How to navigate secondary billing for therapy | Headway

What is secondary billing?

Secondary billing is possible when a therapy client holds two insurances at the same time. One insurance is designated as the “primary” payer and the other is designated as “secondary.” Claims must be submitted to primary insurance first. Once it processes the claim and pays its share, the remaining balance can be submitted to the secondary insurance. Claims must be billed one at a time and not simultaneously. Understanding this process is crucial for therapists and billers to understand for therapists to avoid missed reimbursements and ensure accurate claim handling.

When secondary billing is required

Having secondary insurance is relatively uncommon, but it does arise. Common reasons that someone might hold secondary insurance include dual employer coverage through both spouses, children under 26 covered by both parents, coverage from both a student plan and a parent’s plan, coverage by an employer and a parent’s plan, as well as simultaneous coverage from an employer and Medicare/Medicaid. In these cases, if the client’s primary insurance does not cover the full balance, the remaining amount should be billed to the secondary insurance. Secondary billing is an attempt to cover an outstanding amount that the client owes for services. Headway does not offer secondary billing at this time.

Common challenges in secondary billing

Secondary billing can come with complexity and challenges. Here are some of the most common:

Coordination of Benefits (COB) complexity

When a client has multiple insurance plans, there needs to be a Coordination of Benefits (COB). This is something the client has to ensure is in place and must contact their insurance companies to coordinate it. The COB determines which insurer is primary and which insurer is secondary. It determines the payment order and outlines how much each insurance will cover.

For example, if a therapy session costs $150, a COB would determine that Company A is the primary insurance and would pay $100 first, while Company B is the secondary insurance and would pay the remaining $50. Coordinating benefits ensures accurate payments and helps to streamline the billing process.

Documentation requirements

Insufficient documentation when completing secondary billing can cause delays in processing and reimbursements. It is essential that you or your biller are aware of what documentation is required. Most commonly, you will need to include the COB details, the Explanation of Benefits (EOB) from the primary insurance claim (including the total billed, paid and remaining), dates, adjustment codes (if applicable) and the correct completed claim form (such as CMS-1500). In some cases the secondary insurance might require additional documentation such as itemized receipts or medical records. It is important to have familiarity with the secondary insurance requirements in every situation as it may vary slightly from one payer to another.

Delayed reimbursements

When the required documentation is not provided, or if there are errors in the documentation, it can lead to delays in reimbursements. If a claim is rejected and needs to be amended, this can significantly delay payments. The process of billing primary insurance first, waiting for an EOB, then billing secondary insurance and waiting for their response can naturally cause secondary billing to have more delays than standard billing. Delayed payments from insurance can be frustrating, so it is important to do everything possible on your end to reduce errors and ensure the secondary insurance has what they need.

Compliance concerns

Compliance is a key concern in the secondary billing process. Following the COB, the documentation requirements of the insurance and the order of billing mitigates risk and reduces delays. There may be payer-specific rules that need to be adhered to, such as with Medicare and Medicaid. In these cases it is important to understand and follow those specific requirements. As with all client health information, you must maintain HIPAA standards and protect patient privacy. Failing to comply with HIPAA standards can result in significant negative consequences.

The secondary billing process: Step-by-step guide

A clear and streamlined workflow can help you reduce errors and save time when billing secondary insurance. Here are the key steps:

Verify all insurance coverage and ensure the coordination of benefits (COB) is up to date: Confirm with the client and the insurers which policy is primary and which is secondary. Gain an understanding of the COB and which insurers you will be dealing with in order.
Submit the claim to primary insurance: Submit the claim for services to the primary insurance. Do not submit to the secondary insurance until the primary has processed their claim.
Wait for the primary insurance’s explanation of benefits (EOB): Receive the EOB from the primary insurance. This will include the date of service, payment details, denial information or anything applied to client responsibility. This will be necessary to show the secondary insurance.
Review and post the primary payment: Enter the payment information and any adjustment codes from the EOB into your billing system.
Prepare and submit the secondary claim: Prepare the new claim for the secondary insurance. Include the primary insurance EOB along with any other required documentation. Submit the claim and all documentation electronically or on paper as required.
Monitor the claim status and respond to any requests: Track the claim’s progress with the secondary insurance. Respond to any requests for corrections or additional information.
Post payment (or denial) from the secondary insurance: Post the secondary insurance payment or denial to your billing system. File a correction or appeal if applicable for a denial.
Bill client if necessary: For any remaining balance that both insurances did not cover, send an invoice to your client.

Submission methods for secondary claims

There are multiple ways to submit secondary claims, each with its own pros and cons.

Direct submission to payers

These submissions would be handled directly by you, the therapist. They are often handled electronically but can also be mailed as paper claims. It can reduce costs by eliminating billing middlemen who will charge for their services. You will have full control over the submission from start to finish. However, it can make the process more time consuming. It can also expose you to more potential clerical errors since you will be inputting most of the information manually.

Using a claims clearinghouse

A clearinghouse can be a great option for claim submissions, especially for practices with high claim volume. It saves you time from doing extra clerical work. These clearinghouses usually provide dashboards that offer an overview of claim statuses and progress as well as automatic error-checking which can reduce the number of claim denials. The downsides of this method are the increased costs and the lower levels of control. There also can be a steeper learning curve for people just beginning to work with the clearinghouse.

Automated secondary billing solutions

One of the main benefits of these systems is the automation and efficiency. It can be very useful for busy practices with complicated insurance needs. They can reduce errors and data entry while integrating tracking, payment postings and reminders. The challenge with these systems is that they can be costly and require a significant investment of time for setup. Although the setup can be laborious upfront, automated systems often lead to long-term time and cost savings.

Troubleshooting common secondary billing issues

There are some common issues that can arise with secondary billing, yet there are some practical steps that can be taken to mitigate these problems.

Eligibility and COB verification: The process can be delayed if the COB information is incorrect or outdated. Verify that the primary and secondary insurances are clearly defined before having therapy sessions.
Incorrect claim sequencing: Submitting the secondary claim too soon is a common cause of delay. Ensure that you file only with the primary insurance initially and that you have their EOB before preparing and submitting the secondary claim.
EOB incorrect or not attached: If the secondary insurance does not receive the EOB or it is incorrect, it will create problems with the process. Double check that the EOB contains all required information and is attached properly.
Clerical errors: Typos, missing information, unbalanced accounts and submission mistakes are some of the most common errors in the secondary billing process. Having effective systems and checks, and avoiding rushed work, can help eliminate these issues.

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