coordination of benefits cob

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Coordination of Benefits

Under HIPAA , HHS adopted standards for electronic transactions, including for coordination of benefits.

The coordination of benefits transaction is the transmission from any entity to a health plan for the purpose of determining the relative payment responsibilities of a health plan for health care claims or payment information.  See the Coordination of Benefits Transactions Basics.

About Coordination of Benefits

Coordination of benefits (COB) applies to a person who is covered by more than one health plan.

The COB regulations, as well as the HIPAA Privacy Act, permit Medicare to coordinate benefits with other health plans and payers to reduce administrative burden and enable patients to obtain payment of the maximum benefit they are allowed.  The same applies in situations where Medicare is the secondary payer and a provider must file a COB claim to Medicare.

COB claims are those sent to secondary payers with claims adjudication information included from a prior or primary payer (the health plan or payer obligated to pay a claim first). These claims can be sent 1) from provider to payer to payer or 2) from provider to payer.  Additional information about Medicare's COB/claims crossover process is available. 

HIPAA Adopted Standards

In January 2009, HHS adopted Version 5010 of the ASC X12N 837 for coordination of benefits. For more information, see the official ASC X12N website.

For COB pharmacy claim transactions, HHS adopted NCPDP Telecommunications Standard Version D.0. 

These standards apply to all HIPAA-covered entities , health plans, health care clearinghouses, and certain health care providers, not just those who work with Medicare or Medicaid.

Related Links

• Coordination of Benefits Transactions Basics
• National Council for Prescription Drug Programs (NCPDP)
• COB/Claims Crossover Process

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What is Coordination of Benefits (COB)?

Coordination of Benefits (COB) is when two insurance plans work together to pay claims for the same person. This occurs when you or your dependents are covered for benefits under more than one insurance plan.

How it works

There are three main scenarios when coordination of benefits comes into effect:

Scenario 1: You're covered under your own insurance plan with your employer, and covered as a dependent under your partner’s plan;

Scenario 2: Your partner is covered under their own insurance plan with their employer, and covered as a dependent under your plan;

Scenario 3: Your dependent child(ren) has coverage under both your and your partner’s insurance plans.

In all scenarios there is a primary payor and secondary payor , which determines whose insurance plan you should submit a claim to first.

You have coverage under your own insurance plan and under your partner’s plan:

The primary payor is always your own insurance plan;

The secondary payor is your partner’s insurance plan.

This means you’ll submit a claim to your own insurance plan first. If your insurance plan doesn’t cover the full claim amount you can submit the claim to your partner's insurance plan, with the explanation of benefits statement, and request payment for the remainder of the balance.

Note: When submitting a claim to your partner's insurance, you may not be reimbursed for the entire remaining balance. This will depend on the amount of coverage offered by your partner's insurance plan.

Example: You have a massage appointment. You submit the claim to your insurance plan, which covers 80%. You can then submit the claim to your partner's plan, with the explanation of benefits statement, for the remaining 20% balance.

Your partner is covered under their own insurance plan and under your plan:

The primary payor is always your partner's insurance plan;

The secondary payor is your insurance plan.

This means your partner will submit a claim to their own insurance plan first. If their insurance plan doesn't cover the full claim amount they can submit the claim to your insurance plan, with the explanation of benefits statement, to request payment for the remainder of the balance.

Example: Your partner has a physiotherapy appointment. They submit the claim to their insurance plan, which covers 70%. They can then submit the claim to your plan, with the explanation of benefits statement, for the remaining 30% balance.

Your dependent child(ren) has coverage under both your and your partner’s insurance plans:

The primary payor is the insurance plan of the parent with the earliest birthday in the calendar year (not the earliest birth year);

The secondary payor is the insurance plan of the parent with the latest birthday in the calendar year.

Example: Your birthday is Feb 1st, 1980. Your partner’s birthday is Jan 1st, 1985.

The primary payor for all your child(ren)’s claims will be your partner’s insurance plan, because your partner has the earliest birthday in the calendar year. The year of birth isn’t taken into account.

If both parents have the same birth date:

The primary payor is the insurance plan of the parent whose given name occurs first in the alphabet. 

The secondary payor is the insurance plan of the parent with the given name that occurs last in the alphabet.

Example: Your name is Avery and your partner’s name is Drew. 

The primary payor for all your child(ren)’s claims will be your insurance plan, because your name occurs first in the alphabet. 

Alternate Scenarios

There are two main scenarios when a coordination of benefits won't follow the normal rules:

You're separated from your partner and have a child(ren) together: The primary payor for your dependent child(ren) is the insurance plan of the parent with primary custody.

Your child(ren) has coverage through their school: The primary payor for your dependent child(ren) is their own insurance plan. The secondary payor will be the insurance plan of the parent with the earliest birthday in the calendar year.

How does COB work with spending accounts?

All League Lifestyle Spending Account (LSA) or Health Spending Account (HSA) claims must first be submitted to an insurance plan (both your primary and secondary payors, if applicable). You can then submit the remaining balance against a spending account for reimbursement.

Learn more about coordinating your benefits with a spending account .

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Employee Benefits

Coordination of Benefits (COB): What Is It & How Does It Work? 

In today’s diverse healthcare landscape, someone may opt for additional health insurance plans for various reasons, from access to a broader network of providers to help with reducing healthcare costs.

However, navigating benefits across multiple insurance plans can be tricky. That’s where coordination of benefits (COB) comes in. COB rules determine how multiple health insurance plans work together to pay an insurance claim for one person.

What is coordination of benefits?

Coordination of benefits is the process insurance companies use to determine how to cover your medical expenses when you’re covered by more than one health insurance plan. It clarifies who pays what by determining which plan is the primary payer and which is secondary. It also ensures proper claim processing and helps avoid overpayment or duplicate payments.

How does coordination of benefits work?

When a person has multiple insurance plans, COB rules determine the order in which the insurance plans will pay for covered services. The primary plan is responsible for processing the claim first and paying its share of the coverage amount. The secondary plan would then review the claim and pay the remaining balance within its coverage limits.

For example, suppose you visit your doctor and get billed $250 for the appointment. Your primary health plan may cover the majority of the bill. Let’s say, for example, that’s $200. Then your secondary plan would pay the remaining $50.

To prevent overpayment or duplication, plans will not pay more than 100% of the cost of the medical service(s), meaning that the combined benefits shouldn’t surpass the total cost of the treatment.

You may also be responsible for deductibles , copayments , and coinsurance.

Coordination of benefits examples

There are various scenarios in which someone might have two health insurance plans. Here are some everyday situations and how to determine which plan is most likely to be the primary or secondary payer.

Coordination of benefits rules

COB rules help organize and manage healthcare benefits and costs. Keep in mind that COB rules can vary depending on several factors, including the insurance company, the specific insurance plans involved, and the state you live in. Refer to the plan rules outlined in your policy and consult with your providers.

In general, the following COB rules will typically apply.

Policyholder or dependent rule

The plan for which you are enrolled as an employee or main policyholder will be the primary payer. The plan for which you’re enrolled as a dependent, such as a spouse’s plan, would be the secondary payer.

Birthday rule

This rule determines the order of coverage for children when both parents have health insurance. It places primary responsibility on the parent whose birthday falls earlier in the calendar year. The plan of the parent with the later birthday would have secondary responsibility.

Custodial parent rule

If parents are divorced or separated, the primary payer for dependent children would be the parent with child custody . However, if parents share joint custody, the order of benefits will typically follow the birthday rule.

Continuation coverage rule

If you have continuation coverage — such as the Consolidated Omnibus Budget Reconciliation Act (COBRA) — and coverage from another plan, the benefits of the plan covering you as a member or employee are primary. Your continuation coverage would be secondary.

Medicaid and Medicare rule

Let’s say you have coverage under a government program like Medicaid and Medicare in addition to other health or drug coverage. In that case, determining primary or secondary responsibility will depend on a number of factors. Factors can include your age, the size of the company you have employer coverage with, and other considerations. Check your insurance policy and coverage details or consult with your employer to determine what the order of coverage should be.

Timeline rule

If none of the above provisions determines which plan is primary, then the plan you've been enrolled in the longest is typically considered the primary one.

Potential drawbacks of using COB

Having multiple health insurance plans and coordinating benefits can be useful in the right situation, but in certain circumstances, the disadvantages of COB may outweigh the advantages. Here are some reasons why having multiple insurance plans and using COB may not be a favorable choice: Administrative complexity : Managing multiple plans and navigating COB can come with extra burdens, such as additional paperwork, coordination with multiple providers, and understanding the details of each plan’s rules and coverage.   Cost considerations: Maintaining more than one plan may not be a cost-effective choice if the combined premiums , deductible copayments, and coinsurance outweigh the benefits received.

Before enrolling in multiple health plans, analyze the cost-benefits and carefully review your coverage details to avoid surprises. Consult with your insurance provider(s) to determine the best approach for your unique situation.

Time to Enroll in a New Insurance Plan? 

Related reads:.

1 “Is Medicare Primary or Secondary?” Medicare FAQ, 2023. 

What Does Coordination of Benefits (COB) Stand for in Medical Billing? 

Related articles:

Understanding SOAP Notes: A Comprehensive Guide for Medical Professionals

Understanding the Importance and Evolution of the History of Present Illness (HPI) in a Medical Practice

Understanding the Importance of History and Physical (H&P) in the Medical Field

Patients may enroll in multiple insurance plans, which may mean that there is an overlap in their benefits. With  41% of Americans (72 million people)  experiencing medical billing issues, coordination of benefits issues is just one problem you’ll deal with. When you face a COB denial of the claim you send to the insurance provider, you need to know what that means and how you can address the situation.  

A COB or coordination of benefits denial is one of the most common issues you may face in medical billing. With  medical billing errors  and issues, the care of your patients may be directly affected. So, you need to know what COB is, its purpose, and what you can do to resolve any issues. TempDev can help you to resolve COB denials and other medical billing  challenges .  

What is the Coordination of Benefits (COB)? 

COB stands for Coordination of Benefits, which is how your patients’ insurance benefits are applied. To resolve COB issues, the medical provider needs to determine the primary provider and secondary provider for the patient. Often times patients will forget they have secondary insurance or incorrectly provide it as their primary insurance.  

If your patient only has a single insurance provider, you shouldn’t have to worry about COB. You still might experience issues if the patient recently switched insurance providers or if there is a paperwork discrepancy between insurance providers and benefits.  

Why is COB Important?  

COB sounds simple and easy to process, but it can cause significant issues when you’ve submitted a claim as part of your medical billing process. It’s not always easy for the insurance company and you to determine which insurance company should be the primary and which secondary. Here’s why coordination of benefits is important:  

While you wait for the insurance providers to figure out which one is the primary and which one is the secondary, your claim is usually in limbo. You won’t be paid until the issue is resolved. 

While you don’t have any direct control over which insurance provider will cover your patient’s claim, you still need to follow up several times to ensure that the claim doesn’t get lost and ignored in the shuffle.  

Issues with the coordination of benefits could mean that you’ll need to charge the patient for the cost of services. Then, they can seek reimbursement from the insurance provider.  

What Are the Benefits of COB?  

Coordination of benefits allows you to complete your medical billing process. In the best-case scenarios, it should be clear and straightforward without the potential for duplicate billing issues. Here are a few of the benefits of the COB process.  

The main goal of COB is to ensure that any claim is correctly processed. The insurance provider needs to identify the health benefits and then coordinate the correct payment details.   

Avoid duplication 

When your patient has dual coverage, the insurance provider must coordinate benefits so that the total payments do not exceed 100% of the billed claim amount.  

Transparency 

In some cases, you can help to streamline the COB process by sharing the health insurance eligibility information with the insurance provider.  

Coordination 

Your patient may be carrying a secondary insurance plan to help with out-of-pocket expenses, but you still may need to keep track of their co-pay requirements.  

Is Medicare Always the Primary Payer in COB?  

In some cases, Medicare is the default primary payer for benefits coverage. For example, if your patient is aged 65+ or if your patient is disabled, Medicare is typically the primary payer. If the insurance provider is an Employer Group Health Plan (GHP), Medicare is usually the secondary. 

It’s still important for you to check all the benefits details and follow up to ensure that your claim is processed correctly. With  81 million people  expected to be covered by Medicare by 2030, It's more important than ever to verify coverage and all the patient’s medical details to avoid delays, discrepancies, and miscommunication.

TempDev can consult with you on how to optimize your NextGen practice management system to prepare for and mitigate any issues related to Medicare or other insurance coverage.  

How TempDev Can Help with Your Coordination of Benefits 

TempDev’s revenue cycle consultants offer support and consulting for issues related to your Coordination of Benefits. With automation, dashboards, revenue cycle consulting, and templates, we offer the tools and resources you need to identify and resolve medical billing issues quickly.  

With  top tips and tricks , we make sure you’re successful with your medical billing. Our goal is to streamline your medical billing process as much as possible so that you’re able to correctly bill and receive the correct reimbursement, which should reflect a healthy financial system and a successful revenue cycle.   

Contact us here or by calling us at 888.TEMP.DEV to get the help you need with the coordination of benefits. 

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What does COB mean in Medical Billing

The Health care industry allows patients to enroll in multiple health insurance plans as per their requirements. But enrollment in multiple health insurance plans is likely to cause overlapping or duplication of benefits that a patient is eligible to receive. To avoid duplication of benefits in medical billing Centers for Medicare and Medicaid Services (CMS) has a set of provisions referred to as Coordination of Benefits or COB.

Definition of COB

COB or Coordination of Benefits refers to the process of determining a health insurance company’s status as a primary or secondary payer to provide medical claim benefits for a patient having multiple health insurance policies. With COB it is much easier to determine the responsibilities of the primary payer and settle on the contribution of the secondary payer while processing the medical claims.

The Purpose of the COB Process

As per CMS, the COB process is designed to fulfill the following purposes.

• Correct Payment of Claims:  COB ensures that there is no discrepancy in the payment of medical claims. This is done by identifying the Medicare beneficiary’s health benefits and coordinating the payment process. To make the payment process hassle-free it is important to ensure that the primary payer (either Medicare or other insurance company) pays first.
• Sharing Medicare Eligibility Data:  To maintain transparency it is important to share the Medicare eligibility data with the secondary payer(s) and to ensure payment of secondary payments. However, in case of automatic crossover claims an agreement between Benefits Coordination & Recovery Center (BCRC) and private insurance companies (for the BCRC) is required.
• No Duplication in Payments:  The key purpose of COB is to prevent duplication of payments in dual coverage situations. The payment should not exceed 100% of the total claim itself.
• Coordination of the Part D Benefits:  COB process is important to identify a Medicare beneficiary’s True Out of Pocket (TrOOP) expense. This is helpful in the correct administration of the Part D benefits.

Medicare as Primary Payer under COB

The following are the situations where Medicare is required to pay as the primary payer.

Working Aged (Medicare beneficiary age 65 or Older) and Employer Group Health Plan (GHP):

• Medicare pays primarily if the individual’s age is 65 or above and is covered by GHP (either through current employment or spouse’s current employment), and the employer has less than 20 employees. In the case of more than 20 employees, Medicare pays secondary.

Coverage through COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985)and Medicare:

• Medicare pays primary if the individual’s age is 65 or above.
• Medicare pays primary if the individual is disabled.

Retiree Health Plans:

Medicare pays primary if the individual’s age is 65 or above and has an employer retirement plan.

The Role of COB in Medical Billing

Coordination of Benefits (COB) plays an important role in medical billing by determining the primary and secondary payers. This helps generate the correct bill with EOBs, reimbursement of claims and managing a hospital’s revenue cycle.

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What is coordination of benefits (COB)?

Providers are exceptional at providing care. If there is one area that they find challenging, it is medical billing. With so many regulations and codes, a myriad of jargon and rules could confuse anyone. Coordination of Benefits (COB) is another terminology used in healthcare. In this article, we will walk you through the meaning of coordination of benefits and the process and rules involved.  

What is Coordination of Benefits?  

Coordination of Benefits (COB) is a process to streamline medical billing services . It helps avoid duplication of coverage and overpayment. Some patients may have more than one source of health insurance coverage. Coordination of benefits (COB) helps healthcare insurance providers determine their payment responsibilities or the percentage a plan contributes to the range if there is more than one payment plan. Simply put, coordination of benefits helps payers determine which health insurance plans are primary and which are secondary. Naturally, the primary health insurance plan pays first. If there are any additional expenses that need to be covered, then the secondary health insurance plan provides extra coverage. In this case, there is still some coverage left after using the secondary and primary healthcare plans; the patient pays out of pocket for those expenses. The term “covered services” refers to the medical treatment, supplies, labor, or medications that insurers offer as part of the benefits of their plans.  

Why is Coordination of Benefits Important?  

Coordination of Benefits (COB) is necessary when an individual is signed up on two plans. Some common examples for requesting coordination of benefits are:   

• When an individual is under 26 and under their parent’s plan and covered by their employer’s policy.    
• When a person has a marketplace plan as well as an additional plan.   
• When more than one guardian or parent covers a child.   
• When an individual is covered under their spouse’s plan as well as their employer’s policy.   
• When an individual has Medicare or Medicaid and is covered by a commercial insurance plan.    

Care coordination  helps ensure that the medical billing process is easier for patients. When a patient requests coordination of benefits, the primary insurance provider will take care of the treatment expenses first. As stated before, if there are any other expenses, they will be taken care of by the secondary provider. This ensures that there is no way to receive double benefits from more than one insurance company. It helps reduce the cost of insurance premiums and avoid any situation where the patient has to pay out of pocket due to a lack of coordination between payers. Using coordination of benefits also allows providers to determine which policy should be billed, primary or secondary.    

Coordination of Benefits Rules  

The rules for Coordination of Benefits (COB) vary depends on the place you live, the state you are listed in and most importantly, the type and size of your insurance plans. Some employers may have their own rules set. However, there are some rules that are common:  

• If a patient has more than one health insurance provider, CMS only pays the remaining payable amount. Depending on the situation. Medicare can even be a primary or secondary payer. If the other provider is a small business, it can be the primary provider too.  
• When it comes to the case of spouses, spouses can have separate insurance plans as well. In such a situation, your employer’s insurance policy would become the primary plan and your spouse payer will be secondary.  
• Veterans Administration (VA) is not considered a health insurance plan by CMS. They submit claims for supplies, prescriptions, services, and treatment to public or commercial health insurance companies. If you have VA plan, you must rely on your spouse’s medical insurance plan as your plan.  
• If an employee is covered by an employer, then their compensation package becomes primary and any other payer, whether Medicare or any other insurance company, becomes secondary.  
• Military coverage is a secondary healthcare plan. It is the primary payer for the Tricare Supplement, certain federal government programs, and state crime compensation programs. If a member of the military is injured, military coverage is the only alternative available to them.  

Conclusion  

In the intricate world of outsource medical billing , coordination of benefits stands as a crucial process for ensuring fair and efficient payment processes. IT contributes to a more streamlined and cost-effective healthcare system. Coordination of benefits is a part of a complicated medical billing process. CareCloud provides efficient medical billing services that helps providers navigate through the medical billing landscape and maximize reimbursements.

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Coordination of Benefits (COB)

NYC Health Benefits Program

You may be covered by two or more group health benefit plans that may provide similar benefits. If you have coverage through more than one plan, your City health plan will coordinate benefit payments with the other plan. One plan will pay its full benefit as a primary insurer, and the other plan will pay secondary benefits. This prevents duplicate payments and overpayments. The plan covering you as an employee is primary before a plan covering you as dependent. In no event shall payments exceed 100% of a charge. 

Special Rules for Dependents of Separated or Divorced Parents

If two or more plans cover a dependent child of divorced or separated parents, benefits are to be determined in the following order:

• The plan of the parent who has custody of the child is primary.
• If the parent with custody of a dependent child remarries, that parent’s plan is primary. The step-parent’s plan is secondary and the plan covering the parent without custody is third.
• If the specific decree of the court states one parent is responsible for the health care of the child, the benefits of that parent’s plan are determined first. You must provide the appropriate plan with a copy of the portion of the court order showing responsibility for health care expenses of the child.