What does "coordination of benefits" involve?

Coordination of benefits refers specifically to the processes and regulations that determine how benefits are paid when an individual is covered by more than one health insurance plan. This is vital to avoid overpayment of claims, ensure that healthcare providers receive appropriate reimbursement, and maintain equitable treatment for all insured individuals.

When someone has multiple insurance policies, coordination of benefits establishes which policy is the primary insurance (the one that pays first) and which is secondary (the one that pays after the primary plan has processed the claim). This ensures that the insured does not receive more in benefits than the total amount of the healthcare expenses incurred. By structuring these claims efficiently, coordination of benefits helps streamline the payment process, reduces potential disputes among insurers, and ultimately ensures that the patient’s healthcare needs are met without financial confusion.