Challenge
Carthage Area Hospital, a 25-bed Critical Access Hospital in Carthage, NY, was looking for a comprehensive way to manage their chargemaster (CDM) and develop a consistent method to establish pricing. To meet CMS’s 2021 Price Transparency requirements, all hospitals must now publish an online version of their chargemaster, making it easier for patients to research services, evaluate hospital pricing policies, and estimate their cost of care.
The hospital’s CDM contained more than 4,500 individual charge codes that needed to be analyzed on a tight timeline — a task that seemed insurmountable when the hospital was juggling many competing operational priorities. The revenue management cycle team was already busy managing challenges like invalid CPT codes requiring manual intervention and potential missed revenue opportunities with commercial payors due to charge codes priced lower than the Medicare Fee Schedule.
Process
Stroudwater Associates partnered with Carthage Area Hospital to identify problems and optimize information in its chargemaster. The hospital sent us their CDM and Revenue Detail file, which we loaded into our proprietary, web-based Strategic Pricing Tool. We ran 4,500+ codes through several key data points to identify issues with:
- Invalid CPT/HCPCS codes
- Fees below published Medicare Fee Schedule
- Services using the same CPT/HCPCS codes priced at different rates
- Charge codes missing CPT/HCPCS codes
As part of the hospital’s annual subscription, we also provided advisory services to develop a plan to resolve the issues we identified.
“The Stroudwater Pricing Tool is very easy to use, and it provides us the ability to quickly see our information in a straightforward format. We are able to develop a continuous monitoring process for the chargemaster, freeing us up to internally promote the appropriate usage of charge codes,” said Carrie Bova, System Director of Revenue Cycle, Carthage Area Hospital.
“The simple process to access the information and value we received made it a great investment. The Stroudwater tool is the most affordable option out there, other comparable tools are much more expensive. This tool is a much more fluid tool and allows hospitals to focus on a shared goal of addressing pricing problems which make healthcare more affordable to the marketplace.”
Results
Stroudwater’s services benefited Carthage Area Hospital through qualitative and quantitative results:
- Qualitative results:
- Using the detail provided by our Strategic Pricing Tool, the hospital was able to take immediate action to correct errors and make significant improvements to its chargemaster.
- The hospital is now addressing missed revenue opportunities by identifying policies where changes in price were used to reflect additional services rather than appropriate CPT/HCPCS code usage.
- Quantitative results
- Stroudwater processed the hospital’s entire CDM and analyzed the data in less than two business days, with virtually no work required from hospital staff.
- 17% of the CDM was priced below Medicare Fee Schedule
- 5% of the Codes contained Invalid CPT/HCPCS codes
- 27% of the services were using the same CPT/HCPCS codes priced at different rates
- 3% of the codes were missing CPT/HCPCS codes
- Within 30 days, changes to the CDM led to the following outcomes:
- 6% of the CDM was priced below Medicare Fee Schedule
- 0% of the codes contained Invalid CPT/HCPCS codes
- 2% of the codes were missing CPT/HCPCS codes
- Stroudwater processed the hospital’s entire CDM and analyzed the data in less than two business days, with virtually no work required from hospital staff.
Learn more about our Strategic Pricing Tool.