SOLUTIONS · PHYSICIAN GROUPS AND ASCS
Healthcare operations
Underpayment recovery software for healthcare compares what each payer actually paid on every claim line in the 835 remittance against what your signed contract says it should have paid, flags the short lines, and builds the appeal. OutcomeCatalyst builds and runs that as an AI agent for CFOs and revenue cycle leaders at physician groups and ambulatory surgery centers (ASCs). The agent models your contracts, recalculates the expected allowed amount for every line, separates real underpayments from legitimate adjustments, and drafts appeal packets with the contract clause and the math attached. Your revenue cycle lead approves every packet before it goes to a payer.
The problem: the claim closed, the balance is zero, and the payer still owes you
A denial is loud. It lands on a worklist and someone chases it. An underpayment is quiet: the 835 posts, the contractual adjustment wipes the balance, the account closes, and nobody looks again.
The only way to know a payment was short is to hold it against the contract. And the contract is a PDF in a shared drive, with a two-year-old amendment, a percent-of-Medicare fee schedule exhibit, and an implant carve-out one person on your team understands.
Most groups know this and still do not check often. In a February 2025 MGMA Stat poll of 193 medical group leaders, 30% said they audit payer payments against contracted rates monthly and 18% quarterly; 30% said annually and 23% answered "other" (MGMA, 2025). Respondents named staffing, system limits and juggling many payer fee schedules as the obstacles.
An annual audit lets a payer underpay the same code for eleven months unnoticed, and some of those claims may pass your contract's appeal window.
Where payer underpayments actually come from
Each cause needs a different check.
Fee schedule changes the payer loaded late or wrong. Many commercial contracts pay a percentage of the Medicare fee schedule, so every January the expected rate moves. For 2026, CMS set two physician fee schedule conversion factors ($33.57 for qualifying APM participants and $33.40 for everyone else) and applied a -2.5% efficiency adjustment to work RVUs for many non-time-based services (CMS, 2025). For ASCs, CMS finalized a 2.6% rate update and added 289 procedures to the ASC covered procedures list under revised criteria, plus 271 codes moving off the inpatient-only list (CMS, 2025). A payer pricing from last year's table shorts every affected line.
Carve-outs that never got applied. Implants, high-cost drugs, or codes paid at a flat rate outside the base schedule.
Multiple procedure and bilateral reductions applied wrong. The 835 will tell you a reduction happened (claim adjustment reason code 59, "processed based on multiple or concurrent procedure rules"). It will not tell you whether your contract allows that reduction, or at what percentage.
Contractual adjustments that are larger than the contract allows. Code 45, "charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement," is one of the most routine adjustments on a remit, which is why a wrong rate hides there.
Wrong fee schedule for the provider or location. A new location, tax ID or provider, or a product line such as Medicare Advantage that pays from a different exhibit.
Escalators and lesser-of clauses. An annual increase that never kicked in, or a "lesser of billed charges" rule meeting a stale chargemaster.
What the agent does, step by step
OutcomeCatalyst connects the systems you already run into one governed context layer (the brain) and puts an agent on top that works like your best payer analyst. For underpayments, that agent is part of our claims and appeals agent.
Model the contracts. The agent reads each payer contract, amendment and fee schedule exhibit and turns it into terms it can compute: base methodology (flat fee schedule, percent of Medicare, percent of billed charges, ASC grouper), effective dates, carve-outs, multiple procedure rules, escalators, timely filing and appeal deadlines. Anything it cannot read with confidence goes to a person instead of being guessed.
Calculate the expected allowed amount for every line. From the claim as billed (codes, modifiers, units, provider, location, payer product) and the terms in effect on the date of service.
Compare at the 835 line level. The agent reads each 835 service line (allowed, paid and every claim adjustment segment) against the expected amount, including the group code (CO for contractual obligation, PR for patient responsibility, OA for other adjustment, PI for payer initiated reduction) and reason code, so it knows who the payer says owes what and why.
Separate real variances from noise. Patient cost share, Medicare sequestration (reason code 253), legitimate bundling and coordination of benefits are expected. The agent explains each adjustment it accepts and flags only lines allowed below what the contract supports.
Group variances into patterns. One short line is an appeal. The same CPT short-paid by one payer at every location since January 1 is a fee schedule loading error, fixed with a call to your provider rep and a batch reprocessing request. The agent groups variances by payer, code, location, provider and effective date so you can tell which is which.
Draft the appeal packet. For each underpayment or batch, the agent assembles the claim, the 835 line, the contract clause and fee schedule row it relied on, the calculation, and a letter in the format that payer accepts, with the contract's appeal deadline on the cover.
Track it to payment. When the corrected payment arrives on a later 835, the agent matches it to the appeal and closes it. If the payer upholds the underpayment, the reason goes back into the model, so the next call is better.
The systems it reads
Underpayment detection fails when the data lives in five places and nobody joins it. The agent reads each source where it already lives.
Practice management and EHR. Charges, encounters, provider and location records, from systems such as Epic or athenahealth.
Clearinghouse data. 837 claims and 835 remittances, from sources such as Availity, Waystar or Change Healthcare.
Payer contracts and amendments. Usually PDFs, often scanned, sometimes only in email.
Fee schedules. Payer exhibits, CMS fee schedule files for percent-of-Medicare contracts, and your own spreadsheets.
ASC specifics. Implant invoices and case records where carve-outs depend on device cost.
Past appeals and payer correspondence. What each payer has accepted and rejected before.
More on why this join is hard: the data layer behind denial and underpayment detection.
What stays human
The agent drafts. People decide.
Your revenue cycle lead approves every appeal before it is sent.
Payer rep calls and escalations stay with your team.
Whether a pattern calls for renegotiation instead of appeals is the CFO's call.
Contingency recovery vendors vs underpayment software vs OutcomeCatalyst
Three honest options, each right for a different group.
Option | How it works | Where it is strong | Trade-off |
|---|---|---|---|
Contingency-fee or outsourced recovery firm (for example Aspirion, or PMMC's recovery services) | An outside team reviews closed and zero-balance accounts, works the payers, and is paid a share of what it recovers. | No upfront cost and no staff needed. Aspirion describes a team of attorneys, clinicians and claims specialists and contingency-based pricing. | You pay a percentage of every recovered dollar, and the knowledge of why the payer underpaid can stay with the vendor. Reviews usually start from closed and zero-balance accounts, after the money has already been missed. |
Underpayment and contract management software (for example MD Clarity RevFind, Rivet Payer Performance, PMMC) | You load contracts into the platform; it computes expected reimbursement from 837 and 835 data and routes variances to your team's worklists. | Purpose-built category with established vendors. RevFind runs "what-if" scenarios on proposed rate changes; Rivet pairs contract modeling with market rate benchmarks; MD Clarity also offers a recovery services team. Good fit if you have staff to work the queue. | Your team still loads contracts, keeps terms current, and works every flagged line. If you are short-staffed, the worklist grows. |
OutcomeCatalyst | We connect PM, EHR, clearinghouse data and contracts, and run the agent for you. Your team approves. | Works from your own contracts, past appeals and payer history, across systems that do not talk to each other. | A larger engagement than buying a point tool. If you already run a contract management platform and have analysts working it every week, you may not need us for this. |
Our view: if your team works underpayment queues weekly and the tool keeps up, keep it. If underpayments are reviewed once a year, or only by an outside firm after the fact, the gap is people and data, not features. That is the gap we fill.
What to measure
Name the unit before anything gets built. For this work, the unit is the underpaid claim line: one 835 service line where the payer allowed less than the contract supports, after legitimate adjustments. Then count:
Underpaid lines found per month, and dollars of variance, by payer.
Share of flagged lines your team rejects as not a real underpayment (false-positive rate).
Lines appealed within the contract's appeal window.
Dollars recovered, and days from remit to corrected payment.
Root causes fixed at the payer (fee schedule reloads, carve-out corrections).
How a project starts
We start with a strategy call about your payer mix and where you suspect money is leaking. If there is a fit, we pick a small number of high-volume payer contracts and a recent window of 835 data, model those contracts, and run the line-level comparison. You review the findings with your analysts, including the lines the agent got wrong, and then we decide together whether to extend to more payers and the appeal workflow.
Frequently asked questions
How do we detect payer underpayments against our contracts automatically?
Turn each contract into computable terms, calculate the expected allowed amount for every claim line, and compare it to the 835 allowed and paid amounts and adjustment codes. Our agent does that on every line and flags only variances the contract does not support.
Do we need a data team to run this?
No. OutcomeCatalyst builds and runs the agent. Your revenue cycle team confirms contract terms the agent is unsure about, reviews flagged lines and approves appeals.
Do you copy our data into a new warehouse?
No. The agent reads your practice management, EHR, clearinghouse and contract data where it lives and connects it in a governed context layer.
We already use a contingency recovery firm. Why change?
You may not need to. A contingency firm is a fair choice when you have no staff to spare. The trade is a share of every recovery and slower detection, since most reviews look at accounts after they close. One option is to keep the firm on older accounts and use an agent to catch new underpayments as 835s arrive.
Does it handle percent-of-Medicare contracts and ASC carve-outs?
Yes. Contract modeling covers percent-of-Medicare methodologies tied to the CMS fee schedule in effect on the date of service, flat fee schedules, multiple procedure rules and carve-outs such as implants.
Why not build this ourselves?
You can, if you have a strong analyst. The hard parts are keeping contract terms current, reading scanned amendments, and filtering legitimate adjustments without flooding your team with false positives. More in buy vs build an AI context layer.
What are your security and compliance standards?
HIPAA-aligned and SOC 2 Type 2 aligned, with the formal audit underway and expected to complete before year-end. Every appeal is approved by your team before it leaves.
Sources
MGMA Stat poll on auditing payer payments against contracted rates (February 11, 2025)
CMS, Calendar Year 2026 Medicare Physician Fee Schedule Final Rule fact sheet (October 31, 2025)
CMS, Calendar Year 2026 OPPS and ASC Final Rule fact sheet (November 21, 2025)
Book a strategy call to see this on your own payer contracts.
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