The Keys to Accurate Charge Capture

Don’t underestimate the negative impact of both over- and under-payments

Whitepaper | LaTonya O’Neal, RHIA
Vice President, Revenue Integrity and Centralized Coding, Change Healthcare

LaTonya leads coding, compliance audit, charge capture, and clinical documentation improvement services for facilities and professional services.

In the arduous, complex process of submitting claims, charge accuracy is rarely at the top of providers' concerns. Other challenges, such as denials, are often the priority, since their impact on the bottom line is easier to calculate than revenue loss due to underpayments.

Of course, missed charges are only half of the equation; overcharges can be as detrimental, if not more so, to your organization's financial health. Once you consider staff time spent reimbursing the payer and responding to auditors, plus any government fines, interest and penalties, and/or hiring outside counsel and an auditor, the cost of overpayments becomes clearer. Even more alarming: when the Office of Inspector General conducts an audit that reveals a percentage of claims contain overcharges, it can extrapolate an overpayment estimate for the audit period. This can result in hundreds of thousands or even millions of dollars in fines, interest, and legal and audit fees, in addition to the havoc wreaked on your finance team.

“It’s imperative we start at the time of the first patient encounter, which is pre-registration, to ensure the patient information is correct and valid. You can’t be effective on the backend without technology to ensure data quality on the front-end."

- Daren Bush, Knox Community Hospital

The Source of Errors

There are three main causes of charge-capture errors:

  1. Computer Glitches: An improperly managed software installation or conversion can inadvertently generate duplicate charges, while hardware errors and electromagnetic interference can corrupt software and lead to misapplication of credits. Programming errors can also cause these types of problems. Your system may appear to be functioning properly while these issues are occurring, and if not addressed quickly, the source of the problem can become increasingly difficult to trace and correct.
  2. Insufficient or Incorrect Coding Training: Oftentimes, physicians and staff members are not sufficiently trained on medical coding intricacies. It is not enough to simply map a service to the right code; some services encompass multiple medical codes, while others must be carved out of a flat-rate (daily or procedural) payment and paid additionally. Compounding the problem: annual changes to ICD-10 codes and quarterly changes to CPT®/HCPCS codes are often not presented to physicians and non-coding staff. In addition to these challenges, the physician coding system is entirely different from what the hospital uses/ requires.
  3. Human Error: Any time humans are involved, there is potential for error. For example, if the person responsible for recording charges does so in the middle of a busy emergency department, he or she might check off items or services that are anticipated but which don’t actually occur, leading to an overcharge. Conversely, he or she might forget to check a key item, leading to an undercharge. Another issue is when changes to the Charge Description Master aren’t shared in a timely fashion with staff responsible for entering charges. This can result in billing/charging errors, and one miscoded procedure can cost a facility hundreds of thousands of dollars.

Combine AI-Infused Technology with Human Reasoning to Boost Accuracy

Many hospitals are using automated auditing systems to help improve charge capture. Traditionally, these systems flag issues against set parameters, enabling staff to correct errors, capture all appropriate charges, and submit complete claims. Recently, solutions have been developed that take this model to the next level by leveraging artificial intelligence. These AI-infused solutions are trained on massive amounts of claims data to deliver much greater precision and specificity.

Of course, there’s still a role for human reasoning in the charge-capture equation. For example, expertise is needed to recognize connections between charges that may appear correct individually, but which make no sense together, and to investigate root causes, correct them, then re-educate coders/billers.

Charge-capture accuracy depends on a combination of technology and human expertise. This two-pronged approach is a best practice to have confidence you are capturing all valid charges while mitigating compliance risk.

Choosing a Regulatory Auditing Vendor

Payers invest in auditing technology and skilled experts to assist in identifying overpayments and to enhance their data-driven analytics. Therefore, providers must do the same if they hope to avoid overcharge audits and the accompanying chaos and expense. Plus, what hospital can afford to allow hundreds of thousands (or millions) of dollars in missed charges to fall through the cracks?

Here's what to look for in a vendor:

  • Choose a vendor with broad and deep experience in revenue cycle management— one that has years of experience and a successful track record of working with providers on all facets of billing and claims management. While your focus is chargecapture accuracy, oftentimes it is expertise in cross-functional responsibilities—such as coding and compliance—that enables trained and experienced staff to detect the root cause of a charge-capture issue.
  • Make sure the vendor can demonstrate familiarity with your existing data systems, including your EHR and any automated auditing-support software. [Your team doesn’t have time to train auditors on your systems and processes.] Likewise, support staff must be able to perform the auditing role without handholding.
  • Select a vendor that leverages AI capabilities. Rules-based edits alone can't deliver the charge-capture accuracy needed to transform this phase of the revenue cycle.

Without a robust, proactive approach to chargecapture accuracy, it’s difficult to know just how much revenue you’re missing, or the annual financial impact. Working with an expert vendor could bring a return on investment that surprises even your top financial administrators.

To learn more about our revenue integrity technology and services, call 844-798-3017 or visit changehealthcare.com/solutions/revenue-cycle-management/revenue-integrity

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