Lecture Notes: Hospital Chargemaster by Dr. Eric Bricker

Introduction

A list/database of hospital supplies, medications, and services with associated prices.
Prices are billed to insurance companies, Medicare, Medicaid, or individuals.
The charges are often termed 'billed charges'.

Department Number: Unique to each hospital; a 4-digit code (e.g., radiology, ER).
Charge Code: Unique numeric code (often 9 digits); acts as a service or medication identifier.
Description: Shortened to 36 characters using abbreviations to describe services like X-rays.
Revenue Code: Standardized 3-4 digit codes used across hospitals (e.g., ER visit level).
CPT/HCPCS Code: Procedure code; used for specific procedures like surgeries.
Modifiers: Indicate specifics like left or right side surgery; up to 4 modifiers possible.
Price: The billed charges, which are generally much higher than actual costs.

Insurance Denial: Different payers accept different combinations of Revenue Codes, CPT codes, and modifiers.
- Hospitals often guess combinations, leading to denials.
- Denied charges might be billed to patients automatically.
No Standardization: Hospitals are not informed by insurance companies about acceptable code combinations.
Strategic Pricing: Prices are set based on volume and services; often exaggerated to show average pricing.

Administrative Waste: The complex billing process adds no value to patient care and results in wasted resources.
Irrational Pricing: Creates a burden on patients, especially with denied insurance claims.
Reform Needed: The current system is dysfunctional, with calls for standardization and transparency.

Comments highlight the complexity and call for reform in hospital billing practices.
Concerns about transparency laws potentially leading to price fixing.
Emphasis on educating healthcare professionals about billing intricacies.

The current chargemaster system is flawed and does not benefit patients.
Calls for systemic changes to improve fairness and transparency in healthcare pricing.