Chargemaster 101: Quick Tutorial on a Hospital RCM Essential

hospital chargemaster

Curious about the world of chargemasters? These three questions will give you a speedy introduction to this crucial revenue cycle management tool used by hospitals.

1. What Is a Chargemaster?

A hospital chargemaster, also called a hospital charge description master, lists the billable services and items that a hospital provides to patients. Some of the elements included in the chargemaster may include an internally generated identification number for the line, CPT® and HCPCS codes (including alternatives when payers require different codes) with descriptions, the revenue code associated with the charge, and the facility’s charge.

2. How Is a Chargemaster Related to the Revenue Cycle?

A sample, simplified scenario may look like this: When a department or unit provides services to a patient, it enters the charges in the patient’s record, posting from the chargemaster. Coders then go on to assign codes as required based on the services and documentation, and billers then review the claim to be sure it’s correct and ready to go out to request payment. The chargemaster also offers a way for managers and executives to track data about services and revenue, and information to use when negotiating payer contracts.

The chargemaster’s role in the revenue cycle is why it’s so important for it to be kept up to date with current codes and rates. Keeping up with coding and reimbursement changes is tough enough. Add to that ensuring the chargemaster has the hospital’s latest charge rates. And then consider the chargemaster upkeep work involved in coordinating with clinicians to know exactly which services they provide and supplies they use. The chargemaster needs to represent those supplies and services accurately and sufficiently in a way that supports compliant billing. All of this can be a full-time job and often is a team effort.

Tip: Think about ways to streamline maintenance like including a flag to indicate whether a service is current, scheduled for deletion, or inactive, an AAPC blog post advises.

3. Are Chargemasters Public?

Chargemasters generally are not available to the public (so if you have access to one, be sure you follow your facility’s rules of use), but the call for price transparency is on the rise. Patients can see some information for top services by certain providers at sites like the one for Medicare Provider Utilization and Payment Data, and California’s Health Planning and Development site on Hospital Chargemasters and Charges for 25 Common Outpatient Procedures.

What About You?

Are you responsible for your facility’s chargemaster? What advice would you offer to folks new to the topic?

About 

Deborah works on a wide range of TCI SuperCoder projects, researching and writing about coding, as well as assisting with data updates and tool development for our online coding solutions. Since joining TCI in 2004, she’s covered the ins and outs of coding for radiology, cardiology, oncology and hematology, orthopedics, audiology, and more.

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