Why you're missing carveout benefits in eligibility checks

Big takeaway: Most payers omit carveout benefits from eligibility responses, but many include the carveout administrator's information. Run a second eligibility check with the carveout admin for full benefits details.

Carveout benefits can leave gaps in your eligibility workflows.

For example, many Blue Cross Blue Shield (BCBS) plans carve out mental (behavioral) health benefits to Magellan, a mental health payer.

A BCBS eligibility check may confirm the patient has mental health coverage. But the response doesn’t contain details about mental health benefits. No co-pays, deductibles, or limitations – just basic information for Magellan.

To get the full benefit details, you need to run a separate check with Magellan. This guide shows you how and what to look for in the eligibility response.

What’s a carveout?

A carveout is when the primary payer for a plan lets another entity handle certain benefits.

Often, carveout administrators specialize in benefits for a particular service, such as mental health services or pharmacy benefits.

Carveouts in eligibility responses

Payers aren’t required to return carveout benefits in eligibility checks.
Most don't. If they do, Stedi passes along what the payer provides.

Many payers return the carveout admin’s information.
However, it’s not guaranteed. If you’re using Stedi’s JSON Eligibility API, the carveout admin’s information is typically included in a related benefitsInformation entry in the response. Look for:

• code = U (Contact Following Entity for Eligibility or Benefit Information)
  OR
  code = 1 (Active coverage)

• serviceTypeCodes containing a related Service Type Code (STC) 

• benefitsRelatedEntities object containing contact information for the carveout admin.

• If present, benefitsRelatedEntities.entityIdentificationValue contains the patient’s member ID for the carveout admin.

Also look for key phrases in additionalInformation.description. These may be in a separate benefitsInformation entry with code = D (Benefit Description).

For example:

{
  "benefitsInformation": [
    {
      "code": "U",	// Contact Following Entity for Eligibility or Benefit Information
      "serviceTypeCodes": [
        "MH"		// Mental Health
      ],
      ...
      "benefitsRelatedEntities": [
      {
        "entityIdentifier": "Third-Party Administrator",
        "entityType": "Non-Person Entity",
        "entityName": "Acme Health Payer",
        "entityIdentificationValue": "123456789", // Member ID for the carveout admin
        "contactInformation": {
          "contacts": [
            {
              "communicationMode": "Telephone",
              "communicationNumber": "1234567890"
            }
          ]
        }
      },
      ...
    },
    {
      "code": "D",                        // Benefit Description
      "serviceTypeCodes": ["MH"],
      "additionalInformation": [
        {
          "description": "BEHAVIORAL HEALTH MANAGED SEPARATELY"
        }
      ]
    }
  ],
  ...
}

Tip: Don’t rely on benefitsRelatedEntities.entityIdentifier to identify carveout admins. The value can vary between payers.

The carveout benefits runbook

Payers don’t consistently return carveout admin information. But when they do, you follow these steps to get the full carveout benefits:

1. Run an eligibility check for the primary payer.
   Use a related STC. For tips, see our STC testing docs.
   
   

2. Look for the carveout admin’s information.
   Check for benefitsInformation entries with a related STC in serviceTypeCodes and a benefitsRelatedEntities section.
   
   The benefitsRelatedEntities.entityName field will contain the carveout admin’s name. If present, benefitsRelatedEntities.entityIdentificationValue contains the patient’s member ID for the carveout admin. See the above example.
   
   

3. Get the carveout admin’s ID.
   Use Stedi's Payer Search API or Payer Network to get the payer ID for the carveout admin’s name.
   
   

4. Run an eligibility check for the carveout admin.
   Use the patient’s member ID for the carveout admin. If you use the right STC, many carveout admins will return the missing carveout benefits.
   
   The STC may differ from the primary payer. See our STC testing docs for tips.

Other ways to get carveout benefit details

If checks alone can’t get you the carveout benefits you need, try one of these methods:

Check the member ID card.
The back often lists information for carveout benefits and payers. The card may provide enough information on its own. If not, it may give you enough to run an eligibility check for the carveout admin.

Make a telephone call to the primary payer.
Use an AI voice agent to do this programmatically.

Check the primary payer’s website or portal.
Some payers post plan coverage documents with carveout details on their public website. Others may require you to log in to their portal. For programmatic access, create a scraper or use a scraping vendor.

Claims for carveout benefits

Claims for carveout benefits are often a form of crossover claim.

Submit the claim to the primary payer first. If the primary payer supports crossover, they’ll automatically forward the claim to the carveout admin. If not, you’ll need to submit a separate claim directly to the carveout admin.

You may need to complete a separate transaction enrollment for the carveout admin. For more guidance, see our crossover claims docs.

Carveouts vs. secondary or tertiary insurance

Carveouts are different from secondary or tertiary insurance:

• Carveouts are part of a single health plan.
  Secondary and tertiary insurance is when a patient has multiple, separate health plans.
  
  

• Carveouts don’t show up in coordination of benefits (COB) checks.
  COB checks are intended for cases where a patient has multiple health plans.
  
  

• You can have both carveout benefits and a secondary (or tertiary) plan.
  After the primary payer or carveout admin adjudicates a claim for carveout benefits, you can submit a claim for the remaining balance to the secondary health plan. Sometimes, the primary payer will automatically forward the claim to the secondary payer.
  
  If you’re unsure which plan is the primary or secondary, use a COB check to find out.

Get expert support

Carveouts – and how they show up in eligibility responses – vary widely by payer and plan. Knowledgeable support can make a difference.

Stedi offers real-time support from experts over Slack or Teams. Request a free trial and try it out.