Reimbursement methods are used to reimburse physicians for the services that they provide to their patients and clients. One of the most commonly used reimbursement methods is the charge description master (CDM), which is also referred to as the charge master. This reimbursement method is comprised of all the costs of the services provided together with the products that have been used by the health personnel, and these are used to make the bill of the patient after treatment (OSHPD, 2016) . The CDM is updated yearly, and there is no set format for generating it (OSHPD, 2016) . It is important for the charge description master to be updated every year. This helps in checking whether or not there are mistakes that were made in the billing system of the previous year.
There are several effects of not using the current codes and charges of the chargemaster. One of the main effects of not using the current codes and charges of the charge description master is that it leads to overpayment and underpayment (Motter & Newell, 2015) . This is because the chargemaster is updated yearly and the prices change every year. For instance, the overpayment may happen when the hospital uses the prices of the previous year, which were higher than those of the current year. Underpayment may occur when the hospital uses the billing system of the previous year, in this case, one which was lower than that of the current year.
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This brings negative effects to the healthcare facility because patients will lose trust in the billing system of the hospital. The health care facility may also incur if the bills given to the patients are underpaid. In the case of an overpayment, the hospital will have to compensate the patients the excessive costs that were paid to them. Health care facilities have a duty to ensure that the current codes and charges are used. The hospital management should regularly check that the patients are charged according to the current codes and charges. The healthcare management should also educate the staff on the importance of using the current codes and charges by showing them examples in regard to what is required. The management should also formulate a charge policy which will encourage consistency in the use of current charges. The management should find an audit team that will ensure the charge policy is being followed without any compromises.
References
OSHPD, (2016). Hospital Chargemaster Program Information - OSHPD HID . Oshpd.ca.gov . Retrieved from https://www.oshpd.ca.gov/HID/Hospital Chargemaster.html
Motter, L. & Newell, F. (2015). Fundamentals of Reimbursement in Healthcare (1st ed., pp. 1-2). Colorado Technical University. Retrieved from
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