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Lost in Translation: The Value of Accurate Charge Capture

On average, hospitals lose roughly 1% of potential net revenue due to issues and deficiencies with charge capture processes1. The financial stakes of the matter are certainly real, and usually understood. And yet, difficulties continue to arise due to a large grey area between clinical modalities and revenue cycle operations, and it is in that space where much gets lost in translation. Who takes ownership in this shared territory - clinical leadership, IT, revenue integrity groups?  Responsibility is ultimately diffused. At Wilshire, we are experienced in navigating this shared space and bringing resources across these groups together to obtain optimal processes and results.

Since the transition to EMRs, the expectation has been that charge capture should be simple, quick, and even automated. Reliance on the use and transfer from department to department of paper charge sheets is now mostly obsolete. Today’s sophisticated technology is doing more than ever to reduce manual efforts like charge capture. However, we are also in an era of increasingly stringent and complex rules, regulations, and individualized payer contracts. Despite technological advancements, it is ultimately still people who need to navigate the complexities and get it right at the end of the day.

But people are far from perfect…people take shortcuts, make incorrect assumptions, and can only learn, hold, and compartmentalize so many pieces of information at one time. Consequently, we install as many system checkpoints as possible and have teams of billing and coding experts working tirelessly to ensure full financial returns. And if the buck stops with those tireless workers, it begins at the point of service, when clinicians deliver care, document services, and determine (with or without knowledge) what can be charged and to who(m). What follows next are several reasons why, despite their reluctance, it is in everyone’s best interest (including their own), that clinicians enter and account for charges as accurately as possible at the point of service.

You might be thinking “it doesn’t matter who gets the charges right, as long as someone gets them right”. Unfortunately, that is not an advantageous mentality. It doesn’t take long to see some of the redundancy in healthcare operations when you look at the hospital charge cycle. Take a second to think about your organization. You likely have alerts in place to catch and add charges that are missing. Your ED coders may spend an immense amount of time and effort just going back over the physician’s LOS charges. How many people do you have staffed in your billing office who are focused entirely on claim edits due to inaccuracies? Sadly, this is the current state of affairs across the country. The following is an all-too-familiar occurrence we see at health systems of all sizes:

A clinician documents what he or she performed, and charges are triggered on an account that goes for post-discharge coding and review. The reviewer however, finds a charge for a condition not present on the diagnosis list, a miscellaneous OR inventory charge, used instead of the actual (and expensive) inventory item, and no charges for at all for breathing treatments even though respiratory distress was indicated in the chart, and treatments were recorded by the nurse. The time spend in analysis and investigation is significant. Furthermore, upon completion of account review, confirmation with the clinicians is necessary, which requires additional time and effort out of their already busy schedules. The provider reviews the notes and diagnoses, adds the one that was missing, and the nurse adds detail to her chargeable flowsheet documentation. These edits are then reviewed and verified once again by billing staff. 

There will always be charging complexities that we don’t expect clinicians to understand fully, but when they get the basic charges entered accurately up-front, there is significantly less time spent in analysis, review, and re-work (for everyone involved). In turn, this makes your reimbursement specialists more efficient, and frees them up to focus more on maximizing for payer and regulatory complexity, instead of investigating and correcting all the essentials. The positive impact continues downstream since the increased efficiency creates a quicker bill cycle and speeds up cash flow via reimbursement. At The Wilshire Group, we work hand-in-hand with both your clinical resources and your billing staff to make it happen. We assess the common trouble points and employ methods of education and system efficiencies to improve your charge capture and review program permanently.

One final note, put most simply, is that when your point-of-service clinicians get their documentation and the corresponding charges correct up front, the total amount of revenue coming back into the facility increases. When there are inaccuracies, some of those discrepancies may not get caught in review, and the claim may get denied and the money potentially never recouped. Conversely, improved accuracy of charges and supporting documentation at the time of service reduces necessary downstream edits, which yields a reduction in the number of denials. The better the inputs, the better the outputs, every time. 

Do the scenarios above ring any bells? Are these challenges you deal with regularly at your organization? Ask yourself these questions:

  • Do you have high denial rates or high coding AR days?
  • Do you know your charge lag statistics and percentage of late charges from total?
  • Do you struggle to get your clinicians to buy-in to upfront charge accuracy?

These are issues that can be fixed, and The Wilshire Group can help you do it.  Accurately capturing charges at the point of service ultimately saves time for your front-end clinicians and your back-end revenue staff, while also significantly improving the bottom line on your balance sheet. That 1% starts trending back toward zero. Each point in the life cycle of a hospital account becomes more productive when you remove the excess work and duplication of efforts. The impacts can be transformative.

Stay tuned next week for discussions on opportunities and best practices around reducing manual charge tasks and increasing your system’s charge automation capabilities.