Improving Revenue Integrity & Maximizing Reimbursement Analyze Your Organization's CDM

In today’s environment, Healthcare Leaders are faced with increasing pressures related to stringent regulations, rising costs and reduced reimbursement rates. Internally, they are challenged with revenue integrity concerns to maximize reimbursement, prevent revenue leakage, reduce denials and improve clean claims rates. There are three components of Revenue Integrity that when mismanaged, can poorly impact an organization’s financial health. These components are a Charge Master Management Solution, Charge Capture/Charge Reconciliation Process, and Claim Form Optimization/Maintenance Plan. In this multi-part series, we will look at breaking down each of these components: (1) What every organization should ask and understand; (2) Defining the workflow starting with optimization through maintenance; and (3) Benefits of adopting an optimal best practice. The chargemaster connects the patient’s service directly to the reported revenue and is a key factor in reimbursement.

What Every Organization Should Ask & Understand

Many times the key components connecting the patient’s service to the reimbursement can be overlooked, under-managed, or treated as a price driver to balance the organization’s rising costs. Just like a luxury car that was selected for its top performance, a tune-up regularly keeps the car running to its fullest and ignored will break down. As healthcare regulations continue to change, it becomes increasingly important to maintain a healthy CDM to ensure compliance, accurate reporting, and improve reimbursement. When beginning to analyze your organization’s CDM, it’s important to understand that the CDM houses all the connecting points from services, pharmaceutical items, supplies, and accommodations that tell the patient’s story in terms of revenue that correlate with the patient chart.

Issues/Revenue Leakage Identified in Recent CDM Reviews Conducted

  • Missing Multipliers: Billing with incorrect units due to a difference in dispensed unit and billing unit
  • Overcharging: Supplies or Device being charged inappropriately
  • Missed Charged: Supplies or Devices that can be charged missed
  • Pricing: Price is driven by CDM that are below the cost of an item (Example: Loss of $8 Million in Cardiac Cath Department on Pacemakers and components with Reimbursement Loss of 1.3 Million for a 12 month period)
  • Reporting: Inaccuracy with Modifier Reporting
  • Enterprise Business Solution: Not designed to support an enterprise revenue cycle
  • Standardization: Unstandardized CDM for Multi-Facility Organization
  • Codes: Obsolete codes HCPCS/CPT or missing HCPCS/CPT for service lines available
  • Marketability: No ability to conduct pricing comparison to industry standards, Medicare or Locality pricing
  • Stagnant: Minimal ongoing maintenance and controls

Is Your Organization…

  1. Maximizing reimbursement?
  2. Over or undercharging?
  3. Experiencing charge leakage?
  4. Experiencing increased denials?
  5. Planning to standardize, consolidate, or migrate to a new system; incorporating Ambulatory/Clinics with Acute Services?

If you answered, “yes” to any of the above questions, keep reading for information to help you achieve improved Revenue Integrity.

Defining the workflow (Optimization to Maintenance)

An organization’s CDM should be, at a minimum, audited yearly to ensure compliance, maximum reimbursement, charging practice changes, services provided and pricing strategy. It is recommended that when you analyze your organization’s CDM, the first step for those considering improving the revenue integrity and maximizing reimbursement is to complete an audit/optimization.

Steps to the solution:

  1. Understand your organization’s current and future vision: i.e. service lines offered; use of fee schedules; 340B reporting requirements; specialty billing instances; revenue sites adopted; and ambulatory/acute shared CDM
  2. Conduct a comprehensive CDM audit and identify opportunities for improvement
  3. Collaborate with departments for changes adopted to ensure feeder application are modified to support the regulatory changes
  4. Ensure the ongoing integrity of the CDM by adopting controls and management of the CDM (Revenue Integrity Specialist)
  5. Define a yearly audit process to include department review, pricing comparison, and regulatory changes

Why Audit the CDM/Benefits Realized

Organizations have reported immediate benefits with long-term success through the adoption of a strong CDM Management process. Many of the benefits reported help to prevent revenue leakage, improve reimbursements, minimize rejections, reduce denied claims, and position the organization for competitive pricing. The focus on improving the Revenue Integrity is key for organizations with visions of adopting an Enterprise Revenue Cycle model or optimizing current multi-facility solutions including combined Ambulatory/Acute facilities using the same EHR.

Through the Audit – Why Analyze Your Organization’s CDM

  • Automatically flag potential coding and billing errors, lost revenue, and compliance issues
  • Support current complex regulatory HCPCS/CPT coding changes and edits
  • Ensures code changes implemented with the effective date to minimize denials
  • Improves revenue capture by facilitating accurate and competitive pricing
  • Identify missing procedures and cross coding opportunities


The first step in improving an organization’s revenue integrity is considering a full audit. Moving the chargemaster from clean-up to managed will ensure the component that links the service to the revenue, is a valuable tool for the organization. Taking steps to not only analyze your organization’s CDM but understand, audit and implement a managed CDM will help position your organization to prevent leakage, improve reimbursement, ensure compliance and give you a competitive pricing advantage.

Contact Jacobus to ask about our approach and tools to conduct a complete analysis in a short period of time to provide you with a complete analysis of your CDM covering the key areas of focus. Also, watch for parts 2 & 3 of the series on Improving Revenue Integrity and Maximizing Reimbursement, which will review the Charge Reconciliation/Charge Capture process and outline Key Billing Solutions.

For more information, read the Jacobus Blog or visit our Patient-Centric Revenue Cycle Services page. To connect with Sheryl Easter, contact us.