Coordination of Benefits

The process of determining which insurance plan pays first when a patient has coverage under two or more health insurance plans.

Coordination of benefits, or COB, is the process payers use to figure out who pays what when a patient has more than one insurance plan. This is more common than you might think. Patients can have dual coverage through a spouse's plan, Medicare plus a supplement, Medicaid plus a commercial plan, or multiple employer plans. The primary payer is the plan that pays first. The secondary payer covers some or all of the remaining balance. The rules for determining which plan is primary follow a standard order established by the National Association of Insurance Commissioners. Generally: the plan that covers you as an employee is primary over a plan that covers you as a dependent; for children with two working parents, the birthday rule applies (the parent whose birthday falls earlier in the calendar year has the primary plan); and Medicare has its own complex rules about whether it is primary or secondary based on the reason for coverage. For credentialing, COB matters because you need to be enrolled with both the primary and secondary payers to get paid correctly. If you are enrolled with the primary but not the secondary, the secondary will deny the claim and the patient gets stuck with the balance. Billing COB claims correctly requires submitting to the primary payer first, waiting for the EOB, and then submitting to the secondary payer with the primary's EOB attached. Many clearinghouses and billing systems can automate this crossover process, especially for Medicare secondary claims. The most common COB problem is when the payers disagree about who is primary. Both payers deny the claim saying the other should pay first. When this happens, you need to work with the patient to update their COB information with both payers so the primary determination is resolved.