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Are You Reconciling Your Laboratory Orderables to Your Chargemaster? A How-To in 4 Steps

Over the last several months we’ve seen an uptick in requests from clients nationwide for help reconciling laboratory orderables to chargemasters. In case you’re in this same boat, we wanted to provide some insight into the steps you should be taking.

Any time you’re seeing increased edit requests, an increase in denials, or have requests to do retrospective or pre-payment audits it’s an indicator that something may be amiss between your orderables and chargemaster. Here’s how to make sure you get them back in alignment to ensure correct reimbursement and optimal revenue.

Step 1: Review the chargemaster descriptions

Start with a line-by-line chargemaster review to ensure descriptions and CPT/HCPCS and revenue codes are appropriate. The high-level automated reviews conducted with industry software typically look for what is present and what is not. This is a good place to start, but you’ll want to take it a step further as well if you want to uncover revenue and reimbursement risks and opportunities.

In our experience, a manual review of each laboratory charge usually reveals keying errors, CPT code to description mismatches, or laboratory services that are being reported with erroneous or unlisted CPT codes. Annual reviews of the chargemaster are a must to ensure all applicable laboratory services are present for charging in-house, reference laboratory, outreach laboratory, and/or send-out laboratory.

Step 2: Conduct a periodic reconciliation of orderables and the lab chargemaster

It is also imperative to do periodic reconciliation between the LIS (laboratory information system) orderables and the laboratory chargemaster. The number of laboratory tests performed as well as the number of charges added and updated annually dictates how often a reconciliation should be performed. Busy hospital laboratories should do a reconciliation at least once a year.

This reconciliation must be a manual process because current industry software does not have the level of sophistication required to validate the LIS description and/or chargemaster description to the CPT code assigned. This reconciliation will require a review of the LIS to the chargemaster and vice versa. This is an important part of the compliance process because it will help to identify any disparity in the linked charges, missed orderables, and/or missed chargemaster service lines.

Step 3: Ensure lab and hospitals systems communicate

The next step is to ensure the laboratory modules and hospital systems are communicating adequately. You also need to make sure the applicable charging and billing rules are suspending accounts with potential errors in code pairs, exceeding daily unit values, or that do not meet medical necessity. It is important to ensure these rules are continually updated because billing errors can result if they’re not managed within the hospital systems. Make sure your staff has had the necessary discussions on how to implement system fixes and rule changes when issues are encountered.

Step 4: Conduct audits

The final step to make sure your orderables are reconciled to your chargemaster is to perform periodic laboratory services billing audits to identify potential gaps between the LIS/chargemaster and the finalized charges for claims submission. Because multiple staff members, with various levels of expertise and understanding, work laboratory services accounts with differing levels of responsibility, it can be a challenge to resolve charging and billing edits. Many billing issues are a result of what the staff does not know when interpreting charging and billing edits to resolution—especially when it comes to laboratory services billing.

Audits may reveal that coding, billing, and laboratory staff need additional education to understand the National Coverage Determinations (NCD), MAC Local Coverage Determinations (LCD), American Medical Association (AMA) coding guidelines, National Correct Coding Initiative (NCCI) policies, and Medically Unlikely Edit (MUE) policies and reporting requirements that affect laboratory services coding and billing. Research educational opportunities that will provide the staff this level of education, and make sure your hospital has a process in place to adequately educate and train new individuals to allow for staff turnover.

Putting Your House in Order

Laboratory services are a key revenue producing department in nearly every hospital system, which makes ensuring that correct revenue and reimbursement within this department a critical piece in protecting your organization’s financial health. With these 4 steps you can make sure your orderables are reconciled to your chargemaster and avoid any sort of underpayment or overpayment situation.



By Tiffani Bouchard, CCS,
Panacea VP of Revenue Integrity
Tiffani has more than 25 years of experience in chargemaster management, hospital bill auditing, claims issues resolution, and coding and documentation reviews for PPS and CAH hospitals nationwide. She has extensive knowledge of CMS coding / billing guidance and regulations and provides on-site training for chargemaster staff, claims processing, and department leadership.