Insights: Article

Are You Getting Paid the Contracted Amount?

October 04, 2017

Magnifying Glass

At times, just getting paid by the insurance companies feels like a victory. However, it’s important to ensure that the payments you’re receiving are correct according to your contract. There are a few ways to check:

  1. If your practice management software allows for contracts to be loaded in the system, this is one of the best options. It allows the payment poster to see the contracted or allowed amount when posting the payment.

    Discrepancies can be caught and request for reprocessing can be made at that time. This option also allows monthly reports to be run with any payment that was made that didn’t match your contracted rates.
  2. If your practice management software doesn’t have that capability, run a report regularly (e.g., monthly) that shows the paid and allowed amount of each payment by Current Procedural Terminology (CPT) code and insurance company. Then, you can compare that to the contractual allowed amounts or rates.

We have found that most practices find a discrepancy of up to 10 percent on some payments. That’s a large number when extrapolated across a year for a procedure code that is performed on a regular basis.

For example, take a look at what 10 percent looks like on just 100 99214’s a month:

Code Units/month Annualized Contract Amount Paid Amount Difference/unit Total Revenue Found
99214 100 1,200 $131.70 $118.53 $13.17 $15,804

Contract analysis also allows you to see what codes are being paid on an aggregate basis. It helps answer questions such as:

  • Are there certain insurances that do not cover your cost for certain procedures?
  • Are you charging for services that are never paid?
  • Do you really know what your contract rates are?
  • When was the last time your contracts were reviewed and updated?

Now what?
Now that you’ve found discrepancies on a payment, what do you do? 

Depending on the number and the amount of the discrepancy, you may want to contact an insurance claim representative or take the list of incorrectly paid claims to your provider relations. Either way, make sure that you have all the information about your contract and the exact claims you want reviewed. Be ready to follow up to resolve it fully.