Why Chargemasters Are Important

Chargemaster Training

A chargemaster is a list of all procedures, products, and services offered in a hospital. This important document has everything from prescription medications to diagnostic tests on it, along with the associated price. This method of tracking costs has been in use for many years. It has become crucial since the era of insurance, balance billing, and other healthcare payment practices. Originally, it was like a dictionary that contained all the fee-for-service prices. Now it has been adapted to include things such as value-based care. However, they remain a crucial part of modern hospitals. Today, they are found as large electronic files that can be consulted by the revenue department. 

How Hospitals Create and Use Chargemasters

Chargemasters today do not reflect the actual cost of a service or product. This is because they are created by finance departments focusing on bringing in revenue despite hindrances, such as negotiated insurance rates. To combat negotiation, they are much higher than the actual cost of service. Sometimes, they can be four times the amount of the service. Other services can be significantly more, and others can be closer to the cost for the service. However, these rates are generally not what is actually paid by patients since this is just a starting point for negotiations. 

Requirements for Chargemaster Management Careers

Most of the careers that would use chargemasters do not require medical degrees. Instead, degrees in healthcare management and business are often looked for in applications. Additionally, the financial departments need to have up-to-date chargemasters to keep the hospital running. Unreliable chargemasters can result in revenue loss, legal liabilities, and higher charges for patients. Therefore, chargemaster training is often required of hospital staff. 

Chargemasters are the starting points for negotiations in the financial department of a hospital. These documents are created with a significant increase in a service’s actual price to keep revenue entering the hospital. Having proper training and a degree in management or business is required of hospital staff who work with these documents. 

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