When Selecting a Healthcare Subrogation Vendor, It is Critical to

When Selecting a Healthcare Subrogation Vendor, It is Critical to Select a Vendor That Understands

In the third post in this series, I explained why the most effective healthcare subrogation companies are those with experience and a proven track record. In this post, I will explain why it is so important for a healthcare subrogation vendor to understand healthcare subrogation from a legal perspective.

I really can't stress too much the importance of selecting a vendor that understands subrogation from a legal perspective. What people who work for the vendor am I talking about, what would I expect them to know, and how, if I were evaluating vendors, would I test the level of legal knowledge?


Everybody within the organization that may interact with a participant or a lawyer must have some legal understanding regarding healthcare subrogation. Even the staff level -callers- or -investigators- must, at the very least, be able to spot legal issues and exercise good judgment in seeking assistance from supervisors. But supervisors, even those without law degrees (or only paralegal degrees) need to be able to have a working knowledge of the legal issues they will face in handling healthcare subrogation matters. For example, they need to understand the difference between an ERISA plan and a non-ERISA plan, between a self-funded plan and insured plan (and why it matters in some states), and they need to have a working knowledge of how common concepts like the make-whole rule and common fund doctrine are applied depending upon the federal appellate jurisdiction and the plan language. I can assure you that if you compare non-lawyer supervisors with respect to knowledge in these areas, you will vast differences between some companies.

To be considered an excellent healthcare subrogation company, a company must be able to demonstrate that it is fluent in the concepts above and these, among others: (1) how collateral source rules and allocations impact recovery rights; (2) recovering from wrongful death cases; (3) how to argue that a plan fiduciary could bring a lawsuit where the plan is administered and the circumstances where a plan might want to be able to do that; (4) when an employer's benefits committee needs to review a subrogation matter and how to present that issue to a committee; and (5) how medical malpractice laws can sometimes complicate a healthcare subrogation matter and how to deal with those potential complications.

So how can you test this knowledge? Well, first, you are going to have to become somewhat knowledgeable yourself. After that, my recommendation is that you, on the fly, ask legal hypotheticals of the companies you interview and see how they respond. You'll learn very quickly which of these companies are pretenders and which ones really are knowledgeable.

As always, the purpose of focusing on a legal knowledge is finding a healthcare subrogation vendor that will help you move from $7.00 PMPY to $17.00 PMPY, or more.

Next time, I will discuss the importance of selecting a vendor that has principals who are recognized as industry experts.

To see a short video on my YouTube Channel about this topic, please see somekeyword. Please subscribe to my YouTube Channel while you are there. To sign up to attend my webinar, The Five Most Costly Health Plan Mistakes Companies Make Today, please point your web browser to somekeyword.

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