20160930 - Save Up to 43% on CPC Training | Learn More

AAPC - August DL Sale: 50% OFF
Results 1 to 10 of 10

Thread: Obligation if not contracted with secondary payer

  1. #1
    Join Date
    Apr 2007
    Location
    Anchorage, Alaska
    Posts
    133

    Question Obligation if not contracted with secondary payer

    AAPC: CPC Promo
    We frequently run into the scenario where we may be contracted with a primary payer who indicates a contractual adjustment on the primary EOB which the secondary payer does not utilize in processing their payment. Some individuals in the office believe that, because we have contracted with the primary to accept their allowed amount as payment in full, we are obligated to refund the secondary payer for the amount of the adjustment. For instance, we submit a claim for $140 to PPO payer #1 who allows $120 and pays 80% or $96.00. We submit the secondary claim to the non-PPO payer who allows $140 and subtracts the primary payment and pays $44. Because we have already taken the $20 contractual adjustment for the PPO payer, we show a credit of $20 on this claim. Are we obligated to send a refund to the secondary payer? Also, does anyone have any credible citations for either response?
    Thank you for your help,
    Karen Hill, CPMA, CPC
    DHCM
    Anchorage, AK

  2. #2
    Join Date
    Apr 2007
    Location
    Allentown, PA
    Posts
    122

    Default

    While I do not have a guideline to share, I can offer an opinion. Prior to working for a health plan I spent 15 years on the privider side with 6 of those yesars strictly as a billing manager.

    I would not refund the patient unless the patient overpaid according to the contractual payer (primary) EOB. If the credit is being forced due to an adjustment, I would reverse the adjustment to balance out the account. Again, I stress: as long as the patient did not overpay their finacial obligation on the primary claim.

    You won't likely find a hard guideline on this. This is more of a process protocol and you should follow the same guideline for this situation across your payer population. Do not pick and choose when to apply the policy.

    I would also add this process change to your billing manual, if you have one for the practice.

    Good Luck
    Last edited by martinni1974; 05-03-2012 at 08:09 AM.

  3. #3

    Default

    For my own curiosity and to have a clear conscience (not to mention documentation), I would first call the secondary payor and ask them what their policy is on paying OON providers, that is, how they pay claims when there is a primary PPO (and you don't have to give specific case information). They may be paying you absolutely correctly according to their policy and if that is the case you are under no obligation to refund the insurance company,but because you have a contract with the PPO primary, you still must give the contractual discount. And you can debit out the "overpayment" of the secondary in order not to show a credit.

  4. #4
    Join Date
    Apr 2007
    Location
    Anchorage, Alaska
    Posts
    133

    Default

    Thank you, Nicole. However, I think there is one misunderstanding here. I am not talking about refunding the patient at all, I am talking about a secondary TPL or commercial insurance with whom we are not contracted.

  5. #5
    Join Date
    Apr 2007
    Location
    Anchorage, Alaska
    Posts
    133

    Default

    Thank you, Bready. I think I will follow your advice as I run into these situations and start documenting. I have seen one payer who specifically disallowed the primary's contractual adjustment for the reason that they pay according the primary's allowance.

  6. #6
    Join Date
    Apr 2007
    Location
    Allentown, PA
    Posts
    122

    Default

    If you are not contracted with the secondary payer why would you refund them dollars that resulted from an adjustment already taken with the primary?

    In this scenario I would refund if you were overpaid from the contracted plan (the primary), overpaid by the patient (refund the pt) in acordance with the contracted plan's EOB information (providing everything had been processed correctly), overpaid by the secondary plan as a result of the primary EOB's information not being correct or something along those lines, or overpaid and procedures/services were found to not actually have been performed or warranted for that date.

    Your question was related to the non contracted secondary plan being refunded due to adjustments from the primary. I would not refund dollars that resulted out of an adjustment that was already taken correctly for the primary contracted payer. You don't have to take adjustments directed by a non contracted payer.

    The main two things to focus on in this scenario are: The patient did not overpay their co-pay or other out of pocket obligations in accordance with their contract forcing a credit on the account.....(for instance the pt pd 20.00 copay and EOB states they only should have paid 10.00), and that you took the appropriate adjustments in accordance with your contracted primary payer.

    You won't likely find this in writing when dealing with non contracted payers. Just as you will rarely find how non contracted payers calculate their R&C etc.

    Be cautious in seeking guidance from an insurance company in which you have no contract with. You also will find you'll get different answers depending who you speak to. With no contract how would you hold that payer accountable if you are given incorrect guidance?

    These are just things to think about and discuss.

    Keep us posted, I know many struggle with this issue. It will be interesting to see what guidance you find.
    Last edited by martinni1974; 05-04-2012 at 06:58 AM.

  7. #7

    Exclamation "Balance Billing"

    Good morning!

    I hope I'm not adding confusion to this discussion, but I believe what you are describing would be identified as "balance billing", which is not acceptable.

    Your contract with the primary payor holds your office to that "allowable amount" as the maximum payment due for those services. If a 20% co-insurance is due from either a non-contracted secondary payor or the patient/guarantor, then this is OK to collect. However, it would be inappropriate to collect any monies beyond the "allowable amount" as established by the primary payor.

    BCBS of Ohio used to allow the providers in that state to balance bill the patient for the difference between the payors "allowable amount" and the billed charge. Clearly a big mistake. As a result of this illegal procedure, BCBS of Ohio lost their franchise back in the '80's and went back to their name as "Medical Mutual of Ohio".

    Again, I hope you find this information useful.

    Mary

  8. #8
    Join Date
    Apr 2007
    Location
    Anchorage, Alaska
    Posts
    133

    Default

    Thanks, Mary. I don't think it adds confusion - but . . . I understand about balance billing and when you bring up the example of BCBS of Ohio, this was a situation where the payer allowed the balance billing of their contracted rates, so it is understandable what happened there in the end. However, when we bill the non-contracted secondary insurance, we, of course, provide the EOB from the primary showing their contractural adjustment and we show the balance due on the CMS-1500 to match the patient responsibility on the primary EOB. However, we keep getting secondary payments that disregard the primary contracted rates. At one time we used to immediately refund the secondary with an explanation and they returned our check or reprocessed and sent a new payment of the amount we refunded. BTW, this is not an isolated occurence, there are a number of secondary payers who are doing this. So, we have all this money that some of us think belongs to the secondary insurance company and others think belongs to the providers. But no one is sure of what to do. . .

  9. #9

    Smile

    Seobhan, you and the others have done all that you can do and probably more than you had to. You have called the insurance carrier's attention to their error in payment. In the past you have automatically refunded back to them-- all of which costs you time and money. If you have documentation that you have called them in the past regarding this error and it is still being repeated then you are, in my opinion, under no further obligation. Of course you are not the only provider who is having this problem so at some point in time the "glitch" will be fixed in their system, an audit will be done, and you will be asked to refund any amounts paid in error. Or they may recoup from future payments owed. I wouldn't worry any further about it--but keep documenting any calls you make!

  10. #10
    Join Date
    Apr 2007
    Location
    Morristown
    Posts
    40

    Default

    I agree with Bready. In addition to calling and verifying what their policies are, I would take it a step further and request something in writting for your file. Insurance companies today are going back and performing internal audits and may come back with a refund request even if the additional payment was an error on their part.

Similar Threads

  1. When Medicare is secondary payer.
    By ChristieH in forum General Discussion
    Replies: 6
    Last Post: 04-19-2016, 07:47 AM
  2. Medicare Secondary Payer Form
    By cashiersmortgage@hotmail.com in forum Compliance General Discussion
    Replies: 1
    Last Post: 05-24-2013, 08:26 AM
  3. Obligation is not contracted with secondary payer
    By AlaskaCpcCpb in forum Billing/Reimbursement
    Replies: 0
    Last Post: 05-02-2012, 06:34 PM
  4. Medicare secondary payer??
    By manders07 in forum Medicare Regulations
    Replies: 6
    Last Post: 06-30-2010, 08:23 AM
  5. Medicare as Secondary Payer Allowables
    By SWilliams804 in forum Medicare Regulations
    Replies: 1
    Last Post: 08-24-2009, 11:53 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  

Enjoying Our Forums?

AAPC forums are a benefit of membership. Joining AAPC grants you unlimited access, allowing you to post questions and participate with our community of over 150,000 professionals.

Join Now Continue Reading Without Full Access

Already a Member?

Login

Close Message

In addition to full participation on AAPC forums, as a member you will be able to:

  • Access to the largest healthcare job database in the world.
  • Join over 150,000 members of the healthcare network in the world.
  • Be a part of an industry leading organization that drives the business side of healthcare.
  • Save anywhere from 10%-50% with exclusive member discounts on courses, books, study materials, and conferences.
  • Access to discounts at hundreds of restaurants, travel destinations, retail stores, and service providers. AAPC members also have opportunities to save on heath, life, and liability insurance.
  • Become a member of a local chapter and attend regular meetings.