Discovery Health Partners tackles subrogation transformation initiative, achieves 20% more recoveries for clients

ITASCA, IL (April 30, 2019) – Discovery Health Partners today announced a 20 percent growth in subrogation recoveries for its clients from 2016-2018 and is looking to more than double those results in 2019. This increase is due to Discovery’s strategic four-pronged subrogation transformation initiative spanning its people, process, data, and technology components.

People: Discovery has made significant investments in key subro leadership positions, including the appointment of a new Vice President of Subrogation Operations, Heather Rodemann. It has increased it paralegal staff by 10% and has moved to a remote, national workforce in order to have access to superior talent. In addition, the company expanded its training program to include enhanced negotiation tactics.

Process: Procedural enhancements include a leadership role dedicated to efficiency and automation; stronger alignment of resources with cases based on skills and case complexity; and standardization of KPIs to improve consistency, best practices, and efficiency. The company’s quality audit program boasts scores of 99 percent for financial audits and 97 percent for procedural audits.

Data: Discovery has increased the variety and number of data sources it accesses with its proprietary machine learning and predictive analytics processes, including claims, eligibility, and provider data, as well as external third-party data providers. These enhancements help to identify and validate subrogation claims faster and more accurately. A multi-variant approach to diagnosis codes helps identify cases that otherwise might be missed.

Technology: Discovery has also fine-tuned its technology platform, including a HITRUST CSF® certified file transfer system and improvements to Discovery Case Manager, which guides the case investigation and recovery process, maintains a record of all activity and correspondence, and provides 24×7 visibility into subrogation case inventory and progress.

“Being able to identify and validate recoveries faster, with more accuracy, and with less member outreach further solidifies Discovery’s Subrogation solution as a best-in-class model for the industry,” stated Heather Rodemann, Vice President of Subrogation Operations. “It has been incredibly rewarding to see our team’s hard work and planning result in growth at Discovery and in more significant and accurate recoveries for our clients.”
Discovery is also making improvements to key areas of its Subrogation solution including enhanced pre-payment capabilities. Click here for additional information on Discovery and its Subrogation capabilities.

About Discovery Health Partners

Discovery Health Partners’ mission is to deliver unique, actionable analytic insights and technology-powered solutions to help healthcare payers improve payment integrity, increase revenue optimization, and maximize efficiencies with government programs. Serving more than 60 health plans across the U.S., including six of the 10 largest U.S. health plans, Discovery has been recognized consistently for its growth—earning a spot on the Inc. 5000 list five years in a row and the Crain’s Fast 50 three times. For more information on Discovery Health Partners, go to www.DiscoveryHealthPartners.com.

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Discovery Health PartnersDiscovery Health Partners tackles subrogation transformation initiative, achieves 20% more recoveries for clients
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Should health plans expect more from their subrogation efforts? It’s worth a look!

Health plans have been relying on Subrogation for decades to recover healthcare claim payments that are a third party’s responsibility.  It is typically regarded as a highly manual and time-intensive process that relies heavily on member contact to verify accident and coverage details. It is not often thought of as a center of innovation.

But recent years have seen some health plans and subrogation vendors experiment with information technology and analytics to help improve the identification of claims with subrogation potential, reduce member abrasion across the subrogation process, and improve settlement rates. Should health plans expect more from their subrogation efforts? We think so and here’s why.

1. Subrogation case identification

Identifying cases with subrogation potential is a delicate balancing act. If too many cases are opened, the result will be excessive outreach to providers (e.g., for medical records) or members (e.g., for information about an accident that could be subrogatable).

The more a health plan or its representatives reach out to providers and members for cases that don’t ultimately generate value (often referred to as false positives), the more those communities get frustrated with the health plan. Additionally, this creates inefficiency, costing the health plan time and money and generating no value from it. On the flip side, if too few cases are opened, then recovery opportunities are lost.

Let’s face it—we’ll never have all the information we need to make a perfect decision about which cases to pursue for subrogation. But we do need to explore ways to gather as much information as we can to make better decisions without irritating our important constituencies or leaving money on the table.

How can we fill in the picture? By leveraging more of the data that is available today and using analytic models, we can rely less on member outreach and manual inspection, while automating and speeding up some of the decision processes. For example, what can social media tell you about your members?  What can you glean from external property and casualty databases? Can you build business rules based on past experiences and observations to generate analytics that more accurately identify cases? Can you improve these models over time as you feed back results from earlier efforts?

2. Subrogation investigation and resolution

Again, this is a typically manual process requiring outreach to providers and members for information about the case. It’s an area ripe for inefficiency and member and provider abrasion. Within this step, we have identified opportunities across four areas that could result in better results with less waste and abrasion.

  • Outreach modality: Modality refers to the optimal outreach methods for patients and providers. Would you expect that a retired, Medicare Advantage plan member in their 60s would be more likely to answer the phone in the middle of the day than a 25-year-old who is likely to be at work? Would you expect traditional outreach methods such as letters and phone calls to work as well for a younger generation fixated on texts and email?These are simple examples of how we can build models that identify the best way—and potentially the best time—to reach out to different types of members. We can incorporate these and other measures into models that help determine the best path to reach members and achieve a response.Modality in an important concept because the member response rate is key to being able to work these cases and bring them to resolution in a timely fashion.
  • Natural language processing for automated document review: Incredible advances have been made in text analytics and natural language processing (NLP), which allow us to read, comprehend, and analyze incoming correspondence (including incoming medical records) and limit the passing of that info onto your staff only when the analytics show there actually may be savings here.
  • Work prioritization: You have an inventory of cases that need to be worked—how do you decide what comes first? Traditional wisdom says to prioritize the biggest cases and the oldest cases. Today, we have the ability to build models that look at the pool of inventory each day and make that determination based on more sophisticated observations in the context of that specific inventory. We may decide to look at when a case is going to court and prioritize that differently only as the court date draws near.
  • Work assignment: Looking at an inventory of cases, we have to decide who gets which cases to work. Individual experiences cause people to have different performance on the same case. There is an opportunity to look at the collective history of employees to determine their strengths and weaknesses and then make sure they are assigned as much of what they are good at as possible.

3. Subrogation recovery

Here, we look to optimize the same four areas that we did in the investigation and resolution step. The same types of analytics that drive investigation and resolution are applicable for the recovery work, where we also need to figure out how to optimize how we assign work and in what order. As an example, we may still be doing outreach to the hospital during recovery except that it’s a different part of the hospital and we’re seeking different information—financial versus clinical. We still have to figure out the best approach and time to contact.

This applies across prioritizing and assigning work as well. The work may be slightly different, but ultimately we should be able to leverage the work done on investigative models for what we’re doing in recovery.

For most organizations, leveraging analytics to drive improvements in payment integrity is more of an evolution that a revolution. I suggest starting small with a very specific problem that you believe analytic models can help you solve. From there, learn from your failures and build upon your successes.

For more information about how to get started on building analytics into your organization, read our blog post, “5 key roles your company needs for data analytics success.”

 

 

Discovery Health PartnersShould health plans expect more from their subrogation efforts? It’s worth a look!
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Prepayment cost avoidance: A closer look at one of 2017’s top payment integrity trends

 

This post is part of an ongoing series about trends happening within the payment integrity space for healthcare payers. This series features contributions from Discovery Health Partners payment integrity experts discussing these trends, why they’re happening, and how they affect health plans. To learn more about all of the top trends, download our 2017 Payment Integrity Trends whitepaper.

Health plans see value in prepayment cost avoidance

Health plans are making a concerted effort to focus more of their payment integrity resources on avoiding inaccurate claims payments up front, rather than recovering erroneous payments on the back end. There is general agreement that this creates more value for a plan. When done successfully, prepayment cost avoidance allows the plan to avoid 100% of the claim cost (vs. the portion they can recover) and it reduces downstream administrative costs associated with recovery. I think we all can agree that having to work a claim multiple times is obviously more expensive than having to work it once.

In addition to financial benefits, prepayment cost avoidance can help health plans positively affect relationships with providers by reducing the burden on them to rework claims that are the responsibility of another payer. I recently saw a statistic that said providers incur an additional 20% – 30% of the cost of any claim they have to rework. Your providers would welcome a reduction in that cost.

Meanwhile, a focus on cost avoidance makes your members more accountable for ensuring that correct eligibility information is on file. Particularly in an area like coordination of benefits, members should feel more compelled to be proactive about providing the health plan with accurate, current information so their claims will be paid promptly without fuss.

Why the cost avoidance shift is happening now

In my experience, this is probably the biggest trend in the industry today. Why? Because of the vendor fees and administrative costs associated with recovering a claim that was paid incorrectly. At a time when health plans are very focused on reducing administrative costs and managing shrinking margins, executives are paying attention to every source of leakage.

While prepayment cost avoidance is not a new concept by any means, it requires a level of maturity within a health plan’s payment integrity operations that some plans are just now reaching. For one thing, more mature health plans typically have stronger data integration and analytics capabilities that allow them to look across multiple sources of information to make more accurate payment decisions quickly.

At the same time, their experience with postpayment recovery operations has given them some data to build a business case for the shift to cost avoidance. In my opinion, the largest barrier to cost avoidance until now has been the inability to justify the effort—cost, resources, technology, and vendors—in terms of a business case. There is no standard ROI or business model to work with, and every plan I’ve talked to uses a different approach. The fact is that health plans need to spend money to create a prepay cost avoidance capability and that means making sure the right people in the organization understand the value and business case for it.

For more information, see our infographic about capabilities required for successful prepay cost avoidance.

Coexistence with postpayment recovery

While prepay cost avoidance should be part of a plan’s payment integrity strategy, postpayment recovery must remain part of that strategy as well. The ability to make a prepayment decision can be hindered by the availability of information and the dynamic nature of eligibility and primacy information. Information often isn’t available fast enough to decide if a claim should be held or pended, so prompt-pay rules dictate that the plan must pay.

Meanwhile, member eligibility status and primacy are moving targets and constantly change, so payments are based on outdated information. For some payment integrity functions, like subrogation, costs can be avoided only on part of the whole recovery. In that case, only the first-party liability costs can be avoided, while third-party liability costs have to be paid.

Finding the right balance for your plan

In our view at Discovery, prepay cost avoidance and postpay recovery have to coexist as an integrated solution so you can follow the transaction through the whole lifecycle. The goal should be to find the right balance for your organization.

As health plans consider the proper balance of prepayment cost avoidance and postpayment recovery across their payment integrity programs, it’s important to remember that this is largely a cultural decision. A plan has to be ready to adopt prepay solutions, and a lot goes into that decision—including regulatory issues, technology capabilities, data availability, subject matter expertise, and the business case.

 

 

Discovery Health PartnersPrepayment cost avoidance: A closer look at one of 2017’s top payment integrity trends
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