Underpayments: The Sneakiest Line Item on Your P&L

Discover why underpayments keep slipping through the cracks, and how automation can help you find and recover the revenue you’ve been missing.

Let’s get honest. When was the last time you reviewed your revenue and thought, “Wow, we’re getting every dollar we’re owed – no more, no less”? Exactly. For most healthcare organizations, underpayments are like that one sock that disappears in the laundry: you know it’s missing, but you’re not quite sure where it went.

Why Underpayments Fly Under the Radar

Here’s the harsh reality: payer contracts are complicated, claims data is messier than your Monday inbox, and every system seems to have its own idea of “accurate.” Multiply that by thousands of claims, dozens of payers, and a rotating cast of policy updates, and it’s no wonder underpayments quietly slip through the cracks.

It might be a few dollars per claim. Or a few hundred. Or, if you really want to ruin your day, a few million across your organization each year. And the kicker? Most of it goes unnoticed – or worse, gets written off as the cost of doing business.

The Old Way: Manual, Maddening, and Mostly Missing the Point

Audit teams try their best. They pore over spreadsheets, chase paper trails, and perform sample reviews in hopes of finding a needle in a haystack. The result? Lots of effort, little payoff, and plenty of missed revenue.

The Smarter Way: Automation to the Rescue

Now for the good news: you don’t have to keep playing “Where’s Waldo?” with your reimbursements. Automation can do what humans simply can’t. It can review every claim, cross-reference every contract, and flag every shortfall – in real time. No caffeine required.

With automation, your team can finally go on offense. Instead of chasing after missed dollars months after the fact, you’re identifying and recovering underpayments before they hit your write-off reports. It’s fast, accurate, and (dare we say) a little bit satisfying.

Stop Settling. Start Recovering.

The bottom line: underpayment problems aren’t inevitable. They’re a solvable, scalable problem – if you let technology do the heavy lifting. So stop letting revenue sneak out the back door. Shine a light on your shortfalls, put automation to work, and start keeping more of what you’ve earned.

Ready to turn underpayment recovery into a strategic advantage?

Join us for our upcoming webinar, Stop Letting Payers Keep What’s Yours: The AI Advantage in Underpayment Recovery, and see how industry leaders are making it happen. Register now >

Underpayments, Explained: What You Need to Know.

What are underpayments in healthcare, and why do they matter?

Underpayments occur when payers reimburse less than the contracted amount for services rendered. They’re often small on a per-claim basis but add up to significant lost revenue over time. Identifying and recovering these shortfalls helps healthcare organizations protect margins and improve cash flow.

Why do underpayments go unnoticed for so long?

Payer contracts are complex, data lives in multiple systems, and manual reviews typically focus on small samples. That means discrepancies often hide in plain sight—especially when they’re a few dollars per claim across thousands of encounters.

What are the most common causes of payer underpayments?
  • Contract misinterpretation: Incorrectly applied rates or outdated terms.
  • System configuration errors: Fee schedules not properly loaded or updated.
  • Coding and modifier issues: Missing or mismatched claim details.
  • Payer policy changes: Shifts in reimbursement logic not communicated effectively.

Each of these can quietly reduce revenue unless systematically monitored and corrected.

How can automation help detect and recover underpayments?

Automation reviews every claim against every payer contract—something no manual team can scale to do. It flags shortfalls, quantifies their impact, and helps prioritize recovery actions before the dollars slip into write-offs.

What’s the long-term benefit of automating underpayment recovery?

Beyond recovered dollars, automation builds payer accountability and prevents repeat errors. It turns underpayment recovery from a reactive audit function into a proactive revenue protection strategy that strengthens the bottom line year over year.

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