Carriers market cross-plan offsetting as an efficient way to recoup provider overpayments - but this practice exposes self-funded plans to risks

## **Introduction**

**Cross-plan offsetting** — also known as bulk recovery — is marketed by carriers as an efficient way to recoup provider overpayments. But beneath the surface, this practice exposes self-funded plans to hidden costs, fiduciary risks, and compliance challenges that plan sponsors cannot afford to overlook.

## **How Cross-Plan Offsetting Works: Promise vs. Reality**

- UHC reported recovering nearly $922 million for self-funded customers in 2022.
- What they don't highlight: UHC keeps 25–35% of recovered dollars — as much as $323M siphoned from plan assets.
- These are bulk cross-plan recoveries only and do not include one-off recoveries or settlements.
- Overpayments can be offset across different plans, exposing members to balance billing and disputes.

📎 You can find the source publication from UHC [here](https://www.uhc.com/content/dam/uhcdotcom/en/Legal/PDF/Bulk-Recovery-Process.pdf).

## **The Self-Admitted 1.4% Problem**

- UHC admits that 1.4% of claims are processed improperly and are routed to recovery.
- Yet their ASO contracts guarantee 99% processing accuracy.
- How can both be true? A 1% margin of error under ASO guarantees vs. a 1.4% error rate feeding recoveries means administrators are monetizing their own mistakes.
- Compounding this: not all recoveries are successful, meaning some plan dollars are permanently lost — while carriers still take their fee.

## **Fiduciary Risks of Cross-Plan Offsetting**

- **Conflicts of Interest:** Recovery fees create incentives for administrators to profit from errors.
- **Transparency Gaps:** Public reporting omits what administrators keep.
- **Recovery Dependence:** Plans tied into bulk recovery risk litigation, leakage, and fiduciary exposure.

## **The ClaimInformatics Perspective**

We help **fiduciaries** protect plan assets by:
- Reviewing recovery practices — including cross-plan offsetting arrangements — for ERISA compliance.
- Verifying credits to ensure your plan isn't subsidizing others.
- Uncovering leakage from delayed or missed recoveries.
- Providing **independent oversight** beyond carrier reporting.

## **Frequently Asked Questions**

**What is cross-plan offsetting?** Cross-plan offsetting (or bulk recovery) is a practice where carriers recover overpayments from providers by applying credits across multiple health plans, rather than tracking recoveries to individual plans.

**Why is cross-plan offsetting a fiduciary concern?** Under ERISA, plan sponsors have a fiduciary duty to ensure plan assets benefit only plan participants. When recoveries are pooled across plans, sponsors cannot verify their plan received appropriate credits.

**How much do carriers keep from cross-plan offsetting recoveries?** Carriers typically retain 25–35% of recovered dollars as fees. On $922 million in recoveries, this could mean over $300 million diverted from plan assets.

**How can plan sponsors protect themselves from bulk recovery risks?** Sponsors should request detailed recovery reporting, engage independent claims auditors, and review ASO contracts for transparency provisions around cross-plan offsetting practices.

## **Bottom Line**

Cross-plan offsetting may appear efficient, but without transparency and **independent oversight**, it creates fiduciary and financial risks that no plan sponsor can afford to ignore.

📩 [Contact ClaimInformatics](https://www.claiminformatics.com/contact) for a complimentary review of your plan's recovery practices.