Managing underpayments and delayed reimbursements is one of the most frustrating challenges in healthcare revenue cycle management. Whether you’re dealing with incorrect payer adjustments, stalled claim processing, or rejected appeals, unresolved payment issues can disrupt cash flow and impact your ability to deliver care efficiently.
Many healthcare organizations now look to outsourcing medical coding services as one strategic way to reduce claim denials and ensure claims are processed with accuracy from the start. But what do you do once an underpayment or delay occurs?
Let’s explore practical, step-by-step strategies to minimize underpayments, speed up collections, and recover the money you’re owed—without letting your team burn out.
Understanding the Root Causes of Underpayments and Delays
Before jumping into solutions, it’s critical to identify the key reasons these issues happen in the first place. Most commonly, underpayments and delays stem from:
- Payer Errors: Insurance companies may make system errors, process incorrect rates, or apply outdated fee schedules.
- Coding Inaccuracies: Wrong CPT/ICD-10 codes or lack of documentation can lead to partial payments or denials.
- Authorization Gaps: Missing or expired authorizations result in the payer holding or denying claims.
- Coordination of Benefits (COB): When secondary insurance isn’t clearly established, payments get stuck in limbo.
- Patient Responsibility Confusion: Misunderstanding deductible limits or copays can shift payment burdens improperly.
Each of these issues can delay payment by weeks—or even months—if not tackled quickly.
Step-by-Step Guide to Resolve Underpayments and Delays
1. Conduct Regular Audits of Payer Payments
Start by running weekly or biweekly audits on processed claims. Compare expected reimbursement amounts against actual payments. Any differences should be flagged for immediate investigation.
2. Use Technology to Track Claim Status
Leverage billing software and clearinghouses that allow real-time tracking of claim status and EOBs (Explanation of Benefits). Automation ensures you don’t overlook key follow-ups and gives you a bird’s eye view of payment trends.
3. Build a Robust Appeals Process
For underpayments or denied claims, having a well-defined appeals process is vital. Assign a specific team to manage appeals with templates ready for different denial types. Include all supporting documentation upfront to speed up the decision.
4. Verify Fee Schedules Regularly
Fee schedule discrepancies between what your practice expects and what the insurer pays often lead to underpayments. Ensure that contract negotiations are up to date and documented clearly in your system.
5. Stay Ahead with Pre-Billing Audits
Perform quality checks before claims are submitted to catch any errors in coding, authorization, or documentation. This helps reduce both delays and the chances of partial reimbursements.
Key Tools and Techniques to Streamline Reimbursement
Automated Denial Management
Automated software flags denial trends, categorizes them, and even routes specific denials to the appropriate staff. This keeps your revenue recovery process lean and less error-prone.
Claims Scrubbing Technology
Scrubbing tools review claims before submission to ensure compliance with payer rules. They help reduce rejections due to medical billing errors and improve first-pass acceptance rates.
Follow-Up Scheduling System
Instead of relying on memory or sticky notes, implement a scheduling system that automatically sets follow-up reminders for outstanding claims or reimbursements past 30 days.
Training Your Team to Catch Red Flags Early
Even the best systems won’t work without a trained eye. Make sure your billing team understands how to spot early indicators of underpayments or delays such as:
- EOBs showing “allowed amount” much lower than contracted rate
- Payers repeatedly requesting “additional documentation”
- No claim updates after 21 days of submission
Training sessions should be held quarterly and include examples of real underpayment cases. At Medi-Solutions Management, even front-desk staff receive periodic updates to help with insurance verifications and billing accuracy from the get-go.
Communicating Effectively with Payers and Patients
With Insurance Payers:
- Maintain detailed logs of all communication
- Always ask for a reference number and agent name
- Escalate unresolved claims to supervisors or payer ombudsman offices
With Patients:
- Be transparent about insurance processes and their responsibilities
- Offer payment plans to ease out-of-pocket stress
- Provide online tools to check billing status and balances
Patient satisfaction and payer accountability both benefit when your communication is proactive rather than reactive.
Preventing Future Reimbursement Problems
You can’t prevent every issue, but you can build a process that reduces repeat problems:
- Update coding manuals and payer guidelines quarterly
- Revalidate insurance credentials and authorizations before every service
- Incorporate denial patterns into monthly reports for strategic fixes
These small actions can prevent a huge chunk of revenue loss over the long run.
FAQs About Underpayments and Delayed Reimbursements
1. What should I do first when I notice an underpayment?
Start by checking the EOB for any remark codes. If it’s unclear, call the payer directly to confirm how the amount was calculated.
2. How long should I wait before following up on a delayed claim?
Typically, follow up after 21 days. Some payers process within 14 days, but most delays surface after the 3-week mark.
3. Can patients be billed for underpaid amounts?
Only if it’s part of their deductible, coinsurance, or copay. You can’t bill them for insurance shortfalls due to coding or contract issues.
4. What documents should I include in a claim appeal?
Include the original claim, EOB, medical records, provider notes, and a cover letter explaining the appeal reason.
5. How do I ensure my coding is accurate?
Use regular audits, hire certified coders, and consider coding-specific software to catch issues before submission.
6. Is outsourcing a good option for managing billing delays?
Yes, outsourcing to specialists can reduce errors, speed up collections, and give your internal team more time to focus on patient care.
Final Thoughts
Handling underpayments and delayed reimbursements takes a smart mix of vigilance, technology, and teamwork. Don’t let small errors snowball into big revenue leaks. Stay proactive, build strong processes, and never underestimate the power of quick communication with payers.
Want to stay ahead of billing issues? Consider bringing in support that knows the ins and outs—whether that’s new software or a partner who understands the grind.
