compliance risks and improved reimbursement, while working more efficiently, empower both an individual's work performance and their organizations' overall financial performance.

The goals for charge data today are that charges are current, accurate, clean and lean — with nothing more in the chargemaster than absolutely necessary, in order that the organization's charges remain an asset, and do not become a liability. Charges require maintenance to remain current with changing rules and regulations. Maintenance required is as follows:

  • Every year end with new code changes;
  • Quarterly with OPPS quarterly updates;
  • Anytime procedures expire or new procedures are added; and
  • When the facility or auditor detects a pattern of incorrect charging.

Leadership must evaluate the proper balance between centralized and decentralized elements in their systems to achieve optimal accuracy, efficiency, compliance and legitimate reimbursement. Many healthcare organizations are consolidating and standardizing their internal charge audit process across their enterprise. Their revenue integrity strategy encompasses building a centralized internal audit team; educating on best practices; and establishing a proactive approach to managing audits and compliance through a robust internal audit and monitoring program that encompasses hospitals' departments, physicians' practices and clinics.

Achieving both quality and cost goals in a transparent way is challenging, especially in a time of declining reimbursement, rising competition, non-standardized metrics and growing demand for services. Using automated tools to ensure the accuracy and completeness of EHR data as it translates into charges quickly enables the identification, prioritization and management of issues that directly impact revenue and compliance goals. As a result of a consistent revenue integrity program, the data emerges that is necessary to proactively implement sustainable process improvements in a changing industry. Assuring data and revenue integrity supported by automation is integral to optimal financial performance in this new era of healthcare.

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