Hidden Revenue Risks in Value-Based Care: What Your Denials and RAF Scores Aren’t Telling You

Introduction

As Accountable Care Organizations (ACOs), Management Services Organizations (MSOs), and value-based providers double down on shared savings models, one thing has become painfully clear: most revenue leakage happens quietly—not at the point of care, but after the visit and before the claim leaves your system.

This gap between documentation, coding, and reimbursement is widening. And if you’re not looking at it closely, you’re leaving both shared savings and risk-adjustment dollars on the table.

The New Denial: Paid, But Underpaid

You’re likely familiar with the spike in claim denials. But recently, a more insidious trend has emerged. Payers, under the banner of “severity adjustment” or “medical necessity,” are downgrading reimbursement silently. Instead of denying the claim, they pay it—just less than expected.

Unlike a flat out denial, this doesn’t raise flags in your system. It doesn't trigger a work queue. And yet over months, stealth underpayments compound into millions of lost dollars.

Hospitals and provider groups with limited revenue cycle visibility often miss this leakage entirely. Until the CFO sees a shortfall or CMS issues a clawback.

RAF Scores Are Locking Before Risk Is Captured

In value-based programs like ACO REACH or Medicare Shared Savings Program (MSSP), Hierarchical Condition Categories (HCCs) drive your Risk Adjustment Factor (RAF). But RAF scores don’t wait for your coders to catch up.

The risk? Many conditions are documented in the EHR but never coded on the claim because the note was too vague, the encounter was too complex, or the supporting MEAT (Monitor, Evaluate, Assess, Treat) evidence wasn’t captured properly.

That means you cared for the patient but the reimbursement doesn’t reflect their acuity. In a recent cohort we studied, up to 32% of risk-driving conditions were never coded in the billing file.

High-Need Populations Get Hit the Hardest

If you serve dually eligible populations or patients over 85 years old, you’re in the crosshairs. These patients often have complex conditions, social determinants of health, and fragmented care documentation—making it harder to capture RAF accurately.

Ironically, the very patients who drive your cost of care are the ones whose risk is most likely to be undercoded. And CMS is watching closely. Audits and clawbacks are on the rise, with retrospective reviews tightening year after year.

What top performers do differently

Here’s what top-performing organizations are doing to protect the revenue they’ve already earned:

• Pre-bill RAF review: Embedding tools that flag missing HCCs before the claim is submitted.
• Denial prevention workflows: Learning from historical 835s to stop repeat errors at the source.
• Underpayment detection: Spotting shifts in payer behavior with real-time alerting.
• Line-level MEAT evidence capture: Generating audit-ready drafts coders can submit confidently.

Why it matters now

With margins tighter than ever and CMS scrutiny growing, you can’t afford to guess where revenue is leaking. You need clarity at the line level, in real time. This leads to:

• Fewer Denials
• Higher RAF Scores
• Audit-Ready Documentation
• Cleaner Claims on First Pass
• Network Alignment Across Sites