Challenge
In spring 2021, Ohio County Healthcare, a nonprofit, 21-bed Critical Access Hospital in Hartford, Kentucky, was seeking a way to comprehensively manage their chargemaster (CDM) and develop a consistent method to establish prices and review revenue opportunities.
At the beginning of the year, CMS implemented new Price Transparency rules that require hospitals to make their CDM available for public use — providing opportunities for consumers to understand the information and ask questions regarding hospital pricing policies. Hospital leadership understood that a review of the chargemaster would help the hospital comply with the new CMS regulations and could also improve both its customer service and its bottom line.
Ohio County Healthcare’s CDM contained more than 1,800 individual charge codes. The task of manually reviewing and analyzing them all in a timely fashion seemed insurmountable for a busy revenue management cycle team juggling competing operational priorities. But the hospital was dealing with challenges caused by the CDM, including lost time caused by invalid CPT codes requiring manual intervention and potential lost revenue opportunities with commercial payors due to charge codes priced lower than the Medicare Fee Schedule.
Process
Ohio County Healthcare engaged Stroudwater Associates to review and develop a plan to optimize the CDM. Hospital revenue cycle staff exported its CDM and revenue detail file and sent it to Stroudwater. Our team loaded the information into our proprietary, web-based Strategic Pricing Tool, running the hospital’s 1,800+ codes through several key data points to identify issues with:
- Invalid CPT/HCPCS Codes
- Fees below published Medicare Fee Schedule
- Services using the same CPT/HCPCS codes priced at different rates
- Charge codes missing CPT/HCPCS codes
Stroudwater’s revenue cycle experts provided advisory services, to develop a plan to resolve the identified issues. Our team was able to analyze the chargemaster quickly with no additional burden to busy hospital staff.
Results
Stroudwater’s services led to positive results, both qualitative and quantitative, for Ohio County healthcare:
- Quantitative results
- Stroudwater processed and analyzed the entire CDM in less than two business days with virtually no work required from Ohio County Healthcare staff.
- 7% of the CDM was priced below Medicare Fee Schedule
- Less than 1% of the codes contained invalid CPT/HCPCS Codes
- 9% of the services were using the same CPT/HCPCS codes priced at different rates
- 2% of the codes were missing CPT/HCPCS Codes
- Within 30 days, changes to the CDM led to the following results:
- Less than 1% of the CDM was priced below Medicare Fee Schedule, down from 7%
- None of the codes contained invalid CPT/HCPCS Codes
- 1% of the services were using the same CPT/HCPCS codes priced at different rates, down from 9%
- Stroudwater processed and analyzed the entire CDM in less than two business days with virtually no work required from Ohio County Healthcare staff.
- Qualitative results
- The collaboration between Stroudwater and Ohio County Healthcare teams resulted in significant improvements to the hospital’s CDM.
- Using the detail Stroudwater provided, the hospital was able to take immediate action to fix existing issues and correct their CDM.
- Ohio County Healthcare is now documenting the reasons behind the same CPT/HCPCS codes listing different prices and developing a strategy to address the issue going forward.
“The tool was easy to use,” said Shellie Shouse, Chief Financial Officer, Ohio County Healthcare. “We were able to achieve immediate results with little effort and interruption on our end which really made a big difference.”