Notes on payer behavior
Six questions to ask your billing company about money insurers keep
Six questions tell you whether anyone is checking what insurers pay you, not just whether claims went out. Billing teams are built to submit claims and work denials. Checking every paid line against your contract is a different job, and it's where underpayments and downcoding hide.
At a Miami orthopedic practice with its own billing team, our team went through every payment line. $107,394 of $565,779 in insurance revenue had been paid short or denied the first time. That's 19%. The team wasn't careless. Nobody had asked them to check paid lines against the contract.
These questions take ten minutes in your next billing meeting.
1. When an insurer pays less than our contract rate, how would we know?
Good answer: "Your fee schedules are loaded, and any line paid below contract gets flagged."
Worrying answer: "If it wasn't denied, it was paid." A short payment closes to a zero balance just like a correct one. More in the zero-balance problem.
2. Which of our contracts change rates on January 1, and how will you confirm the new rates are paid?
Good answer: they name the contracts and a date they'll check the first payments.
Worrying answer: "The insurer handles that." Rate changes get loaded late, and nothing on the statement says so. The check is in new contract rates on January 1.
3. How many of our level 4 and 5 visits were paid at a lower level last quarter?
This is downcoding: a visit billed at one level and paid at a lower one.
Good answer: a number, by insurer.
Worrying answer: "We don't track that." Some insurers now lower visit levels by algorithm. See how downcoding works and how it's reversed.
4. What happens when a visit after surgery is denied as "included"?
Good answer: "We check whether the visit was for a separate problem. If it was, we resubmit it flagged as unrelated."
Worrying answer: "Those are always bundled." Routine follow-up is included in the surgery. A new problem isn't. The details are in our note on post-surgery visits denied as included.
5. Which denials do you write off without appealing, and what's the cutoff?
Good answer: a clear rule, and a monthly list you can see.
Worrying answer: no rule. Small denials that nobody has time for add up, and the same denial usually repeats.
6. Which open denials pass their appeal deadline in the next 60 days?
Good answer: a list, by insurer, with dates.
Worrying answer: silence. Each insurer has its own window, and once it closes the money is gone. See the Florida appeal deadlines table.
Try it on three lines
A quick test to run with your team. Three illustrative lines from an insurance statement. All three show a zero balance. Only one was paid right.
- A. A routine follow-up, two weeks after knee surgery. Paid $0. "Included in the surgery."
- B. A visit for a new shoulder problem, three weeks after the same surgery. Paid $0. "Included in the surgery."
- C. The knee surgery itself. Paid $1,180, "per contract." The contract rate went to $1,240 on January 1.
See the answer
Only A was paid right. Routine follow-up is part of the surgical fee.
B looks identical, but a new problem is payable on its own when the claim flags it as unrelated. That's an administrative denial worth reversing.
C was paid at a contract rate, just last year's. That's an underpayment.
To a busy team, all three look finished. Telling them apart takes the visit note and your contract.
How to ask without making it a fight
Frame it as a question about the business, not an audit of the people. Most billing teams are measured on claims out and denials worked. Paid-line checks often aren't in their scope or their fee. If the answers come back thin, that's usually a gap in the job description, not in the team.
Then decide who owns the gap. Some practices add it to the billing agreement. Others bring in a team that does only this, alongside the biller, starting with a payment audit, not a compliance audit. What to look for in that kind of partner is in denial recovery companies: how to choose one.
Questions people ask
Should my billing company check for underpayments?
It depends on your agreement. Many billing contracts cover submitting claims and working denials, not comparing every paid line to your contract rates, so ask what's in scope.
What is downcoding?
Downcoding is when an insurer pays a visit or procedure at a lower level than the one billed, for example a level 4 office visit paid as a level 3. It's reversible when the visit note supports the billed level.
How much do practices lose to underpayments and denials?
At one Miami orthopedic practice our team reviewed, $107,394 of $565,779 in insurance revenue, about 19%, was paid short or denied the first time. Results vary by specialty, payer mix and contracts.
Does a zero balance mean a claim was paid correctly?
No. A zero balance means the claim is closed, not that it was paid at your contract rate. Short payments and denials both close to zero.