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Charge entry is one of the most overlooked sources of lost revenue in a practice. An error here is invisible on a dashboard until the denial arrives or the filing window closes. Four charge-level failures account for most of the leak.
Each failure feeds a denial or a write-off that a clean charge would have prevented. That is why charge entry sits at the front of revenue cycle work.
Charge entry is the activity of entering encounter information into the billing system prior to claim submission. Charge entry is a step in the revenue cycle process that happens after coding but prior to claims creation.
The entered information makes up the claim itself, including the codes, the modifiers along with the diagnosis codes and units. Each piece of information is taken from the clinical documentation of that particular encounter all the way down to the fee schedule.
One incorrect information item will change the results. Lack of modifier information creates one service out of two. Outdated fee schedule information undervalues the claim. Late charge entry puts the filing date at risk. The claim is created from the entered information, not the performed activities.
Here lies the difference between coding and charge entry. Coding applies the correct codes. Charge entry ensures that the codes are complete and follow the rules of each payor.
Definition of Extraction Charge entry is the process in which encounter information is entered in the billing system prior to claims submission in medical billing. This involves the entry of the code along with the modifiers for diagnosis and units. Pricing from the fee schedule is posted in each line.
Charge entry error is the most cost-effective to avoid and the most expensive to overlook. The Office of Inspector General links improper billing to exposure through audit. Five key points of failure are responsible for most of it.
NCCI editing is the coding pairings that cannot be billed together. The violation of NCCI edit rules makes a charge ineligible on the grounds of being bundled. The edit files are updated every three months, so the pairing was eligible last time but not now.
Modifiers explain to the payer why two procedures on the same day are billable. Lack of modifier 25 or 59 when applicable makes the second procedure ineligible. Incorrect modifiers result in recoupment later.
There is a specific period after which a charge is no longer accepted by each payer. The Medicare guidelines allow up to 12 months according to the CMS Publication 100-04. Unposted charges are considered as having missed that filing period and convert a payable charge to a write-off.
The charge should be based on what was documented. Overcoding occurs where there is a code with no note. A billable procedure that is missing in the charge means potential revenue lost.
Any mistake in the member ID or in the payer results in a denied claim. The information is directly transferred from patient registration and eligibility to the charge process.
Each encounter is captured and validated before it becomes a clean claim. Every step below removes a specific denial reason before the claim reaches the payer.
The billing code of each billable activity will be captured from the clinical note and EHR encounter. A billable charge that remains uncaptured will never be billed down the line.
Patient membership and payer information are entered from the patient registration and eligibility process. Proper entry in this phase prevents a demographic denial prior to adjudication.
CPT/HCPCS codes are validated based on documentation along with ICD-10 diagnoses. Modifiers are entered based on the encounter.
Each line is posted at the proper fee schedule amount and unit of service. This avoids underpricing and unit denials.
The charge is checked for conflicts with current NCCI and payer bundling rules before the claim is created. Conflicts are worked out prior to submission.
The posted charge is reconciled against the day's encounters. Problems of missing or under coded charges will be found here rather than in monthly revenue shortfall.
Accuracy comes from two layers, not one. A first pass posts the charge to a standard. A second pass reviews it for what the first can miss.
Each claim has a deadline from the date of service. A delay in billing reduces this time frame. These deadlines vary, so this is contingent on both the payer and state.
According to CMS Publication 100-04, the Medicare deadline is one calendar year from the date of service.
Shorter time frames are usually common among commercial payers. The deadline is included in the payer’s contracts.
Each state Medicaid plan determines its deadline. The time frame depends on the state manual.
It’s about the value that each function brings to the claim and not the function itself. Every point in the list below is linked to an actionable result.
Charge entry carries protected health information, so it runs under the HIPAA Security Rule at 45 CFR 164. Every charge is posted under the controls below.
Each charge matches the clinical documentation, per CMS guidance on medical necessity.
Accurate capture reduces the improper-charge patterns the OIG treats as audit triggers.
The log records who entered a charge and when it was posted, plus any change since.
Review checks a charge against the note in both directions, so neither pattern builds.
Protected health information stays under HIPAA and HITECH control, with role-based access.
Processes of two to five providers where charge entry is competing with front-desk responsibilities.
In-house billing departments require the charge entries to be processed without bringing in additional staff.
Establishments requiring standardization in charge entry but making exceptions for specialties.
Practices where there is a pattern of denials originating from charge level mistakes.
Practices requiring an audit trail and proper charge information prior to an audit.
Processes of two to five providers where charge entry is competing with front-desk responsibilities.
Cost of in-house charge entry is shared by the staff and denials. When outsourcing, the costs are bundled into one net-collections rate. The savings of full-cycle charge entry is inherent in the process since the team performing charge entry also performs claim work.
Cost of in-house charge entry is shared by the staff and denials. When outsourcing, the costs are bundled into one net-collections rate. The savings of full-cycle charge entry is inherent in the process since the team performing charge entry also performs claim work.
The upstream activity that ensures that the clinically proper code assignment occurs is charge entry validation.
The downstream process whereby the charge posts as payment more quickly.
The recovery component. Charge entry validation prevents denials that occur.
The requirement. Coverage verification precedes posting of the charge against coverage.
The master process from which charge entry derives.
Bundling rules by clinical specialty.
RCM Xpert posts charges inside the system already in place, so no migration is required. Common platforms include the systems below.
Charge entry is the process of entering the encounter information into the billing software prior to the claim submission process. Charge entry entails entering the correct codes and modifiers from the documents. It also involves capturing the diagnosis codes and units, right down to the amount of fees per line item. Charge entry is different from medical coding because coding entails assigning the right clinical codes. Charge entry is responsible for data accuracy and compliance with payer rules, whereas coding is responsible for medical necessity. Both have to be consistent for the claim to pass. A charge without a modifier or an outdated fee amount will deny the claim, regardless of whether the code used is clinically correct or not.
Charge entry forms the basis of clean claims. Mistakes here do not stop at being a mistake; they spiral down into denial and rebill, into an aged receivable. What is entered into the system is exactly what appears on the claim; hence, partial charge entry will result in a partial claim. The Office of Inspector General connects improper charge entries with audit risk, making the implications of incorrect charge entries go beyond just denials. Proper entry of charges at this point is the most cost-effective way of preventing denial at this point in the cycle. Finding errors before submitting the claim is always less expensive than trying to overturn it after.
Proper coding decreases denials by fixing the issues that cause denials at the payment source prior to claim submission. It ensures that code combination has met NCCI edits and hence the claim will not be rejected as unbundling. Proper coding ensures use of proper modifiers where required and hence, the combination of the same day procedure codes will both read billable. Proper coding ensures proper matching of each code with the documentation and hence claim cannot be denied for lack of documentation for any particular procedure. Proper coding ensures posting of proper units and fee amount and hence claims will not be denied on basis of units and fee amount. The above actions correspond to particular reasons for denials and hence denial prevention.
Turnaround for charge entry within 24 to 48 hours after the date of service is a typical industry standard. Benchmarks for billing process timing from groups such as MGMA and HFMA have this range. There are two reasons why this applies. First, a fast charge cycle provides a buffer to the earliest filing deadline among the payer group. Thus, no claims will miss their deadlines while waiting to post. Claims cannot be paid until they are filed. Therefore, fast posting reduces days in accounts receivable. A charge left unposted for weeks has the opposite effect. Turnaround needs to be verified as a service promise. Posting fast means posting fast later.
The process of charge entry and coding is a step-by-step process with two different queries in mind. The coding process is the clinical correctness step, and the coder makes sure of the correctness of the codes assigned to the documentation. These codes also contain the medical necessity of what the provider performed. The charge entry process is the data completeness step, where these codes are used to make sure that the charge is ready for filing with the payer after making sure of its completeness and payer compliance. The coding process determines if the codes are clinically correct, while the charge entry process determines if the claim is eligible for filing.
Charge entry outsourcing will increase cash flow due to the dynamics of the collection process, not through the promise made. A claim does not get paid unless it gets submitted. The shorter the charge lag, the sooner each claim gets in the queue for payment. This leads to reduction in days in accounts receivable, the measure of the number of days that revenues sit unpaid. The improvement is increased if there is a higher first-pass rate. When the claim is successfully processed at the first time around, there is no appeals process taking weeks and months. There are fewer denials and hence revenues stuck in the rework process. The impact is determined by the charge lag and denial rate existing, which is unique for each practice. A free billing audit determines these before any projection.
Both charge capture and charge entry are steps within the same process. The former is called charge capture. This is the step that captures all the billable charges that occur within the clinical note or EHR encounters. In simple terms, any activity done during the encounter is charged for. The latter is known as charge entry. This is the step in which the captured charges are entered into the billing system along with the code, modifier, unit and fee amounts. While capture tells what is billable, entry tells if the charge posted is correct and meets payer requirements. Failure to capture a charge will mean the activity goes unbilled, which means lost revenue. Incorrect entry of a captured charge will be a denial.
The following are the four control measures that ensure the RCM Xpert is in compliance with the HIPAA Security Rule at 45 CFR 164. First, the audit trail logs the individuals responsible for the entries and when such entries were made. Secondly, it logs the changes that occurred. This makes compliance verifiable. Thirdly, role-based access restricts posting and editing of charges to only authorized individuals. Fourthly, encryption of protected health information contained in the charges in both transit and storage forms is ensured by the use of encryption technology. Fifthly, there is regular staff training. Lastly, a business associate agreement that outlines terms under which charges will be processed is signed. These measures answer the questions an audit would ask. Namely, what individual accessed the charge and what did the individual do.
Some modifiers play a significant role in a majority of cases of charge entries. Modifier 25 is used to indicate that there is a separate and significant evaluation on the same day of a procedure. Modifier 59 indicates a distinct procedure service that would have been bundled because of the application of the NCCI edits. Modifier 51 is used where there are more than one procedures done in one encounter for proper fee reduction. Modifiers 76 and 77 indicate a repeat procedure by the same or another provider. Modifier 91 indicates a repeat clinical laboratory test. Modifiers 95 and GT indicate telehealth service according to the payer’s standard. Each of these will affect the way the payer interprets the code. The incorrect use or absence of a modifier will be a reason for denial.
Errors in charge entry get auditors’ attention since they are identified through the billing patterns. Payers or the Office of Inspector General may detect such billing patterns. Overcoding charges by more than what the documentation shows. It looks like an improper payment and serves as an audit trigger. Undercoding represents another risk and results in revenue leakage. Frequent unbundling charges in violation of NCCI edits indicates a charge entry issue and not a mistake. Every pattern may lead to an audit requesting documentation to support those charges. An audit trail comes in handy at this point. It provides information about the initial charge entry and any modifications made to the charges in question. Such a facility allows a provider to answer the request with proof. Correct charge entry prevents any issues with the billing patterns in the first place.
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