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 Complex billing processes, changing regulations, outdated and disparate data systems, and overlapping coverage all contribute to improperly paid claims.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.
Subrahmanyam ManthaThree ways to tackle the high cost of waste
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
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.
Trend #1:
“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.
Trend #2:
“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.
Trend #3:
“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
Health plans face increasing pressure to ensure payment integrity. Discovery CEO Jason Brown explains recent trends and how they’re shaping the new decade.
Administrative complexity continues to drive the high level of waste in healthcare. Learn how to reduce improper payments with an optimized payment integrity approach that blends advanced analytics with human expertise.
The number of health plan members that have other health insurance keeps increasing. Are your methods for verifying eligibility and insurance information keeping up? Learn how to modernize your COB efforts and transition from recoveries to cost avoidance.
As these three cases demonstrate, the Discovery Coordination of Benefits solution was designed specifically to address critical COB challenges, with an emphasis on flexible delivery models that support our clients’ unique requirements.
Cost avoidance is more than just a way for Medicare Advantage plans to improve their bottom line; it gives them a competitive edge in a crowded market.
The future of healthcare coordination of benefits might not be as exciting as humans living on Mars or Oprah for president, but there are some interesting things happening in COB that are changing the way health plans approach this age-old process.
How do you take your Coordination of Benefits to the next level? A technology-enabled approach to COB can help identify additional opportunities to save and recover while minimizing member and provider abrasion.
For many health plans, the challenges associated with subrogation―the process of recovering healthcare claim payments that are a third-party’s responsibility―are significant. Outdated identification methods, potential member abrasion, slow validation processes, and marginal settlement rates all impact your ability to appropriately contain and recover costs.
How can you overcome these challenges and maximize recoveries in less time and at a lower cost? Software-as-a-Service (SaaS) applications are a way to enhance your subrogation programs and recoveries. Plans are finding that the combined power of transformative technology and in-house expertise facilitates a more effective, data-driven approach for finding and validating recovery opportunities with minimal member abrasion.
With this in mind, here are three simple but powerful ways SaaS solutions can help you optimize your subrogation operations:
#1: Make in-house recovery management more efficient and insightful
The power of automation allows health plans to do more with less. Built-in algorithms, advanced data-mining techniques, and machine learning work to effortlessly manage cases and shorten the information gathering process. Reporting and analysis give instant and sharable views into recovery efforts. Combine these solutions with user-defined customization options that can be tailored to your needs, and the once burdensome task of subrogation becomes a breeze.
#2: Gain accessible, easy-to-use, highly scalable, and secure solutions
With SaaS, there’s no need for rigorous installs or startups. The system can scale drastically and on-demand, depending on your organization’s needs. Most importantly, the security and fail-safe measures in place not only guarantee continued operations in an emergency, but also consistently ensure that HIPAA and HITRUST CSF® certification requirements are met.
#3: Do more at a lower cost
With the advent of cloud technology, SaaS offers a significant boost to the bottom line for any business. Every application can be accessed from a simple desktop, and processes have been streamlined to make it as painless as possible. Regular, non-disruptive system enhancements work to improve your solutions as well, so your recovery efforts—and your business—continually evolve without interruption.
In a highly competitive marketplace where claims accuracy and cost containment are paramount, SaaS applications can empower your plan with improved efficiencies and productivity―facilitating more accurate payment decisions and generating greater recoveries.
Health plans face increasing pressure to ensure payment integrity. Discovery CEO Jason Brown explains recent trends and how they’re shaping the new decade.
Administrative complexity continues to drive the high level of waste in healthcare. Learn how to reduce improper payments with an optimized payment integrity approach that blends advanced analytics with human expertise.
The number of health plan members that have other health insurance keeps increasing. Are your methods for verifying eligibility and insurance information keeping up? Learn how to modernize your COB efforts and transition from recoveries to cost avoidance.
As these three cases demonstrate, the Discovery Coordination of Benefits solution was designed specifically to address critical COB challenges, with an emphasis on flexible delivery models that support our clients’ unique requirements.
Cost avoidance is more than just a way for Medicare Advantage plans to improve their bottom line; it gives them a competitive edge in a crowded market.
The future of healthcare coordination of benefits might not be as exciting as humans living on Mars or Oprah for president, but there are some interesting things happening in COB that are changing the way health plans approach this age-old process.
How do you take your Coordination of Benefits to the next level? A technology-enabled approach to COB can help identify additional opportunities to save and recover while minimizing member and provider abrasion.
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.
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.
