Understanding Coordination of Benefits for patients with Dual Coverage

Coordination of benefits (COB) is the process insurance companies follow to ensure that the combined benefits from all group dental plans do not exceed 100 percent of the dentist’s fee. There are different types of coordination of benefits policies so it is very important when verifying benefits to confirm whether or not your patient’s policy coordinates benefits. Below you will find a list with descriptions included for some of the more common types of COB policies. 

Traditional/Standard: If a plan has a traditional COB policy, the secondary plan shares the burden of payment with the primary plan and pays up to 100% of the fee charged. This is the rare scenario where payments from both plans cover the total cost of treatment.

Maintenance of Benefits: Under this type of COB policy, the secondary plan reduces the covered charges by the amount the primary plan paid and then applies the plan deductible and eligible co-insurance amounts. In this type of situation, the secondary plan pays less than what it would have paid in a traditional COB arrangement and the patient is usually left with an out of pocket expense.  

Non-duplication of benefits: If the policy has a non-duplication clause, the secondary plan will pay only the difference between what the primary plan pays and what the secondary plan would have paid if it had been the primary carrier. For example, if the primary carrier has an 80% benefit for a service and the secondary also has an 80% benefit, the secondary carrier will not pay anything additional. In the case where the primary carrier has a 50% benefit for a service that secondary has an 80% benefit for, then the secondary carrier will reduce its benefit to 30% to make up the difference.

How to Determine which plan is primary

• The primary plan is the one in which the patient is enrolled as an employee or as the main policyholder. If a patient has more than one job, the policy who has covered the patient the longest, is usually primary. 
• The secondary plan is the one in which the patient is enrolled as a dependent.
• For dependent children, the primary carrier is generally determined by the “birthday rule”: coverage of the parent whose birthday  (month and day, not year) comes first in the year is considered primary. The exception to this is when parents are divorced and there is a divorce decree stating which parent is legally obligated to carry the primary insurance policy. 

How are write-offs calculated?

It is important that no write-offs be made on the patient’s account until all dental plans have paid. There may be cases where you will need to manually calculate write-offs after all plans have paid. Relying on the primary EOB for the write-offs may result in you over or under adjusting the patient's account. It is also important to make sure that you are submitting your full fee on your claim forms. Begin by identifying the lowest contracted fee established by all the contracted plans. Then, total the payments made by (payment received from) all insurance payers. If the total of the insurance payments equals or is
more than the lowest contracted fee, then the patient owes nothing. The difference between the full practice fee and the amount received is then written off. On the other hand, if the total of the insurance payments is less than the lowest contracted fee, the patient owes the difference between the total of the
payments received and the lowest contracted fee. Any balance above the lowest contracted fee is written off. Note that this is only true if you are contracted with one or more of the payers. If you have no contract with a dental plan, you are not obligated to write off any part of your fee.

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