Jeffrey Wade
When a patient has multiple insurance plans, the primary insurance plan is billed first. The primary insurance policy is designated by a Coordination of Benefits form, which is filled out by the patient or their guardian. The primary insurance plan is billed first, and the claim is processed according to the patient's insurance plan. After the primary insurance company has paid up to the limits of its coverage, the remaining amount is sent to the secondary insurance company, which may make an additional payment if the patient's benefits allow.
| Characteristics | Values |
|---|---|
| What is billed first | Primary insurance policy |
| When is the secondary insurance billed | After the primary insurance |
| Who decides which insurance is primary and which is secondary | The patient or the patient's guardian |
| How to decide which insurance is primary | Coordination of Benefits form |
| Who is the primary insurance for minors and young adults covered under their parent's insurance plans | The parent whose birthday falls first in the year |
| Who is the primary insurance for minors and young adults covered under their parent's insurance plans if the parents share a birthday | The parent whose plan has been active longer |
| Who is the primary insurance for minors and young adults covered under their parent's insurance plans if the parents are divorced | The parent as decided by a court order |
| Who is the primary insurance for minors and young adults covered under their parent's insurance plans if one parent is covered under COBRA | The parent who is not covered under COBRA |
| Who is the primary insurance for a young adult (under 26) who is married and covered by both a parent and a spouse | The plan that has been effective longer |
| Who is the primary insurance for a young adult (under 26) who is married to a spouse, but also covered by their employer | The employer |
What You'll Learn
Primary and secondary insurance
Having more than one insurance plan can help cover out-of-pocket medical expenses. However, it also means you will likely have to pay two premiums and face two deductibles. In some cases, the added premium payment and deductible might increase your overall health expenses and cause further complications.
When you have two insurance plans, one is considered primary and the other is secondary. Your primary insurance is responsible for paying first. The secondary insurance comes into play only if the primary insurance is unable to cover the entire claim.
Who is it for?
Most people have a primary insurance plan, but not everyone has or needs a secondary insurance plan. However, secondary insurance can be beneficial for those who qualify, including:
- Married couples with separate health plans
- Children with health plan coverage under each parent
- Children under 26 with a health plan through an employer who are also covered by their parents' plan
- Children under 26 who are married and on a spouse's policy and their parent's policy
- A child under 26 who is pregnant and on a parent's health plan
- An injured worker who qualifies for workers' compensation and has an employer health plan
- A senior who is covered under Medicare and has a private health insurance plan
- A person who qualifies for Medicaid and has a private health insurance plan
- Veterans covered under Veterans Administration (VA) benefits and a private health insurance plan
- Servicemen and women with military coverage who also have another health insurance plan
Your secondary insurance takes effect when your primary insurance is exhausted. This means that your primary insurance has covered everything it is obligated to pay under your policy and will not be covering additional services. For example, you need physical therapy but your primary insurance only covers a limited number of sessions. If your doctor thinks you need more sessions, your secondary insurance may cover the remaining physical therapy sessions. Other benefits of secondary insurance can include coverage of:
- Deductibles and copays
- Dental or vision services
- Critical care for injuries, cancer care, and other unexpected occurrences
Having two insurance plans can make the claims process more complicated, especially if you have disputes with one or both insurers. You will still be responsible for some cost-sharing. For example, your secondary insurance will not cover the deductible attached to your primary insurance. Instead, you will be responsible for covering the deductible. You may also be responsible for copay and coinsurance fees.
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Coordination of Benefits
When an individual has multiple insurance plans, COB rules dictate the order in which the insurance plans will pay for covered services. The primary plan is responsible for processing the claim first and paying its share of the coverage amount. The secondary plan then reviews the claim and pays the remaining balance within its coverage limits. This process ensures that the combined benefits do not surpass the total cost of the treatment.
To initiate the coordination of benefits, individuals must contact their insurance company and disclose information about any other health plans they have. Insurance companies follow general principles to establish the order of payment, with the primary payer covering the largest share of the cost, and the secondary payer covering the remaining cost.
The coordination of benefits is particularly important when navigating Medicare and other health insurance options, as well as in scenarios where dual health insurance coverage is involved, such as when an individual is covered by both their own insurance plan and their spouse's plan.
The National Association of Insurance Commissioners (NAIC) released its first set of model coordination of benefits guidelines in 1971, providing a consistent set of rules for employers and state legislatures to adopt. These guidelines include the "birthday rule," which is commonly used to determine the primary insurance plan when a child is covered by both parents' health plans. According to this rule, the parent whose birthday falls first in the year will have their insurance plan pay primary for the children, while the other parent's plan becomes the secondary payer.
In conclusion, coordination of benefits plays a crucial role in ensuring that individuals with multiple insurance plans receive proper coverage without overpayment or duplicate payments. By establishing the order of payment, insurance companies can work together to provide accurate and efficient reimbursement for medical expenses.
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Explanation of Benefits (EOB)
An Explanation of Benefits (EOB) is a statement from your health insurance plan that details the costs it will cover for medical care or products you've received. It is generated when your provider submits a claim for the services you received.
An EOB is not a bill. It is a statement of the medical services you received and details on how you and your plan will share costs. It is a tool for showing you the value of your health insurance plan. You see the cost of the services you received and the savings your plan helped you achieve.
An EOB typically includes:
- Personal details such as your name, member number, and plan information.
- Information about your visit, including the date(s) of service, your doctor or clinic's name, and the type of care you received.
- A breakdown of the charges for the service(s) received, so you can see how much your insurance company paid and the amount you owe.
- A glossary of terms and definitions included on your EOB, as well as instructions for how you can appeal a claim if necessary.
- More specific details about the cost of the care you received, including what portion of your out-of-pocket medical expenses count toward your annual deductible.
It is important to keep your EOBs and statements organized, for example, by filing them by date. This way, you can access them easily if questions arise.
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Insurance billing errors
Billing errors are common in the medical field, and they can have a significant financial impact on patients. Here are some tips to help you identify and address insurance billing errors:
Understanding Your Insurance Plan: Familiarise yourself with the basics of your insurance coverage, including deductibles, coverage limits, and in-network providers. Review your insurance plan documents, which are typically available on your insurer's or employer's website. Knowing what is covered and what is not will help you identify any discrepancies in billing.
Waiting for the Final Bill: Before paying any bills, wait until you receive an Explanation of Benefits (EOB) from your insurer. The EOB details what services were provided, how much the insurer paid, and the amount you are responsible for. Compare the EOB with the bill from your healthcare provider to ensure the charges match.
Identifying Common Errors: Be vigilant in identifying common billing errors. These can include incorrect patient or provider information, such as misspelled names or incorrect policy numbers. Keep an eye out for duplicate charges, where you are billed twice for the same service. Also, watch out for upcoding or downcoding, where incorrect billing codes are used to charge you for more expensive procedures or omit certain procedures from the bill.
Acting Quickly: If you suspect a billing error, act promptly. Contact your healthcare provider and insurer to discuss the issue and request corrections if necessary. Billing errors are often the result of simple mistakes that can be rectified with a few phone calls. However, be mindful of the time limits on bill payment; if there is a dispute, notify the billing office in writing to avoid your account being sent to collections.
Seeking Help: If you are unable to resolve the issue on your own, seek assistance. You can reach out to your employer's benefits department, consumer assistance programs, or patient advocates who can help navigate billing issues. Additionally, consider contacting a medical billing advocate who can negotiate with your provider or insurer on your behalf.
Negotiating Your Bill: If you cannot dispute a charge, consider negotiating. Compare prices in your area using online resources to determine if you have been overcharged. If so, reach out to your provider and request a reduction in the fee. You can also inquire about payment plans or financial assistance programs offered by the healthcare provider or hospital.
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Appealing medical bills
Get an Itemized Bill
Ask for an itemized bill from your medical provider. This will allow you to see every charge clearly and spot any errors or unexpected fees. Check for double charges, coding mistakes, and incorrect calculations. Compare the itemized bill with the explanation of benefits (EOB) sent by your insurance company or your Medicare Summary Notice if you're a Medicare recipient.
Talk to Your Medical Provider
Contact your doctor's office and ask about any charges you don't understand. Point out any obvious errors and request that they review and correct your bill. If you are challenging a charge, ask the medical provider to delay sending the bill to collections while you seek a resolution. Take notes on the names of people you speak to, dates, and what was discussed.
Contact Your Insurer
Review your insurance plan and get in touch with your insurance company. Ask them why certain charges aren't covered and what is needed for them to be covered. There may be missing medical records or issues with out-of-network doctors. Write down the names of people you speak to, dates, and information shared for future reference.
File an Appeal
If your health plan denies a claim, you have the right to appeal. Work with your doctor to gather supporting documentation, such as letters and journal articles explaining why a procedure or treatment was medically necessary. The explanation of benefits (EOB) from your insurance company will provide information on how to file an appeal. You can also enlist the help of a medical advocacy agency that offers free assistance.
Negotiate Payment
If you are unable to get the bill revised or the denial of coverage overturned, negotiate with the medical provider's billing office to reduce the amount you owe. Many providers are open to lowering the bill to ensure payment rather than dealing with debt collection. You can also explore payment plans and financial assistance programs offered by medical offices and hospitals.
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Frequently asked questions
The primary insurance policy is the insurance that claims will be billed to first. The claim will be processed according to the patient's insurance plan with the primary insurance provider, and payments will be made according to their benefits.
The secondary insurance policy is the insurance that claims will be billed to second. After the primary insurance provider has paid their portion, the claim will be sent to the secondary insurance company. If the patient's benefits with the secondary insurance company allow, additional payment may be made.
The primary insurance plan should be designated by something called a Coordination of Benefits. Using a coordination of benefits form, a patient or a patient's guardian can designate which insurance they would like as their primary and secondary insurance.
Having a secondary insurance plan is not uncommon, especially in the case of children who are covered by both parents' insurance plans. Less common is a tertiary (third) or quaternary (fourth) insurance plan. If you do encounter patients who have more than two plans, the process for claim submission is the same as with secondary plans.
In cases involving minors and young adults who are covered under their parent's insurance plans, there is something called the birthday rule that determines which plan is primary and which plan is secondary. The parent whose birthday falls first in the year has the primary insurance plan, and the other parent's insurance provides secondary coverage.
