When Would a Biller Bill Secondary Insurance?

When an individual has more than one health insurance plan, understanding how these plans work together to cover medical expenses becomes important. Primary insurance is the plan responsible for paying a claim first, up to its coverage limits. Secondary insurance then steps in to potentially cover remaining costs that the primary plan did not pay, such as deductibles, copayments, or coinsurance. This coordinated effort prevents overpayment and ensures that the total benefits paid do not exceed the actual cost of services. The process governing this payment order is known as Coordination of Benefits (COB). This article explains the circumstances and the specific process a biller follows when submitting claims to secondary insurance.

Determining Primary and Secondary Coverage

The core function of Coordination of Benefits (COB) rules is to prevent overpayment and establish the payment order between multiple health insurance plans. These rules ensure that when a patient has more than one insurance, the plans collectively do not pay more than 100% of the medical costs. The biller relies on accurate patient information and COB guidelines to determine which insurance is primary and which is secondary before any claims are submitted.

Spouse and Dependent Coverage

One common scenario involves spouse coverage, where an individual’s own employer-sponsored plan is primary for them. If their spouse also has a plan, that plan is secondary for the individual and primary for the spouse. For dependent children covered by both parents’ plans, the “birthday rule” applies; the plan of the parent whose birthday falls earlier in the calendar year is considered primary.

Medicare Coordination

Medicare, a federal health insurance program, also has specific coordination rules with other types of coverage. For individuals over 65, Medicare is often primary. However, if the individual is actively working and covered by an employer group health plan (EGHP) from an employer with 20 or more employees, the EGHP is primary, and Medicare is secondary. If the employer has fewer than 20 employees, Medicare remains primary. For individuals with retiree health plans, Medicare is primary to the retiree plan.

Medicaid and COBRA

Medicaid, a state and federal program for low-income individuals, functions as the “payer of last resort.” This means Medicaid is secondary to any other health insurance coverage an individual might have, including private insurance, Medicare, or employer-sponsored plans.

COBRA coverage allows individuals to continue their group health benefits after certain qualifying events. If an individual has COBRA and also enrolls in another employer’s plan, the new employer’s plan is primary, and COBRA becomes secondary.

The Billing Process for Secondary Claims

Once the primary and secondary insurance status has been determined, the biller initiates the claim submission process by first sending the claim to the primary insurance carrier. This initial submission details the services rendered, the associated charges, and the patient’s demographic information. The primary insurer then processes the claim according to its policy terms, applying deductibles, copayments, and coinsurance amounts.

Upon completion of the primary insurance’s processing, an Explanation of Benefits (EOB) document is generated and sent to both the patient and the healthcare provider. This EOB itemizes the services, the amount the primary insurance paid, any amounts adjusted or discounted, and the remaining patient responsibility. It also provides reason codes for any denials or partial payments, which are important for understanding how the secondary claim needs to be prepared.

The biller then uses the information from the primary EOB to prepare and submit the claim to the secondary insurance. This involves attaching a copy of the primary EOB to the secondary claim. The secondary claim form must accurately reflect the services, the total charges, and the amount paid by the primary insurer.

When the secondary insurance receives the claim, it reviews the submitted information, including the primary EOB, to understand what the primary plan covered. The secondary insurer then applies its own benefit rules, deductibles, and coinsurance based on the remaining balance from the primary EOB. A secondary EOB is then issued detailing their payment or denial.

Patient Financial Responsibility After Secondary Billing

Even after primary and secondary insurance plans process a claim, patients may still have out-of-pocket costs. The combined payments from both insurers may not cover the entire cost of services, leaving a remaining balance. Understanding these potential costs requires careful review of both the primary and secondary EOBs.

Common reasons for remaining patient responsibility include deductibles, which are amounts a patient must pay out-of-pocket before their insurance begins to pay. Copayments are fixed amounts owed for specific services, while coinsurance represents a percentage of the cost of a covered service that the patient must pay after their deductible is met.

Services not covered by either the primary or secondary plan also become the patient’s responsibility. If a service falls outside covered benefits, the patient is liable for the full charge. Additionally, if a healthcare provider is out-of-network for one or both plans, patients might face balance billing, where they are responsible for the difference between the provider’s charge and the amount the insurance plans allow.

Benefit maximums or limits imposed by either plan can also result in patient responsibility. Some plans have annual or lifetime limits on certain benefits, and once these maximums are reached, the patient becomes responsible for any further costs related to those services. Patients should carefully compare the provider’s bill with both EOBs to reconcile payments and understand their final financial obligation.