Administrative Simplification Basics Series: Coordination of Benefits

CMS Administrative Simplification includes standards for health care administrative transactions. Widespread use of standards for these transactions—where everyone uses the same language, format, and codes—can lead to substantial savings across the health care industry.

Today, we’ll review one of these transactions: coordination of benefits.

The coordination of benefits (COB) transaction is used when a patient is covered by multiple health plans. In the transaction, health plans determine which insurance plans will cover the costs of a patient’s care, and in which order.

The goal of the transaction is to make sure that all parts of a patient’s care are covered by the right insurance plan and that patients receive the maximum benefits they are allowed. Administrative Simplification standards require that all health plans, including Medicaid and Medicare, coordinate these benefits.

In a COB transaction, information about a claim paid by one health plan is sent to another health plan or payer (for example, an auto insurance company) to coordinate coverage and payment. The transactions and codes sets final rule (page 50336) states that the choice of communication model is up to the health plan.

The goal of the COB standard—and all Administrative Simplification standards—is to streamline these transactions so that you spend less time on paperwork.

Visit the coordination of benefits page of the CMS Administrative Simplification websiteto learn more.