Not every payment difference is an underpayment
A payment can differ from an expected amount for legitimate reasons, including contract terms, policy rules, patient responsibility, bundling, adjustments or limitations in the organization’s expected-reimbursement model. Revenue integrity starts with a variance, then investigates whether the variance is explainable.
Use a controlled classification sequence
Expected reimbursement is calculated.
Actual payment and adjustments are matched.
A variance is identified.
Contract, payer rule and claim context are reviewed.
The variance is classified as explained, unresolved or possible underpayment.
Supporting evidence is gathered.
A substantiated underpayment is pursued where appropriate.
Recovery is recorded only when payment is actually received or otherwise verified.
Useful terminology
| Term | Practical meaning |
|---|---|
| Payment variance | Difference between expected and observed financial outcome. |
| Possible underpayment | A variance that appears inconsistent with expectation but is not yet fully substantiated. |
| Substantiated underpayment | Evidence supports that additional payment is due under the applicable arrangement. |
| Revenue leakage | Revenue lost or not realized because of process, contractual, payment or operational failure; the category should be defined carefully by the organization. |
| Recovery opportunity | A substantiated item that may be pursued. |
| Verified recovery | Additional value actually recovered and evidenced. |
Evidence matters
- Original claim and service detail.
- Applicable contract or expected-reimbursement rule.
- Remittance and adjustment reason.
- Payment posting.
- Payer communication.
- Appeal or reconsideration documentation.
- Final payer response.
- Evidence of any additional payment received.
Avoid inflated recovery reporting
Potential exposure, substantiated opportunity and verified recovery should be reported separately. Combining them can make a program appear more successful than the evidence supports. Management should be able to see how values move from one state to another.
Look for recurring leakage patterns
Individual payment variances may reveal a larger pattern when they cluster by payer, contract, procedure, facility, provider, service line or time period. Pattern analysis can help distinguish a one-off claim issue from a systematic payment or process problem.