Research shows that 40% of revenue cycle leaders do not talk about charge capture on a regular basis.2
As hospitals and health systems work to recover from the financial fallout of the COVID-19 pandemic, they must recognize and address revenue loss related to charge capture leakage. According to the Healthcare Financial Management Association (HFMA), up to one percent of a health system’s net charges are lost to such leakage, leading to millions in lost revenue annually.1 “These errors, such as charges billed for services that differ from documentation, incompatible or even contradictory charges between hospital and professional claims, and services that were never charged at all, pose threats to payment.”
Industry best practice for charge capture is three to five days after the service date. Yet, nearly one in four revenue cycle leaders surveyed reported that submitting a claim can take up to four weeks after the service date.4, 5
Certain charges are more complex to capture. These include cardiology, nephrology, orthopedics, pediatrics, and radiology.3 These specialties include more extensive documentation and codes that can be more time-consuming to manage. For areas such as busy emergency departments, clinicians may find it especially challenging to stay on top of charge capture tasks. Yet, under-capturing or mismanaging high-risk charges can lead to increased denials, decreased or delayed reimbursement, payer takebacks, and substantial penalties.
Achieving Charge Capture Best Practices
First and foremost, revenue cycle leaders need to proactively identify high-risk service areas that are prone to delays in charge capture. These should be prioritized for process improvement. Setting goals to improve charge capture is vital for timely, accurate reimbursement. This means clinicians should strive to complete charts within 24 to 48 hours of the service date, although adding one or two days may be appropriate if there is an interface. According to Conifer Health, achieving 100% within four days is possible regardless of specialty area if the hospital establishes guidelines and enforces policies.
Prioritizing high-risk charge capture can help hospitals prevent missing charges, reduce charge lag times, and maximize revenue potential.
Another significant step hospitals can take to improve high-risk charge capture is to stress the importance of cross-functional collaboration between the clinical and revenue cycle teams. Clinicians must understand the need to respond to biller questions as quickly as possible and that not doing so can directly impact charge capture and cash flow. Similarly, billers need to understand that it is inappropriate to guess when facing issues such as illegible clinician handwriting or incomplete notes. Making guesses to avoid disturbing a busy clinician will likely lead to more work in the future for both the biller and the clinician.
Mitigating Risks and Ensuring Compliance
According to Modern Healthcare, payers are using more sophisticated algorithms to perform automated reviews, more complex criteria for claims submission and medical necessity, and more variables in their contracts—all leading to an increased potential of compliance issues and denied claims.6 Simply keeping up with ongoing amendments to procedure rules for services that involve high-risk charge capture can be challenging for already over-burdened revenue cycle staff. Yet, not doing so can lead to an increase in payer audits, takebacks, and penalties.
Because incorrect coding falls under the “fraud and abuse” category of the American Medical Association’s Principles of CPT® Coding, penalties can run into hundreds of thousands of dollars and include incarceration.7
One of the best ways to ensure regulatory compliance for high-risk charge capture is to establish a robust compliance program that includes rigorous staff training. It can be challenging for clinicians to stay on top of changing ICD and documentation requirements. Clinical Documentation Integrity Practitioner (CDIP®) training can be beneficial and can help mitigate much of the discomfort many billers have about interrupting or correcting busy clinicians. Training brings enhanced awareness of the importance of timely, accurate charge capture and can go a long way in reducing charge capture-related revenue loss.
Another equally important part of a successful compliance program is the implementation of internal quality audits—including evaluation and management (E&M) utilization reviews. E&M is an area government and commercial payers pay particular attention to. Internal E&M reviews give hospitals a more complete view of trends over a larger period of time, enabling potential regulatory issues to be corrected before a payer audit occurs.
A third element of a successful compliance program is the implementation of automation technologies such as HRC (high-risk charge capture) solutions. These technologies work by continuously auditing processes and flagging potential issues so they can be quickly addressed before they have a chance to interrupt the revenue cycle. This can help reduce additional work for staff while also making them more productive.
The Bottom Line
In these challenging times, hospital revenue cycle leaders must do all they can to ensure timely, accurate high-risk charge capture. By proactively identifying high-risk charges prone to error, establishing industry best practices, implementing clinician compliance training, and establishing an internal quality audit program, hospitals can help mitigate revenue loss and promote long-term financial viability.