Unraveling The Billing Process: Navigating Copays And Secondary Insurance

Secondary insurance is an additional insurance plan that a patient may have on top of their primary insurance. It covers the costs of care or services that a primary insurance plan may not, such as vision or dental care. It can also help with the costs of a patient's primary insurance policy by addressing high deductibles or the cost of a hospital stay. When billing secondary insurance claims, it's important to first verify the patient's insurance and submit the claim to the primary insurance plan. Once the primary insurance has paid its portion of the claim, the remaining bill is sent to the secondary insurance provider.

Understanding primary and secondary insurance

Having two health insurance plans is perfectly legal, and it can help cover some of your insurance expenses. However, it is important to understand how primary and secondary insurance work together.

Primary insurance is the insurance that pays first when you receive health care. It is typically the insurance you receive through your employer or, in the case of children, the insurance of the parent whose birthday comes first in the calendar year. If you are covered under an employer-based plan, that is usually your primary insurance. Primary insurance pays up to its coverage limits, after which the remaining bill goes to the secondary insurance.

Secondary insurance is an additional insurance plan that a patient may have on top of their primary insurance. It covers the individual in addition to their primary insurance plan and is usually billed when the primary insurance plan is exhausted. Secondary insurance may help cover additional health care costs, such as deductibles, copays, and coinsurance. It is important to note that having two insurance plans does not mean the patient has zero payment responsibility, and they may still be responsible for copays or coinsurance.

Who is Eligible for Secondary Insurance?

Most people have a primary insurance plan, but not everyone needs a secondary insurance plan. However, secondary insurance can be beneficial for those who qualify, including married couples with separate health plans, children covered under each parent's plan, children under 26 with employer insurance who are also covered by their parents' plan, and seniors covered by Medicare and a private health insurance plan, among others.

When an individual has both primary and secondary insurance, the insurers use a framework called "coordination of benefits" (COB) to ensure that both plans pay their fair share without overlapping or paying more than 100% of the medical costs. The coordination of benefits determines which plan is primary (pays first) and which is secondary (pays second). The primary insurer pays what it owes, and if there is still money left on the bill, it goes to the secondary insurer. If there is still a remaining balance, the patient is responsible for paying it.

When to bill secondary insurance

When billing insurance for clients, it is important to understand the difference between primary and secondary insurance. This will help you successfully submit insurance claims for your clients.

The primary insurance is responsible for paying first on any claims. The secondary insurance comes into play only if the primary insurance policy is unable to cover the entire claim. It is incorrect to assume that primary and secondary insurance claims are billed simultaneously. The primary claim is sent before the secondary claim. Once the primary payer has remitted on the primary claim, you can send the claim to the secondary payer.

You can submit a claim to secondary insurance once you have billed the primary insurance and received payment. It is important to remember that you cannot bill both primary and secondary insurance at the same time. The secondary insurance company will need to see the bill total, how much the primary insurance paid, and why they didn't pay the remainder of the balance. Including the adjustments and categories for the remaining balance is crucial to a seamless secondary claim process.

The coordination of benefits (COB) is a crucial factor when you have multiple health insurance policies. The COB specifies which plan pays first, reduces the duplication of benefits, and increases the efficiency of claim processing. The COB uses various industry regulations to establish which insurance plan is primary and pays first. This is not always straightforward and often depends on the type of insurance the patient has and their age. Generally, if a patient has insurance through their employer, that is their primary insurance.

Coordination of benefits

COB is important because it:

• Avoids duplicate payments: COB ensures that the two plans do not pay more than the total amount of the claim.
• Establishes primary and secondary insurance: COB determines which plan pays first and which plan pays the remaining balance after the insured's share of the costs is deducted.
• Reduces insurance premiums: By coordinating benefits, insurance companies can help lower premium costs for the insured.
• When an individual has health insurance and auto insurance: In most cases, your health insurance is primary. So, your health plan will pay first, and if there are remaining expenses not covered by your health plan, your auto insurance will pay those.
• When an individual has health insurance and is injured in an accident that wasn't their fault: In this case, the individual's health insurance company will contact the other party's insurance company to get them to help pay for the insured's care.
• When an individual has Medicare and another type of insurance: In this case, "coordination of benefits" rules decide which insurance is the primary payer and which is the secondary payer. The primary payer pays what it owes on the bills first, and then sends the rest to the secondary payer to pay.
• When an individual has multiple health insurance plans: In this case, COB determines which insurance plan is primary and which is secondary. The secondary payer can be considered supplemental coverage to help pay for out-of-pocket costs.

Secondary insurance and copayments

Secondary insurance is an additional insurance plan that a patient may have on top of their primary insurance. When a provider files a claim for a patient's care, the primary insurance pays that claim first. Once the primary payer covers its portion of the claim, the secondary insurance pays a portion of what's left.

The main difference between primary and secondary insurance is that the primary insurance pays towards the claim first. The secondary insurance pays some or all of the remaining balance, which can include a copay.

Having two insurance plans doesn’t mean the patient has zero payment responsibility. The secondary insurance won’t cover the primary insurance’s deductible, for example. Patients may also still be responsible for copays or coinsurance even after both insurance plans have paid their portion of the claim.

Billing Secondary Insurance Claims

If you have a patient with multiple insurance plans, here’s how to submit a claim to 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, make sure to contact the patient and tell them they need to update the Coordination of Benefits (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. Make sure to include the original claim amount, how much the primary insurance paid, and reasons why they didn’t pay the entire claim. Including the remittance information and Explanation of Benefits (EOB) is important for avoiding a claim denial from the secondary insurance. If there is an outstanding COB issue, tell the patient to call the insurers and confirm which insurance plans are active and primary.
• Once the secondary insurance pays their portion of the claim, forward any remaining balance to the patient.

Avoiding Secondary Insurance Claim Denials

One of the most common reasons for secondary insurance claim denials is a COB issue. For example, you might bill the wrong insurer first, or the primary plan is no longer active. To avoid this, verify insurance and confirm COB before submitting a claim.

Another reason for denial is missing information. To avoid this, submit the original claim amount, how much the primary insurance paid, and any reasons why the primary insurance didn’t pay the full claim. Include remittance information and EOB to help with this.

Secondary insurance and Medicare

When an individual has Medicare and another type of insurance, Medicare can be either the primary or secondary payer. The "primary payer" pays what it owes on the patient's medical bills first, and then sends the remainder to the "secondary payer" to pay. The secondary payer only pays if there are costs that the primary payer didn't cover.

Medicare is the primary payer if the patient is 65 or older, or if they are under 65 and qualify due to a disability, end-stage renal disease (ESRD), or amyotrophic lateral sclerosis (ALS). If the patient has other insurance coverage in addition to Medicare, that insurance typically becomes the primary payer, with Medicare acting as the secondary payer.

Medicare Part A (hospital insurance) may act as a secondary payer for inpatient hospital services. For example, if a patient is admitted to a hospital, their employer-sponsored insurance would pay first, and Medicare Part A may cover costs that exceed what the primary insurance paid. Medicare Part B (medical insurance) may also serve as a secondary payer. For instance, if a patient has Part B and another insurance, like worker’s compensation, Medicare may pay for covered medical services after the primary payer has contributed.

Medicare's role as a secondary payer can help reduce out-of-pocket costs by covering expenses that the primary insurance doesn't fully cover. However, it's important to note that Medicare won't pay more than it would have paid if it were the primary payer.

In terms of billing procedures, when Medicare is the secondary payer, the healthcare provider submits a claim to the primary insurance first. Once the primary insurance processes the claim and pays its share, the remaining information is sent to Medicare. Medicare then reviews the claim and pays its portion, if any, according to Medicare guidelines. The patient will then receive an Explanation of Benefits (EOB) from Medicare, detailing how the claim was processed and what payments were made. If there are any remaining out-of-pocket expenses, the patient may be responsible for covering those costs.

Frequently asked questions