What does "secondary insurance" refer to?

"Secondary insurance" refers to an insurance policy that provides coverage for costs not fully covered by the primary insurance. This means that when a patient receives healthcare services and their primary insurance pays a portion of the claim, any remaining balance may be billed to the secondary insurance. This can help minimize out-of-pocket costs for the patient by covering deductibles, copayments, or coinsurance that the primary insurer did not pay.

Understanding secondary insurance is crucial in pharmacy billing and reimbursement because it directly affects how claims are processed and how much the patient ultimately needs to pay. The coordination of benefits between primary and secondary insurance ensures that patients maximize their coverage and reduce their financial burden.

In contrast, other options do not accurately capture the essence of secondary insurance; they discuss aspects or conditions that do not define its primary function of covering additional costs.