Overcoming Subrogation Challenges

Common Subrogation Mistakes and How to Avoid Them

We’ve all heard the saying, “What you don’t know can’t hurt you.” But when it comes to subrogation, that old adage couldn’t be more wrong. From the occurrence of an accident involving third-party liability to the completion of negotiations and receipt of reimbursement dollars, there are numerous points throughout the subrogation process where things can go awry.

To begin with, if you don’t know about a subrogatable claim in the first place, there’s no way to seek reimbursement, leaving your health plan on the hook for someone else’s medical bills. This critical information gap tops the list of common subrogation challenges and mistakes, but there are plenty of others:

1. Failure to identify all eligible claims correctly: To be reimbursed, a plan must first identify a medical claim as eligible for subrogation. Traditional methods too often let non-obvious, subrogation-eligible claims fall through the cracks.
2. Relying on subrogation questionnaires: Sending questionnaires to members to obtain information of the cause of an injury has been the long-accepted way to locate eligible subrogation claims. However, only 15% of accident questionnaires are ever completed, and only 4% result in a successful recovery, according to Intellivo’s internal data.
3. Lack of external data: Having access to a rich data ecosystem, including access to external public records and the ability to recognize patterns from historical caseloads, is a must-have for streamlined subrogation that yields results. Modern subrogation requires incorporating and working with data from multiple sources.
4. Missing or poorly written health plan language: Subrogation efforts can be limited by the overall stipulations and parameters of the health plan’s language. Ensuring you have the right plan language still requires having the right legal counsel. For more, see details in the chapter on Legal Aspects of Subrogation.
5. Failure to issue liens promptly and/or missing deadlines: Delays in issuing liens reduce recoverable dollars. Time is of the essence when it comes to subrogation. One TPA lost $9.2 million across 814 cases due to delayed or missed actions.
6. Declining to pursue smaller recovery amounts: The vast majority of subrogation opportunities are not high-dollar or high-profile. Identifying every claim, no matter how small, translates into meaningful savings when multiplied across thousands of claims.
7. Lack of negotiation preparation or skills: The mindset of every health plan should be to represent the best interest of the plan. Too often, plans shortchange reimbursement potential, especially at the outset of negotiations.
8. Failing to capture all associated costs related to an injury: After an injury, there could be numerous bills from multiple providers, both immediately and over time. To recover all expenses related to an accident, you need to monitor and account for the entire episode of care, not just the initial treatment.
9. Lack of transparency and reporting: You can’t monitor what you can’t see. Without some form of reporting, administrative teams struggle to keep track of open cases, outstanding liens, the status of negotiations, and total recovery potential.
10. Failure to embrace new technology: From the review of paid claims all the way to recovery, relying on human staff alone risks overlooking claims and revenue leakage due to poor data and inconsistent processes.