SUCCESS STORY | Strategic Alliance for Financial Efficiency 

Capturing Revenue Leakage: Coding and Reconciliation Enhancements from Intalere Partner Craneware Bring Madison Memorial $327,000 Return on Investment

The Challenge

Madison Memorial Hospital is a 69-bed licensed facility in southeastern Idaho that prides itself on being in the forefront of providing evidence-based holistic patient care and linking its community members to the most progressive physicians, treatment and medical technology available.

Like many healthcare facilities, Madison Memorial had been struggling with financial management challenges, including how to keep the chargemaster updated with the most valid and recent codes and descriptions. According to Dorsie Sullenger, Director of Pharmacy for Madison Memorial Hospital, there were hundreds of items in the chargemaster that did not contain the correct information necessary for the facility to maximize reimbursement, increase operational efficiency and mitigate compliance risk. “The system we had in operation was a manual system that required each department director to submit new supplies and medications into the central chargemaster,” she said. “This was very labor intensive and did not seem to register highly on the priority list of most directors and managers.” The facility was writing off thousands of dollars due to incorrect coding, and incorrect unit descriptions. It had turned into a situation in which the facility was being reactive to chargemaster problems, rather than being proactive. 

The Solution

The Directors Touchbase Committee, a regular standing committee at Madison Memorial, convened to brainstorm ideas on how the chargemaster problems could be resolved. A consensus was reached on moving away from the current manual input system and implementing an automated software system that would assist in reducing critical write-offs that Madison Memorial was experiencing. The objectives of implementation were to:

  • Clean up the chargemaster with valid charges, codes and unit descriptions.
  • Use an electronic system to keep the chargemaster current at all times by posting the latest updates from Centers for Medicare and Medicaid Services (CMS).
  • Reduce the amount of write-offs taking place (particularly Medicare).
  • Maximize revenue potential within the hospital.
  • Communicate electronically with any directors having supply or medications changes.
  • Achieve a return on investment (ROI) greatly exceeding the cost of implementing the solution.

After turning to their Intalere team for help, Intalere recommended a consultation with Craneware, a member of the Intalere Strategic Alliance for Financial Efficiency (SAFE) and partner that specializes in all aspects of revenue integrity including chargemaster management and control processes. Recognizing a good fit and the potential for significant return on investment, the hospital signed a contract with Craneware to implement the company’s Chargemaster Toolkit® and Pharmacy ChargeLink.

Chargemaster Toolkit is a flexible, easy-to-use solution that continually updates chargemaster data to ensure ongoing charge accuracy and consistency. Chargemaster Toolkit, ranked #1 in KLAS, is packaged with Craneware’s Online Reference Toolkit®, a browser-based tool that provides instant access to the most current clinical, financial, coding and regulatory information. Over a thousand hospitals and healthcare providers rely on Chargemaster Toolkit to:

  • Optimize reimbursement by identifying chargemaster incompleteness/inaccuracy.
  • Increase operational efficiency by automating chargemaster management.
  • Manage workflow based on the organization’s charge control processes.
  • Track interdepartmental routing, approvals and communication to provide an accurate audit trail.
Pharmacy ChargeLink ensures that administered medications are accurately coded, billed and reimbursed at an optimal level. By syncing the drug purchase history and the chargemaster and then plugging the gaps that cause revenue leakage, Pharmacy ChargeLink helps identify revenue opportunities and create defensible pricing strategies.

The Outcome

Almost immediately following the implementation, a large number of pharmacy items were found in the chargemaster without the appropriate HCPCS code assigned, which prevented proper reimbursement from the payer. Based upon this alone the immediate anticipated yearly ROI opportunity was $327,658. In addition, pricing issues were discovered including 140 identified items in which the unit cost was greater than the amount charged to Medicare. In terms of volume reconciliation issues, there were 647 line items in the chargemaster that had never been billed out.

The Craneware solution also allowed Madison Memorial to benchmark, by seeing how pricing on certain medications compared to other hospitals within the state or local area. “We could see if we were charging too much for an antibiotic infusion and, therefore, we could correct the problem before we had a patient complaint,” said Sullenger.

It also allowed the facility to do a price comparison based on procedure. For example, they could see what Madison Memorial Hospital charged for a cholecystectomy versus the price charged by other hospitals in the state. This comparative data allowed Madison Memorial to see significant changes that could be implemented into their current pricing scheme, a significant advantage in a highly competitive environment.