Underprofile Payments: Detection and Resolution

Let the old saying, “we all make mistakes,” be your guiding principal for monitoring the money coming in from third-party payers. As remittances are received from payers, your duty is to verify that the information is correct. Sounds like a simple task, but there are several crucial steps to achieving consistent success in recognizing and remediating less-than-expected – underprofile – payments. 

Identify. The first step in detecting an underprofile payment is to understand what you’re supposed to get paid. This requires that you have a copy of your participation agreement, open to the section that outlines payments. In industry parlance, it’s often referred to as the fee schedule, but think of it as the prices that you are allowed to collect. With patients now bearing significant financial responsibility, the fee schedule represents the amount that you can collect in totality for the service(s) you render–¬the patient and the payer(s) combined. Awareness of the price down to the penny means knowing that you are owed $118.94 for a CPT® 99214 visit, not just estimating that it’s 110 percent of the Medicare rate* of 99214–there are too many ways that payers can tweak such vague amounts. If you don’t have the fee schedule, or can’t find it, request it. Do so for every payer, but recognize that many payers have multiple health plans or products, many of which may have a different fee schedule. If you don’t get anywhere with a verbal request, put your query into writing. If a few weeks go by and still no response, ask again in writing. This time, carbon copy your request to the state insurance commissioner. If the payer continues to be nonresponsive, file a complaint with the commissioner’s office. Finally, recognize that many states give you the right to obtain the fee schedules of payers with whom you contract. If your state law gives you this leverage, be sure to mention it in your payer request letter, as applicable. Completing this step may take time and energy, so consider it all the reason you need to always obtain and hang onto your payers’ current fee schedules. 

Compare. Historically, payment posters in a medical practice would spot check payments against a copy of the fee schedule hanging on a nearby clipboard. Given the rapid work pace of manually posting, it was unusual for them to ascertain any opportunities. Today, practice management systems allow you to load the fee schedules of multiple payers, and perform this function automatically. As remittances are processed through your system, the prices conveyed on the electronic remittances are systematically checked against the fee schedules loaded into the system for each payer and (if applicable) each health plan. Exceptions – payments that are underprofile (i.e., a lesser amount than expected, according to the fee schedule on file) – are identified and reported, typically, as remittances are being processed. If you must resort to manual checking, confirm that the allowable reported by the payer for every transaction matches the expected reimbursement as defined by the contract. In order to make accurate comparisons, updated fee schedules must be loaded and activated as soon as they are effective. 

Appeal. Document all underprofile payments as they are identified – and believe me, no matter how good you were at spot checking manually, you will uncover opportunities after automating payment monitoring. Practices find that most of these discoveries reveal a pattern. For example, every CPT 99214 that was supposed to be paid at $118.94 is allowed at $116.94. Sure, $2 isn’t a lot in the grand scheme of things, but this 99214 is one of the most commonly used codes. Moreover, if this payer represents a significant portion of your business, the sum of those $2 can add up quickly. For underpayments that involve just one transaction – a procedure that was paid $200 less than the contracted fee schedule, for example – approach the situation as you would a denial. Whether it’s a single transaction or a pattern of underprofile payments, document your case in a letter to the payer along with the evidence, which should include a copy of the remittance(s) in question as well as documentation of your fee schedule. Don’t default to mailing it to the payer’s main address; use the address the payer has designated for appeals or other provider queries. If that doesn’t work, begin the escalation process. Send the letter again, directing it to the payer’s provider representative, attorney and/or medical director. Be sure to copy your state insurance commissioner’s office on the second or third request. If necessary, research the payer’s grievance process (which is required by law for the payer to offer), and follow it to get your case heard. If these efforts fail, consider engaging your local or national legislator(s). Your state medical society can be a tremendous advocate to help you navigate the escalation process as well. 

Don’t settle for just determining that a remittance was received for each claim filed. Your practice must ensure that each reimbursement amount is correct down to the penny ¬– a task that requires painstaking attention to detail and the perseverance of a climber trying to summit Mount Everest. Train your staff to use your practice management system to assist in identifying every possible underprofile payment. Finally, don’t let all that diligence and effort go to waste: doggedly pursue each underprofile payment. The payoff? Ensuring you get paid what you deserve.

* If you still have contracts where the payer stipulates payment as a percentage of Medicare, use the free CPT Code/Relative Value Search from the American Medical Association to look up the correct prices.
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