Another Interesting Benefit to Pursuing Underpayments
Just about every commercial contract has some sort of clause for additional payment to the provider when the payer fails to make timely payments on services. Some states mandate that additional payments are issued for late payments. Most often that additional payment is in the form of interest.
These interest payments come in the provider level portion of an ERA or EOB. You may often hear these referred to as provider level adjustments or PLBs (the name of the segment in the ANSI 835 where they appear). They are called adjustments only because they adjust the amount paid to the provider on the check or EFT, either up or down. In the case of interest payments, the amount of the actual amount paid to the provider is adjusted up.
Since these payments are not typically applied to the patient's account and are usually a nominal increase in provider revenue, they sometimes fly under the radar. But in the case of underpayment recovery, interest payment on underpaid services can create a serious pick-up in provider revenue.
The chart above shows a 2.5 year trend of interest payments for one payer for an underpayment detection client of theirs. To be clear, the underpayment detection project kicked off in Q7 of 10.
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