What Is a Charge Capture and How Does the Process Work?

Charge capture is a fundamental process within the healthcare revenue cycle, serving as the bridge between patient care and financial reimbursement. It encompasses the systematic identification, documentation, and recording of all billable services and items provided to a patient during their encounter with a healthcare facility. This intricate process is essential for healthcare providers to ensure they are accurately compensated for the medical services delivered, thereby supporting the financial stability and operational continuity of the organization.

Defining Charge Capture

This process is about identifying and recording all revenue-generating activities to facilitate proper billing and reimbursement from insurance companies, government programs like Medicare and Medicaid, or directly from patients. Without accurate charge capture, healthcare organizations risk significant revenue loss, potentially impacting their ability to operate and invest in patient care. Healthcare organizations generally face a loss of approximately 1% of their potential annual revenue due to charge capture errors, which can translate into millions of dollars for larger facilities.

Components of Charge Capture

Clinical documentation forms the foundation, requiring healthcare professionals to maintain thorough and precise patient records of all services rendered, diagnoses, and treatments. This documentation serves as the authoritative source for all billing codes.

Medical coding then translates these documented services into standardized, universally recognized codes. This involves using systems such as Current Procedural Terminology (CPT) codes for procedures and services, Healthcare Common Procedure Coding System (HCPCS) codes for non-physician services and supplies, and International Classification of Diseases, Tenth Revision (ICD-10) codes for diagnoses. The Charge Description Master (CDM), also known as the chargemaster, is a comprehensive database listing all billable services, supplies, and procedures with their associated codes and prices. This master list influences the financial health of healthcare institutions. Finally, technology systems, particularly electronic health records (EHR) and billing software, are crucial for facilitating the efficient flow of information and automating aspects of the charge capture process.

The Charge Capture Process

The process begins when a patient receives care. Healthcare providers meticulously document all services and supplies provided during the patient encounter in the patient’s medical record. This detailed notation, often done within an electronic health record (EHR) system, includes specifics about when and how services were rendered.

Following documentation, professional medical coders or automated systems review the clinical notes to assign appropriate medical codes. These codes, such as CPT, HCPCS, and ICD-10, accurately reflect the diagnoses, procedures, and services delivered. Once services are coded, they are translated into specific charges using the Charge Description Master (CDM), which links the coded services to their corresponding prices. These generated charges are then submitted to the billing system. This final step prepares the charges for claim generation and submission to payers, ensuring that the healthcare provider is reimbursed for the care provided.