When clients have more than one health insurance policy—for example, through their own employer and a spouse’s plan—they may not know how mental health benefits are billed or reimbursed. Providers need to understand how to handle primary and secondary insurance, how to coordinate benefits, and how to prevent billing issues that can delay payment or confuse clients.
In this comprehensive guide, you’ll learn:
- What primary and secondary insurance actually mean
- Which policy pays first and why it matters
- How to bill correctly for both policies
- Documentation and coordination tips to ensure accurate reimbursement
- Common challenges and how to avoid them
What Are Primary and Secondary Insurance?
Primary insurance is the policy responsible for paying first when a claim is submitted.
Secondary insurance is billed after the primary payer has made its payment or denial. The secondary policy may pay the remaining balance, depending on its coverage rules.
For mental health sessions, clear coordination between payers is essential. Without it, clients risk unexpected bills and providers often face payment delays.
Why Is Coordination of Benefits Important?
- Avoid duplication in reimbursements. Proper coordination ensures total combined payments do not exceed the provider’s billed charges.
- Ensure maximum benefit to clients. Coordinated billing lets clients tap into all available benefits before paying out of pocket.
- Simplify financial tracking. Clear coordination gives both providers and clients a transparent view of billing and payments.
- Protect against denied claims. If you don’t submit to both policies in the proper order, insurers may deny or underpay claims.
How to Identify Which Insurance Is Primary
Determining which policy pays first usually depends on relationship and employment rules:
- Employee plan vs dependent plan: The employee’s own policy is typically primary.
- Dual employment: If both partners have insurance through their respective employers, the plan where the birthday occurs earlier in the year (month-day rule) is primary.
- Divorced parents: The policy of the parent with custody is primary; others take secondary status.
- Medicare: Medicare pays primary only if the client hasn’t turned 65 or has specific conditions; otherwise, commercial insurance pays before Medicare, and Medicare acts as secondary.
Always document how you determined which policy is primary to help with audits and avoid surprises.
Step 1: Collect Insurance Information
At intake:
- Ask for all insurance cards the client has
- Gather member ID, group number, policyholder name, and relationship to the insured
- Ask whether services are already receiving or will receive reimbursement from a second policy
- Be sure to keep a copies for your records, but maintaining HIPAA standards is essential.
Step 2: Verify Benefits and Inform Clients
Check mental health benefits for both plans:
- Confirm copays, deductible, coinsurance, visit limits, and network restrictions
- Check prior authorization requirements
- If one plan requires a paper superbill, note that in your records
- Inform clients how the billing process will work and what to expect regarding out-of-pocket costs
Clients appreciate transparency up front, especially when two policies are involved.
Step 3: Submit Claim to Primary Insurance
Submit your claim normally to the primary insurer with full documentation, including:
- CPT and ICD-10 codes
- Session date, duration, and therapeutic notes
- If it’s a mental health/substance use visit, appropriate modifiers may be needed
- Your NPI and provider information
Once paid, you’ll receive an EOB that outlines allowed charges, paid amount, adjustments, and remaining balance.
Step 4: Submit Claim to Secondary Insurance
After receiving the EOB from the primary payer:
- Create a secondary claim using that EOB
- Attach relevant sections: the allowed amount, paid amount, and patient responsibility
- Submit electronically or via paper depending on payer requirements
Some secondary insurers require the primary EOB before processing. Others use an electronic crossover, so the carrier automatically receives primary payment info.
Step 5: Post Payments and Balance Bill Clients
Once the secondary insurer processes:
- Post payment and adjustments from the secondary claim
- Determine any remaining client balance
- Generate client invoices promptly and provide copies of both EOBs
- Clearly label what the primary and secondary insurance covered versus what the client owes
Prompt and transparent billing builds trust and minimizes surprises.
Step 6: Manage Denials and Appeals for Secondary Claims
Secondary claim denials often occur because:
- Documentation is missing from the primary EOB
- Timely filing deadlines were missed
- The policy excludes certain kinds of therapy or session lengths
Accurately log all denials, then:
- Correct minor issues and resubmit
- Appeal formally with notes and the primary EOB
- Track follow-up closely, and keep clients updated on any outstanding balances
Clear processes for denials help maintain steady revenue flow.
Tips for Success With Primary and Secondary Insurance
- Educate front-office staff on COB rules, when to verify benefits, and how to track denials
- Store EOBs securely for audit protection and client referencing
- Track deductible accumulation across both policies, especially if they have separate limits
- Review annual benefits to check for changes at renewal time
- Transparent billing policy: include details about primary/secondary billing in your consent forms
Final Thoughts
Managing primary and secondary insurance billing is more than following a process. Well-coordinated billing helps clients access all applicable benefits, avoids confusion or surprise bills, and builds their trust.
At Anchor Point Billing Solutions, we specialize in coordinating insurance billing, whether you have primary, secondary, or Medicaid coverage. Our team ensures claims are submitted correctly, appeals are filed when necessary, and clients are billed accurately.
Want to streamline your primary and secondary billing process? Contact Anchor Point Billing Solutions today to optimize claim coordination and maximize your reimbursements.