Practice Management Alert

Question: If a patient (or a parent) does not give secondary insurance coverage proof at the time of service, is our practice responsible in the future to refund the money that secondary insurance paid him at a primary rate? Or does the practice have the right to keep the initial payment until the two insurances have recognized that primary/secondary coverage applies to their client and they work out the solution?

If billing patients with primary and secondary insurance poses a challenge to your practice, you-re not alone. Knowing where practice responsibility ends and patient responsibility begins is the key to successful payment and fewer patient problems.

Take a look at these three common questions -- with answers from the experts -- to get the scoop on what you need to do to ensure you-re on the right track with billing order.

There is no easy answer to this question, says Rebecca Marthaller, CMRS, owner of Lower Columbia Medical Billing in Longview, Wash. "If the patient has not notified the insurance carriers about the secondary, then no one will know about this situation," she says.

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. You should obtain this information prior to the patient's initial visit when possible.

"If the practice verifies eligibility and benefits prior to an appointment, sometimes the insurance companies will indicate that other insurance coverage exists," says Richard C. Blate, MBA, practice management adviser and owner of Richard C. Blate LLC, a practice management, reimbursement and health information technology consulting firm in Atlanta. "This should be a red flag for the practice to speak to the parent regarding the primary/secondary coverage for the patient."

Smart tip: Take advantage of carrier Web sites to make insurance verification less time-consuming, Blate says. Find out which carriers you deal with have verification Web sites, and sign up for them. Some clearinghouses also offer verification services.

"This shows that the office made a good faith effort to submit the claim correctly," Marthaller says. "I believe that in a court of law, if the office could prove that there was no way they could have known there was other insurance, then they would not be at fault."

Here's how: 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).

You are obligated to refund overpayments to payers regardless of primary-versus-secondary issues between the payers. "Once an error is found, the practice must refund the money even if it is not contracted with them," Marthaller says. "This is in the OIG [HHS Office of Inspector General] compliance guide."

Stay compliant: Both the OIG's compliance guidance for physicians and its guidance for third-party billing companies address overpayment refunding. As a healthcare provider, you have a legal obligation to repay any discovered overpayments.

If you discover an overpayment, your practice "should be prepared to refund one of the payers -- or sometimes the patient -- some money at sometime in the future," Blate says.

Smart tip: Don't send refunds to payers until you have specific information on where to send the money. When you find out about an overpayment because of primary and secondary payer mix-ups, send a letter to the payer explaining the situation, and wait for them to tell you where to send the repayment check.

If a patient presents you with information on what she thinks is her primary insurance, and your practice finds out much later that it was her secondary insurance but you were paid, talk with the payer.

Ideally: Patients are responsible for being compliant, and they can get into trouble for insurance fraud by not following their insurance carriers- rules, Marthaller says. If the patient makes a mistake and gives the secondary payer as the primary, the insurance company will hopefully catch the error and then pay at the secondary rate.

"It is always the patient/guarantor/subscriber's responsibility to know what their benefits are," Blate says. "The practice can only go on the information that the patient provides."

Reality: Sometimes patients and payers make mistakes. If the secondary insurance paid the claims as a primary because it was unaware of other insurance and the practice also did not have any knowledge of the primary payer, then the practice is not held liable, Marthaller says.

Be proactive: If you find out about the error -- for example, if the patient calls your office several months later and explains the situation -- you should call the payer and let it know of the error, Blate says. Often the payer may not do anything because so much time has passed, or it may work directly with the patient to solve the problem.

"I have had insurance carriers that decided to only go back six months and not recoup the rest," Marthaller says.