Underpayment Recovery

The Money You’ve Already Earned, Just Never Collected

Hospitals and health systems routinely receive less than what their payer contracts entitle them to. A forensic look-back of the last 12–24 months of remittance files against actual contract terms typically uncovers recoverable underpayments in the 5–10% range — identified and collected within a 6–9 month window, on a pure contingency basis.

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5–10%
Typical Recovery Range on 835s Reviewed
6–9 mo.
From Engagement to Funds Collected
100%
Contingency-Based, No Upfront Cost
The Problem

Underpayments Are a Quiet, Compounding Margin Drain

Most health systems assume that if a claim was paid, it was paid correctly. That assumption is expensive.

Payer contracts are dense, frequently amended, and rarely reconciled at the line-item level after adjudication. Carve-outs, stop-loss thresholds, fee-schedule updates, multiple-procedure adjustments, and modifier-driven reductions create dozens of ways an individual claim can be paid below contract. Each one, viewed in isolation, looks like a routine adjustment. Across 12–24 months of remittance volume, the same patterns compound into millions of dollars left on the table.

Internal billing teams are typically focused on current AR and active denials — not on auditing remittances that already cleared. Outsourced RCM partners apply the same forward-looking lens. Look-back recovery is structurally different work, and it requires a structurally different engagement.

How It Works

A Three-Stage Forensic Process

From data collection to collected funds — here’s what the engagement actually looks like.

1

Digitize Remittances & Contracts

  • Collect in-scope 835 and 837 files (paper or digital)
  • Collect all relevant payer contracts, including amendments
  • Convert remittances and contracts into structured digital models
  • Build complete invoicing and payment history by patient, plan, and payer
2

Analyze & Identify

  • Reconcile every adjudicated claim against actual contract terms
  • Run pattern analysis across payer, plan, and code combinations
  • Build a documented business case for each underpayment opportunity
  • Internal review with payer-side specialists for accuracy and reasonableness
3

Recover & Collect

  • Pursue identified underpayments with each payer
  • End-to-end claim recovery through an automated appeals workflow
  • Health System receives recovered funds first; fee follows on a contingency basis
  • Reporting on collected dollars by payer, plan, and root cause
Project Timeline

Typical 6–9 Month Engagement

Once data flow is established in the first 30–60 days, recovery work runs continuously through resolution. Most engagements collect the bulk of recoverable funds within nine months of kickoff.

M1
M2
M3
M4
M5
M6
M7
M8
M9
Kickoff & Walkthroughs
835/837 Digitization & Review
Payer Contract Digitization
Opportunity Analysis
Pursuit, Invoicing & Adjudication
Underpayment Collections
What’s Included

A Complete Recovery Engagement

Everything from data collection through collected funds is included in the contingency arrangement.

Free Initial Opportunity Assessment. Detailed review of representative remittance and contract data to estimate recoverable opportunity. Actionable if you choose to engage; at no cost if you don’t.
835/837 Digitization & Reconciliation. Conversion of 12–24 months of remittance data into a structured model reconciled against payer contract terms.
Payer Contract Digitization. All contracts, fee schedules, and amendments converted into a digital model that drives claim-level reconciliation.
Pattern Analysis & Business Case Development. Algorithmic identification of systemic underpayment patterns by payer, plan, and code, with documented business cases for each pursued opportunity.
Automated Appeals & Recovery Management. End-to-end claim recovery through an automated appeals workflow purpose-built for underpayment pursuit.
Pure Contingency Engagement. No upfront cost. The Health System receives recovered funds first; fees apply only against dollars collected.
How This Differs From RCM

A Look-Back Recovery, Not Ongoing Billing

Outsourced RCM and underpayment forensic recovery are complementary, not redundant. RCM handles current billing operations — submitting claims, working denials, managing AR going forward. Underpayment recovery is a one-time, deep look at remittances that already cleared, reconciled against contracts that may have been amended multiple times since the date of service.

Most health systems run both at once. The forensic work recovers historical dollars that the current operation was never structured to find, while the RCM operation continues to manage everything moving forward. There is no overlap in scope and no contention over claims.

If you already have a strong RCM operation, this engagement is additive, not duplicative. If you don’t, the forensic look-back can run in parallel with an RCM evaluation.

Common Questions

Frequently Asked Questions

What does “contingency-based” actually mean here?
There is no upfront fee, retainer, or hourly cost. The Health System receives recovered funds first. A pre-agreed percentage of the actually-collected amount is invoiced after the fact. If nothing is recovered, nothing is owed.
How disruptive is this to our internal billing team?
Minimally. The bulk of the work happens on copies of 835/837 files and contracts; your team isn’t expected to staff the recovery effort. The main ask is access to the data and a designated point of contact for kickoff and periodic check-ins. Pursuit and appeals are handled externally.
Will this damage our relationships with payers?
The work is grounded in contract terms the payer agreed to. Underpayments are pursued through standard appeal channels, with documented business cases for each claim. Payers are accustomed to underpayment review — structured, evidence-based recovery is generally a non-event from a relationship standpoint, particularly compared with unstructured or aggressive denial work.
What if our remittance data is partly on paper?
That’s common, particularly for older claims and smaller payers. Paper 835s, EOBs, and contracts are digitized as part of the engagement at no separate cost.
How is the free opportunity assessment different from the full engagement?
The assessment uses a representative sample of your data to estimate the size of the recoverable opportunity. It produces a documented range, not a guess. If you decide to engage, the same digitization and analysis work continues at scale; if you decide not to, the assessment cost stays at zero.
Is the 5–10% range a guarantee?
No. The 5–10% figure reflects typical recovery on remittances reviewed across the partner’s engagement history. Your actual recovery depends on contract complexity, payer mix, time period reviewed, and historical billing accuracy. The free assessment is the most honest way to estimate your specific opportunity before committing.

Find Out What’s Recoverable

A 20–30 minute conversation is all it takes to scope the assessment. If there’s no meaningful opportunity, we’ll tell you. If there is, the assessment quantifies it before you commit to anything.

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No fee, no pitch, no obligation.