Subrogation is no longer just a back-office function. Healthcare costs are rising faster than ever, which is why subrogation has emerged from its status as a “black box” of claims administration into a strategic cost containment tool that helps organizations recover funds from liable third parties and return those dollars to the bottom line.
By adopting these proven subrogation best practices your organization can transform subrogation into a transparent, predictable source of revenue.
1. Improve Identification and Accuracy
The most important first step is to identify all potential subrogation opportunities that could be eligible for reimbursement, which is easier said than done. Intellivo’s internal data shows that more than half of motor vehicle accidents are not properly coded, which means that health plans will miss them as being subrogation-eligible if relying only on information within the paid claim alone. This results in potential recoveries slipping through.
To assess if claims are subrogatable, it is necessary to know what caused the injuries, who was at fault, and if there are alternative liability policies associated. Using multiple data sources, including external insurance feeds and accident reports, improves identification accuracy. A modern, tech-enabled subrogation solution can continuously crawl in real time all public and private databases to find all eligible claims, not just those with obvious ICD codes for motor vehicle accidents or workers comp-related injuries.
2. Minimize Member Disruption
The traditional subrogation model relies heavily on member questionnaires that request members provide additional information about the cause of an injury and who was at fault. Response rates are notoriously low — only 15% of those questionnaires are ever returned — and just a fraction of those lead to reimbursements. Worse, the process often frustrates members during already stressful times.
Modern processes use alternative data sources to obtain the accident information and automation to reduce or eliminate member outreach, improving both recovery rates and satisfaction.
3. Act Fast to Maximize Reimbursements
Timely notification of a reimbursement request, or placing a lien on the alternative policy, is critical. Delays can leave plans competing for limited policy funds, and dollars can be depleted by the time a claim is pursued for subrogation. The goal is to issue lien notices within hours, not weeks or even months as is often the case when identification is dependent on member responses.
Tech-enabled subrogation solutions can automatically confirm case details and issue liens to the appropriate party or parties — all without contacting plan members.
4. Modernize the Process with Technology and Automation
When powered by the right data and technology, health plans and payers can pivot from the manual, reactive, and error-prone subrogation processes of the past to a more consistent, transparent, and effective approach that involves:
- Automated discovery tools identify opportunities faster.
- Integrated workflows ensure lien compilation is complete and accurate.
- Real-time case tracking prevents premature settlements and gives administrators full visibility into outstanding claims.
These advancements reduce administrative burden while improving consistency and scale.
5. Strengthen Quality Control
Consistency of recoveries comes from addressing common but overlooked gaps. One of these gaps is plan language; administrators should regularly review plan language to ensure that it supports the ability to recover the maximum allowable amount. Negotiation is another area that suffers from inconsistency. Case-specific, data-backed negotiation guides help TPAs and health plans in real time to push back against unnecessary concessions and secure fair settlements. Without the proper guardrails and guidance, overworked case managers may be prone to settle too quickly or accept “industry standard discounts” that erode results.
6. Treat Subrogation as a Strategic Priority
Subrogation plays a critical role in strategic cost containment. While many plans emphasize pre-pay review practices, too often they overlook what happens after claims are paid. Without a strong post-pay strategy, significant recoverable dollars go unclaimed. That’s where smarter subrogation plays a pivotal role. Health plans that incorporate post-pay diligence into their overall cost containment strategies achieve better financial outcomes.
Subrogation recoveries can increase by up to 75% through automation and best practices.
— Intellivo Benchmarks Data
7. Choose the Right Subrogation Partner
Relegating subrogation to the back-office can lead to significant revenue leakage, administrative strain, and even damaged or lost client relationships. But when done well, subrogation safeguards margins, reduces waste, and protects the member experience. Having the right team in place, with the proper training, technology, and recovery mindset, is the real differentiator when it comes to health plan subrogation.