May 2010 - Up Close

INSIDE THE CURRENT ISSUE	May 2010
Up Close
Charged up about product coding Experts offer mixed reviews about coding hopes, reality by Rick Dana Barlow As part of Healthcare Purchasing News’ April 2010 coverage of supply chain managers working with revenue cycle managers to link and sync the item master with the chargemaster, we probed deeper to determine whether individual coding should be unified. Here’s how sources responded. HPN: Should every single supply item have a charge code in a facility’s system and why? Michael Whitacre, business solutions consultant, Craneware Inc. There is universal agreement that all codable supplies should have charge codes. But there are two schools of thought on the chargeable supplies that aren’t codable. I happen to agree with the school that says yes, absolutely line up all your chargeable supplies with charge codes. Although many of those supplies are bundled within DRGs, their costs still form the basis of what you will be reimbursed for those DRGs in the future. If you don’t have a handle on what’s happening, you’ll be in no position to appeal for higher reimbursement as the costs of chargeable supplies rise. Scott Gardner, product manager, compliance technologies, MedAssets, Inc. MedAssets works with hospitals and health systems that have a wide range of policies. What is more important is that the hospital has a transparent and consistent approach to how they charge for supplies and be able to defend that methodology. Whether a customer chooses to bundle supplies with procedures or detail a charge code for each and every supply item, the customer should have a stated policy to help them maximize their revenue integrity. Michael Rudomin, principal, HealthCare Solutions Bureau LLC If the hospital is still charging for supplies individually, every unique supply item should have a charge code unless the hospital has decided to charge by category; e.g. a single charge for any Foley catheter used, regardless of size vs. the exact charge for any specific Foley catheter used. In addition, as there may be opportunities with some payors for ‘carve outs’ and payment for expensive supplies, there needs to be an appropriate charge code in place to capture such revenue. Mary Beth Lang, Amerinet’s senior vice president of business intelligence and president, Diagnostix This is not considered best practice in today’s world. Most low-cost commodity widgets are not reimbursable, or could be factored into the cost of the procedure, visit or admission. Only those products that create a significant cost, or those that have additional reimbursement attached to them need to have a charge code. Should each charge code correspond to an item master number and why? Todd Tabel, vice president and general manager, ERP Solutions, McKesson Corp. Yes, having these numbers correspond will minimize confusion on chargeable items as nomenclature will be the same in both your materials management system as well as in the revenue cycle system as well as the charge number for an item will be the same regardless of where it is used in the organization. This should help maximize charge capture and revenue recognition as it will eliminate a point of failure between the systems, in addition the synchronization should allow organizations to adjust patient prices for items more often keeping revenue in line with costs. On the downside many CDM numbers include department information which allows for department recognition of revenue, with a single charge code across the organization department recognition must be done from the charge message which will contain the information. This can represent an IT cost for updating interfaces sending/receiving this information. Gardner: Whether many different items are charged under a particular charge code or each item has its own charge code, it is very important that the customer link their item master numbers to its corresponding charge. Without that link, it is very difficult for a hospital to have visibility into their charging practices for their items and to apply it in a consistent, defensible manner. This is especially true concerning miscellaneous codes and charges priced at time-of-use. The hospital is running the risk that an item may not be charged out with the correct price or the correct coding. Rudomin: I believe it should, as this is one way to ensure the charge is always based upon the most current item pricing. Lang: Yes, for those items which are reimbursable, each item should be specific to the item master. This is very workable when the number of chargeable items is limited to those above a certain dollar threshold, or other limiting criteria. Pros for this method include the greater likelihood that the item will be paid by the insurance. Does every single supply item have a charge code in your system and why? Becky Daniel, regional director supply chain, Texas Health Resources, Arlington, TX No, no charge code is needed if [the product is] not chargeable. Terry Murphy, director, supply chain management, Lee Memorial Health System, Fort Myers, FL No. Our designation of a chargeable item is any single patient use item with a cost of $8 and up. Deborah Petretich Templeton R.Ph., MHA, vice president, supply chain services, Geisinger Health System, Danville, PA No. Currently we have a dollar threshold – unit’s cost is less than $10 – that is applied to ‘qualify’ items for chargeable status. These items are included in procedures fees and not charged separately. There are few exceptions to this threshold guideline. Robert S. Adkins, MS, MBA, CMRP, assistant director, supply chain, support services, Texas Children’s Hospital, Houston Only separately billable patient supply items receive charge codes. Billable and non billable supply items are expensed to the using departments. John Mateka, FAHRMM, executive director, supply chain operations, Greenville (SC) Health System Unfortunately, every single supply item does not have its own unique item charge code. This makes it very difficult when trying to classify items in like families as we do today at GHS.