The benefits of a plan which covers a person as an
employee who is neither laid off nor retired (or as that employee’s dependent) are
determined before those of a plan which covers that person as a laid off or retired
employee (or as that employee's dependent). If the other plan does not have this
rule and if, as a result, the plans do not agree on the order of benefits, this rule is
ignored
Some health insurance plans describe Coordination of Benefits in the Benefit
Manual or Summary Plan Description (SPD). For example, the following is from
an employer SPD: Coordination of Benefits (COB) applies when an individual has
health care coverage through more than one group program. The purpose of COB
is to insure that the individual receives all of the coverage for which the individual
is entitled, but no more than the actual cost for the care received. In other words,
total payments from all of the insurance coverage combined cannot be more than
the total charges incurred.
As you can see, COB can be very complicated. Lets look at the following
examples:
EXAMPLE: SFC Stewart Lee is former military with veterans benefits. He
resides in Orlando, Florida. His place of veterans treatment is the VA hospital
located in Tampa, Florida. SFC Lee also has Medicare Part B as coverage. SFC
Lee was seen at the Our Lady of The Blessed Acne hospital in Orlando. He asks
that the claim be sent to Medicare Part B. Medicare know SFC Lee has coverage
through the Veterans Administration. In this case, either Medicare or the VA is
primary. Medicare doesn’t pay for what the VA doesn’t pay and the VA doesn’t
pay for what Medicare doesn’t pay. Once Medicare makes its payment, SFC Lee
can be responsible to the provider for any co-insurances and deductibles. Under
normal circumstances with commercial health insurance, you might send the
Medicare EOB to the commercial insurance company. Two things could happen.
The insurance company could pay the coinsurance and/or deductible or they could deny payment by stating they don’t pay anything more than what the primary
insurance company paid. This may be a clause in the patient’s health insurance
contract. However, KNOW YOUR STATE COB LAW. With Medicare and the
VA, SFC Lee cannot ask that the Veterans Administration be billed to pay what he
owes. If SFC Lee asks that the VA be billed first, any payment that is made by the
VA is considered as payment in full. I once had a SFC Lee case. He said WE
made a mistake in billing Medicare. However, we followed his telephonic
instructions. We refilled the claim to the VA, they paid what they would normally
pay and we refunded Medicare the payment they made. From that point on, it
became office compliance policy that under NO circumstance was a patient claim
with Medicare and VA to be sent to Medicare without written instructions from the
patient.
