3 bad habits that are good for healthcare subrogation

February 4, 2019 Heather Rodemann
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 resource page.

Heather Rodemann3 bad habits that are good for healthcare subrogation
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Should health plans expect more from their subrogation efforts? It’s worth a look!

October 17, 2017 Discovery Health Partners
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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Calculating cost avoidance: A closer look at one of 2017’s top payment integrity trends

August 30, 2017 Discovery Health Partners
Calculating 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.

Making the business case for prepayment cost avoidance

As health plans more aggressively adopt cost avoidance as a payment integrity tactic, many struggle with the business justification. There simply is no industry-standard method of quantifying cost avoidance.

With pay-and-chase models of recovery, it’s usually pretty simple – you calculate the recovery and if you’re using a vendor, you subtract a percentage contingency fee. It works nicely in a spreadsheet formula and the extra cash looks great in your P&L. But if you’re avoiding—not recovering—dollars, how do you measure the return on investment? How do you calculate the costs avoided?

Health plans have been left to their own devices to determine the right method to quantify the business case for cost avoidance. And to compound this issue, the method of measuring cost avoidance and the business case isn’t consistent across all types of payment integrity. The calculation and return on investment will differ depending on whether you’re looking at coordination of benefits, subrogation, claims analytics, etc. Based on my experience, even among the largest health plans, there is incredible diversity of opinion on how to measure and value prepay. Read on to learn about some examples that I’ve come across.

Claims cost multiplied by estimated months of savings

This large commercial plan with over 40 million members uses average claim cost per member to calculate potential savings from cost avoidance. The plan first identified “leads,” or members suspected of having other coverage, and sent them to Discovery Health Partners to verify other coverage.

Of those leads, 10% have been confirmed to have other primary coverage. The plan estimates that it would have paid claims for those members for 6 months before catching the error. By multiplying the 6 months times a monthly claims cost per member, the plan figures it avoids more than $7 million in erroneous payments.

This method provides a general sense of the value of cost avoidance, which allows this plan to justify the cost of using a vendor as a partner for some of its prospective COB processes. Not all buy into this method, though. Some might argue that not all members would incur the average claim cost in all 6 months, and some of the costs, had they been paid up front, likely would have been recovered on the back end. This method doesn’t account for that.

On the other hand, it accounts for neither the administrative cost avoided by not having to recover on the back end nor the fact that a percentage of recovery efforts are unsuccessful. In the end, this plan felt that these balance each other out and the methodology works for now.

In another example for COB cost avoidance, one of our clients uses the average cost of claims for each member over the previous 12 months and applies that value over the next 12 months.

Costs to consider when calculating ROI on cost avoidance

Once you have identified a method of calculating the value of cost avoidance, you need to understand the costs that are involved in developing cost avoidance capabilities.

  • Vendor fees. How vendors make revenue will depend on the method the health plan uses to calculate cost avoidance. Options could include contingency, transactional (per validation), monthly, and fixed fees.
  • Resources. Subject matter expertise and operational expertise will help ensure you avoid the right costs at the right time with minimal member and provider abrasion.
  • Technology. Software and other programs allow you to integrate the data from correct sources into your systems so you can make timely pre-payment decisions. This could include applications to manage the workstream.

The move to prepay cost avoidance requires a set of skills that health plans need to develop or acquire in order to be successful. These should be considered when calculating the cost. See our infographic for a list of these capabilities.

 

 

 

 

 

 

 

 

Discovery Health PartnersCalculating cost avoidance: A closer look at one of 2017’s top payment integrity trends
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Discovery announces webinar on payment integrity analytics

August 1, 2017 Discovery Health Partners
Discovery announces webinar on payment integrity analytics

Data scientists bring fresh thinking to payment integrity processes

 

ITASCA, IL (August 1, 2018)—Discovery Health Partners, a provider of payment and revenue integrity solutions for healthcare payers, will host a webinar August 8, 2017, to share the principles of data science that are transforming the way payment integrity processes are managed, with measurable impact on recovery results. Titled “Payment Integrity: Using analytics to drive better results,” the webinar features Discovery healthcare payment integrity and analytics expert Steve Forcash, Vice President of Analytics.

The webinar will explore how principles of data science are being applied to real-world payment integrity processes and offer actionable steps for getting started with an analytics agenda:

  • What levers are available in the typical payment integrity business process
  • How data science techniques ensure we pick the right cases, helping maximize client savings while minimizing member and provider abrasion
  • How to identify capabilities that are largely transferable across payment integrity functions
  • How advanced analytics can position postpayment solutions for a shift to prepayment or hybrid pre/postpayment solutions

Seats remain available for this free webinar. To register for the webinar, visit http://bit.ly/Payment-Integrity-Webinar

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About Discovery Health Partners

Discovery Health Partners, a division of LaunchPoint, offers payment and revenue integrity solutions that help health payers improve revenue, avoid costs, and enhance the member experience.  We offer a unique combination of deep healthcare expertise and analytics-powered technology solutions to help our clients improve operational efficiency, achieve financial integrity, and generate measurable results.  More information about our solutions, including Coordination of Benefits, Eligibility, Medicare Secondary Payer Validation, and Subrogation is available at https://www.discoveryhealthpartners.com.

 

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Discovery Health PartnersDiscovery announces webinar on payment integrity analytics
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2017 National Other Party Liability Group Conference

January 20, 2017 Discovery Health Partners
2017 National Other Party Liability Group Conference

Date: April 25-28, 2017

Location: Glendale, AZ

Venue: Renaissance Glendale Hotel and Spa

Join Discovery Health Partners at the 2017 National Other Party Liability Group (NOPLG) conference in Glendale, AZ. The NOPLG is an organization of professionals who manage Other Party Liability (OPL) activities in Blue Cross Blue Shield (BCBS) Plans across the nation.  Our annual educational seminars are open to BCBS employees, BCBS subsidiary employees and BCBS OPL contractors.  We bring together participants for workshops, networking, and discussion of issues involving Coordination of Benefits (COB), Subrogation, Workers’ Compensation (WC), Medicare Secondary Payer (MSP), OPL Management and Over-payment Identification and Recovery.

For more information, please visit the 2017 NOPLG Conference webpage.

 

 

Discovery Health Partners2017 National Other Party Liability Group Conference
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Intelligent Subrogation delivers better results with powerful analytics and optimized workflow

May 1, 2014 Discovery Health Partners ,
Intelligent Subrogation delivers better results with powerful analytics and optimized workflow

Case Study: Next-generation subrogation solution drives millions in recoveries for health plans

Over a two-year period, a prominent health plan with more than 110,000 members has recovered over $3.9 million using Discovery Health Partner’s Intelligent Subrogation solution.

Based on the success of this program, the health plan has expanded its relationship with Discovery Health Partners to include additional cost containment solutions — including Coordination of Benefits and Medicare Secondary Payer (MSP) Validation and Premium Restoration — and has improved its bottom line by $16 million dollars since implementation.

To learn how Intelligent Subrogation can improve your results and bottom line, just use the quick download request below.

 

 

Discovery Health PartnersIntelligent Subrogation delivers better results with powerful analytics and optimized workflow
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Discovery Health Partners wins new healthcare customers

September 19, 2013 Discovery Health Partners ,
Discovery Health Partners wins new healthcare customers

Intelligent Cost Containment Software Delivers Transparency, Control and Savings 

ITASCA, IL (September 19, 2013) – Discovery Health Partners  today announced that it has added new healthcare organizations to its client roster and expanded current customer portfolios, demonstrating demand for effective analytics-driven payment integrity solutions that reduce and contain healthcare spend.

Since January, Discovery Health Partners has won multiple new healthcare clients seeking proven solutions for healthcare subrogation, COB recovery and eligibility services.  They include Paramount Health Care, a large southern integrated health care services system, a leading mid-Atlantic health plan, and a leading western health plan.

Additionally, current client Lovelace Health Plan expanded its partnership with Discovery Health Partners with a Cost Containment Blueprint consulting engagement, which identified new opportunities for cost savings and revenue generation.  Fallon Community Health Plan, another client, extended its relationship with Discovery Health Partners to include Medicare Secondary Payer (MSP) Validation and Premium Restoration in addition to existing services provided for subrogation and COB.

“Discovery Health Partners has been a true partner in every sense for our recovery and cost avoidance programs,” said Karen Eskridge, Chief Operations Officer, Lovelace Health Plan.  “Their team has helped us to reduce erroneous claims payments and improve reporting; working together, we’ve also broken down obstacles and identified new savings opportunities we hadn’t seen before.”

Discovery Health Partners recently published the following client successes:

  • Within the first year, a mid-sized health plan with more than 230,000 members (including 30,000+ Medicare Advantage members) realized nearly $3.5 million in subrogation and COB recoveries.  By adding MSP Validation and Premium Restoration, the health plan recovered an additional $7.4 million dollars in six months. The health plan’s total two-year forecast for these services is nearly $15 million.
  • A community health plan with more than 200,000 members (including 30,000+ Medicare Advantage members) realized incremental savings of more than $2 million with Discovery Health Partners’ subrogation and COB services in seven months. The health plan expects to recover an additional $2.4 million in subrogation claims over the next six to 12 months. MSP Validation and Premium Restoration Services are expected to recover an additional $8.4 million in 2013.
  • Seeking greater transparency and the ability to respond faster to employer group reporting requests, another health plan adopted Discovery Health Partners’ cloud-based subscription software for on-demand analytics and case management tools. As a result, the health plan decreased their resources, support needs, and capital expenditures.

“Our flexible offerings, client advocacy, and leading-edge tools are highly valuable to our clients’ cost management programs,” said Paul Vosters, President and Chief Operating Officer, Discovery Health Partners. “We help clients look holistically at their cost containment efforts, and we will customize a plan and approach to meet their unique requirements. We quantify the results to show the difference we make.”

 

 

 

 

 

 

 

 

 

 

 

 

Discovery Health PartnersDiscovery Health Partners wins new healthcare customers
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Laura Cohen joins Discovery Health Partners

March 12, 2012 Discovery Health Partners

ROLLING MEADOWS, IL (March 12, 2012) – Discovery Health Partners, a provider of cloud-based healthcare cost containment solutions, announced the addition of its newest executive management team member, Laura Cohen.  As Director, Client Advocacy and Coordination of Benefits (COB), Ms. Cohen serves as an ambassador for client engagements and manages new client onboarding and customer relations, including retention, growth, satisfaction, reporting, and business development.  Dually, Ms. Cohen oversees operations and product development for Discovery Health Partner’s COB offering.

“Laura’s extensive experience directly aligns with our priorities, which are to continue serving our growing roster of customers with excellence; further build and differentiate our COB solution; and expand the business,” said Paul Vosters, President and Chief Operating Officer of Discovery Health Partners. “Laura’s customer focus, industry knowledge, and financial savvy are a tremendous asset.”

Ms. Cohen brings a 20-year track record in health insurance customer service, business development, financial operations and administration, and profit-building. Prior to joining Discovery Health Partners, Ms. Cohen was Vice President of Operations at ACS Recovery Services, a Xerox Company. In this role, Ms. Cohen had complete responsibility for all claim overpayment identification and recovery services for large healthcare payers. Her achievements were numerable, including significant revenue and profit growth, division performance optimization, increased staff productivity. In 2009, Ms. Cohen was named Line of Business Innovator of the Year. She also earned the designation of Lean Six Sigma Champion.

Previously Ms. Cohen served in the capacity of Line of Business Controller at ACS, where she was responsible for transitioning all Primax Recoveries financial reporting, cash management, human resources, payroll and benefit functions to ACS after acquisition, and handling ongoing reporting to ACS corporate thereafter. Previous to the ACS acquisition, Ms. Cohen was Chief Financial Officer/Controller for Primax. Earlier in her career, Ms. Cohen worked at BABCO Investments as Controller/Consultant and at Advanced System Applications in various financial and accounting roles.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discovery Health PartnersLaura Cohen joins Discovery Health Partners
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