The charges recorded on a claim determine whether a bill is complete in medical billing or not. This recording begins the moment a service is rendered and continues till the billable charge is entered to create the final bill. This whole process of billing a payer is what charge capture is in medical billing.
According to a PwC report published by the Healthcare Financial Management Association (HFMA), charge capture is a function of revenue integrity and where billing services and clinical practices intersect.
Although charge capture holds a primary role in the billing process, it can also be a source of frequent revenue loss.
HFMA’s findings were cited in an American Academy of Professional Coders (AAPC) article, which states that an average practice loses around $125,000 per year to poor charge capture processes. The most astonishing part is that these losses grow quietly, often before a billing team identifies this gap.
Importance of Charge Capture in Medical Billing
Without accurate charge capture, the claims submission workflow is always incomplete. If a practice does not capture charges precisely, the practice may permanently lose the ability to submit the claim within the payer’s filing deadline.
Disruptions in the charge capture cycle also have serious financial strains. For instance, HFMA’s revenue cycle research notes indicate that nearly 1% of potential annual net revenue is lost because of charge-related issues.
Thus, if a medical facility generates $500 million per year, they lose $5 million annually.
Apart from financial losses, failures at this step also lead to:
- Incorrect claim submissions
- Poor payer relationships
- Compliance exposure and audits
Charge capture and correct coding are a team effort that requires revenue-generating departments, billing teams, and other professionals to collaborate systematically.
Components of Charge Capture in Medical Billing
The following are the three components of healthcare charge capture to remember:
Charge Capture Workflow
The charge capture workflow is a systematic approach that ensures all services that can be charged are properly identified. Initially, the clinician identifies services rendered to a patient and documents them in detail. The captured charges are then transferred to the billing workflow for coding, reconciliation, and claim preparation.
Charge Capture Team
The charge capture team involves the staff behind the charge process, responsible for billing and submission of all information collected. Typically, the charge capture team involves the following members working together to reconcile charges:
- Healthcare professionals
- Coders
- Billing staff
With the staff’s help, every billable item is properly captured, accurately coded, and added to the claim form, which is then sent to the correct payer. Ideally, an accurate claim should include:
- Charge Description Master (CDM)
- Superbill / Charge Ticket
- ICD-10-CM Diagnosis Codes
- CPT Procedure Codes
- Charge Reconciliation
Charge Capture System
The charge capture system is a vital tool in the process and can either be manual or automatic. This system tracks billable services and supporting documentation to reduce missed charges.
Moreover, manual systems rely on spreadsheets and paper-based forms, whereas automated systems require electronic health records (EHR). In other cases, the automated systems may employ specialized charge capture software.
Charge Capture Process in Medical Billing
The following steps are involved in the charge capture process in medical billing:
Rendering Medical Services
The healthcare charge capture process begins when clinical services are rendered to the patient. The services are rendered by a relevant professional after careful consultation and medical decision-making. After the physician provides services, they also document them in the medical record or EHR.
Charging for Services
After documentation is completed, the encounter is translated into applicable ICD-10-CM and CPT codes through the coding workflow.
Charge Entry
The charges marked in the previous step are then entered into the billing system or practice management system. The system then translates the charges into billable line items for the next phase.
Charge Reconciliation
During charge reconciliation, professionals verify that every rendered service corresponds to a charge in the billing system. This usually helps identify possible errors and discrepancies within the process. If a practice has a proper charge reconciliation system, it can easily detect:
Missing charges
- Duplicate charges
- Incorrect charge levels
Claim Submission
Once the charges have been reconciled properly, the billers create the final claim and submit it electronically using the HIPAA 837P transaction standard.
Charge Entry vs. Charge Capture in Medical Billing
Some people use the terms charge capture and charge entry interchangeably. However, these two terms describe distinct steps of the same workflow. Once you understand their difference, managing accountability gaps between clinical and billing teams becomes easier.
| Aspect | Charge Capture | Charge Entry |
|---|---|---|
| Definition | Process used to identify, record, and reconcile each billable service rendered. | The process of entering captured charges into the billing system. |
| Performed By | Clinician, physician, and clinical staff. | Charge entry specialist or a member of the billing team. |
| Input | Services provided and documented in the EHR or the superbill. | The complete charge ticket, including all service details with their corresponding billing codes. |
| Output | A completed, reconciled charge record for each encounter. | Billable line items entered into the billing system for claim generation, ready to be submitted to the payer. |
| Risk if Missed | Revenue can be completely lost if the service is not charged properly. | The claims are delayed if they are submitted without a complete charge entry and require resubmission. |
Source: AAPC
Coding vs. Charge Capture in Medical Billing
Coding and charge capture are closely connected, but still have different functions in medical billing. Physician charge capture helps identify and determine the services billed, whereas coding determines their description, classification, or arrangement for payer adjudication.
For example, a hospitalist may correctly document and capture a discharge encounter. However, if the selected CPT code does not match the documented medical decision-making level or total time, the payer may downcode or deny the claim during adjudication.
Why? The charge may have been captured correctly, but the code used was inaccurate.
What Needs to Be Done?
Coding and charge capture should always be synchronized because a charge that does not have a corresponding or supporting ICD-10-CM diagnosis code is invalid. Similarly, a charge that has an invalid CPT code reported to the documented service also puts the claim at risk.
The claim may still be denied even when the original charge was captured correctly. Therefore, charge reconciliation holds much significance in accurate medical billing. It bridges capture and coding before a claim is sent out of the billing system.
Mobile Charge Capture in Medical Billing for Physicians
Mobile charge capture allows physicians to capture charges almost anywhere, which resolves a major challenge faced earlier. Previously, physicians relied on paper-based recording for charge capture.
According to a study by Ingenious Med, approximately 78% of the respondents consider charge capture an essential part of an organization’s success. Similarly, 21% consider it useful, and only 1% consider it optional for their practice.
With the help of mobile charge capture, physicians can use a smartphone or tablet at or immediately after the point of care.
If charge capture is integrated properly into a practice’s billing system, the charge lag can be significantly reduced. Additionally, it also eliminates the need for a manual reconciliation that traditional systems require.
Charge Capture in Medical Billing: Common Challenges
The following are some of the most common challenges that professionals face with charge capture in medical billing:
Charge Lag
What happens if it takes more than three to five days between the date of service and the posting date? Charge lag. According to Target Tech, if late charges apply to more than 2% of total practice charges, it could be more than just an isolated incident and be a systematic gap instead.
Additionally, when a claim has a charge lag, there is also a risk of not filing the claim on time. If the payer’s filing deadline is missed, the claim may become permanently non-billable.
Missing Charges
What is the single most prevalent challenge that any practice faces during charge capture in medical billing? Scenarios where a practice renders services but fails to record them on the superbill or EHR. HFMA’s revenue cycle leader survey confirms this notion, and it can sometimes be a result of human error.
Additionally, missing charges happen when a physician documents an encounter but fails to complete the charge entry workflow.
High-volume settings that deal with more patients daily, such as an emergency department and inpatient rounding, are at a higher risk of accidentally missing charges.
Poor Reconciliation Systems
Inaccuracies between clinical documentation and billed charges can often be overlooked if a practice does not have a daily reconciliation system.
In most cases, practices identify errors only when the payer has received the claim. By this time, the claim can only be corrected via rework and resubmission.
Industry standards dictate that each department should set up a system with a primary and secondary point person.
These individuals should be responsible for daily charge reconciliation specifically, and not other ad hoc responsibilities.
Charge Leakage
Without billing platforms and clinical documentation system integration, charges are manually transferred between clinical and non-clinical teams.
HFMA’s analysis of Novant Health’s charge capture remediation showcased that traditional systems required staff to review each folder when isolating charge problems.
Unfortunately, this could only happen long after the service was rendered. Therefore, this traditional system for charge capture in medical billing contributed to recurring errors without practitioners realizing it.
Automation that builds evaluation and management (E/M) charge scoring logic directly into the EHR reduced missed E/M charges from hundreds to a few per week.
Best Practices for Charge Capture in Medical Billing
Optimizing the healthcare charge capture process is imperative for any practice. Therefore, the following are some of the best practices to streamline it:
Enforce a 3-5 Day Charge Capture Turnaround
Implement standardized charge posting timelines requiring all charges to be submitted within three to five days from the date of service. Charge lag should be considered an essential key performance indicator (KPI) and trigger alerts in case of recurring delays at the provider or department level.
Implement Cross-Functional Staff Training
Consistent training between clinical, coding, and billing staff can greatly benefit practices. Additionally, training for billing, IT, and revenue cycle teams can also prove fruitful as it:
- Strengthens documentation accuracy
- Improves coding alignment
- Ensures translation of rendered services into billable charges
Conduct Charge Capture Audits
Conducting regular audits across your practice’s charge capture lifecycle can help identify errors and problems with the systems, indicating:
- Revenue leakage
- Operational inefficiencies
- Compliance risks
Use Tech and Third-Party Services
Sometimes, an in-house billing team may not be equipped to handle physician charge capture, limiting the system’s efficiency.
Fortunately, practices can opt for automated software or third-party services that handle charge capture efficiently.
Achieve Charge Capture Accuracy with NeuraBill
Charge capture in medical billing is not an administrative afterthought. Instead, it is the foundation of an accurate claim submission workflow. If you are unable to handle charge capturing efficiently, NeuraBill’s charge entry services can help.
They ensure accurate recording and coding of billable services and prompt submission of a clean claim, reducing the risk of charge lag and claim denials.
