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Linking charge capture to the revenue cycle

Patient Financial Services Weekly Advisor, February 11, 2005

Charge capture has a significant impact on a facility's revenue. Each department in the hospital that provides goods and services needs to properly document and record its charges. Be aware of the following six areas to ensure your facility receives all the revenue it deserves:

1. Verification of correct patient: All charges must be applied to the correct patient account to avoid nonpayment from a payer.

2. Verification of key service elements: Correct patient account number, service date, and bill type should be verified prior to the charge-entry process. The service date must reflect the admission dates and charges incurred; and the bill type on the claim form must reflect the type of service the patient received (e.g., inpatient, outpatient, observation).

3. Selection of date of service: Many patients have more than one admission date. During the charge-entry process, staff must correctly identify and record the charges for each patient service date.

4. Clinical documentation: If a supply, room accommodation, or service is not properly documented by the staff providing the care, the hospital will not be able to collect payment for services rendered. If a charge on a patient account carries no corresponding clinical documentation in the medical record, the charge must be credited to the patient account-an overcharge.

5. Linking to order entry: Physician orders are linked by the order-entry system to some departments within a facility (e.g., laboratory, radiology, etc.). These orders trigger an automatic charge to the patient account. If the physician's orders call for a certain item to be given each day, the charge will automatically be charged to the patient account through the order-entry link.

Tip: When a patient is discharged, charging staff must match the order-entry charge with the clinical documentation in the medical record to ensure the charge matches the documentation. If there is an order-entry charge on an account without supporting clinical documentation, the charge must be credited to the patient account.

6. Undercharges, overcharges, and late charges: Undercharges are for goods and services provided to a patient and not charged to the patient account. An overcharge could result when there are two charges to the patient account and only one item was documented in the medical record-a duplicate charge. Most hospitals have a hold period after the discharge or service date during which staff enter all charges.

Tip: If staff are not timely with submitting charges, a late charge will be added onto the account and the business office must take action. Depending on the contract or rules governing the insurance company, the charge must either be submitted late (which causes delay in payment to the hospital) or written off, because no late charge can be submitted to the payer.

This week's tip was excerpted from HCPro's Revenue Cycle Training Handbook. Copyright 2004 by HCPro. To learn more about the handbook, which covers how each department plays a role in the facility's financial success, click here.

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