Coordination of Benefits

Coordination of Benefits (COB) is the process of determining how claims will be processed when a patient has two or more health insurance carriers. The primary carrier will pay first and the secondary carrier may pick up the balance. This additional coverage may be available because:

  • A spouse also has health coverage through their employer.
  • A person has two jobs and two coverages
  • Two working parents each insure a child under an employer plan.
  • Government plans like Medicare or Medicaid.
  • Medigap plans.
  • Military plans.

Determining the order is important because it enables you to understand which carrier should be billed first, how claims will be reimbursed and if the patient will have any out of pocket costs.

Most health plans are written so that plan members share in the cost of healthcare. For example, an 80/20 plan means that a carrier will pay 80% of the covered charges leaving the patient to pay the remaining 20%. When a patient has more than one plan, all health plans will be billed and all payments will be applied to that date of service.

Example 1 of COB


Ben J. has an 80/20 plan through his place of employment and his wife, Janis J, also covers him under an 80/20 plan through her company. Neither plan has a deductible.

Ben goes to the doctor and incurs $500.00 in healthcare costs.

The same claim is billed to Janis’ plan with the EOB showing the $400.00 payment.

Although Janis’s plan could pay out $400.00, they know that the bill was only $500.00 and that $400.00 has already been paid by the primary carrier. They issue a payment for $100.00. Between the two carriers the claim has been paid in full with ZERO out of pocket from the patient.

Keep in mind that each carrier will only pay up to its allowed amounts. Let’s look at an example of this.

Example 2 of COB

Sally M. has a Blue Cross 80/20 plan and a Medicaid plan that pays 100% of their allowed.

Sally goes to the doctor and incurs $1000.00 in medical costs.

The claim is billed to the primary plan Blue Cross first:

The secondary Medicaid plan is billed:

The balance of $360.00 is deemed to be over Medicaid allowed and will be adjusted off.

In a Nutshell

  • In spite of how the clam is calculated, no more than 100% of the billed charge will be paid.
  • The health carrier deemed to be the primary carrier is billed first.
  • Both carriers CANNOT be billed at the same time.
  • The primary carrier will determine their liability and the EOB from this determination, will be used to bill the secondary carrier. Unless you have a way to attach the EOB electronically, your secondary claim will be billed as a paper claim.
  • Even if we know in advance that the primary carrier will deny coverage for a service or supply, we must still bill them because we will need that denial in order to bill the secondary.
  • When you call the health carrier you may not learn about a second or third coverage but if you handle all benefits and eligibility verification through an online system you may have access to information on any and all health carriers that a patient has.       
  • Patients with more than one health carrier do not get to decide not to use one. They are required to disclose all information about all health plans so that claims can be handled correctly.

Real World Example

A few years ago, we had a patient that filled out the insurance forms indicating that she had Medicaid coverage only. She provides us with the front and back of her Medicaid ID card, we call to verify benefits and eligibility and since preapproval was not required the service is provided and the claim was billed.

Shortly after, Medicaid denies her claim because she has other primary coverage. We contact the patient who says she, “does not want to use that coverage.” She feels that it is her right to not use a carrier if she does not want to. After numerous attempts, she still refused to fully disclose her primary plan and Medicaid refused to honor our claim that ended up aging out. We now have systems in place for situations such as these.


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