A Guide to Coordination of Benefits for Providers

When a patient has more than one insurance policy, appropriate coordination of benefits is crucial. If you bill an insurance company without full disclosure of other coordinating plans, your clinic might face financial responsibility.

Insurance companies pay claims in a specific order. You must bill the primary plan before the secondary one. This process is necessary even if the primary insurer doesn’t pay for the claim. 

At Doug Fir Billing, we’re on a mission to make it easier for providers to help patients. Reach out today to learn more about how our excellent outsourced billing services can increase your medical practice revenue. 

How Do You Coordinate Benefits When Someone Has Dual Insurance Coverage?

Individuals may have a second health insurance plan for a variety of reasons. Employment, spouses, parents, and school are all usual sources of health insurance plans. Many people are happy to add a policy if they believe it will decrease their medical expenses.

Dual insurance plans can help lower your medical costs.

But most patients don’t understand how dual policies work together. As a result, they may not get the maximum benefit of their policies.

Any patient with more than one health insurance policy should know which is primary and which is secondary. The enrolling plans should be able to agree on their relative roles, but here are a few basic rules:

• Your employer's plan is primary if you have coverage through your job and your spouse's employer.

• If both of your parents cover you, the plan of the parent whose birthday is earliest in the year is primary. The year of birth doesn’t matter, only the month and day. If the parents are divorced, and the divorce decree requires one parent to cover health care, that parent’s plan is primary.

• If an individual purchases one plan, then buys another, the plan they’ve had the longest is primary.

• If you have private insurance, and you also have Medicaid, your private insurance is primary.

Insurers and patients do not get to choose which plan they would like billed first. Insurance laws determine which policy is primary.

Primary vs. Secondary Insurance

Knowing which plan is primary is essential for coordination of benefits.

The billing details can get complicated, but the basic idea is that providers must bill the primary plan before the secondary. Once you apply any payments from the primary insurer, you can bill the secondary policy for the remaining balance. 

For instance, perhaps your patient has two plans with different benefits for office visits. Plan A has a $1000 deductible. Plan B only requires a $20 copay. 

If Plan A is the primary insurer, the visit bill goes to them first. They apply the cost to that deductible, and they don’t pay the balance. Then the visit bill goes to Plan B. They pay for the visit, leaving the patient with the $20 copay. 

So if the patient has several visits, they could effectively use Plan B to meet their deductible for Plan A, paying only the copays. 

Here is an illustration of how that could work. Let’s say the patient has five visits billed at $200 each. Each bill goes to Plan A, which applies the expense to the patient’s deductible. They don’t pay the clinic because the patient hasn’t met the $1000 deductible.

Dual insurance coverage can save you money.

Then Plan B receives the bills. For each one, they pay $180 and leave a $20 copay for the patient to pay. After five visits, the person will have met Plan A’s, even though they only paid $100 out of pocket.

Benefits from one policy don't diminish the patient's coverage from another plan.

The Provider’s Role In the Coordination of Benefits Between Multiple Plans

While your patients are probably aware of all their insurance policies, they may not share this information with you. Unfortunately, many people think their second plan is irrelevant if it provides no additional or unique coverage. 

Even though it’s a person’s responsibility to understand the policies they own, the reality is that few people actually do. So, it’s up to you to get all applicable insurance information from your patients. 

The only way to be certain you know about any primary and secondary insurance is to ask patients specifically. Be sure to clarify that you need all the information, even if one plan won’t cover this provider or type of care.

All insurance companies must be aware of each other and in agreement over who is primary.

Coordination of benefits requires the patient to tell their provider about both insurance plans.

Once you’re aware that a patient has dual coverage, it’s essential to bill both policies for services. Providers do not receive double payments by billing both plans. The primary and secondary insurers will coordinate the claim to maximize the total benefit without overpaying. 

The primary insurance must get the bill first, even if the provider is out of network or if the service is not something they cover. If the primary plan doesn’t cover the claim, then the bill goes to the secondary insurer. 

What Happens If the Insurance Companies Don’t Know About Each Other? 

Patients frequently are unaware of how their dual insurance plans work together. Your patient may think that they can choose which plan to use. If they happen to select the secondary plan, this can create a significant problem.

Let’s say your patient is receiving mental health services. Their primary insurer doesn’t cover this, so the patient sees no reason to mention that plan. They only tell you about their secondary insurance, which they may have purchased to cover a gap like this.

Patients often think it's unnecessary to tell you about another insurance plan. This is a mistake.

You bill the secondary insurer. They pay the claims because neither of you knows about the primary coverage. 

But then the patient sees another provider for something different, and they want to use their primary insurance. They also give that practitioner their secondary policy information. 

Now the plans are aware of each other. Cue the ominous music.

The secondary plan realizes they have been billed as primary, and they go back and deny those claims! They will notify the provider that they incorrectly submitted those claims. 

Suddenly the provider and the patient may find themselves with unpaid office visits. And this situation can go back as far as the problem was happening, for years, if necessary. The financial damage can easily climb into tens of thousands of dollars.

What Do We Do Now?

If the claims aren’t too old, you can submit them to the primary insurance plan and then resubmit them to the secondary one. It takes time and effort, but it’s doable.

Hiring an expert medical biller can help you untangle COB issues.

However, if those claims date back beyond a billable period, things get more complicated. You need an expert if you’re in this situation. A medical biller who has navigated this problem before can work with the patient’s plans to get a resolution. 

Keep Insurance Payments Flowing Smoothly

Outsourcing your billing is a simple way to increase your revenue by avoiding costly errors and freeing up more of your time to see patients. Reach out to Doug Fir Billing today to see if our team is the right fit for you. 

Our Portland OR team serves practitioners throughout the US to help providers get paid so they can take care of their patients. Let’s connect and get started.