Revenue integrity depends on data accuracy, CDM-IM connectivity

Jan. 21, 2022

Like any decent recipe where the slightest ingredient deviation in amount/measurement or type can change the taste of the end product, so goes the accuracy and integrity of an organization’s revenue stream with the inclusion of erroneous or missing data.

The oft-quoted refrain since the 1980s about automating “bad” data just means you’re transmitting bad data faster still applies. Even now, four decades after those initial concerns were raised, serious fundamental questions about progress linger. Some 40 years ago, the internet was not widely accessible to the general public or industry at large, but it has developed into a ubiquitous part of everyday life now. Further, healthcare organizations are pursuing artificial intelligence, blockchain and robotic process automation (RPI) and other seemingly progressive solutions.

Whether we’ve learned anything from the advancement of technology outpacing the fundamental accuracy and integrity of the data themselves remains questionable – particularly involving the circumstances if the pursuit of basics fails to catch up.

From a supply chain perspective, revenue integrity has little to do with coding and instead hinges in part on collecting accurate data within financial and operational information systems based on what’s in the item master (IM) as well as the charge data master (CDM). To some degree, how those two databases are linked or synchronized can make a difference, too. Yet not all healthcare organizations connect their IMs and CDMs, forging a necessary conduit between the expense and revenue sides of the balance sheet.

While industry experts and observers acknowledge that uniting these two databases can be integral to revenue integrity, they also concur that it’s not as simple as flipping a switch or plugging in a software widget, which is why the notion faces resistance.

Data unplugged

Unfortunately, the connection complexity tends to center less on technology and more on the fundamentals.

The top three concerns about synchronizing the CDM with the IM, whether on separate or shared databases, that causes healthcare organizations to hesitate, postpone or reject implementation are unknown and unmanaged data sets, a lack of common identifiers and a lack of visibility, according to, Senior Vice President, Global Product Management, Global Healthcare Exchange (GHX).

“When merging the item master and chargemaster, it’s important to note that these systems may not be in the best state,” he lamented. “If either system is drawing from ‘dirty’ data, it can create unknown or unmatched data sets, resulting in errors that can be proliferated across multiple systems. This can become a particularly complex challenge when it comes to the item master. Because it supports so many internal processes, introducing bad data and spreading the wrong information can be extremely costly and time-consuming to fix.”

Data standards can play a role, too.

“If the item master and chargemaster are not well managed, enriched with data from outside sources like supplier catalogs or the GUDID [Global Unique Device Identification Database] or fail to use common product identifiers, such as GTINs [Global Trade Item Number], aligning item data to help ensure revenue integrity is nearly impossible,” he indicated.

Luoma adds that revenue integrity sometimes can be a “hidden” problem.

“Organizations may adopt an ‘if it’s not broken, don’t fix it’ mentality or even mask the issue by conducting item research after an issue has been discovered. One common scenario is failing to catalog supplies in the clinical documentation system and only discovering this during an audit when it is too late to capture the potential revenue,” he said.

Any gap in item data, inconsistencies in the data or the lack of connectivity between operational systems like the enterprise resource planning system (ERP) and clinical systems like the electronic health record (EHR) will result inaccurate costing and lost revenue, emphasizes Marlin Doner, Vice President, Data Analytics, Marketing & Product Strategy, Prodigo Solutions Inc.

Doner points to data completeness, accuracy and maintenance as three obstacles to linking/synchronizing IM and CDM datasets. 

He starts with product identification. “The lack of adoption of data standards like Unique Device Identifiers makes it difficult to map item records across disparate data sets and presents challenges for clinicians documenting the use of supplies in the procedure,” he noted. “Common item identifiers are the first step to enable data interoperability between disparate data across financial [ERP], clinical [EHR] and revenue cycle [CDM] systems so that health systems can improve the capture of supply costs.”

Product categorization is next. “Ensuring items are classified to a granular level, such as commodity-level UNSPSC [United Nations Standard Products and Services Code], provides the detail needed to accurately assign expense codes,” Doner continued. “The industry has largely standardized on UNSPSC as a global classification standard for items, which is a good thing. Product categorization ensures an item is mapped to the correct expense coding in the ERP Item Master which can then be used as a data point to inform decisions about how an item is consumed and costed into a procedural case.”

Procedural coding also matters. “The HCPCS [Healthcare Common Procedure Coding System] procedural code is the final link between the item, its cost and the revenue reimbursed for the patient care event,” he said. “All items in the item master that are used in a surgical procedure must have a charge code and revenue code assigned so that the correct reimbursement can be realized from the delivery of service to the patient.”

Still, John Freund, CEO, Jump Technologies, wonders whether healthcare organizations understand the nuances behind these connections and their inherent value.

The concept of linking the ERP item master to the CDM is novel in its thought, but extremely difficult to do,” he noted. “ERP item masters are designed for purchasing. CDMs are designed for charging. Although there is a tremendous amount of information that can be shared between them, the item master is set up by purchasing staff, while rev cycle staff builds items in the CDM. Rarely is there a situation where an item can be completely built in the CDM from data that exists in the item master. There will always be some sort of touch required by rev cycle to complete an item in the CDM such that it can be charged for properly.

Such tracking remains a necessary feat, he argues.

“It is important that a hospital has automated technology in place that is monitoring materials being consumed in cases and checking the data integrity to ensure that items consumed can be billed for properly and reimbursed quickly, without challenge from the payer,” he said. “The typical hospital has data issues impacting 30% or more of the charges in a case. Having a system in place that can identify these issues in real-time can lead to improved cash flow for hospitals.”

Scrubbed or redubbed?

With lingering concerns of merely speeding the transmission of “bad” data through linked IMs and CDMs, it seems logical that cleaning data should take precedence if not attract a higher priority. But then the question arises as to whether the potential revenue integrity results using clean data far outweigh the expense of continually cleaning the data in the IM and CDM ahead of time.

“On average, our experience shows item data churns approximately 28% annually,” GHX’s Luoma said. “With so much churn, it’s important for organizations to continuously cleanse, validate and unify item master and chargemaster data at scale.

“Ongoing management of the item master and chargemaster is critical in reducing risk to patient safety, improving patient outcomes, decreasing supply expenses and clinically integrating the supply chain,” he continued. “Organizations may view revenue integrity projects as simply closing existing holes, but this is short-sighted. A lack of proper data management will only reintroduce problems down the road. Forward-looking organizations are embracing the creation of a solid data foundation as a crucial part of cost optimization and care improvement initiatives.

Prodigo Solutions’ Doner sums up the situation from a supply chain perspective in that revenue integrity comprises two components that are dependent on the quality of data in the IM and CDM datasets:

1. Complete capture of supplies used in a surgical procedure.

2. Accurate reimbursement for the patient supplies and services rendered.

“Incomplete documentation translates to lost revenue,” he insisted. “As much as 30% of charges are not being captured because clinicians cannot easily [efficiently] identify and document supplies that are consumed during the delivery of care. Typically, this is the result of missing Device Identifiers or Universal Product Codes (UPC) on the item record, which represent the bar code(s) on the package. The ability to scan a bar code on a package should be your first test of data integrity in your supply chain and clinical ecosystem.

“Inaccurate expense and charge coding translate to lost revenue, too,” he continued. “If items and services used in the patient care event are not accurately coded the reimbursements can be underreported. Additionally, cost conversions from the contract or purchase unit price to the unit of use costing must be accurate for the true cost of the procedure is be known.” 

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