Three ways to tackle the high cost of waste

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Part of this administrative burden stems from a complex claims adjudication process impacted by legacy or outdated technology, a lack of clear contract or policy information, and no universal way for sharing information (e.g., member’s name, diagnosis code, etc.).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

Payment Integrity continuum DiscoveryDespite 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 But outdated or legacy technology can create just as much waste as you might find with manual processes.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.
Subrahmanyam ManthaThree ways to tackle the high cost of waste
read more

3 bad habits that are good for healthcare subrogation

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?

Prioritize cases

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.

Summary

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.

Learn more on our Subrogation solutions page.

Heather Rodemann3 bad habits that are good for healthcare subrogation
read more

White paper: Innovations in payment integrity for healthcare payers

White paper: Innovations in payment integrity for healthcare payers

Data mining, business intelligence, and analytics are at the core of today’s most successful payment integrity strategies

Today’s most successful payment integrity solutions are information-driven and automate many processes that are otherwise manual and time-consuming.

By combining advanced technology such as data mining and cloud computing, with information analytics and improved business processes, this new generation of “intelligent” payment integrity solutions enables health plans to more efficiently and effectively manage programs including eligibility, coordination of benefits, and subrogation.

Download this informative whitepaper today.

Discovery Health PartnersWhite paper: Innovations in payment integrity for healthcare payers
read more

Discovery Health Partners drives millions in recoveries and revenue optimization for Lovelace Health Plan

Analytics-based subrogation, COB and eligibility services improve health plan’s visibility, reporting and reduction of claims payment errors

ITASCA, IL (April 28, 2014) – Discovery Health Partners’ cost containment support for New Mexico-based Lovelace Health Plan has resulted in $16 million in recoveries and revenue optimization in two years, announced the company.

A mid-sized health plan, Lovelace has realized nearly $7 million in subrogation and COB recoveries working with Discovery Health Partners. These savings are the result of improved data mining, analytics, and modernized workflow available through Discovery Health Partners’ Intelligent Cost Containment Platform, which allows quick and accurate identification of cases for recovery.

By adding Medicare Secondary Payer (MSP) validation and premium restoration – a service that helps Medicare Advantage plans quickly and accurately validate MSP records, correct inaccurate records, and restore underpaid premium dollars – Lovelace has recovered an additional $7.1 million. A majority of these restorations were found within 120 days, with future revenue optimization forecast at $4.2 million annually.

“It’s a critical time for healthcare organizations to improve efficiency and performance. Discovery Health Partners’ reporting and analytics provided greater visibility into cases and trending. We also are impressed with how well their team partnered with ours,” said Karen Eskridge, Chief Operations Officer, Lovelace Health Plan. “Since working with Discovery Health Partners, we’ve pursued new savings, recovery and cost avoidance opportunities, improving our bottom line very quickly.”

Lovelace also engaged Discovery Health Partners for a Cost Containment Blueprint consulting engagement, which identified additional opportunities for cost savings and revenue generation.

“We look holistically at every health plan client’s cost containment program. Each has its own unique challenges and requirements, which our customized plans reflect,” said Paul Vosters, President and Chief Operating Officer, Discovery Health Partners. “Time and again, our clients say they value our flexible approach, partnership, and leading-edge case management and reporting tools.”

 

 

 

 

 

 

 

 

 

 

 

 

 

Discovery Health PartnersDiscovery Health Partners drives millions in recoveries and revenue optimization for Lovelace Health Plan
read more

Discovery drives millions in recoveries for Lovelace Health Plan

Analytics-based subrogation, COB and eligibility services improve health plan’s visibility, reporting and reduction of claims payment errors

ITASCA, IL (April 28, 2014) – Discovery Health Partners’ cost containment support for New Mexico-based Lovelace Health Plan has resulted in $16 million in recoveries and revenue optimization in two years, announced the company.

A mid-sized health plan, Lovelace has realized nearly $7 million in subrogation and COB recoveries working with Discovery Health Partners. These savings are the result of improved data mining, analytics, and modernized workflow available through Discovery Health Partners’ Intelligent Cost Containment Platform, which allows quick and accurate identification of cases for recovery.

By adding Medicare Secondary Payer (MSP) validation and premium restoration – a service that helps Medicare Advantage plans quickly and accurately validate MSP records, correct inaccurate records, and restore underpaid premium dollars – Lovelace has recovered an additional $7.1 million. A majority of these restorations were found within 120 days, with future revenue optimization forecast at $4.2 million annually.

“It’s a critical time for healthcare organizations to improve efficiency and performance. Discovery Health Partners’ reporting and analytics provided greater visibility into cases and trending. We also are impressed with how well their team partnered with ours,” said Karen Eskridge, Chief Operations Officer, Lovelace Health Plan. “Since working with Discovery Health Partners, we’ve pursued new savings, recovery and cost avoidance opportunities, improving our bottom line very quickly.”

Lovelace also engaged Discovery Health Partners for a Cost Containment Blueprint consulting engagement, which identified additional opportunities for cost savings and revenue generation.

“We look holistically at every health plan client’s cost containment program. Each has its own unique challenges and requirements, which our customized plans reflect,” said Paul Vosters, President and Chief Operating Officer, Discovery Health Partners. “Time and again, our clients say they value our flexible approach, partnership, and leading-edge case management and reporting tools.”

 

Additional information

To learn more about Discovery Health Partners and our solutions, please visit one of our resource pages or complete our contact request form to speak with a Business Development Director.

Press releases

Recent news

Search

Discovery Health PartnersDiscovery drives millions in recoveries for Lovelace Health Plan
read more