Every independent practice loses some revenue. Denials happen. Patients do not pay. Payers underpay. Those are realities of running a medical practice. But in our experience working with physician-owned practices, there is a difference between normal revenue loss and avoidable revenue loss. Many practices are leaving meaningful revenue on the table without realizing it, not because of a single large problem but because of several smaller ones that compound over time. A medical management company can help your practice identify exactly where that revenue is going and what it would take to recover it.
Your Fee Schedule May Be Working Against You
The most common source of avoidable revenue loss is a fee schedule that has not been updated in several years. If your practice sets fees manually for individual CPT codes rather than as a consistent percentage of CMS, there is a real risk that some of your fees are below the allowable amount in your payer contracts. When that happens, the payer pays what you charge rather than what the contract would have allowed. The practice bills less than it is entitled to collect, and neither side flags the problem.
Setting your fee schedule as a percentage of CMS, typically in the range of 200% to 300%, creates a system where your charges consistently exceed your contractual allowables. That means you always collect the full contracted amount rather than leaving money behind on services where your fee was set too low. Revenue cycle management includes monitoring fee schedule positioning against payer contracts to make sure this gap does not develop.
Coding May Not Reflect the Care Being Delivered
Another common source of lost revenue is coding that does not match the level of care actually provided. This is especially true for E&M visits where time-based coding could support a higher level than medical decision-making alone.
Since 2021, established patient visits can be coded based on the total time spent, including preparation, documentation, and care coordination completed on the same day. For visits lasting 30 minutes or more, time-based coding typically supports at least a Level 4 code. But if the provider does not document the total time spent, the billing team cannot use it. The result is a visit that gets billed at Level 3 when the work performed supported Level 4.
The same pattern shows up in wellness visits where acute or chronic issues are addressed alongside preventive care. When the additional care is documented as distinct from the preventive visit, it is often billable as a separate E&M code. But when documentation does not clearly support the distinction, that additional revenue goes uncaptured. These are not billing errors. They are process gaps between what happens in the exam room and what makes it onto the claim.
Payer Contract Lag Is Costing You More Than You Think
Payer contracts do not always reflect the most current CMS fee schedule. Many commercial payers operate one to three years behind the current CMS rates, and some lag even further. When CMS increases RVU values for commonly billed codes, practices on older fee schedules do not benefit from those increases until the payer updates its reference year. Medical practice management consultants track these reference years across all of a practice’s payer contracts and flag the ones that are falling behind.
To make matters more complicated, some payers reduce their conversion factor when they adopt a newer fee schedule, offsetting the RVU gains and keeping their total spend roughly flat. A contract that appears to be paying the same percentage of CMS may actually be paying less in real dollars for your most commonly billed codes. Without detailed analysis of both the reference year and the conversion factor, this shift is easy to miss.
Time-of-Service Collections Leave a Measurable Gap
Patient balances collected at the time of service are recovered at significantly higher rates than those billed through post-visit statements. When practices do not have a consistent process for collecting co-pays, deductibles, and outstanding balances at check-in, a meaningful portion of patient responsibility goes uncollected.
The gap is not usually about patient willingness. It is about the front desk having the tools and process to know what is owed and ask for it. Verifying co-pay amounts during the eligibility check, flagging outstanding balances before the appointment, and giving staff clear scripts for the collection conversation are all process improvements that produce measurable results. Medical practice management services include building these collection workflows into the practice’s daily operations.
Your Gross Collection Rate Tells the Story
If your practice sets its fee schedule as a consistent percentage of CMS, the gross collection rate (total collections divided by total charges) becomes a reliable diagnostic tool. A rate that falls between roughly 45% and 65% generally indicates the fee schedule is well-positioned. If the rate drops below that range, it may point to collection issues downstream. If it climbs above, it may signal that the fee schedule is set too low and the practice is at risk of billing under its allowables.
Practices that do not track this metric, or that set fees inconsistently, lose one of the simplest tools for spotting revenue problems before they grow. Monitoring the gross collection rate on a monthly basis gives practice leaders an early warning signal and a clear starting point for investigation when the numbers shift.
Find the Revenue Your Practice Is Missing
If any of these patterns sound familiar, your practice is likely leaving revenue on the table. The good news is that most of these issues can be identified and addressed with the right analysis and operational support. MedMan works with independent practices to evaluate fee schedule positioning, review payer contracts, assess coding and documentation practices, and build the collection processes that protect revenue. Reach out to find out where the opportunities are for your practice.
Frequently Asked Questions
How do I know if my fee schedule is set too low?
The clearest indicator is your gross collection rate. If it is consistently above 65%, your fees may be too close to your contractual allowables, meaning you may be billing below what some payers would actually pay. Setting fees as a consistent percentage of CMS and monitoring the gross collection rate regularly helps prevent this.
What is the revenue impact of undercoding E&M visits?
The difference between a Level 3 and Level 4 E&M code is meaningful on a per-visit basis. Across a full day of patient-facing hours, undercoding by one level on multiple visits adds up to a notable amount of lost revenue. Medical office management teams help practices quantify this gap and address it through documentation and workflow changes.
How can I tell if my payer contracts are underperforming?
Compare the conversion factor, fee schedule reference year, and effective reimbursement for your most commonly billed codes across all of your payers. If one contract is paying significantly less than others for the same services, that is a data point for negotiation or, at minimum, a conversation with the payer.
Does improving time-of-service collections require new technology?
Not necessarily. Most EHR and practice management systems already have the tools to check eligibility, verify co-pay amounts, and flag outstanding balances. The issue is usually process, not technology. Building collection steps into the front desk workflow and training staff on how to have the conversation is often enough to see results.
References
CMS. “Physician Fee Schedule and RVU Updates.” cms.gov
MGMA. “Revenue Cycle and Collection Benchmarks.” mgma.com
AAPC. “E/M Coding Guidelines.” aapc.com
HFMA. “Patient Financial Responsibility and Collections.” hfma.org