How Often and How Should a Hospital Review Its Chargemaster?
Review the whole chargemaster at least once a year, and recheck the lines that carry HCPCS codes when CMS posts its quarterly files. The review itself is a line-by-line worksheet: for each line, confirm that what the chargemaster holds will land correctly in the UB-04 form locators, with the revenue code, HCPCS code, modifier, units and date the payer needs.
Written by Salman Saeed, CEO and Co-Founder · Reviewed by a Certified Medical Coder · 
In short: treat each chargemaster line as the template for a claim line. If the line cannot produce a valid revenue code, HCPCS code, modifier and unit count on the claim, every claim that uses it carries the same defect.
How Often Should a Hospital Review Its Chargemaster?
The annual review is the floor. Under 45 CFR 180.50, a hospital must update its standard charge information at least once annually for price transparency, and the chargemaster is the source of those charges. The code-bearing lines need more attention than that, because CMS posts an alpha-numeric HCPCS file for January, April, July and October, and posts OPPS Addenda A and B each quarter.
Add event reviews on top of the calendar: a new service line, a new drug or device, a change in the ED's leveling guideline, or a denial pattern traced to one line. The chargemaster review guide has the full calendar of triggers. This post is the worksheet you run when one of them fires.
What Do You Check on Each Chargemaster Line?
Take the chargemaster export and run every line through the same eight questions. The right-hand column shows where the answer lands on the UB-04 claim, following Chapter 25 of the Claims Processing Manual.
| Question | Where it lands on the claim | Pass test |
|---|---|---|
| Is there a revenue code, and does it fit the department? | FL 42 | One revenue code explains each charge in FL 47, and the code is allowed on the bill type you bill it on |
| Does an outpatient line carry a HCPCS code? | FL 44 | The code describes the procedure, and the code is current in the latest quarterly file |
| Does the description read clearly in 24 characters? | FL 43 | The CMS-1450 description field is 24 characters long, so the first 24 characters have to identify the item |
| Does the line carry the right modifier? | FL 44, after the HCPCS code | Up to four modifiers of two characters each, and no separate HCPCS code reported in place of a modifier |
| Do units match the service? | FL 46 | For HCPCS-coded services, units equal the number of times the service was performed |
| Does each occurrence create its own line? | FL 45 | A line item date for every iteration of every revenue code on outpatient bills |
| Do drug lines carry what the payer needs? | FL 43 and FL 44 | HCPCS under 0636, and an NDC where Medicaid rebate data is required |
| Do the price and the payer rules still apply? | Contract and price file | The line matches the posted standard charge and the payer's own manual |
For Medicaid drug rebate data, Chapter 25 says to enter N4 followed by the 11-digit NDC in positions 1 to 13 of FL 43, with the quantity from position 14. The same field is only 24 characters long, so a long description and an NDC cannot share it.
What Does a Reviewed Line Look Like?
The lines and findings are invented to show how a reviewer records a pass or a fix.
The failed lines share a pattern: each one would pass a visual check of the chargemaster and fail on the claim. That is the reason to review against claim fields rather than against the price list.
How Do You Score and Rank the Findings?
Count failed lines by failure type, then rank them by how many claims use each line. A line that fails an edit and is used every day outranks a cosmetic problem on a line nobody bills. Give each failed line one owner and one due date, and keep passed lines on the sheet, so the next reviewer can see what was checked and not only what was wrong.
How Do You Retire or Change a Line Safely?
- Record the effective date. Codes and rates follow the date of service, so a line change applies to services from that date, not to everything already in the system.
- Compare the line to the newest HCPCS file and the latest OPPS Addendum B for its status indicator and APC. If the indicator changed, check the packaging effect.
- Build a replacement line before you inactivate the old one, and map the department's charge screen to the new line.
- Build one test claim for each bill type the line is used on, and confirm the revenue code, HCPCS code, modifier and units appear in FL 42, FL 44 and FL 46.
- Keep the old line active for dates of service before the effective date until those accounts are billed.
- Log the change, so the next price file update reflects the same set of codes.
Which Departments Need the Closest Review?
- Emergency: visit levels, procedure lines under 0450, critical care, trauma activation, and the ER modifier, which Chapter 4 says is required on lines from an off-campus provider-based dedicated ED since January 1, 2019 and has no effect on payment.
- Observation: 0760 or 0762 lines, with G0378 units equal to hours rounded to the nearest hour.
- Pharmacy: 0636 lines with HCPCS, unit rules based on the code descriptor, and NDC handling. Note that 0250 does not require a HCPCS code.
- Surgery and procedure rooms: separate lines for each procedure, with modifiers that match the code.
- Inpatient accounts: revenue codes that are allowed on 11x bills. Inpatient payment follows the MS-DRG, so the chargemaster's job there is clean revenue codes and charges on the bill. Physician charges for the same stay belong on the professional side, as covered under internal medicine billing.
Once the lines are right, charge capture is the next place leaks hide.
What Should You Record at Every Review?
A review without a record cannot be repeated or defended. Keep one page per review with the date, the reviewer, and the exact files used: the HCPCS file month, the OPPS addendum quarter, the IPPS grouper version and the price file version. Add the number of lines checked, the number that failed, each change with its effective date, and the owner of any open item.
Rates and codes change on the schedule in the OPPS and APCs page, and the form locator rules are on the UB-04 revenue and condition codes page. The revenue code 0450 page covers the ER lines in detail.
How Does Nucleus Align Handle Chargemaster Work?
Billing and coding audits are a paid service at Nucleus Align. Our UB-04 accuracy checks cover bill type, revenue codes, patient status, condition and occurrence codes, authorization requirements and payer-specific rules. See billing and coding audits, or book a call. More explainers are on the blog.
- Medicare Claims Processing Manual, Chapter 25, Completing and Processing the Form CMS-1450 Data Set · CMS
- Medicare Claims Processing Manual, Chapter 4, Part B Hospital (Including Inpatient Hospital Part B and OPPS) · CMS
- Medicare Claims Processing Manual, Chapter 17, Drugs and Biologicals · CMS
- 45 CFR 180.50, Updating requirements · eCFR
- HCPCS quarterly update · CMS
- OPPS Addendum A and B updates · CMS
We check every rule, code and deadline against the official source. See our editorial policy.
Common Questions
Straight answers from the team that does the work.
Ask a billing lead directly. A 20-minute call, Monday to Friday, 9am to 5pm Eastern.
01How often and how should a hospital review its chargemaster?
Review the whole chargemaster at least once a year, because 45 CFR 180.50 requires standard charge information to be updated annually, and recheck code-bearing lines when CMS posts new HCPCS files each quarter. Review line by line against the claim fields each line will populate: revenue code, HCPCS, modifier, units and date.
02Does the chargemaster description have to appear on the claim?
For Medicare, FL 43 is not required, and the CMS-1450 description field is 24 characters long. Keep the first 24 characters of each description clear enough to identify the item, because that is all the form can carry. Check each payer's manual for its own description requirements.
03How do you report an NDC on a hospital claim?
When NDC data is required for Medicaid drug rebates, Chapter 25 of the Claims Processing Manual says to enter N4 followed by the 11-digit NDC in positions 1 to 13 of FL 43, with the quantity starting at position 14. Confirm the format in the state Medicaid agency's billing manual.
04What happens if a revenue code is not allowed on the bill type?
Medicare edits fail the line. Chapter 4 lists revenue codes not allowed on certain bill types, and for revenue code 045x on a 12x bill the remittance shows group code PR, CARC 96 and RARC M28. Fix the chargemaster map for that bill type, not only the single claim.
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