CDM Management Strategies: Improving Charge Descriptions

Part 1 – Charge Description Risks, Influences, & Improvement Strategies

Does your hospital have a clear and definitive policy for charge descriptions? Hospitals and health systems are often challenged by how they should address billing descriptions. Updates are often low priority despite their importance. Let’s talk about the challenges many hospitals face when evaluating their charge descriptions.

What’s a Charge Description and Why is it Important?

Charge Descriptions are key data elements in the charging file of a hospital, clinic, or physician billing system. The charge description is a limited character field that represents the item or service that is being charged by the health care provider. Differing hospital information system vendors have varying field length limits, but all try to accommodate the electronic hospital and professional fee (“UB” and “1500” claims requirements). Charge descriptions flow to detailed patient account encounter-specific charges that may be provided on request to the patient or simply archived in your system for charge detail backup. For outpatient hospital and physician claims, the descriptions may be reported the electronic claim. Descriptions are also frequently reported on revenue-oriented reports such as Charge Description Master (CDM), Revenue & Usage, Statistics, Daily Activity/Charges, etc. Internal and external audits and work processes often include comparison of detailed charges against claims and chart documentation. Charge descriptions are often pivotal to efficient and accurate audit interpretations. However, from the charge capture perspective, we realize that descriptions may serve varying functions. The level of risk of vague or truncated descriptions differs based on the applicable charge capture functionality, coding actions, claims processing environments, and applicable payment systems. As your team evaluates Charge Description Management at your organization consider both the current approach to charge descriptions as well as your ideal charge management environment. The following sections contain considerations relative to the importance, philosophies, mistakes, and ground rules your team may want to review. We’ve also provided some examples of updates that often improve charge description clarity.

Just How Important Are Descriptions?

Hospital staff may place charge descriptions at a lower priority believing they carry little risk. We understand that perspective. In today’s reimbursement environment most claims are paid based on codes, percent of charges, or other methods and descriptions have little impact on payment. However, many teams haven’t considered CDM Descriptors’ charge integrity or file management implications. Every CDM or Revenue Cycle team needs to assess how well their charge descriptions support their current or planned auditing, monitoring, and file management priorities. Specificity of charge descriptions ensures fewer file maintenance errors, easier quarterly and annual CDM updates, and greater support for data monitoring or auditing activities.

CDM Description Philosophies

We find that the CDM Description viewpoints throughout an organization may vary based on who is providing input and advice. Here are some differing perspectives we’ve encountered: Charge Management Coordinators & Consultants – Health system CDM management staff and external auditors want to ensure that the organization’s file management efforts are supported by precise charge descriptions. Specificity is imperative. These individuals typically desire clearly-defined charge descriptions to support long-term file management efforts. It’s likely that documented protocols or policies will be of interest (if not already in place) for charge description standards so charge master management, monitoring, updates, and auditing can be accurately performed. These individuals may also advocate for a Charge Master Charge Description Update project (internal or external) to overhaul problematic masterfiles. Such a project is often timely in preparation for or during a system conversion process. Revenue Cycle Teams – Hospital Revenue Cycle teams typically look at the CDM file from a multi-functional perspective including: reimbursement, financials, statistics, charge integrity, claims processing, and compliance. This global perspective allows proactive Revenue Cycle teams to develop charge description rules based on their own systems, priorities, and staffing. Charge Master tools are often used with proactive teams to support internal description update work, ensure long term accuracy, and save on consulting. IT/Implementation Specialists – The priorities of applications specialists and implementation consultants may differ based on the vendor implementation expertise, conversion timelines, or file building process. It’s best to keep IT in the loop on Charge Master update tasks, including any revisions to charge descriptions, quarterly code changes, prices, or other CDM data elements. Today’s health care systems require ongoing masterfile synchronization as well as consideration of charge data work flow processes. Clear charge descriptors are usually vital for well-maintained information systems. Corporate CDM Managers – Multi-entity health systems often require more standardization of charging files for better controls and long-term data management. These individuals will desire charge description policies to support their long-term file management efforts. It’s likely that standards may already be in place so charge master management, monitoring, updates, and auditing can be accurately performed. Clinical & Technical Department Management – Department managers may not be aware of the impact of charge descriptions and may have little understanding of the importance of Charge Master data. Some ancillary and clinical department personnel may not even understand the flow of charge data beyond their service area, and may need orientation to your team’s charge description concerns. When considering a charge description project, it’s important to include department staff to ensure any modifications are well-understood and agreed-upon. Changes without a team approach may lead to confusion down the line. Charge Capture Staff – Hospital, clinic, or physician office personnel inputting charges may have a widely-differing approach in how they capture charges. This can range from paper charge ticket transposition, charging based on documentation, charge entry from Order Entry menus, charging through documentation-driven software applications, and other work flow processes. The charge description’s importance will vary based on the unique charge capture methods of these individuals. Outpatient Coders – Hospital and physician coding staff may provide minimal input on charge descriptions. Coders most often select outpatient CPT-4 codes from encoder tools interfaced or integrated into the claims processing functionality of a system. Charge capture may or may not be driven by coder action. If coders are involved in charge capture, ask whether they utilize the charge description for their patient- specific charging and coding tasks. Finance Staff – Health system staff focused on costs, budgeting, or pricing may have important suggestions and input on the organization’s charge descriptions. Some of their activities rely heavily on a complete and accurate understanding of what a charge item represents. Your organization may have other players who can provide input on charge descriptions. Even if the point of control is often the CDM Coordinator, a collaborative approach to charge descriptions is not only more productive but also more enduring.

5 Rules of Charge Descriptions

Now that we’ve discussed the importance of descriptions and other individuals’ priorities, let’s address some basic strategic approaches common in proactive hospitals. The H&A team members apply these basic guidelines when working with ChargeAssist® customers, performing consulting audits, and in our educational programs:

  1. Charge descriptors should represent the item or service as accurately and specifically as possible within system field length limitations.
  2. Charge descriptors should provide the necessary clarity for masterfile maintenance, charge monitoring, and auditing purposes.
  3. Charge descriptors should include key verbiage or terminology to allow confirmation of the associated ‘hard-coded’ CPT-4, HCPCS Level II, or other data elements in the charging file.
  4. Charge descriptors should follow hospital-defined standards to avoid charge capture confusion or difficulty in charge lookup. Standards may include the sequence or order of description verbiage, standard abbreviations, rules related to punctuation, capitalization preferences, and other agreed-upon description guidelines to achieve the level of specificity needed.
  5. Charge descriptors should include verbiage similar (while not necessarily parallel) to the associated ancillary system files to allow accurate file synchronization auditing and long term file maintenance activities.

“Patient-friendly billing” is absent from our 5 Rules which may come as a surprise. Some individuals advocate for service descriptors that patients can easily understand. However, overly-general descriptions often lead to CDM file maintenance challenges and potential charge capture problems. We believe that the most ‘patient friendly’ approach an organization can take is to use charge descriptors that clearly state the service. If descriptors reflect key terms within the associated code descriptions then the patient can confirm the item despite that the verbiage may be clinical or technical in nature. As mentioned earlier, charge description standards are unique and specific to the hospital. While they may be formalized in some environments, they may have simply been adopted over time and not well-defined in other environments. Integrating our five rules above will help your team establish priorities and communicate goals.

Charge Description Tips for Clarity

Charge description specificity is essential, yet we’ve found no regulatory or payer-driven guidelines mandating what to include in your CDM. Likewise, there appears to be a lack of documented industry standards. Here are some H&A consulting team tips for achieving charge description clarity:

  • Charge descriptors should be sufficiently-specific and detailed to support:
  • Confirmation of the charge’s intent, associated codes, pricing, and usage
  • Encounter-specific charge detail in the event of charge or coding audits (internal or external) including:
  • Verification of charge data accuracy (for CDM Reviews, charge audits, claims data confirmation, charge reconciliation, claims error resolution, coding, etc.)
  • Supporting the intended use of the charge
  • Determining coverage (perhaps through searching for common description verbiage or payer-specific limitations)
  • Internally verifying and implementing CDM Review initial audit findings
  • Future CDM management efforts (internal with a Charge Master software tool or external by CDM consulting experts)
  • Synchronization audits (e.g. Lab file vs CDM file)
  • Patient detailed billing (if requested) so the beneficiary can differentiate services provided
  • Charge capture for any ancillary or clinical area that may perform direct charge entry or application file building (e.g. menus, order entry file build, preference lists, etc.)
  • Charge descriptor verbiage (although potentially truncated due to field length restrictions) should:
  • Reflect key terms:
  • As used by current quarter coding resources such as AMA CPT-4 and HCPCS Level II codes (as they are HIPAA transaction standard fields)
  • For code-specific verbiage that differentiates similar charges
  • To differentiate charges assigned the same codes
  • Including verbiage in the prefix as well as verbiage following the semi-colon of the CPT-4 or HCPCS descriptor
  • Enumerate terms that differentiate codes within a code range or code family, for example:
  • Views (to correlate with CPT-4 code descriptors)
  • Modality (PT, OT, ST) if helpful for charge capture or patient charge differentiation
  • Type of technological service that is provided (MRA, MRI, CT, CTA, US, Fluoro, etc.)
  • Specimen source (if differentiated by code) for laboratory tests
  • Technique of the test (quantitative vs qualitative, manual vs more advanced technological testing methods, etc.)
  • Unique use of a charge (which may or may not need modifiers) such as:
  • Limited procedure
  • Distinct procedure
  • Services or items represented by anatomic modifiers (LT, RT, -50, etc.)
  • Specify actions/techniques/procedural details that reflect the service such as:
  • Abbreviations for tests sent out to reference labs or outside providers
  • Unique cost center charge items that shouldn’t be used by other cost centers/departments
  • Indicate the unit of service that may drive charge capture or pricing such as:
  • Units, volume, dosage, size, etc.
  • Exceptions may include situations where:
  • Other applications drive the CPT or HCPCS Level II codes
  • An application has functionality that adjusts charge detail so claims data is accurately reflected (e.g. unit of service billing multiplier, dispensed unit calculations, wastage reporting, etc.)
  • Identify internal use of the charge item such as:
  • Including key terms needed for more precise for charge selection
  • Identifying a statistical charge
  • Denoting whether an item is a charge explosion parent or possibly a component (if needed for future pricing studies)
  • Differentiating hospital from physician billing (revenue code and cost centers or billing categories should serve this purpose, but often description abbreviations are helpful)
  • Reflect external information about the charge:
  • Reference lab test id (note: this has to be changed each time the send out lab/testing order changes, so it may not be a preferred description component)
  • Model number for supplies and implants (also must be maintained)
  • Follow hospital or health system abbreviation standards

It’s important to note that many ancillary, ordering, menu, or documentation-driven systems have descriptors that are more specific than the charge description. These fields may need to be compared to the CDM descriptors if a dedicated description update process is undertaken.

When is a Less-Specific Description OK?

We believe that it’s rare when a description can be non-specific and not present some level of charge management risk. However, occasions have arisen when we do believe that the compliance risk is lessened. Despite the challenges with masterfile maintenance and upkeep, the charge description may have little impact on charge capture or code assignment. Non-specific description scenarios may include:

  • Work flow processes where coding staff selects a code from procedure documentation, references encoder or coding reference tools, then enters a charge based on the hard-coded code field
  • Abbreviated, truncated, or ‘placeholder’ descriptions as seen in CMS and AMA materials prior to code adoption/finalization (including meeting agendas or transmittals)
  • Short CPT and HCPCS descriptors may be displayed rather than complete charge descriptions with interfaced systems or alternative applications that have little need for charge detail specificity
  • Some reports may include short descriptions simply because they are assumed to be sufficient

Mistakes to Avoid

  • The most common CDM Management mistake we encounter occurs when the hospital or health system simply fails to consider the importance of descriptor clarity. Often, Charge Master owners are working with data built long ago following guidance, advice, and input from various individuals who may no longer be involved with the organization.
  • Another mistake is assuming that purchased code descriptors are appropriate for populating your charging files. Some hospitals rely on purchased CPT-4 and HCPCS Level II “Short Descriptions” which fail to provide the level of detail needed.* While this approach is common for some legacy physician billing systems, the function and fields in today’s more advanced systems can accommodate individualized and highly-specific descriptors for your charge items.
  • Some hospitals must adopt corporate standard descriptions or descriptions developed by an affiliated health system. Since charge descriptions are highly ‘personalized’ for most organization, conversion planning should always include strategic discussions about descriptors. This is often overlooked.
  • Finally, while not necessarily a ‘mistake’, we find that charge descriptions embedded with CPT-4 or HCPCS codes can lead to additional file maintenance challenges. Remember that when the code changes, the charge description must change.

We hope these charge description ideas are helpful for your team and can be used to establish some preliminary efforts towards improvement. Today’s proactive Charge Management teams realize that charge description updates can improve work flow efficiency, data integrity, and long-term file management efforts. If you are interested in receiving our Charge Description Assessment, contact us by e-mail:

*While ChargeAssist® includes licensed fields for AMA Long, Medium, Short, and Consumer Descriptions, none of these are typically used as hospital CDM descriptors because of the level of customization typically desired and field length limitations.

Reference and Related Posts:
10 Steps for Failsafe Charge Data Management – Holliday & Associates
Holliday & Associates Charge Management Software Solutions
ChargeAssist HFMA Peer Review Renewal Press Release
ChargeAssist Charge Master Public Portal Press Release

Holliday & Associates offers ChargeAssist®; an HFMA Peer Reviewed® Charge Master auditing and resource tool for easily auditing, collaborating, and maintaining Charge Master files. We also provide Charge Management Team and Charge Master Coordinator Educational Programs as well as customized CDM Reviews by a team of credentialed clinical, coding and technical auditors.

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