What is Coordination of Benefits (COB)?

Coordination of Benefits (COB) is a process used by health insurance payers to determine which plan is the primary payer and which plans are secondary (or tertiary) when a patient is covered by two or more active health insurance policies.

The primary goal of COB is to ensure the claim is submitted to the correct payer in the correct order. Incorrect COB is a major front-end error that leads to claim rejections, delays, and denials.

Why COB is Critical for CFOs and Financial Leaders

Errors in COB are a leading cause of claims denial and a major contributor to rising Days in Accounts Receivable (A/R).

• Minimizing Claim Denials: A high percentage of initial claim denials occur because the claim was filed to the wrong primary payer. Correct COB is essential for achieving a high Clean Claim Rate (CCR).
• Patient Financial Transparency: Accurate COB ensures that the patient's correct final financial responsibility is calculated post-adjudication, reducing post-service Bad Debt.

Key Use Cases: How Automation Solves COB Challenges

COB information is often manually verified and changes frequently, making it an ideal process for RCM Automation.

• Automated Verification: Modern RCM platforms can automatically query multiple payer systems in real-time to verify all active coverage and accurately identify the primary and secondary payers.
• Pre-submission Claim Intelligence: Before Claims Submission, the RCM platform cross-references the determined COB order with the claim data. If the primary payer on the claim does not match the verified COB information, the system will flag the claim as a high-risk denial, preventing the initial submission error or replace it with a verified primary payer from the COB order.

Coordination of Benefits (COB) vs. Eligibility Verification

These front-end terms are closely related, but distinct:

• Eligibility Verification confirms if a patient has active insurance coverage for the date of service.
• Coordination of Benefits (COB) determines which of the patient's multiple active coverages must be billed first.

Resources and Education

• Candid Health Solution: Integrated RCM Solution /solution

Product Claims: Claims Management /product/claims