If you defi ne revenue cycle around the transactional function of charge capture in the Charge Data Master (CDM), then how much sense does it make for IT to link the CDM with Supply Chain’s Item Master fi le (IMF) of devices, products, services and supplies brought into the organization and why?
DeAngelo: T is would not necessarily change the reimbursement for revenue cycle. However, it would allow for timely procurement of an- cillary products/services that may cause delays in being able to provide services to the patients if the supplies, devices, etc., are unavailable, therefore causing delays in when services can be rendered and billed
Dragovits: As we move toward value-based payments, there will be the need to see the entire cost of a procedure or service. T at includes devices, products, services and supplies. Only when we know the complete picture will we know what the outcome is versus the cost. T at is critical for value-based care as well as reducing the overall cost of care.
Amick: Linking your item master to your chargemaster makes all the sense in the world as it’s really the one way to give you a complete picture of your pricing strategy in action – which is another critical change in the post-reform era – the patient is going to become an increasingly advocate consumer of goods. Linking these two technology database “types” (chargemaster supplies, materials management item master, internal invoice fi les, internal markup schedules and manufacturer information) is a way to get what are have been traditionally siloed functions – revenue cycle and supply chain/procurement – on the same page to achieve the same goals and will improve charging processes, minimize revenue leakage and improve revenue capture. Creating a defensible pricing strategy requires analyzing your acquisition costs against target markups and actual charges. T e comparison should include billable and non-billable items, along with supplies and pharmaceuticals. T is organizational linkage will help to improve cost-to-charge
transparency and accuracy to capture all chargeable supplies ap- propriately. It also will play an important role in understanding and controlling cost drivers, which will be critical in surveying the episode of care and bundled payment reimbursement envi- ronment.
England: From a supply chain and data integrity perspective, it does make sense to link the CDM and IMF. By showing utilization and standardization throughout the organization, trends in both the ex- pense and revenue aspects can be proactively managed and addressed.
Rose: It depends on the depth and breadth of the linkage. Core sets of data elements should be tied together so charges and resource use can be analyzed. But since systems are so diff erent in their functionality and in the standards they use for coding, to integrate them within a hospital is extremely diffi cult. Not only that, but to integrate them across hospitals and diff erent environments and systems is nearly impossible. It is important to link specifi c elements of resource and device use from the IMF fi le with the CDM.
Campbell: Tighter linkage up and down the chain is very valuable to management and not just between the CDM and the IMF for cost analysis and near-time inventory management. It’s also important in OPPS settings to link CDM entries to the appropriate CPT codes. Auditors are looking for discontinuity between documentation, professional fees and technical fees. Being able to link and reconcile all three is increasingly important.
Magnuson: Greater synchronization with the supply chain is a neces- sary optimization. Not only do organizations spend an extraordinary amount of their operational budgets on supply, but those supplies need to be appropriately billed.
Schwartz: Linking the chargemaster to the item master provides the key foundational data needed to gain insight into procedure costs and quality metrics. Identifying how items are captured in the item master and defi ned in the chargemaster is the fi rst step toward being able to analyze how to capture and improve outcomes in conjunction with tactical reimbursement plans. If items (implants and devices) are not clearly defi ned in the chargemaster, then the data cannot provide the foundation needed for charge capture, clinical eff ectiveness and compliant reimbursement. On the other hand, supply chain must focus on consignment inventory, which represents a large percentage of implant and device expense. Without clarity around implant pur- chase activity and usage, true cost management and revenue integrity get lost behind the data.
Lang: Providers are operating under multiple payment models: Fee for service for outpatient and physician reimbursement, procedure- based fl at fees and value-based purchasing payments. Under the shift from volume to value, providers must take mul-
tiple approaches to connect data. T ere is a race to get the IMF cost information complete, con- sistent and tied to the CDM to aff ord providers with access to the highest reimbursement and the lowest withholding based on their cost/quality profi le compared to other institutions.
Visit the HMT website for additional answers to questions from the full article at www.healthmgttech.com/articles/201406/tactics- boost-revenue-cycle-management-operations.ph
• Why might you argue that Revenue Cycle should connect the CDM to the EHR/EMR first or before the Item Master File?
• What financial and operational problems do you think the CDM- IMF linkages will reveal?
And Online bonus revenue cycle management articles:
• Cycling through improving revenue management www.healthmgttech.com/articles/201406/Cycling-through- improving-revenue-management.ph
• Same-database marriages www.healthmgttech.com/articles/201406/same-database- marriages.ph
•Code connections www.healthmgttech.com/articles/201406/Cycling-through- improving-revenue-management.ph
•Want to accelerate your revenue cycle? www.healthmgttech.com/articles/201406/Code-connections.php
•Unburden your billing cycle by going electronic www.healthmgttech.com/articles/201406/Unburden-your- billing-cycle.ph
HEALTH MANAGEMENT TECHNOLOGY June 2014 11
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