Question

What is a hospital chargemaster? Please provide a paragraph that describes what it is but also the history of how it started and how it is used to determine what a hospital gets charged.

Answer 1

What is a hospital chargemaster?

A hospital chargemaster can be defined as a comprehensive list of all the billable services to either the patient or the patient's health insurance provider.It takes into account the cost of all the procedures, prescription drugs, diagnostic tests and other services like room charges and equipment fees.

How it started?

• The use of a hospital chargemaster dates back to the mid of the 20th century.
• At that time,the fee-for-service(FFS) health insurance plans had just emerged in the US healthcare system.It is a traditional model in which the healthcare providers and physicians are reimbursed on the basis of the number of services they provide,that is,insurance companies or the government agencies are billed for every test, procedure, and treatment given whenever a patient makes a consultation, or is hospitalized.
• The chargemaster system emerged akin to this,with an entry for all billable items under the economic model of healthcare.

How it is used?

• The documentation of charges through the chargemaster serves as an integral component of the hospital billing process.
• Whenever a patient receives any kind of service from a hospital, providers document the details in the medical record.The health information management staff or professional coders then assign codes for the purpose of reporting and claim submission.
• These codes and documentation are then converted to chargemaster rates and used to bill the patient and create a claim for payers.
• An inaccurate chargemaster results in overpayment or underpayment, as well as claim rejections.