Revenue leakage is earned reimbursement that a provider never receives. Some losses are easy to recognize. Others sit inside routine workflows unnoticed for months or years.
Two Types of Revenue Leakage
1. Losses Everyone Sees
These are the issues that trigger reports and daily work queues:
- Claim denials
- Missed prior authorizations
- Rejected claims
- Bad debt from unresolved patient balances
- Claims that never reached the payer
The absence of payment is obvious, so these problems get most of the attention.
2. Losses That Go Unseen
These losses only surface when someone compares expected reimbursement to what was actually paid. They fall into two groups:
Silent Reductions
The claim processes normally, but the allowed amount is lower than it should be. Common sources include:
- Underpayments inside “paid” claims
- Contractual variances buried in the allowed amount
- Outdated or inaccurate fee schedules
- Missing units or modifiers
- Algorithmic edits that quietly trim payment
These reductions are rarely flagged because the payer technically issued a payment.
Unbilled or Unrecorded Work
The service was delivered, but never fully captured or billed. This includes:
- Charge capture gaps
- Lost or unbilled services
- Coding issues that result in partial billing
- System mismatches that drop charges
- Documentation gaps that prevent posting
In these cases, reimbursement is lost before the claim even reaches the payer.
How Providers Identify Hidden Leakage
Most invisible losses only surface when someone reviews the underlying payment patterns. High-level indicators include:
- Allowed-versus-expected variances that don’t match contract terms
- Missing or inconsistent charges across similar encounters
- Unusual payment patterns in 835 remittance data
These signals don’t diagnose the problem outright, but they show where deeper review is needed.
A broader look at root causes, diagnostic methods, and solution strategies is available in our comprehensive article on operational revenue leakage.
