Chargemaster Management: How to move from neglect to revenue gains

Given that the provider organization chargemaster dictates fair reimbursements, it’s baffling that so many provider organizations fail to proactively manage it. 

Healthcare organizations with outdated or inaccurate chargemasters set rates below payer allowables, resulting in direct revenue loss. In an active merger and acquisition era when lenders, buyers, and potential partners scrutinize P&Ls meticulously, leaving revenue on the table is no longer an option. 

Organizations relying on flawed, simplistic, or outdated pricing methodologies (for example, fixed multipliers of Medicare rates or stagnant charge updates) inadvertently bill too little, allowing payers to under-reimburse or outright deny claims.

Often, revenue loss doesn't stem from a single dramatic failure, but rather from a multitude of small mistakes that quietly accumulate significant financial impact over time. Seemingly minor issues—such as an unbilled injection in the emergency department, a missed therapy session, or an undercoded procedure—may appear negligible in isolation, but when repeated across hundreds or thousands of encounters, they collectively create a substantial gap in an organization’s bottom line.

Here, you discover how to turn chargemaster neglect into chargemaster excellence — transforming overlooked risks and lost revenue into compliance, efficiency, and financial strength through proactive, best-practice management. 

What is chargemaster management?

Chargemaster management refers to the continuous process of updating, auditing, and maintaining the master list of billable services, supplies, drugs, and procedures—known as the chargemaster—so that all charges are reasonable, defensible, and accurately mapped to billing codes. Proper maintenance directly impacts revenue capture, reduces billing errors, and improves compliance with payer requirements and government regulations.

Differences between chargemaster management and chargemaster maintenance

Although the terms are sometimes used interchangeably, there is a distinction between chargemaster maintenance and chargemaster management. Chargemaster maintenance is typically a subset of chargemaster management, focusing on the day to day review, updating, and verification of charge codes, item descriptions, prices, and payer requirements to ensure ongoing accuracy, compliance, and optimal reimbursement.

Where chargemaster maintenance involves the short-term tasks, chargemaster management extends to higher-level oversight, governance, and strategic process improvement. It Includes policy setting, cross-departmental collaboration, technology adoption, workflow optimization, and integration with overall revenue cycle and compliance initiatives. 

How chargemaster management drives revenue cycle optimization

Effective chargemaster management lays the groundwork for accurate charge capture, billing, and compliance. With proactive chargemaster management, provider organizations can achieve:

• Accurate charge capture and billing: gets every service, procedure, supply, or drug provided by the organization correctly reflected and billed. Aims to limit billing errors and missed charges, minimizing claim denials and the need for re-billing, which accelerates the cash flow cycle.
• Regulatory compliance and risk mitigation: proper charge documentation keeps provider organizations compliant with ever-changing CMS, payer, and state regulations, avoiding regulatory penalties and payer take-backs. This step prevents audits and keeps codes up to date. 
• Data integrity for financial operations: chargemaster data fuels payer negotiations, financial reporting, and strategic pricing, giving provider organizations a stronger position in contract negotiations and planning. This data also ensures transparency initiatives by providing clear patient-facing pricing and accurate estimates.
• Operational efficiency:  efficient chargemaster management reduces the cost-to-collect by cutting manual effort, automating coding updates, and preventing charge compliance bottlenecks.
• Continuous improvement and cost control: ongoing management identifies performance improvement opportunities, highlights areas of revenue leakage, and streamlines workflows for more timely and efficient revenue conversion.
• Denial management: when all billing codes, descriptions, and prices are accurate, up to date, and fully aligned with payer requirements. By promptly updating the chargemaster for regulatory shifts, payer policy changes, new technology, or internal service additions, organizations minimize billing errors and prevent denials caused by outdated or incorrect information. Regular audits and ongoing updates allow providers to quickly identify and correct root causes of denied claims, preventing recurrence and capturing revenue that would otherwise be lost to avoidable denials.

Take a quick, self-guided tour through powerful denial management and contract optimization software. 

In summary, robust chargemaster management supports an optimized revenue cycle by maximizing revenue capture, reducing delays and denials, ensuring compliance, and providing a foundation for sound financial operations and strategic growth.

From zero to hero: Effective chargemaster management

When was the last time your provider organization reviewed your chargemaster? With  new regulations and payer updates rolling out consistently all the year, conducting quarterly and annual chargemaster assessments are the minimum.  

But what does a chargemaster assessment entail and how do provider organizations conduct them? 

Use these steps to optimize your chargemaster management. 

Step 1: Share chargemaster management importance with your team to win buy-in 

Typically, staff feel maxed out with current duties. Explaining that chargemaster management is on the horizon may elicit resistance. 

To keep your project on track, first acknowledge that change is stressful to your team. 

Valerie DeCaro, VP RCM, DOCS Dermatology recently told us: 

“Healthcare is currently in a huge state of disruption. Change is hard. Getting your groups onboard and then motivating them to be successful takes careful planning.”

Key to winning buy-in is sharing how chargemaster management work will benefit your organization. Let staff know that improved revenue will impact the organization’s viability, and subsequently, raises, bonuses, and other perks.   

A study involving 30 healthcare professionals found that organizational change succeeds when staff:

• understand and agree with the purpose
• have time to implement changes gradually
• have opportunities to play an active role or even initiate changes themselves
• feel sufficiently prepared
•  recognize benefits for both themselves and their patients

 These positive conditions are consistently achieved when leaders follow a thoughtful, well-documented approach to managing change in healthcare.

Get more tips for initiating a proactive chargemaster program on our change management post. 

Step 2: Establish appropriate governance

Staff can raise concerns that the new work will fall disproportionately to one or another. To get ahead of this pushback, appoint dedicated owners or teams for chargemaster upkeep, define clear roles, and maintain robust communication across billing, coding, compliance, clinical, and finance departments.

Consider which team members will become: 

• Chargemaster manager or coordinator: Leads the overall management and maintenance of the chargemaster, overseeing regular reviews, coordinating departmental collaboration, ensuring coding accuracy, monitoring compliance, and communicating updates to stakeholders.
• Coding manager: Supervises the coding team, ensures accurate and compliant code assignment, collaborates with the chargemaster manager on updates, and provides guidance on coding practices.
• Certified coder: Assign and validate procedural codes (CPT, HCPCS) for services, ensuring accuracy and compliance while supporting code updates in collaboration with coding and chargemaster managers.
• Patient financial services (PFS) or billing staff: Specialize in payer-specific coding and billing requirements, resolve claim edits, and work alongside the chargemaster manager to maintain payer-compliant charge data.
• Compliance officer: Monitors adherence to regulatory guidelines, identifies and mitigates compliance risks, and educates staff on coding and billing regulations through collaboration with all relevant teams.
• Clinical department representatives: Include clinicians and charge capture specialists who provide essential input about services, supplies, and procedures to ensure accurate representation in the chargemaster.
• Finance and revenue cycle management team: Your revenue cycle managers assess the financial impact of chargemaster changes, optimize reimbursement, and support revenue enhancement initiatives.

Here are three additional steps to move from zero to hero with proactive chargemaster management, each with an explanation:

Step 3: Ensure service lines, supplies, and procedures are accurately represented 

To ensure service lines, supplies, and procedures are accurately represented and competitively priced in line with market and contract demands, organizations should follow these steps:

• Conduct comprehensive market research: Regularly analyze competitor pricing by benchmarking your charges against other hospitals and regional/national market data. Consider factors such as prevailing Medicare rates, local market rates, and payer fee schedules to see where your organization stands and identify necessary adjustments for your service lines and supplies.
• involve subject matter experts and departmental leadership: Engage clinical, administrative, billing, and coding experts to validate that all billable services, supplies, and procedures are captured in the chargemaster and are coded accurately. Department leaders should help define and review the service mix to ensure completeness and clinical accuracy.
• Analyze and align with payer contracts: Systematically compare chargemaster rates with payer contract allowables to flag charges that fall below contracted payments or are at risk for "lesser of" denials. Use scenario modeling and analytics to forecast the net revenue impact of pricing changes and adjust accordingly to maximize reimbursement without pricing yourself out of network.
• Assess internal cost structure: Examine the direct costs (labor, supplies, equipment, overhead) for each procedure and supply to set rational, defensible prices that cover actual expenses and contribute to operational sustainability. Transparency and cost-aware pricing also ensure compliance and consumer trust.
• Review coding and descriptions: Audit each charge item to ensure the assigned CPT/HCPCS codes and descriptions match current clinical practice and payer requirements, thus supporting clean claims and revenue integrity. Inaccurate or outdated codes can lead to underbilling or denials.
• Leverage automation and maintain continuous review: Utilize chargemaster management solutions and analytics platforms to automate benchmarking, contract comparisons, and scenario testing. Set routine deadlines for review—quarterly at minimum—and be responsive to any regulatory, technological, or marketplace changes.

By consistently executing these steps, organizations can keep their pricing strategy agile, compliant, competitive, and aligned with both payer contracts and the market.

Outsourcing chargemaster management

Should the work and the amount of staff needed to complete it outmatch your team’s capacity, you can consider outsourcing chargemaster management. 

Provider organizations have several options, ranging from full-scale remote management to targeted reviews and ongoing consultation. Partners such as Cognizant’s Chargemaster Services offer remote CDM (Charge Description Master) outsourcing, ongoing maintenance, comprehensive reviews, and strategic pricing analysis, often leveraging advanced technology for ongoing compliance and revenue capture. 

Other specialty vendors like Optum, Cerner, Epic, Evident, MEDHOST, Change Healthcare, nThrive, and VitalWar provide chargemaster management services, which are typically integrated with EHR or revenue cycle platforms. These solutions automate updates, ensure price transparency, and optimize charge capture.

Provider organizations use these services when they lack in-house resources or seek expertise in navigating regulatory changes and payer contract complexities. For example, Prowers Medical Center in Colorado significantly reduced chargemaster errors, decreased claim denials, and freed up staff time by partnering with Optum for ongoing chargemaster maintenance, demonstrating how external expertise can streamline operations and improve results. 

By outsourcing, provider organizations can tap into industry-leading best practices, reduce operational burden, and maintain a compliance-ready, revenue-optimized chargemaster. 

How chargemaster management and payer contract management improve revenue cycle

Optimal financial performance requires continuous alignment between the chargemaster and all payer contracts. 

When new contracts are signed or terms are renegotiated, the chargemaster must be promptly updated to reflect these rates and provisions, allowing for compliance and maximized reimbursement. 

Advanced contract management software now helps organizations detect disparities between chargemaster rates and contract terms, flagging areas vulnerable to underpayment and supporting both strategic pricing and contract negotiations. Clear dashboards provide the insights to help RCM teams proactively minimize revenue leakage, respond to market shifts, and negotiate from a position of strength.

The chargemaster sets the prices for every service and procedure, while payer contracts determine the reimbursement terms for those codes—often with clauses like "lesser of" language that pays the provider either the billed charge or the contract rate, whichever is lower. If the chargemaster rates are outdated or underpriced compared to contract allowables, providers risk being reimbursed below contractual agreements and losing significant revenue.

Take a quick, self-guided tour through a powerful contract management and underpayments identification tool:

Modern healthcare organizations increasingly rely on cutting-edge software and automation to maintain chargemaster accuracy, compliance, and efficiency. With AI and automation-driven contract management software automatically updating billing codes and flagging regulatory changes, you can:

• identify pricing discrepancies, “lesser of” clause vulnerabilities, and underperforming codes.
  
  
• integrate with EHR and RCM systems for seamless charge capture, data consistency, and audit trails.
  
  
• access real-time analytics for benchmarking against market and contract rates, thus empowering proactive financial decision-making.
  

MD Clarity supports chargemaster management

Sweep in earned net revenue when you optimize your chargemaster. 

Chargemaster management contributes to revenue cycle optimization by ensuring every charge is accurate, defensible, and aligned with market and contract demands. With rigorous oversight, routine audits, and integration of advanced technology, organizations can capture the full value of their services, minimize denials, and maintain compliance. These improvements strengthen financial performance and long-term growth. A well-managed chargemaster empowers provider organizations to negotiate better contracts and achieve sustained revenue excellence. 

MD Clarity’s RevFind contract management solution is designed to align chargemaster and each payer contract to maximize net revenue. By centralizing and digitizing all payer rates and terms, RevFind pinpoints where payers are underpaying on specific CPT codes Their underpayments may result from chargemaster issues. The platform also ranks payer contracts by their performance, equipping your organization with the data needed to strengthen negotiation strategies. With advanced contract modeling tools, RevFind can project the financial implications of proposed payer policy changes, empowering smarter, revenue-protective decision-making. Should your organization need underpayment or denial recovery services, our seasoned experts take your denials and underpayments to payers to advocate for accurate reimbursement. 

 Schedule a demo to see how RevFind can ingest your contracts to help you ensure your chargemaster is up-to-date and accurate. 

‍