CRCR Charge Description Master (CDM) and Price Transparency — Questions and Answers
Question 1: What is a Charge Description Master (CDM)?
- A comprehensive database containing every service, supply, and procedure a hospital can bill, along with the associated charge, revenue code, and procedure code (Correct answer)
- A list of diagnosis codes approved by CMS for inpatient reimbursement under Medicare DRGs
- A payer-specific fee schedule showing the maximum allowable payment for each CPT code
- A regulatory document listing all Medicare Conditions of Participation for hospital accreditation
Correct 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.
Question 2: Under the CMS Hospital Price Transparency rule (effective January 1, 2021), hospitals are required to publicly post:
- A machine-readable file of all standard charges and a consumer-friendly display of shoppable services (Correct answer)
- Only their Medicare-contracted rates in a PDF format on their website
- A summary of denied claims and appeals outcomes for the prior calendar year
- Their negotiated rates exclusively for the top 10 commercial payers in their market
Correct 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.
Question 3: A CDM audit is primarily conducted to:
- Identify outdated, incorrect, or missing charge codes that could lead to underpayment, overbilling, or compliance risk (Correct answer)
- Verify that all inpatient admissions have a matching physician order in the medical record
- Calculate the hospital's case mix index for the upcoming fiscal year
- Ensure that all nursing staff are accurately documenting medication administration times
Correct answer: Identify outdated, incorrect, or missing charge codes that could lead to underpayment, overbilling, or compliance risk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.
Question 4: The No Surprises Act (effective January 1, 2022) primarily protects patients from:
- Unexpected out-of-network bills for emergency services or services received from out-of-network providers at in-network facilities without prior notice (Correct answer)
- Premium increases by their employer-sponsored health plan exceeding 10% annually
- Balance billing by pharmacies for specialty drug dispensing fees
- Retroactive denial of claims for services that were pre-authorized by the payer
Correct 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.
Question 5: 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?
- A three- or four-digit code that classifies the accommodation or ancillary service (e.g., 0450 for emergency room, 0270 for medical/surgical supplies) (Correct answer)
- The two-digit condition code indicating the patient's admission source
- The two-character type-of-bill code identifying the facility and claim frequency type
- The five-digit HCPCS modifier appended to the procedure code to specify service circumstances
Correct 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.
Question 6: 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?
- Assign the correct HCPCS code, revenue code, and charge amount to a new CDM line item before the implant is used clinically (Correct answer)
- Submit a test claim to Medicare to verify the reimbursement rate before adding the item to the CDM
- Wait until the end of the fiscal year CDM review to add new items in a batch update
- Use the nearest existing implant CDM line item as a temporary placeholder until the new item is formally approved
Correct 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.
CRCR Charge Description Master (CDM) and Price Transparency
What is a Charge Description Master (CDM)?