Author: Brendan Laffey

AI in Healthcare Subrogation: Scaling TPL Identification Without Compromising HIPAA or MSP Compliance

Posted on by Brendan Laffey

For decades, health plans, employers, and Third-Party Administrators have faced a difficult balance in subrogation: identifying hidden Third-Party Liability while protecting PHI, managing Medicare Secondary Payer obligations, and keeping recovery operations efficient at scale.

Traditional reviews based primarily on manual workflows and trauma-related diagnosis codes are no longer enough. Injury narratives often live in places billing codes cannot fully capture: provider notes, accident descriptions, EMS records, pharmacy patterns, and claim histories.

At Other Party Liability Inc. (OPL), we believe well-governed AI can materially improve this process. The opportunity is not simply to “use AI,” but to deploy it within a compliance-first architecture that protects PHI, supports auditability, and keeps experienced recovery professionals in control.

1. Maximizing TPL Identification via Secure NLP

Relying solely on billing codes to identify a subrogation opportunity misses the full narrative of an injury event. AI fundamentally changes this dynamic.

  • Unstructured Data Analysis: AI models utilizing Natural Language Processing (NLP) can securely ingest and comprehend unstructured clinical data (physician notes, EMS reports, EHRs) to flag liability such as a slip and fall or an auto accident long before a diagnostic code is assigned.
  • Proactive Interception: By continuously cross-referencing daily claims feeds with pharmacy and historical records, AI transitions TPL identification from a reactive audit to a proactive, real-time discovery process.

2. Strengthening PHI and HIPAA Compliance

Opening unstructured clinical data to standard AI models introduces massive HIPAA risks. Purpose-built healthcare AI embeds compliance directly into the technology framework.

  • Automated Redaction: AI-assisted redaction, tokenization, and de-identification workflows can reduce unnecessary PHI exposure before clinical narratives are used in broader triage.
  • Air-Gapped Processing: By processing data in secure, localized, or strictly Business Associate Agreement (BAA) governed environments, PHI is processed only in approved, access-controlled environments governed by appropriate BAAs and security controls, and is never used to train unauthorized public models.
  • Audit-Ready Logging: Real-time, operation-level logs provide the strict audit controls required by the HIPAA Security Rule, detailing exact AI access and authorization trails.

3. Automating and Strengthening MSP Compliance

Streamlined Section 111 Reporting: AI automatically maps and validates critical fields like Ongoing Responsibility for Medical (ORM) indicators and Total Payment Obligation to Claimant (TPOC) amounts prior to CMS submission.

  • Conditional Payment Tracking: AI can help track MSPRP-related workflows, organize conditional payment correspondence, compare claimed charges against clinical records, and prepare dispute packages for expert review.

4. The “Human-in-the-Loop” Philosophy

As an expert in this field, I can state clearly: AI is a powerful tool, but it is not a replacement for seasoned legal and compliance professionals. AI lacks the nuanced judgment required to interpret complex ERISA plan language or negotiate a disputed lien reduction with a liability carrier.

At OPL, we champion a “Human-in-the-Loop” model. AI can serve as a tireless compliance assistant auditor and administrative engine surfacing the right claims, redacting the PHI, and flagging MSP reporting requirements. This empowers our recovery experts to focus their energy on what they do best: high-level advocacy, complex negotiations, and closing cases.

Strategic Outlook

Integrating AI into health insurance subrogation is rapidly shifting from a competitive advantage to an industry baseline. By leveraging AI to safely read unstructured medical data and automate the heavy lifting of MSP coordination, health plans can significantly increase net recoveries, eliminate costly regulatory fines, and drastically reduce administrative overhead.

Let’s Connect

The future of subrogation will not be defined by AI alone. It will be defined by organizations that combine AI-driven detection, defensible compliance controls, and experienced human judgment.

At OPL, that is the model we are building: technology that surfaces more opportunities, protects sensitive data, supports MSP compliance, and gives recovery professionals the tools to resolve cases faster and more effectively.

If you are evaluating how AI, payment integrity, and healthcare recovery intersect, I welcome the conversation.

Brendan Laffey SVP Payment Integrity

Other Party Liability

How well are States complying with Medicaid’s third-party liability requirements?

Posted on by Brendan Laffey

Medicaid is a joint federal-state program that provides health coverage to millions of low-income Americans. However, Medicaid is not supposed to pay for services that are covered by other sources, such as private insurance, Medicare, or workers’ compensation. This is known as the third-party liability (TPL) requirement, which ensures that Medicaid functions as the payer of last resort and avoids unnecessary spending.

The Office of Inspector General (OIG) recently conducted an audit of five States (Illinois, Indiana, Michigan, Ohio, and Wisconsin) to assess their compliance with TPL requirements. The OIG found that the States faced ongoing challenges in meeting TPL requirements, such as identifying and verifying other sources of health coverage, collecting and reporting accurate TPL data, and recovering payments from third parties.

The OIG also found that the Centers for Medicare & Medicaid Services (CMS) did not provide adequate guidance, oversight, and technical assistance to the States to help them address these challenges. The OIG recommended that CMS take several actions to improve the States’ TPL performance, such as issuing clarifying guidance, enhancing data quality checks, conducting regular reviews, and providing targeted training and support.

The OIG’s report highlights the importance of ensuring that Medicaid pays only for services that are not covered by other sources. This can help save taxpayer dollars and preserve the program’s fiscal sustainability. The OIG’s recommendations can help CMS and the States improve their TPL processes and outcomes.

How Other Party Liability, Inc. Can Help You Recover Medicaid Overpayments

Medicaid is a joint federal and state program that provides health coverage to millions of Americans who are eligible based on their income, disability, or other factors. However, sometimes Medicaid pays for services that are also covered by another payer, such as a private insurer, Medicare, or a workers’ compensation plan. This results in overpayments that Medicaid is entitled to recover from the other payer. This process is known as third party liability (TPL).

According to a recent report by the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services, the Ohio Department of Medicaid (ODM) did not always identify and recover Medicaid overpayments from other payers. The report found that ODM did not have adequate policies and procedures to ensure that TPL information was accurate and complete, and that overpayments were promptly identified and collected. As a result, ODM missed opportunities to recover an estimated $51.6 million in Medicaid overpayments from other payers in fiscal year 2015.

This is where Other Party Liability, Inc. comes in. We provide TPL services to help state Medicaid agencies identify and recover Medicaid overpayments from other payers. We have the expertise, technology, and resources to handle all aspects of TPL, including:

  • Data matching and verification: We use advanced data analytics and verification techniques to match Medicaid claims with other payer information, and to verify the accuracy and completeness of TPL data.
  • Overpayment identification and recovery: We use sophisticated algorithms and rules to identify potential overpayments, and to pursue recovery from other payers through various methods, such as billing, coordination of benefits, subrogation, and cost avoidance.
  • Reporting and monitoring: We provide comprehensive and timely reports and feedback to our clients on the status and outcomes of TPL activities, and we monitor and evaluate the performance and effectiveness of our TPL services.

By outsourcing TPL services to Other Party Liability, Inc., state Medicaid agencies can benefit from:

  • Increased savings and revenue: We can help state Medicaid agencies recover more Medicaid overpayments from other payers, and reduce the amount of future overpayments, resulting in significant savings and revenue for the state and federal governments.
  • Improved compliance and quality: We can help state Medicaid agencies comply with federal and state laws and regulations regarding TPL, and improve the quality and accuracy of TPL data and processes.
  • Reduced administrative burden and cost: We can help state Medicaid agencies reduce the administrative burden and cost of TPL activities, and free up their staff and resources for other core functions.

If you are interested in learning more about our TPL services, please contact us today. We would love to hear from you and discuss how we can help you recover Medicaid overpayments from other payers.

https://oig.hhs.gov/oas/reports/region5/52100013.pdf

Medicare Secondary Payer (MSP) NGHP Reporting Entities CMS Update Alert

Posted on by Brendan Laffey

CMS: NGHP Responsible Reporting Entities (RREs) that both Med Pay and
Personal Injury Protection (PIP) coverage should be included when reporting the No-Fault Insurance Limit (Field 61 of Claim Input File). As such, NGHP RREs must combine both Med Pay and PIP coverage limits for a policy when they are separate coverages being paid out on claims for the same injured party and incident under a single policy.

Health plans must continue to innovate claim systems and recovery modules, incorporating the OHI and MARx weekly and monthly update files into their claim mining Third Party Liability software.

https://www.cms.gov/files/document/alert-reporting-no-fault-insurance-limit-non-group-health-plan-nghp-claim-input-files.pdf

OPL Inc. to Sponsor and Workshop Leader NOPLG 2019

Posted on by Brendan Laffey

The National Other Party Liability (NOPLG) conference, scheduled for March 31-April 3, Savannah, GA. The NOPLG annual educational seminars are open to BCBS employees, BCBS subsidiary employees and BCBS OPL contractors. NOPLG brings together participants for workshops, networking, and discussion of issues involving Coordination of Benefits, Subrogation, Workers’ Compensation, Medicare Secondary Payer, OPL Management and Overpayment Identification and Recovery. For more information visit
http://www.noplg.org/