One of the largest issues still facing hospitals today is successfully capturing and billing for pass-through charges. CMS (Centers for Medicare and Medicaid Services, formerly HCFA) has placed limits on the amount of time they will be providing reimbursement through the use of the pass-through methodology. Many systems are still playing catch-up when it comes to the processing of pass-through codes. Immediate focus should be given to this issue to ensure that reimbursement equals the service and level of care provided.

It is imperative that the chargemaster is updated regularly with information necessary to identify and bill for pass through codes. The item should be listed with the appropriate revenue code, CPT/HCPCS, and specific description (Include the Manufacturer name, item name and size/dose). Following are some issues that result in reduced reimbursement by the incorrect us of a pass-through code or through incorrect billing of a pass-through code:

o Failure to update the Chargemaster with the correct coding information and item description;
o Incorrect unit doses captured on the Chargemaster versus how the drug is reimbursed by Medicare. For example, if Medicare reimburses a drug using increments of 100mg and the item is captured in the Chargemaster at 500mg, the facility has lost 80% of the available reimbursement. The pharmacy and clinical staff must be educated on this change;
o Lack of charge capture audits to ensure that items such as implants are charged each time an implant procedure is performed, i.e. pacemaker insertion;
o Failure to update charge tickets and charge screens with new item descriptions so the user knows exactly the item they are choosing;
o Insufficient training of outpatient coding staff to identify coding opportunities;
o Lack of physician education regarding which items are reimbursed as pass-through items. Physicians may use items that are not pass-through items when equivalent items exists on the pass-through list that may be used instead.

If you feel that there may be areas where improvement is still needed, it is not too late. Provide your department directors with a copy of the most current pass-through list. After they have reviewed the list and identified items used in their department, update the Chargemaster to reflect the necessary information. Finally, update your charge tickets/charge screens with the new information and educate the physicians and staff.

In addition, based on Medicare timely filing limits, you may still have the opportunity to submit adjustment bills for missed charges. Identify procedures that are effected by pass-through items, review the UB-92 for the correct Revenue Code, HCPCS code, and description. Be sure to validate any changes made to the bill with the medical record. This should result in the appropriate payment for the service and level of care provided.

Jay Watkins
Senior Manager - Revenue Cycle
PricewaterhouseCoopers, LLP