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What is COB? Why does a health insurance company need a COB solution?

It’s common for more than one insurer to potentially have responsibility for paying a portion of a medical claim. When that happens, insurers go through a process known as Coordination of Benefits (COB) to determine which insurer pays what portions of the claim.

COB is a relatively common occurrence, with an estimated one in five Americans having coverage from more than one health insurance provider for at least a portion of any given year.

Common situations that trigger COB activity can include supplemental insurance products for Medicare, Medicaid, TRICARE and similar programs; other third-party supplemental plans such as pharmaceutical benefit providers; claims from accidents where automotive or worker’s comp insurance might also apply; families with employer-sponsored health care plans from both parents, young workers who have employer coverage but are still covered under their parents’ family plans; workers whose new employer-sponsored plans take effect before the previous plan sunsets or children with divorced parents who each have family health insurance coverage. There are also COB situations where a third party is at fault such as a property owner in a slip-and-fall accident from whom the primary insurer is attempting to recover cost through a process known as subrogation.

The greatest challenge for insurers, which highlights the need for effective COB solutions, is that they are usually reliant on their customers to inform them when COB might apply. The complexity of insurance means that many consumers, even with the best of intentions, fail to provide their insurers with timely and correct information.

This results in higher payouts, as well as increased administrative costs when overlapping coverage is discovered after a claim has already been processed and paid. Inefficient COB processes can also decrease consumer satisfaction, especially if they aren’t settled quickly and efficiently or require significant involvement from consumers who may be going through traumatic health experiences.

Today, modern big data solutions like Lia are transforming COB. Data mining and scoring algorithms can identify consumers who either have or are likely to have additional insurance coverage, allowing insurers to prioritize those cases and determine whether or not COB is appropriate before a claim is processed.

Are you interested in learning more about how data and analytics tools can help your COB process evolve from reactive to proactive? Contact us today to learn more.


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