Why Payers Are Flagging More Claims Than Ever

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Introduction: A Record Surge in Flagged & Suspended Claims

Healthcare providers across the U.S. are experiencing an unprecedented increase in flagged, pended, and manually reviewed insurance claims. Even practices with historically strong clean-claim rates are seeing more requests for documentation, delayed payments, and unexplained rejections.

This is not accidental.

Payers have fundamentally changed how claims are evaluated. Advanced analytics, AI-driven fraud detection, stricter medical necessity enforcement, and aggressive cost-containment strategies have created a claims environment where every detail matters more than ever before.

This guide explains why payers are flagging more claims, what triggers payer scrutiny, and how providers can protect revenue in this new billing reality.

1. AI-Powered Claim Scrutiny Has Replaced Manual Review

Payers rely heavily on artificial intelligence and predictive algorithms to analyze claims before payment. These systems compare claims against millions of historical data points to detect anomalies.

What AI Is Looking For:

Billing patterns that differ from peer benchmarks
Unusual frequency of CPT codes per patient
High utilization of modifiers (25, 59, 95, GT)
Repeated high-level E/M services
Inconsistent diagnosis-to-procedure relationships

Even clinically valid claims may be flagged if they deviate from algorithmic norms.

🔴 Impact: Claims are suspended, routed for manual review, or denied without clear explanations.

2. Stricter Medical Necessity Enforcement

Medical necessity enforcement has become one of the top reasons claims are flagged.

Payers now cross-check:

ICD-10 codes against LCDs and NCDs
Documentation consistency across encounters
Frequency limits for procedures and visits
Diagnosis specificity and sequencing

Common Medical Necessity Red Flags:

Using unspecified ICD-10 codes
Mismatch between diagnosis and procedure
Repetitive services without progressive documentation
Templates that appear cloned across visits

📌 Key Insight: Medical necessity is no longer inferred—it must be explicitly supported.

3. Benchmarking Against National & Regional Utilization Data

Payers now benchmark every provider against:

National utilization averages
Specialty-specific billing norms
Geographic peer comparisons

If a provider bills above average—even legitimately—claims are more likely to be flagged.

Examples include:

Higher-than-average E/M levels
Frequent add-on codes
Increased telehealth utilization
Higher therapy or behavioral health visit frequency

This approach allows payers to preemptively flag claims before overpayment occurs.

4. Modifier Overuse Is Triggering Automated Flags

Modifiers are essential—but they are also one of the fastest ways to trigger payer audits.

High-risk modifiers include:

Modifier 25 (significant, separately identifiable E/M)
Modifier 59 (distinct procedural service)
Telehealth modifiers (95, GT)
Modifier 24 and 57

When modifiers appear frequently without bulletproof documentation, claims are flagged—even if historically paid.

5. Increased Focus on Fraud, Waste & Abuse (FWA)

Federal and commercial payers are under pressure to reduce healthcare spending. As a result, FWA monitoring has expanded dramatically.

Payers now flag claims for:

Upcoding patterns
Unbundling indicators
Excessive visit frequency
Duplicate or overlapping services
Time-based billing inconsistencies

⚠️ Important: A flagged claim does not mean fraud—but repeated flags increase audit risk.

6. Documentation Quality Is Being Actively Scored

In 2025, documentation quality itself is evaluated.

AI tools analyze:

Note completeness
Clinical progression between visits
Time documentation accuracy
Use of cloned or repetitive language

Poor-quality documentation—even with correct codes—raises red flags and increases claim scrutiny.

7. Coordination of Benefits (COB) Errors Are Under Heavy Surveillance

COB-related issues have become a major focus area.

Claims are frequently flagged for:

Conflicting primary vs secondary coverage
Inaccurate subscriber information
Employer group changes not reflected
Medicare coordination mismatches

Even minor COB discrepancies can cause automatic claim suspension.

8. Telehealth & Behavioral Health Claims Face Extra Scrutiny

Telehealth expansion has permanently changed payer policies.

Telehealth and behavioral health claims are flagged for:

Location and POS mismatches
Modality inconsistencies (audio vs video)
State licensing verification
Frequency and duration validation
Documentation alignment with telehealth rules

These services remain high-risk categories for payer review.

9. Payers Are Delaying Payments Strategically

Not all flagged claims are denied.

Some are intentionally delayed through:

Additional documentation requests
Repeated reconsideration cycles
Manual review queues

This strategy improves payer cash flow while testing provider follow-up strength.

10. How Providers Can Reduce Claim Flagging

To survive and thrive in this environment, providers must adapt.

Best Practices:

Strengthen diagnosis specificity
Align CPT codes tightly with documentation
Audit modifier usage regularly
Monitor utilization benchmarks
Improve documentation quality—not length
Track denial and flag trends by payer
Use specialty-focused billing expertise

📈 Practices that implement proactive billing controls experience faster payments and fewer denials.

Final Thoughts: Billing Accuracy Is No Longer Optional

In 2025, payer scrutiny is not temporary—it is the new standard.

Claims are flagged not only for errors, but for patterns, trends, and perceived risk. Providers who rely on outdated billing processes will continue to face delayed payments and rising denials.

Success now depends on precision, documentation integrity, payer intelligence, and proactive revenue cycle management.

About Solubillix

Solubillix helps providers navigate this complex billing environment with payer-aware billing strategies, denial prevention workflows, and compliance-driven RCM solutions.

If your claims are being flagged more frequently, the problem may not be your care—it may be your billing strategy.

Solubillix turns payer scrutiny into predictable revenue.