Full Transcript Introduction to the Revenue Problem 0:00 What if your organization's biggest revenue problem had nothing to do with payer contracts? 0:06 Think about that for a moment. 0:08 Because in healthcare, we spend enormous amounts of time obsessing over payer negotiations, denials, collections, reimbursement schedules, 0:17 staffing ratios, labor costs, and operational efficiency. 0:21 Entire leadership meetings are devoted to squeezing another one or two percent out of contracts. 0:26 But what if the revenue problem starts long before the claim is ever submitted? 0:31 What if biggest leak in your organization is happening quietly, invisibly, every single day, inside the clinic? 0:39 Today we're uncovering the million dollar problem nobody is talking about. 0:43 Physician undercoating. 0:46 Welcome to Medical Money Matters, the podcast where you can find experts, answers, and resources so that you achieve mastery over the financial and business 0:59 aspects of your practice. 1:01 Hello everyone, I'm your host Jill Arena. 1:04 I began my career in accounting and finance and I have more than 30 years of experience running medical groups. 1:19 In 2020, I co-founded the Physician Leadership Project, and in 2025 I released Physicians Edge, the first of its kind, CME-accredited online business education 1:31 for physicians. 1:32 My passion is to increase financial and business literacy for Physicians. 1:38 Episode 183, The Million Dollar Problem No One's Talking About, Physican Undercoding. 1:47 What if your organization's biggest revenue problem had nothing to do with payer contracts? 1:52 Think about that for a moment. 1:54 Because in healthcare, we spend enormous amounts of time obsessing over payer negotiations, denials, collections, reimbursement schedules,
What Physician Undercoding Means 2:03 staffing ratios, labor costs, and operational efficiency. 2:07 Entire leadership meetings are devoted to squeezing another one or two percent out of contracts. 2:13 But what if the revenue problem starts long before the claim is ever submitted? 2:17 What if biggest leak in your organization is happening quietly, invisibly, every single day, inside the clinic? 2:25 Today we're uncovering the million dollar problem nobody is talking about. 2:30 Physician undercoating. 2:32 And before anyone gets uncomfortable, let me be very clear right up front. 2:36 This is not about gaming the coding system. 2:39 this is about maximizing codes irresponsibly. 2:42 In fact, it's exactly the opposite. 2:51 It's about documenting complexity appropriately. 2:53 It is about understanding how fear, culture, bad training, and broken systems are quietly suppressing legitimate reimbursement across healthcare organizations 3:05 all over the country. 3:07 And honestly, this conversation matters now more than ever. 3:11 Margins are shrinking. 3:12 Labor costs continue to rise. 3:15 Physicians are exhausted. 3:17 Staffing shortages are everywhere. 3:19 Independent practices are under pressure. 3:22 Hospitals and medical groups are trying to survive financially in an environment that feels increasingly difficult every year. 3:30 And in response to all of that pressure, many organizations assume the answer is simply more volume. 3:36 See more patients, work longer hours, double book schedules, push harder. 3:41 But sometimes the answers isn't more volumes. 3:44 Sometimes the answered is recognizing the value of the work that is already happening every single day. 3:51 Because here's the truth, you cannot collect revenue that you never bill. 3:55 And most organizations have spent years focusing externally on payers, reimbursement rates, denials, while ignoring a massive internal blind spot, 4:05 coding distribution patterns. 4:07 What physicians and clinicians actually bill, how consistently they bill whether documentation reflects true complexity, 4:16 whether fear is suppressing legitimate reimbursements. 4:20 These conversations are uncomfortable because physicians are deeply conditioned to avoid looking greedy. 4:25 Many are terrified of audits. 4:28 Others were trained during residency to always play it safe. 4:32 Some simply never learned coding well in the first place. 4:36 And unfortunately, those habits compound over time.
Financial Impact of Missed Coding 4:39 What starts as defensive coding slowly becomes organizational culture. 4:44 Then it becomes normalized. 4:46 And eventually, accurate coding starts looking abnormal. 4:50 That's the environment many physicians are operating in today. 4:53 The financial impact is staggering. 4:56 Let's walk through some very simple math. 4:59 Imagine one physician undercoding just two visits per day by one level. 5:03 Two visits. 5:05 Maybe a visit should have been a 99214, but gets billed as a 99213 instead. 5:12 The reimbursement difference might be $25, sometimes $40, and sometimes 60, depending on pay or mix. 5:19 Now multiply that by roughly 220 clinic days per year. 5:21 Suddenly, one physician may be leaving $30,000, $50, 000, even $80, 00 on the table annually. 5:32 one physician. 5:34 Now multiply that across an organization. 5:37 Five providers? 5:38 You could easily be looking at a quarter million dollars in missed revenue. 5:42 Ten providers, half a million or more. 5:45 Twenty-five providers. 5:47 You may very well be talking about a $1 million operational problem hiding in plain sight. 5:53 And remember, this is not hypothetical fantasy math. 5:57 This is work that's already being performed. 6:00 Patients are already being managed. 6:02 Complexity is already been addressed. 6:05 Medical decision-making is occurring. 6:08 The organization simply isn't capturing it accurately. 6:12 That distinction matters because this conversation tends to trigger anxiety very quickly. 6:18 People hear higher coding and immediately think fraud risk. 6:23 That's not what we're finding. 6:24 We're talking about appropriate coding supported by legitimate documentation that reflects real clinical complexity. 6:31 Nothing more, nothing less. 6:34 And one of the biggest problems with our rampant under-coding is that it distorts far more than revenue. 6:40 Most people don't realize how deeply coding affects organizational decision-making. 6:45 Coding impacts RVUs, compensation, benchmarking, staffing models, provider productivity metrics, contract negotiations, recruitment, 6:57 operational planning. 6:58 When physicians consistently undercode, the data becomes inaccurate. 7:04 The physician appears less productive than they truly are. 7:07 Their patients appear less complex. 7:10 The workload appears lighter. 7:12 There value to the organization becomes artificially diminished. 7:17 Leadership teams may unknowingly make major operational decisions based on distorted information. 7:24 And here's the crazy part. 7:26 Many physicians performing highly complex care are billing as though they are managing straightforward problems. 7:32 We see this all the time. 7:34 Multiple chronic conditions, medication management, data review, coordination of care, moderate or high-risk decision-making. 7:43 That complexity exists whether it gets documented properly or not. 7:48 A physician may absolutely be doing level 4 work while billing level 3 visits all day long.
How Undercoding Distorts Data and Culture 7:54 And when that pattern becomes widespread, entire benchmarks become skewed. 7:59 National averages aren't reflective of true complexity anymore. 8:04 Imagine two practices in the same specialty with similar patient populations. 8:09 One practice has a healthy distribution of 99214s because physicians document accurately and code confidently. 8:18 The second practice builds overwhelmingly 213s, because everyone was trained to play it safe. 8:25 On paper, the second practice suddenly looks less complex, less productive, and less efficient. 8:31 But clinically, these patients may be nearly identical. 8:35 That's how dangerous distorted coding data can become. 8:39 And unfortunately, fear is often driving these behaviors. 8:43 Physicians will say things like, I don't want an audit. 8:47 I do not want to look greedy. 8:49 I'd rather underbill than get into trouble. 8:51 I'm probably safer just down-coding. 8:56 But here's something important we need to acknowledge. 8:59 Most physicians were never taught coding properly in the first place. 9:03 Medical school teaches medicine. 9:06 Residency teaches clinical survival. 9:08 Neither teaches business, finance, reimbursement strategy, or operational leadership. 9:14 Yet physicians graduate and suddenly find themselves responsible for managing multi-million dollar enterprises. 9:20 They are expected to understand coding systems, payer behavior, compliance, staffing economics, compensation structures, 9:28 and revenue cycle management, often with almost no formal education in any of it. 9:35 So physicians create habits based on fear and incomplete understanding. 9:39 And then those habits get passed down. 9:42 Senior physicians teach younger physicians to, quote, be careful. 9:47 Residents absorb defensive coding culture. 9:50 Everyone starts normalizing undercoding behavior. 9:53 Over time, the average shifts downward. 9:57 Then something very strange happens. 9:59 Appropriate coding begins looking aggressive simply because the averages themselves have become distorted, and this creates a dangerous self-reinforcing loop. 10:10 Physicians undercode. 10:11 The averages shift lower. 10:13 Accurate coders appear abnormal. 10:16 Fear increases. 10:17 More physicians under code. 10:20 And around and around it goes. 10:22 This is one reason why peer comparison letters from large organizations can become problematic. 10:28 A physician may receive a vague warning saying something like, you code higher than your peers. 10:35 You may be at compliance risk. 10:38 Your distributions are outside the norm. 10:41 But what if the normal norm itself is wrong? 10:44 What if a benchmark is built on years of systemic undercoding? 10:48 Now suddenly physicians who are documenting correctly appear suspicious simply because they are behaving differently from a distorted average. 10:57 That creates a chilling effect across organizations. 11:01 Fear suppresses legitimate reimbursement, and the consequences extend far beyond money, because undercoding doesn't just hurt organizational revenue. 11:11 It hurts physicians emotionally. 11:14 It contributes to burnout. 11:15 That creates compensation inequity. 11:18 Increases frustration. 11:20 Leaves physicians feeling exhausted, overworked, undervalued, and financially squeezed despite delivering extremely complex care. 11:30 And many physicians internalize that stress personally. 11:33 They think, maybe I'm not productive enough.
Why Physicians Undercode 11:37 Maybe I am inefficient. 11:42 when in reality the data itself may be incomplete. 11:45 And most of the time, we find the issue is not over-coding at all. 11:51 Frequently, the visit is simply under-documented. 11:55 That is an incredibly important distinction, because under documentation is fixable. 12:01 Fear is also fixable. 12:04 Education gaps are fixible. 12:07 Broken workflows are also fixed. 12:10 But only if organizations are willing to address them honestly. 12:14 Now, here's where this conversation becomes really interesting. 12:19 You're listening to Medical Money Matters, a weekly podcast brought to you by Healthy Practices, A healthcare consulting and revenue cycle company dedicated 12:29 to keeping our clients independent. 12:31 If you're looking for more ways to strengthen your business skills, check out Physicians Edge, the first of its kind CME accredited online business education 12:41 for physicians. 12:42 It's a mini MBA online course designed to help you master the financial side of your practice. 12:48 You can find that and more about how we support practices like yours at healtheps.com. 12:56 That's www.healtheps dot com. 13:01 And don't forget to follow or subscribe so you never miss a new episode. 13:07 Because once organizations recognize the problem, the next question becomes, what actually works? 13:14 And honestly, traditional coding education often fails badly. 13:18 Many physicians have sat through painfully dry compliance lectures that feel disconnected from real-world medicine. 13:25 They're filled with jargon, rules, warnings, fear-based messaging, and often they leave physicians feeling even more anxious than before. 13:34 That approach rarely changes behavior. 13:38 What actually works is physician-to-physician education. 13:42 Practical conversations, real charts, Real examples, and real clinical context. 13:48 Physicians respond differently when another physician says, I understand your workflow. 13:54 I Understand your time pressure. 13:59 Let me show you how to capture the complexity that's already there. 14:04 That changes the dynamic entirely, because coding is not just technical, it's psychological too. 14:11 If physicians feel judged, they shut down. 14:14 if they feel shamed, the disengage. 14:16 But if the feel supported, educated, and understood, behavior starts changing surprisingly quickly. 14:28 And effective education is rarely generic. 14:32 One-size-fits-all training doesn't work very well. 14:35 Specialty-specific examples matter. 14:38 An internist thinks differently than an orthopedist. 14:42 A cardiologist documents differently then a psychiatrist.
Better Coding Education and Feedback 14:50 Real education uses actual clinical scenarios physicians recognize immediately. 14:56 It also simplifies documentation. 14:58 Because let's be honest, physicians are overwhelmed already. 15:02 Nobody wants another 40-page compliance manual. 15:06 They want clear examples, practical shortcuts, efficient workflows, useful templates, simple language, and fast implementation. 15:16 And perhaps most importantly, they want reassurance that accurate coding is not unethical, because many physicians carry tremendous emotional discomfort 15:26 around money. 15:27 There's almost a cultural expectation in medicine that physicians should sacrifice endlessly without discussing financial sustainability, 15:36 but as we've said throughout this podcast, healthy organizations require healthy finances. 15:42 practices cannot retain staff, invest in technology, improve operations, or expand patient services if revenue is quietly leaking away every day. 15:53 Financial stewardship matters, and organizations with healthy coding cultures tend to understand this at a deeper level. 16:01 They treat coding distributions as operational intelligence.They monitor patterns consistently. 16:08 they create supportive feedback loops.they align clinical teams and revenue cycle teams instead of positioning them against one another. 16:17 And importantly, they remove shame from the process. 16:21 Because unfortunately, many organizations still have broken coding feedback systems. 16:27 Here's what often happens. 16:29 When a chart note doesn't substantiate the code that was billed, the coder tells the physician that he overcoded his visit. 16:37 He hears, your work wasn't that valuable, you didn't do that much for the patient, You're greedy and you're breaking the rules and doing it wrong. 16:47 Imagine having someone say that to you about your work. 16:50 How demoralizing. 16:52 He may not be polite at this point. 16:55 The coder may then be hesitant to give him feedback in the future, instead quietly down-coding his physician visits in future in name of keeping him compliant. 17:07 No meaningful discussion occurs. 17:09 The physician never learns why. 17:12 Revenue goes out the door. 17:15 Frustration builds silently. 17:17 Over time, physicians lose confidence entirely. 17:22 That's not education, that's suppression. 17:25 Healthy systems look very different. 17:27 Health systems encourage dialogue, coaching, transparency, collaboration. 17:33 The goal becomes accuracy, not maximal coding and not defensive under-coding, just accuracy. 17:42 And we also need to talk honestly about audit fear, because compliance absolutely matters. 17:48 Compliance is table stakes in this game. 17:52 Audit fraud prevention also matters. 17:55 Documentation quality matters, audit preparedness matters—no responsible person is arguing otherwise. 18:02 But there is also a tremendous amount of mythology surrounding audits in health care. 18:07 Many physicians imagine auditors appearing instantly the moment they bill higher complexity visits. 18:13 That's simply not reality. 18:15 Well-documented, medically appropriate coding is always defensible. 18:20 In fact, poor documentation is often a bigger risk than appropriately coding complexity itself. 18:29 Education reduces risk. 18:31 Clarity reduces risks. 18:33 Consistency reduces the risk Fear-driven undercoding is not a sustainable compliance strategy.
Compliance, Accuracy, and Practice Health 18:39 And honestly, many organizations are finally beginning to understand that. 18:44 They're recognizing that coding is not merely a billing department issue. 18:48 It's a leadership issue, a culture issue a physician education issue A strategic operations issue because when physicians document accurately and code confidently, 19:01 the benefits ripple outward. 19:03 practices become financially healthier, teams become more stable, investment capacity improves, operational stress decreases, 19:13 and ultimately, patient care benefits too. 19:16 This is the part many people miss. 19:19 Healthy practices create healthier communities. 19:22 Financially stable organizations can hire better staff, reduce turnover, invest in patient experience, improve systems, expand services, 19:33 support physician well-being. 19:36 and physicians who feel appropriately valued are far more likely to remain engaged, energized, and sustainable over the long term. 19:44 That matters enormously right now, especially as healthcare continues facing burnout, consolidation pressures, workforce shortages, 19:52 operational strain. 19:54 We cannot afford to continue normalizing systems that suppress legitimate physician value. 20:01 And again, this conversation is not about greed. 20:04 It's about accuracy. 20:05 Its about recognizing the true complexity of modern medical care. 20:10 its about making sure physicians receive appropriate credit for the work they are already doing every single day. 20:17 because every missed code represents something real. 20:21 Work already performed, complexity already managed, risk already addressed, value already delivered to patients. 20:30 And when organizations fail to capture that accurately, everyone loses. 20:35 So as you leave today's episode, I want you to think about a few questions. 20:39 Are your coding patterns truly accurate? 20:42 Or are your physicians leaving money on the table? 20:45 Are physicians in your organization coding from confidence or from fear? 20:50 What operational blind spots or distortions might exist inside your current data? 20:58 what conversations are not happening because everyone feels uncomfortable discussing coding openly? 21:04 And perhaps most importantly, what would happen if your organizations treated coding education as physician support instead of compliance surveillance? 21:15 Because replacing fear with clarity can transform more than revenue. 21:19 It can Transform Culture. 21:22 Thank you so much for joining me for this episode of Medical Money Matters. 21:26 If this conversation resonated with you, share it with a physician leader, administrator, or colleague who needs to hear it. 21:33 And if you're ready to tackle this, reach out to us about our Code Mastery program.
Closing Thoughts and Code Mastery 21:39 Until next time. 21:42 Before we wrap up, if today's conversation sparked any questions about whether you're truly capturing all of the revenue you've earned, 21:50 I want to point you to something we've built specifically for that. 21:54 At Healthy Practices, our Code Mastery program is designed to help physicians and medical groups close the gap between the carry they deliver and the Revenue 22:04 they actually collect. 22:06 Because in many cases, it's not about working harder. 22:09 It's about documenting, coding, and communicating your clinical work in a way that fully reflects its value. 22:16 This physician-to-physician training program is delivered via Zoom in four one-hour trainings throughout the year to simplify coding improve accuracy and 22:27 uncover missed revenue opportunities that are often hiding in plain sight. 22:31 So if you're ready to better understand your numbers and take control of your revenue, I'd encourage you to learn more about code mastery. 22:39 You can visit us at Healthy Practices or check the link in the show notes to get started.
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