How Health Plans Can Repair the “Leakage Loop” and Get Subrogation Reimbursements Flowing
Like a slow but steady faucet drip that goes unnoticed for too long, missed opportunities for subrogation reimbursement can add up to a very costly long-term money leak, with health plans potentially missing out on millions of dollars every year.
Health plans leave subrogation reimbursements on the table for a number of reasons, ranging from undetected claims to late lien filings to poor case management. Rather than isolated failures, these reimbursement gaps are systemic and can lead to permanent leaks in the recovery process — unless they are addressed and fixed. These gaps build on one another in an ever-repeating “leakage loop,” where each weak point compounds the others and undermines the effectiveness of the overall subrogation process:
- Inadequate case detection overlooks cases altogether
- Delayed identification leads to missed or diminished recoveries
- Overlooked additional claims which are related to injury limits reimbursement amounts
- Inexperienced negotiation risks shortchanging recoveries
- Inconsistent case management execution leads to subjective decision-making and inconsistent results
In a recent webinar hosted by BenefitsPro, Intellivo CEO Laura Hescock and COO Charm Pratt discussed five common areas of revenue leakage and how modern subrogation best practices can help health plans repair these leaks to keep more money flowing to the bottom line.
1. Inadequate Case Identification
The first and most significant area of leakage is failing to identify and pursue every recoverable opportunity. “If cases are not found in the first place, those dollars go unclaimed, and this is a substantial area of leakage for a health plan,” Hescock said.
To succeed at this first essential task, you need to know:
- Were the medical expenses paid as a result of an accident?
- What was the accident, and what caused it?
- Who was involved and who was at fault?
- Are there alternative policies that are liable for paying the claim?
Unfortunately, this information is often missing or difficult to confirm. And, as Hescock points out, reliance on member questionnaires to investigate and obtain this information is disruptive, antiquated, and ineffective. According to Intellivo’s internal data, only 15% of member questionnaires are ever returned, leaving health plans that rely on them at a substantial disadvantage in identifying and promptly acting on subrogation opportunities.
In addition, Intellivo’s data also shows that 56% of claims related to auto accidents do not have an ICD code that identifies it as a motor vehicle accident (MVA). Given that MVAs typically make a vast portion of all subrogatable claims, this one area alone can have a major impact on subrogation outcomes for a health plan.
Fixing the Leak:
To identify all eligible subrogation opportunities, you need a complete picture of the accident and the medical claims that result from it. This requires having the right data from both internal and external sources. Modern subrogation technology efficiently and effectively integrates data from multiple sources, enabling your team to identify cases in real-time. They are then able to more easily determine next steps to maximize reimbursements.
2. Delayed Identification or Action
Hescock noted that time is of the essence in subrogation. In the case of a car accident, multiple parties may be involved, and all of them may be competing for the same limited pool of funds. COO Pratt added, “With each passing day that an eligible claim goes undetected, the funds associated with that policy could be significantly reduced or exhausted.” “This is a great example of where operational lag actually puts the dollars that you’re entitled to at risk.”
Fixing the Leak:
Plans should implement automated systems that continuously cross-reference for subrogation opportunities across multiple data sources, not just paid claims data. As more data points flow into the process, the more precise and timely identification becomes.
3. Undercalculated Claims Reimbursement Totals
Health plans also come up short because they simply aren’t asking for enough. To recover all the expenses related to an accident, you need to approach it as an entire episode of care, not just the initial treatment. For a single accident, there could be numerous bills from multiple providers, including the surgeon, anesthesiologist, and rehabilitation specialist. There may also be bills for possible complications or further treatment over an extended period of time.
Unless you are using technology to automatically connect the dots on related claims, you are going to depend on an individual to make an accurate assessment. Ensuring that liens are calculated accurately and completely not only requires the right clinical expertise but also an investment of time, which creates an administrative burden.
Fixing the Leak:
Rather than manually linking claims, health plans can use logic-based automation to group related services and treatments into a cohesive episode tied to the injury. This ensures that all relevant claims are accurately captured, appropriately valued, and compiled into a defensible lien, minimizing underreporting or duplication.
4. Negotiation Know-How
Even if you’ve put together an accurate and complete lien, you could still run the risk of leakage during the negotiation process. Without a standardized negotiation framework, health plans are flying blind.
“Imagine that you’re negotiating with a lawyer who’s probably done this over a thousand times,” Pratt said. “They might tell you there is a standard or industry discount totaling about 25% of the dollars you’re trying to recover. But that is just a tactic. And if you agree to them, you’re going to take a haircut.”
Fixing the Leak:
By using tools that provide benchmarks, case precedents, and recommended negotiation ranges based on historical outcomes and case strength, plans can reduce variability and maintain fiduciary compliance. A guided negotiation framework not only makes the process faster but also safeguards the plan by enforcing consistent, transparent practices across teams.
5. Inconsistent Execution
Health plans often rely on case managers to make decisions about which cases to pursue and how aggressively to pursue them. This can lead to inconsistencies, especially when those case managers lack the necessary expertise or training to handle more complex cases.
“The process is highly manual, first and foremost,” Pratt observed. “Second, it is managed by an individual who may not have the right tool set or system to conduct their own investigation. So they’re ending up having to chase the information to tell that full story.”
Fixing the Leak:
Modern subrogation technology can build a data intelligence ecosystem that puts relevant data in the hands of case managers in real time. Such a system can set automatic thresholds for which cases to pursue. This transforms the process from being fragmented, subjective, and reactive into one that is proactive, predictive, and precision-driven, Pratt explained.
“The key here is connected intelligence,” she said. “It’s about being able to integrate the right data set and inject the right workflows that allow you to yield the same consistency and outcomes. Data is really the backbone of a modern subrogation process.”
Data is the backbone of a modern subrogation process.
– Charm Pratt, Chief Operating Officer, Intellivo
How Health Plans Can Break the Leakage Loop
Repairing any one source of leakage helps but doesn’t completely shore up the weaknesses in the subrogation process. To maximize reimbursement opportunities and make subrogation a reliable lever in strategic cost containment, it’s essential for health plans to execute consistently and fix these five leaks.
Instead of relying on outdated tools or manual processes for case identification, lien compilation, and negotiation, health plans should consider implementing a modern subrogation solution that leverages technology to:
- Automatically identify all subrogation opportunities in real time with no member contact
- Integrate internal and external data sources to optimize lien compilation and management
- Provide standardized frameworks to negotiate effectively for maximum reimbursement
- Automate critical workflows to inform decision making and deliver consistent outcomes
By embracing each of these technology-enabled components, the subrogation process becomes not only more efficient, but significantly lower risk and more likely to produce stronger financial results while meeting fiduciary obligations.
“The most successful organizations are the ones that treat their subrogation process like a forensics unit,” Pratt said. “So think: clean data, connected intelligence, and coordinated action.”
Watch the webcast replay to discover how your health plan can repair these five common areas of revenue leakage and reap the benefits of a modern subrogation process.