Whether an employer decides to handle subrogation itself or outsource it, you need to thoroughly evaluate the options and document the decision process on an annual basis based on performance and defined metrics.

3 ways to strengthen a plan's subrogation strategy

Whether an employer is just getting started with subrogation or needs to refine a plan's approach to it, here are three ways to streamline the process and ensure fiduciary responsibilities are met in order to maximize subrogation recoveries.

Review the current plan's subrogation language. Make sure the recovery language is clear and broad in its application and ensure you take a consistent approach to following the subrogation terms. Don't hesitate to line up a legal resource or tap a knowledgeable third party to ensure nothing is overlooked.

Get ahead of latent risks that can reduce subrogation recoveries. One of the biggest risks is how you respond to document letter requests. Recently, these requests have become more frequent and complicated and the ability to properly and thoroughly respond impacts total reimbursements. You can get ahead of these requests by establishing an effective strategy, approach and workflow to the request before it arrives.

Know when to bring in legal counsel. A well-designed subrogation operation can recover in most cases without legal counsel. Still, larger claims will arise that require legal expertise to negotiate the best result. Also, legal advice can make sure the right processes, language and protocols are in place so that when a subrogation claim arises, it can be properly and efficiently handled. This strategy ultimately saves a lot of time and allows you to maximize recoveries while reducing the risk of not upholding fiduciary responsibilities.

Fiduciary liability based on systemic subrogation breaches

While each subrogation case has its own fiduciary risk profile, the larger concern for anyone responsible for subrogation is the extent that a single case issue reflects systemic problems due to insufficient investigation, oversight and monitoring processes. The way to address this concern is with a thorough investigation and evaluation followed by taking the proper steps to shore up subrogation-based obligations.

Instant Insights /

The fiduciary responsibilities of subrogation: a legal view

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