Mid-Year Billing Cleanup: What Needs to Be Fixed Before Q3?

A Mid-Year Billing Cleanup is a structured audit of your revenue cycle performed at the halfway point of the year to fix claim errors, reconcile unapplied payments, and stop revenue leakage before Q3 makes it worse.

For physician groups and specialty practices, completing this review in June — not December — is what separates practices that hit annual collection targets from those buried in year-end write-offs. In June 2026, there is no better time to run this review.

The CY 2026 Physician Fee Schedule has been active since January 1 with two new conversion factors, the FY2026 OIG Work Plan is actively adding new audit targets monthly, and most practices are now five to six months into billing patterns they have never stress-tested. The gaps that formed in Q1 and Q2 are still recoverable — but only if you act now.

1. Audit Your AR Aging Report — Before the 90-Day Cliff

The most damaging thing a billing team can do is ignore accounts receivable aging beyond 60 days. The probability of collecting on a claim drops sharply once it crosses 90 days, and most commercial payers follow the same patterns as Medicare.

Your Mid-Year Billing Cleanup should begin with a full AR aging report segmented by payer, provider, and CPT code bucket. Look for:

• Claims denied for missing prior authorizations that were never resubmitted
• Balances sitting in ‘pending’ status with no follow-up date assigned
• Unapplied payments inflating your suspense account and distorting cash flow
• Duplicate billing entries that could trigger payer audits or RAC review requests

If your practice is still managing AR aging in spreadsheets, that is an infrastructure problem your medical billing services partner should have resolved. Modern RCM platforms flag aging claims automatically — if yours does not, the mid-year point is the right time to escalate that conversation.

2. Reconcile Your CY 2026 Fee Schedule Crosswalk

This is the most overlooked step in any mid-year review — and in 2026 it is more critical than ever. Effective January 1, 2026, CMS implemented two separate conversion factors for the first time: $33.57 for qualifying APM participants and $33.40 for non-qualifying APM participants, representing increases of 3.77% and 3.26% respectively from the CY 2025 rate of $32.35.

If your fee schedule crosswalk has not been updated to reflect these CY 2026 conversion factors, your payer variance reports are producing inaccurate underpayment data — and every shortfall you miss now becomes a write-off by December.

The CY 2026 PFS Final Rule (published October 31, 2025, effective January 1, 2026) is available directly at the CMS Physician Fee Schedule page. Practices working with a qualified revenue integrity partner should have this crosswalk updated automatically.

This step also matters because the CY 2026 rule introduced a 2.5% efficiency adjustment to work RVUs for non-time-based services. If your internal benchmarks have not accounted for this adjustment, your collections-to-expected ratio will be off, and you may be writing off legitimate underpayments as ‘contractual adjustments.’

3. Identify Revenue Leakage by CPT Code — Not Just Denial Category

Most practices look at denial rates. Fewer look at what was never billed in the first place. Revenue leakage in specialty practices routinely occurs at the documentation stage, before a claim is ever submitted.

CMS updates its National Correct Coding Initiative (NCCI) edits quarterly. The Q2 2026 NCCI update (effective April 1, 2026) introduced new bundling restrictions affecting evaluation and management codes billed alongside certain procedure codes — with direct impact on orthopedics, pain management, and gastroenterology practices.

The current NCCI Policy Manual is available at the CMS NCCI Edits page. If your team has not audited coding against the Q2 2026 update, you may already have both a compliance exposure and a revenue gap forming simultaneously.

A proper mid-year coding audit cross-references your top 20 billed CPT codes against current NCCI edits, MAC Local Coverage Determinations in your jurisdiction, and any payer-specific billing guidelines updated in 2026.

4. Reconcile Unapplied Payments and Clear Your Suspense Account

Unapplied payments are one of the most underreported sources of billing risk. When ERA payments are posted without matching to specific claims, they accumulate in suspense accounts — and practices often carry these balances for months without realizing it.

During your Mid-Year Billing Cleanup, reconcile every payment posted since January 1 against open claims. The goal is a zero-balance suspense account. Anything left unmatched after 30 days of review should be escalated to your RCM services provider for manual resolution.

This step alone has recovered an average of $40,000–$80,000 in found revenue for mid-sized specialty practices — revenue that was collected but never applied, quietly sitting in accounting limbo for months.

Reactive vs. Proactive Mid-Year Billing Cleanup: The Cost of Waiting

5. Run a Modifier Compliance Audit Against the FY2026 OIG Work Plan

The OIG FY2026 Work Plan is actively expanding. As of June 2026, the OIG has added new audit projects targeting Medicare Advantage risk adjustment, Part B drug billing, and inpatient rehabilitation facility claims. Medicare Part B drug billing — including modifier compliance on injection and infusion claims — remains a consistent OIG focus area.

The OIG Work Plan is updated monthly, and practices that monitor it proactively can anticipate audit targets before they become demand letters. The full active work plan is available at the OIG Active Work Plan Items page. Your mid-year modifier audit should specifically address:

• JW modifier (drug amount discarded) and JZ modifier (no drug discarded) — mandatory on all Part B drug claims since January 1, 2024, now in their third year of enforcement with active OIG monitoring
• Modifier 25 — if your practice bills this on more than 40–50% of procedure days, that ratio warrants a documentation review before a RAC auditor flags it
• Modifier KX — required on claims for services where medical necessity is established by a Local Coverage Determination; missing KX on applicable claims is an automated denial trigger

A systematic modifier audit across H1 2026 claims is not optional at this point. It is the most direct protection against a demand letter arriving in Q4.

Is Your Practice Leaving Revenue on the Table Before Q3?

Most practices discover $80,000 to $200,000 in recoverable revenue during a structured mid-year audit — revenue that would have been written off by December. With CY 2026 fee schedule changes, new NCCI edits in effect since April, and the OIG Work Plan adding targets monthly, the mid-year window to fix H1 billing gaps is closing.

Our team has conducted Mid-Year Billing Cleanup reviews across 20+ specialties in 40+ states, identifying coding errors, unapplied payments, and modifier compliance gaps that in-house teams consistently miss. We identify the gaps before they become permanent losses — with no commitment required to start.

Call: 888-357-3226 | Email: info@medicalbillersandcoders.com

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FAQs: Mid-Year Billing Cleanup

Neel M

With almost 12 years of experience in healthcare revenue cycle management, this Revenue Cycle Specialist brings deep expertise in medical billing, claims optimization, and practice profitability. Shares industry-backed insights focused on improving collections, reducing denials, and driving operational excellence.