What is the charge description master (CDM)?
The Charge Description Master (CDM), or the chargemaster, is a comprehensive list of items billable to a hospital patient or health insurance provider. It includes various medical services, procedures, equipment fees, medications, and supplies that the healthcare provider offers. Each item in the CDM has a unique identifier, description, and associated price. The primary purposes of the CDM are to:
- Ensure charges are consistent and accurate across different departments and services.
- Help hospitals manage the billing process from patient registration to final payment.
- Ensure the hospital adheres to regulations and guidelines set by governmental and insurance agencies.
- Provide a basis for explaining charges to patients and their families.
The CDM is a critical tool in hospital administration and financial management. It requires regular updates to reflect changes in medical practices, costs, and regulatory requirements.
What are the main components of CDM?
Here is a brief overview of the key components of a CDM:
Charge code:
A unique identifier for each item or service listed in the CDM.
Description:
A detailed description of the service, procedure, or item being billed.
Revenue code:
A four-digit code required by Medicare and other insurance providers to identify the specific type of service provided.
CPT/HCPCS codes:
Current Procedural Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS) codes that standardize medical procedures and services for billing purposes.
Charge:
The amount charged to the patient or insurer for the specific service or item.
How does a CDM help ensure compliance with regulatory requirements?
A Charge Description Master (CDM) ensures compliance with regulatory requirements by meticulously organizing and maintaining accurate information about the healthcare services and items provided by a facility.
The CDM includes standardized codes such as CPT (Current Procedural Terminology), HCPCS (Healthcare Common Procedure Coding System), and ICD-10 (International Classification of Diseases) codes, which are essential for accurate billing and reimbursement.
By regularly updating these codes and descriptions to reflect changes in regulations, healthcare providers can avoid billing errors and ensure that claims are submitted correctly.
Additionally, the CDM helps adhere to payer-specific guidelines and pricing transparency rules, thereby reducing the risk of non-compliance penalties and audits. Consistent and accurate use of the CDM supports healthcare providers in meeting federal and state regulatory standards, ultimately facilitating smooth operations and financial stability.
Examples of charge description master (CDM)
Procedure Charges:
The CDM also includes charges for diagnostic imaging services, which are essential for diagnosing various medical conditions. Each imaging procedure is assigned a unique code, such as a CPT code, to ensure accurate billing and categorization. For example, a CDM entry for a chest X-ray may include the procedure description, code (e.g., CPT code 71020), and the associated charge.
Example: Chest X-Ray
Description: Radiologic examination, chest; two views.
Code: CPT 71020
Charge: $250
Supply Charges:
The CDM also covers charges for pharmaceuticals administered during treatment, such as medications and intravenous fluids. Each pharmaceutical item is assigned a unique code and description to ensure precise billing. For example, a CDM entry for an intravenous antibiotic may include the supply description, code, and the associated charge.
Example: Intravenous Antibiotic (Vancomycin)
Description: Vancomycin hydrochloride, 500 mg, intravenous infusion.
Code: PHAR67890
Charge: $150