Strong Subrogation Matters More Than Ever in an Era of Denials, Disputes, and Appeals

By: Matthew Kyle

Health plans are facing increasing scrutiny over claim denials as new data shows that external independent review organizations overturn more than half of disputed medical, mental health, and surgical claims. Researchers found that overturn rates in New York climbed from 38% in 2019 to nearly 53% in 2025, fueling calls for greater federal and state oversight of payer review practices and automated denial processes. https://www.healthcaredive.com/news/insurance-denials-overturned-appeal-new-york-study-JAMA/817490/

For self-funded plans, this presents graves challenges. Plan fiduciaries have an obligation to protect plan assets and control healthcare costs, yet denial decisions are increasingly being questioned by regulators, providers, participants, and independent reviewers.

This is where a strong subrogation program becomes especially valuable.

Rather than focusing on denying or limiting claims, subrogation provides an avenue to recover medical expenses from the parties ultimately responsible for an injury, such as an at-fault driver, workers’ compensation carrier, or liability insurer. By pursuing these recoveries, plans can offset rising healthcare costs while ensuring participants receive the benefits to which they are entitled.

Successful subrogation efforts help replenish plan assets, reduce net claim costs, and help fulfill a plan’s fiduciary obligations without increasing reliance on aggressive claims management strategies. Every dollar recovered is a dollar returned to the plan, helping maintain its financial stability and long-term sustainability.

Subrogation is more than a recovery tool. It is a strategic asset that helps self-funded plans protect resources, fulfill fiduciary responsibilities, and manage costs while reducing dependence on increasingly scrutinized denial practices.