Wiki Verificaton on 2nd ins allowable less than 1st

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monalisa

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Can someone verify this for me.

1st insurance Medicare they pay then billed to United Behavioral Health who's allowable is less than Medicare so they do not pay at all.

Can they do this?

I always thought they would pick up difference because they are not the primary?

Thank you in advance for any clarification on this.
MonaLisa
 
If the secondary payer has a contract with you and that contracted rate that your office agreed to is less than Medicare's allowable, then you have to accept that.
for example:
If medicare allows 100.00 for a service, but only pays you 80.00 leaving 20.00 for your pt's responsibility and you bill that 20.00 balance to the second insurance but they have a contract with you that they only pay 60.00 for that same service- they are not going to send you any money and you have to write that off per your contract with the second insurance. According to the second payer, Medicare already paid you more than what the second payer allowed, so no payment is due.

Now using the same scenario- if you bill the remaining 20.00, after medicare paid, to your second payer and your second payer allows 120.00 for the same service then there is 40.00 dollars that the second payer is obligated to pay you. (minus pt copay or deduct if any)

Just because there is a second payer does not mean they are obligated to pick up after medicare. Know your contracts!

Good Luck
 
I have a question. In the second scenario- what happens when the 2nd insurance overpays? Do you refund the difference or reverse contractuals or what? This presents a credit on the account that I do not know how to resolve.
Thank you
Nancy K
 
Insurance contracts specifically state they will pay the lesser of billed charges or the contracted rate. If a secondary is paying as a primary, then you will need to verify with them why they think they are primary...they will need to run a cross check...perhaps the patient is wrong in what they think is primary vs secondary. It is best to have this cleared up and documented so when the recoupment process starts, you can defend why you did not refund the overpayments in the correct time frame. If this is a Medicare with a secondary but the patient is still working, Medicare may be the secondary payer.
 
to elaborate on Marcus' response:

Most payers overpay as a secondary because they are paying as the primary payer. Marcus is right, you need to get you ducks in a row and find out who truly is the primary payer. Most insurances will not overpay as a secondary if they are listed as the secondary.
But, if you send a secondary claim to them, and they are listed primary you will end up with too much money on that claim and it is your responsibility to get it straightened out.

Insurance companies do not query patient's very often for COB information, and, patient's are forgetful. Therefore, it does happen quite a bit. You can lessen this occurence by having your patients fill out a quick form each time they come in about how many insurances they have, and what order they fall in.

Good luck!!

Caprice Walder, CPC
 
Thank you all for your help. I am new to this office and there is a lot of credits on a lot accounts. Do you know if there is a time limit on how soon after you post a credit that you have to refund?
We are verifying the insurance orders but that does not mean the insurances have that order.
I have my work cut out for me.
PS: this office does not like to do refunds.
Nancy K
 
Audit the accounts to make sure the "credits" are real overpayments and not over adjustments. Then identify who actually made the overpayment(s). Did patient overpay? Send refund ASAP. If insurance overpayments, then determine why, and again making sure each claim was not over adjusted. can you tell I worked for a large facility that had millions of dollars in over adjustments due to very poor accounting standards? To speed up the posting process, they made copies of all the eob's and then gave each set to different posting teams to make only the adjustments. The result was payments were posted correctly, but every contractual discount was double posted, creating thousands of accounts with credit balances. And they did not run any reports to show credits. After I kept requesting reports to run all credits, they were stunned when these millions of dollars in credits popped up. Most of these were adjustment errors, but there was a lot of overpayments to be sorted out. You have a big job ahead of you, but until you get this sorted out, the practice will not have an accurate financial picture of what is real. Good luck.
 
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