Medicare Advantage (MA) enrollment is on the rise, helping to boost health plans’ annual profits to $35.7 billion in 2019.1 These enrollment increases are expected to continue in 2020, so it’s critical to make sure CMS properly pays you for all your MA members.
Especially when it comes to members with end-stage renal disease (ESRD), the final stage of chronic kidney disease that requires patients to undergo costly dialysis or kidney transplants. Members with ESRD account for a disproportionate amount of medical expenses. Experience shows that health plans are underpaid an average of $60,000 in CMS premiums for each misidentified or inappropriately documented ESRD member. Without a strategy to identify these members, your MA plan could be missing out on millions of additional premium dollars from CMS.
CMS allows health plans to identify, investigate, and restore up to 84 months of underpaid premiums for members with ESRD. Your plan maintains responsibility for identifying those ESRD members and ensuring data is validated and corrected according to CMS guidelines. It can be a challenge to sift through CMS monthly membership reports (MMRs), plan eligibility files, and claims data to find any potentially underpaid premiums.
However, with a systematic approach, plans can gain control of ESRD member statuses and restore underpaid premiums. Let’s look at five ways you can take control of your ESRD premiums.
#1: Explore the hidden value in your data
Your data is critical to restoring underpaid ESRD premiums. Potential missing flags can be hidden in various, disparate data sources and take years to uncover. You will want to dedicate resources and analytics to bring these data sources together and surface anomalies. By regularly combing through MMR, eligibility, and claims data going as far back as 84 months, you can identify likely ESRD members that require further investigation.
#2: Investigate cases that show opportunity
After using your data to identify possible opportunities for ESRD premium restoration, you will want to investigate each case to determine what funds may be owed to you. With the right investigation process, you can determine the root-cause issues for each ESRD member you identified. Then outline the right process you need to follow to address the issues with the appropriate submitting authorities.
#3: Remediate the case
Once you have properly investigated the possible ESRD case, you will want to use that information in your remediation efforts. Your investigation will have uncovered the root cause of the problem, inaccurate or incomplete submissions, and any inconsistencies in the data. In your remediation efforts, you will use the right method of outreach and coordinate with dialysis centers, CMS, or other third parties to ensure the information is corrected and updates are confirmed.
#4: Restore underpaid premiums
Your investigation and remediation efforts will have given you the information you need to seek premium restoration. At this point, you will have corrected the information and submitted it to CMS for restoration. As soon as that has been done, you will want to diligently track and reconcile restored premiums and monitor future premiums for accuracy for as long as it takes to make sure revenue is fully realized.
#5: Monitor premiums
After you have worked to restore premiums, you will want to continue to ensure that all ESRD members are identified. Whether you review data on a monthly basis or do a health check twice a year, you will want to ensure that identified ESRD member statuses continue to be reported accurately and that correct premiums continue to be paid.
Plans that take a systematic approach to analyzing and reconciling their ESRD membership can successfully restore underpaid premiums and ensure accurate premium payments going forward. Many plans find that partnering with an experienced ESRD premium restoration vendor to focus on the things outside the plan’s control can help maximize results.
Contact Discovery Health Partners today to find out how we can help you restore underpaid premiums for members with ESRD.
Fierce Healthcare, “Health insurers’ profits topped $35B last year. Medicare Advantage is the common thread,” February 24, 2020.
Jeff MartinESRD: Finding and restoring underpaid CMS premiums in five steps
“New year, new me.” Seems like we hear this at the beginning of every year and hold on to the promise of moving on from the past and setting new goals for the future. Likewise, healthcare organizations are kicking off 2020 by charting new paths to address old problems and expanding into new initiatives to stay ahead of the competition.
Priorities such as increasing member satisfaction, provider relationships, and regulatory compliance remain top of mind for many health plans, which makes it a good time to take a fresh look at your payment integrity strategies and resources. Now is the time to evaluate how well your plan is maximizing recovery opportunities, improving cost avoidance strategies, and exploring premium restoration possibilities. To do this, you need to start at the source of your payment integrity challenges: eligibility data.
The impact of eligibility errors
It’s a known fact that improper payments abound in healthcare, many of which stem from eligibility errors made as a result of multiple data sources, outdated technology, manual processes, and members with other insurance coverage. When eligibility errors occur, they affect many payment integrity areas such as coordination of benefits (COB), subrogation, and Medicare secondary payer (MSP) validation. Failing to address these issues leads to incorrectly paid claims, improper reimbursements, or claims that shouldn’t be paid at all—costing your plan millions.
According to Gartner, billions of dollars are spent every year in improper claims payments across commercial, Medicare, and Medicaid lines of business. Gartner research states, “Payer CIOs must get proactive and leapfrog current performance by focusing on prospective payment integrity capabilities.” With this in mind, what can you do to strengthen your payment integrity approach?1
Identify inaccurate eligibility data
When taking a close look at eligibility data, your plan will want to determine which claims may have been paid incorrectly as a result of inaccuracies. We estimate that 20% of a plan’s membership will have other insurance, and of that 20%, the other insurance will be primary 17.5% of the time. For a 200,000-member plan, this represents nearly $5.4 million in incorrectly paid claims. When statistics like this are uncovered, the plan quickly realizes how important it is to keep its eligibility data in check.
Determine a cost-avoidance strategy
Avoiding improper payments is a core tenet of any payment integrity strategy. Accurate and trusted eligibility data plays a key role. We estimate that the same 200,000-member plan could save over $13.4 million by avoiding incorrect payments. With the right cost avoidance strategies founded on accurate eligibility data, the plan stands to see a significant impact to its bottom line.
Look beyond dollars and cents
When evaluating your payment integrity strategy, you will want to think beyond dollars and cents. Quality eligibility data will have a positive effect on administrative efficiency, member satisfaction, and provider relations.
By avoiding improper payments in the first place, you avoid the need to rebill, saving you and your staff valuable time and energy that might be channeled toward other payment integrity initiatives.
Member satisfaction is a key priority for any health plan. In fact, the member experience drives performance on CAHPS (Consumer Assessment of Healthcare Providers and Systems), which is a key driver of Star ratings. Eligibility data drives a diverse number of systems and processes including registration, enrollment, care provision, wellness, and customer care. All of these areas influence your members’ experiences with your plan.
Lastly, providers depend on prompt, accurate payment. When claims are denied as a result of recurrent eligibility issues, payer-provider relationships already burdened by administrative complexity are further strained. Ensuring accurate eligibility data and determinations not only improves efficiencies, it also helps to accelerate reimbursements, greatly improving relationships and alignment.
Consider a connected payment integrity approach
Given the effect that eligibility data can have on payments, you will want to consider a connected payment integrity approach and address any gaps in your technology. Often, challenges arise from multiple sources of data, conflicting or inaccurate data, data integration challenges, manual workflows, multiple reporting systems, and more. By creating a technology environment that can support connected payment integrity functions (e.g., claims recovery, subrogation, and COB), business managers and IT can come together in their thinking and create a single, trusted source of eligibility data.
Contact Discovery Health Partners today to find out how we can support your payment integrity initiatives in 2020 and beyond.
1Gartner, “U.S. Healthcare Payer CIOs Must Adopt Prospective Payment Integrity to Thwart Improper Claims Payment and Fraud,” February 13, 2018.
As the industry transitions from volume to value-based healthcare, health plans face increasing pressure to better manage costs and ensure payment integrity. We recently sat down with Jason Brown, CEO of Discovery Health Partners, to get his thoughts on recent trends and how they’re shaping the road ahead in 2020.
Healthcare continues to change and evolve. What do you see as some of the trends setting the stage for optimizing payment integrity?
Health plans face a number of challenges when it comes to ensuring the right care is provided to the right member for the right amount. Complex billing processes, changing regulations, outdated and disparate data systems, and overlapping coverage all contribute to improperly paid claims. Today, nearly a third of claims are paid incorrectly, leading to billions in administrative waste.
In 2020 and beyond, we anticipate health plans will continue to struggle with rising healthcare costs, numerous competing priorities, and a lack of resources. Furthermore, changing regulations and mandates will continue to add layers of administrative and clinical complexity to a system already bogged down in paperwork. While there is no clear path to cost containment, there are ways health plans can work toward transforming their payment integrity approaches. An example is leveraging advanced technologies to move from retrospective payment to prospective payment—by detecting improper claims before they are paid, health plans can keep costs in check, increase member satisfaction, and most importantly, cultivate healthy provider partnerships.
What are some of the ways Discovery is helping health plans address their payment integrity challenges?
This past year has been an exciting time of innovation and growth for Discovery. We have an expanded suite of payment integrity solutions—Coordination of Benefits, Subrogation, Data Mining, Clinical Audits (in areas such as diagnosis-related group (DRG) audits and itemized bill review audits) and Premium Restoration. Our integrated solutions are designed to work together. This connected approach helps optimize claims recoveries and avoid future expenses across the entire claim lifecycle while reducing provider and member abrasion.
What makes Discovery unique is that our solutions start with our clients’ own data and processes. We leverage the latest analytical tools and technology like machine learning to identify patterns that present opportunities for cost recovery and cost savings. By blending artificial intelligence with human expertise, we identify hidden errors and root causes that are often overlooked. We also provide the highest levels of support to our clients, acting as an extension of their teams, to free up their internal resources so they can focus on other business priorities.
Since its inception, Discovery has been proud to provide flexible solutions that help health plans solve their payment integrity challenges. Our newly formed Client Council provides a platform for clients to share industry insights and challenges with their peers and help drive product innovations with Discovery. Going forward, custom-tailored solutions like ours will be key to helping plans manage costs while maintaining the high levels of care that their members expect.
What’s on the horizon for Discovery in 2020?
During the past decade, we’ve demonstrated measurable success by helping our clients improve operational efficiencies, increase claims accuracy and payment, and recover dollars back to their health plans.
From 2020 forward, we will continue to evolve existing solutions and create new forward-thinking approaches to help plans prevent and recover inaccurate payments. By expanding our use of data analytics and data integration and accelerating our investments in research and technology like machine learning and predictive analytics, we will help health plans capitalize on information to coordinate claims correctly. Once individual plans reach the point where they are paying the appropriate amount for the healthcare that’s delivered, they can re-invest in clinical care for their members.
At the same time, we will position clients to transition toward a more proactive approach to cost management. Reimagining the payments process and applying insights further upstream will be key to enabling providers to take advantage of opportunities to proactively change wasteful behaviors.
And of course, we’ll continue to keep our finger on the pulse of the industry. By building partnerships with our clients, industry organizations, agencies and others to learn about best practices and stay on top of the latest trends, we can prepare clients for the challenges ahead.
Find out how Discovery Health Partners can help strengthen your payment integrity initiatives in 2020. Contact us today!
Jason BrownJason Brown on the road ahead for payment integrity
The new year is upon us and with it comes a new decade. It has been a decade of transformation for healthcare with regulatory changes, health system consolidation, healthcare consumerism, and new technologies that have forever changed the industry. 2019 has been a time of change and growth for Discovery Health Partners as well. Here are highlights from our most popular blogs of 2019 to remind you what we’ve been up to all year.
In February, we talked about the three “bad habits” that can lead to successful subrogation: be unfair, ignore your members, and be pushy. In any other scenario, these tactics can get you into trouble. But for subrogation, being unfair requires that you not treat all cases equally. Ignoring your members is all about avoiding member abrasion. And being pushy involves aggressively identifying and verifying subrogation cases. Altogether, these tactics help improve the opportunity for quick and fair settlement of subrogation cases.
In March, we featured a post about the challenges Medicare Advantage plans face with members with end-stage renal disease (ESRD). Though ESRD afflicts fewer than 100,000 people nationwide, the disease requires lifelong care—and a disproportionate percentage of medical expense. The blog discusses the gap in CMS premiums for ESRD members and what Medicare Advantage plans can do to better identify them.
Another popular blog continued the ESRD discussion, highlighting a systematic approach Medicare Advantage plans can take to restore ESRD premiums. This includes automating the process of sifting through data to identify potentially underpaid premiums and maximizing the 84 months that CMS allows plans to identify, investigate, and restore premiums. The blog identifies five key components of an effective ESRD program: analytics, investigation, remediation, restoration, and monitoring.
In July, we returned to the topic of subrogation with a discussion of how software-as-a-service applications can help. Plans are finding that combining SaaS applications with in-house expertise creates a more effective, data-driven approach for finding and validating subrogation recovery opportunities. Specifically, you can: 1) make in-house recovery more efficient and insightful; 2) gain accessible, easy-to-use, scalable, and secure solutions; and 3) do more at a lower cost.
Stay tuned to our blog for more insights on these topics and to see what 2020 has in store. You can also get the latest industry and Discovery updates by following us on LinkedIn and Twitter. Are you interested in learning how Discovery Health Partners can support your organization? Contact us today!
Discovery Health PartnersA year in review: top blogs from 2019
New research published by the Journal of the American Medical Association (JAMA) estimates that 25% of U.S. healthcare spending, or $760 billion to $935 billion, is spent annually on waste1. According to the study, the greatest source of waste is administrative complexity, which accounts for $265.6 billion in annual waste.
Part of this administrative burden stems from a complex claims adjudication process impacted by legacy or outdated technology, a lack of clear contract or policy information, and no universal way for sharing information (e.g., member’s name, diagnosis code, etc.). These administrative challenges results in data and eligibility errors that are made throughout the claims continuum, resulting in millions of dollars in improper payments.
Life of a claim: Errors along the way
Despite the best efforts to address waste, administrative complexity in the healthcare system continues. Recent research from JAMA shows that measures to eliminate waste would result in a 25% improvement, but there’s more work to be done. Finding the root causes of errors is the most effective way to ultimately remove waste—and the high cost of it—from health plans’ payment integrity operations.
Here are three approaches to combatting the high cost of waste in your payment integrity strategy.
1. Reduce manual processes
Manual processes are often at the heart of human error. Manual processes are tedious, error-prone, and inefficient, contributing to the high cost of waste in healthcare. When your entire claims adjudication or payment integrity process contains manual tasks, the likelihood of error is high. Reducing or eliminating manual effort in your payment integrity processes will go a long way toward reducing waste.
2. Use technology to your advantage
Technology plays a key role in taking out waste from the payment integrity process. But outdated or legacy technology can create just as much waste as you might find with manual processes. With the right technology in place, you can modernize your payment integrity processes and reduce the amount of time and effort associated with correcting complex claims.
By the same token, emerging technologies like artificial intelligence and machine learning solve traditional payment integrity problems in new and innovative ways. These technologies offer analytics and predictive insights that can optimize your claims payment processes and drive data-driven decisions.
3. Look to a partner for advanced capabilities
A partner can supplement your in-house operations and offer the expertise you need to reduce waste. The right partner will bring robust capabilities that round out your core operations—capabilities like data mining techniques that prevent incorrect and unnecessary payments; industry experts who are up on the ever-changing and complex healthcare landscape; and processes that identify opportunities to correct, recover, and prevent improper payments at all points in the claims’ lifecycle.
The high cost of waste can threaten the viability of organizations throughout the healthcare ecosystem. With a holistic, connected payment integrity strategy built around these three tenets, your organization can improve operational efficiencies and achieve financial integrity by preventing improper payments—all while eliminating waste and generating meaningful results.
To learn how Discovery Health Partners can help you advance into the future of payment integrity, contact us today.
1“Waste in the US Health Care System: Estimate Costs and Potential for Savings,” JAMA, October 7, 2019.
Discovery Health PartnersThree ways to tackle the high cost of waste
At our recent Discovery Client Council meeting, we had the pleasure of hosting Wheeler Coleman, CEO and Executive Partner of EC-United and a member of our Strategic Advisory Board. In this guest blog, Wheeler summarizes the key takeaways of his presentation on the healthcare digital revolution.
Survive or thrive
The digital revolution has been a game changer for all industries, and health payers are not immune. Startup companies are creating new business models and blending existing and emerging technologies to leap-frog and disrupt well-established companies and business protocols. There are also well-established companies in other industries that are entering the healthcare industry to the same end—to change the model and dislocate the existing players.
A few good examples of this are Amazon, Google, and Microsoft. These companies see healthcare as an industry ripe for an operational and administrative transformation that they can deliver through their powerhouse of technological capabilities and expansive digital footprint. To survive, payers must take this threat seriously. They cannot take their leadership position or their iconic name for granted. Resting on their laurels will very likely result in a slow death spiral.
Look at a company like Kodak. They were a market leader with a great brand. Did you know that they created the digital camera? But they were so happy with their position that they refused to make changes and ignored the red flags:
Hitting a revenue plateau
Competing on price / no differentiation
Big on data and short on analysis and actionable information
Neglected table stakes
Too much pride
Too deep in their comfort zone
Healthcare payers need to make sure they don’t fall victim to the same pitfalls. They are enjoying large revenues now, and too many are unwilling to reconsider their business models and leverage technology to maximize efficiency.
We’ve seen how this plays out in other industries. The following well-known companies were able to leap-frog the competition and disrupt well-established businesses by creating new models and leveraging existing and emerging technology.
Uber disrupted the taxi and limousine business models and, in many markets, expanded the demand for service by leveraging GPS, e-commerce, and mobile technology.
Netflix disrupted the cable and movie industries and recently their stock increased 20 percent due to increased subscriptions. This happened when 4G was introduced and movies could be streamed to individual homes. They quickly pivoted from shipping DVDs to digitally streaming movies. The outcome has been the end of the video rental business and a cable industry trying to play catch-up.
Airbnb disrupted the hospitality market and transformed how people approach travel accommodations worldwide by allowing people to lease their homes electronically.
These three different companies in three different industries each changed the playing field and caused disruption by using new and emerging technologies, redesigning how services were delivered, and lobbying for new rules and regulations. So, the question for us is not if, but when will this happen to healthcare payers? Those who are reluctant and slow to adopt emerging technology or work with new technology partners could soon find themselves like the Kodaks of the world.
How does this apply in healthcare?
The companies we’ve already mentioned, and so many more, have reset consumer expectations across the board. In healthcare, we must keep up with the evolving demands of the new “digital patient” by harvesting actionable information from all the data that is being generated by the internet of things. To do this, our options must be instant, seamless, and insightful:
Instant—Information is now in all our pockets and consumers demand information in real time. Historically, our industry has taken advantage of batch processing, but we need to change our processes and our information systems to allow for real-time processing.
Seamless—The relationship between payer, provider, and member needs to become real-time. Payers and providers must be able to exchange information in real time without impacting the member experience. The member does not want to know what’s happening behind the scenes.
Insightful—Consumerism and social networks are generating an unprecedented amount of data that we need to be able to harvest and transform into actions. The new generation of analytics (advanced analytics, ML, AI, robotic technology) will allow us to discover noncompliance and fraud more easily than ever before, but only if data is converted to information that triggers action by the payer, provider, or member.
The digital revolution is upon us!
To catch up and better serve consumer demands and stay ahead of competition, companies will need:
Strategic partnerships—Companies must seek non-traditional employees and partners.
Operational excellence—Companies must reduce costs and increase efficiencies.
Emerging technology—Companies must rapidly adopt and embrace new technology.
Healthcare has historically been a slow mover in this regard, but some progressive healthcare organizations have already begun differentiating themselves by providing a more customer-friendly, tech-enabled experience. Still, it’s not too late for those companies contemplating their next moves. The companies that make this a priority and quickly adapt to this inevitable change can survive and rise to the top of their sectors. But the clock is ticking, and for those organizations that continue with business as usual, time is running out.
To learn how Discovery Health Partners can help you advance into the future of payment integrity, contact us today.
Wheeler ColemanInsights and observations on the digital healthcare revolution
It takes people with a unique mix of skills and experience to successfully handle complex healthcare subrogation matters involving third-party payers. Health plans that don’t have the right professional resources to identify and pursue recovery opportunities run the risk of leaving millions on the table.
Recruiting and retaining top-tier subrogation talent can be challenging but well worth the effort. Here are some insights and advice on finding the right subrogation staff, based on a recent survey of healthcare subrogation experts.
1. Subrogation experience is important but not critical
When it comes to prior work experience, front-line professionals agree that 1-4 years of experience provides a firm foundation.
What you might find surprising is that past subrogation experience is not the most important hiring criteria. Candidates with experience in related fields such as legal, claims, property and casualty, or medical coding typically have what it takes to review and understand complex medical claims.
Subrogation professionals also agree that regardless of industry affiliations, candidates should have top-notch organizational, multi-tasking, customer service, and communication skills. Additionally, the most successful subrogation specialists are good investigators, analysts, and critical thinkers who can navigate the “gray areas” to solve problems creatively. Solid relationship-building skills and a positive attitude are also must-haves to help subrogation professionals successfully negotiate for their share of limited recovery dollars.
2. Cast a wider net
In today’s tight job market, companies may have to look outside their industries and geographic regions to find top talent. Thanks to technology, more healthcare companies can offer remote work opportunities that will attract the best and brightest from across the country.
The medical and legal fields are good sources for high-quality candidates with transferable skills, since they already understand concepts used in subrogation. Often, healthcare companies can find new talent for entry-level positions at college career fairs. Look for students with backgrounds in legal studies, paralegal, and political science.
Law firms are filled with professionals who can easily apply their personal injury, class action, contracts, property and casualty, health, disability, and reinsurance claims experience to a career in healthcare subrogation. Insurance companies are also a good source of employees who already speak legalese and have mastered case management, handling multiple files at once, and reviewing medical claims.
3. Look beyond the resume
Once you find qualified candidates, you can use pre-screening tests and assessments as well as interviews to determine if someone will be a good fit for your organization. A multitude of online test sites offer customizable tools to measure everything from aptitude and attitude to role-specific knowledge and skills.
Assessments are good predictors of performance and offer insights to a candidate’s likelihood of job success as well as cultural indicators, such as honesty, discipline, and reliability. They can also help you make unbiased employment decisions based on quantifiable data.
Behavioral or problem-solving interviews that examine candidates’ past experiences or present real or simulated problems to solve will reveal insights into candidates’ thought processes, problem-solving skills, and ability to think clearly under pressure. Meanwhile, planned or structured interviews that present the same set of questions to everyone help level the playing field and call out the clear winners.
4. Set employees up for success
Congratulations! After a lot of time and effort, you found the right talent. So how can you keep them with you for the long haul?
Training is a good start to set new hires up for success and help more experienced employees advance their careers. Classroom training can cover in-house case management systems, procedures, and other basics. Side-by-side shadowing provides more in-depth exposure to practical applications. And mentoring is a great way for employees to get immediate feedback and learn tips and tricks of the trade.
5. Follow the leaders
Front-line subrogation specialists say that culture is a key to employee satisfaction. Adobe, Google, Southwest Airlines, and other highly sought-after employers have turned their culture into a competitive advantage by offering a combination of work, lifestyle, and monetary rewards. Challenging work assignments; empowering employees to go the extra mile to help customers; and perks like flexible working hours, on-site gyms, and even dog-friendly workplaces are incentives that the companies use to encourage loyalty.
Don’t forget rewards and recognition. Many subrogation associates see themselves as having a long-term career in the industry. Those who have a defined career path and feel valued are more likely to spend their career with you. Money can be a good motivator, but sometimes all it takes is a shout-out on the company website or positive feedback from an executive to encourage and inspire employee loyalty.
Collaborate with the experts
Even health plans with the best subrogation specialists can benefit from Discovery Health Partners’ deep expertise, advanced technologies, and data-driven approach. Find out how we can help health plans improve their recovery efforts on our Subrogation solutions page.
Heather Rodemann5 keys to hiring and keeping top-notch subrogation talent
When health plans think of Coordination of Benefits (COB), the hassles of managing spreadsheets, letters, and phone calls come to mind. These painstaking manual and error-prone methods for identifying other insurance, validating coverage status, and recovering incorrectly paid claims can negatively affect your internal efficiencies, your provider and member relationships, and ultimately, your bottom line.
According to new research, waste accounts for about 25% of U.S. healthcare spending or $760 billion to $935 billion per year –with administrative complexity cited as the greatest source of waste.1 In addition, as many as 15% of all health plan members may hold other insurance coverage.2 Compounding these challenges are continual changes in membership, such as an aging workforce that is eligible for both employer plans and Medicare, and outdated claims processing environments that are ill-equipped to support growing and siloed data.
The convergence of these trends calls for a modern approach to managing your COB program. In today’s competitive marketplace, plans must have the right people, processes, and technology in place to effectively integrate data sources, look at member eligibility holistically, and determine the most successful indicators or combination of indicators of other coverage.
Here are three ways you can improve your COB program and cut down time, money, and paper:
#1: Increase recoveries with technology
There is great manual effort in traditional approaches to COB. Typical COB efforts involve tedious, time-consuming research and member questionnaires and calls—all of which are often ineffective and create member dissatisfaction. New technologies, such as machine learning, predictive analytics, and rules-based analytics, help identify members who have other forms of insurance and other factors that might mitigate inaccurate payments.
#2: Improve cost avoidance
One of the most important keys to success in the modern approach to COB is avoiding inaccurate payments in the first place. Proactive approaches to COB leverage sophisticated data integration, data mining, and data analytics. With technologies that quickly and accurately identify claims that are not the plan’s responsibility, a health plan can resolve claims before paying a dime.
#3: Focus on member and provider satisfaction
Traditional approaches to COB put members and providers in the middle, causing abrasion and dissatisfaction. The modern approach to COB requires that plans and their vendors look to new ways to get the information they need while communicating with providers and members on their terms. This may include using a combination of traditional communication channels, as well as member portals and automation to exchange information in more productive, cost-effective ways.
Core elements of a successful COB program begin with data sources, driven by sophisticated machine learning algorithms to create leads, and matching capabilities which all stand on the foundation of human talent. Without the right team, the technology does not yield the same results.
Discovery’s COB program encompasses all these components and offers both cost avoidance and post-payment, delivering considerable incremental recovery opportunities with minimal disruption to operations. Our COB program uses machine learning-based data mining and modeling to:
Identify additional instances of other insurance coverage
Validate coverage status
Recover any claims paid in error without any disruption to existing claims adjudication processes or existing internal COB validation and recovery efforts
1 JAMA, “Waste in the US Health Care System: Estimated Costs and potential for Savings,” October 7, 2019
2 Discovery Health Partners’ experience.
Ron JonesThree ways to modernize your COB approach
Healthcare subrogation can be terrifying! Health plans are “afraid…very afraid” of what high costs and low settlements do to their bottom line. They’re frightened of member backlash about questionnaires and phone calls asking for details about injuries they’ve suffered.
Let’s face it, we’ve all endured subrogation nightmares that keep us awake at night feeling anxious and dreading the dark. From case overload and staffing issues to non-responders and negotiation horrors, it seems that something scary is always lurking, waiting to throw us off track.
In this article (using more than a bit of tongue-in-cheek nods to some famous spooky movies), we’ll explore typical subrogation horrors and how advances in data and technology are helping us overcome the fright and emerge victorious.
What happens when case identification goes overboard?
Does your subrogation rely on broad case identification parameters? Do all identified cases flow into the investigation process? Do you find your team being eaten alive by case inventory backlog? If you said yes to these questions, “you’re gonna need a bigger boat.”
It has long been common practice to attempt to maximize subrogation recoveries by casting a “wide net” to identify suspect cases – often based mainly on diagnostic codes. Yet these loose identification standards produce too many false positives (unrecoverable cases), which when they make their way into the investigative stage, can drown recovery teams in excess work. The team either has to grow or it becomes overwhelmed and backlogs start to build up. In either case, it costs plans time and money without producing proportionately greater recoveries.
Meanwhile, the investigation of false positives can lead to unnecessary member outreach in the form of calls and questionnaires, which can confuse and frustrate members needlessly. With fierce competition among payers today, none can afford member abrasion.
Best practice is to avoid over-identifying subrogation cases. It’s a delicate balance between identifying too many cases, resulting in false positives, and identifying too few cases, resulting in missed opportunities.
Three trends shaping the future of subrogation
Like the transformation from a drab landscape to a technicolor dreamscape, the last decade has seen dramatic advances in technology that can transform the subrogation operation from a dreary manual process to one driven by advanced technologies and automation.
From cloud-based storage and applications to data proliferation and predictive analytics, we now have faster, cheaper access to technology that can help us:
Leverage more sources of data from multiple internal and external sources
Identify subrogation-worthy cases faster and more accurately
Make pre-payment decisions about other party liability
Prioritize cases for investigation by scoring them based on multiple factors
Match cases to team members according to various factors such as workload and skill
Manage communications, including generating outgoing letters and uploading incoming letters
Capture information about relevant parties, including insurers, providers, and attorneys
Track and report on case progress for your whole inventory
To operate more efficiently, reduce costs, and improve recoveries, health plans should consider three trends that are taking shape in subrogation operations, both within health plans and subrogation vendors.
“They’re heeere!” More data sources, that is!
It may sometimes feel like a terrifying spirit lurking within your walls, but don’t fear data! It’s your biggest asset and it’s all around you. With the abundance of internal and external data sources available today, you should be using all possible investigative tools to more accurately identify and investigate subrogation cases that have recovery potential.
First, it’s critical to ensure you’re maximizing all the data currently available to you. Then seek supplemental external data sources that can fill in context without member contact. Finally, use all this data to learn from past experiences and continuously improve your processes.
Traditional data sources contain valuable information
Traditionally, subrogation cases are identified based on diagnostic data from the member’s claim file. While this is an appropriate starting point, it’s important to go beyond diagnosis codes. By analyzing them along with demographic information, procedure codes, revenue codes, and other data elements, you can identify the relationships that lead to recoveries and that allow you to prioritize recovery efforts.
And when you continuously analyze these codes in connection with varying demographics (age, location, presence of other medical conditions) compared against the data on recoveries achieved, you can constantly refine which combinations are more likely than not to result in a recovery.
External data adds context
Meanwhile, external sources of data about motor vehicle accidents, liability, litigation, and workers’ compensation can provide valuable insight about claims, which can speed up case identification and investigation.
In recent years, these types of third-party data have become increasingly affordable and are available fast and electronically, so they can easily be incorporated into your systems. Data such as court documents, police reports, ambulance run reports, and litigation databases is extremely useful in the decision to open a case. It reduces your reliance on Incident Questionnaires and may allow you to sidestep member outreach altogether.
Additionally, some data sources can point to unique subrogation cases, such as malpractice or mass tort, which can be difficult to identify through normal data mining algorithms. In this case, eligibility information can be matched up to court case databases. As an example, a cancer diagnosis code does not necessarily indicate an injury, but it could be the result of negligence on the part of a company that has been named in a mass tort case.
By now, you may be thinking “easier said than done.” Maybe not. Read on to learn how Trend #2 enables plans to access and integrate internal and external data sources to simplify case identification as well as investigation and recovery.
“It’s alive! It’s alive!” On-demand applications bring sluggish subrogation operations to life
Software-as-a-service applications are alive! On-demand subrogation software offers web-based access to data integration, case management, forecasting, and reporting. These applications allow you to integrate multiple data sources (without relying on internal IT) and leverage built-in analytics to identify cases more accurately. Case management features guide investigation and recovery processes with powerful tools such as diaries, contact databases, and letter generation engines.
These applications allow you to see the big picture across your subrogation operation. They maintain an ongoing record of all activity and correspondence for each case so that anyone with proper access can see the status of the case and any activity associated with it. If you’re able to use the application internally and extend access to your subrogation vendors, you’ll be able to measure performance across all delivery teams. This can provide valuable insight about worker productivity, process effectiveness, and overall financial performance.
Increasingly, application vendors are incorporating machine learning (a form of artificial intelligence) into their products. What this means is that over time, the system will continuously learn from the data and use what it learns to refine identification algorithms.
“Whatever you do, don’t fall asleep.” Prepayment cost avoidance and other tips to be proactive
Avoid subrogation nightmares with pre-payment solutions
What better way is there to maximize your bottom line than to know in advance of paying a claim that it’s another party’s responsibility?
Traditional subrogation models seek to recover funds after a payment on the claim has already occurred. But pre-payment subrogation decisions are now a real possibility, thanks to the availability of data and the technology that quickly integrates and analyzes it for us.
It makes sense for plans to begin exploring pre-payment capabilities, as it allows them to avoid 100% of the claim cost as well as the cost to recover after payment has been made. By quickly analyzing multiple types and sources of data, it is possible to determine much more quickly whether a) an injury is the result of another party’s fault and b) a claim has been filed by another carrier that would have primary responsibility for payment.
The key is to have the data and technology in place. Whether you are graced with a supportive IT team that develops these capabilities with you, or you acquire the applications externally, it’s critical to have fast access to data from multiple systems.
When implementing a pre-payment subrogation strategy, think strategically, review state requirements and your policy language. There are nuances to pre-payment but by engaging with your IT, legal and contracting teams, it can be successful. Additionally, keep in mind that pre-payment cost avoidance should be coupled with post-payment recovery for a holistic approach that follows the transaction through the whole lifecycle. Despite the efforts to acquire the right types of data, you won’t always get what you need fast enough for a pre-payment decision. Traditional post-payment subrogation augments pre-payment and serves as a safety net to catch any claims that you aren’t able to make a determination on within timely filing limits. Some erroneous payments will continue to be made, requiring post-payment evaluation.
Be alert for opportunities to optimize post-payment processes
The term “time is money” is very relevant to subrogation. The faster a case is handled, the better the plan’s chances are of maximizing the settlement. Therefore, it’s critical to be proactive throughout the post-payment subrogation process. Again, data and technology are key to making more informed decisions and automating complex tasks. Below are some tips:
Prioritize cases. Dollar value tends to be the most used metric for prioritization, but it shouldn’t be used alone. As mentioned earlier, multiple pieces of data can be used to determine recoverability, so teams can focus first on those cases that are more likely to settle.
Align case complexity with skills. When the most complex cases are assigned to the most skilled resources, they are likely to reach a settlement faster. This requires a definition of the elements of case complexity, as well as a method of evaluating skill levels.
Legal oversight. Legal resources should be engaged during the settlement phase of a subrogation case to aggressively pursue optimal recovery for the health plan. Though settlement is typically the shortest phase in a subrogation case, it’s also the most complex. With limited dollars available, legal negotiations must be articulate and based on a strong understanding of the plan’s rights.
Track and measure consistently. Measurement of subrogation performance is critical to knowing what works and where to make improvements. Plans should insist upon robust reporting and analytics across their subrogation inventory to quantify recovery efforts, view real-time and historical case data, forecast recoveries, and get regular reimbursement reports.
Causes of subrogation elation
Besides our references to horror movies, the common theme here is that data and technology are helping subrogation organizations maximize financial results for their plans more effectively than ever. Now is the time to take a fresh look at the tools and techniques used to identify, investigate, and settle third-party liability cases. Work with your IT organization, talk to your vendors, and evaluate the subrogation software available today. Our white paper on Transforming subrogation operations with data, technology, and analytics explores how 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.
Heather RodemannHow to wake up from subrogation nightmares
Primacy and eligibility errors can lead to serious losses and expenses. By some estimates, a third of paid health claims contain errors, and as many as 15% of members have other insurance—representing a staggering $1 trillion in annual waste1. Paying for claims due to incomplete or inaccurate member eligibility not only costs your plan millions in higher payouts and administrative costs, these errors can also generate substantial downstream administrative costs and greatly impact your provider and member relationships.
While Coordination of Benefits (COB) is a common occurrence (the process of determining which plan pays for what portions of a claim), the challenges associated with addressing other insurance retrospectively lead to increased administrative costs and payouts. Plans must go beyond the traditional process of post-payment recovery to an expansion of prospective processes that identify potential primacy conflicts while still in the pre-payment stage.
Things to ask as you evaluate your COB processes:
How can we identify more instances of other coverage and maximize our savings from cost avoidance and recovery of overpaid claims?
Do we have the data mining technology and expertise to identify Medicare or other commercial coverage?
How do our COB processes compare to industry best practices?
How do we transition our COB program from recovery to cost avoidance?
How can we minimize member and provider abrasion while coordinating benefits?
Data mining, business intelligence, and analytics are at the core of today’s most successful payment integrity strategies, including COB. As part of our connected payment integrity approach, Discovery’s COB solution automates data integration across multiple sources, bringing it all together in a single database that allows for quick and accurate identification of claims and provider responsibility. This means frequently refreshed data with up-to-date information. In addition, predictive analytics and machine-learning technologies analyze and prioritize data, allowing us to flag and take a closer look at members with a high probability of having other coverage. Our goal is to identify and address primacy issues at the earliest possible stage—improving claims payment accuracy, building stronger relationships with providers, and reducing administrative expenses.
To learn how Discovery Health Partners has helped health plans drive cost savings and millions of dollars in recoveries, download our COB case study or visit our Coordination of Benefits solution page.
1 The Office of the Actuary in the Centers for Medicare & Medicaid Services (July 2015)
Ron JonesMaximizing your COB processes with integrated technology