Cath Lab Digest

  In 2007, TWC published an issue on Before the patient can be seen, the clinic has to determine how it will prepare a bill (charges) for the services rendered to the patient. This means that every hospital clinic needs to develop a chargemaster that is specific to their department in order to capture charges and ensure consistent billing. The layout of individual facility chargemasters varies from hospital to hospital; however, it includes a core group of data elements that correspond to all of the services, procedures and supplies that may be used in that facility.

  The key corresponding data items are described below.
     1) Department Cost Center: This is the number assigned to the specific ancillary department, and provides a mechanism to attribute the charges generated with this entry as originating in the Wound Care department.
     2) The CPT® Code: An abbreviation for “Common Procedural Terminology” published annually by the American Medical Association. These standardized codes represent diagnostic and treatment procedures and evaluation and management services provided by physicians, podiatrists, osteopaths, and other health care practitioners.
     3) The HCPCS Code: An abbreviation for “Healthcare Procedure Coding System” these are “level 2” procedure codes developed by the Centers for Medicare and Medicaid Services (CMS), which provide “descriptive terminology” used for reporting the provision of supplies, materials, injections and certain services and procedures which are not defined in CPT®.
     4) Description: The name of the procedure or service, which is hospital-specific but should be listed in a way that is recognizable to others who do not work in the clinical department.
     5) Revenue Code: See below.
     6) Price: The markup above the “Medicare allowable” that the hospital is going to charge.
     7) CDM Number: The CDM (charge description master) number is the hospital’s unique identifier for that procedure or service. Every hospital will have their own unique CDM number for every procedure and supply. Some hospitals use the CPT code as part of their CDM but it is different at every facility.

  Some chargemasters may include supply charges or pharmaceuticals. The chargemaster structure facilitates the submission of patient claims in a consistent manner. A poorly constructed chargemaster can cause inaccurate claims to be submitted, which may result in denials and delays in payment.

Hospital Revenue Codes

  What is a revenue code? Revenue codes are 4-digit numbers that are used on hospital bills to tell CMS and other insurance companies either where the patient was when they received treatment, or what type of item a patient might have received during treatment. For example, revenue code 0420 represents services done in a Physical Therapy department by a therapist.

  There is no revenue code to identify care done specifically in a “wound clinic.” Most of the services, which occur in a hospital-based outpatient wound center occur in a clinic or a treatment room. Thus, wound center services are assigned the revenue codes 0761 or 0510 that define these places of service. Other examples of revenue codes (representing areas of service in the hospital) are pharmacy, surgery (more on this later) and respiratory therapy services.

  On the claim submitted to the insurance company, commonly known as the UB-04, every CPT code must be linked to a revenue code that explains where in the hospital that service was provided. Unless the CPT code is linked to a revenue code, the claim will not be paid. Where explicit instructions are not provided by CMS through a National or Local Coverage Decision (NCD or LCD, respectively) policy, hospitals should report their charges under the revenue code that will result in the charges being assigned to the same cost center to which the cost of those services are assigned in their cost report.

What is a Cost Report?

  At the end of the year, the hospital will send a “cost report” to CMS to calculate and determine the final Medicare and Medicaid reimbursement due to the facility. In other words, depending on this report, at the end of the year the hospital could get a higher reimbursement or a lower reimbursement than they were getting the prior year. Accuracy in this report is critical to the hospital’s bottom line in the long term. This data is also used by Congress to control the rate of increase in Medicare spending and by the Prospective Payment Assessment Commission to make recommendations for changes to the prospective payment system. In other words, the revenue codes in the chargemaster matter a lot.

  The local contractors must apply Cost-to-Charge Ratios (CCRs) prospectively to calculate outlier payments (for hospitals paid under OPPS and CMHCs), Transitional Outpatient Payment System (TOPS) payments (for hospitals paid under OPPS), device pass-through payments (for hospitals paid under OPPS), and items and services paid at charges adjusted to cost (for hospitals paid under OPPS). In the future, if Medicare ever decides to convert outpatient care to a DRG like payment system as they did the inpatient setting, this data will play an important role in determining the reimbursement.