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Don’t Leave Money on the Table: Secondary Claims

How many secondary claims is your practice writing off?

The classic response to this question is a quick shoulder shrug, followed by the return query, “Why does it matter?” After all, the value of secondary claims is usually just a fraction of that associated with primary claims. Most practices believe it costs more in resources (especially staff time) to chase secondary payments than they’re worth.

In the past, that was probably true. But now, I’m urging all practices to take a second look at their secondaries. They may be worth more than you think.

As you consider your practice’s secondary claims, it’s important to keep in mind a very basic concept: Ultimately, the patient is the party responsible for paying you for your services. If you think back just a few decades, you’ll recall that patients used to file their own insurance claims. They were the ones who shouldered the burden of orchestrating all payment—including that of primary and secondary insurers.

While this arrangement made the patient’s reimbursement responsibility clear to all involved, it often created cash flow problems for practices. It’s hard to run a business when you’re waiting for someone else—someone with no real financial motivation—to get around to asking his or her insurance company to pay you!

So gradually, more and more practices began filing insurance claims on behalf of their patients. Today, most practices do. Patients certainly appreciate the service, but it’s also a vital way to ensure more consistent cash flow for the practice. This arrangement remains a win-win situation on the whole, but secondary claims historically have been lost in the shuffle.

As stated earlier, the cost to collect secondaries has never seemed to justify the effort. But two trends may now invalidate that idea:

1) the current economic environment and impending health reform initiatives are dampening earning capacity, thus making it more important to collect every dollar owed; and
2) the increasing ability of clearinghouses to file secondary claims electronically makes it much more economical to collect those dollars.

Clearinghouses with large lists of payers able to accept electronic secondaries can be tremendously helpful. Have you ever filed a primary claim to Medicare, then waited forever on a secondary filed to AARP, for instance? Many clearinghouses can send and track those claims for you, reducing the resources you need to expend to bring in that revenue stream.

Bottom line: less time, less effort, and more money. And the payoff can be substantial.

How much money from secondary claims is your practice writing off?