Whether using data management tools, data scrubbing firms or partnering with group purchasing organizations and suppliers for assistance, supply chain management departments are renewing efforts to fortify their item masters as a growing number of hospitals are linking them to chargemasters on the revenue side of operations. These linkages only magnify any errors within the item master as they would affect the facility’s income from reimbursement.

So for some, the item master may be just a database, but for others, it’s sacrosanct, a piece of technology so valuable to the bottom and top lines that it can’t be managed on autopilot or even cruise control.

Here’s what some are doing and have accomplished.

Terry Murphy

"Several years ago we made the decision that the chargemaster needed to be updated through a single source and that was from our purchasing item master," said Terry Murphy, director, supply chain management, Lee Memorial Health System, Fort Myers, FL. "This change also involved implementing a nightly interface to the chargemaster from the purchasing database. We also implemented a one-source data updating process by creating a central file maintenance department. This department is the only authorized area where the item file can be updated. This change controlled information entry to a limited group of individuals who worked directly with the contracting arm for all pricing changes.

"The chargemaster interface was a significant change as previously the item master was being updated annually based on the annual Consumer Price Index percentage for medical supplies and adjusted the same for all items in the database. Our current process allows for real-time adjustments to the chargemaster based on actual pricing. This change adjusted our patient charges to uniformly reflect true cost plus mark-up in real time. However, reimbursement is not based on actual charges in a heavy Medicare environment."

Deborah Petretich Templeton

Deborah Petretich Templeton, R.Ph., vice president, supply chain services, Geisinger Health System, Danville, PA, ventured down a slightly different path.

"We utilize a third party data analytics tool that not only helps to keep our item master up-to-date, but allows us to use this information to maintain contract and price accuracy," she said. "We are using the item master information to feed our operating room clinical system. By providing a daily feed to the OR system, it allows the OR to [maintain updated] supply information in the clinical system. Chargemaster is then linked to the item information within the clinical data system.

"This automated maintenance has saved man-hours by streamlining the communication of information between the OR billing and clinical areas. Patient billing information can be processed in a more timely and accurate manner. With the introduction of data standards, we see this process becoming more valuable, and in the future will allow item information to be accurately pulled directly into the patient medical record in areas beyond the OR. Also, this information has allowed us to create utilization scorecards that are used by clinical use evaluation teams to enhance product standardization efforts."

John Mateka

For John Mateka, FAHRMM, executive director, supply chain operations, Greenville (SC) Health System, an external system does the trick.

"We recently deployed GHX’s Nuvia tool that essentially cleanses our item master daily," he said. "It also provides exceptional reporting capabilities. This has helped us in our interface with the revenue cycle Crosswalk product – providing accurate data, opportunities for charging and identifying potential errors and mischarges."

Obtaining supplier buy-in and cooperation from the start makes a significant difference, according to Mike Brown, director of materials management, University Hospital, Augusta, GA.

Mike Brown

"We have found it very helpful to have vendors submit key information in advance, before a new item is actually used up on the floor," Brown noted. "In the area of implants, for example, we have developed a system that runs in sync with our material system. Whenever a vendor is introducing a whole new implant system they need to give us the entire item file in electronic format, so we can load it electronically into our synchronized system. Then our purchases are compared to that system to see if the product code has been submitted and that the price has been established. That avoids problems and delays down the road. This process can only work effectively if there are electronic interfaces to help manage the sheer volume of data that is prevalent in the healthcare environment. Most MMIS systems are pretty structured so I have found it helpful to have a flexible and easy to manage system interfaced with the MMIS system to assist with managing the data. "We’re fairly automated here, so in general, we don’t miss too many supplies," he continued. "On those occasions when something is missed, however, it is so important to have strong relationships with all of our ancillary areas, so you can quickly resolve any issues. That extends to vendors, as well. They have a direct stake in providing all the information we need to process claims promptly. Any delay there also delays payment to them. That’s a self-regulating thing, and it discourages vendors from trying to bypass our established purchasing procedures."

John Gaida

John Gaida, vice president, supply chain,
Texas Health Resources, Arlington, TX, cites
as a cost avoidance for a clean item master "the cost of people time when it comes time to reviewing what you are currently charging.