When it comes to getting better results from subrogation, forget everything you ever learned in kindergarten! Being unfair is…well, unfair; ignoring people is bad; and being pushy is rude.
But adopting a few “bad” habits actually can make your subrogation program stronger to drive better financial results and member feedback.
1. Be unfair
Not all subrogation cases are equal, so let’s not treat them that way. Some cases are worthy of more time and energy than others, so let’s find new and better ways to identify the right cases and use the most advanced methods to pursue them.
First, you have to be as certain as possible that a case has subrogation potential and this starts with the identification phase of your subrogation process.
For too long, the practice was to cast a wide net when looking for cases to subrogate. Anything that looked like a car accident or a slip-and-fall case ended up in the “verification” bucket. The problem with this “wide net” approach is that it funnels too many false positives into the process. Devoting time and resources to a case that has no recovery potential ties up your staff (which costs you time and money) and creates undue stress on members.
The last decade has seen advances in information science and technology that have allowed subrogators to more precisely identify cases that actually have third-party liability and can be expected to reach a settlement.
You can now mine claims data for details such as diagnosis codes and demographic data that signal a subrogatable case. In fact, ICD-10, which came out in 2015, has been beneficial for companies using data mining to zero in on claims with greater likelihood of having subrogation potential. Many health plans and vendors have adopted these techniques, which have allowed them to reduce false positives so they can use resources more efficiently and cost-effectively, while improving settlement ratios.
Recent years have seen the most aggressive health plans and vendors (including yours truly) begin to experiment with technologies that fall into the category of artificial intelligence, machine learning, and predictive analytics.
These emerging technologies allow us to build upon the improvements of the last decade by learning from subrogation results and automatically applying those learnings back into the case identification algorithms to become even more precise.
2. Ignore your members
Well, not really. But as you pursue the big business of subrogation for your health plan, keep an even bigger focus on your members’ experience. Remember that your members come first above all.
It has become clear to all of us in this business that we need to find more ways to verify the causes of injury and rely less on calling and mailing members repeatedly. The first line of defense for your members is the identification process (described in #1 above), which allows you to more accurately identify cases that actually have third-party liability. With this smaller net, you minimize false positives, which as a matter of course, reduces unnecessary outreach to those members.
Additionally, you can take advantage of external liability databases and other third-party data services to augment your detection methods and further minimize member outreach. One use case for this type of service is medical malpractice and personal injury claims, which can be difficult to find using traditional data mining techniques. These techniques can shorten the lifecycle of subrogation cases by as much as 90 days, while minimizing member outreach.
3. Be pushy
The previous two subrogation bad habits lend themselves to the third, which is to be pushy. When we’re aggressive about accurately and quickly identifying and verifying subrogation cases, we increase our chances of not only reaching settlement more quickly, but also reaching a settlement that is agreeable to us and/or our clients. How, you ask?
One way to get more aggressive is to prioritize cases by dollar values and “push” them to staff accordingly. Obviously, a case totaling $450,000 in claims demands more attention and resources than one totaling $4,000 in claims. Yet traditionally, all cases ended up in the same pile to be worked top to bottom. In subrogation, time is money.
The faster you act on a case, the better your chances of reaching a desirable settlement. But the faster cases pile up, and the more overwhelmed the team gets, the more this idea falls by the wayside.
Case management technologies can automatically drive prioritization methods throughout your subrogation process based on rules you define. As a result, you can get the timeliest and costliest cases pushed to the top.
Similarly, case management queues can assign specific cases to recovery specialists most suited to characteristics of the case. For example, if you can identify which team members are best at negotiating with difficult attorneys, then you can automatically push cases to those specialists.
Engage legal resources at the right time
Once you make it to the settlement phase of a subrogation case, it’s important to engage with your legal resources, whether internal or external, to aggressively pursue optimal recovery for the health plan.
Though settlement is typically the shortest phase in a subrogation case, it’s also the trickiest and most involved because it’s when you start talking about limited dollars available, you have to be articulate in legal arguments, you must have a strong understanding of the plan’s rights, and you must be able to aggressively negotiate to recoup dollars on behalf of the plan.
Subrogation lawyers and paralegals who are trained to manage these types of negotiations can navigate this complicated phase to quickly optimize your settlements.
Consider subrogation prepay cost avoidance
Health plans are showing a growing interest in identifying third-party liability before paying a claim. As health plans become increasingly adept at data integration for mining and analytics (either internally or through their vendors) they have more tools to inform pre-payment decisions.
If a plan is able to coordinate a third-party liability claim with a primary payer, it can avoid the cost without engaging in subrogation methods. Due to time constraints, pre-pay subrogation may prove to be more member intensive, requiring direct outreach to identify if there is another recovery source.
In the case of subrogation, as in most payment integrity functions, pre-pay cost avoidance has to be balanced with post-pay recovery. It’s never all or nothing. Even if the decision is to pay a claim because it appears that there is no liability or no other coverage available, the claim can be pended for potential post-pay subrogation.
Now is the time for subrogators to take a fresh look at the tools and techniques they use to identify, investigate, and settle third-party liability cases. Technology-enabled subrogation is the way to go, and fortunately for everyone, newer technologies are making it more possible than ever to narrow the focus on subrogatable cases, minimize member contact, shorten time to settlement, and maximize recoveries.