Troubleshooter: Why are primary and secondary dental insurance so confusing?
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QUESTION: We’ve had some confusion with primary and secondary insurance. My question is, which fees do we have to follow, primary or secondary? What if primary is lower than secondary? Also, what happens when primary says a patient owes one amount and secondary says the patient owes another. Which amount does the patient pay?
ANSWER FROM CHRISTINE TAXIN, founder of Links2Success:
Each type of insurance follows a different set of rules. You need to know if your state has any policies that will not allow this to happen, such as California’s rule that prevents nonduplication of benefits. This allows the office to bill and collect up to the highest fee, not the lowest fee.
The difference between the dentist’s full fee and the sum of all dental benefit plan payments and patient payments is the amount of the write-off. Write-offs should not be posted until all plans have paid accordingly. If a write-off is posted after the primary insurance pays and then posted again based on the secondary payment, it is possible the dental office may incorrectly apply a credit to the patient’s balance. Remember to always submit your full fee on the dental claim form.
These are some ways you may need to write off according to the plan you are billing.
- When filing primary and secondary insurance, you must bill your full fee on the patient’s ledger.
- You need to submit primary claim and secondary claims. The patient is responsible only for the fee up to the lower of the two insurances. For example, if the fee for a crown is $700 from one insurance company, and $800 from another, then the patient is responsible for his or her portion only up to the lower fee of $700. If the office receives $700 or more from both insurances, then the patient owes nothing. The office is allowed to collect up to its office fee. If the office receives more than its office fee, it must refund the insurance company. The patient does not collect any portion of the fee received by the office.
Types of coordination of benefits (COB)
Many factors determine how COB is handled, including state laws, processing policies of the carriers involved, contract laws, fully insured versus self-funded plans, and types of COB used. There are several different types of COB that plans may use. A brief description of some of the more common methods are:
- Traditional: Traditional coordination of benefits allows the beneficiary to receive up to 100% of expenses from a combination of the primary and secondary plans.
- Maintenance of benefits (MOB): This reduces covered charges by the amount the primary plan has paid, and then applies the plan deductible and coinsurance criteria. Consequently, the plan pays less than it would under a traditional COB arrangement, and the beneficiary is typically left with some cost sharing.
- Carve out: Carve out is a coordination method that first calculates the normal plan benefits that would be paid, then reduces this by the amount paid by the primary plan.
- Nonduplication COB: In the case of nonduplication COB, if the primary carrier paid the same or more than what the secondary carrier would have paid if it had been primary, then the secondary carrier is not responsible for any payment at all. Nonduplication is typically used in self-funded dental plans. A self-funded dental plan is one in which the plan sponsor bears the entire risk of utilization.
- Self-funded plans are exempt from state insurance statutes and are generally governed by the Employee Retirement Income Security Act (ERISA). In 2012, 49% of people with a dental benefit had a self-funded plan.(. It is important that dental offices understand that not all patients will have a dental plan that is subject to the state’s COB laws. ADA policy opposes nonduplication provisions, and at least one state, California, has enacted legislation prohibiting such provisions.
Network plan write-offs
The difference between the dentist’s full fee and the sum of all dental benefit plan payments and patient payments is the amount of the write-off. Write-offs should not be posted until all plans have paid accordingly. If a write-off is posted after the primary pays and then posted again based on the secondary payment, it is possible the dental office may incorrectly apply a credit to the patients’ balance. Remember to always submit your full fee on the dental claim form.
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Don't be shy! If you have a tough issue in your dental office that you would like addressed, send it to [email protected] for the experts to answer. Remember, you'll be helping others who share the same issue. Responses will come from various dental consultants and experts in the areas of human resources, coding, front office management, and more. All inquiries will be answered anonymously on DIQ.
Originally posted in 2017 and updated regularly
