Certified Revenue Cycle Representative (CRCR) Practice Exam

How does the Coordination of Benefits (COB) function when multiple health plans are involved?

1. Only one plan pays all expenses

2. Patients can choose their preferred plan to pay first

3. It establishes which plan is primary for payment

4. Directly issues payments to healthcare providers

The correct answer is: It establishes which plan is primary for payment

The Coordination of Benefits (COB) process is designed to determine the order in which multiple health plans will pay for a patient's medical expenses. When an individual is covered by more than one health insurance plan, COB helps clarify which of these plans is considered the primary payer and which is the secondary. The primary plan is responsible for paying first, covering the initial portion of the claim according to its coverage policies. After the primary plan has made its payment, the secondary plan can then consider the remaining unpaid expenses, which may include deductibles, copayments, or coinsurance. This ensures that the patient is not overpaid and that all relevant claims are processed correctly, avoiding duplication of benefits. This structured approach enhances efficiency in the claims process and helps patients receive optimal benefits without leading to confusion about which insurer is responsible for what portion of their medical costs. It is essential for maintaining compliance with both state and federal regulations governing health insurance.