Coordination of Benefits (COB) is a term used by healthcare organizations which explains the determination of benefits for a patient with multiple insurance plans. There are many rules and regulations made by The American Dental Association (ADA) to accurately coordinate patient’s benefits. Following these rules will help avoid delays in payment and will ensure that insurance companies process claims correctly!
How does a patient end up with multiple insurance plans? Many different ways, but there are a few common examples to remember. It is common to see a child with dual coverage because both parents have their own insurance coverage. Of course, the child would have to be enrolled in both parents’ plans. Using the same scenario, can we assume that both parents also have dual coverage? If both insurance plans cover families/spouses, then it is definitely safe to assume.
A few other reasons a patient might have dual insurance:
Being a part of a federal insurance plan (Ex. FEHB and FEP)
Being qualified for Medicaid
Being an adult child (under 26) who has his or her own coverage and also through their parents
Patients may be thinking, “I have two insurance plans; so that means I would get double the benefits?” That is not always the case. Having two or more insurance plans does help cover insurance expenses better through the coordination of benefits provisions. Giving your patient knowledge about their dual insurance benefits before treatment is essential. Yet again another reason insurance verification is so important.
So how can we determine the order of benefits for patients with dual insurance? There are many rules to remember when setting up a patient’s account. Here are the most common rules used to determine benefits:
Birthday Rule - Child has coverage from both parents' insurance plans. The parent whose birthday falls earlier in the calendar year is primary. If the parents have the same date of birth it is determined by who has had coverage the longest with the insurance company.
Subscriber Rule - When the patient is the subscriber, employee, member, policyholder of the insurance plan he or she is always primary on that plan. Any other plans where the patient is a dependent would be their secondary plan.
Medicare Rule - Medicare is secondary to the plan covering the patient as a dependent.
Divorce Rules - If a court decree states one of the parents is responsible for the child’s health care expenses/care, the plan of that parent is primary.
No court decree? - Order of benefits are as follows:
The plan covering the custodial parent
The plan covering the spouse of the custodial parent
The plan covering the non-custodial parent
The plan covering the spouse of the non-custodial parent
Dental offices need to have a basic understanding of these rules to properly handle account setups. The dental office is also responsible for making sure their patients properly understand their benefits, especially when dealing with dual insurance. This conversation should happen with the patient during treatment plan negotiations. Before all of this happens, your office must verify patients’ benefits through your insurance verification process.
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Coordination of Benefits (COB) is a term used by healthcare organizations which explains the determination of benefits for a patient with multiple insurance plans. There are many rules and regulations made by The American Dental Association (ADA) to accurately coordinate patient’s benefits. Following these rules will help avoid delays in payment and will ensure that insurance companies process claims correctly!
How does a patient end up with multiple insurance plans? Many different ways, but there are a few common examples to remember. It is common to see a child with dual coverage because both parents have their own insurance coverage. Of course, the child would have to be enrolled in both parents’ plans. Using the same scenario, can we assume that both parents also have dual coverage? If both insurance plans cover families/spouses, then it is definitely safe to assume.
A few other reasons a patient might have dual insurance:
Being a part of a federal insurance plan (Ex. FEHB and FEP)
Being qualified for Medicaid
Being an adult child (under 26) who has his or her own coverage and also through their parents
Patients may be thinking, “I have two insurance plans; so that means I would get double the benefits?” That is not always the case. Having two or more insurance plans does help cover insurance expenses better through the coordination of benefits provisions. Giving your patient knowledge about their dual insurance benefits before treatment is essential. Yet again another reason insurance verification is so important.
So how can we determine the order of benefits for patients with dual insurance? There are many rules to remember when setting up a patient’s account. Here are the most common rules used to determine benefits:
Birthday Rule - Child has coverage from both parents' insurance plans. The parent whose birthday falls earlier in the calendar year is primary. If the parents have the same date of birth it is determined by who has had coverage the longest with the insurance company.
Subscriber Rule - When the patient is the subscriber, employee, member, policyholder of the insurance plan he or she is always primary on that plan. Any other plans where the patient is a dependent would be their secondary plan.
Medicare Rule - Medicare is secondary to the plan covering the patient as a dependent.
Divorce Rules - If a court decree states one of the parents is responsible for the child’s health care expenses/care, the plan of that parent is primary.
No court decree? - Order of benefits are as follows:
The plan covering the custodial parent
The plan covering the spouse of the custodial parent
The plan covering the non-custodial parent
The plan covering the spouse of the non-custodial parent
Dental offices need to have a basic understanding of these rules to properly handle account setups. The dental office is also responsible for making sure their patients properly understand their benefits, especially when dealing with dual insurance. This conversation should happen with the patient during treatment plan negotiations. Before all of this happens, your office must verify patients’ benefits through your insurance verification process.
Is Your Insurance Aging Report Inflated?
It happens often that doctors and OMs believe their aging report is an accurate estimate of receivables owed to the practice. Because the report says a certain amount is outstanding, the belief is that this is exactly what they should be able to put in their pockets. Unfortunately this is not true. Understanding why is crucial to predicting your actual insurance payments based on the numbers in your insurance aging report.
Focusing on your over 30 day insurance aging report is the best way to monitor if your practice is a tight, well-oiled machine.. (Take a look at our blog “What Your Insurance Aging Report is telling you!” for a detailed explanation.)
So here’s an example I want to share with you. Your total insurance aging report shows $200,000 outstanding – every claim created and sent and outstanding. Wow, that’s a lot of money! The amount of this aging report over 30 days is $50,000. This means that your insurance aging report over 30 days makes up 25% of the report. Ideally you want this % under 10%, but that’s another discussion. The question here is, if I’m looking at my over 30 day report, should I expect $50,000 to be coming in from these old claims? The common misconception is yes, but the reality is NO! So, why is this number inflated?
Here are 3 reasons your insurance aging report could be inflated:
Claims Paid But Not Posted
Checks and balances are not in place at every office. Deposit reports aren’t run every day, different staff members are responsible for a multitude of responsibilities, roles switch and change, etc. This means that things fall through the cracks!
If your doctor, or whomever is in charge of depositing checks, doesn’t make sure claim payments are posted before taking the deposit to the bank, those claims will linger on the report.
If your office receives EFTs/VCC from insurance companies, but the RAs (electronic EOBs) are not retrieved and posted, then these claims still lurk on the aging report, YET the doctor’s bank account has already been credited.
Claims Denied But Not Cleared
Claims deny for multiple reasons and sometimes they are accurate denials. Frequency, missing tooth clause, waiting period, and max reached are typical accurate denials that show up on insurance aging reports all the time. These claims carry a dollar amount, so if they are not cleared off your aging report, they only inflate the report showing more money should come in from insurance than what is realistic.
Insurance Aging Report Dollar Amount is Often UCR
Write-offs- Since the aging report dollar amount is the UCR dollar amount, you have to take into account write-offs from any PPOs you participate with.
Example: A claim for a $1,200 crown. The in-network fee is $800…
Your report is already inflated $400 ($1,200 – $800 = $400)
Coverage Percents- Many procedures only pay at a percentage of the fee associated with them.
Example: The same claim for a $1,200 crown. The in-network fee is $800 and insurance is only going to pick up 50% of that.
Barring any deductible, we can only expect $400 payment from insurance even though the report shows a $1,200 claim outstanding.
A great way to determine what you should bring into your practice from insurance is to run your current aging report (0-30) number. Divide your monthly insurance collections by this number, and you can find out a predictable dollar amount of what you should collect from insurance monthly based off the current (0-30) dollar amount of your insurance aging report.
Dental Billing Support Podcast
Coordination of Benefits (COB) is a term used by healthcare organizations which explains the determination of benefits for a patient with multiple insurance plans. There are many rules and regulations made by The American Dental Association (ADA) to accurately coordinate patient’s benefits. Following these rules will help avoid delays in payment and will ensure that insurance companies process claims correctly!
How does a patient end up with multiple insurance plans? Many different ways, but there are a few common examples to remember. It is common to see a child with dual coverage because both parents have their own insurance coverage. Of course, the child would have to be enrolled in both parents’ plans. Using the same scenario, can we assume that both parents also have dual coverage? If both insurance plans cover families/spouses, then it is definitely safe to assume.
A few other reasons a patient might have dual insurance:
Being a part of a federal insurance plan (Ex. FEHB and FEP)
Being qualified for Medicaid
Being an adult child (under 26) who has his or her own coverage and also through their parents
Patients may be thinking, “I have two insurance plans; so that means I would get double the benefits?” That is not always the case. Having two or more insurance plans does help cover insurance expenses better through the coordination of benefits provisions. Giving your patient knowledge about their dual insurance benefits before treatment is essential. Yet again another reason insurance verification is so important.
So how can we determine the order of benefits for patients with dual insurance? There are many rules to remember when setting up a patient’s account. Here are the most common rules used to determine benefits:
Birthday Rule - Child has coverage from both parents' insurance plans. The parent whose birthday falls earlier in the calendar year is primary. If the parents have the same date of birth it is determined by who has had coverage the longest with the insurance company.
Subscriber Rule - When the patient is the subscriber, employee, member, policyholder of the insurance plan he or she is always primary on that plan. Any other plans where the patient is a dependent would be their secondary plan.
Medicare Rule - Medicare is secondary to the plan covering the patient as a dependent.
Divorce Rules - If a court decree states one of the parents is responsible for the child’s health care expenses/care, the plan of that parent is primary.
No court decree? - Order of benefits are as follows:
The plan covering the custodial parent
The plan covering the spouse of the custodial parent
The plan covering the non-custodial parent
The plan covering the spouse of the non-custodial parent
Dental offices need to have a basic understanding of these rules to properly handle account setups. The dental office is also responsible for making sure their patients properly understand their benefits, especially when dealing with dual insurance. This conversation should happen with the patient during treatment plan negotiations. Before all of this happens, your office must verify patients’ benefits through your insurance verification process.
