How to Bill Medicaid as Secondary Insurance

When a person holds more than one health insurance policy, a process known as Coordination of Benefits (COB) determines which plan pays first and which pays second. For individuals enrolled in Medicaid, this program typically functions as the secondary payer. This means Medicaid pays after all other available health coverage options have contributed their share.

Understanding Medicaid as a Secondary Payer

Medicaid operates under the “Payer of Last Resort” (POLR) principle. This means Medicaid only pays for medical services after all other liable third-party resources have been exhausted. The objective of this policy is to conserve Medicaid funds. This approach is codified in federal law, specifically Social Security Act Section 1902.

The hierarchy of payers dictates that private health insurance, Medicare, workers’ compensation, and TRICARE generally pay before Medicaid. For instance, if a patient has both commercial insurance and Medicaid, the commercial plan is always considered primary. Similarly, Medicare typically takes precedence over Medicaid when an individual is eligible for both programs, often referred to as “dual eligibles.”

Each state’s Medicaid program develops specific rules and procedures to implement federal COB requirements. These state-specific guidelines detail how providers identify other coverage and submit claims appropriately when Medicaid is secondary. These rules prevent duplicate payments and ensure Medicaid covers only the remaining balance after the primary insurer has paid its portion.

Information Needed for Secondary Medicaid Claims

Before submitting a secondary Medicaid claim, providers must gather specific financial and patient information from the primary insurance carrier and the patient. A primary insurer’s Explanation of Benefits (EOB) or Remittance Advice is necessary. This document details the primary insurer’s payment, the total allowed amount for services, and any patient responsibility like deductibles or co-pays.

Providers also need to verify the patient’s current Medicaid eligibility and identify their specific Medicaid plan. Medicaid coverage can vary, with patients enrolled in either a Fee-for-Service (FFS) program or a Medicaid Managed Care Organization (MCO). Accurate patient demographic and insurance identification details, including the patient’s Medicaid ID number, are also necessary.

When Medicaid acts as the secondary payer, its payment calculation involves comparing the Medicaid allowable amount for the service to the primary insurer’s payment. Medicaid generally pays the lesser of two amounts: the difference between its allowable amount and the primary payment, or the patient’s remaining liability after the primary payment. For example, if Medicaid allows $100 for a service and the primary insurer paid $70, Medicaid might cover the remaining $30, provided it does not exceed the patient’s remaining financial obligation.

Submitting Secondary Medicaid Claims

Once all necessary information and documentation are compiled, providers can proceed with submitting the secondary Medicaid claim. The process involves waiting for the primary insurer to process the initial claim and issue an Explanation of Benefits (EOB) or Remittance Advice. This document confirms the primary payment, allowed amount, and any patient responsibility.

The appropriate claim form must be completed, with specific attention to fields related to primary insurance payments. Professional claims use the CMS-1500 form, while institutional claims use the UB-04 form. On the CMS-1500, Box 29 (Amount Paid by Other Source) and Box 24E (Diagnosis Pointer) are commonly used. For the UB-04, Form Locator 54 (Prior Payments) and Form Locator 55 (Estimated Amount Due) are relevant.

Claims can be submitted through various methods, depending on the state’s Medicaid program requirements. Electronic submission through a clearinghouse is the most common and efficient method, as it allows for faster processing. Many state Medicaid programs also offer online portals for direct submission.

After submission, providers should anticipate processing times, which can range from a few weeks to a month or more, depending on the state and submission method. Medicaid will then issue its Remittance Advice, detailing payment, adjustments, or denials. Providers should monitor claim statuses and respond promptly to any inquiries.

Handling Specific Secondary Medicaid Scenarios

Specific situations require distinct considerations when billing Medicaid as secondary. Medicare and Medicaid crossover claims represent one common scenario for “dual eligibles.” If a provider accepts both Medicare and Medicaid, Medicare will often automatically “cross over” the claim to Medicaid after processing its primary payment.

Third-Party Liability (TPL) scenarios involve situations where another party, such as an auto insurance company or a homeowner’s insurance policy, is responsible for medical costs. Providers must bill the responsible third party first. Medicaid can then be billed for any remaining balance, requiring specific reporting on the claim to indicate the TPL payment.

Billing Medicaid Managed Care Organizations (MCOs) as secondary can differ from billing Fee-for-Service Medicaid. When a patient has primary commercial insurance and secondary Medicaid coverage through an MCO, the provider must adhere to the specific claim submission guidelines and contractual agreements established by that MCO. These guidelines may dictate unique claim forms, submission portals, or documentation requirements.