CDM maintenance impacts hospital revenues

CHICAGO – A charge description master, or CDM, encompasses basic information and coding about everything a hospital can charge a patient.

Despite its importance, independent consultant Cheri Kane estimates that half of all U.S. hospitals don’t have an automated CDM tool, which standardizes pricing and descriptions for line items.

“Regulations are so layered and difficult, hospitals must have a CDM vendor that can help you set up basic guidelines and policies,” she said.

A CDM tool can help hospitals become Medicaid-compliant. The Centers for Medicare and Medicaid Services doesn’t allow hospitals to charge for certain things, and a CDM tool can automatically strip out those items from the CDM.

“A CDM tool can also help you get the maximum reimbursement,” said Kane. One of her hospital clients saw an estimated $50 million net revenue change in one year because of lost charges due to a reimbursement change.

Another client discovered duplicative and inappropriate charges and refunded $500,000 to CMS. “It’s better to self-disclose than to have others uncover the inappropriate charges,” Kane said.

For financially distressed hospitals, CDM maintenance represents the biggest opportunity to recover revenue, she said.

Wayne Little, CPA, director of ambulatory care services for 3M Consulting Services, said hospitals are looking for more bandwidth to manage enterprise-wide processes that impact CDM maintenance and a dynamic environment where new services are constantly being offered.

Little also advocates for automated CDM tools, but added, “The tools are only as good as the user. There are decisions you have to make based on items being flagged. That rests on the internal staff or consultants. They are the ones that drive change.”

Ultimately, he said, “What you want from beginning to end is to make the processes be complete, compliant and accurate. You want a process to monitor changes and have the knowledge to be able to understand what those changes mean.”

Hospitals need to know which solution is the best fit. Rebecca Kidder, RN, compliance supervisor for Marietta Memorial Hospital in Ohio, said a consulting firm’s annual review of the hospital’s CDM didn’t provide mechanisms to fix problems. In 2004, the hospital switched to a Web-based software solution by Accuro Healthcare Solutions.

Now, Kidder can run reports at any time, access information and go to an electronic link for troubleshooting. She can also get information in real time for changes in CPT codes and the rules associated with them, which translates into misbilling reductions.

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