"I have had the privilege of working with HMI for twenty plus years and have always found their representatives to be professional and knowledgeable in all aspects of acute hospital and professional service charge master management. Additionally ongoing coding related reviews and billing reviews and associated report backs are timely and positively impact appropriate revenue capture - billing - and compliance." "I recommend HMI to be considered when choosing a partner to assist with the...
Greg Yost, PFS Director Princeton Community Hospital, Princeton WV
We have utilized HMI Corp. since 2002 for consultation services related to chargemaster review and updates and have always found their services to be professional of nature and valuable to our organization.
David Alley, CFO Athens Regional Medical Center, Athens TN
We recently transitioned to HMI from another Physician Documentation & Coding Compliance Review vendor, and the entire experience has been positive. HMI has been extremely accommodating throughout the process and has demonstrated a willingness to adapt to our workflows, leading to a seamless transition. We’ve received positive feedback from our providers about their experiences with HMI, and the Coding Hotline has been an invaluable resource. For anyone looking for a new consulting partner,...
Dawn Chrismer, RHIT, CHC, CCS-P Director of Business Services/Compliance Officer Heritage Medical Associates, Nashville, TN
HMI has been a very reliable resource for Princeton Community Hospital for many, many years. I have had the opportunity to work with many staff members and have found all to be reliable and courteous in every aspect. The staff is very flexible and provides Princeton Community with the support and coding stability needed. Thank you for the sometime short notices for coding coverage when unexpected situations arise with our staff. We thank you for your coding expertise as well as your...
Denise Moore, CCS Coding Manager Princeton Community Hospital
I’ve worked with HMI employing them to conduct audits of physician documentation and coding. They have consistently produced quality work in a very timely fashion with reports that were well written and easy to understand. Communication has always been prompt and effective. I have such confidence in their work that, over the years, I brought them from my prior location to my current location. I would recommend HMI to anyone in need of accurate and timely coding or auditing.
Robert C. Kay, RRT, MBA, MJ, CHC, CPC-A Chief Compliance Officer St. Christopher\'s Hospital for Children
“I have had the privilege of working with HMI over the past 10+ years with two different health systems. I have used HMI for hospital CDM and compliance reviews as well as physician coding reviews and education. I always receive top-notch service from the HMI team and I appreciate working with a partner that is always honest and responsive to my questions and needs. I have worked with Mary Quimby and Vickie Faler and both have proven to be very knowledgeable, accessible, and...
Rodney Adams, MMCH, Associate Administrator of Finance Williamson Medical Center
HMI has been a great partner with MedStar Washington Hospital Center now for many years. We can always count on them to provide us with support on small to very large projects. HMI delivers consistent and honest results and additionally provides very thoughtful & targeted education to our physicians.
Purvi Jani AVP Reporting and Revenue Cycle MedStar Washington Hospital Center
Having worked in healthcare revenue cycle for more than three decades, I have partnered with many vendors. My vendor of choice for CDM Review, E/M Coding Compliance and Physician Education is without a doubt HMI, LLC. Mary Quimby and Vickie Faler are not only subject matter experts, they are true partners providing that extra level of service that sets them far above others in the industry. I have worked with them for 15+ years in 5 different acute facilities, and multi-specialty physician...
MaryAnn Hastings, CPMA, Director Revenue Cycle Operations, Galen Medical Group
We have been working with HMI since 2010 and have expanded the use of their services to include CDM and ED Coding. The HMI coding staff is extremely knowledgeable and has become an integral part of our coding team. Our consultant Beth never shies away from any CDM project that comes her way. We appreciate the professionalism and teamwork we have with HMI.
Janet Willis, Director of Revenue Management, Monadnock Community Hospital
We have utilized HMI’s for chargemaster compliance and billing reviews for nearly 10-years. We have always found that their staff to be knowledgeable, resourceful and professional in all services provided to our organization.
Jessica Mayfield, Manager Revenue Management University of Missouri Health Care
What Role Does a Hospital Chargemaster Play in Revenue Cycle Management?
Hospital Chargemaster in Revenue Cycle Management
The hospital charge description master, or hospital chargemaster, communicates medical bills to payers and patients.
The hospital chargemaster plays a crucial role in revenue cycle management: it’s the heart of the healthcare revenue cycle. It’s the central point from which all billing gets sent to patients and insurers.
Organizations that fail to maintain the chargemaster face enormous problems. Poor chargemaster maintenance leads to revenue leakage. It can also lead to inaccuracies, non-competitive fees, and claim rejections.
What is the Chargemaster?
The hospital chargemaster is a list of all the billable services and items to a patient or patient’s health insurance provider.
The chargemaster lists the costs of each product and service offered by the healthcare organization, including any procedures, services, supplies, prescription drugs, and diagnostic tests provided by the hospital. The chargemaster lists the cost of everything related to that service, including any equipment fees and room charges.
When a patient receives service from a hospital, the healthcare provider documents the encounter in the medical record. Then hospital staff – like professional coders – assign the service a code for reporting and claim submission.
The codes are sent to the chargemaster. Each code is matched with a specific product or service and a fixed rate. Then, the charges are billed to the patient, creating a claim for payers – like insurance companies – to pay.
What’s Included in the Chargemaster?
Hospitals use chargemasters to keep track of the cost of all products and services offered by the organization.
Each product or service offered by the hospital – like a diagnostic test or specific surgery – gets its own entry in the chargemaster.
Each chargemaster entry includes the following:
Item Number: This number is assigned by the facility and is unique to that product or service.
CPT or HCPCS Codes: Current Procedural Terminology (CPT) codes or Healthcare Common Procedure Coding System (HCPCS) codes help keep track of each product or service in a standardized way.
Item Description: Each entry has a brief text description of the product or service.
Revenue Code: A unique code based on the revenue of that item.
Charge Amount: The fee assigned to the item.
Alternative CPT or HCPCS Codes: Sometimes, codes overlap. Or, some insurers may require additional codes.
Numeric Designation for Department: A unique code describing the department where the product or service took place.
Ledger Number: A general number for organization accounting purposes.
A hospital may offer thousands of products or services. There’s a chargemaster entry for each one.
Patients Rarely Pay the Chargemaster Rate
Healthcare transparency battles raged throughout 2019. In response, some organizations are making chargemasters more transparent.
However, it’s easy for patients to get confused about chargemaster prices. The prices displayed on the chargemaster are rarely the prices paid by customers.
In fact, most patients do not see the chargemaster price from their hospital visit unless they are uninsured and must actually pay the chargemaster rate.
Why are chargemaster rates so different from real prices? It’s because of markups.
Chargemaster services are heavily marked up to make negotiations with insurance companies easier. One recent study found that the average hospital in the United States had a charge-to-cost ratio of 4.32, which means the hospital charged $432 when the service really only cost $100.
Maintaining marked up chargemaster prices also makes it difficult for patients to compare prices between organizations.
Hospitals defend this practice, claiming that markups help hospitals stay open and competitive. However, there’s been a push for transparency in recent years, and hospitals have started changing how they treat the chargemaster.
Why is Inadequate Chargemaster Maintenance a Problem?
Inadequate chargemaster maintenance is a serious issue. Even the best healthcare organizations experience chargemaster-related issues, and these issues lead to lost revenue.
Accurate chargemaster maintenance is crucial for revenue integrity. A lack of maintenance leads to revenue leakage.
Poor chargemaster maintenance can lead to overpayments or underpayments. It can also lead to claim rejections from insurance companies, poor patient experience, or compliance violations.
Many organizations are surprised to discover they have been significantly undercharging or overcharging for specific treatments because of poor chargemaster maintenance. A chargemaster audit can reveal surprising results.
Tips for Maintaining Accurate Chargemasters
Hospital chargemaster maintenance is crucial to revenue cycle management. Here are some tips to help your organization manage.
First, the American Academy of Professional Coders (AAPC) recommends maintaining chargemaster lists by following the three C’s: correct, complete, and compliant codes.
Correct Codes: Chargemaster coordinators should check that the correct codes are billed. There may be differences between what is captured in the order entry system or EHR and what is reported on the chargemaster. Someone may assign an unlisted HCPCS code when a specific code is available, for example, or the entry may be missing HCPCS codes for separately paid drugs.
Complete: Chargemaster code sets need to be complete. Hospitals need to capture the charges for all the services and items provided to patients. Failure to maintain complete code sets can lead to missed payments and revenue leakage.
Compliant: Chargemasters must also be complaint with coding standards and federal, state, and commercial payer rules. Failing to adhere to regulations can lead to significant issues, including repayments to payers, healthcare fraud, and healthcare abuse.
Ultimately, all of these issues can be solved with frequent chargemaster code reviews. Check your chargemaster code to ensure it’s correct, complete, and compliant to ensure good revenue cycle management.