When to use this playbook
You need more than a suspicion that reimbursement looks low. Your goal is to prove, claim by claim, whether the payer used the wrong contracted rate and to separate recoverable pricing errors from coding, eligibility, and patient-responsibility issues.
- A payer’s allowed amounts changed without a clear contract amendment.
- The same CPT or HCPCS code is paid at inconsistent rates across otherwise comparable claims.
- A new agreement or rate increase was signed, but claims still appear to use the prior fee schedule.
- A remit includes an unexplained PPO or network discount.
- You suspect underpayment extends across months or years and need a defensible recovery package.
What success looks like
A successful audit identifies the affected payer, product, network, entity, date range, and claim lines; calculates the expected and actual allowed amounts; assigns a root cause; preserves every applicable deadline; and produces a documented request for correction and bulk reprocessing.
| Element | What you need | What it proves |
|---|---|---|
| Governing rate | Contract, rate exhibit, amendment, code-specific confirmation, or matched in-network rate data | What the claim should have allowed on its date of service |
| Submitted claim | CPT or HCPCS code, modifiers, units, place of service, NPI, TIN, and billed charge | What the practice actually asked the payer to adjudicate |
| Adjudication record | ERA or EOB showing allowed amount, payer payment, patient responsibility, adjustments, CARCs, and RARCs | How the payer priced or edited the line |
| Deadline record | Corrected-claim, reconsideration, appeal, and contractual dispute windows | Whether and how recovery can still be pursued |
Step 1: Freeze the deadlines before analyzing the full history
Action: Build a deadline register for the payer before investigating every suspected claim. Record the original filing limit, corrected-claim limit, first-level appeal or reconsideration window, contract-dispute process, submission address or portal, and the event that starts each clock.
As of August 31, 2026, Original Medicare claims generally must be filed within one calendar year of the date of service, while a Medicare fee-for-service redetermination generally must be requested within 120 days after receipt of the initial determination. Medicare reopening rules are separate: a determination can be reopened within one year for any reason and within four years when good cause exists. Commercial payer deadlines differ, so use the executed contract, current provider manual, and remittance notice rather than applying Medicare’s rules to commercial claims. CMS Medicare timely-filing guidance, CMS Medicare redetermination guidance, and CMS reopening manual.
Expected outcome: You know which claims need immediate action and can protect recent recovery rights while the broader audit continues.
Gotchas: Timely filing and appeal filing are different clocks. Do not assume that a claim submitted on time can still be appealed indefinitely, or that a two-year suspected pattern means every claim remains recoverable.
Time estimate: 60–90 minutes when the contract and provider manual are organized; longer when terms are distributed across amendments and portal notices.
Step 2: Establish the rate that governed each date of service
Action: Collect the executed participation agreement, fee-schedule exhibits, amendments, effective-date notices, product attachments, network-access provisions, and the provider manual version applicable to the audit period. Request both current and historical schedules when rates changed during the period.
If the payer will not release a complete fee schedule, narrow the request without abandoning the audit:
- Request written rates for the CPT and HCPCS codes selected for review, including modifiers, units, place-of-service rules, and effective dates.
- Ask whether reimbursement uses a fixed amount, a percentage of Medicare, an internally defined maximum allowable, or another methodology.
- Obtain code-specific estimates from the provider portal and retain dated screenshots or exports.
- Use the payer’s Transparency in Coverage in-network rate files as a fallback, matching the correct network, NPI, TIN, place of service, billing class, code, and effective period.
Most group health plans and issuers must publish machine-readable in-network rate files, but these files can be extremely large and require technical processing. The federal specifications associate rates with identifiers including NPI, TIN, and place of service, so a rate found under the wrong entity or location is not adequate proof of your contract. CMS Transparency in Coverage guidance and CMS technical clarification.
Expected outcome: Every audited claim line has a documented rate source and effective date rather than an assumed benchmark.
Gotchas: Check for “lesser of billed charges or contracted rate” language. A claim billed below the fee schedule may be correctly allowed at the lower charge. Also confirm that the schedule applies to the exact payer product, network, TIN, location, and provider type.
Time estimate: Two to four hours to assemble internal documents; payer retrieval may take substantially longer.
Step 3: Build a claim-line audit file
Action: Export claims and electronic remittance data into one line-level worksheet or database. One row should represent one adjudicated service line—not one patient, encounter, claim, or EFT deposit.
| Category | Fields to capture |
|---|---|
| Contract identity | Payer, product, network, TIN, billing NPI, rendering NPI, location |
| Claim identity | Claim number, line number, patient control number, date of service |
| Service details | CPT or HCPCS code, modifiers, units, place of service, billed charge |
| Expected result | Rate source, expected allowed amount, applicable adjustment methodology |
| Actual result | Actual allowed amount, payer payment, patient responsibility, CARC, RARC, and any provider-level adjustment |
| Recovery status | Variance, root cause, filing deadline, dispute number, submission date, recovered amount |
Electronic remittance advice records adjustments at the service-line, claim, and provider levels. CARCs and RARCs explain claim adjustments, while Provider-Level Balance codes can change the EFT without belonging to a particular claim. CMS payment and remittance guidance.
Expected outcome: You can calculate and filter variances without confusing claim pricing, patient responsibility, and unrelated payment offsets.
Gotchas: Do not compare the contracted rate directly with the EFT deposit or payer-paid amount. Compare it with the adjudicated allowed amount; deductibles, coinsurance, secondary-payer coordination, and provider-level adjustments affect cash without necessarily changing the contracted allowance.
Time estimate: Half a day when clean claim and ERA exports are available; several days when staff must transcribe PDF remits.
Step 4: Audit the CPT codes where errors will matter first
Action: Rank codes separately by total allowed dollars and paid-line volume. Begin with the codes near the top of both lists, then add codes exposed to modifier, unit, place-of-service, or recent contract-amendment errors.
| Priority | Code group | Why it comes first |
|---|---|---|
| 1 | Codes producing the most total allowed dollars | A percentage or fixed-dollar error creates the largest financial exposure here. |
| 2 | Highest-frequency codes | A small recurring variance can become material when repeated across hundreds of lines. |
| 3 | Codes already showing inconsistent allowables | Different payments for matching claim attributes often reveal product, schedule, or configuration differences. |
| 4 | Modifier-, unit-, or place-of-service-sensitive services | Professional and technical components, bilateral services, timed therapy, multiple procedures, and telehealth can be priced differently. |
| 5 | Recently amended rates and negotiated carve-outs | These expose stale fee-schedule loads and incorrect effective dates quickly. |
For primary care, the first group often includes office and outpatient evaluation-and-management families. Behavioral health groups commonly start with diagnostic and recurring psychotherapy services; therapy practices start with high-volume timed treatment codes; procedure-heavy groups prioritize professional, technical, bilateral, and multiple-procedure combinations.
Expected outcome: A focused sample reveals whether the problem is isolated, code-specific, or systematic before the team audits every line.
Gotchas: Do not review only denied claims. A payer can pay every claim while consistently applying an outdated or unauthorized rate.
Time estimate: Two to four hours to rank codes and select a defensible initial sample.
Step 5: Calculate the variance and classify the cause
Action: Recalculate the expected allowed amount using the rate and methodology in effect on the date of service. Then subtract the actual allowed amount:
Potential underpayment = expected allowed amount − actual allowed amount
A positive variance is only the start. Classify why it occurred before choosing a recovery path.
| What the claim shows | Likely classification | Next move |
|---|---|---|
| Same code, units, modifiers, place of service, and eligibility—but actual allowed is below the governing rate | Contract-pricing or fee-schedule loading error | Submit a rate dispute and request corrected pricing. |
| Allowed amount is correct, but payer payment is lower because of deductible or coinsurance | Patient responsibility, not payer underpayment | Follow the patient-balance and secondary-payer workflow. |
| The payer reduced units, changed the code, bundled services, or ignored a modifier | Coding or adjudication dispute | Validate the claim and documentation against the applicable edit or payment policy. |
| The remit cites provider eligibility, enrollment, location, or effective-date problems | Credentialing or enrollment issue | Prove the correct effective status and pursue claim reprocessing. |
| The claim line is correct, but the EFT is lower because of a provider-level deduction | Payment reconciliation issue | Reconcile the PLB separately from the claim. |
CARCs and RARCs identify the payer’s stated adjustment reason, but a contractual-obligation adjustment does not prove that the correct contract or schedule was loaded. Coding edits also require separate validation: CMS’s NCCI framework, for example, distinguishes procedure-to-procedure edits, medically unlikely units, and modifier-sensitive situations, while commercial payers can implement their own payment policies. CMS ERA standards and CMS NCCI guidance.
Expected outcome: Each variance is assigned to the correct operational owner: contracting, billing, coding, credentialing, eligibility, or payment posting.
Gotchas: Do not label a downcoded, bundled, noncovered, or ineligible service as a fee-schedule underpayment. Conversely, do not accept a contractual adjustment merely because the remit assigned it to the provider.
Time estimate: Half a day for a focused sample, assuming the historical rates and claim attributes are available.
Step 6: Test unexplained discounts for a silent PPO or leased-network issue
Action: Compare four entities for each suspect claim: the insurer on the member card, the claims administrator, the organization that priced the claim, and the network whose discount was applied. Search the remit for network identifiers, repricer names, healthcare-policy references, or wording such as “PPO discount.”
Ask the payer or administrator to provide, in writing:
- The contract and network used to price the claim.
- The contracting entity that authorized access to the discount.
- The product and effective date to which that access applies.
- The contract clause permitting affiliate, third-party, or rental-network access.
- The fee-schedule version and rate applied to the disputed line.
Rental networks can legitimately lease contracted discounts when the agreement authorizes access. The problem is an unexplained or unauthorized discount. The American Medical Association recommends checking whether a valid PPO contract applies when a remit uses “PPO Discount” to justify reduced payment. AMA fair-contracting guidance.
Expected outcome: You can trace the discount to an authorized contract path or document that the payer has not established its right to use the rate.
Gotchas: A different administrator or payer name is not automatically evidence of a silent PPO. Self-funded plans, third-party administrators, and authorized leased networks can produce legitimate differences between the card, remit, and contract names.
Time estimate: One to two hours per suspect network once the contract, remit, and payer contacts are available.
Step 7: Submit the right recovery package through the right channel
Action: Match the submission route to the root cause. Use a corrected claim only when the submitted claim data was wrong. Use a reconsideration, appeal, or contract-rate dispute when the original claim was correct but the payer priced or edited it incorrectly.
| Problem | Submission route | Requested remedy |
|---|---|---|
| Incorrect code, modifier, units, NPI, or other submitted data | Corrected claim | Readjudication using corrected claim information |
| Correct claim priced under the wrong fee schedule | Contractual rate dispute or claim appeal | Corrected allowance and payment |
| Rate amendment not loaded | Provider relations or contracting escalation plus claim schedule | Retroactive configuration correction and bulk reprocessing |
| Unauthorized network discount | Contract dispute and network-access escalation | Removal of the discount and repricing under the governing arrangement |
| Provider incorrectly marked ineligible | Enrollment escalation followed by reprocessing request | Correction of payer records and readjudication of affected claims |
Attach the executed contract or applicable excerpt, rate exhibit, amendments, sample claims, original claim data, ERAs, expected-rate calculations, eligibility evidence when relevant, prior correspondence, and proof of timely submission. Identify the complete affected population and request reprocessing of all similarly priced claims—not merely payment of the examples attached.
A strong cover letter states the payer, product, network, TIN, NPI, date range, rate source, observed error, total known variance, earliest deadline, and requested remedy. Thorough documentation and correct routing materially improve the practice’s ability to challenge claim-payment issues. AMA claim-payment appeal guidance.
Expected outcome: The payer receives a reproducible calculation and a specific correction request that can be routed to claims configuration, contracting, enrollment, or provider relations.
Gotchas: A generic “please reconsider” appeal is easy to close without addressing the rate error. Do not submit a corrected claim when no claim field changed, and retain portal confirmations, reference numbers, delivery receipts, and copies of every attachment.
Time estimate: Half a day to create the first complete recovery package; later claims should follow the same evidence template.
Step 8: Expand the pattern and verify recovery
Action: Once a sample confirms an error, query the full claims history using the characteristics that define the pattern: payer, product, network, TIN, NPI, location, CPT or HCPCS code, modifier, units, place of service, date range, and actual allowed amount.
Separate claims into three queues:
- Claims approaching a filing or appeal deadline.
- Claims safely within the standard dispute window.
- Older claims requiring contract-level escalation, a reopening request, or other specialized review.
Track the amount identified, submitted, acknowledged, adjusted, paid, denied, and still unresolved. Reconcile each recovery against the replacement remit and actual deposit; a payer response promising adjustment is not completed recovery.
Expected outcome: A single confirmed pricing error becomes a controlled recovery project with a measurable outstanding balance and accountable follow-up.
Gotchas: Payers sometimes correct only the sample claims. Keep the dispute open until the fee-schedule configuration is fixed, the full affected population is addressed, and future claims begin pricing correctly.
Time estimate: Several hours to expand a clean, well-defined pattern; ongoing review should be scheduled weekly until payment and configuration are reconciled.
When a claim audit becomes a payer-operations problem
A small number of isolated claim errors can usually stay with billing staff. Outside payer-operations support becomes more useful when the evidence spans multiple contracts, networks, TINs, locations, enrollment records, or fee-schedule versions.
Arctic Health is the best fit when…
- The suspected underpayment overlaps with contract loading, network access, provider enrollment, effective dates, or roster accuracy.
- Your organization needs contract and fee-schedule review paired with remittance reconciliation and payer follow-up.
- A practice acquisition, ownership change, new TIN, or multi-state structure makes it unclear which agreement should govern each claim.
- Your internal team can identify suspicious payments but lacks the capacity to trace the payer relationship and pursue bulk recovery.
Arctic Health combines payer contracting, rate negotiation, enrollment, appeals, and ongoing payer maintenance rather than treating each as a separate workflow. That connected model is most valuable when an apparent payment variance could have originated in either the contract or the operational setup. Arctic Health payer contracting and rate negotiation.
Arctic Health is not a fit when…
- You have one straightforward claim with an obvious data-entry error that only requires a corrected claim.
- The sole issue is whether clinical documentation supports the billed code and you need a specialized coding or clinical documentation audit.
- Your experienced payer-contracting and RCM teams already have the governing schedules, automated contract-versus-remit reconciliation, and established payer escalation paths.
Arctic Health provides managed payer operations for organizations that need execution as well as workflow visibility; it does not guarantee a particular reimbursement or recovery outcome. Arctic Health services.
Frequently asked questions
We think one payer has underpaid us for two years. How do we prove it and recover it?
Start with the newest claims so appeal rights do not expire while you investigate the full two-year period. Establish the historical contracted rate for each date of service, compare it with the line-level allowed amount, document identical errors across a representative sample, and ask the payer to correct its configuration and reprocess the entire affected population. A proven pattern establishes the issue, but it does not automatically make every older claim recoverable; each payer’s contract and dispute deadlines still control. AMA payment-dispute guidance.
How do I compare what I was paid against my contracted fee schedule?
Compare the expected contracted allowance with the actual allowed amount at the service-line level, not with the payer’s EFT or check. Match the CPT or HCPCS code, modifiers, units, place of service, date of service, product, network, TIN, and NPI before calculating the difference. Payer payment can be below the allowed amount because of deductible, coinsurance, secondary coverage, or provider-level adjustments, none of which necessarily represents an underpayment. CMS remittance guidance.
What can I do if the payer will not provide a complete fee schedule?
Request written rates for your highest-value and highest-volume codes, including their effective dates and adjustment rules, then supplement that evidence with portal estimates and matched Transparency in Coverage data. Federal in-network rate files can provide code-level negotiated pricing, but the rate must correspond to the correct network, NPI, TIN, place of service, and billing class. Treat unmatched market rates as a benchmarking clue, not proof of your own contractual entitlement. CMS in-network rate-file guidance.
How do I tell whether a low payment includes a silent PPO discount?
Trace the discount to the contract that supposedly authorized it. Compare the insurer, administrator, repricer, and network named across the card, claim, remit, and contract, then request the clause granting that entity access to your negotiated rate. Wording such as “PPO Discount” or an unfamiliar network name is a reason to investigate, not final proof. Authorized rental-network access can be legitimate; an unexplained or unauthorized discount is the actual dispute. AMA rental-network guidance.
Our claims deny for provider eligibility even though we are contracted. Is that an underpayment?
No—an eligibility denial is first an enrollment or payer-record problem, not evidence that the fee schedule was applied incorrectly. A group contract does not by itself prove that the rendering provider, billing TIN, location, product, and date of service were active in the payer’s claims system. Obtain the payer’s enrollment and effective-date records, correct the mismatch, and request reprocessing of the affected claims. Arctic Health’s in-network enrollment playbook.
References
- Arctic Health payer contracting and rate negotiation services
- CMS health care payment and remittance advice
- CMS Transparency in Coverage pricing information
- CMS in-network rate-file technical clarification
- CMS National Correct Coding Initiative
- CMS Medicare redetermination process
- AMA guide to identifying and appealing claim-payment issues
- AMA fair-contracting and rental-network guidance