Journal of AHIMA - July 2011

System, and the National Drug Code
x CDM vendor resources (e.g., user’s guide or manual that
spells out in detail requirements for CDM maintenance at
the CDM file and field levels)
x Allowable data requirements within each field of the
CDM, which vary from vendor to vendor
x National Coverage Determinations and Local Coverage
Determinations
x Other public and private payer guidelines (e.g., detail
medical necessity and reimbursement policies set by vari-
ous other entities)
x The CDM file itself (hard copy or electronic)

Conduct Audit

The fifth step is to conduct the actual review of the CDM fields, taking care to specifically validate all data elements. Members of the audit team must have the proper audit mentality, which is to strive for the utmost CDM accuracy and consistency, involving all relevant stakeholders, and using all available resources to support the compliance plan, the revenue cycle, and the organization’s mission. They will need to actively coordinate and communicate throughout the audit.

A value-added CDM audit should at minimum result in fewer delayed or denied claims and an increased sense of ownership in the organization’s overall compliance plan.

The CDM is the vehicle through which a healthcare facility conducts all its charging operations. It is the link between the front-end ordering systems and the back-end billing systems. Consequently, every billable but not separately payable procedure, service, drug, or supply should be included in the CDM. Additionally, there should be reasonable expectation of coverage or payment and reimbursement for the item or service. The exception to this guideline is charge codes included in the CDM for statistical purposes. These items or services are included in the CDM for internal tracking and are not meant to be used for billing purposes.

During the audit, the audit team should ask the clinical department managers the following questions related to billing and reimbursement. For example, is every billable but not separately payable procedure, service, drug, or supply used in your department included in the CDM?

An example of a billable but not separately payable supply is a patient who presents to the emergency department needing a laceration sutured. The suture supply item is set up in the CDM at $15 per suture. Suturing services are covered and billable, and although Medicare will not pay for the suture supply item,

Conducting a CDM Audit

charge-based payers will. So it is important to include such items on the CDM.

Another question to ask the department manager is if the staff performs any services or procedures other than those listed in the CDM. If so, the CDM committee should consider if these items should be added to the CDM. This may be a good time to discuss the CDM workflows with the department manager.

Other items that require careful attention include:
x Linked and exploding charges: facilities that use these
charging strategies must audit them carefully, as improp-
er execution can result in significant compliance issues.
x Department codes: verifying the department number for
a given charge item will ensure the correct department is
charged and credited in the cost-reporting process.

The audit team must carefully validate the data within the CDM fields for every item, specifically noting any data fields that are incorrect or inconsistent. All incorrect or inconsistent data items must be reviewed with the stakeholders relevant to that specific section of the CDM (department) to:

x Confirm the error or inconsistency
x Agree on the correct data
x Agree on the time frame to make the change in the CDM
(immediate, at beginning of next month or quarter, or
other time)
x Obtain sign-off on the data changes and time frame, and
retain the sign-off sheets for future reference

Implementing, Monitoring Changes

Once the review and validation occurs, the facility will move to a
new phase of agreeing to any changes with stakeholders, imple-
menting, and validating the changes. Facilities should monitor
activities post-implementation to ensure that the changes have
been made accurately and determine a return on investment. A
value-added CDM audit can result in many improvements, but
it should yield two significant results:
x A favorable (downward or reduced) trend in delayed and
denied claims
x Increased stakeholder ownership over their part of the or-
ganization’s overall compliance plan ¢

Acknowledgment This article is excerpted from: Richey, John. “Charge Description Master Audits.” In The Charge Description Master Handbook, Anne B. Casto, ed. Chicago, IL: AHIMA Press, 2011. Available at https://ahimastore.org.

Notes

1. Institute of Internal Auditors. 2010. www.theiia.org.

2. Roth, James. “How Do Internal Auditors Add Value? Characteristics Common to Top-Rated Audit Shops Help to Shed Light on the Nebulous Concept of Adding Value.” Internal Auditor 60, no. 1 (Feb. 2003).