Impact of Charge on Administration on Revenue and Medication Administration
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Background: The Affordable Care Act and subsequent healthcare reform has led to an increased focus on revenue integrity and has stimulated inpatient pharmacies to transition from a charge on dispense (COD) to charge on administration (COA) model. However, the transition to COA can result in a 10 to 20 percent reduction in gross charges and relies on accurate medication administration. Objective: To determine the impact of the transition to charge on administration at a large, academic medical center. Methods: Data for the COD model was collected from September through December 2013 and compared with COA model data in 2014. Primary endpoint assessed percent change in gross charges of top ten medications by total charge and frequency. Rates of change were compared using pharmacy charge data from the medication administration record. Secondary endpoints assessed the effect of the change on barcode medication scanning compliance (BCMA) and MAR administration compliance. Results: Total charges for top ten medications were $10.9 million and analysis of trends revealed an average decrease of 11.57% in total charges. Analysis of trends in top ten medications by total frequency revealed an average decrease of 34.13% in total charges. BCMA scanning trends increased from 92.7% at the beginning of the study period to 96.6% post COA implementation. Conclusion: The transition to charge on administration led to an overall decrease in billed charges at our institution. Changes in charge capture workflow with an emphasis on nurse scanning led to an overall increase in barcode medication scanning compliance.