A hospital’s charge description master (CDM), or chargemaster, is often referred to as the “heart” of the healthcare revenue cycle. It includes codes for every procedure, material used, medication, and service that a healthcare organization provides its patients. It is the structure that drives the hospital, and is the starting point for billing patients and insurers and complying with public reporting. A typical health care system chargemaster may contain 15,000 to 25,000 entries, according to Becker’s Hospital Review.

Neglecting your chargemaster can lead to inaccurate billing, regulatory risks, claim issues with payers, and low patient satisfaction scores, all of which affect your healthcare organization’s revenue. Your hospital can’t afford to overlook this essential piece of its operations. Ongoing evaluation of your chargemaster with an eye toward increased calls for pricing transparency in the healthcare industry is the key to maintaining a chargemaster that will serve your organization, as well as its payers and patients.

Ongoing maintenance

With so many diverse components in a chargemaster, it can be extremely difficult to set up correctly. Failing to update any of the components can result in negative outcomes for your healthcare organization. Often, when hospitals add new items to their chargemaster, they simply copy existing charges. However, this can be problematic because the new charges may not have the same requirements (e.g. CPT codes, modifiers, revenue code, or pricing) as the item being copied. Care should be taken to make sure the new charges are set up correctly.

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Author: Pam Gallagher

Pamela J. Gallagher is a change agent who deploys the right processes, people, and technology to optimize financial performance for health care operations. With a 20+ year successful record of instilling financial discipline, streamlining processes to maximize revenue, and reduce expense for immediate improvements and long-term results, Pamela knows how to balance the reality of finance with the delivery of excellent patient care. She is a decisive leader who works with people to blend art-of-the-possible and get-the-job-done mentality to produce sustainable change in fast-paced, time-sensitive environments.