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A project to redesign hospital and physician bills is picking up steam as providers realize the benefits for financial and operational performance, and for patient satisfaction.

The OIG's new definition of "usual charges" could have a significant impact on payment rates for a hospital's services. Traditionally, "usual charges" has referred simply to non-discounted rates maintained in a hospital's charge description master. The OIG's definition of the term includes discounted rates that a hospital negotiates with commercial payers. If the OIG's definition is adopted, payers may attempt to apply it, thereby complicating rate setting negotiations and monitoring of contract compliance.

Effective CDM management not only minimizes revenue losses due to denied claims, but also helps eliminate administrative costs associated with correcting coding errors. Accountability for CDM management should be assigned to a single individual, who ideally reports to the CFO or high-level finance director. If your organization is prone to making billing errors due to CDM deficiencies, you should consider purchasing CDM software to help you manage your CDM.

Cedars-Sinai Medical Center in Los Angeles revamped its billing system to better meet patients' needs for comprehensible billing information. After changing its billing format and processes, the provider's phone-call volume decreased 31 percent, translating into an annual savings of more than $250,000. Patient feedback regarding the new system has been over-whelmingly positive. The new billing system has contributed to 20 percent acceleration in payment.