As healthcare facilities and hospitals strive to improve their performance in the financial department, it is increasingly crucial to know what elements in the process of generating revenue operate well and which areas could improve. Few industries can handle the complicated combination of external and internal issues to maximize the revenue streams that healthcare institutions must tackle. One of the areas that illustrates these challenges is the issue of charge capture, which is a prime target for problems that could arise.
Companies typically audit the charge capture process to find and fix these issues. If executed properly, charge capture audits could result in significant improvement in capturing revenue lost, ensuring compliance, and improving general financial efficiency.
How do you define charge capture? And what is its significance?
Charge capture is the recording of the posting and reconciliation for all medical services provided during a patient’s visit. This covers therapies, labs such as pharmacy services, diagnostics, and all other aspects of the delivery of care to patients, like diagnoses and procedures. Capturing charges is carried out within the company’s financial and clinical systems. This means that the information is input into various systems with various functions.
The main goal of accurate charge capture is to guarantee revenue. If there are no or incorrect charges from an encounter with a patient, the service provider is likely to not be able to earn revenue. For companies already operating at low margins, the loss of revenue can hinder their ability to adequately fund their operations, upgrade equipment, or hire additional personnel to ensure that service levels are maintained.
Incorrect charge capture can also affect financial performance in various ways.
In preparing a claim for reimbursement by the payer, providers need to transform the charges from other medical records and administrative and clinical data into medical codes. Charges play a crucial function in ensuring the accuracy of coding because they reflect the specific services rendered and facilitate the utilization of certain revenue codes, such as DRGs (diagnosis-related groups) and HCCs (hierarchical condition categories), which are the basis for payments. The correct charge codes help to ensure accurate coding and increase the likelihood of timely payment.
Payers typically examine charges from various angles. As such, providers must ensure that the correct recording of charges is supported by the required documents and revenue codes and that they meet payers’ specific requirements, such as health necessity, preauthorization, or other requirements.
If any charges are missing following the submission of a claim, the amended claim should be made and analyzed to ensure that the coding is accurate, and then it should be re-sent at the paying party’s request.
What is the best way to conduct a formal audit of charge capture?
Charge capture audits should check the internal controls surrounding the current procedure. They should evaluate the current methods for initial charge capture, monitor the accuracy of charges, and report on the overall effectiveness of all interactions. This will allow you to pinpoint areas causing problems and identify the problem or make system changes needed to prevent incorrect charges.