Charge Description Master (CDM): A Critical Resource, but Often Overlooked

The health care industry has experienced significant change in the past decade. The pace of change is breathtaking! Organizations have grown and consolidated by acquiring hospitals, service lines and physician groups. Many organizations are now faced with the burden of standardizing their operations.

Competing priorities have created a challenging environment to keep up with standard business practices. Organizations are focused on improving revenues, improving regulatory compliance and coding updates. However, they often overlook a critical resource, their Charge Description Master (CDM).

What is at risk?

The CDM is the brain of the revenue cycle billing system and is the most critical table in the Electronic Medical Record, (EMR). This critical resource drives organizations’ ability to reduce unnecessary billing denials, diminish compliance risk, and improve accuracy of clinical coding. High performing organizations update this regularly through a combined use of technology and manual resources.

Do you have the right tools in place?

Many tools are offered in the industry to improve the accuracy of the charge master. The tools are only as good as the employees who use them. Elaborate charge reconciliation tools that have worked in the past can be much too burdensome for the clinical departments to manage on their own. Highly complex rules and regulations are a challenge to keep up with.

For example, the accuracy of the CPT code is impacted by the type of test performed in the laboratory. With the amount of big data available, a strategic, focused approach is necessary to successfully manage revenue integrity. Although there are software tools available to maintain annual coding and pricing changes, it is often necessary for your service department to partner with a consulting firm. The consultants will help your team identify new services to be added to the CDM, or to determine existing services that have undergone significant changes in how they are captured, coded and billed.

What should organizations do to be successful?

Your organization should focus on key analytics that drive revenue integrity at your institution for specific payors, service lines and patient populations. Review your CDM regularly as changes take place in the service lines of your organization. When services are added to an organization, it is important to ensure the CDM is updated to prevent challenging revenue integrity issues. Evaluating changes with strategic focus will have the potential to identify opportunities to improve the revenue integrity of the service both clinically and financially. For example, a client health system made one strategic change of ECMO services on the CDM and returned a financial gain of over $4M annually to the organization.

Reviewing and updating the coding on the CDM regularly is a must. We find many organizations have codes on the CDM that have been replaced or are no longer accurate. Inaccurate coding can cause unnecessary billing delays, denials, and compliance risks.

Another tactic to be successful is to improve your staff’s efficiency by removing unused CDM codes. This avoids clinical staff from having to scroll through the unutilized codes in the EMR to get to the right code. Unutilized codes can also cause errors. Don’t leave money on the table. Make sure your charges are at least as high as what the payors are willing to pay you in your contracts and fee schedules. We find many organizations are getting less revenue because their charges are set too low on the CDM.

Are you Paying it Forward?

• When was the last time your organization reviewed Charge Description Master (CDM)?
• What services or physicians have you added without updating the infrastructure?