If Medicare Denies, Will Secondary Pay?

Many Medicare beneficiaries wonder if their secondary insurance will cover a claim if Medicare denies it. Understanding the complex interplay between Medicare and other health coverage can be challenging. Healthcare billing and insurance coordination involve specific rules determining who pays first and what services are covered. Understanding how denials impact overall coverage is important.

Understanding Medicare and Secondary Coverage

Medicare generally acts as the primary payer for eligible healthcare services, paying its share before other insurance. Secondary plans, such as Medigap policies, employer-sponsored health plans, or Medicaid, then help cover remaining costs. This coordination of benefits (COB) process determines the payment order among multiple insurance plans. Secondary coverage aims to supplement Medicare by covering out-of-pocket expenses like deductibles, copayments, and coinsurance, effectively filling financial “gaps” in Medicare coverage.

Medigap plans work with Original Medicare to cover costs Medicare does not, provided Medicare approves the service. For example, if Medicare pays 80% of an approved amount, a Medigap policy might cover the remaining 20% coinsurance. Employer-sponsored plans coordinate with Medicare in various ways, often depending on employer size and active work status. Medicaid, for those who qualify based on income and resources, can also act as a secondary payer, often covering Medicare premiums, deductibles, and copayments.

Secondary insurance plans generally pay for costs associated with services Medicare has already approved and covered. These plans are designed to fill “gaps” in Medicare coverage, not to substitute Medicare’s primary role. Consequently, if Medicare determines a service is not covered or not medically necessary, the secondary insurer will often follow that determination. The specific terms and conditions of each secondary plan dictate its coverage extent and how it coordinates with Medicare.

Reasons for Medicare Claim Denials

Medicare may deny a claim for various reasons, each with specific implications for beneficiaries and providers.

Medical Necessity

One common reason is a determination that the service or item was not medically necessary for the patient’s condition. Medicare defines medical necessity as a service being reasonable and necessary for diagnosing or treating an illness or injury, or to improve the functioning of a malformed body part. For example, a denial might occur if a particular therapy is deemed experimental or not proven effective for a specific diagnosis.

Non-Covered Services

Another frequent cause for denial is that the service or item is simply not covered by Medicare. Medicare has specific exclusions, such as routine dental care, most cosmetic surgery, or hearing aids. Claims for these services will be denied outright because they fall outside Medicare’s scope of covered benefits, regardless of medical necessity. This is distinct from services deemed not medically necessary, as it refers to a blanket exclusion.

Technical Issues

Technical issues also account for a significant portion of denials, including coding or billing errors made by the healthcare provider. This could involve incorrect procedure codes, diagnosis codes that do not support the service rendered, or missing information on the claim form. Claims might also be denied if not submitted within Medicare’s timely filing limits, which typically require claims to be filed within 12 months of the date of service. Duplicate claims, where the same service is billed more than once, will also result in a denial.

Prior Authorization

Furthermore, Medicare may deny claims if required prior authorization was not obtained before the service was rendered. Certain services, particularly those that are expensive or potentially overused, may require pre-approval from Medicare to ensure medical necessity and appropriateness.

Eligibility Issues

Finally, denials can occur due to beneficiary eligibility issues, such as the individual not being enrolled in Medicare Part A or Part B at the time of service, or if their coverage had lapsed.

Scenarios Where Secondary Insurance May Pay

Despite a Medicare denial, secondary insurance might still provide coverage in specific scenarios.

Technical Denials

If Medicare denies a claim for an administrative reason rather than a medical necessity determination, such as coding errors or late filing by the provider, the secondary insurer might process the claim. This can happen once the technicality is resolved or if the secondary plan’s filing limits are more lenient. The secondary insurer’s review would focus on whether the service itself aligns with its policy terms, rather than simply echoing Medicare’s administrative finding.

Services Not Covered by Medicare

Some secondary plans, particularly certain employer-sponsored health plans or Medicaid, may cover services that Medicare explicitly does not. For instance, Medicare does not generally cover routine vision or dental services. If an employer plan includes these benefits, it might pay for them even after Medicare denies the claim because the service falls within the secondary plan’s covered benefits. In these cases, the secondary plan effectively becomes the primary payer for that specific service, as Medicare has no financial responsibility.

Excess Charges

Medigap plans can also offer coverage in specific instances of a Medicare denial related to “excess charges.” If a healthcare provider does not accept Medicare’s assigned amount as full payment and charges more than Medicare’s approved amount, Medicare will deny the portion exceeding its limit. Certain Medigap plans, such as Medigap Plan F and Plan G, are designed to cover these excess charges. While Medicare denies the excess amount, the Medigap plan steps in to pay this difference, protecting the beneficiary from balance billing.

The key determinant in these scenarios is the specific terms and conditions of the secondary policy. If the secondary policy’s coverage rules differ from Medicare’s regarding covered services or administrative requirements, it may still provide payment. This often requires the secondary insurer to conduct its own review of the claim, independent of Medicare’s initial denial reason.

Situations Where Secondary Insurance Will Not Pay

While secondary insurance can sometimes provide coverage after a Medicare denial, it will not in many situations.

Medical Necessity Denials

Most secondary plans, especially Medigap policies, generally adhere to Medicare’s determinations regarding medical necessity. If Medicare denies a claim because the service was deemed not medically necessary, the secondary insurer will typically also deny coverage for the same reason. These plans are designed to supplement Medicare’s approved benefits, not to override its medical necessity decisions.

Excluded Services

Similarly, if a service is not covered by Medicare and is also explicitly excluded by the terms of the secondary policy, neither plan will pay. For example, if Medicare does not cover experimental treatments, and the secondary plan also excludes experimental treatments, a denial from Medicare will almost certainly be followed by a denial from the secondary insurer. This applies to services that fall outside the scope of both Medicare’s benefits and the secondary plan’s specific coverage.

Fraud or Abuse

Claims denied by Medicare due to suspected fraud or abuse will almost certainly not be covered by a secondary insurer. Insurance companies, both primary and secondary, have strict policies against paying for services associated with fraudulent activities. Such denials are typically non-negotiable and are designed to protect against illegal billing practices.

Lack of Prior Authorization

Furthermore, if both Medicare and the secondary plan required prior authorization for a specific service, and this authorization was not obtained, neither insurer will likely pay. Both plans often have internal rules that necessitate pre-approval for certain procedures to ensure they meet coverage criteria. A failure to follow this administrative requirement can result in a denial from both the primary and secondary payers.

Navigating a Claim Denial

Receiving a claim denial can be confusing, but there are specific steps beneficiaries can take to address the situation.

Review Denial Documents

First, carefully review the Medicare Summary Notice (MSN) or the Explanation of Benefits (EOB) received from Medicare. These documents detail the services billed, the amount Medicare paid, and, most importantly, the reason for any denial. Understanding the specific denial code and explanation is crucial for determining the next steps and understanding why the claim was denied.

Contact Provider’s Billing Department

After reviewing the denial reason, contact the healthcare provider’s billing department. They may be able to clarify the billing codes used, provide additional documentation, or even submit a corrected claim to Medicare if an administrative error occurred. Providers often have experience navigating the claims process and can be a valuable resource for resolving technical denials.

Appeal Medicare’s Decision

Beneficiaries also have the right to appeal Medicare’s decision. The Medicare appeals process typically involves several levels, beginning with an initial determination, followed by reconsideration by a qualified independent contractor, and potentially an Administrative Law Judge (ALJ) hearing. Each level provides an opportunity to present additional information or argue why the service should be covered. While this process can be lengthy, it is designed to ensure fair consideration of the claim.

Contact Secondary Insurer

Simultaneously, contact the secondary insurer to inquire about their specific denial policies and whether they require any additional information from the beneficiary or provider. Even if Medicare has denied a claim, the secondary insurer might have different criteria or require specific documentation to consider payment under their policy.

Seek Assistance

Finally, resources such as State Health Insurance Assistance Programs (SHIPs) offer free, unbiased counseling and assistance to Medicare beneficiaries regarding their rights and options for navigating denials and appeals. These programs can provide personalized guidance.