By Mark Wright, OD, FCOVD,
and Carole Burns, OD, FCOVD
June 1, 2022
A patient presents at your office for a procedure for which you charge $150 and they have two different insurance policies. Which one do you bill?
A better question would be: Which reimbursement would you rather have, $135 or $65? Utilizing coordination of benefits may allow you to receive the higher number.
Coordination of Benefits
What is coordination of benefits?i Sometimes multiple insurance companies need to work together to pay claims for the same patient. When this situation occurs, it is called coordination of benefits.
Coordination of benefits occurs when a patient has more than one insurance policy that covers the patient for the procedure received on a specific date (think comprehensive exam).ii When it comes to processing a claim and multiple policies exist, in coordination of benefits each policy is assessed to determine rank order.
One policy will be assigned with the primary responsibility for covering the predominant share of the claim costs and then the complete process involves assessing the extent that other policies contribute toward the claim. These other policies are also placed into rank order (i.e.: secondary, tertiary, etc.). The plan assigned the primary rank pays first and then the plans ranked lower pay any remaining balance within the limits of its responsibility.
The order of the policy coordination is dictated by insurance law. If only one insurance plan is held by the patient, then all responsibility for reimbursement falls onto that one plan. When a patient has more than one policy in place, the primary intention of coordination of benefits is to make sure the person receives their complete benefit entitlement and, at the same time, prevents benefits from being duplicated.
A key idea to understand is that coordination of benefits does not permit multiple plans to pay more than the total amount of the claim, however, because different plans reimburse for the same thing at different rates, the total reimbursement received after coordination of benefits may result in different total reimbursement.
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Subrogation
Coordination of benefits also happens when a patient is injured and it’s not their fault. This is a special process called subrogation for getting another insurance company to pay a claim. Here’s how that works. A patient is a grocery store and slips on a wet floor. They fall and scratch their eye on the corner of a shelf. Because the accident wasn’t the patient’s fault, the patient’s health insurance company will contact the store’s insurance company to get them to help pay for the care.
VSP and Coordination of Benefits
Often the same patient is covered by two different VSP plans. Think of the situation where a patient is covered by VSP at their own workplace and at the same time they are covered by VSP at their spouse’s workplace. What most doctors do is just pick one of the VSP plans and bill that one. That is a mistake.
HERE are the step-by-step instructions on how to coordinate VSP benefits when the above situation occurs.
Be careful to follow the rules exactly. You cannot bill the same comprehensive exam to two different companies and expect to get paid the full amount from both companies. An example would be if the patient has both Medicare and EyeMed. You cannot bill the same comprehensive exam on the same day to the same patient to both companies expecting to get paid the full amount for the same work from both companies. In this case, you are asking to be paid more than the total amount of the claim.
References
i. What is coordination of benefits? | FAQs | bcbsm.com
ii. Coordination of Benefits: Everything You Need to Know (upcounsel.com)
