Issue/opportunity

A leading multi-state health plan faced ongoing revenue loss due to the lack of a defensible, data-supported method for allocating costs across its state-based contracts. Without an auditable framework to justify cost-sharing for services rendered, the organization struggled to support invoicing accuracy and regulatory expectations.

Approach & outcomes

• Developed a suite of data-driven cost allocation models tailored to each state contract’s requirements.
• Ensured models were auditable, defensible, and aligned with regulatory standards.
• Conducted a detailed analysis across 40+ departments to understand functional cost drivers.
• Incorporated time and effort metrics as proxies for resource allocation.
• Integrated product-level marketing analysis to strengthen cost attribution logic.
• Provided documentation and tools to support ongoing compliance and future audits.
• Enabled the recapture of approximately 3-5% in previously unbilled or misallocated revenue, improving overall financial performance.
• Increased cost allocation accuracy by 15-20%, enhancing transparency and defensibility for state and regulatory reporting.
• Reduced manual effort in cost reconciliation by 25%, freeing resources for higher-value financial analysis.
• Strengthened the organization’s position in state cost-sharing negotiations, leading to 2-3%improvement in reimbursement recovery across targeted contracts.