COB policy & procedures

When two or more health plans provide coverage to the same member, Priority Health coordinates between the plans following these steps:

1. Identify if other coverage exists
2. Review documentation to determine correct order of benefits
3. Update Priority Health's FACETS Claim Processing System with other coverage information
   
4. Calculate the allowable expense
5. • All deductibles, copayments, limits and accumulators apply to both plans, as if there were no secondary coverage
   • When coordinating benefits between two Priority Health plans for capitated services: On the secondary policy, PH will reimburse the lower of the two copayments
   • Priority Health will coordinate to the lowest allowable benefit unless Medicare is primary. If Medicare is primary, PH will always coordinate to the Medicare allowed amount.
6. Process the payment
   

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Types of coordination
Priority Health plan language identifies two types of COB methods.

Traditional method - most plans coordinate by this method.

• The secondary benefit is the difference between the lowest allowable amount and the primary plan payment amount.
• The primary plan payment is subtracted from the secondary plan's benefit.
• The benefit can not exceed the Priority Health benefit amount.
• Jump down to traditional method examples
  

Carve-out method (also referred to as Integration of benefits or Non-duplication) - generally used for a few self-funded plans and Medicaid.

• The secondary plan calculates its benefit using the lowest allowable among the plans.
• The primary plan payment is subtracted from the secondary plan's benefit. If there is any balance, the secondary plan may make a payment.
• Jump down to carve-out method examples
  

Traditional Method
Example 1: Charge of $200
Primary Allowable  $180.00	Secondary (PH) Allowable  $178.00
Primary Benefit       $ 80.00	Secondary (PH) Benefit    $142.40
Calculation is as follows:
$ 178.00	Lowest allowable between plans
-    80.00	Primary payment
= $98.00	Secondary payment ($142.40 is available, but only $98 is payable)
Example 2: Charge of $200
Primary Allowable  $170.00	Secondary (PH) Allowable  $150.00
Primary Benefit       $ 70.00	Secondary (PH) Benefit      $  40.00
Calculation is as follows:
$ 150.00	Lowest allowable between plans
-    70.00	Primary payment
= $80.00	Remaining (more than PH benefit)  BUT
$   40.00	Is the maximum that can be paid.

"Carve Out" Method
Example 1: Charge of $200
Primary Allowable  $180.00	PH Allowable  $178.00
Primary Benefit       $ 80.00	PH Benefit    $142.40
Calculation is as follows:
$ 142.40	PH benefit (as if no other coverage existed)
-    80.00	Primary payment
= $62.40	PH payment
Example 2: Charge of $200
Primary Allowable  $70.00	PH Allowable  $ 60.00
Primary Benefit      $60.00	PH Benefit      $ 48.00
Calculation is as follows:
$  48.00	PH benefit (as if no other coverage existed)
-    60.00	Primary benefit paid
= $ 0.00	Zero due, since primary benefit exceeds PH benefit