Revenue cycle leaders are always on the lookout to optimize charging practices and maximize charge description master efficiency—and for good reason. When running appropriately, these two areas contribute to a healthy bottom line. However, when operating inadequately, it is almost impossible for an organization to receive proper reimbursement.
While true for all medical services, HBI’s Revenue Cycle Academy has focused on surgical supply charging for the past year, as healthcare leaders reevaluate whether to bundle or charge these items separately at their organization.
Below are some considerations to take into account when determining how to bill for surgical supplies:
Bundling Supply Charges
Organizations may consider bundling supplies, at least to some extent, to avoid possible denials (and lost revenue) for separately charged items. The following bundling strategies could be utilized to ensure proper reimbursement for surgical supplies:
- Bundling Supplies for Certain Services: Including supplies in room rates for certain service lines, such as inpatient, medical-surgical, and intensive care units, can ensure reimbursement is received for those items, since they are bundled into the overall charge.
- Implementing a Charge Floor: Certain supplies, such as items less than $10 or those considered routine, could be included in the cost of the service. Though not charged separately, the money for these items is not lost but simply rolled into the procedure cost.
Considerations for Charging Separately
While some organizations may find it advantageous to bundle supply charges, others may choose to continue charging separately for supplies in order to ensure reimbursement is received for every item utilized during a procedure. As such, the following are considerations for items which may be beneficial to charge separately:
- High-Dollar Items: Charging separately for high-dollar items, such as joint replacements and implantable devices, could help ensure reimbursement is received for those items. However, it could still be worth considering bundling surgical supplies for commercial payers, as they have a greater tendency to deny line items.
- Individual Charge Codes: Utilizing individual charge codes rather than bundling supplies may help improve price transparency, enhance patient-friendly billing, allow for more accurate cost reporting, and ensure more consistent charging practices for staff.
- Supplies with HCPCS Codes: Any supplies with their own HCPCS codes could be charged separately, although it could still be beneficial to consolidate supplies that are considered routine, such as sutures.
Setting Criteria for Routine Supplies
When determining how to bill for surgical supplies, it could be helpful to establish the difference between routine and chargeable supplies. Some strategies that could prove useful in doing so are:
- Including clinical and revenue cycle leadership in discussions to determine how much time and labor is needed to provide certain procedures in order to determine what is considered routine and what may be charged as line items. Doing so not only ensures an organization accounts for all the supplies expended, but it also takes into account the allocation of staff needed for the procedures.
- Creating a decision tree to help staff determine if an item is separately chargeable. This resource could help revenue integrity staff explain to curious patients or the staff responsible for charge capture why an item is charged.
While supply charging practices vary across the industry, the strategies and considerations highlighted above may prove helpful when determining which supplies to charge separately and which to bundle into a room or procedure rate. By tailoring charging practices in this area to an organization’s specific needs, staff may be better prepared to appropriately capture charges, payers may reimburse claims more quickly, and leaders may notice an increase in overall financial performance.