What effective charge capture looks like

Charge capture audits are necessary. Effective charge capture audits are essential. 

In Kodiak’s experience, the average healthcare provider organization can lose up to 1% of gross charges due to missing charges in just five clinical departments in its revenue cycle transactions. It can add up quickly. 

In this article, we present a case study showcasing the value of combining data analytics and technology to identify control gaps, strengthen charge capture processes, and more effectively audit charge capture data to find missed charges. 

Kodiak uses a continuous monitoring technology tool—the Charge Capture Audit Accelerator—to dig deep and scan for potential charges. The following case study underscores how internal auditors can leverage technology like this to reveal deeper insights from their organizations’ charge capture data, resulting in more effective audits and large dollar values. 

Case study: Missed charges in the OR 

Background: Surgical departments and procedures are rife with potential for missed charges. Some of the most missed charges related to surgery include: 

• Missing surgical procedures 
• Missing anesthesia charges 
• Missing recovery charges 
• Missing implants associated with their respective procedures 
• Incorrect dollar amounts of implants 
• Implants tied to incorrect revenue codes 

The issues: Kodiak reviewed 23,000 surgical encounters from over a one-year period for a surgical department within a large health system. Using data analytics and the Charge Capture Audit Accelerator, the team reviewed the hospital’s charge data to identify control gaps within its charge capture process. They revealed some troubling trends, including: 

• 8% of surgical procedures were missing proper codes, resulting in a missed charge for the procedure. With such a large volume of procedures in the department, this resulted in a high revenue loss for the organization. 

• Kodiak identified 1,200 instances in which the system did not bill for anesthesia services that were provided to the patient. This resulted in a loss of revenue for the health system.  

• An astounding 1,400 cases had no post-operative recovery time charges associated with them, despite patients receiving anesthesia that calls for recovery time. Again, this resulted in significant lost revenue due to the high volume of procedures within the department. 

• The health system was missing approximately $2 million in charges for implants used during surgical procedures during the one-year period that Kodiak reviewed. 

Root causes: After reviewing the charge capture data, the team noted two main underlying themes that had contributed to the inaccurate or missed charges: 

• Lack of standardized protocols: The surgical department lacked standardized protocols for documentation of surgical procedures, whether the documenting was performed by the physicians or during the HIM department’s coding to patient accounts. This ultimately created critical misunderstandings about what should be going on during surgical procedure coding. 

• Manual entry: For physicians, having to input specific codes for certain services they perform typically isn’t top of mind for them as they are focused first and foremost on patients’ safety and health. This health system’s surgical department had far too many manual entry steps for physicians to input charges—and many were being missed. 

Corrective actions: The Kodiak team and health system staff worked together to define key corrective actions the surgical department could take to reduce missed charges. Two of the most impactful were: 

• Develop policies and standard protocols. Moving forward, the health system will develop a detailed policy and provide education to key stakeholders, including clinicians and HIM and revenue cycle staff. The policy will include detailed, standardized protocols for documenting surgical procedures, with the aim of improving communication among staff members and minimizing errors. 

• Automate charge entry. Manual physician entry of surgical charges was a major cause of missed charges for the surgical department. Minimizing manual entry, therefore, was paramount to improvement efforts. Working with Kodiak, the health system identified multiple parts of the charge entry process that it could automate, saving physicians valuable time to focus on patient care and reducing missed charges overall. 

Are you getting the most from your charge capture data? 

Being able to focus on your biggest risk areas is crucial to improving your charge capture audits. To identify control gaps and weaknesses, using technology to conduct continuous auditing over your charge capture controls is essential.  

Contact our risk and compliance experts today to discuss how you can use technology and data analytics to improve your charge capture audit processes, strengthen risk management and compliance, save valuable time, and increase revenue.