The price (and coding) is right

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Revenue Cycle / Supply Chain

Sue Te
Project Manager
DeKalb Medical Center

Jennifer Classen
Senior Analyst
DeKalb Medical Center

With the rise of consumer-driven health care and increased scrutiny of hospital pricing by federal agencies and patients, hospitals are challenged with developing a defensible pricing strategy while improving their bottom line. In this presentation, DeKalb Medical Center in Decatur, Ga. shares how they faced this challenge and how they have created significant net revenue improvement for the three-hospital system.

By closely managing the charge description master for the past three years, DMC has steadily experienced financial improvement. In the past year, chargemaster maintenance generated an additional $13 million in net revenue. Tips on how to identify these opportunities and examples of the effect of poor CDM management on reimbursement will be shared.

One of the most significant projects DMC has recently completed is an overhaul of their chargemaster for materials management. This was accomplished through an item master to CDM linkage, a process that is considered to be a best practice by HFMA. As a result of this review, DMC has improved charging compliance, developed cost-based pricing for supplies, and identified new revenue opportunities.

While analyzing the chargemaster remains a priority for DMC, recent efforts have been focused on addressing the scrutiny on hospital pricing and the rise of the uninsured. As an alternative to across the board price increases, DMC performs an annual pricing analysis to price competitively within the metro Atlanta market while maximizing reimbursement. The methodology for the pricing review will be discussed in detail, including identifying the necessary data, performing price sensitivity analysis, and estimating net revenue impact. This year's pricing analysis resulted in a three percent increase in gross revenue and an estimated $1.4 million in net revenue for DMC.

With the increase of consumer-driven health care, DMC has experienced an increase in patient phone calls requesting price estimates for services. For this reason, DMC has recently developed a tool to estimate total charges by procedure and package pricing for self-pay patients. The functions of the price estimation database and the structure of the packages will be shared.

The goal of this presentation is to provide attendees with project ideas, implementation guidelines, and lessons learned to identify net revenue opportunities in their facility while improving processes.