THE VOICE
August 2002


Inside:
* Customized Patient Bills Can Improve Customer Service
* The Chargemaster - An Essential Component of Reimbursement and Compliance
* Annual Institute Agenda


Dear Friends,
This is my final president's message for the WMCA Voice and the only good
thing about that is that I don't have to worry about the print deadlines
anymore. I will miss sharing my thoughts and ideas in this format, but
perhaps will engage in writing an article now and then.

It's been a great year as the association's president. I've enjoyed the
experience, the learning process and especially the chance to meet new
friends. I worked hard this past year at trying to raise the awareness of
WMCA to other organizations and associations. My goal was to have WMCA
become more involved on issues beyond the normal scope of patient accounts
and have WMCA recognized as a contributor on issues affecting our
professional lives. I've developed an interactive relationship with the
Wisconsin Health and Hospital Association, which I plan to maintain. I will
continue to bring legislative issues to WMCA and will continue to
promote the positions and issues that benefit the health care industry.

In looking back over my term, I am proud of the work we did as an
association. I believe our quarterly meetings and workshops were
educational, interesting and enjoyable. The attendance at most meetings was
exceptional and I am so happy to have had a membership as involved as you
were. I am looking forward to doing more in the future with the provider
and associate members of WMCA.

In closing, I want to extend a heartfelt thanks to all of the members of
this fine organization. Additionally, I am truly appreciative of the
support I have received from the WMCA Board of Directors. Without the
guidance, assistance and friendship of this group the experience would not
have been as wonderful as it was.

One last thing, I have to put a plug in for the upcoming 40th Annual
Institute that will be at the beautiful Stone Harbor Resort & Conference
Center. This Door County resort is an outstanding facility and the program
we have planned is one you won't want to miss. We have also gathered
together several of the WMCA past presidents who plan to attend to help
celebrate the 40th Anniversary of WMCA. I hope you can all attend and I
look forward to seeing you in August.

With Warm Regards,
Jennifer....

 


The Chargemaster - An Essential Component of
Reimbursement and Compliance
By Pat Boyer, Manager & John Russell, CPA, Manager


The chargemaster has one of the most important functions in a hospital.
But, quite often, a chargemaster is one of the last items on which
departmental managers and business office staff focus because it is
extremely detailed and time-consuming to maintain.  Because the
chargemaster is responsible for 100 percent of the gross revenue of a
facility, all departments throughout the hospital need to be aware of its
impact on the financial status of the hospital.

One of the critical issues often overlooked when changes are made to the
chargemaster is the importance of proper revenue and expense matching for
the Medicare Cost Report.  It is extremely important to match the revenue
and expense of providing a service with the same cost center used to bill
Medicare.  Only one or two staff members should have the ability to update
or make changes to the chargemaster.  These individuals should be well
informed of the impact these changes can have on the hospital's
reimbursement.

Cleaning-up an inaccurate chargemaster or keeping the chargemaster updated
can be an overwhelming task.  A number of issues have compounded this task
for many facilities.  The following steps will simplify the clean up or
maintenance of facility's chargemaster.

  • Delete or Inactivate Unused Charges-On an annual basis, staff should
    review all charge items not used during the last 12 months.  By eliminating
    these unused charge items from the chargemaster, it shortens the process of
    evaluating the chargemaster in future periods.
    It also eliminates potential errors in using a charge item that was not
    properly updated.  As applicable, the narratives on the chargemaster should
    be as close as possible to the actual narrative listed in the CPT  (Current
    Procedural Terminology) book.  A procedure needs to be agreed upon so the
    chargemaster is updated on a timely basis with all CPT code changes or
    deletions.  Changes should be based on historical revenue and usage.  All
    charge sheets used by each department will also need to be updated to
    reflect any chargemaster and CPT changes.
  • Consider Not Billing for Low Dollar Items-Each facility should establish
    a dollar threshold for the pricing of items for the chargemaster.  This is
    especially important for the Central Services and Pharmacy departments.
    The threshold amount may vary slightly by department.  Because of the
    administrative costs to prepare and submit a claim, it may not be feasible
    or cost effective to bill for small dollar items.  The item(s) identified
    as being lower than the threshold amount, can become floor stock.  Common
    examples would be Tylenol and Band-Aids.  The revenue associated with these
    items can be modeled into the room and board, procedure charge or other
    charges within the department so the revenue from these items is not lost
    for full charge or percent-of-charge payers.
  • Make Chargemaster Maintenance the Responsibility of the Department
    Heads-In many facilities the responsibility for maintaining the
    chargemaster has been assigned to the CFO or someone in the business
    office.  Often this staff person does not have the clinical background to
    know what procedures are being performed in each department.  This applies
    to the definitions and technical terms used in the CPT updates and other
    technical publications.

It should be the responsibility of the department head to annually review
the charges in his/her section of the chargemaster to ensure the charge
description matches the CPT code assigned.  In addition, the CPT code
manual and other technical publications contain a "Summary of Additions,
Deletions and Revisions" that can be reviewed for changes in each
department's codes.

Department heads should receive copies of all third party payer newsletters
and educational correspondence.  A specific staff person should be
responsible for making copies of the documents and distributing them to all
department heads and appropriate administrative staff.  The originals of
these documents can be centrally filed for easy reference at a later date.
The review of the newsletters and educational correspondence should be a
permanent agenda item at every department meeting.
A tracking process can also be established to ensure required changes are
assigned and completed.  In addition, each department head whose area is in
some manner reimbursed by CPT (and HCPCS) should receive a current CPT book
(and HCPCS book if appropriate).

Other problem areas commonly found in a facility's chargemaster include:

  • Billing for Equipment-Medicare's regulations prevents the separate
    billing of equipment.  Equipment is considered to be part of the room and
    board, procedure charge or other departmental charges.  Reusable equipment,
    such as sterile instrument trays, scopes, infusion pumps and monitoring
    devices, should not be billed.  The cost of equipment is being depreciated
    and should be included as part of overhead capital costs.  The room or
    procedure charges may need to be re-evaluated to make-up for the lost
    equipment revenue.
  • Billing for Routine Supplies-Routine supplies should not be billed
    separately and should be included in the room and board or procedure charge
    facility charge.  Common examples of routine supplies include Attends,
    Chux, drapes, gloves, etc.  The room or procedure charges may need to be
    re-evaluated to makeup for the lost routine supply revenue.  To assure
    reimbursement does not decrease because of this process, the hospital
    should make certain that all changes are revenue neutral.
  • Billing of Outpatient Procedures in Multiple Areas of the Facility-It is
    common for services such as blood administration, IV therapy and
    chemotherapy administration, as well as injections and minor procedures, to
    be performed in multiple areas of a facility.  Often these services are
    being performed in the emergency room, medical/surgical unit and possibly,
    an outpatient procedure room in the same facility.  These procedures
    performed in multiple areas of the facility often cause revenue and expense
    mismatches on the Medicare Cost Report.  It is important to have the
    charges set-up in each section of the chargemaster where services are being
    performed with a different UB-92 Revenue Code in each sections.  This will
    assist in the proper revenue and expense matching as well as the
    appropriate match with the related Medicare charges on the Provider Summary
    Report (year-end summary of charges from your Medicare intermediary).
  • ER Level System-Under Medicare's APC system, each hospital is allowed
    (and required) to develop its own protocols for grouping patients into one
    of five ER levels.  These levels should be developed based on resource
    utilization (i.e., staffing time and supplies).  The facility's system for
    determining the ER levels should result in a reasonable representation of
    the resources utilized for that particular patient.  It is also important
    to remember the facility's ER charge level chosen for a particular patient
    will not always match the CPT code reported by the physician for evaluation
    and management services.  The codes reported by the physician are dependent
    on the documentation of the three evaluation and management key components,
    while the codes (or levels) reported by the hospital are more dependent on
    resource utilization.  The final APC regulations regarding ER services
    state that Medicare does not expect a "high correlation" between the code
    used by the physician and the code used by the hospital.  We recommend that
    Critical Access Hospitals follow the same guidelines as APC reimbursed
    facilities and establish ER charge levels.  In addition, the facility
    should have a critical care charge in place.
  • Proper Use of Revenue Codes Related to Supplies-All non-sterile supplies
    should be billed with revenue code 271 and sterile surgical supplies should
    be billed with revenue code 272.  Take-home supplies should be billed under
    revenue code 273, and prosthetics and orthotics should be billed with
    revenue code 274.  Revenue code 275 should be billed for pacemakers, and
    IOLs should be billed with revenue code 276.  Implantable devices that are
    on Medicare's list of pass-through devices (typically with "C"HCPCS codes)
    should be billed with revenue code 278.  Often facilities incorrectly bill
    for durable medical equipment (DME) with a 27X revenue code.  DME items,
    such as crutches and walkers, should not be billed with revenue code 27X.
    The proper revenue codes are 291 or 292 with an appropriate HCPCS code.  A
    UB-92 claim form is not used for the billing of DME.  DME has specialized
    billing requirements including a physician's prescription and Certificate
    of Medical Necessity and must be billed on a HCFA1500 claim form with a
    special supplier number.  Due to the complexity of billing DME items, often
    it is easier for facilities to contract with a local DME provider and to
    make sure the items are not billed to the patient.
  • Pharmacy Issues-There are many issues in the pharmacy section of the
    chargemaster that require attention.  One is to make sure revenue code 636
    is used to report outpatient drugs that require detailed coding.  In
    addition, Medicare's APC system also makes separate payment for many
    injectable "J" and "C" HCPCS codes.  To receive proper reimbursement, the
    dosage for pharmacy items with a HCPCS code must correspond with the HCPCS
    description.  These charges should be billed with revenue code 250 on
    inpatient claims.  In addition, because of Medicare regulations regarding
    self-administered drugs, all outpatient pharmacy should be carefully
    monitored for billing purposes.  Medicare will pay for drugs furnished to
    outpatients for therapeutic purposes only if they are of a type that cannot
    be self-administered.  Generally, they are limited to those administered by
    injection.  If an injection is normally self-administered, such as insulin,
    the drug is not paid unless administered in an emergency situation.
    Self-administered drugs are billable to the patient without issuing a
    notice of non-coverage.  However, to maintain a positive public image, we
    do recommend that the facility inform the patient that the charges for the
    self-administered drugs will be the patient's responsibility.

 


We recommend a facility have a chargemaster review performed every two to
three years.  When seeking outside assistance for a chargemaster review, we
recommend you consider the vendor's understanding of the vital link between
the chargemaster and the cost report.  In addition, it is particularly
important for critical access facilities to have a chargemaster review
performed prior to change in status or shortly thereafter.  Having an
accurate chargemaster is an important part of a facility receiving the
proper reimbursement for the services performed.  But, more importantly it
is a vital part of each facility's compliance program.  Make your
facility's chargemaster a priority.


Pat Boyer is a health care manager specializing in providing analysis and
support services for clients. Pat can be reached through e-mail at
pboyer@eidebailly.com or in our Fargo office at 701.239.8663.


John Russell, CPA, is a health care manager specializing in providing
chargemaster, audit and reimbursement services to clients. John can be
reached through e-mail at jrussell@eidebailly.com or in our Minneapolis
office at 952.944.6166.

Reprinted with permission from Eide Bailly "The Medical Moniter"


 

If You Must Criticize Someone

Here are some suggestions for giving criticism in a way that motivates
others to do a better job:

Tip:  Be sure you can take criticism yourself.  If not, you may not be
perceived as a credible source.

Source: How to Love the Job You Hate, by Jane Boucher, Thomas Nelson
Publishers, P.O. Box 141000, Nashville, TN 37214.

 

 


Understanding the Boss Better

If you and your boss are having communication problems, try to uncover what
motivates him or her.  How:  Act on the answers to these questions:

 

Source: Len Schlesinger, writing in Fast Company, 745 Boylston St., Boston,
MA 02116.

 


Customized Patient Bills Can Improve Customer Service
By Paul Hoffman


Patient billing communications traditionally have not been viewed by
healthcare providers in a strategic light.  Bills and statements have been
regarded as mere accounting documents used to collect cash.

This perspective is changing, however, as healthcare organizations discover
that despite all their efforts to provide and promote the high quality of
the care they render, patient perceptions of quality are negative because
of problems they have understanding the billing process.  As a result of
this perception, more and more healthcare organizations cite improvement of
their patient bills and statements as a top priority.

Effective patient communications should start immediately following
discharge.  A well-designed, timely bill can:

 

A bill with organized account summaries and plain language is easier for
patients to read, thus enabling patients to understand all information
pertinent to their account.  By taking this approach to patient
communications, healthcare providers can better convey to patients what
financial obligations they have assumed for their care, as well as build
confidence in the billing process.

A New Paradigm in Patient Billing
Because most organizations see the patient bill only as a cash-collecting
document, its potential to influence and educate patients is overlooked.
Among the marketing and relationship-building activities for which the
patient bill can be used are the following:

 

These and other uses transform the patient bill from a transaction-based
tool into a strategic vehicle for gaining long-term patient loyalty-all
without increasing the organization's marketing budget.

To integrate the organization's marketing strategy and patient billing
communications effectively, an integrative billing technology should be
used.  The integrative technology must be geared towards personalization.
This means that the application must have the ability to print each
document differently and immediately to prevent billing delays that can
interfere with cash flow.

Providers now have the flexibility to customize their billing output.  Such
customization can occur through the health information systems (HIS) using
data manipulation software that works in concert with laser printing and
mailing technologies without altering resident billing applications.

The content and design of patient bills and statements can be customized
based on data elements such as type of service, financial class, or any
other user-defined criteria that are present in the resident HIS
billing-software print image.  The result is bills and statements designed
from the patient's perspective.

Healthcare organizations can leverage patient data used for billing, such
as financial class, service type, age, gender, and zip code, to select the
target market for newsletters and other marketing materials.  This
marketing content can be printed on the bill itself.  For example, Illinois
Masonic Medical Center (Chicago, Illinois) is using the bottom portion of
their patient statements to market wellness classes and seminars offered by
the hospital.  Or a separate insert that can be mailed with the bill, thus
reducing postage costs.

Or, the statement could include targeted marketing messages and wellness
news.  For example, preventive services such as mammogram screenings,
colorectal cancer screenings, and flu vaccinations can be promoted on
statements sent to Medicare patients only.

Patient statements can be structured to answer a patient's most commonly
asked questions, resulting in a marked decrease in patient telephone calls.
Over a two-year period, Alexian Brothers Medical Center's (Elk Grove
Village, Illinois) custom billing approach has achieved a reduction in
patient phone calls from 425 per day to 215.

Cost Analysis
Patient financial services professionals who are considering outsourcing
customized patient billing should estimate their return on investment.
This calculation should go beyond the obvious costs of paper, envelopes,
postage, or even a current outsourcing service.  PFS professionals should
conduct a study of the communication flow of each type of patient billing
document that is mailed.  The objective of this study is to examine all
printed communications to patients, measure the effectiveness of each
strategy, and identify the most productive opportunities for cost reduction
and quality improvement.  To achieve these aims, the patient-billing study
should include all internal staff whose daily routines "touch" the patient
bill.

The study should ask the following questions:

 


Conclusion

 

In today's complex healthcare climate, there is no substitute for highly
accurate, intelligible patient bills and statements.  Just ask your
patients.

About the author
Paul Hoffman is a principal, HealthCom Partners, Inc. Mount Prospect,
Illinois.  He can be reached at (847) 375-6800 x209 or via e-mail at
paul@healthcompartners.com.

Reprinted, by permission, from Patient
Accounts, Dec. 2000.  Copyright 2000 by
the Healthcare Financial Management
Association.

 


6 Ways to Build a Top Staff
To build a staff into a team that does the best possible
job for the organization:

 

Source: Gene H. Cheatham writing in Association Source, Florida Society of
Association Executives, 1211 Semoran Blvd., Casselberry, FL 32707.

 

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