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January 27, 2016

An Introduction to Developing Department Charge Masters

With ongoing changes in technology for improving patient care and department operations, it is essential that hospitals and medical centers function efficiently and cost-effectively. One common area of departmental operations where deficiencies are noted is the patient charge system. Oftentimes, the greatest offenders are larger departments like Surgical Services and the Cath Lab, whose supply inventories are among the largest and most costly within the facility.

Common Charge Master Problems
It is not unusual to find supply items that have not been set up as a charge or added to the charge sheet within a timely manner. In many instances, the charge may be written on a notepad or documented on a separate list ad hoc without a system that includes audit and accuracy functions. Additionally, a charge master for interventional areas may have several thousand items, and a loss of charged items will result in a negative effect on the accuracy of documented patient costs.

Due to rising material and supply expenses, it is important for departments to maintain current and up-to-date charge masters. Charge masters can be lengthy, contain obsolete supply items, include incorrect and/or outdated charges, and be time consuming when there is a need to find a specific charge.

Key Steps for Developing Department Charge Masters
To create and maintain charge masters that are accurate, user-friendly, and well-organized for staff use, follow these two crucial steps:

  • Assess current charging/information system(s)
  • Review/Revise or develop procedures for maintaining a current charge master
    • Department/Staff member responsibility
    • Action steps in setting up/revising patient charges
    • Following established processes
      • Interaction with Finance; Finance charge processes/procedures
      • Adherence to patient charge guidelines
      • Integration with contractual requirements

System Improvement Guidelines

Establishing standards for the revised charge system is important for ensuring continued maintenance. The following guidelines can help improve the system:

  • Place charge items in alphabetical order
  • For Operating Rooms, place items in charge master by service (e.g., General, Orthopedic, Vascular, etc.)
  • List items by category for products that have a large volume (e.g., suture, catheters, packs, drains, dressings, etc.)
  • Establish a charge for each item (e.g., catheters, orthopedics screws)
    • For example, orthopedic screws may have the same cost for a range of screw sizes (i.e., 6mm – 20mm length). Although tedious, a separate charge code for each item is required for replenishment purpose associated with charge, barcoding, and scanning systems
  • Provide an adequate amount of charge numbers for each product group
    • This ensures new charge items will have an available number within the group

Next Steps

Implementing and maintaining an efficient charge master system can seem like a daunting task, but the efficiency and cost savings payoffs are well worth the effort. If you have additional questions about developing an effective charge master system, or if you would like to speak with one of our consultants to find out how third party assistance could facilitate your charge master improvement process, contact us or call 866-345-3887 today »

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