Some individuals are fortunate enough to have coverage from two health insurance plans. But what happens when two insurers both provide the same cover to a patient? This is when a process known as Coordination of Benefits (COB) comes into effect.
What is coordination of benefits in insurance?
When patients are eligible for benefits under two or more health insurance plans, the insurers will “coordinate” benefits to establish proper claims processing. The COB process begins with the insurance companies determining the primary and secondary (or tertiary in rare situations) plan for a patient. Once this has been determined, the primary plan will pay for services according to their provided benefits, while the secondary or tertiary plan will pay for any remaining costs for services according to their provided benefits.
When is coordination of benefits needed?
Coordination of benefits should be completed by each member with more than one policy on an annual basis. Common reasons for the coordination of benefits to be requested by insurance are:
- When an individual is covered by their employer’s policy and is also covered under their spouse’s plan.
- When an individual has a private or marketplace plan, but has an additional plan through a spouse or parent.
- When a child is covered by more than one parent, stepparent, or guardian.
- When a patient has Medicare or Medicaid in addition to being covered by a commercial insurance plan.
How are benefits coordinated?
We’ve already briefly touched on how insurers will engage with each other to decide on which health insurance plan is primary and which is secondary. However, there are other elements that could affect how benefits are coordinated. These factors are:
- If an individual is covered by their employer’s policy, this policy will pay before a policy where the individual is considered a dependent.
- If a child or dependent is covered by more than one person, several factors are considered:
- If the child/dependent is covered by multiple parents/guardians, the plan of the parent/guardian with the earlier birth date in the calendar year pays first. In some instances, a custody or court order might supersede the date of birth rule.
- If the child/dependent has coverage through an employer or post-secondary institution, these plans will always pay before a plan where the child is the dependent.
- Policy holders need to complete the coordination of benefits form with each insurance company and are obligated to disclose all policies. Claims may be held if coordination of benefits forms are not completed by policy holders. Policy holders must also communicate changes in coverage to their insurance company.
- Many children with autism or other disabilities are covered by Medicaid and/or additional funding sources. Typically, Medicaid is considered the payer of last resort. The patient’s parent/guardian is still obligated to disclose coverage to all insurers, and they will coordinate benefits.
Why is coordination important?
The necessity of COB for insurance providers and patients can’t be overlooked. Coordination helps both insurers and patients deal with many challenges including:
- Preventing both insurance companies paying for the same claim.
- Helping reduce the cost of insurance premiums.
- Helping the provider understand which policy to bill as primary, secondary, or tertiary.
- Helping keep the cost of prescription medication as affordable as possible.
- Avoiding any situations where a patient or insurer has to pay for expenses due to a lack of coordination
Get assistance with revenue cycle management from Missing Piece
Coordination of benefits is just one piece of the puzzle of revenue cycle management for ABA providers. Missing Piece Billing and Consulting are leading experts on ABA and behavioral health billing and revenue cycle management. Thanks to our excellent ABA therapy billing services managing the complicated process of billing, ABA consultation and service providers can focus on delivering excellent therapy to their clients.
To learn more about how our comprehensive revenue cycle management process helps ABA services, including in situations requiring coordination of benefits, contact us online or by phone at 765-628-7400.