How to Detect and Address Underpaid Insurance Claims

Underpaid claims can quietly drain a healthcare practice’s revenue if left undetected. Medical Underpayment Recovery Services are essential for identifying and rectifying these payment discrepancies. By understanding how to detect underpayments early, providers can take corrective action before the losses accumulate.

Why Underpayments Happen

Insurance underpayments often occur due to:

• Contract Misinterpretations: Payers applying incorrect rates.

• Coding Errors: Mistakes in CPT, HCPCS, or ICD codes.

• System Errors: Automated payment systems failing to calculate accurately.

• Policy Changes: Adjustments in payer rules without provider awareness.

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Key Signs Your Claim May Be Underpaid

1. Payment Lower Than Contracted Rate

If your payment amount doesn’t match your payer contract, it’s a strong indicator of underpayment.

2. Unexplained Reductions in Reimbursement

Review explanation of benefits (EOBs) carefully for vague or missing justifications.

3. Recurring Shortfalls from the Same Payer

A pattern of reduced payments from a single insurer suggests systemic issues.

Steps to Identify and Resolve Underpaid Claims

Conduct Regular Payment Audits

Compare received payments against expected reimbursement rates for each service code.

Use Claim Tracking Technology

Revenue cycle management systems can automatically flag payment discrepancies and highlight trends.

Appeal Underpaid Claims Promptly

Timely appeals increase the likelihood of recovering the full amount owed.

The Role of Credentialing in Payment Accuracy

Accurate credentialing ensures correct payer setup, which directly impacts payment accuracy. For example, CAQH Supports NP Credentialing by keeping provider data updated and consistent, reducing claim errors.

Best Practices to Prevent Underpayments

• Maintain clear documentation for every claim.

• Stay updated with payer policy changes.

• Train billing staff on contract terms and coding updates.

  
  

Final Thoughts

Spotting underpaid insurance claims requires diligence, accurate records, and prompt action. Partnering with experts like Steady Medical Billing can help you recover missed revenue and strengthen your payment processes for the future.