First Steps for 2018 Charge Master Update Success

Seasoned Charge Master owners realize the busy “Annual CDM Update” season is just around the corner. Everyone experienced in this effort will tell you that a staged, well-planned process ensures a successful January 1st conversion.
Now is the time to establish your CDM update plan to prepare for upcoming charging, coding, and regulatory changes. Successful plans require a strong understanding of the players, operations, systems, and changes for the New Year.
If your hospital hasn’t implemented a structured annual CDM update plan, here are some considerations we commonly share this time of year.

Define the Team

Updates to master files and associated charge capture processes can be dramatic, and are never the same year to year. Because of the variability of changes, staff affected by updates can differ each year. Defining a team approach for annual updates not only helps ensure efficiency and accuracy, it also helps increase accountability and ownership. These activities will ensure your selection of an appropriate team for annual updates:

  • Define the leaders for annual updates and collaborate to delegate duties.
  • Reimbursement, Revenue Cycle, Coding, and Charge Master Teams are typically responsible for leading the organization in interpreting annual regulatory, coding, and payment system changes. Team members should understand all data elements and processes impacted by coding and payment system changes.
  • The leadership team typically establishes an initial plan for review of changes and coordinates activities impacting their respective support areas.
  • A chairperson is suggested to prioritize the organization’s annual update milestone tasks and monitor progress. Because of their established organizational relationships, a strong CDM Coordinator is often the ideal candidate for year-end update leadership.
  • Determine clinical and technical personnel who should be involved in year-end updates.
  • Interdisciplinary collaboration is increasingly important as patient care, quality and reimbursement present intersecting priorities. However, many hospitals have allowed department managers to stay removed from critical regulatory and payment system mandates. To increase department ownership, administrative representatives should be debriefed on the time, tasks and duties that will be delegated.
  • Department managers should have a baseline knowledge for ensuring correct reporting and payment of their area’s services.
  • Evaluate department representatives’ skills to be certain they have the knowledge needed to participate in annual regulatory, coding and payment system updates.

Involving the right personnel in your annual CDM update process will result in good decisions, accurate data, and coordinated implementation. Departmental participation and accountability typically continues throughout the year for health systems that follow a team approach. This, in turn, leads to long term charge management success.

Understand Your Operations & Reimbursement

Clinical services, payer mix, and reimbursement are different in every provider setting. Organizations with a keen understanding of reimbursement and payer-specific rules consistently have stronger Charge Management processes. The following actions will help your team better understand the health system’s broad mix of services, and their associated payment methodologies:

  • Develop an inventory of services your health system offers.
  • Map the cost centers or GL numbers to department owners. This will allow your team to tie back services to the Charge Master file.
  • Identify the mix of services or items provided in each area (e.g. diagnostic procedures, therapeutic procedures, tests, surgical services, visits, supplies, drugs, implanted devices, etc.).
  • Correlate services and items to the applicable payment system(s) for in and outpatient care (e.g. DRG for Medicare inpatient services, OPPS for outpatient services, CAH Method I or Alternative Method payment, Fee Schedule payment, etc.).
  • If select departments have predominant payers other than Medicare (e.g. Medicaid or Commercial), be sure to understand any unique payment rules or billing requirements.
  • Ensure that each cost center understands the components of their respective information systems environment that may be affected by annual coding and payment system updates.
  • Orient departments to the data flow and functionality that links their commonly-used applications to charge and claims data. Be sure each department representative knows which applications, master files, and data elements are impacted by year end changes.
  • Review reports or functions in Charge Master tools that allow departments to view charge data integrated with payment system data.
  • Document system/application problems or challenges that arise in working sessions for reporting, delegation, and follow up. Often, the Charge Master Team can help escalate systems work orders if compliance or payments are at stake.
  • Determine priorities for updates as well as contingencies and outside players that could affect your timelines.
  • Most importantly, document timelines for systems upgrades, conversions, or transitions that may impact charge data or claims processing.
  • Identify your organization’s payer mix and the payers’ reporting requirements.
  • Document the manner in which charges are reimbursed by major payers for each unique area.
  • Note whether coding systems follow HIPAA Transaction standards (based on the current quarter/year), or whether they are using unique codes or alternative code years.
  • Obtain high level reimbursement and charge management orientation or strategic assistance if needed for the Charge Master Team or for select departments. A successful team will assess their own skills and knowledge, and seek resources to fill in gaps.
  • Often, the help needed is in-house: seek expertise from various support areas and see who can provide further training.
  • Ask for outside assistance if needed.
  • Establish a trusted portfolio of resource providers. Typically, multiple educational programs, reference sources and strategic support are used to learn about all applicable coding, payment system and regulatory changes. (Note: Now is the perfect time for scheduling the Holliday & Associates’ Charge Management Program if your team needs education. This will enhance your success when deploying the H&A Annual CDM Update program in December.)

Identify Payment & Coding Data

As teams plan for annual and quarterly file updates they should be aware of not only payment and coding data, but also the sources, release dates, and timelines for implementation. A house-wide organized resource plan can save thousands of dollars annually, will avoid redundancy, and should serve as a catalyst for planning for the New Year. Some suggestions for assessing payment and coding data include:

  • Plan a team orientation to CDM updates so everyone understands the necessary timelines, rationale, and staging for file updates.
  • Focusing on payment and coding data is important, but other operational issues typically arise as well. A worklist of issues beyond the basic annual changes may be in order.
  • Remind team members that codes alone are not an indication of payer coverage. In addition to codes, integrated regulations and payment information from primary insurers must be considered for accurate Charge Master or information systems changes. Unless your team has mastered integrating information from various payers and payment systems, this type of data is available through Charge Master tools or consultants.
  • Know your organization’s key reference sources and purchased data sources.
  • A resource inventory allows proactive management of internal resources and budgets. (See the H&A Resource Inventory worksheet from past articles, or contact us for a copy.)
  • Document current as well as preferred sources and the typical dates when information will be available for team evaluation.
  • Evaluate resources critically each year for optimized use and best value.
  • Confirm product licensing periods, renewal timelines, and any automated renewals or cancellation penalties that may be applicable.
  • Make decisions for annual data and reference sources.
  • Confirm access and order the coding and regulatory reference publications or online resources.
  • Confirm users, passwords, and access to coding software products such as Charge Master tools, encoder products, or other coding references.
  • Note vendors’ or publishers’ release timelines for greater preparedness.
  • Place orders for annual coding resources for all who need them.
  • Confirm whether the CPT Professional Edition or Standard Edition is desired, and select the publisher that meets your needs for shipping availability and cost. Check for discounts for bulk orders
  • Remind your Purchasing Department that the organization needs the 2018 reference sources as soon as possible upon publication – not simply prior to the New Year. They may not be aware of the preparatory work required.
  • Confirm whether hard copy or electronic versions of AMA’s CPT Changes, or CPT Assistant subscriptions are desired. If these products are integrated into current CDM resource tools or coding systems hard copy orders may be redundant.
  • If departments prefer specialty-specific publications or charging sheets, confirm when orders will be placed and ensure there is no redundancy with other subscriptions.
  • Ensure your team has integrated payment system and edit information for all mandated CDM-driven coding (CPT, HCPCS Level II or Payer-Specific local codes). Without this important information, codes cannot be interpreted correctly. Transmittals are your best source for detail about the changes. Paired with articles or educational material from trusted resource providers, your organization can be assured of a well-documented rationale for annual changes.
  • Revisit your organization’s access to HCPCS Level II Codes annually. HCPCS includes not only pharmacy and supply codes, but also temporary codes mandated by CMS when they reject or delay AMA coding.
  • CDM Tools may be a better resource for Level II Codes because of the integrated data sources and faster availability not offered through hard copy publications.
  • Preview AMA references for potential changes.
  • The CPT® Editorial Summary of Panel Action and meeting agendas are published on the AMA CPT-4 website. You’ll need your own login. Consider that the Panel’s actions don’t necessarily reflect the upcoming year’s final changes. Some revisions may be accepted but published further into the future.
  • As soon as AMA allows publication by licensed vendors, H&A will publish CPT Manual Appendices of changes.
  • H&A will announce publication of 2018 CPT codes as the data is released, normalized, and integrated into our product.
  • Code changes impact many different systems and processes. Be sure you are aware of data sources and timeframes for data availability for all areas impacted.
  • Many vendors require providers to purchase code sets for their systems. Confirm who will purchase the data and the date orders will be placed.
  • If your I.S. vendor has to upload files for you, establish a contractual timeline now. No hospital should be forced to miss the HIPAA transaction code set deadlines because of poor planning.
  • Encoder tools will include codes, edits, and possibly reference publications but may not be accessible to all departments. Updates to these products are typically managed by the HIM department.
  • CDM Tools will include licensed code update information and will provide data release announcements. Some CDM Tools also include reference publications and may reduce the need for hard copy publications.

Plan for Annual Update Education

Determine whether coding, payment system and regulatory changes can be internally interpreted, or whether formalized education may be needed. Some tips for planning the necessary education include the following:

  • Evaluate the volume and complexity of the New Year’s changes.
  • Plan for education on upcoming payment system changes by focusing on how various services are paid and your organization’s predominant payment systems.
  • Often, Revenue Cycle Managers or Charge Master Coordinators must be the leaders in learning about how services are reported and paid.
  • Departments will then need to be educated on changes that affect them.
  • Assess industry resources.
  • The H&A Team believes that hospital teams greatly benefit from multiple programs including: Charge Master, Coding, and Regulatory summaries. Typically, a single presentation at association meetings is not sufficient for a complete overview of all applicable changes.
  • Identify publications, consultants, educators, and other preferred sources and confirm dates/availability.
  • Know what differentiates charge master education from regulatory and coding updates. Scope and content of programs by differing industry resources are vastly different. (H&A provides department-specific annual CDM update lessons and a detailed manual the second week of December. We also offer 1:1 live strategic education based on scheduling availability. If interested in the program, contact our office at
  • Ensure that planned education includes not only codes, but regulations and payment system information as well.
  • Attendees for lessons on charge-driven code updates (CPT, HCPCS, or local codes) should include department representatives responsible for charging as well as those who perform CDM maintenance.
  • Hospitals may need to include coding staff in various department educational programs based on the changes and how codes are assigned. (Internal collaboration between coders and clinical/technical staff is invaluable for coordination and coding accuracy.)

Based on input from our clients across the country, hospital teams that plan ahead are consistently more successful with their annual CDM updates. Planning for the education, data research, environmental assessment, and staffing will help your hospital avoid the risk of missed deadlines or payment issues in January. If your team needs strategic assistance over the coming months, feel free to contact Holliday & Associates. We can discuss your organization’s needs and help with time-tested methods and education for a more proactive annual update program.

Exhibit A

September Action Plan

Now that you’ve reviewed the ‘first steps’ included in our article, here are a few priorities to incorporate into your Team’s CDM update action plan for September and October:

  • Formalize Your Plan. As noted in the associated article, health system teams should coordinate now to develop their annual CDM Update Plan. Be sure your team is aware of any significant system updates, service line changes or personnel changes that may impact your updates.
  • Clean House. Outdated cost centers and unneeded charge items in systems master files are not only unnecessary, but create false positive edits when auditing with CDM tools. Confirm your organizational philosophy about data retention and determine how files can be streamlined prior to starting the annual update program.
  • Confirm Coding Strategies. Mid-year is an excellent time for a ‘who codes?’ evaluation. It’s important to know whether the charge structure, CDM coding, and HIM efforts are synchronized for correct claims data. Develop a department and service specific ‘who codes’ Excel worksheet to be sure about coding action.
  • Conduct an Inventory of Coding Resources. Significant cost can be saved through a house-wide resource plan. Look for department redundancy in resources and subscribers who no longer need or use the resources provided. Also, check for departments with out of date coding resources to evaluate needs and options.
  • Evaluate Charge Master Resource Tool Use. CPT-4, HCPCS Level II, and all payment systems and regulatory information are integrated into the more sophisticated tools in today’s market. Additional payment system code-based edits (Outpatient Code Edits, CCI Edits, MUEs, and Fee Schedule status indicators) provide even more power to making charge and coding decisions.
  • Rethink Pricing. Even if your hospital engages consultants for annual pricing updates, there is great benefit in involving CDM Teams and Department Managers in year-round price monitoring. CDM Tools offer price modeling and price analysis functions that work well for ensuring ongoing pricing accuracy. Ensure that new charges are built using a formally adopted pricing protocol. Any staff responsible for pricing should understand cost, mark-up formulas, and the organization’s strategic pricing objectives.
  • Check Systems Overrides and Edits. Many hospital CDM Teams struggle with system overrides and edits that modify charge data or change claims data. Be sure your team understands data population and overrides. If clean-up of CDM field options is needed, now is the time. If you use CDM tools, it’s time for a new upload and high level audit. If your hospital doesn’t have a CDM Tool, quick check assessments can be done by trusted Charge Master Consultants for low cost. (H&A provides this option and can return results within a week.) Don’t forget that annual updates may also require changes to ancillary systems, CPOE, or charge capture tools. Engage the hospital information systems personnel in your update planning to incorporate their needs and capabilities.
  • Ensure Administrative Support. Tasks, priorities, and anticipated work efforts should be outlined with hospital administration and approved as a Department and Revenue Cycle priority. Proactive CFOs and Revenue Cycle leadership enforce a ‘no tolerance’ policy for departments failing to be prepared for year-end file updates.
  • Orient Your Team. Any health system initiative requires communication and prioritization. Prepare to have an orientation meeting soon so all are aware of the formal update plan you will be following over the coming months.
  • Start Today. Don’t wait until November or December to start your annual update process. Overwhelmed teams are not only prone to errors, but often miss important concepts. This can result in claims errors, delayed claims or incorrectly reimbursed services. A proactive and thorough planning process will reduce risk and keep your team on track for success.

Copyright 2017 Holliday & Associates