Haris Ashley
When a patient has two insurance policies, one is considered the primary payer and the other is the secondary payer. The primary payer pays up to the limits of its coverage, and the secondary payer covers some or all of the remaining costs. When billing, healthcare providers must submit a claim to the primary payer first and then submit any remaining balance to the secondary payer. This order of payment is called coordination of benefits. Determining which insurance is primary and which is secondary can be complex, and it is important to confirm this before submitting a claim.
| Characteristics | Values |
|---|---|
| When the primary insurer has paid their portion of the bill and there's still a balance left | Submit the claim to the secondary insurance company before billing the patient |
| When there is more than one insurance plan | Confirm which one is the primary coverage before submitting a claim |
| How to submit a claim to secondary insurance | Submit claims directly to the payer or use a claims clearinghouse |
| Medicare as a secondary payer | When an individual has employer coverage or is covered under workers' compensation |
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What You'll Learn
Medicare as a secondary payer
When a patient has two insurance policies, one is considered the "primary payer" and the other the "secondary payer". The primary payer pays up to the limits of its coverage, and the secondary payer covers the remaining balance. If the secondary payer does not cover the remaining balance, the patient may be responsible for the rest of the costs. This order of payment is called "coordination of benefits".
Medicare Secondary Payer (MSP) is the term used when the Medicare program does not have primary payment responsibility. In other words, when another entity has the responsibility for paying before Medicare. When Medicare was introduced in 1966, it was the primary payer for all claims except those covered by Workers' Compensation, Federal Black Lung benefits, and Veteran’s Administration (VA) benefits. However, in 1980, legislation was passed that made Medicare the secondary payer to certain primary plans, shifting costs from Medicare to the appropriate private sources of payment.
There are several situations in which a patient may be covered by two different insurance policies. For example, an individual over the age of 65 who is still working may be covered by both Medicare and their employer's plan. In this case, 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.
It's important to confirm the coordination of benefits (COB) before submitting a secondary insurance claim. Claims submitted in the wrong order are more likely to be denied, causing delays and additional work for the billing team. After billing the primary payer, submitting a claim to the secondary insurance works in a similar way as any other claim. However, in addition to the regular billing details, the total amount billed initially, the amount paid by the primary insurer, and the reason for the remaining balance must be included.
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Coordination of benefits
In the context of primary and secondary insurance, the primary payer pays up to the limits of its coverage, after which the remaining balance is sent to the secondary payer. The secondary payer then covers any remaining costs that the primary insurance didn't cover. It's important to note that the combined benefits from both plans should not surpass 100% of the total cost of treatment.
Determining the primary and secondary payers is crucial before submitting a claim. Healthcare providers cannot submit a claim to both insurance companies simultaneously. The primary insurance is typically the patient's coverage from their employer, while the secondary insurance could be coverage from a spouse or parent. However, this may vary depending on factors such as the patient's age, the size of the company providing employer coverage, and other considerations outlined in the insurance policies.
When submitting a claim to the secondary insurance, it's important to include the total initially billed, the amount paid by the primary insurer, and the reason for any unpaid balance. Claims submitted in the wrong order may be denied, causing delays and additional work for the billing team.
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Primary payer
When a patient has multiple health insurance plans, one plan is always the primary policy, and the other is the secondary insurance policy. The primary payer, or primary insurer, is the insurance that pays first. The primary payer covers the costs of the patient's healthcare up to the limits of its coverage. If there is still a balance left, the patient's provider will then send the bill to the secondary payer for secondary payment.
The primary payer is usually the patient's coverage from their employer, while the secondary payer is usually the patient's coverage from a spouse or parent. For patients with Medicare and employer coverage, the payer responsible for paying first depends on the number of employees in the company. If the company has fewer than 20 employees, Medicare pays first. If there are 20 or more employees, the employer-based insurance pays first.
It is important to confirm which insurance is the primary payer before submitting a claim. To do this, healthcare providers can check the coordination of benefits (COB). This is a provision in an insurance policy that specifies what each insurer is responsible for paying for. After billing the primary payer, the provider can submit a claim to the secondary payer. In addition to regular billing details, they will need to include the total that was billed initially, how much the primary payer covered, and why the primary payer did not pay the full balance.
In some cases, Medicare may make a conditional payment if the primary payer does not pay the claim promptly. However, Medicare will later recover any payments that the primary payer should have made.
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Secondary payer
When a patient has multiple insurance policies, one policy is always the primary insurance, and the other is the secondary insurance. The primary payer has the primary responsibility for paying a claim. The primary payer pays up to the limits of its coverage, and the secondary payer covers the remaining balance. This order of payment is called coordination of benefits.
Medicare, for example, remains the primary payer for beneficiaries who are not covered by other types of health insurance or coverage. Medicare is also the primary payer in certain other instances, provided several conditions are met. For example, if an individual is 65 or older and covered by a Group Health Plan (GHP) through their current employment, and the employer has 20 or more employees, then the GHP pays primary, and Medicare pays secondary.
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.
When billing a secondary payer, it’s important to confirm the coordination of benefits (COB) before submitting a secondary insurance claim. Claims that are submitted in the wrong order are more likely to be denied, which causes delays and additional follow-up work for your billing team. After billing the primary payer, submitting a claim to secondary insurance works the same way as any other claim. However, in addition to regular billing details, you’ll need to include the total that was initially billed, how much the primary insurer paid, and why the primary insurer didn’t pay the full balance.
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Submitting claims to secondary insurance
When submitting a claim to a secondary insurance company, it's important to first confirm which insurance is the patient's primary coverage. This is because healthcare providers cannot submit a claim to both insurance companies simultaneously. The Coordination of Benefits (COB) will help determine which insurer is the primary payer.
Once the primary insurer has paid their portion of the bill, if there is still a balance, the claim can be submitted to the secondary insurance company. This submission will include the regular billing details, as well as the total initially billed, the amount paid by the primary insurer, and the reason for any shortfall. It is also beneficial to include the full Explanation of Benefits (EOB) from the primary insurer.
There are two ways to submit a claim to a secondary insurance company. The first is to submit the claim directly to the payer, which is usually done electronically. This method does not incur additional service costs, but the submitter is responsible for any errors in the claim. The second method is to submit the claim through a clearinghouse, which will review the claim and check for errors.
It is important to note that claims submitted in the wrong order are more likely to be denied, causing delays and additional work. Therefore, it is crucial to confirm the COB before submitting a secondary insurance claim.
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Frequently asked questions
The insurance that pays first is called the primary payer. It pays up to the limits of its coverage.
The insurance that pays second is called the secondary payer. It pays the remaining balance that the primary payer doesn't cover.
To determine which insurance is the primary payer, you need to check the coordination of benefits (COB). This provision in an insurance policy outlines the financial responsibility of each insurer.
If the primary payer doesn't cover the entire bill, you should submit the claim to the secondary insurance company before billing the patient.
When submitting a claim to the secondary payer, include the total initially billed, the amount paid by the primary insurer, the reason for the shortfall, and the full explanation of benefits from the primary insurer.
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