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Secondary claims billing

Secondary Claims Billing for Therapy and Psychiatry Practices

Secondary claims billing is the process of sending a claim to a client's second insurance after the primary payer has processed it, so the secondary plan can pay part or all of the remaining balance.

MCM South Medical Billing Service bills secondary claims for psychotherapists and psychiatrists. A secondary claim that skips the primary payer's payment data, or goes out in the wrong order, is a claim that denies.

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Who this is for

Therapists with clients who have two health plans
Psychiatrists billing E/M visits and add-on codes to a second payer
Practices whose secondary claims deny or never get filed
Office managers unsure which plan pays first

What is secondary claims billing?

Secondary claims billing is the second step of coordination of benefits (COB), the way two or more plans work out who pays first when they cover the same claim (HealthCare.gov).

The primary plan pays first under its own terms. The secondary plan then figures what it would have paid on its own and applies that to the unpaid allowable expenses. Under the National Association of Insurance Commissioners (NAIC) model COB regulation, combined benefits may not exceed 100 percent of total allowable expenses, and amounts paid count toward the secondary plan's deductible (NAIC, checked 10/1/26). This is a model. Each state adopts its own version, so state rules vary.

Order matters. Billing the wrong plan first, or billing the second plan without the first plan's payment data, is the most common reason a secondary claim fails.

Secondary claims billing is the step that follows a primary payer's payment. It asks a second plan to consider the balance. Our electronic claims submission page covers how the first claim gets filed.

Which plan pays first?

The plan that pays first depends on the situation: the client's own employer plan usually comes before a dependent plan, and special rules apply to children, divorced parents, COBRA and Medicare.

Situation	Who is primary (NAIC model)
Child covered by both parents	The plan of the parent whose birthday falls earlier in the calendar year. If the birthdays match, the plan that has covered a parent longer.
Divorced or separated parents	First a court decree that assigns responsibility. If both parents are responsible or share custody without a specification, the birthday rule. With no decree: the custodial parent's plan, then the custodial parent's spouse's plan, then the non-custodial parent's plan, then that parent's spouse's plan.
COBRA continuation	The plan covering the person as an employee or dependent is primary. The continuation plan is secondary.

Source: NAIC Model Regulation, section 6, checked 10/1/26. States adopt their own versions, and plan documents may differ. Verify the order with both payers. See our eligibility terms.

Secondary claims billing depends on getting the order of plans right. Confirm which plan is primary before you file anything, and keep the order of benefits on record. Our billing terms glossary defines the terms.

Secondary claims billing in five steps

1. Verify both plans and the orderConfirm that both plans are active, and which one the payers treat as primary. Update the record if the client's coverage changed.
2. Bill the primary payer firstSend a clean claim to the primary payer and wait for its remittance. See our CPT and E/M code guide for the codes on the claim.
3. Get the primary payer's 835 or EOBThe explanation of benefits or electronic remittance advice shows what the primary allowed, paid, adjusted and left as client responsibility.
4. Send the secondary claim with the primary's dataOn an 837P, other-insurance information goes in loop 2320. It includes the other subscriber (SBR), the amount the prior payer paid (AMT) and the prior payer's adjustments (CAS), reported with claim adjustment reason codes at the claim level in 2320 and the line level in 2430 (WPS Health Solutions, checked 10/1/26).
5. Post the payment and follow upPost the secondary payment against the balance. If the secondary denies, find the reason code and correct or appeal. Any balance left may belong to the client under the plan terms.

When a later payer reports the earlier payer's result on its own 835, X12 shows prior-payer payments and reductions under group code OA with reason code 23, remaining client responsibility under PR, and new contractual reductions under CO (X12 coordination of benefits example, checked 10/1/26). For payer-specific detail, UnitedHealthcare asks for the primary paid amount for each service line plus the adjustment group and reason codes from the 835 or EOB, and the service and claim levels must balance (UHCprovider.com, checked 10/1/26).

Secondary claims billing generally needs the primary payer's remittance. Keep the explanation of payment with the claim so the second plan can see what the first plan allowed and paid.

Why secondary claims deny

Secondary claims deny mostly because the payer thinks another plan should have paid first, because the primary payment data is missing, or because the filing deadline passed.

Wrong order. In Medicare guidance, claim adjustment reason code CO-22 reads 'This care may be covered by another payer per coordination of benefits,' and remark code N598 reads 'Health care policy coverage is primary.' The fix is to bill the primary payer first. If the COB record changed to show Medicare primary, bill Medicare. If the other-insurance record is wrong, the client contacts the Benefits Coordination and Recovery Center (Noridian Medicare, checked 10/1/26).
Missing or unbalanced primary data. Line-level and claim-level amounts have to add up, and the primary payer's adjustment codes have to match the 835 or EOB.
Timely filing. Medicare requires claims within one calendar year of the date of service, and a claim denied only for timely filing has no appeal rights (Noridian Medicare, checked 10/1/26). Secondary-claim deadlines at private payers and Medicaid agencies are payer-specific, so check each contract and manual.
Coding problems carried over. A claim coded wrong for the primary is coded wrong for the secondary. See modifiers and place-of-service codes.

Secondary claims billing runs into denials when the primary payment details are missing or the coordination of benefits (COB) on file is wrong. See our Claim Denials & Appeals guide for next steps.

Secondary billing rules differ by payer type and by state

Keep these separate. They conflict, and none replaces the payer's own manual.

Private (commercial) plans

COB order follows the plan document and state law, often modeled on the NAIC regulation. Each payer sets its own secondary-claim requirements. UnitedHealthcare, for example, requires line-level paid amounts and the other payer's adjustment codes. Never carry one payer's requirement to another. See our private insurance guides.

Medicare

Medicare Secondary Payer rules make Medicare the secondary payer in several situations: a working-age client on an employer group plan with 20 or more employees, a disabled client on an employer plan with 100 or more employees, the first 30 months of end-stage renal disease coordination, and no-fault, liability and workers' compensation cases (CMS.gov, checked 10/1/26).

CMS asks providers to ask Medicare clients about other primary coverage and report it on claims (CMS provider services). After Medicare adjudicates, it can send claims on to supplemental payers through a crossover process, with a 5-digit Medigap COBA ID on the claim, and a crossed-over claim returns remark MA18 (Medicare Claims Processing Manual, chapter 28). Crossover depends on that agreement being in place, so confirm it before you assume it.

Medicaid and state rules

Medicaid is generally the payer of last resort. It pays for covered care only if no other source of payment is available, and states must take reasonable measures to identify liable third parties (CMS bulletin, 8/27/21). Under cost avoidance, the state Medicaid agency rejects a claim when a liable third party is likely and directs the provider to bill that party first.

If the third party denies for substantive reasons, the provider may resubmit the balance to Medicaid (Medicaid.gov COB/TPL Handbook, checked 10/1/26). Billing details, claim codes and deadlines vary by state and by Medicaid plan. See our Medicaid HCPCS guide.

Secondary claims billing rules differ for commercial plans, Medicare and Medicaid, and Medicaid rules vary by state. Check each payer's own rules.

Psychotherapists and psychiatrists bill secondary claims differently

Psychotherapists

The secondary claim often covers the copay, coinsurance or deductible left after the primary pays. Check that the psychotherapy code, units and time match on both claims. See individual psychotherapy codes.

Psychiatrists

An E/M visit with a psychotherapy add-on has more than one line, and each line needs its own primary payment data on the secondary claim. See E/M codes and add-on codes.

Secondary claims billing applies to psychotherapists and psychiatrists alike. The codes on the claim differ, so see our CPT and E/M code guide.

How MCM South bills your secondary claims

What we do

We confirm whether a client has a second plan when we verify coverage, bill the primary payer first, and send the secondary claim with the primary payer's payment and adjustment data. If a secondary claim denies, we find the reason and correct it or appeal it. We bill in-network and out-of-network claims for our clients.

Second plans caught at verification
Primary billed first, secondary billed with the primary's data
Secondary denials reviewed by reason code
Medicare, Medicaid and commercial secondary rules kept separate

We serve clients in Georgia, Massachusetts, Connecticut, Texas, Florida, New York, Colorado, Tennessee, North Carolina and Illinois. See who we serve and all of our services. Network status also changes how a second plan pays. See our in-network vs out-of-network guide.

Secondary claims billing FAQ

How do I know which insurance is primary and which is secondary for a therapy session?

Use the plan documents and the payers' own records, then confirm with both. The NAIC model rules say, for a child, the parent whose birthday falls earlier in the calendar year is primary. For divorced parents, a court decree comes first. States adopt their own versions, so verify the order before you bill.

Does the birthday rule apply when parents are divorced?

Only in some cases. Under the NAIC model, a court decree that assigns responsibility comes first. The birthday rule applies if both parents are responsible or share custody without a specification. With no decree, the custodial parent's plan is primary, ahead of the non-custodial parent's plan.

Do I need to bill the secondary payer myself, or does the claim cross over automatically?

It depends. Medicare can send claims to supplemental payers through a crossover process, but that requires a COBA agreement and a Medigap ID on the claim. Commercial and Medicaid secondary claims usually need you to send them, so confirm with each payer.

What do I send with a secondary claim: the 835 or the EOB?

Send the primary payer's payment and adjustment data. On an 837P that means the amount paid and the adjustment codes, at claim and line level. Some payers also ask for a copy of the EOB. Check each payer's requirement.

Why was my secondary claim denied with CO-22 or N598, and how do I fix it?

Those codes mean the payer believes another plan or Medicare should pay first. Bill the primary payer first. If the COB record changed, bill the right payer. If the other-insurance record is wrong, the client contacts the Benefits Coordination and Recovery Center.

Sources and date checked

Sources checked 10/1/26. Payer rules, deadlines and form versions change. Confirm against the current source before you rely on one. This page is operational guidance for a billing service. It is not legal advice.

Collect the second payment too

Tell us about your practice. We bill the primary, then the secondary, with the right data, for psychotherapists and psychiatrists.

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