[ANSWERED] What is Coordination of Benefits?

Coordination of benefits applies to a patient who has multiple insurance providers also known as payers.

Now, there could be multiple reasons as to why someone would have two payers. Some may say that there are benefits of having multiple insurance providers, while others deem it as more of a hassle. That’s not necessarily the most important thing here, but we can acknowledge the commonality of it in the United States.

Around 43 million Americans had multiple health plans in 2021. The U.S. Census Bureau estimated that there were around 301 million people in the United States in 2021. That’s about 14% of Americans with multiple insurance payers.

Coordination of benefits determines who pays for what. It’s a process carried out by a patient’s insurance providers to decipher who is the primary payer and who is the secondary payer in regard to the specific service.

The primary payer is the insurance that pays first. They fall primarily responsible for paying a claim. Then the secondary payer comes into play. The secondary payer will pay up in the case that the primary payer is unable to cover the costs. Think of it as this…a primary payer is standing on the frontlines while the secondary payer comes in for backup.

It can get confusing at times to distinguish what goes where. There is some back and forth which we will get into. Now what significance does this have for a healthcare provider if the insurance has to determine the coordination of benefits? Well, there are COB claims and COB denials.
The primary payer will review the healthcare claim. There are 3 decisions that can come out of this: the primary will pay the claim in full, partially, or completely deny it altogether.

This claim adjudication information then gets sent to the secondary payer from the primary payer. This can become quite a long and complicated process because the payers are trying to clarify who is said “responsible” for paying or covering what.

What can come out of this long and complicated process you may ask? What I mentioned before…COB claim denials. These denials can occur because multiple insurance parties are deciphering who is the primary insurance provider and who is secondary. Confusion is the result. More information could be needed which results in a longer waiting time.

What can you do as a healthcare provider to try and avoid this?

If a claim includes a coding or misspelling error, it’s going to be denied by an insurance carrier. All a denial does for you is delay, delay, delay your payment. The claims process goes on hold because of manual reviews, revisions, and resubmissions. Prevent coding error delays by implementing coding checks. Detecting errors up front before they are submitted eliminates the likelihood of receiving a claim denial.

Making sure that no information is missing is essential to the COB process. You want to give insurance providers as much information as possible. The more, the better. When insurance providers understand the situation at hand, it allows them to make a more conclusive decision as to who is the primary payer, and who is the secondary.

Communication amongst you and your patients is another important way to make this process as simple as possible. Understanding where your patients stand in relation to their insurance providers as well as what they will cover is a responsibility that falls onto the healthcare provider. You should know what you’re getting into before offering a service and go from there. Patients can also help to prevent errors and delays by providing you with the necessary and most accurate information in a timely fashion. Not to mention, it’s probably easier to reach out to your patients than it is to insurance providers…I would hope.

It’s important to mention, keeping patients in the claim adjudication loop helps to build strong relationships.

If you’d like to learn more about what is a coordination of benefits in medical billing, reach out to Etactics! And you already made it this far into the video, so you might as well like it, share it, and comment below.

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