Case Study: Medicare Underpayment Identification and Revenue Recovery

The Client

An academic medical center operating multiple hospitals and specialized service lines.

The Situation

Following a recent conversion to a new electronic health record (EHR) platform (EPIC), the health system engaged Withum to perform a comprehensive Medicare underpayment audit to validate the accuracy and completeness of prior reimbursement.

Given the complexity of Medicare reimbursement methodologies, leadership sought an independent assessment to ensure that billing workflows, charge capture, and payment outcomes were functioning as intended.

The Challenge

Medicare reimburses hospitals for certain drugs and medical devices through add-on payments that are separate from the standard DRG reimbursement. These payments are dependent on accurate coding, billing, and charge capture processes.

Although no specific issue had been previously identified, the post-EPIC environment introduced potential risk areas, including:

Since these cases represent a small population of accounts with significant financial impact, discrepancies can remain undetected without a targeted, data-driven analysis.

The Approach and Solution

Withum conducted a targeted and comprehensive Medicare underpayment review that included:

Withum’s team collaborated with revenue cycle, revenue integrity, HIM and IT stakeholders to validate findings and isolate breakdowns within the end-to-end billing process.

The Results, ROI

Sustainable Impact

Beyond the retrospective recovery opportunity, this engagement delivered long-term value through:

Key Takeaway

Even in the absence of known issues, proactive Medicare underpayment audits can uncover significant hidden revenue. High-cost, low-volume medical services require precise alignment across clinical and revenue cycle functions to ensure accurate reimbursement and reduce long-term compliance and financial risk.