Service Documentation Monthly Journal
Source: The Academy of Healthcare Revenue

Charge Capture Improvement Strategies

February, 2007 –Denials and underpayments originating from errors during patient access have been an ongoing concern for many revenue cycle leaders, but of equal (if not greater) importance are denials and underpayments resulting from inaccurate and inefficient charge capture processes.  Inefficient charge capture can result in significant financial losses for providers, as well as putting providers at risk for compliance issues with Medicare and Medicaid programs.  Thus, it is of vital importance that revenue cycle leaders ensure their charge capture processes—from physicians’ documentation through the coding and billing of claims—are optimized to maintain accurate coding, avoid both under- and over-coding, and guarantee that claims are submitted promptly after patients’ visits. 

Some of the potential consequences of an ineffective charge capture process can include lost reimbursements due to missed coding assignments, denied claims due to lack of linkage between ICD-9-CM and CPT codes, a prolonged period of time needed for billing, and an increase in administrative costs.  In a traditional paper-based HIM environment, the charge capture process typically entails a physician recording patient encounters that are then batched and sent to the facility’s billing area for coding.  Unfortunately, this process has the potential for several errors resulting from lost forms, delays in submitting documentation, and more.  In response, many providers continue to shift away from the paper-based environment to an electronic one.  Yet, although an electronic charge capture process can significantly reduce some of the inefficiencies inherent in the paper-based model, HIM leaders should still evaluate many elements in the charge capture process for their effectiveness. 

One of the elements that HIM leaders should evaluate is the charge ticket, or charge slip.  It is important that the charge ticket encourage accurate coding assignments, making sure to include all possible levels of severity of illness, and ensure that all ICD-9-CM and CPT codes are linked.  Some of the essential elements that must be contained on the charge ticket are the following: 1

• Patient Identification.  Identification should be verified with at least two data elements unique to each patient, such as a patient’s social security number and date of birth.

• Service Details.  The date of service is important for documentation purposes.  HIM leaders may also want to consider recent changes being made in the UB-04 form requiring documentation of the reason for patients’ visits (e.g., chest pain), as well as the new present on admission indicator (POA).  For more information on the new UB-04 form, see the article entitled “UB-04 and Its Implications for HIM Staff Members” in last November’s SDM.   

• CPT Code.  The charge ticket should include ample space for recording services or procedures performed by the physician during patient encounters.

• ICD-9-CM Diagnosis.  There should be a clear link between the diagnosis code and the CPT code in order to support medical necessity and ensure appropriate reimbursement. 

Ultimately, the charge capture methodology used by each physician must enable the physician to record the highest level of detail for patient encounters.  This should also include the level of severity of illness and the treatment required for that diagnosis.  Physicians must be able to easily and accurately record the level of service provided to patients so as not to under- or over-code patient encounters.  Illustrating this point is the example of a University of Chicago physician practice group that was discovered to be only billing for the two highest levels of evaluation and management codes.  The reason for this error by the group was that physicians’ charge tickets only contained—and thus encouraged physicians to document—these two levels, leading to inaccurate reporting and billing. 2 

Another aspect of charge capture that HIM leaders should evaluate is the quality of linkage between assigned CPT and ICD-9-CM codes, which is a critical component of reimbursement.  ICD-9-CM codes should be recorded in descending order with the first being the diagnosis with the highest relative weight.  CPT codes then must be linked to each corresponding diagnosis code that provides the most support for the CPT assignment.  To help facilitate accurate linkage between diagnosis and procedure codes, best-performing hospitals require physicians to number the ICD-9-CM codes assigned on the charge ticket.  Numbering diagnoses can significantly aid coding staff members later who must prepare the ICD-9-CM codes for billing.  However, coding staff members should not be required to sequence these diagnoses since they are not appropriately qualified to make such judgments.  Therefore, physicians’ charge tickets should not simply contain a list of check boxes with the most common ICD-9-CM diagnoses, but should also include space for physicians to sequence the diagnoses recorded during patient encounters. 

HIM leaders should also analyze the processes used to follow-up with physicians in the event that documentation of patient visits do not support assigned ICD-9-CM codes.  An ineffective chain of communication between coding staff members and physicians can result in denied claims or underpayments.  Physicians that are contacted by coding staff must be required to provide written documentation of any amendments to records of patient encounters.  If a coding staff member simply makes an adjustment on the charge ticket based on a verbal exchange with a physician, third-party payers and external auditors would likely rule that the charge was inappropriate since it lacked supporting documentation in the patient record. 

To help facilitate the charge capture process, many facilities have turned to electronic methods of documentation, specifically adopting electronic charge tickets to replace paper-based lists.  Physicians can then accurately record ICD-9-CM codes during patient visits and be prompted with the appropriate corresponding CPT coding assignment.   These devices can also be integrated with facilities’ patient accounting systems so that patient information is easily accessible by the attending physician.  Also, information on the electronic charge ticket recorded can be easily transferred to the patient accounting system, reducing the potential for record loss or keying errors when paper records are transferred.  However, it important to note that, although an electronic charge capture tool can significantly increase accuracy and reduce time-to-bill, HIM staff members are still needed to review all coding assignments for accuracy and medical necessity to ensure appropriate reimbursements. 

One primary key to maximizing charge capture processes is obtaining physician buy-in of all efforts to improve documentation and coding quality.  Physician involvement in any coding improvement effort is vital for success.  To this end, HIM leaders who successfully drive coding improvement initiatives often first consult with physician leaders to jointly evaluate where potential charge capture process breakdowns may be occurring and to identify specific areas with the opportunity for improvement.  With more scrutiny of hospitals’ charging practices, especially on the part of Medicare and Medicaid, it is more important than ever to ensure that ICD-9-CM and CPT codes are assigned appropriately and all necessary documentation is collected to obtain maximum reimbursements. 

1 Susan M. Hull, “Charge Capture and the Physician Revenue Cycle,” Journal of AHIMA, October 2003.

The Academy of Healthcare Revenue
The Academy of Healthcare Revenue is a membership-based community that provides healthcare leaders with objective research focused specifically on the healthcare revenue cycle. Members receive an unlimited supply of all research--including benchmarking and best practice reports, implementation tools, monthly journals, attendance to virtual conferences, and more--designed to enable them to improve their revenue cycle processes and financial health from within. Furthermore, The Academy's membership offering is tailored to team members throughout the revenue cycle, from executive leadership to patient access, coding, billing and collections, and clinical staff, helping to drive process improvement efforts revenue cycle-wide. Service Documentation Monthly is one of four journals written by The Academy of Healthcare Revenue monthly.

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