Whether you are a patient, doctor’s office or medical billing company, you are sure to run into a coordination of benefits issue at some point. CMS.org defines coordination of benefits, or COB, as the process which “allows plans that provide health and/or prescription coverage for a person with Medicare to determine their respective payment responsibilities”. In other words, COB determines which insurance carrier is primary, secondary and so forth.
This process is not unique to Medicare. In fact, most insurance companies will check COB before processing a claim. This is one of the most common reasons for claims denial. Here are a few ways in which COB can affect your claims processing.
Coordination of Benefits and Medicare
Many patients have Medicare, so it stands to reason that this issue is most commonly seen when dealing with Medicare claims. Medicare eligible patients may also have a Medicare supplemental plan, such as AARP, as their secondary. In most cases, Medicare will have this information on file and will automatically cross the claim over to the supplemental insurance. However, this process is not foolproof. Therefore, it is important that the provider documents all insurances for the patient. In the event that Medicare does not cross over the claim, providers will need to manually submit claims to the patient’s secondary.
Another common COB problem arises when a patient has recently reached Medicare age but continues to use primary insurance provided by an employer. Often commercial insurances will deny claims until the member updates their COB. In other cases, the carrier will require a denial from Medicare showing that the patient has opted out of Medicare as primary. In both cases, these denials slow down reimbursement and cause frustration for the involved parties. Because it is the responsibility of the member to update their COB, amending this problem is often out of the medical billing company’s hands. It is important that patients of Medicare age understand how COB works in order to avoid receiving unnecessary bills from their doctor.
COB and Other Insurance Carriers
According to Insure.com there are several situations in which it is necessary to understand your COB. These include, but are not limited to:
- Spouses with separate health insurance plans. Unless otherwise specified, your employer’s insurance plan should be your primary, while your spouse’s would then be secondary. This can be especially complicated when both spouses have insurance under the same carrier.
- Accidents. Typically, if the services rendered are due to an accident, the patient’s worker’s compensation or motor vehicle insurance would be used as primary, while the commercial insurance would be billed second.
- Medicaid. If you have both Medicaid and any type of commercial insurance, Medicaid will always be used last.
- Patients under 26. By law, people under 26 will still be covered by their parent’s insurance. However, if the patient has insurance through work or school, those insurance carriers will be primary to the parent’s insurance.
Coordination of benefits can be a complicated process and it is not always clear which insurance is primary. It is always a good idea for patients to verify the order of their policies before scheduling an appointment. This precautionary step will reduce the risk of claims getting denied for a COB issue and save time in the long run. In addition, if the COB needs to be updated, this can often take a week or more to finalize. Staying one step ahead of easily corrected insurance issues means fewer headaches for all parties involved.
Disclaimer: The materials contained on this website are provided for informational purposes only and do not constitute legal or other professional advice on any subject matter. Advanced Medical Practice Management does not accept any responsibility for any loss which may arise from reliance on information contained on this site.