If Medicare Denies a Claim, Will Secondary Pay?

When Medicare denies a claim, beneficiaries often wonder if their secondary insurance will cover the costs. Understanding how Medicare denials occur and how secondary plans interact with these denials is important for managing healthcare expenses. This article clarifies the relationship between Medicare and secondary insurance when a claim is denied, outlining potential coverage and necessary actions.

Understanding Medicare Claim Denials

Medicare claims can be denied for various reasons. One common reason is that Medicare may determine a service was not medically necessary. This means Medicare believes the service or supply was not reasonable or necessary for diagnosing or treating an illness or injury, or to improve the functioning of a malformed body part. Such denials often occur when documentation does not sufficiently support the need for care.

Another frequent cause for denial is when a service is not a Medicare-covered benefit. Medicare has specific guidelines on what services it will pay for, and certain items or procedures fall outside its scope. Examples include routine dental care, cosmetic surgery, and some types of hearing aids.

Administrative or coding errors also lead to denials. These can include incorrect patient information, wrong service codes, or duplicate claims. A lack of required prior authorization can also result in a denial. Claims might also be denied if the healthcare provider is not properly enrolled in Medicare or not authorized to provide the specific service billed.

The Role of Secondary Insurance

Secondary insurance works with Medicare to help manage healthcare costs. This includes Medigap policies, employer-sponsored group health plans, and Medicaid. “Coordination of benefits” dictates which plan pays first and which pays second. Medicare generally acts as the primary payer for most beneficiaries, paying its approved portion first.

After Medicare processes a claim and pays its share, secondary insurance typically covers some or all of the remaining out-of-pocket costs. These can include deductibles, coinsurance, and copayments. Medigap policies are designed to cover Medicare’s cost-sharing amounts for approved services. They fill the “gaps” in Original Medicare coverage, such as the Part A deductible or the 20% coinsurance for Part B services.

Other types of secondary insurance, like employer-sponsored plans or Medicaid, may have broader coverage than Medicare. Employer plans can sometimes be the primary payer, with Medicare acting as secondary. Medicaid always pays after Medicare and any other health insurance, serving as the payer of last resort. While these plans often cover Medicare’s cost-sharing, their specific benefits and coverage rules vary widely.

Scenarios for Secondary Coverage After a Medicare Denial

When Medicare denies a claim, secondary insurance coverage depends on the reason for Medicare’s denial. If Medicare denies a service because it is not a Medicare-covered benefit, secondary insurance may still provide coverage. For instance, if Medicare denies a claim for a routine eye exam or a hearing aid, an employer-sponsored health plan or Medicaid might cover the service if it is part of their benefit package. These secondary plans may have their own benefit schedules that include services Medicare does not.

If Medicare denies a claim due to a lack of medical necessity for a service Medicare generally covers, secondary insurance usually will not pay. Most secondary plans, particularly Medigap policies, align with Medicare’s medical necessity determinations for Medicare-covered services. A Medigap plan’s purpose is to cover the patient’s share of costs for Medicare-approved services, not to cover services Medicare deems unnecessary.

When a Medicare denial results from an administrative or coding error, secondary insurance generally will not pay until the issue with Medicare is resolved. Errors such as incorrect billing codes, missing information, or duplicate claims prevent proper processing by Medicare. The claim needs to be corrected and successfully reprocessed by Medicare first. Only after Medicare approves will the secondary insurer process its portion.

Medigap plans will not cover services Medicare denies because they are not covered benefits or are not medically necessary; these plans strictly follow Medicare’s payment decisions. However, other secondary insurance, such as some employer group health plans or Medicaid, may have expanded benefits that could cover services Medicare does not.

Actions to Take After a Medicare Denial

Upon receiving a Medicare claim denial, review the Medicare Summary Notice (MSN). The MSN provides details on services billed to Medicare, what Medicare paid, and the reason for any denial. Understanding the specific denial reason, indicated on the MSN, is essential for determining subsequent actions.

Next, contact the healthcare provider’s billing office. They can help clarify the denial, verify correct billing codes, and determine if the claim can be resubmitted with corrected information. Providers often assist in rectifying issues with Medicare. This communication can sometimes resolve administrative denials without further appeals.

Medicare beneficiaries have the right to appeal denials if they disagree with Medicare’s decision. The Medicare appeal process typically involves several levels, starting with a redetermination by the Medicare contractor. Instructions for initiating an appeal, including deadlines, are provided on the Medicare Summary Notice. Official government resources, such as Medicare.gov, and State Health Insurance Assistance Programs (SHIPs) can offer guidance.

After understanding the Medicare denial and initiating any necessary appeals, contact your secondary insurer. Discuss the denial and inquire about their policy regarding the service. This step is best taken once the Medicare determination is clear, as the secondary insurer’s decision depends on Medicare’s final ruling or your plan’s specific benefits.