Question

Q: Can the secondary plan coordinate benefits based upon the primary plan’s contracted fees?

A: Yes, a secondary payer can coordinate benefits based upon the primary plan’s contracted fees instead of the full fee submitted or the secondary plan’s contracted fee. Coordination of benefits (COB) means that the secondary plan pays in addition to what the primary plan pays up to the allowable amount as established in the COB rule of the plan. With COB, (which is governed by federal or state law) doctors may receive up to the full fee submitted under the best of circumstances. This means the practice could be in 2 PPO plans with low allowable fees and yet still collect up to the full fee. On the other hand, the secondary plan may only pay up to the primary or secondary PPO fee (again controlled by state or federal law as it might apply to coordination of benefits). If the plan is an insured plan, state law applies. If the plan is self-funded or federal, ERISA rules apply.

Q: What is the patient responsibility when the patient has primary insurance (with which the practice is not contracted) and the secondary plan is a discount plan (with which the practice is contracted).

A: The patient receives the benefit of the lower contracted fee, which in this case is the secondary plan (discount plan). The lower contracted fee is “patient responsibility.” However, the provider may retain up to the full fee after both plans have paid, resulting in the reduction of the required provider adjustment. Primary and secondary coverage have nothing to do whatsoever with patient responsibility, only the order of filing each claim. Patient responsibility is always the lower contracted fee amount. Primary and secondary status determine the order of claim processing, and do not determine COB. The secondary payer determines the COB.

Q: We are an in-network provider for the patient’s primary plan; we are out-of-network for the secondary plan. If the patient pays an estimated portion at the time of treatment, then the total payment received from both the primary and secondary plans exceeds the total fee, resulting in an overpayment. Does this overpayment belong to the patient?

A: If the total amount received from both plans exceeds the lowest contracted amount (the patient’s responsibility), then the patient would receive a refund of the estimated amount which was paid out-of-pocket by the patient. When a patient has one or more dental plans with which the provider participates, the patient always receives the benefit of the lowest contracted fee. The lowest contracted fee establishes the patient’s maximum out-ofpocket financial responsibility. The final patient responsibility and the provider write-off are calculated once all benefits have been received from all plans.

Before any patient credit is issued, an account audit should be conducted to determine if the insurance writeoff was correctly calculated. The provider write-off is determined after all plans have paid. Do not make the adjustments as indicated on any of the EOBs. Again the patient responsibility is determined by the lowest contracted amount and the write-off varies according to the total amount received from all plans. The doctor is allowed to keep any amount received above the lowest contracted amount, up to the full fee, thus reducing the provider write-off.

For example:

Full fee                              $1,000           Paid by primary    $500

Lowest contracted amount $ 700           Paid by secondary $300

                                                                               Paid by both plans $800

Patient responsibility is zero, because the total paid by both plans is more than the lowest contracted
fee ($700). The provider write-off is $200 ($1,000 full fee less $800 total payment received).

Below are a few tips regarding coordination of benefits:

  • Always submit claims to the secondary payer.
  • Always assign benefits to the provider, not the patient.
  • Always submit the full fee charged for the procedure, never the contracted fee on all claims.
  • Always record the full fee on the ledger card.
  • Never take any write offs until after all plans have paid.

Q: The Coordination of Benefits Model Regulation written by the NAIC, Section 3 Paragraph A.5.(c) states: “If a person is covered by 2 or more plans that provide benefits or services on the basis of negotiated fees, any amount in excess of the highest of the negotiated fees is not an allowable expense.” Does this imply that the higher of the 2 fee schedules is the patient’s responsibility? In other words, does this mean I can charge the patient the higher negotiated fee?

A: The NAIC and the ADA agree on this recommended COB model for dental plan design. However, few payers have adopted this model, and since the NAIC and the ADA do not have the authority to mandate that payers adopt the model it would be uncommon that you would see this in practice.

Most plans are designed to give the patient the benefit of the lowest fee schedule established by the
individual’s plans. The practice may request that the patient obtain a copy of the plan document to review
the COB policies set by the individual plan. If the patient receives the benefit of the lowest fee schedule,
the practice will never overcharge the patient and the calculation will be correct in most cases. Ultimately,
the practice is obligated to adhere to the COB rules established by the plan, regardless of the COB model
endorsed by the NAIC and ADA.

Q: Which plan is primary, medical or dental? Can I file the same procedure to both plans?

A: Typically, when a procedure is considered medical in nature, the medical plan is considered primary and
should be billed first. It is advisable to hold the dental claim until the medical payer first adjudicates the claim. Afterwards, the claim may be submitted to the dental payer with the medical explanation of benefits (EOB). Filing both medical and dental claims simultaneously may result in an overpayment requiring refunds to the payer(s) and/or the patient and is not recommended.

Q: What is non-duplication of benefits?

A: Non-duplication of benefits means that the secondary payer will not pay any benefit if the primary plan paid the same or greater benefits than secondary would have paid if it had been primary. For example, secondary would pay $500 on the claim, but primary pays $500 or higher, so secondary pays nothing. Non-duplication of benefits is determined solely by the secondary payer. Often, self-funded plans (large employers) when secondary, use this technique to hold down costs.