Hedging bets for subrogation success
Insurance finance executives need to understand changes in the market to maximize opportunity and avoid claims losses
A number of changes have affected the success of subrogation in the healthcare insurance setting – changes that financial executives need to be aware of in order to both mitigate negative impact and maximize opportunities.
"With the Affordable Care Act and morphing of the Employee Retirement Income Security Act of 1974, all involved with healthcare insurance are having to adapt – and are doing a good job given the uncertain environment we are in," said Gary L. Wickert, a partner in the law firm of Matthiesen, Wickert, and Lerher, S.C. in Hartford, Wisconsin.
The ACA and ERISA may cause much disruption in subrogation processes for insurers, Wickert said. ERISA preempted state authority over some aspects of health plans, including outlawing subrogation of health claims.
"When the employer mandate kicks in, it will harm subrogation in a profound way," said Wickert. "As many as 40 to 50 million people with employer-based health care will move to private plans through exchanges and no longer be subject to ERISA prohibitions against state-level anti-subrogation laws. To the extent this happens, state anti-subrogation laws will have a devastating effect on health insurance subrogation and reimbursement as they will no longer be preempted under ERISA."
The advancement of technology is both a boon and a curse when it comes to subrogation, depending largely on your vendor's ability to move through available records online.
Many accident reports are now posted online, said Daran Kiefer, an attorney with Kreiner & Peters Co., in Columbus, Ohio, which means that subrogation vendors should be able to find the insurance information about the drivers, for instance, involved in an accident more easily. It is also a more efficient way to search court dockets to find suit settlements subject to subrogation.
One development that should help financial executives trying to manage subrogation is the formation of the National Association of Subrogation Professionals (NASP). This new professional organization has increased the education and professionalism of subrogation service providers and increased communication among these providers throughout the U.S.
"We now have a way to keep track of what is happening in the field throughout the U.S.," said Kiefer, who is currently serving as the NASP president. "Before it was hard for me in Ohio to find out what was happening in California or share tips and ideas with someone in Florida. The group has brought a focus allowing coordination across the country and an ability to look at a broader picture of the industry."
