5 Things Hospitals Should Know About Their Chargemaster and ICD-10

By Bob Herman, for Becker’s Hospital Review

ICD-10 is coming, and it will affect virtually every department within a hospital or health system. A question many are asking is, “How exactly will it impact the revenue cycle?”

At the 2012 AHIMA Convention and Exhibit, Jeff Pilato, director of revenue cycle at coding firm HRS, broke down how a hospital’s chargemaster fits within the scope of its ICD-10 transition — and why it is so important to the hospital revenue cycle.

For anyone involved with a hospital’s revenue cycle — CFO, CIO, revenue cycle directors, case managers, health information management staff, CDI specialists and others — here are five things to know about the chargemaster and ICD-10.

1. The chargemaster, which is the hospital’s electronic list of all services, procedures and supplies charged to payors, is the central mechanism of the revenue cycle. “All charges for services and supplies, whether inpatient or outpatient, reside in the chargemaster,” Mr. Pilato said.
2. Outpatient procedure codes are joined directly to charges via the chargemaster, but inpatient procedure codes, which will involve ICD-10-PCS, have no direct connection to the hospital’s charges. “CPT codes and PCS codes don’t speak the same language,” Mr. Pilato said. “It’s important to know this and understand that somebody in the finance department has a responsibility to make sure [total charges] match up.”
3. The biggest challenge for hospitals to understand about ICD-10 and their chargemaster is that inpatient charges must match coded procedures. This is complicated by the fact that inpatient codes that are recorded do not exactly correlate to a single ICD-10 code. Mr. Pilato, who specializes in radiology coding, said this is especially problematic in certain specialties like cardiology and interventional radiology.
4. Risks associated with ICD-10 and the hospital’s chargemaster include inaccurate and/or missed charges, inaccurate cost-to-charge ratios for Medicare, effects on future governmental reimbursements and others.
5. Mr. Pilato said hospital revenue cycle teams can take several preventive measures to make sure chargemasters aren’t crippled by the ICD-10 transition. For example, revenue cycle teams can perform chart-to-charge audits to ensure charges match coded procedures, and they can also review the chargemaster to make sure all procedures and prices are up-to-date and accurate.