Years ago I walked into a small billing company in Chattanooga, and the first thing I noticed was a row of shoeboxes along the wall behind the owner’s desk. Eleven of them, each one marked with a month and a year. They were full of paper superbills, remittance advices, and yellow sticky notes like “call BCBS again Tues.” She told me the boxes worked before I had even put my bag down.
I asked to go through the oldest box, March of the year before. It took about twenty minutes. I ended up with forty two claims that had been denied once and never sent back out, mostly for things like a wrong subscriber ID or a typo in a date of birth. All of them were past timely filing. When I added them up it came to a little over eleven thousand dollars, and that was one month.
She sat down and didn’t say anything for a while. Her billers were good at their jobs. The only thing keeping a denied claim alive in that office was somebody remembering it, and sticky notes get buried.
Money rarely leaves a practice through one big hole. It leaks out of six smaller ones: missed charges, unworked denials, underpayments, eligibility errors, timely filing misses, and patient balances nobody collected. No single report adds them up, so most owners never find out the total. Each one gets fixed the same way, by knowing where to look.
I think about that box a lot. Now when an owner tells me the schedule is full and the deposits feel light, I skip the denial report at first and go looking for the claims nobody is responsible for: charges that never went out, denials that came back once and sat, and payments nobody checked against the contract.
The all payer initial denial rate reached 11.8% in 2024, up from 10.2% in 2020. But denials are only one of the six leaks. Add the charges that never got billed, the payments that arrived short, and the patient balances nobody collected, and the gap between what your practice earned and what it banked gets wide fast.
Leak 1: Missed charges
The patient came in. The physician did the work. The note may even be sitting in the EHR. But somewhere between the exam room and billing, the charge disappeared.
This may be the easiest leak to miss. Nothing gets denied because nothing got billed. No rejection, no remittance code, no work queue item. The loss never appears on a report you review, which is exactly why I check it first.
Unsigned notes hold charges in limbo. Injections, supplies, and minor procedures get performed during a visit and never coded. The patient squeezed in at 4:45 falls outside the normal check out flow. Telehealth visits run through their own workflow and get skipped.
I once spent a morning shadowing a pediatrician in Cookeville who still ran on paper charts. His nurses spent minutes on every visit hunting for the chart, and each vaccine got written down in three different places. When the same shot is recorded three times, it is easy for none of those three to be the one billing reads.
The fix takes about ten minutes a day. Compare the schedule against billed charges before the office closes. Every patient who came through the door should produce a charge, and every gap gets a name next to it and a deadline.
Leak 2: Unworked denials
Those forty two claims in the shoebox are a good picture of this one. Each was denied, set aside, and forgotten.
65% of denied claims never get appealed. Of the claims that do get appealed, 70% get overturned. The money was earned. Nobody went back for it.
Claims get abandoned for three reasons. Rework costs $25 to $118 per claim, and on a low dollar claim that math looks bad to a busy biller. Staff run out of hours, so the oldest denials sink to the bottom of the queue. And appeal windows close while the claim waits for someone to touch it.
For a practice billing around $1.5 million a year, that can easily turn into tens of thousands of dollars sitting in claims the practice already earned. Depending on the denial mix, the recoverable amount runs anywhere from $50,000 to $120,000 a year.
A disciplined appeal process pays for itself. Work every overturnable denial within 48 hours of receipt. Batch low dollar denials by payer and reason code so one appeal template covers a whole group of claims. Track overturn rates by payer so your team knows where appeals pay off.
Leak 3: Underpayments
Underpayments are sneaky. Unlike a denial, nothing looks wrong.
The ERA shows a paid amount and a CO 45 adjustment. A claim that pays $82 when the contract says $97 goes straight to the posted column. The claim paid. The ERA looks normal. Everybody moves on. And the payer isn’t going to call and tell you it underpaid you.
Behind the short pay sits a payer side error: an outdated fee schedule, a multiple procedure reduction applied to the wrong line, a modifier the system ignored, or a contract rate change nobody updated.
If you don’t know what your biggest payers are supposed to pay, you won’t know when they pay you wrong. Start with your top five payers and compare the allowed amounts on the remittance against your contract. A variance on one claim usually shows up on every claim with the same code and payer.
One of the best billers I ever worked with was a woman named Gladys, who had been at the same billing company for fifteen years and knew most of the payer reps in the region by first name. She once noticed a payer was using the wrong fee schedule for an entire orthopedic practice and got back almost sixty thousand dollars. She noticed because she knew the contracted rates by heart. On most billing teams, nobody does.
Fifteen dollars does not sound like a problem. Fifteen dollars multiplied by the same CPT code, the same payer, and twelve months is a real problem.
Leak 4: Eligibility and registration errors
The insurance card in the patient’s wallet is not proof they are covered today. That catches practices all the time.
The card tells you what the patient was enrolled in when it was printed. It doesn’t tell you what is active this morning. Employers terminate coverage mid month. Medicaid redeterminations cycle patients in and out of eligibility. Exchange plan members miss a premium and lose coverage without warning.
A good share of the claims in that Chattanooga shoebox died this way. A subscriber ID keyed in wrong at the front desk, a typo in a date of birth, a denial that came back once and never went back out.
His team started running batch eligibility checks 48 hours before every scheduled visit and sending the practice a daily list of problems. Eligibility denials across all his clients fell 63 percent, and he kept the cardiology group.
The numbers back it up. Half of all denials trace to missing or inaccurate claim data, and registration errors alone account for 32%. Most of that data gets captured, or missed, in the first five minutes at the front desk.
A single eligibility check at check in won’t catch these changes. The practices with low eligibility denial rates verify electronically at scheduling, again 72 to 48 hours before the visit, and once more on the day of service. That 72 hour check is the one that matters most, because it leaves time to fix a problem without canceling the appointment.
Leak 5: Timely filing misses
CO 29 denials account for 10% of all denials, and they carry no appeal path. Once the filing window closes, the revenue is gone. No appeal strategy saves it after that. Nobody gets to work harder and recover it next week. The clock ran out.
The filing deadline does not care how busy the billing department was.
Practices fool themselves here. They assume a claim sitting in the system is a claim in motion. It isn’t. Claims sit in unbilled status because a note is unsigned. They sit in a rework queue after a denial nobody prioritized. They get rejected at the clearinghouse and nobody notices, because a clearinghouse rejection never reaches the payer and doesn’t stop the clock.
Medicare allows one year from the date of service. Commercial windows vary by contract and run much shorter with certain payers. Your team needs a weekly report of every claim within 30 days of its payer’s filing limit, sorted by dollar value.
Leak 6: Uncollected patient balances
Collecting $150 while the patient is standing at the front desk is one thing. Trying to collect that same $150 three weeks later, after they open a bill they were not expecting, is a much harder fight.
After Katrina, I helped a family physician in New Orleans reopen her practice. A lot of her patients paid out of pocket, so we posted the self pay prices on the waiting room wall and asked for payment at the visit. She worried it would scare people off. Her patients told her they liked knowing the number ahead of time, and her point of service collections for self pay patients got to 82 percent.
The patient is much easier to collect from when they are standing in front of you.
When the front desk skips the estimate, the practice ends up chasing balances by mail. The statement gets set aside, a second one follows, and the balance slides toward bad debt. The 72 hour eligibility check already produces the deductible, copay, and coinsurance data you need. Share the estimate before the visit and collect at check in.
How to size your own leaks
If you handed me your practice today, I would not start by buying another tool. I would pull 90 days of data.
First, I want to know how much money should reach the bank and how much does. Then we start tracing the difference. Net collection rate gets you there: payments divided by charges minus contractual adjustments. Anything below 95% is leaking somewhere.
Then I’d go leak by leak. A week of schedules compared to billed charges shows the missed charges. The denied dollars nobody appealed show the second leak. A sample of remittances from your largest payer tells you whether underpayments are a problem. CO 29 dollars show the timely filing losses, and patient responsibility minus patient payments shows what walked out the door uncollected.
Rank the six by dollar value. This is one of those exercises that looks harmless until you run the numbers.
How HARRIS CareTracker closes each leak
Finding the leak is only half the job. The bigger win is keeping it from happening again.
That is where the workflow matters. HARRIS CareTracker can run eligibility checks in batches before the visit, flag encounters that never produced a charge, and push claim problems to staff while there is still time to fix them. The eligibility checks run as electronic 270/271 transactions at scheduling and again before the appointment, and staff only see the accounts with a problem.
Claims get checked against coding rules and payer requirements before they go out. When a denial comes back, it lands with the right person along with what they need to appeal it before the window closes. And because scheduling, the EHR, and billing sit in one system, the dashboards show when a payer slows down or collections drop while you can still do something about it.
Your practice is unlikely to carry six equally large problems. Most practices do not. Usually one or two leaks are doing most of the damage. Find those first. Fix them. Then move to the next one.
Follow for more on revenue cycle management, claim denial management, and building a practice that keeps what it earns.
Frequently Asked Questions
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About the Author
Thomas Koehl is a 30 year health technology veteran and currently Director of Marketing at Harris CareTracker. Prior leadership roles at QRS Healthcare Solutions focused on supporting revenue cycle management partners. Following Hurricane Katrina, he served as Director of a large New Orleans medical clinic that delivered care to over 32,000 patients. Koehl has testified before the U.S. House Committee on Energy and Commerce as an expert witness on disaster healthcare delivery. He also volunteers as COO of International Medical Alliance, a nonprofit providing free medical care to impoverished communities in developing countries. He writes about the business, strategy, and human side of health technology for the practitioners and leaders living it day to day.
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