Navigating Dual Insurance Coverage: Billing Strategies For Primary And Secondary Plans

When a patient has two insurance plans, it's essential to understand the difference between primary and secondary insurance to bill them correctly. The primary insurance is responsible for paying first, and the claim will be processed according to the patient's insurance plan and benefits. Once the primary insurance has paid up to its coverage limits, the remaining bill goes to the secondary insurance, which may cover part or all of the remaining cost. It's important to note that both primary and secondary insurance have their own coverage limits, and patients may still be responsible for any remaining out-of-pocket expenses. Healthcare providers cannot bill both primary and secondary insurance simultaneously. They must first submit a claim to the primary insurance and wait for payment before billing the secondary insurance.

Understanding primary and secondary insurance

Having two health insurance plans can be beneficial in many ways, such as reducing out-of-pocket expenses and providing more coverage options. However, it is essential to understand the difference between primary and secondary insurance to make the most of your coverage.

Primary Insurance

The primary insurance is the policy that claims will be billed to first. It is designated by something called a Coordination of Benefits (COB), which specifies the order in which the insurance policies will pay out. The primary insurance payer is responsible for paying the claim first, up to the coverage limits. Once the primary payer has paid its share, the remaining bill goes to the secondary insurance.

Secondary Insurance

The secondary insurance comes into play when the primary insurance policy cannot cover the entire claim. It pays some or all of the remaining balance after the primary insurance has paid its portion. It is important to note that the secondary insurance will not cover the deductible or copay associated with the primary insurance. The patient may still be responsible for some out-of-pocket costs, even with dual coverage.

Determining Primary and Secondary Insurance

Determining which insurance is primary and which is secondary depends on various factors, including the type of insurance policies, the patient's age, and the size of the company providing the employee insurance plan. In most cases, the patient's coverage from their employer is considered primary, while coverage from a spouse or parent is secondary. For children covered under both parents' plans, the parent whose birthday comes first in the year is usually the primary insurer.

Billing Process

When billing for patients with primary and secondary insurance, it is important to remember that you cannot bill both insurances at the same time. The claim is first submitted to the primary insurance, and once they have paid their portion, the remaining bill is sent to the secondary insurance. The secondary insurance company will need to know the total bill amount, how much the primary insurance paid, and why they didn't pay the full amount.

When to bill secondary insurance

Billing insurance when a patient has multiple coverages can be a complex process. It is important to understand the difference between primary and secondary insurance and when to bill which.

Firstly, the primary insurance will be billed first. This is typically the insurance plan that the client is the primary subscriber to, for example, an insurance plan through their employer. The secondary insurance is then billed after. This is usually the insurance plan of a spouse or parent. However, it is important to note that the client does not get to choose which insurance is primary and which is secondary. This is determined by their insurance payers.

When billing the secondary insurance, it is crucial to include the total amount billed, the amount the primary insurance paid, and the reasons why the primary insurance did not pay the full amount. This helps to avoid a claim denial from the secondary insurance company. It is also important to confirm the coordination of benefits (COB) before submitting a secondary insurance claim, as submitting claims in the wrong order can cause delays and additional work for the billing team.

Once the secondary insurance company has paid their portion of the claim, any remaining balance is forwarded to the patient. It is important to remember that having two insurance plans does not mean the patient has no payment responsibility. There may be costs that neither insurance plan covers, such as copays or deductibles.

In summary, billing secondary insurance involves understanding which insurance is primary and which is secondary, billing the primary insurance first, and then submitting a claim to the secondary insurance that includes all relevant details of the primary insurance payment.

Coordination of Benefits (COB)

The primary insurance policy is the policy that claims will be billed to first. The claim will be sent to the secondary insurance company if the patient's benefits with the secondary insurance company allow for additional payment.

The primary payer covers the largest share of the cost, and the secondary payer covers some of the remaining cost.

The order of benefit determination is as follows:

• The plan that covers the individual as an employee will generally pay primary, and the plan that covers the individual as a dependent will generally be the secondary payer.
• The "birthday rule" is common for children covered by two employer group health plans. In this situation, the plan covering the parent whose birthday falls first in the year will pay primary on the children; the other parent’s plan becomes the secondary payer.
• If a person has COBRA continuation coverage or any state-mandated continuation of coverage, the continuation coverage is secondary.
• If neither plan spells out coordination of benefit rules, the plan that covered the person for the longest time is usually primary.

COB is important because it ensures that individuals who receive coverage from two or more plans will receive their complete benefit entitlement and prevents benefits from being duplicated when an individual has more than one policy in place.

Scenarios with two insurance plans

There are several scenarios where an individual might have two health insurance plans. Here are some common examples:

• Married couples: Both spouses have separate insurance plans through their respective employers. In this case, the primary insurance is usually provided by the spouse whose birthday comes first in the calendar year.
• Students: Many students have their own insurance plan, either through their school or a private plan, while also being covered by their parents' insurance plan until the age of 26. The student's own plan would typically be considered the primary insurance.
• Divorced parents: Children of divorced parents might be covered by separate insurance policies from each parent. The parent with custody is usually the primary insurer, and the other parent's plan is secondary.
• Supplemental insurance: Individuals who qualify for Medicaid or Medicare may also have their own insurance plan to supplement their coverage. In this case, Medicaid or Medicare would typically be the primary insurer.
• Employer and spouse's employer coverage: An individual might have coverage through their employer's plan and their spouse's employer's plan. The primary and secondary insurers are typically determined by the coordination of benefits rules, which vary depending on the specific situation and insurance companies.
• Other scenarios: Other situations where dual insurance may occur include having both health insurance and a workers' compensation claim, or having private health insurance and being eligible for coverage through a veterans' plan.

It is important to note that having two insurance plans does not necessarily mean that all expenses will be fully covered. The primary insurance pays first, up to its coverage limits, and the secondary insurance covers any remaining costs, also up to its coverage limits. Both insurers have separate deductibles and premiums, so individuals with dual insurance may still have significant out-of-pocket expenses.

How to submit a claim to secondary insurance

If a patient has more than one insurance plan, it is important to confirm which one is their primary coverage before submitting a claim. Healthcare providers cannot submit a claim to both insurance companies at the same time. The primary insurance policy is the policy that claims will be billed to first. Once the primary insurance has paid its share, the remaining bill goes to the secondary insurance company.

To determine which insurance is primary and which is secondary, healthcare providers should ask the patient to verify the Coordination of Benefits (COB) or contact the insurers. The COB is a provision in an insurance policy that specifies what each insurer is responsible for paying for. Generally, a patient's coverage from their own employer will be primary insurance, and their coverage from a spouse or parent will be secondary insurance. If a patient has both Medicare and employer coverage, the employer-based insurance pays first as long as the company has 20 or more employees. If it's a smaller business, Medicare pays first.

Once you've confirmed which insurance is primary and which is secondary, follow these steps to submit a claim to the secondary insurance:

• Collect up-to-date and accurate demographic information about the patient, including their name, birth date, and insurance plan subscription information.
• Check eligibility and verify insurance for each of the insurance plans. If neither plan shows up as primary insurance, contact the patient and tell them they need to update the COB with their insurer.
• Once you're ready to bill the claim for the patient's appointment or services, submit the claim to the primary insurance plan.
• After the primary insurance processes the claim, note the allowable amount, the patient responsibility, and any adjustments.
• Submit the claim to the secondary insurance. Include the original claim amount, how much the primary insurance paid, and the reasons why they didn't pay the entire claim. It is also important to include the remittance information and Explanation of Benefits (EOB) to avoid a claim denial from the secondary insurance.
• Once the secondary insurance pays their portion of the claim, forward any remaining balance to the patient.

It is important to remember that having two insurance plans doesn't mean the patient has zero payment responsibility. The secondary insurance won't cover the primary insurance's deductible, and patients may still be responsible for copays or coinsurance even after both insurance plans have paid their portion of the claim.

Frequently asked questions