The patient is at your front desk, smiling wide. They declare that they have had a change in insurance, and now they have DOUBLE the coverage. TWO HEALTH PLANS! Their triumphant look likely means they don’t know how much extra work this could be for the practice.
Coordination of Benefits (COB) is the process we use to figure out the primary and secondary coverage when someone has more than one policy. The many rules can be a bit confusing, so here are 9 things your practice should know about COB.
- Medicaid Plan: Often called the “payer of last resort” because Medicaid will always be secondary to a Medicare or Commercial plan.
- Medicare: It’s a good idea to ask your patients if they are Medicare eligible each and every time they come to the office. Why? Because the rules of coordination of benefits are tricky. A patient may be Medicare eligible because they are 65 years old or older or Medicare eligible due to disability without being 65 years old.
- Subscriber vs. Dependent: If a patient is the subscriber (owner) of an employer group health plan, then that plan will be their primary plan. This plan will also be the primary plan for the whole family unless the subscriber’s spouse carries an employer group plan under their own name. If the spouse does carry an employer group plan under their own name, then that plan is their primary plan. So each spouse has their own primary plan through their respective employers while, at the same time, they are dependents under each other’s plan.
Example: John subscribes to AllWays Health Partners through his employer. At the same time, John’s wife Mary subscribes to BCBS through her employer. John’s primary plan is AllWays Health Partners while his secondary plan is BCBS. Mary’s primary plan is BCBS while her secondary plan is AllWays Health Partners.
- Birthday Rule: This rule comes into play when you have a child who has health insurance under both parents. (Remember John and Mary above.) COB rules for the child are determined by the parents’ birthdays. The parent who’s birthday comes first in the year provides the primary coverage. Using John and Mary again, if John was born on May 11 and Mary was born on September 23, then John’s plan is the primary plan because his birthday comes first. If both spouses have the same exact birthday, whichever policy has been active longer is the primary plan.
- Cost Sharing: Many of your patients may assume that because they have two plans they will not be responsible for any copayments or other cost sharing. This might not always be the case. Cost sharing can apply even after both carriers have paid the claim because each plan has its own benefits and cost sharing. Just because the primary plan pays first and cost share is applied, doesn’t mean the secondary plan doesn’t have its own cost share, as well. Your patients can always give their carriers a call if they have any questions.
- Covered Benefits: In order for your claims to be processed correctly, you should always submit an Explanation of Payment (EOP) when sending the claim to the secondary payor. Without it, the claim may be denied because the secondary carrier calculates their payment by using the total amount paid by the primary carrier, the benefits available under the patient’s plan, and any cost share applicable under the secondary plan. After both plans pay their share, the patient still may owe a portion of the claim.
- Secondary Claims Payment: In order for your claims to be processed correctly, you should always submit an Explanation of Payment (EOP) when sending the claim to the secondary payor. Without it, the claim may be denied because the secondary carrier calculates their payment by using the total amount paid by the primary carrier, the benefits available under the patient’s plan, and any cost share applicable under the secondary plan. After both plans pay their share, the patient still may owe a portion of the claim.
When you add up the primary carrier’s payment, the secondary carrier’s payment, and the patient’s payment, the total should equal your allowable contract rate under the primary carrier’s contract.
- Filing Claims: When you’re filing a claim a patient with two insurance plans, it’s important to indicate this on the claim. (n the CMS-1500 claim form, indicate this in boxes 9 a-d and check “yes” in box 11d. On the UB-04, you would indicate this in box 50 and boxes 58-61.
- Tell Us: Providers are required to tell the health insurance plans that they are filing claims for a patient who has more than one health plan. Telling the health plans as soon as possible may prevent claims retractions and claim denials. Encourage your patient to let both of their carriers know, as well, to prevent unnecessary confusion!