Becker's Hospital Review

59 FINANCE Deconstructing the Enigmatic Hospital Chargemaster By Carrie Pallardy P atients struggle to understand healthcare costs, but the process of setting costs and charging for services rendered can be complex enough to confound industry experts. e chargemaster is at the heart of the cost structure matter, yet ask hospital executives to explain how it works. e answers run the gamut from barebones basic to overly vague. At the most simplistic level, the chargemaster is a list of prices for any service or product a hospital offers. In this digitized age of healthcare, the chargemaster will be accessible through a hospital's EHR. "e chargemaster is a living set of data elements," says Scott Pillittere, vice president with Impact Advisors. "At its simplest form, think of it as a menu — anything you can charge a patient." But, looking past the obvious, understanding the inner workings of this set of data elements grows more difficult. Who uses it? Access to the chargemaster is generally restricted. One or two leaders, likely those who built and maintain the detailed list, will have the ability to make changes by adding or removing data. "e chargemaster is invisible to most people in the hospital," says Doug Barry, president of Cardon Outreach. ough the chargemaster is inextricably linked to a hospi- tal's finances, CFOs rarely interact with this document. "Hon- estly, I don't see many CFOs who would understand the details," says Mr. Pillittere. CFOs are faced with a hospital's myriad budgetary demands. Rather than become bogged down in the details of the charge- master, they oen delegate the responsibility to a vice president of finance of revenue cycle management. "CFOs are going to have a high level understanding of costs and timing associated with payments," says Angie Grunte, executive vice president with Vizant. A team member or members in the finance or treasury department will likely know more about the ins and outs of the chargemaster than a C-suite executive. Where is it found? e physical chargemaster is a standard part of a hospital's IT infrastructure, but only someone intimately familiar with a hospital's contracts and market — whether an in-house leader or consultant — can lead the building process. "e chargemaster resides in every hospital information system, whether Cerner, Epic or MEDITECH," says Mr. Barry. "It is a module standard in that purchase, but when it arrives it is an empty shell." at shell needs to be filled with the hundreds of thousands of line items that comprise all of a hospital's possible charges. What does it contain? How this intricate pricing menu is developed and managed varies based on the size of the hospital or health system and the available resources. e ideal chargemaster leader is someone with a firm grasp of the clinical and financial. "Some of the stron- gest [chargemaster] leaders I have seen are nurses," says Mr. Barry. "When interpreting Medicare law, it is not oen you find someone with a billing background that is qualified. e talent hospitals have to hire has gotten more expensive." Larger organizations are more likely to have the bandwidth to find someone with a foot planted in each sphere of healthcare, while smaller hospitals may assign some- one from the financial side as a chargemaster coordinator. Within the chargemaster, information is generally organized by department. "Each department has a numeric code. Every charge starts with the number associated with that particular department," says Mr. Barry. "en [organization] trickles down to the individ- ual payer." Information on bundled services and carve outs then resides within each payer section. For more information, call 425-657-0494 or visit our website at www.eveia.com Eveia's Clients: · Ambulatory Surgery Centers · Surgical Hospitals · Health Systems · Physician Practices · Anesthesiologists Provider Business Services Optimizing opportunity Provider Contracting Services Reimbursement experts Operations Compliance & Consulting Services Preparing for excellence

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