What Exactly is COB Insurance, and Why is it Important?

Healthcare providers of all types need to be up-to-date with the various types of health insurance and benefits held by patients. After all, the best patient outcomes occur when payments go through smoothly to avoid delays. You may have heard of COB insurance, which stands for coordination of benefits. This is a critical term that can determine how your firm gets paid and even if a patient's claim will be authorized or denied.

Understanding the meaning of COB insurance and it's intricacies can help providers navigate the challenges and potentially invest in the right software to help.

What is COB Insurance?

COB stands for coordination of benefits. Rather than a single insurance product, it describes the method in which policy providers pay out when a claim is made by an individual who holds multiple health insurance policies.

Insurance companies must coordinate carefully to ensure that the right details of the right plan are applied correctly in any given healthcare situation. 

Do People Really Have More Than One Health Insurance Policy?

Yes, in fact, it's fairly common. At least 43.1 million Americans hold more than one health insurance policy. There are numerous reasons for this, including:

• Someone may have already purchased private healthcare insurance and now be covered by their employer's benefits as well.

• Children can be covered by policies from two parents, particularly in the case of separated or blended families.

• A veteran may have policies provided by Veterans Affairs (VA) Health Care and other private insurers.

• Married couples can be covered by their own and their spouse's benefits. 

• Up to the age of 26 young people can still be covered by a parent's policy as well as their own.

• Someone who is eligible for Medicare/Medicaid may also have private insurance.

Each insurer needs to be open to understanding the details of other plans. It benefits all insurance carriers, patients, and healthcare providers to understand how the patient may be impacted by conflicting or overlapping benefits.

Why COB Matters

COB allows insurers and healthcare providers to do just that: coordinate exactly what needs to be paid and to whom. Without a clear pathway of where money needs to go, risks include:

• Duplicate payments

• Failure to note that a condition is covered by a particular policy

• Not understanding which plan is primary, i.e., takes precedence in the case of conflicts

• Potentially higher costs for treatment or medication if plans aren't utilized correctly

In every situation with multiple plans, one policy will be considered the primary plan. This is usually the plan that offers the most coverage in most scenarios. If a medical procedure is covered to the amount of $2000, but costs $2500, the primary plan will leave the patient liable for $500. 

However, a secondary policy may also cover the same condition, and pay for that $500. As long as the patient is up to date with their premium payments, it's perfectly valid for them to utilize both policies to pay for the procedure.

Insurers must coordinate with each other and the healthcare provider to ensure that a) the healthcare facility gets paid and b) the carriers don't over or underpay. When COB works, the patient gets their full entitlement without the insurers going out of pocket.

How Electronic Health Records (EHRs) and Other Digital Solutions Help

Managing multiple policies via COB rules manually is almost impossible. It requires sending emails or faxes of policies and coverage details from individual to individual — which holds many data protection risks, especially under HIPAA rules. 

Instead, insurers and healthcare providers should move away from legacy systems and embrace integrated electronic records that allow them to securely send data to the relevant parties almost instantly. In many cases, insurers can use these systems to quickly assess what other policies the patient has and start the COB process immediately, avoiding delays that could negatively impact patient outcomes.

Getting the Right Support for EHRs

As a healthcare provider, you want to balance the right outcomes for your patients with continuous income provided by their insurance and benefits packages. Without funding, you can't provide the services and treatments your patients need. COB ensures that regardless of how many policies a patient holds, payments will occur correctly and promptly.

Leveraging NextGen EHRs and other digital solutions helps you take the step forward you need to ensure you're playing your part in the COB process. TempDev's team of NextGen consultants, developers, and trainers can help support your transition to more practical electronic systems. From dashboards and revenue cycle consulting to automation and workflow redesign, TempDev offers the tools you need to ensure ongoing payments and great relationships with both patients and insurers.

Contact us online or by calling us at 888.TEMP.DEV for more information.