Ever heard of the terms “primary payor” and “secondary payor”? You may not hear them in normal conversation, but have you ever had a bill that you discovered the insurance company hadn’t paid yet? You call the insurance company because you receive a bill from the provider you went to, so you quickly call the insurance company to see what’s going on. To your dismay, the agent asks you to authenticate your identity with certain information, and then he or she proceeds to check the account to see what the reason could be as to why the bill isn’t paid. In some cases, it could be that the invoice isn’t paid because the insurance company has yet to receive the claim from the provider.

If you discover that the insurance company hasn’t yet received a bill, my advice to you is to refrain from paying the bill until your insurance company receives the bill. Why? because the provider may want you to pay the bill in full, though your copay is a small portion of that (you may not owe a copay at all). In fact, you should tell the provider who sends the bill, “I refuse to pay until you send a bill to my insurance company.” In many cases, providers don’t want to send a bill to the insurance company because the company, if they are a Medicare Advantage plan, only pays what Medicare demands.

For example, if a procedure costs $150,000 but Medicare says the rate for the procedure is only $5,000, then the Medicare Advantage insurance company only pays the Medicare rate of $5,000. In proper language, it’s called the “Medicare Allowable Rate.” Providers hate billing Medicare Advantage plans because they know they can’t get any more than what Medicare demands for services rendered. But, if the provider thinks $5,000 is too little for that procedure or service, what does the provider do? if they’re nefarious, they bill the patient. In many cases, providers think patients will be so scared and nervous about a bill going to collections that they will pay it without thinking or even talking to their insurance company. Whatever you do, don’t take the bait: refrain from any payment until your insurance company has a copy of the bill by which they can advise you.

But in some cases, the agent comes back to the phone and says, “yep, the reason the bill isn’t paid is that you have another insurance company as your primary payor. This insurance company is the secondary payor.”

In such cases, what do you do? how do you respond? Many members want to easily respond with emotion. The first thing to do is respond with outrage that the bill isn’t paid; then members get upset because of what they believe to be a “technical error” in the system. Some members never consider they have secondary insurance. They never consider that they could be the ones that haven’t resolved the issue. It’s too easy to make the insurance company the scapegoat. However, in some cases, members still have secondary insurance that they forgot to leave or drop. The insurance company can be wrong (all entities can be wrong because no entity on earth is perfect), but it can also be right at times, too.

But what if the insurance company is right? What if, to your surprise, you do have secondary insurance and that company is the primary payor while the Medicare Advantage plan you assumed was your sole company is secondary? Well, to know what to do, you have to know what the terms primary payor and secondary payor mean.

So I will set to a discussion of these terms, then go on to talk about what you can do to empower yourself should you find yourself in the same or similar situation.

what is a primary payor?

What is a primary payor? A primary payor is the insurance company in charge of paying for your medical expenses or accidental expenses in the event that you have injuries and are hospitalized. If you end up in a car accident but you have minor injuries that can be treated at home, the insurance company still pays for the medical bills if you are an active member of the insurance plan or policy. Many members don’t accrue serious medical bills, however, until they end up in the hospital for a few weeks to a few months at a time.

The primary payor is called “primary” because they are first, the first company to pay your medical bills. This company has the unfortunate advantage (I say “unfortunate” because I’m taking the perspective of paying a medical bill) of being the first company to cover your medical expenses. They are responsible for covering the lion’s share or the majority portion of your medical expenses. For example, if you have a medical bill totaling $6000, the primary payor may have to pay $4000 of your bill. You, the member, just want the bill paid, but insurance companies, like you, want to budget expenses. Having to pay the lion’s share of any huge medical bill is not a wanted thing.

Think if you were the insurance company: would you want to pay the first $4000 and leave the secondary payor to foot the remaining $2000? Chances are, you’d want to pay no more than $2000. That’s the way insurance companies think when budgeting their financial responsibility.

It’s no different than the primary care physician, or the doctor you see every few months. The doctor you see regularly is called the “primary care” physician because they are the first doctor in a long line of doctors. Yes, you see specialists, but you only see specialists when something is wrong and the primary care physician (PCP) notices it and doesn’t know how to treat you. The PCP is what many call a general practitioner; he or she is trained to study the body as a whole, but if you have dermatitis, for instance, the PCP is more likely to send you to a dermatologist (skin specialist). The reason? You may have an underlying condition that the PCP cannot study in detail or knows little about. The skin specialist or dermatologist, on the other hand, may be able to diagnose the exact skin condition and prescribe direct treatment for the problem.

This doesn’t mean the PCP is just a “figurehead” of a doctor. In actuality, without the PCP, you would never be seen by a specialist, particularly if you’re a member of an HMO plan. There are very few self-referred fields in HMO plans (gynecology, dermatology, optometry, dentistry, and chiropractic are the only 5). If you have a serious skin condition that requires excising skin to determine what the matter could be, you could find yourself with a dermatology surgeon. You can’t self-refer to dermatology surgeons; you must be referred to them by a general dermatologist. These referrals/authorizations are based on medical necessity in HMO plans, which explains why a doctor has to refer you rather than you self-refer to these specialists.

The primary payor is the insurance company that is “first” (think “primary”) in paying your medical bills. The first company you joined in the list of two serves as your primary payor. So if you joined your current Medicare Advantage plan last, then the previous company you had is your primary payor. When the insurance company says, “we are not your primary payor,” then think to yourself, “Which insurance company did I have prior to this one?” Go back through old bills and so on. You may just be surprised to find out you still have insurance with a former company, but you never know.

what is a secondary payor?

If the “primary” payor is the first insurance company to pay out, then the secondary payor is the “second” (the root word of “secondary”) insurance company to pay in the event of medical expenses and bills. When an insurance company says “we are not the primary payor,” they’re saying in a roundabout way that “we are the secondary payor.” The benefit of being the secondary payor for the insurance company is that, in the event of medical need, the secondary payor is the second company to pay out. What this means is that the secondary payor covers whatever expenses were not covered by the primary payor.

If the primary payor foots the first $4000, then the secondary payor only owes the remaining $2000 for the accident. They get off relatively better than the primary payor. All insurance companies want to be secondary payor because they can save money. Trying to save money does not make the insurance company criminal, however, any more than you trying to budget your expenses and get quality items for less makes you criminal.

The secondary payor is not the first to pay in the event of an accident or medical need if you have two insurance companies. This rule of “primary first, secondary second” is what you will hear referred to as “coordination of benefits” or COB (acronym). Your benefits work the most for the primary insurance while working secondary for the second insurance company.

I’ve been told I have secondary insurance; what do I do now?

1. find out which company is primary payor and which is secondary payor

If you’ve been told you have secondary insurance, then in essence, you’re being told you have two insurance companies you are a member of: one primary, one secondary. In order to get rid of one and keep the other, you need to first find out which insurance company is primary. If the company you want to be primary is secondary, then you’ll have to disenroll from the primary payor. If you have a secondary and you do not want the secondary payor, then you will have to disenroll from the secondary payor.

You can disenroll from either the primary payor or secondary payor by calling up your insurance company and requesting disenrollment. If you are in a universal election period (where members can switch plans or disenroll) such as an Open Enrollment Period or Annual Enrollment Period of some sort, you can call the insurance company and request the agent transfer you to a licensed sales agent that can enroll or disenroll you. Only licensed sales agents can enroll and disenroll members from plans. Not all insurance agents over the phone are licensed sales agents with the power to enroll or disenroll.

There are other election periods members can utilize, such as 1) moving out of the service area in an HMO plan, for example, but, outside of an Open Enrollment Period for all members, disenrollment requests will prove more difficult to achieve. So with that said, call your insurance company or go online to find out when you can enroll or disenroll. It will remove barriers for you and make your efforts easier in the process.

2. contact primary payor

If you find out that a former insurance company is the primary payor, contact them immediately regarding a bill you have. They may have received a claim for your medical expenses. If they haven’t, call them to obtain your insurance information. If you haven’t been active with your primary payor in a while, you will need an insurance card from them with your information. You may need to call the provider for your current bill and provide the primary payor insurance info so that the provider can bill the primary payor. You will need to contact your primary payor for a myriad of reasons that can help progress you toward getting your bill paid.

3. appeal the denied bill with your insurance company

If you have proof of disenrollment from the previous insurance, but the current says that you still have them as your primary payor, then you can always appeal the decision. In the appeal, you can provide a copy of the letter of disenrollment from the former company, as well as other information from agents at the former company as proof of your disenrollment. Appeals are a great opportunity for members to make a case for reconsideration of a bill or a request. There are a number of members who reject appealing decisions made, but to reject appealing your case is to deny yourself a chance to be heard.

If you discover that your insurance company has made a technical error, then you should immediately gather all the information you can and appeal the decision and the bill rejection. Depending on the company, you will likely have something around 60 days to appeal the decision. In that time, you can make calls and gather the information you need to make a case for yourself. Don’t turn down another way to let your voice be heard. Make an appeal with the researched information as soon as you can before the appeals deadline.

keep your head in the equation: dealing with crushing news of denied bills and secondary insurance (Conclusion)

It’s all too easy to come unglued when you call to find out a bill hasn’t been paid and you’re told that you have secondary insurance and that the former company has to pay out first. It’s all too easy to get angry at the agent delivering the news. But what you must remember is that the insurance company is not rejecting you because of some random reason. Humans enter info into computers and can be wrong at times. Humans can look things up in computer information systems and get wrong results at times, too. But, in either case, the error is not on the agent delivering the decision, but rather, someone before them who placed certain info in the system. The agent on the phone, like you, is just trying to make sense of what has happened with your case and see what they can do to help.

If you can keep your head in the issue and not let your emotions (hurt and disappointment) get the better of you, you will be able to see the issue through until the end when it is resolved and you are at ease. Hopefully the info and tips above will guide you to that desired end.