Cost avoidance is receiving greater attention as Medicaid health plans search for ways to reduce unnecessary spending and make limited healthcare dollars go further. With budgets under pressure and federal oversight evolving, plans need savings strategies that improve financial performance without reducing benefits or creating additional barriers to care.
Some of those savings may already exist within an established Medicaid responsibility: making sure another insurer pays when it is responsible for a member's healthcare costs.
This issue has become increasingly relevant as federal policymakers examine how Medicare and Medicaid address improper spending. A September 2026 majority staff report from the House Committee on Energy and Commerce called attention to the shortcomings of relying heavily on "pay and chase" practices. The report also discussed greater use of data, analytics, and technology to identify potential payment issues earlier.
Although the congressional review is primarily focused on fraud and program integrity, its emphasis on using better information to protect healthcare dollars has clear relevance to coordination of benefits (COB) and third-party liability (TPL).
An Existing Responsibility With Greater Financial Potential
Medicaid is generally the payer of last resort. When other insurance is responsible for a member's healthcare expenses, identifying that coverage helps ensure the claim is directed to the appropriate payer.
The difficulty is that insurance coverage does not remain static.
Members regularly gain, lose, or change commercial coverage. Employment changes, dependent coverage, marriage, and transitions between insurers can all affect payer responsibility. Health plans may not immediately receive information about those changes, leaving active coverage absent from the data used to coordinate benefits.
That delay has a direct financial consequence.
If another insurer is identified only after Medicaid has paid the claim, the plan may need to recover the money retrospectively. When that coverage is identified sooner, the plan has an opportunity to avoid an expense that should have been another payer's responsibility.
For plans under pressure to find savings, improving that timing can make an existing COB/TPL function more financially valuable.
Turning Coverage Intelligence Into Savings
Retrospective recovery will continue to be necessary. Not every coverage change can be known immediately, and some third-party liability will inevitably be identified after claims have been paid.
The opportunity is to reduce the number of cases that reach that point.
A health plan's existing eligibility and coverage information may not capture every active commercial policy. Supplementing those sources with automated insurance discovery can provide a broader view of a member's coverage and identify additional opportunities to coordinate benefits correctly.
The financial impact can extend beyond recovered dollars.
Consider two claims involving members with other commercial insurance. In the first, Medicaid pays and later recovers the expenditure after discovering the other payer. In the second, the commercial coverage is identified in time for the appropriate insurer to assume responsibility.
Both represent successful COB/TPL outcomes. Only one produces a recovery.
The other produces savings by eliminating an unnecessary Medicaid expenditure.
That difference is increasingly important when plans evaluate the effectiveness of their payment-integrity programs. A September 2026 KFF analysis makes a related point in the broader program-integrity context: recovery totals do not fully account for the financial value of prevention and payments that never occur.
For Medicaid health plans, measuring avoided expenditures alongside retrospective recoveries can provide a more complete picture of the financial contribution of COB/TPL.
Expanding the Value of COB/TPL
The objective is not to choose between recovery and cost avoidance. Plans need both.
Recovery addresses claims when other insurance becomes known after payment. Cost avoidance captures savings when better coverage information is available soon enough to establish another payer's responsibility.
ProTPL from Syrtis Solutions is designed to strengthen that process. Using automated algorithmic analysis and insurance discovery engines (AAAIDE), Syrtis identifies other active commercial pharmacy and medical coverage that can supplement the information available to existing COB/TPL operations.
For health plans, the opportunity is straightforward: improve visibility into other insurance, identify more instances in which another payer is responsible, and reduce unnecessary Medicaid expenditures.
That is particularly valuable in today's financial environment because it does not depend on cutting services or reducing access. The savings come from improving the accuracy of payer responsibility and directing healthcare costs where they belong.
Cost avoidance can turn better coverage identification into measurable savings for Medicaid health plans while strengthening an obligation they already have as payer of last resort. As plans look for sustainable ways to manage constrained budgets, expanding visibility into other commercial insurance can help COB/TPL deliver greater financial value without compromising member care.
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