Understanding pharmacy department billing and the charge master

Abstract

Every hospital develops a charge master, also called a charge description master (CDM). Although CDM designs differ among hospitals, they generally include similar types of data: general ledger number, product description, billing units, Healthcare Common Procedure Coding System (HCPCS) codes, revenue codes, and pricing information. Functioning as the line-item detail for all hospital billing and compliance, a CDM is the central billing mechanism for all supplies, procedures, services and drugs. Because of the complexity of the charging and billing processes, it is vital that pharmacy directors and managers understand the various resources available to assist them in making intelligent decisions regarding their practices. The first and most important resources are the hospital leaders and other individuals at the facility who are responsible for charging activities. Consequently, pharmacy directors and managers must establish a proactive working relationship with executive leadership and the finance department, especially the chief financial officer (CFO). Within an institution, the CFO provides critical guidance regarding CDM organizational goals and legal requirements. Pharmacy managers should also collaborate with compliance experts, coding and billing personnel, and accounting and business office personnel, who often are the best resources for learning about the CDM processes and regulations.