A proven best practice for increased revenue capture and compliance is to bridge two disparate information systems – the item master and the chargemaster – and it’s never been a more critical time to undergo this process.

If your organization is receptive to creating efficiencies and looking for ways to improve operating margins for the capital equipment your facility needs, below are some additional benefits and key considerations:

By linking the item master and chargemaster through technology that automatically audits and updates the information you’ve created a knowledge source to capture and view this information. This can help streamline processes – improved coding for supplies – and by identifying all supplies used can provide insight to improve contract negotiations. It can also reduce the number of miscellaneous charge codes and reimbursement errors.

This initiative can be extremely beneficial for IDNs and healthcare systems. While it may cause initial strife at individual facilities as they lose some independence for capturing charges, ultimately this move will provide resource efficiencies, more consistent charge capture and increased consistency for coding and compliance. Think about the manual updates for both very large chargemasters and item masters across facilities, and another perspective, the potential for savings if all item masters and supply acquisition were combined and streamlined.

Among the chargeable items, medical-surgical supplies can be the most expensive and the most notorious for lack of tracking. This can be the result of high tech devices and non-stocked items being sold and delivered direct to the OR, or the fact that use of and preference for these items, such as implants, can rapidly change. By establishing a more disciplined process around the ordering of med surg supplies, hospitals can reduce the number of off-contract purchases subsequently reducing their overall costs.

Simply adding, tracking and coding these items correctly, not manually, can result in fewer reimbursement challenges in the process.

A best practice solution for supply chain-revenue cycle linkage should establish a defensible price equation to your chargemaster, you don’t have to worry about changes in supply acquisition costs impacting your margins. For one 800-bed hospital that used the linkage to test mark-up structures, the right combination was at 75th percentile in the market, resulting in a $13 million increase in net reimbursement.

There are several myths still commonplace in this process including lack of control over physician preference items. Physicians today are likely more open than ever to conversations about PPI due to scrutiny over medical device payments and concern regarding their hospital’s viability. Supplies changing infrequently are a myth since new and improved devices are constantly being introduced and prices constantly fluctuate. Not being able to control margins and reimbursements is finally being addressed in many facilities with best practice technology. Even when faced with fixed reimbursement, you can use your knowledge to lower your supply costs through better negotiations, or through better coding based on new utilization information and coding.

While materials managers are inundated with supplies, contracts, and contract negotiations, the revenue cycle team is challenged with reimbursement compliance, managed contracts and CMS guidelines. Through technology, you can get these employees out of their silos and focused on the bigger picture. Materials managers will have to devote time to this project, but as supply costs are often the moving target, it’s beneficial in the long-run. Sharing their reimbursement and managed care knowledge, revenue cycle counterparts can help match high expense supplies with the compliant coding that is needed for appropriate reimbursement.

It’s also important to get clinical staff involved, especially those in high supply utilization departments such as the OR, Cath Lab or Interventional Radiology or those who order specialty items.

With a tough economic forecast, now is the time to closely scrutinize operations and identify efficiencies and cost savings. Whether you choose proven technology or a in-house solution, linking the supply chain and revenue cycle operations of your hospital is just one of many ways to help your organization weather this storm.

Lee Brooks is senior director, product management for MedAssets and has extensive experience working with the company’s supply chain – revenue cycle linkage solution, Crosswalk.