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JotPsych Notes
JotPsych Notes

3 steps to find commercial payments below your contract

An underpaid claim carries the same adjustment code as a correct one. Each quarter, compare what the payer allowed with your contracted rate.

Chris Hume
Chris Hume
Head of Growth and Operations, JotPsych

Your remittance posts a commercial claim as paid, with no denial. You don't look again.

Reading a paid commercial remittance line for an underpayment
claim adjustment reason codes (CARCs) from the X12 code list
On the remittance
FieldWhat it holds
Chargeyour billed amount
CO-45charge above the allowed amount
PR-1, 2, 3deductible, coinsurance, copay
Paidwhat the payer sent
Your check

Paid plus PR-1, 2, 3 amounts = allowed amount

Allowed amount below your contracted rate = underpayment

Unless your charge was lower and your contract pays the lesser of the two

X12's claim adjustment reason code list defines CARC 45 as a charge above the fee schedule, maximum allowable, or contracted fee. CO-45 sits on correct and underpaid lines alike, so only the allowed amount shows an underpayment.

  1. Pull one quarter of paid lines. Start with the code you bill most to your largest commercial payer, such as 90837. Each line on a remittance shows its charge, its payment, and its adjustments.
  2. Compare the payment plus the patient's share with your contract. The patient's share is the deductible, coinsurance, and copay under group code PR (patient responsibility), per the X12 code list. The sum is the allowed amount. Any allowed amount below your contracted rate is an underpayment, unless your charge was lower and your contract pays the lesser of the two.
  3. Ask the payer to reprocess the underpaid lines. Send the claim numbers, your contracted rate, and each allowed amount. Ask which fee schedule the payer loaded for your contract. If the payer won't reprocess a line, check your contract for a deadline on payment disputes.

Your contracted rate can be a dollar amount per code or a percentage of Medicare's rate. For a percentage, look up the Medicare rate your contract names, such as the 2026 physician rate, in the Medicare fee schedule look-up tool. Then apply the percentage.

What to send a payer with a reprocessing request
  1. 1The claim number and date of service for each underpaid line
  2. 2The code billed and the units
  3. 3Your contracted rate for that code, with the contract page
  4. 4The allowed amount on each line: payment plus patient share
  5. 5Your ask: reprocess each line at the contracted rate

Four items come from your remittance or your contract, and the last is your ask. Sending the five items in one request gives the payer what it needs to check each line.

Every health plan that sends you an electronic remittance must use one federal format, the X12 835, under 45 CFR 162.1602. Group code PR and the reason codes mean the same on each payer's remittance, so you can check each of your commercial payers the same way. Add a new payer each quarter.

The Payer expected rates tab of your fee schedule in JotPsych keeps each payer's contracted rate by code.

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Sources:
  1. X12, Claim Adjustment Reason Codes: CARC 45, CARCs 1 to 3, and group codes CO and PR; read October 1, 2026.
  2. 45 CFR 162.1602, standards for the health care remittance advice transaction, Electronic Code of Federal Regulations: the X12 835; read October 2, 2026.
  3. Centers for Medicare and Medicaid Services, Physician Fee Schedule Look-Up Tool.