1700 Underpaid Claims Resolved in 6 Weeks

Client Overview

A two-location dermatology practice in Philadelphia was thriving clinically but gradually losing revenue without realizing it. On the surface, claim payments appeared routine and consistent, but a closer look revealed a recurring pattern of payer underpayments across several high-volume CPT codes and procedure bundles.

The in-house billing team, already stretched thin managing both medical and cosmetic services, lacked the time and resources for detailed payment reconciliation. As a result, many of these underpaid claims went unnoticed and unchallenged, quietly eroding the practice’s bottom line time.

AnnexMed was engaged to conduct a comprehensive payment integrity audit, identify revenue leakage, and recover missed reimbursements, while streamlining processes to prevent future underpayments. Our approach strengthened the practice’s financial transparency and helped the leadership regain confidence in their revenue cycle performancei

Hidden Challenges Uncovered

Inconsistent Contract Enforcement

Payers continued reimbursing certain procedures at outdated rates, failing to align with recently renegotiated fee schedules. Common dermatology services, such as excisions and lesion removals, were frequently paid below the contracted amount, averaging a 9% underpayment variance.

Limited Tracking and Escalation Process

The practice relied on manual spreadsheets to track payments. Without automation or variance alerts, staff could not distinguish between partial payments, bundling edits, or payer miscalculations. This led to slow follow-ups, missed appeal windows, and unresolved AR creep.

AnnexMed’s Strategy

Precision Underpayment Audit

AnnexMed’s AR specialists performed a full payer-level audit covering six months of EOBs and ERA data. Using contract variance analytics, claims were segmented into actionable categories, rate errors, multiple-procedure reductions, and incorrect bundling.

Data-Driven Recovery and Appeals

Each variance was validated against payer contracts, with discrepancies escalated using structured appeal templates. AnnexMed’s team collaborated with payer representatives for high-value corrections, ensuring full reimbursement and interest recovery where applicable.

Process Reinforcement and Prevention

AnnexMed implemented automated underpayment tracking within the practice’s PM system and established a monthly variance report. Billing staff received refresher training on modifier use (notably 59 and 51) and payer-specific bundling logic to sustain future accuracy.

Restoring Control, Clarity, and Cash Flow

Unified payer contracts and updated fee schedules under one compliance framework.
Implemented automated underpayment alerts and variance dashboards.
Established weekly AR review huddles for proactive revenue monitoring.
Reduced dependency on manual spreadsheets through PM system integration.
Created payer trend reports highlighting chronic underpayment patterns.
Provided on-site refresher training for billers on modifier logic and EOB analysis.
Delivered monthly executive summaries tracking payer compliance and recoveries.

Solution Impact

$386K

Recovered in 6 weeks

72%

Drop in underpayments

98%

First-pass appeal success

59%

AR >90 days reduced

Ready to Get Started?

Whether you need full-scale support or help with just one part of the revenue cycle, AnnexMed offers modular services tailored to your most pressing needs.

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