Key Takeaways
- 01Much of the revenue physicians lose never shows up as a denial: it comes from undercoding, missed add-ons and unworked accounts receivable.
- 02Office visits coded below what the documentation supports are a quiet, repeating loss.
- 03Denials nobody works are revenue earned and then abandoned. On HealthCare.gov plans in 2024, fewer than 1% of denied in-network claims were appealed (KFF analysis of CMS data).
- 04A new physician who is not yet enrolled with a payer cannot bill that payer. Credentialing typically takes 60 to 90 days per payer.
- 05Medtransic charges 4-8% of collections, and credentialing is $150 per application, per provider.
Most physicians assume their billing problems show up as denials. Many do not. Some of the biggest losses in physician billing come from claims that get paid, just at the wrong amount: the wrong visit level, a missing add-on code, or a fee schedule nobody has checked in years.
The second category of loss is claims that do get denied but never get appealed. That is revenue that was earned, billed and then abandoned.
Why Physician Billing Falls Short
Physician billing fails in predictable ways. It is rarely dramatic: no mass denials, no system failures. It is the quiet build-up of small, repeating errors across many claims.
| Where Revenue Leaks | Why It Happens |
|---|---|
| Office-visit undercoding | Billers pick a lower level to avoid scrutiny, and physicians underestimate their documentation. |
| Missed add-on codes | Add-on codes have pairing rules. General billers miss them, and physicians do not list them on superbills. |
| Unworked denials | Denial follow-up takes time and payer-specific knowledge. |
| Outdated fee schedules | Contracted rates are rarely reviewed after signing. |
| Credentialing gaps | New providers, new payers and lapsed credentials each create a period with no payment from that payer. |
The common thread is that these losses are preventable. They are operational failures that a competent billing service catches and corrects.
Office-Visit Leveling
Office visits for new and established patients are the core of physician revenue for most practices. The common problem is not upcoding but undercoding: encounters billed at a lower level than the documentation supports.
Since 2021, office-visit levels have been chosen by medical decision-making or total time on the date of the visit. Practices that never updated their documentation or coding habits often still bill lower levels out of caution.
Missed Add-On Codes
Add-on codes are secondary codes billed alongside a primary code to capture additional work in the same encounter. They are legitimate and designed to reflect the full scope of what a physician does.
- Longitudinal-care complexity add-on - Medicare began paying it with office visits on January 1, 2024.
- Prolonged services - needs the total time documented in the note.
- Remote patient monitoring - needs documented time and patient consent.
- Same-day interpretations - such as an ECG read on the day of a visit.
- Annual wellness visit on the same day as a problem visit - needs correct sequencing and a modifier.
Ask any billing company how it tracks add-on capture, and ask to see the checklist it uses for your specialty.
Denial Management
Denials nobody works are the clearest loss in physician billing. In 2024, HealthCare.gov plans denied about 85 million in-network claims, and fewer than 1% of those denials were appealed (KFF analysis of CMS data). About one in three appeals won.
Appeal deadlines vary by payer. Medicare allows 120 days from when you receive the notice, and Aetna's provider dispute standard is 180 days. A denial left in a pile past that window becomes a write-off.
Outdated Fee Schedules
Every commercial payer pays your practice from a contracted fee schedule. If nobody reviews it, your rates can fall behind while every claim pays "correctly" with no denial and no red flag.
| Fee Schedule Issue | How It Shows Up | Fix |
|---|---|---|
| Contracts never renegotiated | Rates stay at the level signed years ago | Review contracts every year and request renegotiation with data |
| Charge master not updated after coding changes | New procedure codes billed at default rates | Audit the charge master against current payer fee schedules |
| Underpayments not detected | Payer pays less than the contracted rate and it is posted as correct | Compare payments against contracted amounts |
| Medicare rate changes missed | The Medicare fee schedule updates every year | Update charges when the new fee schedule takes effect |
Credentialing Gaps
Every physician must be enrolled with each payer before that payer will pay claims. Credentialing typically takes 60 to 90 days per payer, and a physician who sees patients before enrollment is complete is seeing them unpaid.
A new physician who needs eight commercial payers plus Medicare and Medicaid needs ten applications, each with its own forms and follow-up. Medtransic's credentialing service charges $150 per application, per provider.
What a Physician Billing Service Should Include
| Service Area | What to Ask About |
|---|---|
| Office-visit coding review | Chart audits against decision-making criteria, add-on capture, specialty checklists |
| Charge capture | Superbill review and missed charges |
| Claims submission | Checks before submission, payer-specific edits, modifier review |
| Payment posting | Reconciliation and underpayment detection |
| Denial management | Root cause, appeals within deadlines, denial trends by payer and reason |
| Accounts receivable | Aging follow-up and payer escalations |
| Fee schedule management | Annual contract review and charge master updates |
| Credentialing | New provider enrollment, re-credentialing, CAQH upkeep |
| Reporting | Monthly collections, denials by payer, days in A/R |
How to Evaluate a Physician Billing Company
- Ask how they handle office-visit coding. Do they audit charts against decision-making criteria, or code whatever is on the superbill?
- Ask for their denial rate and appeal results by specialty, and how they calculate each. If they cannot answer, they are not tracking it.
- Ask about underpayment detection. Do they check payments against your contracted rates?
- Ask about credentialing. Who handles CAQH upkeep and re-credentialing deadlines?
- Ask for references from your specialty and practice size.
For a complete framework, see our guide on how to choose a medical billing company.
What Physician Billing Services Cost
| Pricing Model | Best For | Watch Out For |
|---|---|---|
| Percentage of collections | Most practices - the billing company earns more only when you collect more | Confirm what the percentage applies to and what it includes |
| Flat monthly fee | Practices that want a fixed budget | Check whether denials, appeals and credentialing are included |
| Per-claim fee | Low-volume practices | No reward for chasing what each claim is worth |
Medtransic charges 4-8% of collections. Credentialing is $150 per application, per provider, and every client has a dedicated account manager. Request a free billing review to see where your own claims stand.
Sources & References
- KFF, Claims Denials and Appeals in ACA Marketplace Plans in 2024 - denial and appeal rates on HealthCare.gov plans
- Aetna, Provider Disputes and Appeals - the 180-day provider dispute standard
- Sources checked October 2026.