When Would a Bill for Secondary Insurance Coverage Be Created?

Having more than one health insurance policy can offer additional financial protection against medical costs. While one plan typically serves as the primary coverage, a secondary policy can help manage expenses not fully covered by the first. Understanding how these plans interact is important for navigating healthcare billing and maximizing benefits. This interaction often leads to a bill for secondary insurance coverage.

Understanding Coordination of Benefits

When an individual holds multiple health insurance policies, Coordination of Benefits (COB) dictates the order in which each plan pays for medical services. COB rules prevent overpayment and ensure combined benefits do not exceed the total cost of care. The primary plan processes a claim first, paying its share according to its benefits and coverage limits. Any remaining balance may then be considered by the secondary plan.

For children covered by both parents’ health insurance, the “birthday rule” commonly applies, making the plan of the parent whose birthday falls earlier in the calendar year the primary one. A court order may specify the primary plan for divorced or separated parents. For adults, coverage through one’s own employer is typically primary over a spouse’s plan, and active employment coverage usually takes precedence over COBRA or retiree plans.

Circumstances Leading to Secondary Billing

A bill for secondary insurance coverage is generated after the primary plan processes a claim and applies its benefits. This occurs when a financial gap or remaining balance exists after the primary insurer’s payment. Secondary insurance aims to cover costs the primary plan did not fully pay, such as deductibles, copayments, and coinsurance.

For example, if the primary plan has an unmet deductible or only covers a percentage of the service cost, the remaining amount can be submitted to the secondary insurer. Secondary billing also becomes necessary if the primary plan reaches its benefit limits for specific services or if certain treatments are not fully covered. If the primary plan denies a portion of a claim, the secondary plan may cover that denied amount based on its own coverage rules.

Information Required for Secondary Claims

Before a secondary claim can be submitted, specific information and documentation must be gathered. This includes the patient’s full personal details, such as their name, date of birth, and the policy numbers for both their primary and secondary insurance plans. The healthcare provider’s information, including their name and identification numbers, is also necessary. Details of the services rendered, including dates of service, procedure codes, and diagnosis codes, are crucial for accurate claim processing.

A particularly important document is the Explanation of Benefits (EOB) from the primary insurance company. An EOB is a statement that details how the primary insurer processed the claim, showing the total charges, what the primary plan paid, any amounts applied to the patient’s deductible or coinsurance, and the remaining patient responsibility. This document is not a bill, but it provides essential data needed by the secondary insurer to determine its payment. Any other supporting medical documentation, such as referrals or prior authorizations, might also be required by the secondary insurer to process the claim.

Steps for Processing Secondary Claims

Processing a secondary claim involves a series of steps to ensure proper submission and payment after the primary insurer has processed its portion. Typically, the healthcare provider’s office is responsible for submitting the claim to the secondary insurance, although patients can sometimes submit claims themselves. The first step involves obtaining the Explanation of Benefits (EOB) from the primary insurer, which outlines how the primary claim was processed and any remaining patient liability.

Once the primary EOB is secured, the secondary claim can be prepared. This usually involves completing a standard claim form, such as the CMS-1500, with all the patient, provider, and service details. The primary EOB or its electronic equivalent must be included with the secondary claim, providing the secondary insurer with the necessary information about the primary plan’s payment and adjustments. Claims can be submitted electronically, which is often preferred for faster processing, or via mail, especially if the secondary payer requires a paper submission with the physical EOB attached. After submission, the secondary insurer processes the claim, issues its own EOB, and pays any covered remaining balance according to its policy terms.