Coordination of Benefits and its implications to Health Plans

Coordination of Benefits (COB) allows plans that provide health and/or prescription coverage with Medicare to determine their respective payment responsibilities (i.e. determine which insurance plan has the primary payment responsibility and the extent to which the other plans will contribute when an individual is covered by more than one plan). Member’s primary plan has the responsibility of paying claims first, followed by coverage by remaining plans. This process of splitting the costs across multiple coverage is called COB. This document introduces COB and how health plans and members benefit through COB regulations.

1. Coordination of Benefits (COB) and its Implications on Health Plans 07 July, 2017 | Author: Manoj Upadhyay, Solution Architect, CitiusTech CitiusTech Thought Leadership

2. Agenda COB for Health Plans Overview of COB Key stakeholders involved in COB General regulations governing COB Data and coverage sources for Medicare eligibility Benefits Coordination and Recovery Centre (BCRC) of Medicare Some COB facts of Medicare EDI 837/835 transaction for COB EDI flow for COB of provider-payer-provider/ payer transaction Typical challenges and solutions for implementing COB

3. COB for Health Plans Coordination of benefits (COB) allows plans that provide health and/or prescription coverage with Medicare to determine their respective payment responsibilities (i.e. determine which insurance plan has the primary payment responsibility and the extent to which the other plans will contribute when an individual is covered by more than one plan). Member’s primary plan has the responsibility of paying claims first, followed by coverage by remaining plans. This process of splitting the costs across multiple coverage is called COB.   This document introduces COB and how health plans and members benefit through COB regulations.

4. Overview of COB Accident/ Incident occurs Beneficiary goes to hospital/doctor Clearing House Primary Payer Secondary Payer Tertiary Payer EDI 835/837 Messages Payers Coordination of Benefits COB Workflow COB process helps faster processing of claims in dual coverage situations by ensuring: That insurance claims are not paid multiple times when member has multiple insurance plans. That the primary payer pays first and the portion of pending amount not paid by the first insurer is claimed through the second insurer. That the amount paid by plans in dual coverage situations does not exceed 100% of the total claim thus avoiding duplicate payments COB reduces financial burden over federal and state insurance programs and helps beneficiary by optimizing the use of health insurance benefits.

5. Key Stakeholders Involved in COB Health Plans/ Payers Atypical Provider (e.g. Taxi services, respite services etc.) Clearing Houses Healthcare Providers Practice Management Software Vendors Industry Associations & Organizations (OMA, WEDI, CORE etc.) Stakeholders Provider Billing Agents COB happens over all the multiple insurance covers that a member has. Key stakeholders involved in COB include:

6. General Regulations Governing COB Some general guidelines by CMS that determine the payment order of primary and secondary plans are as below: Employee, member or subscriber Plan that covers you as an active employee is primary over the plan that covers you as a laid-off employee or retiree. Plan covering you as an employee, member or subscriber is primary over the plan covering you under state or federal continuation. Dependent children of parents not separated or divorced Primary Plan is the plan that covers the parent whose birthday falls earlier in the year (birthday refers only to the month and day in a calendar year and not the year). In the event of a disagreement between two plans, the gender rule applies – stating that the father’s coverage is the primary carrier. Dependent children of separated or divorced parents The order of primary coverage is determined as: First: The plan of the parent with custody of the child Second: The plan of spouse of the parent with custody of the child. Third: The plan of the parent or spouse of the parent without custody of the child As per the court’s decree – overriding all the above conditions Birthday rule applies to dependent children of parents with joint custody.

7. Data and Coverage Sources for Medicare Eligibility CMS shares Medicare eligibility data with other payers and transmits Medicare-paid claims to supplemental insurers for secondary payment via BCRC. Data Source Data Type IRS/SSA/CMS Claims Data Match Includes data for situations where another payer is primary to Medicare Voluntary Data Sharing Agreements (VDSAs) Sends and receives GHP enrolment information including Part D plans COB Agreement (COBA) Program  Transmits enrolee eligibility data and Medicare paid claims data Initial Enrolment Questionnaire (IEQ) Includes information about other coverages of enrolees at the time of Medicare enrolment Data Collected from Group Health Plan (GHP) Includes data liability insurance, including self-insurance, no-fault insurance and workers' compensation

8. BCRC of Medicare BCRC is responsible for initiating an investigation when it learns that a person has other insurance. BCRC establishes Medicare Secondary Payer (MSP) occurrence records on CWF. Common Working File (CWF) is the single data source to verify beneficiary eligibility. The Medicare Administrative Contractors (MACs), Intermediaries and Carriers are responsible for processing claims submitted to Medicare for primary or secondary payment. BCRC enables to: Consolidate activities that support identification, collection, management and reporting of other primary insurances. Supply information on supplemental drug coverage. U pdate Medicare systems with other insurance information. BCRC does not: Process claims. A nswer claim queries.

9. Some COB Facts of Medicare Medicare: Is always a secondary payer to Non Group Health Plans (NGHP’s). Is a secondary payer to Group Health Plans (GHP’s) when certain conditions are met. May mistakenly pay as primary (role of BCRC) when details of primary insurance are not known. Commercial Repayment Centre (CRC)  : It is responsible for identifying and recovering Medicare mistaken payments where a GHP has primary payment responsibility. Responsible Reporting Entities (RREs): It helps to ensure that Medicare payments are made in the proper order by being knowledgeable of and participating in COB processes.

10. EDI 837/835 Transaction for COB Interchange Control header ISA Functional Group Header GS Transaction Set Header ST Interchange Control trailer IEA Functional Group Header GE Transaction Set Header SE Structure of an EDI 837 Transaction and COB: Capability of handling COB effectively in an EDI environment depends on two transactions - 835 and 837. The upgraded 5010 version of EDI transactions support enhanced COB functionality to minimize manual intervention and/or the necessity for paper supporting document. COB in 837 EDI message can be achieved for both Institutional and professional message at claim level and line level. Claim Information Loop Claim Information Loop End COB fields: COB Paid Amount COB Total Non Covered Amount Remaining Patient Liability COB Patient Paid Amount COB Patient Paid Amount Estimated Total Claim before Taxed Amount COB Claim Adjudication Date COB Claim Adjustment Indicator

11. EDI F low for COB of Provider-Payer-Provider Transaction Provider-Payer-Provider transaction as handled by 837: Provider originates transaction by sending 837 to primary payer. The primary payer adjudicates the claim and sends an electronic remittance advice (RA) transaction (835) back to the provider. Provider sends second 837 claim to secondary payer. Secondary payer adjudicates the claim and sends the provider an electronic remittance advice (835) to provider. This process keeps on repeating for all the additional payers

12. Provider originates transaction by sending 837 to primary payer. 2A. The primary payer adjudicates the claim and sends an electronic remittance advice (RA) transaction (835) back to the provider. 2B. Primary payer reformats the 837 and sends to the Secondary payer. 3. Secondary payer adjudicates the claim and sends the provider 835 RA. For additional payers this process is followed by secondary payer EDI Flow for COB of Provider-Payer-Payer Transaction Provider-Payer-Payer transaction as handled by 837:

13. Typical Challenges and Solutions for Implementing COB Constraints Industry Challenges Lack of appropriate databases that track, identify and maintain multiple coverages Need to operationalize methods for wider implementations Acceptance cost – paper-oriented providers may resist IT Constraints Efficient handling of scenarios to reduce appropriation and data errors and improve compliance Lack of financial investment in the EDI infrastructure or appropriate vendor relationships Clearing house limitations Limited or unwilling support of clearing houses and Billing vendors towards COB Solutions COB Smart® It’s a nationwide initiative by CAQH to have a collaborative, secure registry of COB data, developed in partnership with health plans Features of COB Smart® Shared solution can help streamline benefits coordination. Access to a national registry with the most up-to-date and complete coverage information available helps industry stakeholders get COB right the first time. CAQH CAQH is working with health plans and clearing houses to deliver COB data to providers through the existing EDI 271 eligibility response transaction. Health Plans should look to partner with vendors that are specialized and experienced and can help in integrating with COB Smart® registry and with periphery applications to streamline COB process.

14. References http://www.1edisource.com/transaction-sets?TSet=837 http://www.bcbsm.com/index/health-insurance-help/faqs/topics/understanding-benefits/coordination-of-benefits.html http://www.aetna.com/provider/data/COB_exmpl_ext_prof_nov_2007.pdf https://www.nebraskablue.com/~/media/pdf/NEBlueConnect/Companion%20Documents/BCBSNE%20837.pdf https://www.harvardpilgrim.org/portal/page?_pageid=253,4049993&_dad=portal&_schema=PORTAL http://www.sunshinehealth.com/files/2008/06/Centene-5010-COB-Mapping2.pdf http://insurance.illinois.gov/HealthInsurance/coord_benefits.asp http://www.orhealthleadershipcouncil.org/wp-content/uploads/COB_Best_Practice.pdf http://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/Medicare-Secondary-Payer/Downloads/MSP-Overview.pdf

15. Thank You About CitiusTech 2,700+ Healthcare IT professionals worldwide 1,200+ Healthcare software engineering 700+ HL7 certified professionals 40%+ CAGR over last 5 years 80+ Healthcare customers Healthcare technology companies Hospitals, IDNs & medical groups Payers and health plans ACO, MCO, HIE, HIX, NHIN and RHIO Pharma & Life Sciences companies Authors: Manoj Upadhyay Solution Architect [email protected]