It is common for the residents in skilled nursing facilities to have multiple coverages. A combination of Medicare and a supplementary coverage. A combination of Medicare and Medicaid. Another combination of an employer retirement coverage that follows all the previous coverages. Every combination brings about different payers to process the claims.
Submitting a claim to the wrong payer brings about rejections that appear as an issue of ineligibility, which is not really the case; coverage was there, the services were also covered and the claim was rejected due to submitting the claim to the wrong payer. It is for such reasons that we see platforms such as Approved Admissions exist, and it is only the first step.
The rules that follow are worth knowing in detail.
The Basic Order
Medicare is usually primary for residents aged 65 and over who are retired. A supplemental or Medigap policy pays second, covering coinsurance amounts that Medicare leaves behind.
Medicaid is always the payer of last resort. Every other liable source pays first, and Medicaid covers what remains within its own rules. This holds regardless of how the other coverage arose.
Employer group health plans complicate this. A resident still working, or covered through a working spouse, may have that plan as primary over Medicare depending on employer size. The thresholds differ: 20 or more employees for age-based Medicare entitlement, 100 or more for disability-based entitlement.
The Sources of Problems
Sometimes the secondary insurance coverage does not get mentioned upon admission. People bring up the Medicare card but forget the additional insurance because of automatic payment that has not been checked for years.
Sometimes there is a retiree coverage which means that a resident has an insurance which pays after the Medicare, and nobody in the facility knows about it until it gets brought up by a family member.
Then there is the timing problem. Billing a secondary payer before the primary has processed the claim produces a denial every time, and the secondary will not reconsider until the primary remittance is attached.
Medicare Secondary Payer Situations
Certain circumstances put Medicare in the secondary position, and they are easy to miss because they arise from events outside the facility.
Liability insurance following an accident. Workers’ compensation for a work-related injury. No-fault coverage after a motor vehicle incident. In each case, the other insurer pays first for care related to that event.
These matter because Medicare can recover payments made when another party was responsible. A resident admitted for rehabilitation after a fall in a store or a car accident may have a liability claim in progress, and that changes the billing picture substantially.
Ask about the circumstances of the injury during admission. It is a straightforward question that prevents a difficult recovery situation later.
The Medicare and Medicaid Combination
Dual-eligible residents are common in long-term care and carry their own set of rules.
Medicare pays first for covered Part A stays. Medicaid may then cover coinsurance amounts, subject to state-specific limits on what it will pay. Some states pay the full coinsurance, others pay only up to their own rate, which can mean no additional payment at all.
Patient liability applies separately. A dual-eligible resident in long-term care usually contributes part of their income toward the cost of care, and that amount has to be applied correctly on the claim. Getting it wrong produces either an overpayment to recover or a shortfall to chase.
Knowing your state’s specific treatment of both issues is necessary. General Medicaid knowledge does not transfer between states here.
What to Capture at Admission
The intake conversation determines how much of this gets resolved early.
Ask directly whether the resident has any coverage besides the primary card presented. Ask about retiree benefits from a former employer. Ask whether a spouse is still working and whether the resident is covered under that plan. Ask about the circumstances of any injury that led to the admission.
Photograph both sides of every card, including supplemental and prescription cards. The claim addresses and payer identifiers printed on the back are frequently the only place that information appears.
Record which coverage is primary and why. A note explaining the reasoning saves the next person from working it out again and makes errors visible when circumstances change.
Mid-Stay Critical Changes
The order of coverages is not set during the period of a stay.
One spouse retires; now the employer plan is not the primary one. A liability claim has been settled and the patient qualifies for Medicaid during the stay, thus making all the other payers prior to Medicaid.
All of the above mentioned will affect the billing order starting from a certain date, and claims that have already been submitted may require modification. However, the important thing here is not the status of the primary insurance but changes of coverage status.
Working the Denials
Coordination denials tend to carry recognizable reason codes indicating that another payer is primary or that primary payment information is missing.
The response depends on which. Missing primary remittance means obtaining and attaching it. An incorrect primary determination means identifying the correct order and rebilling in sequence, which takes time and often means restarting a filing clock.
Track these separately from eligibility denials in your reporting. They come from a different failure point, and grouping them together hides how often the problem occurs.
The Practical Summary
Coordination of benefits problems are largely front-end problems that surface at the back end. The information needed to bill correctly is usually available at admission, and it goes uncaptured because nobody asked the right questions.
A short set of intake questions, photographs of every card, and a documented reason for the primary determination will prevent most of these denials. The remainder come from mid-stay changes, and periodic re-verification is what catches those.