What is Coordination of Benefits (COB) in Medical Billing?

Coordination of Benefits (COB) is a process used in medical billing to determine the primary and secondary insurance coverage for an individual who has multiple health insurance plans. When a person is covered by more than one insurance plan, COB ensures that the total benefits paid by all the plans do not exceed the actual expenses incurred by the patient or provider.

The purpose of COB is to establish a hierarchy or order of payment between the different insurance plans. The primary insurance plan is typically the plan of the individual who is the policyholder, such as their employer-sponsored plan. The secondary insurance plan, if applicable, would be the plan of the individual’s spouse or parent.

Here’s how COB generally works:

The patient or provider submits a claim to the primary insurance plan, which processes and pays the eligible portion according to the plan’s benefits and coverage.

Once the primary insurance plan has paid its share, the remaining unpaid portion (if any) is submitted to the secondary insurance plan. The secondary plan will consider the remaining expenses, subject to its own benefits and coverage limitations.

The secondary insurance plan may pay all or a portion of the remaining balance, depending on its policies and the patient’s coverage. In some cases, the secondary plan may only cover the copayments, deductibles, or services not covered by the primary plan.

The patient or provider is responsible for any remaining balance after the primary and secondary insurance plans have paid their portions.

The purpose of COB is to prevent overpayment or duplication of benefits. Insurance companies use COB to coordinate the payment process and ensure that the total reimbursement does not exceed the actual expenses incurred. This process helps to minimize healthcare costs and prevent fraud.

It’s important to note that the specific rules and procedures for COB can vary between insurance companies and plans. The coordination is typically based on guidelines established by state regulations and the coordination of benefits provisions outlined in the insurance policies. If you have multiple insurance plans, it’s best to contact each insurance company to understand their specific COB procedures and requirements.