Charge Description Master (CDM) and Price Transparency Flashcards
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What is a Charge Description Master (CDM)?
Answer: A comprehensive database containing every service, supply, and procedure a hospital can bill, along with the associated charge, revenue code, and procedure code
The CDM (also called the chargemaster) is the facility's internal price list — every billable item has a description, HCPCS/CPT code, revenue code, and charge amount. It is the foundation from which all claims are generated.
Under the CMS Hospital Price Transparency rule (effective January 1, 2021), hospitals are required to publicly post:
Answer: A machine-readable file of all standard charges and a consumer-friendly display of shoppable services
CMS requires hospitals to post two things: (1) a comprehensive machine-readable file with all standard charges for every item/service, and (2) a patient-friendly display of at least 300 shoppable services with payer-negotiated rates and self-pay discounted rates.
A CDM audit is primarily conducted to:
Answer: Identify outdated, incorrect, or missing charge codes that could lead to underpayment, overbilling, or compliance risk
Regular CDM audits catch coding errors (wrong CPT/HCPCS), obsolete codes, missing new services, and pricing anomalies — all of which can result in claim denials, compliance violations, or lost revenue.
The No Surprises Act (effective January 1, 2022) primarily protects patients from:
Answer: Unexpected out-of-network bills for emergency services or services received from out-of-network providers at in-network facilities without prior notice
The No Surprises Act bans surprise medical bills in emergencies and when patients unknowingly receive care from out-of-network providers at in-network facilities. It requires Good Faith Estimates for uninsured/self-pay patients and limits patient cost-sharing to in-network amounts.
Which revenue code on a UB-04 claim form indicates the type of service and is required to map CDM charges to the correct billing category?
Answer: A three- or four-digit code that classifies the accommodation or ancillary service (e.g., 0450 for emergency room, 0270 for medical/surgical supplies)
Revenue codes are three- or four-digit numeric codes on the UB-04 that classify the department or type of service generating the charge. Each CDM line item must have a valid revenue code to route the charge correctly on the claim.
When a new high-cost implant is added to a hospital's surgical services, what is the FIRST CDM-related action that should be taken?
Answer: Assign the correct HCPCS code, revenue code, and charge amount to a new CDM line item before the implant is used clinically
New services and supplies must be added to the CDM proactively — before clinical use — with the correct codes and charge to ensure the item is captured and billed correctly from day one. Using a placeholder or waiting creates compliance risk and revenue loss.