Start With Knowing Your State’s COB Requirements
Multiple coverage is typically a favorable situation. However, insurers may delay payments due to coordination of benefits investigations. Further, denials and refund requests related to COB appear to be growing. COB investigation stalling on the part of the insurance carrier can frequently be resolved with a letter demanding compliance with state COB regulations. The majority of states have adopted the National Association of Insurance Commissions model COB provision which dictates use of the birthday rule when attempting to determine the primary carrier for a dependent child. Under this rule, the plan of the parent whose birthday occurs first in the calendar year is designated as primary. Several exceptions to this rule can apply including coordination with COBRA coverage and court decrees stipulating which parent is responsible for coverage. However, COB regulations have detailed instructions for determining primary/secondary coverage duties. Most of the regulations clearly state that the regulations have been adopted in order to avoid inconsistency among plans which lead to unnecessary claim payment delays.
COB-related denials and post-payment refund requests should also be scrutinized for compliance with state COB regulations. Multiple coverage can contribute to situations where incorrect information was provided at the time of treatment. Lack of timely filing denials result from claims being inadvertently filed with the secondary carrier rather than the primary. Lack of authorization denials can result from authorization being obtained from the secondary carrier instead of the primary.
Because such errors result from incomplete insurance information, it is important to appeal such denials with detailed information regarding the insurance information obtained at the time of treatment.
Medical billers should also know their state’s regulations regarding COB. Some states have added consumer protections which go beyond the NAIC model language. Some of the consumer protections potentially applicable to COB denials include:
Additional time to file claims involving COB denials
Alabama – Alabama law states that if a carrier retroactively denies reimbursement for services as a result of COB with another insurer, the health care provider must be given an additional six months from the date that the health care provider received the notice to file the claim with the other coverage. This type of law can help providers overturn a lack of timely filing denials related to COB,
Florida – Florida law prohibits the secondary from denying the claim based on the amount of benefits paid by the primary and requires the carriers to pay 100 percent of the total reasonable expenses actually incurred of the type of expense before citing a COB-related denial.
Limited time frame for conducting COB investigation
Iowa, Kentucky, North Dakota, Oregon and South Dakota all have a law or insurance regulations requiring COB investigations to take no more than 30 days from receipt of all necessary information needed to pay the claim. If the carriers are unable to agree upon primary/secondary designation, the plans are directed to pay the claim in equal shares and determine their relative liabilities following payment. Once liability has been determined, the secondary plan may have the option to exercise a right of recovery against the primary for having paid more than their rightful amount.
Limited time frame for recoveries
Utah law states that insurers may make reversals of payments due to COB issues only within 120 days from the date a payment is made unless the reversal is due to fraudulent acts, fraudulent statements, or material misrepresentation by the insured.
Several states’ COB regulations imply that recoveries cannot be made by a secondary carrier until the primary carrier has paid benefits.
Right to designate primary
A few states have issued bulletins to clarify coordination rights between medical and auto coverage and give insured’s the right to chose which policy to act as primary.
New Hampshire – Department of Insurance Bulletin No. 03-051-AB states that MedPay is not a “plan” and the insured can coordinate and access MedPay coverage for expenses not paid under the group plan. See www.state.nh.us/insurance/News/Bulletins/cob_and_medpay_Ins03-051ab.pdf
New Jersey – Department of Banking and Insurance Bulletin No. 05-25 clarifies that an insured can chose his or her health plan as primary to auto coverage. Please see www.njdobi.org/bulletins/blt05_25.pdf.
A final rule to keep in mind is that if one carrier has a COB provision and the other does not, the one that does not is always the primary carrier. Therefore, if you receive any denial related to COB, ask for disclosure of the COB provision to ensure that the insurance carrier actually has such wording in the policy or plan document.
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