Contract underpayments.
A contract underpayment is a claim line the payer allowed for less than the rate in your contract for that payer, procedure code, clinician and date of service.
Why it happens
Payers load contracted rates into their claim systems by hand, per fee schedule and effective date. A schedule that was never updated, loaded under the wrong provider, or applied to the wrong date pays a little less on every claim, and nothing on the remittance says so.
How Owed checks
- 01
For every paid service line, Owed looks up your contracted rate for that payer, procedure code, the clinician's license tier, telehealth or in person, and the date of service, and multiplies it by the units.
- 02
It flags the line when the allowed amount is below that by more than $1 or 1%, whichever is larger, so rounding never becomes a finding.
- 03
Lines with other adjustments (denials, level-of-service reductions) are left to the findings made for them, so the same dollar is never counted twice.
What you'll see
- The contracted rate, the fee schedule it came from and its effective date
- The allowed amount and the difference
- The clinician's license tier and whether the visit was telehealth
- An appeal deadline: your window for the payer when you've set one; otherwise the one the payer publishes, where Owed has checked it against the payer's own documents (BlueCross BlueShield of Tennessee, 18 months; Cigna Healthcare, 180 days); otherwise Owed's default (180 days for commercial plans, 60 for confirmed Medicare Advantage plans, 60 for Medicare-type claims (filing codes MA, MB and 16) and 60 for Medicaid, from the remittance's date); with Tennessee's 15-month payment-correction date shown separately as an outer limit (Tenn. Code Ann. § 56-7-110(b)) on plans you've confirmed are fully insured. Pending legal review, Owed keeps the payer's applicable deadline
Rules check your remittances against the rates, settings and history available. Each finding shows its evidence; AI does not decide the result.
What to do
Send the payer a payment reconsideration citing the fee schedule and its effective date. When the same variance repeats, ask provider relations to correct the schedule and reprocess every affected claim.
Questions
- How do I know if an insurance payer underpaid a claim?
- Compare the allowed amount on the 835 remittance with the contracted rate for that payer, code, clinician license and date of service. If the allowed amount is lower, the claim may have been underpaid, subject to contract terms such as lesser-of-charge. Owed does this for every line of every remittance.
- How long do I have to dispute an underpayment in Tennessee?
- On fully insured plans, Tennessee law says an insurer isn't required to correct a payment error when the provider asks more than 15 months after receiving payment (Tenn. Code Ann. § 56-7-110(b)), and the section can't be waived by contract. Pending legal review, Owed keeps the payer's applicable deadline and shows the 15-month date separately as an outer limit.
- What's the difference between the allowed amount and the contracted rate?
- The contracted rate is what the payer agreed to pay. The allowed amount is what it actually recognized on the claim. When the allowed amount is lower, the difference may be owed, subject to contract terms such as lesser-of-charge.