Imagine hundreds of thousands—or even millions of dollars—in reimbursements for your health plan slipping through the cracks without even knowing it. Every year, this is exactly what happens to many health plans and benefits administrators, whose subrogation efforts fail to identify reimbursement opportunities within a significant portion of paid claims they should be recovering.

Why? Because they’re tripping up on the first, most essential step of subrogation : identification of which paid claims are eligible for subrogation reimbursement.

There are three main reasons for failing to identify cases, all tied to the limitations that result from relying on ineffective subrogation assumptions, processes, and technology.

1. Relying Only on Obvious Indicators

In identifying subrogation-eligible claims within paid medical claims, health plans typically rely on “obvious” indicators. Frequently these are ICD (international classification of diseases) codes specific to motor vehicle accidents (MVAs) and workers’ compensation cases. These are easy enough to flag, but what happens when medical providers don’t specify those specific ICD codes? Missing injury codes undermine claim recovery and lead to missing reimbursements.

Here’s a typical scenario: Someone comes into the hospital or an outpatient care clinic with an injury caused by a car accident. Providers can designate any number of different treatment and diagnosis codes, but they may choose not to include an MVA-specific code to designate the cause of the injury.

That’s because the top priority for providers is treating the patient, not coding for downstream reimbursement scenarios like subrogation. If a provider uses only general injury codes (e.g., a fracture, back pain, or laceration) and skips the MVA code, the claim looks like a typical health plan liability.

Vital information about the underlying cause of a patient’s injury is often the missing piece in the subrogation puzzle.

Automated subrogation solutions catch what relying only on diagnosis and treatment codes alone misses by:

  • Matching claims against external data sets (e.g., accident reports, police records).
  • Flagging claims with consistent patterns (e.g., multiple follow-ups, certain types of imaging or injuries common in accident-related treatment.)
  • Leveraging historical data and member demographics to identify outliers such as injury type to patient age

2. Information Gaps and Delays

To evaluate if a claim is subrogation-eligible in the first place, plans must know the answer to three things; was medical treatment directly related to an accident, what caused the injury and who was at fault, and is there is an alternative insurance policy or active legal suit on the matter? The problem is that assessing cause—the root of the accident and the presumed source of liability—requires gathering information outside of the claim.

For as long as most can remember, health plans have relied on plan members responding to a subrogation questionnaire to gather this information. These forms or letters get sent to members with trauma-related treatment, such as fractures, to get more information about the circumstances or cause of the injury. Questionnaires are intended to “fill in the gaps.”

A health plan may end up sending thousands of these questionnaires annually, depending on the size of their member base. Not surprisingly, the vast majority (as much as 85%, according to Intellivo’s internal data) go unanswered. Members often don’t understand what these letters are intended to accomplish, and the plan is forced to wait on setting a reimbursement effort in motion, if it even moves forward at all.

This process is not only burdensome to plan members. It leads to missed opportunities and creates a huge administrative burden for the health plan, which is left trying to track down information from members, who in turn feel harassed and confused about why they need to respond in the first place.

3. Neglecting Small-Dollar Cases

Identifying subrogation opportunities is complicated, cumbersome, and often costly.  If you’re relying on your staff using long-standing processes and systems to identify and pursue subrogation opportunities, there’s a good chance they’ll prioritize big wins while skipping over small or low dollar claims that simply add to their administrative burden.

Given that health plan subrogation traditionally requires gathering accident information, sending questionnaires, issuing liens, and tracking settlements, this type of informal triage is understandable. But it creates subrogation reimbursement gaps that up-to-date technology can solve.

Without the help of modern subrogation solutions, the ineffective technology and manual effort required can outweigh the perceived financial benefit of the claim recovery.

Reviewing, verifying, and pursuing a claim worth “only” a few hundred dollars may not seem cost-effective or worth the effort, but these low-dollar claims add up quickly. Health plans and TPAs deal with thousands of claims every month. And when hundreds or even thousands of low-dollar opportunities get ignored, the cumulative value can easily reach six or seven figures annually.

Technology-based subrogation solutions establish an automated process that turns those “not worth it” claims into a reliable, recurring source of reimbursements.

How Modern Subrogation Solutions Strengthen Case Identification and Claim Recovery

When subrogatable opportunities are not obvious, small-dollar reimbursement opportunities get skipped over, or plans rely on plan members to provide information to fill in the gaps, the result is the same: lost recoveries, inefficient processes, and an unnecessary financial burden on the primary health plan. Without proven technology to automatically find and validate every potential reimbursement, it’s almost impossible to recover all the payments you’re entitled to.

The good news? Subrogation solutions have come a long way in just the last few years.

Digital transformation, automation, and advanced technologies make it easier, faster, and more effective to prevent these missed opportunities for claim recovery. For example, one Intellivo client identified over 800 missed cases worth $9.2 million simply by improving this first essential step.

For more insights on maximizing reimbursements and stopping the silent revenue leak, download You Don’t Know What You’re Missing.