Today’s environment necessitates that healthcare CFOs and financial managers explain, document, and defend the rationale behind their CDM prices.

Hospitals and healthcare systems have experienced years of inadequate inflationary update factors often reduced by factors such as presumed over coding under the federal inpatient and outpatient prospective payment systems. Consequently, operating margins, once attained through tight operating budget controls and across-the-board price increases to payers, have suffered for decades. Many hospitals experienced reimbursement shortfalls and some optimized their chargemaster prices to subsidize such losses and to help maintain their financial viability. Unfortunately, those techniques have caused individual chargemaster line item prices to become irrational and indefensible.

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