All healthcare organizations continue to face unprecedented levels of financial pressure, leaving money on the table isn’t an option. Yet too many organizations continue to lose anywhere from 1% to 10% of net revenue on underpaid claims each year – money they are contractually owed.

Resolving underpayments can be challenging for organizations given that everyone is working with limited resources. Medical Practice Succes has a team of experts who are adept at understanding payer contracts, as well as reviewing payment discrepancies and mitigating problematic trends.

There are many factors that cause an underpayment such as:

• Contractual Underpayments
• Processing errors by payors
• Charge capture errors
• CDM not up to date
• Coding related issues
• Medical Billing issues
• Implant / Supply error
• Modifiers missing
• New/deleted codes
• Pharmacy multipliers
• Inaccurate procedure order
• Payor specific edits

The ideal goal is to identify the issue causing the underpayment.  This takes extensive analysis to drill into the root cause.  Many payment variance reports contain a lot of false variances/noise and distort the issues.  Posting errors, late charges, denials, contract loading errors, etc. are all examples of false variances/nose. 

An example underpayment project included recovery of over $21,000 per single claim due to a pharmacy coding variance.  The client was using revenue code 250 which was not as specific as it could have been.  By utilizing the more specific revenue code of 636 the reimbursement by one payor alone increased dramatically per claim.  We were able to recover over $1.9 million for this issue. 

Medical Practice Success can bring in a team of seasoned experts who understand payor contracts, revenue cycle management and claim resolution as well as payor appeal and recovery processes.  Once issues are uncovered, our team cross-references payer fee schedules to calculate accurate reimbursement amounts. Our resolution team contacts the payer to review our analysis and interpretation of the contract and then advocates for full payment on your behalf. For underpayments due to medical necessity, we send a corrected claim with appropriate documentation and/or begin the appeals process.

Focused Underpayment Strategy = More Revenue Recovered

Hospitals and healthcare providers will continue leaving money on the table if they aren’t thinking holistically about identifying, recovering, and resolving underpayments. The amount of net revenue lost to underpayments varies by provider based on its complexity of payor contracts, efficacy of underpayment management efforts and health of revenue cycle operations. Thinking beyond payment variances will help ensure costly underpayments are identified and resolved to prevent future missed revenue.

Contact us below if you would like to speak to someone about establishing a successful underpayment program for your organization.