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.

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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.

For the first time ever, Marietta Memorial Hospital conducted a pharmacy review – a critical task given that one quarter of the 199-bed facility’s 15,000-item CDM comprises pharmacy items.

The review identified whether the pharmacy items had the correct code, description and multiplier attached to them. Wrong multipliers result in either overpayment or underpayment of the pharmacy item charged.

CDM maintenance is a Top 10 IT priority, according to Kidder, because it impacts everything from IT to accounting to claims. “You have to have e-tools to have an accurate, timely and complete CDM,” she said.

Duane Abbey, CFP, of Abbey & Abbey, Consultants, said CDM maintenance has become “increasingly more important over the last decade” given the pricing issues, increased billing for physicians, the continual addition of new services and the need to keep abreast of CPT/HCPCS codes and similar payment systems that are impacted by procedure coding.

Abbey recommends an external CDM review or audit every three to five years. CDM coordinators can use simple office productivity tools such as MS Excel and Access for enhanced analysis and maintenance.

For more rigorous coding, billing and claims transaction issues, knowledge-based tools run the spectrum from simple search capabilities to artificial intelligence engines.

“Most hospitals recognize the need for a CDM coordinator,” said Abbey. “For larger hospitals and/or tightly integrated systems of hospitals, a small department of well-trained and skilled personnel is needed regardless of specific tools.”

In the last seven years, CDM maintenance has become much more manageable because of the various tools now on the market, said James Brown, a partner at Deloitte.

That said, a distinction needs to be made between CDM maintenance and charge capture maintenance – at the point of the clinical service.

“The real revenue leakage is when other department systems aren’t tied into the CDM,” Brown said, resulting in charges for reimbursable services not getting coded and hence billed.

While charge capture is separate from CDM maintenance, they are inextricably linked. Evaluating front-end systems to discover gaps to the CDM is just as important – especially now that the automated CDM maintenance market has rapidly matured.


3M Health Information Systems

3M Chargemaster Online

Features: A comprehensive Web-based chargemaster solution that goes beyond standard coding validation: Provides advanced charge capture features that alert healthcare organizations to revenue opportunities that may have been overlooked; analyzes all itemized procedures and automatically identifies related procedures or devices which may be missing or for which charges may not have been generated; and streamlines cross-departmental communication with enhanced workflow features, updated forms, assigned approval teams and user-friendly e-mail functions. 3M’s complete chargemaster solution combines advanced software with onsite support from chargemaster experts with 3M HIS Consulting Services who assess chargemaster coding, charging, intent of service and compliance issues.
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Accuro Healthcare Solutions

CodeCorrect CDM

Features: Accuro Healthcare Solutions’ Web-based CodeCorrect CDM allows users to identify and correct coding issues, create new line items, perform comparative pricing and maintain comprehensive line item history. Standard and ad-hoc reporting coupled with notification of regulatory changes as they occur with impacted line item identification improves communication and streamlines workflow, making it simple to keep your chargemaster up-to-date. CodeCorrect CDM is integrated with Accuro’s CodeCorrect Knowledge for easy access to the latest regulatory information and coding and compliance intelligence.
Contact for product: Sales Support, 877.937.3600, ext. 302,


Chargemaster Toolkit Suite

Features: The number one selling Chargemaster management solution, this suite helps hospitals manage their Chargemaster file, ensuring accuracy, compliance and efficiency. The PC-based suite includes the Chargemaster Toolkit and modules that assist with supply management; modifier usage; biologicals, devices, and pharmaceuticals payments; fee schedules; comparative price benchmarking; price modeling; and specialized workflow processes.
Contact for product: 877.624.2792

MedAssets Net Revenue Systems        

CDM Master

Features: CDM Master incorporates state of the art technology with the industry’s most accurate and complete coding, compliance and best practice charging information. Built-in defensible pricing tools and comprehensive benchmarks ensure optimal revenue integrity.
Contact for product: Gee Gee Collins, 651.222.7038,

MedAssets Net Revenue Systems

Medgician Online

Features: Dashboard indicators; desktop view of all identified chargemaster issues; warnings and alerts specific to hospital, clinic, DME and ASC provider; settings; robust reporting and flexible filters; wage-adjusted Medicare fee schedules and pricing benchmarks; integrated electronic Request Management and Tracking System; permanent audit histories; data export templates with wizards; charging and compliance consultative support; pricing benchmarks covering 95 percent of all clinical services – including inpatient, supplies and pharmacy items; access to MedAssets’ Best Practice Chargemaster, which enables intelligent setup of new services and supplies; pharmacy billing factors; HCPCS to brand-name crosswalks and device codes; facility-specific CMS benchmarks and local fee schedules; embedded references and source documents and permission-controlled user security access.
Contact for product: Lisa Kadi, 800.434.5142, ext. 3153,