IONM Chargemaster…what is it really?

One of the topics that I’m asked about most frequently is how to set an appropriate chargemaster. For those readers that are unfamiliar, the chargemaster is the summary document or program that lists the different services or tests provided by a clinical practice/group, along with the associated fees that are billed to third party payers, facilities and/or patients for those services. Of course, that’s just a basic description and there are many details that go into the actual process of building a chargemaster.

So, how do groups determine what they are going to charge, and why is there so much variability between what different groups charge for the same or similar services? Does one group charge more for their service because it is that much better than another group? Are higher charges related to working in urban environments, and lower charges related to rural environments? What variables are considered when building a chargemaster?

​Before we jump to any conclusions, I think it’s fair to say that this topic is not just a neuromonitoring thing; rather, it’s a healthcare thing. Case in point: back in 2013, Time Magazine published an exposé that tackled this very topic (Bitter Pill, Time 2013). The article shed light on the differences that two hospitals in the same geographic region may charge for the same procedure or product. Suddenly the concept of the chargemaster was in the spotlight. The article gave several examples of how variable changes can be for services like troponin level testing for suspected MI, CT/MRI testing, and implantation of a spinal cord stimulators (a procedure with which this audience is likely familiar).

In the past, for reasons made obvious by the Time exposé, hospitals and clinicians tended to conceal their chargemasters. Today’s patient is getting savvier, more educated, and is more likely to shop around for healthcare. This is happing along with the coming era of value-based reimbursements, and suddenly hospitals and clinicians are beginning to make cost information available up front, rather than to keep it concealed.

So how does a group create their chargemaster? The fact is, there is no one right way to do it. If we bring the focus back to neuromonitoring, there are no universal recommendations to what the fee for upper extremity SSEPs are, or how much to charge for upper and lower extremity motor evoked potentials. There are fees established by Medicare, but they vary by region. When it comes to charging third party payers and patients, often some multiple of the Medicare average reimbursement is used. Which multiple? What if one group uses Medicare times 1.5 and the next group uses Medicare times 20? So, you can certainly see how using “multiples of Medicare” can lead to wide discrepancies between what different groups charge for the same service.

You can likely imagine the result of having charges that are either too high or too low. Too low, means that you may not properly be valuing your services, and therefore not receiving fair market value for services rendered. What about the other end of the spectrum? Is “too high reimbursement” an oxymoron? Can’t we charge what the market will bear? Is there a such thing as charging too much for a service?

There is definitely such a thing as charging too much. Large reimbursement checks have been quite the story of late. You don’t want to make your reputation this way and end up in the news. The subject of some of these questionable practices was the impetus of the American Society of Neurophysiologic Monitoring’s new Position Statement on Business Practices (ASNM Position Statement). Exploiting loopholes from certain payers may seem like a good strategy in the short run, but in the longer run, it will spell trouble for both the company in question as well as the profession, as payers respond to the few bad apples by refusing to pay for neuromonitoring at all. So, what constitutes a fair fee for service?

UCR = Usual, Customary and Reasonable

UCR is the amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service (Healthcare.gov). Professional knowledge of the norm helps, but for those that don’t know what others are likely charging, there are resources on medical fees that are available to help guide the process. In some ways, common sense should prevail, as most reading this post likely have a good sense of what is reasonable (and what is not).

Keep in mind that each patient will receive an Explanation of Benefits (EOB) soon after surgery, and this is a common source of confusion in healthcare. The EOB lists each procedure code (CPT) and its associated charge (i.e., billed amount) as a line item. It also lists the “allowed” amount, which is not always equal to the “paid” amount. The difference between the allowed amount and the paid amount is the patient’s coinsurance/copay/deductible. While each EOB clearly states, “THIS IS NOT A BILL” there is also a section that either reads “Patient Responsibility” or “your provider may bill you”. This amount is the difference between the allowed amount and the billed amount. This often confuses patients who may think they are on the hook for thousands of dollars.

The following is a typical scenario:

​After surgery, frequently while the patient is still recuperating, they will start to receive EOB’s from various providers. The patient, potentially having no recollection of meeting someone from neuromonitoring in pre-op, and no recollection of signing a consent, sees that they may be billed thousands of dollars out of pocket for neuromonitoring. The patient panics, often calling the surgeon’s office who will either refer them to your billing office for an explanation or, if significantly outraged, the surgeon may call the neuromonitoring company his/herself. You may explain to the surgeon that the patient won’t necessarily be billed the amount in question, but the surgeon is more concerned with the fact that the EOB creates distress with their patients and causes extra work for the surgeon. They can also be understandably upset if your fees exceed theirs! That’s a whole other topic for discussion.

The moral of the story is: If you don’t have a sense of what is reasonable, at least make your chargemaster defensible.

With all of these large reimbursements for neuromonitoring making the regional and national news, there is real concern that insurance companies may begin to curtail reimbursements even further or eliminate them altogether.

“We must, indeed, all hang together or, most assuredly, we shall all hang separately”
– Benjamin Franklin
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