Billing Corner: Combat Primary vs. Secondary Payer Challenges

Medical Billing

Once a patient is covered by two insurance companies, for instance patients whose employer as well as spouse's employer both offer health benefits, claims processing can be puzzling. Add in different payer claims processes and patients who might not offer you all the information you require, and primary plus secondary payer cases can result in reimbursement loss -- not to mention medical billing headaches.

You can get the most out of your practice's reimbursement and diminish the costs involved in administering claims for patients covered by more than one payer in case you comprehend coordination of benefits (COB) and how both insurers are supposed to pay.

In this article, you'll learn the basics about billing two payers.

Take a look at these first three questions -- with answers from the medical billing experts -- to get the scoop on what you are required to do to make certain you're on the right track with multiple payer medical billing situations.

1. What Does Coordination of Benefits Even Mean?

COB is usually a common clause in a lot of health insurance policies. It identifies how the insurer will reimburse for services once more than one insurance plan is applied to a claim.

Coordination of benefits occurs when there are two policies in place (i.e., one is the husband's employer policy and the other is the wife's employer policy). The primary policy pays, and then the secondary coverage will evaluate the claim paying any difference between what the primary insurance has paid and what the secondary coverage permits.

2. How Does State Law Factor Into COB Rules?

COB rules can follow state law definition as well as state law requirements.

But even though COB rules can be governed by state law, and maximum insurers have COB rules in their contracts, a lot of payers follow model rules established by the National Association of Insurance Commissioners (NAIC).

Medical Billing Update: In case the health benefits are not under state law jurisdiction, as well-defined by the Employee Retirement Income Security Act (ERISA), specifically 29 USC 18, 1144(a), then COB might fall under Federal Regulation jurisdiction as defined in 29 CFR 2560-503-1.

3. How Do I Know Which Is the Primary Payer?

As per the NAIC rules, the plan that pays first is recognized as the primary plan; on the other hand, the plan that pays second is identified as the secondary plan. The primary plan should pay benefits as if the secondary insurer did not exist. The secondary plan can simply just consider what another plan paid when it is secondary to that plan in order to ensure accurate medical billing.

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