Master Charge Capture: Why Automation, Collaboration, & Evaluation Are Key to Success

Accurate and complete charge capture has always been crucial to hospitals and health systems, but with margins down and denial rates high, it’s more important than ever.  

The numbers are alarming. Kaufman Hall’s “optimistic” projection is that margins will be down 37 percent compared with pre-pandemic levels during the second half of 2022, while the consulting firm’s “pessimistic” projection points to a 133 percent decline in margins. Meanwhile, 2022 expenses are projected to increase to nearly $135 billion over 2021 levels. 

In addition, a Kaiser Family Foundation analysis published in July found that, on average, HealthCare.gov insurers deny more than 18 percent of in-network claims, and nearly one in five report they denied more than 30 percent of in-network claims. Decreased margins, increased expenses, and high denial rates leave little room for error regarding charge capture.  

Accurate charging and coding promotes accurate and compliant payments for the services the organization provides, as well as an increase in net revenue. With some preparation and collaboration, organizations can:  

• Avoid overcharge credits; 
• Improve the clean claim rate; 
• Reduce denials; 
• Receive faster reimbursement; 
• Decrease excess A/R days; and 
• Escape risk of fines from audits. 

Yet accurate charge capture can be difficult to achieve. Ongoing regulatory changes imposed by the Centers for Medicare & Medicaid Services (CMS) affect packaging, bundling, unbundling, units of service requirements, price integrity, price transparency, complex combinations of services, ICD-10, documentation, and modifiers. These changes lead to increased costs for clinical data management (CDM) upgrades and maintenance, as well as coding and charging errors, denials and rebilling, additional educational requirements for staff, and the need for more coding professionals, auditors, and CDM staff.  

This perfect storm of reduced margins, increased expenses, and continual regulatory change is happening at a time when many teams are experiencing unprecedented staffing shortages. Revenue cycle, coding, and clinical departments are struggling with high turnover, and nurse auditors and senior coding professionals are in short supply. Clinicians’ often limited understanding of the billing process exacerbates these staffing woes. 

Keys to Improved Revenue and Compliance 

If the challenges mentioned above sound familiar, here are six steps an organization can take to improve charge capture, even in the face of current barriers. 

1. Automate the process.  

Using an automated charge capture solution to review all itemized bills removes the threat of issues falling through the cracks. This process can hold bills in the patient account services (PAS) before the claim is generated, which ensures charges and codes are corrected up front, establishes accountability, and reinforces the need for immediate action. Downstream, this helps to avoid costs and headaches associated with rebilling. These systems can also remove bills from hold within a hospital-defined bill-hold period. In addition, teams can use the automation tools to establish rules to review matters such as detailed charges and demographic data. Finally, automation tools can create service line work queues and assign them to clinical staff who should be responsible for charging or coding. 

2. Implement comprehensive revenue integrity edits.  

Mistakes can happen to the best of us, but in the world of healthcare, charge capture and coding errors are potentially detrimental to revenue integrity. An internal or outsourced content/compliance team can develop and maintain rules that search for missing charges, overcharges, coding errors, and charge and coding mismatches to achieve comprehensive revenue integrity edits. This team should understand the relationship between charging and coding, and be well versed in current CMS and other regulatory requirements. 

3. Establish a revenue integrity team.  

The power in numbers holds true when it comes to streamlining the organization’s charge capture. A revenue integrity team led by a chief financial officer (CFO) champion should include various stakeholders within the organization to ensure all departments are involved in decisions that drive charge capture. The director of revenue integrity can establish and maintain daily processes and identify primary and backup work queue users. Nurses and/or senior coders can assume the role of charging and coding auditors who conduct daily reviews of charging and coding results and ensure accurate distribution to clinical departments.  

4. Don’t overlook other revenue integrity team members.  

For instance, health information management (HIM) should play a key role to ensure compliant coding and accurate payment. This requires a separate HIM work queue for daily review. Clinical department staff members are critical for tasks such as reviewing documentation to ensure the accuracy of changes added or removed and implementing process improvement to reduce charge capture issues.  

5. Create a prebill workflow.  

One option for creating a prebill workflow involves distributing charge capture results to clinical departments to ensure root cause issues are identified and corrected. It also reduces the workload for smaller revenue integrity teams and allows the opportunity to reduce the bill hold period, which gives revenue integrity teams the freedom to focus on CDM maintenance and other auditing requirements. This option uses revenue integrity auditors who can review complex results, address department questions, and provide education.  

Another prebill workflow option is to distribute the results to integrity auditors. This method requires a dedicated staff to review revenue capture issues daily, remove bills from hold, and educate departments regarding errors. However, this option increases the risk of a longer bill hold period with results spread across fewer people.  

6. Establish work queues.  

Automatic distribution of charge capture results within patient accounting work queues allows staff to immediately update and initiate process improvements. Work queues should be based on the occurrence of charge capture or coding issues in specific areas. Examples of best practice work queues include:  

• Revenue integrity 
• HIM/coding 
• Cardiac catheterization lab 
• Emergency 
• Injections/infusions 
• Labor and delivery 
• Laboratory/pathology/blood bank 
• Observation/case management 
• Pharmacy 
• Radiology  

Reporting, Analysis, and Process Improvement 

Once process improvement procedures are in place, revenue integrity and charge capture teams can proceed with reporting and analyzing their work and using the data to implement process improvements where needed. This involves the following steps: 

• Track all charging and coding errors in PAS work queues for reporting. 
• Run monthly ROI report for the CFO, the revenue integrity team, and department managers. 
• Include results in monthly department meetings to ensure every service line recognizes benefits of revenue capture and the importance of department intervention. 

The reporting and analysis process should also include thorough review of discharged not final billed (DNFB) cases to ensure bills are corrected within the acceptable bill hold period. Publishing a report of the findings will allow the CFO and department managers to see where accounts have exceeded the reasonable bill-hold period and make sure issues are corrected in a timely manner. It also provides an opportunity to review trends with clinical departments to determine root causes and establish process improvement. 

These steps are the foundation for ongoing process improvement. Compliance staff should review regulatory changes on a quarterly basis and be prepared to create and modify rules accordingly. Best practice is to add, modify, and customize rules to reflect the organization’s evolving business practices, especially when issues are identified within charging and coding processes.  

Finally, it is important to review ignored exceptions for appropriateness. Staff education on this issue, in addition to charging and coding related to current billing practices and regulatory requirements, can help reduce future errors. 

Taking steps to improve charge capture requires a team approach that employs every weapon in the organization’s arsenal, from automating the charge capture process, to establishing clear work plans, to having systems in place to track, analyze, and report outcomes that promote process enhancements. While the organization may not be able to control reduced margins, increased expenses, and ongoing regulatory changes, they can take charge of charge capture through automation, collaboration, and evaluation. 

Sherry Nardi is the director of solution strategy at FinThrive revenue management firm.