Neurology & Pain Management Coding Alert

Know the coordination of benefits and what each payer pays.

If you have questions about primary and secondary payers, our experts have answers -- especially when one of the payers in question is Medicare. Read through these FAQs to maximize your practice's reimbursement and reduce the costs of administering claims for patients covered by more than one payer.

Who Is Responsible for Knowing About Primary vs. Secondary?

There is no exact, easy answer to this question, but everyone should be aware of which insurance that patient has. "Ideally, the patient should know but that is not usually the case," says Linda Huckaby, CMA (AAMA), with Carolina Medical Rehabilitation in Greenville, S.C.

"Everyone -- provider, patient, and payer -- has a responsibility to know," adds coding, billing, and practice management consultant Steven M. Verno, CMBS, CMSCS, CEMCS, CPM-MCS, in Orlando, Fla. "The provider should know because they need to know who the claim is to be sent to if the patient has covered health benefits. The medical biller who works for the provider should know for the same reason. The patient should know so that they seek care from doctors who are networked with their insurance plans, which may be outlined in their contract with the insurance company."

"Also it is important to know to make sure that if any of the patient's insurance(s) requires pre-authorization for any of the provider's services," says Marvel J. Hammer, RN, CPC, CCS-P, PCS, ACS-PM, CHCO, owner of MJH Consulting in Denver, Co.

Ask the patient for his insurance information before rendering services, and check whether the patient if he has more than one plan.

"It is the responsibility of the practice to identify primary and secondary because billing done incorrectly slows the revenue flow," Huckaby adds. "The payer will always have some clue as to primary and secondary, although sometimes that information is incorrect and requires assistance from the patient."

Best bet: Verify a patient's insurance coverage before you bill the service. Verification means checking the patient's insurance information to be sure that a patient belongs to the group you're billing and that her group and member identification are correct. Obtain this information prior to the patient's initial visit when possible.

If your practice verifies eligibility and benefits prior to an appointment, sometimes the insurance companies will indicate that other insurance coverage exists. That lets you know ahead of time that you should speak to the patient regarding the primary/secondary coverage.

Work faster: Take advantage of payer Web sites to make insurance verification less time-consuming. Find out whether payers you deal with have verification Web sites, and sign up for them. Some clearinghouses also offer verification services.

Ask the patient: Have good patient registration and insurance forms to collect all the information you'll need. Make sure there is room for the patient to list a secondary payer. Ask front-desk personnel to look immediately at the form for any missing information. Also ask returning patients if their information has changed, and get a new copy of the insurance card(s).

What Does the Secondary Pay?

The secondary plan must determine the amount of benefits it would normally pay if no coordination existed and apply that amount to unpaid covered charges owed by the insured after any benefits have been paid by the primary payer. The payable amount must include deductibles coinsurance and copays owed by the insured. The secondary plan can use its own deductibles coinsurance and copays to determine the amount it would have paid had it been primary. It can apply only its own deductibles coinsurance and copays to the total allowable expenses not to the amount owed after payment by any primary plan.

The secondary plan has no obligation to pay for any services that it does not cover as a benefit. A practice should never expect reimbursement from the primary and secondary insurer to total more than the service charges. The purpose of coordination of benefits (COB) is to make sure insurance payments for patients with duplicate health insurance coverage do not exceed the cost of the services.

When a secondary insurer acts on your claim, check the payer's COB clause to see if it followed its own rules. Ask the insurer's customer service representative to explain its COB rules and request a copy in writing. A company's Web site may also explain how to handle COBs. You can also ask patients for copies of their insurance policies so you'll have complete information.