Many health plans are struggling to reduce costs while
increasing revenue. Plans must leverage next generation
subrogation solutions that deliver powerful results and
significantly impact the bottom line through advanced
technology and optimized business processes.
NEXT
GENERATION
SUBROGATION
SOLUTIONS
injury for which there is no recovery source. To compound matters, when ICD-10 becomes effective, there will be more than 2,400 femoral fracture codes. With predictive analytics, identification of potentially recoverable fractured femurs will be refined based on an analysis of which femur codes, in combination with other codes and populations, are yielding recoveries, and which are not.
As another example, diagnosis codes alone are not selective enough to identify treatment related to many of the current device mass torts. Only with an analysis of all claims data, including procedure codes, will meaningful identification of these mass torts be possible.
In addition, many times we see that identification is hard coded and not customizable. However, one size does not fit all for proper identification. When identification is table driven, thresholds and certain Identification is the foundation of the
recovery process. First, plans need to accurately identify recoverable and cost avoidable cases. This is a delicate balance between over-identification (leading to false positives) and under-identification (leading to missed opportunities). The goal is accurate identification of the right cases to pursue, not more cases.
Use scoring
and predictive
analytics
For purposes of identification, many plans utilize a static list of diagnosis codes based on a subjective determination of which are “good” codes. That list is usually not reviewed with any frequency to determine which codes or combinations of codes are yielding the best cases. Best practice is the implementation of scoring and predictive analytics to understand which diagnosis and
procedure codes, in association with other codes, populations and lines of business, are resulting in recoveries. It’s important to continually analyze all codes, including procedure and revenue codes, as well as other factors such as varying demographics to identify which combinations are consistently helping plans achieve recoveries. If plans are only looking at the first diagnosis code, they are missing valuable information, such as E-codes.
Health plans should continuously learn from their data and use what they learn to refine their identification. For example, the benefits of scoring and predictive analytics is demonstrated by those cases triggered by fractured femur diagnosis codes, which often appear on the subjective, static list of codes described previously. The problem is that fractured femurs often occur in older populations, and more often than not, are the result of an
Health plans that implement intelligent subrogation solutions, including predictive analytics and optimized workflow, generate measurably better results and deliver millions in recoveries.
Subrogation results can be improved by focusing on three areas: • Identifying and maximizing subrogation opportunities and potential
• Optimizing the recovery process and subrogation program performance by leveraging technology and best practices
• Measuring and managing program performance through on-demand metrics, data and transparency
Identification strategies for better
recovery opportunities
Lastly, scoring of member chronic or ongoing medical conditions is important as many identification processes don’t leverage or track these conditions. Not accounting for these conditions results in reinvestigation of claims that will not be recoverable and member abrasion. Best practice is to implement scoring and tracking for member chronic conditions to avoid opening these cases unless another injury is indicated.
codes can be modified or excluded. For example, healthcare system groups may not want the plan to pursue medical malpractice cases or to seek approval prior to pursuit. With a table-driven analysis, plans can turn off data mining for codes that are indicative of medical malpractice cases or flag them for reporting purposes.
Flexible identification tables can also help plans effectively pinpoint the right cases, especially in select
populations. For example, many states have enacted cancer, cardiac and lung presumption laws for firefighting and police officer populations. Under these laws, there is a presumption that those conditions are work-related and the health plans are not responsible for payment. Identification must be flexible to identify these conditions which the plan would actively seek to avoid identifying for other populations.
which can take weeks.
Today, due to capacity restraints, many subrogation IT operations can only load data in a single, one-at-a-time process that results in a backlog of data to be loaded. A backlog delays pursuit and recovery of claim payments, and reduces the possibility of cost avoidance. Being able to react quickly is critical to maximizing recoveries, especially in cases where PIP, no-fault or medical payments coverage is available and limits are usually quickly exhausted.
Additionally, cloud storage has become HIPAA compliant. With the enactment of the Omnibus Rule last year, it has become clear that cloud storage providers are Business Optimizing the subrogation
process by leveraging technology and best practices helps plans ensure performance is maximized. Optimization can occur in three major areas: platform, which is the technology supporting the subrogation process; process, which ensures the plan is most efficiently working the cases; and people, ensuring team members are the right fit for the organization and process. Leveraging the platform and technology is critical to success. Subrogation operations must include technology, and in particular, automation, to increase recoveries with less cost and fewer resources.
Doing more
with less
sounds good,
but how?
• Optimize your platform • Head to the cloud
Utilizing cloud technology is a classic example of how health plans and vendors can do more with less. Cloud technology provides a solution to more easily and quickly load claims and run the identification processes. In addition, cloud storage and servers are infinitely scalable and at a fraction of the cost of maintaining physical data centers. Server capacity may be added on demand - in a matter of minutes – unlike physical data centers,
Optimize platform, process and people
to do more with less
case management software. In many subrogation operations, letters are created and then must be uploaded to some other platform for faxing. Best practice allows a user to create a system letter and fax it directly from the case to the recipient identified in the case. This automation results not only in saved time, but creates an auto generated record of the fax in the case, complete with fax coversheet and confirmation. Additionally, such functionality virtually eliminates HIPAA breaches associated with misdirected faxes as faxes can only be sent to a party associated with the case.
Lastly, software should automatically create a time stamped record of every activity that has occurred, by user, for each case along with a creation of detailed activity reports, which saves significant time expended gathering case activity information necessary for internal and external audits.
Optimize Your
Process
Review processes periodically. Subrogation recovery processes have often been in place for years, without review in light of evolving technology. It is important for plans to re-evaluate their processes and workflows to make Associates. This has resulted in several
positive changes by cloud providers regarding security. The majority of cloud storage providers, including Amazon, Google and Microsoft will execute a Business Associate Agreement. Also, many offer HIPAA dedicated instances which encrypt all data and isolate health plan data from all other data in compliance with the Security Rule.
Automate with
software and
tools
Powerful case management software and automation is a must to do more with less. Subrogation operations must handle workflow in a paperless, intuitive and efficient manner. Next generation subrogation solutions include software that at least provides the following functionality and automation:
• Bar coding
• Automated workflow • Application generated letters
• ISO batched processing • Integrated Imaging • Integrated plan language • Integrated fax
Specifically, case management software should:
Integrate imaging capability to digitize all incoming and outgoing correspondence. Time is wasted hunting through paper files for case-related documents. When imaging technology is integrated into case management software, images of all incoming correspondence can be automatically uploaded or attached to each case allowing for instant access.
Integrate 2D bar coding of letters to automatically associate them to the case upon their return. Most subrogation processes include sending investigation letters or questionnaires. Documents are returned by members indicating whether there is a potential source of recovery. Bar coding allows for returned documents to be automatically associated with the correct case and for the automatic closure of cases where there is no potential recovery source. Similarly, best practices include a web response so members can easily respond to questionnaires via the web. This response mechanism is a win-win for everyone. It allows the member to easily respond to the health plan’s inquiry and provides an automated way to record member responses and automatically close those cases where there is no recovery source.
Integrate fax functionality in
With a table-driven analysis,
plans can turn off data
mining for codes that
are indicative of medical
malpractice cases or flag
them for reporting purposes.
Optimizing the people working on the subrogation team, from call center staff to in-house counsel, is critical to ensuring the client and health plan shine and maximum recoveries are achieved. The first step in optimizing people is to identify the right candidate for the right job.
Once an optimal team of candidates is in place, ongoing training and continuing education is key. Investing in people takes time but the payoff is worth it in the end. Plans should ensure call center staff are thoroughly trained on all sources of recovery and not just trained to handle scripted calls. Similarly, paralegals and recovery analysts need periodic training on the ever changing laws that can impact recoveries. In addition, holding informal round table discussions with team members often results in sharing and refinement of best practices.
Team motivation is essential and helps team members to become invested in recovery success and process. Incentivizing staff with financial benefits works for some, but there are other motivators, such as team motivation by goals and instituting personal metrics as a percent of the team average. Lastly, it is critical that the plan have access to performance metrics to measure success and ensure the right team is in place.
sure they are looking at areas for improvement and leveraging areas of opportunity for increased automation processes. Workflow should leverage automation and be predictive and intuitive, to the extent possible.
The following actions within the case investigation process should be automated:
• Generation of outbound investigation letters upon case creation and automatic creation of work-flow for cases that are out of the letter process. • Automatic case assignment based on type of case. Once the availability of medical payments, PIP or no-fault coverage is identified, a letter should be auto generated to the carrier requesting a copy of the payment log and reimbursement of the available limits up to the amount of the lien. An automatic diary or action item should simultaneously be created for the case worker to follow up with the carrier if no response is received.
Be Proactive
Another way to optimize the performance of a plan’s subrogation program is through proactivity. Although proactivity is a must in all phases of the subrogation process to maximize recoveries, it is especially
critical in the investigation and monitoring stages. The investigation process may include time wasted waiting for a member response to a questionnaire. Instead, the process must be supplemented with proactive investigation by leveraging external resources such as outbound calling, obtaining ambulance run reports, police reports, people locating services and ISO searches.
In addition, plans should ensure that the subrogation process includes legal proactivity by ensuring that subrogation operations include in-house attorneys and attorney involvement throughout the lifecycle of a case. When there is not legal involvement and oversight throughout the subrogation process, the plan or vendor is operating in a crisis mode when there is an issue that requires legal involvement. At this point there have been lapses of time and communications that narrow options for resolving a case on the most favorable terms.
Optimize Your
Team
Technology alone is not enough to maximize recoveries. Subrogation recoveries are never the result of one person’s work -- It takes a united and coordinated team. It’s important to carefully build and nurture the right team of people to maximize success.
Best practice is to require
real-time access to
information and reports
regarding inventories,
communication, correspondence and activities. Enhancing transparency within subrogation operations forces better quality and recoveries.
Many plans also have limited transparency of subrogation program performance. While many plans may receive a monthly report, it often contains very little information and no detailed analysis can be made because the information isn’t in a format that can be manipulated and analyzed. Best practice is to require real-time access to information and reports regarding inventories, recoveries and work metrics. Information is the key to helping plans improve, accurately forecast and make strategic decisions.
black box and do you regularly review processes for holes? • Do you have access to real time analytics to measure performance of your subrogation program?
• Do you have the data to and do you regularly measure staff performance?
Analytics are essential to evaluating the performance and effectiveness of any subrogation program. Armed with meaningful data and metrics, organizations can better analyze performance and make more strategic decisions. Transparency is fundamental to providing meaningful data for analytics purposes.
Today, transparency is lacking in many subrogation programs. If a plan or vendor does not know how their subrogation operations are performing, it is impossible to improve, accurately forecast or make strategic decisions. Plans must be able to evaluate why they are (or are not) recovering on various cases and claim types, by group, by line of business
Ready to get started on evaluating a current subrogation program? Begin by asking the following questions:
• When is the last time your identification process was reviewed?
• What is your rate of false positives and missed opportunities?
across the plan’s subrogation inventory.
Next-generation subrogation solutions require a dashboard that provides on-demand information and metrics. If a health plan utilizes more than one vendor or a hybrid in-house subrogation team/vendor model, the dashboard must integrate data from all operations to provide a full picture of performance.
Currently, many plans have very limited metrics or benchmarking available. In addition, many plans have limited transparency into the details of a subrogation case and do not have access to view vendor activities. Health plans must require full access to all case details, including all in-bound and out-bound
• What new technology and process have you or your vendor implemented in the last 5 years? • Do you know what recoveries are forecasted for each quarter and year and how your subrogation program recoveries are performing against forecast? • Is there any aspect of your subrogation process that is a
