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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.

Healthcare payment systems are varied and complex, and have a great impact on the development and maintenance of the chargemaster. The general approach and structure for payment systems must be understood, as well as the various idiosyncrasies within specific payment systems.

Is your chargemaster current, compliant, and comprehensive? In the age of APCs, healthcare facilities would do well to answer these questions regularly. Here's how an HIM professional can help.

Upcoming modifications are designed to capture current service delivery patterns, reimbursement methods, and payment sources for hospital visits, rather than what the hospital charges for individual treatment inputs; the result will be an index that better reflects price changes in the dynamic health care field.

Systems thinking is a fundamental element of quality management and should be a fundamental element of health care reform. An implication of systems thinking is that one aim of health care should be to minimize the total costs of illness, not simply the direct medical expenditures. If we are to continue to improve health care over time, we should measure its impact on the total costs of illness to the patient, family, employer, and society. Thus a system of measurement is needed that quantifies total costs of illness and also suggests how these constituencies can collaborate to improve processes and reduce total costs. This article introduces the total costs of illness concept, contrasts it with societal costs of illness, describes a measurement system we developed to quantify it, and describes a case study examining the total costs of back injury illness to employers. We found that medical expenditures accounted for less than half of the total costs of illness, the average total costs of illness varied by over 350 percent among employers, and a simple metric (days off work) explained 62.5 percent of the variance in total costs of illness.