Co-ordination of Benefits (COB)

Posted by Ecareindia on July 2nd, 2013

One of the trickiest situations in medical billing is to ascertain the Primary, Secondary and Tertiary payers when the patient is covered under more than one group payer. When the wrong payer is selected, it usually results in a denied claim which needs re-work prolonging the time taken for payment. This system of designating the payer and how they pay a claim is called Co-ordination of Benefits (COB). The system exists to prevent the multiple payers from paying more than 100% of the allowed amount for a particular healthcare service.

Who pays first? : There are several nuances to be considered in medical claims billing while checking for COB to ascertain the Primary payer. Typically, the plan provided by the employer or where the patient is a member or subscriber would pay first rather than a plan where the patient is a dependant. But there are exceptions to this rule, if the employer has less than 20 employees, the patient is disabled or has only Retiree coverage or is a Veteran etc. Again there are separate rules that govern which payer covers for dependent children based on the marital status of the parents.

MSP Rule: The MSP rule is nothing but ‘Medicare as secondary’ and CMS has laid out detailed guidelines of when Medicare would act as a secondary payer though the patient is entitled and has coverage from Medicare. These guidelines are quite detailed and have to be strictly followed while performing medical claims billing.

How does COB work? : Under the rules of COB, a secondary payer can reduce its payments to conform to the 100% of the allowed amount. However, the secondary payer has to calculate the total payable amount and remit the saved balance to a benefit reserve account. This is because the secondary payer will always save, since the Primary payer would pay the bulk of the expenses. The benefit reserve account can be utilized to pay expenses such as deductibles, co-pays and co-insurance etc. Knowledge of these intricacies is essential when medical billing needs to be done for a Provider.

Impact on Medical Billing: The impact that COB has on medical claims billing is huge. Billing companies that do not posses this expertise would add to the burden by drastically increasing the AR and also re-working the claims several times. This affects their profitability due to reduced cash inflows to the Providers who are their end clients. One of the options for such medical billing companies is to partner with another offshore company like e-Care and outsource medical billing. In addition to the expertise, they can also enjoy the cost-savings that outsourced medical billing provides.

About e-Care India:
e-Care India is one of the renowned outsourced medical billing companies in India that promises the above mentioned benefits with total customer satisfaction. With 13 years of experience in the industry, e-Care’s outsourced medical billing delivery centers have been providing end-to-end medical billing services seamlessly to its clients, namely the US based companies that bill for Providers and healthcare Facilities. To know more about e-Care and its services, log on to

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