10/05/2007  Coordination of Benefits (COB) is changing

Effective for dates of service beginning Jan. 1, 2008, Asuris will change the way claims are processed in relation to Coordination of Benefits (COB). We are making these changes to comply with a new rule issued by the Office of the Insurance Commissioner (OIC). This new rule applies to all employer groups and Individual plans with exception of ERISA self-funded business. 

There are two significant changes to current practice when Asuris is the secondary plan:

Highest Allowable Expense. Under the new rule, all health plans processing COB claims will reimburse in the secondary-payer position using the "highest allowable expense" among the paying plans. In other words, we must make payment in an amount that, when combined with the amount paid by the primary plan, the total benefits paid or provided by all plans for the claim will equal 100% of the total allowable expense. However, plans in the secondary position are not required to pay an amount in excess of their maximum benefit plus any accrued COB savings.

Example:

A provider charges $150 for a service; one health plan may allow $120 while another allows only $100. The goal is to pick up the patient balance and ensure that the provider is reimbursed up to the highest allowable, in this case $120.

Under current COB rules, when Regence is the secondary plan, we use the amount paid by the primary plan in order to determine our secondary payment. We determine the secondary payment by subtracting the amount the primary plan paid from the amount we would have paid had we been primary. Therefore, payment will not exceed our allowable.

Estimated Secondary Plan Payment. If the primary plan's payment amount is unknown, plans in the secondary position now must make a reasonable estimate of the primary plan payment and base their secondary payment on that estimated amount. Once the primary plan payment information is available, secondary plans can recover any excess amount paid after the primary plan pays under the "right of recovery" provision in the plan. If the carrier underestimates their secondary payment, an adjustment will be done to pay the additional amount.

This is a significant departure from our current practice in which carriers are permitted to deny claims pending payment information from the primary carrier.

We will mail information to impacted employers by the end of November with information they can share with their employees.

For additional information, visit the Office of the Insurance Commissioner's web site or talk to your Asuris Sales contact.

« Back to Communications