Calculating five types of typical underpayments.

Underpayments to providers under their payer agreements are a cause of many thousands of dollars in lost revenue. Providers should devise a plan to make certain that payments made to them are accurate, on time, and adhere to other contractual obligations. The importance of developing and implementing such a plan is substantiated by the fact that nearly 100 percent of a provider's commercial business is under contract. As a starting point, providers may wish to focus on five common types of underpayments: underfunding due to late payments; fee-schedule changes that are contractually disallowed; miscalculation of performance-based bonuses and errors in risk-payment reconciliations; inappropriate denials or inappropriate downcoding of claims; and non-payments. The successful execution of a plan to identify and resolve problems and recover payments owed relies on the provider's ability to document and prove that payment is due.