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Leading the charge: a North Carolina healthcare enterprise implements a CDM solution that eliminates paper and errors while increasing accuracy and recoupment.


Hospitals and health systems handle their charge description master (CDM) management in many different ways. It's a highly centralized process for some. Other organizations give individual departments more control over this encyclopedic price list of billable services, goods and procedures. Most hospitals still use a cumbersome, manual system to manage the CDM. These organizations also share a great need to add efficiency, accuracy and authoritative information.

In addition to cost reporting and accounts review, the CDM is just one of the responsibilities within our department at University Health Systems of Eastern Carolina (UHS). Based in Greenville, N.C., UHS comprises two regional acute care hospitals, three critical access hospitals, an ambulatory surgery center and home health services. We serve 1.2 million people in 29 counties in eastern North Carolina. The flagship hospital is Pitt County Memorial Hospital (PCMH), which is one of four academic medical centers in North Carolina.

CDM management has always been a centralized process for all six of our facilities. Even so, our paper-based system was lacking in terms of productivity, support for compliance and accessible expertise. In 2003, we began talking about automating our CDM maintenance across the UHS enterprise.


With only two staff members, our department was already overextended when we started looking for CDM software--a situation that compounded the already difficult challenge of manually incorporating frequent and in-depth coding changes for all six facilities. We had a separate CDM for each facility, which meant we had to individually apply edits to each database whenever new procedure codes were released.

From closely reading each Medicare and Medicaid newsletter, CMS release and HFMA weekly update, to manually conducting extensive daily searches for outdated and obsolete CPT codes, our organization went to great lengths to keep an up-to-date CDM and fully support compliance. Regardless of our efforts, manual processes can result in keying errors, out-of-date codes and missed revenue opportunities.

CDM management has slowly grown in complexity over the years. CPT codes, for instance, are more difficult to interpret without clinical expertise, and, increasingly, payors have different coding requirements for the same procedures.

In response, we identified the need for a tool that would achieve several goals at once. We wanted to make better use of our time, minimize manual data entry and the accompanying potential for errors, as well as acquire a source for expert answers to our questions about new guidelines--all of which would improve our compliance efforts.

Finding The Solution

At UHS, we make as many as 100 changes to our CDM a day for supplies, implants, pharmacy and radiology. Consequently, our most important criterion during the selection process was user-friendliness closely followed by support. A third requirement was the ability to automate both the entry of CDM changes into our financial system and distribution to our facilities. Our bottom line was another priority. We suspected that our manual methods sometimes resulted in missed charges related to Medicare's Ambulatory Payment Classification (APC) because we could not keep all codes up-to-date.

We extensively researched the industry's top CDM management solutions with input from our IS department. Conversations with users of each product provided valuable insight and allowed us to narrow our search. Of particular interest were the experiences of larger systems with multiple facilities, much like ours. HFMA Peer Review approval was also important in our decision-making process.

We ultimately selected the Chargemaster Toolkit from Craneware Inc., complemented by their Online Reference Toolkit--a reference for medical necessity, Correct Coding Initiative (CCI) edits, procedure and diagnosis code references and other information. In addition, a third, separate tool gave us the ability to automatically upload CDM changes directly into our billing system. In a later second phase, we added Chargemaster Corporate Toolkit to manage and coordinate our multiple facilities.


CDMs are inherently complex, and the manual process is quite different than an automated one. The software has so many capabilities that the implementation phase can be a bit overwhelming. Having support services available to us simplified the process and made it easier to learn the software's many features.

In order to begin utilizing the toolkit, our IS department customized the software file, created a folder on the shared drive, assigned permissions and installed the application to the server. A separate workstation with the software was set up in IS to serve as the license manager. Now, when we access the toolkit from our individual workstations, it goes out on the network and contacts the license manager. The IS department also created programs to extract all CDM information from our HIS, so that data could be converted to a format that would be directly uploaded into the new toolkit.


After installing the software, Craneware's product manager came onsite for two days of training. The first day, she and I met exclusively to set up department information and titles within the application and review supervisory tasks involved in managing the software.

On the second day, we had an extensive training class, including CDM and finance staff members. A large part of our time was spent learning how the software divides codes into a number of different tabs--each of which has a different meaning--and how to work through each tab. For example, one tab flags codes that are affected by the latest regulatory and coding edits.

In addition, I participated in a number of Web demos to further my knowledge of the software and prepare for implementation after our initial sessions. My staff and I also individually trained departments who needed frequent access to the software, such as pharmacy, radiology and compliance.

We started a limited test phase in January 2005. After continuing to test and customize the software to satisfy UHS requirements, additional features that would allow more scalability became available. Following these initial revisions, we made some changes in the way we scripted updates into our financial system, and went live in April 2005.

Today's Workflows

Today, all departments have access to Web-based coding and compliance reference materials. As a result, department managers have more autonomy to conduct research affecting their service areas, and have become more proactive and involved.

Despite these advances, we continue to elect not to allow them to directly maintain their own portions of the CDM as we want them focused on charge capture and reconciliation instead of CDM changes. Additionally, we have to ensure that codes are consistent throughout the enterprise from a compliance standpoint and to accommodate our new clinical system. For example, if one department were to make a change to a code that is a replicated service throughout the system, we would need to distribute the change to all departments. By maintaining primary control of the CDM, we circumvent these problems and ensure that all service codes are in sync throughout UHS.

At UHS, we use the software to help determine our pricing when introducing new procedures, and can now compare fees against other hospitals in the region, APCs, and our own cost accounting results to gauge and control our prices precisely. The system also guides our determination of rate increases at the end of each fiscal year.

We have come to rely on some other features as well, such as audit trails and notes. Unlike paper memos, an automated system makes it easy to determine what specific change was made, who made the change and also list any important issues another user would find informative.

In addition, the reporting and analysis tools allow us to capture as much or as little information as needed, providing results in a matter of seconds. For example, if a department needs a quick review of its CDM, we can run a report that shows service codes, descriptions, prices and CPTs specific to its area. In the past we had to use a separate reporting system, which involved multiple steps and conversion of files.

This past summer, we implemented a new clinical system that required us to use the same service codes and descriptions for each procedure, supply and implant throughout all six facilities. Therefore, we decided to introduce Chargemaster Corporate Toolkit to standardize codes across the enterprise. It allowed us to create and maintain a master CDM for the entire organization while accommodating coding variations from different facilities based on individual hospital needs.


After adjusting APCs, adding missing charges and other measures, we calculated that we re-captured $1.4 million in revenue during the first year of use. Beyond the hard-dollar impact, we now have what I call a "one-stop shop" where everything we need for efficient CDM maintenance and compliance is at our fingertips. Now, rather than keying through three screens to add an item in our financial system, we add all information on one screen and simply run a script to make those changes.

We also noticed a decrease in errors relative to revenue and CPT codes, which enhanced compliance and also reduced billing adjustments. Additionally, we have improved the level of service we can provide. When we have large-scale changes, we do not have to involve the IS department. Therefore, we can accommodate requests and expedite turnaround times.

At a higher level, automating our CDM and creating a standardized corporate CDM has changed the way we work. We use the system almost daily for analysis, while additionally, I can now meet with department managers throughout the system and work more closely with them on the CDM. The enhanced communication that the system provides may be the most important benefit of all. The streamlined processes and departmental access to a range of information has effectively transitioned us from being a reactive department to a proactive one.

For more information on Craneware solutions,

Carol Lynn Heath is CDM supervisor at University Health Systems of Eastern Carolina. Contact her at
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Title Annotation:charge description master
Author:Heath, Carol Lynn
Publication:Health Management Technology
Geographic Code:1USA
Date:Nov 1, 2007
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