Coordination of Benefits means a way to decide which insurance is responsible to pay the medical expense as primary, secondary and then tertiary, whenever patient is covered by more than one insurance plan.
Coordination of Benefits is also called as COB in Medical billing. COB is the usual run-through to share the cost of care between two or more payers, when a patient is covered by more than one health benefit plan.
In simple words we can say when patient is having more than one active insurance plan to cover his/her medical expense at the time of service, then it will be a patient duty to bring up all of his active insurance carriers info and also to provide the order of health benefit plan respectively (Like which Payer is designated as primary, secondary and then tertiary payer) in order to avoid the conflicts between payers in paying and also to avoid the denials from insurance companies.
Now let us see the rules for identifying Primary and Secondary Insurances to cover medical expense and also will deal with Coordination of benefits denials, whenever insurance companies denies the claim.
How to identify Primary and Secondary Insurances?
The most common rules used for identifying the primary and secondary insurances are as follows:
- Dependent or Non Dependent rule
- Active or Inactive rule
- Birthday rule.
Dependent or Non Dependent rule:
Plan that covers the individual as subscriber, an employee or member is the primary plan used to cover his/her medical expenses before the plan in which the individual is considered as dependent.
Active or Inactive rule:
Policy which covers an individual as an active employee is the primary payer to cover his/her medical expense over the policy covering the individual as a retired or laid of employee.
When dependent child medical expenses are covered by both parent’s benefit plan, then we need to use a standard method (Birthday rule) to identify which plan will be primary or secondary for a dependent child.
The parent whose birthday (month and Day only) falls first in a calendar year is the parent with the primary coverage for the dependent child. Suppose if both parents have a same birthday (month and Day only), then the plan that has been in effect for longest will cover the medical expenses of dependent child as a primary.
Father DOB: 12/25/1986
Mother DOB: 03/21/1992
In this case Mother Insurance will be primary insurance as her birthday (month and day only) false first in a calendar year.
Father DOB 12/25/1986
Mother DOB 12/25/1992
In this example both parent’s birthday false on same month and day in a calendar year, so in this case we need to see the plan that has been in effect for longest will be considered as primary insurance.
Father insurance policy is effective from 01/06/2014
Mother insurance policy is effective from 01/01/2016
Here, father insurance policy is in effect for longest and it will be considered as primary insurance for the dependent child.
Coordination of Benefits Denial:
Whenever there is a change in coverage of medical expenses and member is having two or more insurances, then its member responsibility to update information to each carrier to facilitate prompt processing of the claim.
If information is not updated properly by patient/member/subscriber then claim will be denied.
According to Insurance, if patient has other insurance and responsible to pay the service as primary, then insurance will deny the claim as CO 22 – This care may be covered by another payer as per coordination of benefits.
If insurance need additional information from patient i.e. Coordination of Benefits, then claim will be denied as Need additional information from patient.
Whenever you find denial CO 22 – This Care may be covered by another payer as per Coordination of Benefits, then we need to follow the below protocol to get rid of this denials.
- First check with representative/Check eligibility/review previous notes or service to find out correct primary insurance.
- If primary insurance info found active and eligible at the time of service, then update and submit the claim to primary insurance.
- If primary information not found, then contact patient requesting the correct insurance details.
When you find the denial Need additional information from patient (Coordination of Benefits), follow the below steps:
- First review the previous notes and Previous Date of service to check, whether patient has updated the requested coordination of benefits info to insurance or not. If patient has already updated the requested COB information, then call and reprocess the claim.
- If patient has not updated the Coordination of benefits information, check with insurance company when the last letter was sent requesting COB info from patient. Request representative of insurance company to send another letter to patient.
- If still patient has not updated the coordination of benefits information to insurance, then contact patient and take necessary action based on Client specification.