QUESTION: Can you explain how to determine which insurance is primary and which is secondary when I have two plans and one child? – Jessica in OH
ANSWER: Thank you for asking a very common and important question. Secondary insurance can make an insurance coordinator sigh with frustration. First, let’s figure out which is primary. The patient who has active coverage as the employee is considered to carry primary coverage. Example: Molly works at Boeing and is covered by Acme insurance. Molly’s husband, James, works at Walmart and is covered by Widget insurance.
· Molly’s primary insurance is Acme and her secondary is Widget.
· James’s primary insurance is Widget and his secondary is Acme.
In the case of children, a guideline called the birthday rule takes effect. The birthday rule states that the parent whose birthday falls earlier in the year is the primary insurance holder. In the example with Molly and James, James was born in January and Molly was born in May. For their child, the primary insurance would be James’s Acme insurance.
How do you handle the situation when a divorce occurs? If the court ruled that a parent has financial responsibility for the child’s health care bills, then the birthday rule is thrown out. In this case, if Molly is designated as responsible for the child’s health care bills, then she is primary. Unfortunately this will usually require a call to the insurance company to inform them. You may also have to deal with returned claims that improperly tell you that the father’s insurance should be primary because of the birthday rule. This is not an easy situation to resolve, but it must be worked through. What if the court has not designated this matter and the parents split the bills? Typically the parent with primary custody is responsible for the bills, but the birthday rule still applies when it comes to filing the claim.
Many offices struggle with this because sometimes a patient comes in with a non-parent or an extended family member. I suggest that your office develop a policy for this situation. It should state that the parent or guardian who brings the child into the office for treatment is the financially responsible party. Let the parent know this policy ahead of time so it’s not a surprise. Keep in mind that if the court documents state that one parent is financially responsible, you will need to make arrangements with that particular parent to collect copayments, either by keeping a credit card on file or asking the parent to prepay the copayment amount.
Teresa Duncan, MS, FADIA, FAADOM, is an international speaker who addresses topics such as insurance coding, office manager training, and revenue growth. Her company, Odyssey Management, Inc., provides virtual, customized training in these areas. She can be reached at [email protected].