Secondary insurance plans often pay deductibles, co-pays, or coinsurance that is due after the primary insurance plan has paid on the claim. Secondary claims process through the insurer’s regular claims progression, so it may be somewhat of a surprise when a denial EOB shows up for a secondary claim. Remember, a patient’s secondary insurance plan has its own benefits and coverage policies that cover that member. So, for example, while a patient may have coverage for a certain procedure under their primary insurance, that procedure might not be included in the patient’s benefits under the secondary policy.
Let’s examine a recent claim for radiation therapy that crossed over from Medicare to a secondary insurance company and was denied by the secondary payer for “place of service incompatibility”. Radiation therapy is routinely performed in free standing facilities and in this case was billed as such, per Medicare coding guidelines. Upon phoning the secondary insurer to point out a possible denial error, it was discovered that this particular patient’s plan falls within a small group for which radiation therapy is only payable as an inpatient procedure. Therefore, in this instance the denial is correct since the treatment was performed as an outpatient procedure, disqualifying it for secondary coverage for this particular patient.
However, secondary payer denials often prove to be an error on the insurer’s part and an adjustment to the claim is warranted. The accounts receivable manager’s first step is to compare the service line to other claims that have already processed. If the same procedure code has been paid by the plan in the past, a quick phone call to point this out will often result in an adjustment to the denied service. Sometimes an accounts receivable manager has to be confident and persistent to get a denial error reversed. Your persistence may cause the insurance company to retrain its claims processors or may result in the correction of an error in their system so that future services are not denied improperly. It is always worth pursuing secondary denials that you believe are erroneous.