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Charge Lag & Reconciliation: The Bottom Line!
Ensuring a clean claim to avoid denial


Before we dive into charge lag and reconciliation in the revenue cycle process, we need to first understand the basic life of a claim. In its simplest form, the life of a claim goes: 

1) Charge capture - a provider sees a patient and records the services rendered.

2) Coding - The charges are reviewed for accuracy prior to sending out the “clean claim.” Note, missing documentation or physician queries can lead to coding lag.

3) Claim submission - The clean claim is sent to the patient’s insurance company.  Any edits with the payer or additional claim edits can also delay claim submission. 

4) Payment posting - Payment is received from the payer, which can also include denials or requests for additional information. 

5) Collections - The remaining balance owed by the patient is collected.

What is charge lag?

Charge lag is calculated by the number of days from the date of service to the date charges are entered. Ideally, charges should be entered within 24 hours of the date of service, but that’s not always the case. In fact, a 2019 survey revealed only 32% of respondents indicated their charges are captured in 24 hours, while 35% said it takes 3-7 days, and 6% reported taking more than a week.

The negative impacts of charge lag

As the first step in the life of a claim any charge lag can significantly delay everything that comes after it. Therefore, charge lag ultimately leads to delays in reimbursements, a.k.a, it takes longer to get paid. For example, if charges aren't captured within 24 hours, it can cause delays in claim submission, which then causes delays in reimbursement from insurance, especially if there are any follow-up and/or additional requests from the payer. Many payers also have strict deadlines for when claims and/or additional information must be submitted after the date of service, which can lead to underpayments or denials if the charge lag is significant. This can result in appeals and unnecessary follow-up, which can be incredibly time-consuming and costly. 

So for instance, if a provider bills a 99291 for initial critical care, payers may request to review medical records to finish processing the claim. But if the charge lag was high to begin with it could result in the inability to get documentation submitted in time. At that point, payers can change the code to 99233, which is a subsequent inpatient code. This can be the difference between being paid $104 instead of $220, which is more than a 50% reduction. Or, the claim could also deny altogether for untimely filing with zero reimbursements; all caused by the initial charge lag. Depending on the insurance company, timely filing can be as little as 60 days from the date of service.

What is charge reconciliation?

Charge reconciliation is the act of comparing charges captured to the services provided. It is an important process within a health care organization's revenue cycle to ensure consistent, timely, and accurate charge capture and resolution of pending charges.  Completing regular charge reconciliation helps identify root cause issues that can lead to delays in reimbursements and denials.

Best practices for charge reconciliation

Good charge reconciliation can reduce charge lag and increase revenues overall. Here are a few tips to set you up for success:

*Establish a standard of acceptable lag limit when entering charges,
*Reconcile frequently and track missing charges, 
*Maintain and track the charge lag report,
*Educate providers on missing charges that are identified. 

In pMD, you'll find all of the reporting tools needed to help audit, reconcile and educate. 

If you are interested in learning more about pMD’s Billing & Revenue Cycle Management Services, please contact us here or give us a call at 800-587-4989 x2. We’d love to hear from you!

Related Articles:

Charge Lag Statistics: What to Look for When Evaluating Charge Capture

Custom Medical Coding & Billing Solutions – pMD, Your Coding Assistant

Electronic Health Records Don’t Reduce Administrative Costs - Mobile Charge Capture Does!

To find out more about pMD's suite of products, which includes our charge capture and MIPS registry, billing services, telehealthsecure messagingclinical communication, and care navigation software and services, please contact pMD.

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