Coordination of benefits or COB

What is coordination of benefits or COB?

The order in which two or more insurance companies will pay benefits for the same claim. This will avoid duplicate payment of the claim by more than one insurance.

How to handle coordination of benefits in CH ?

Handling COB in the clearinghouse where the data flow model is from Provider-Payer A-Provider (CH behalf of provider) -Payer B is clearly explained to the segment level, pls follow the excerpt from 837 IG

Coordination of Benefits Data Models - Detail
The 837 transaction handles two models of coordinating benefits. Both models
are discussed in Section 1.4.2.2, Coordination of Benefits Data Models. See Section
4, EDI Transmission Examples for Different Business Uses, for examples of
these models. The implementation guide contains notes on each COB-related
data element specifying when it is used. See the Federal Register for HIPAA
rules involving COB.
Model 1 - Provider-to-Payer-to-Provider
Step 1. In model 1, the provider originates the transaction and sends the claim information
to Payer A, the primary payer. See figure 1, Provider-to-Payer-to-
Provider COB Model. The Subscriber loop (Loop ID-2000B) contains information
about the person who holds the policy with Payer A. Loop ID-2320 contains information
about Payer B and the subscriber who holds the policy with Payer B. In
this model, the primary payer adjudicates the claim and sends an electronic remittance
advice (RA) transaction (835) back to the provider. The 835 contains the
claim adjustment reason codes that applies to that specific claim. The claim adjustment
reason codes detail what was adjusted and why.
Step 2. Upon receipt of the 835, the provider sends a second health care claim
transaction (837) to Payer B, the secondary payer. The Subscriber loop (Loop
ID-2000B) now contains information about the subscriber who holds the policy


from Payer B. The information about the subscriber for Payer A is now placed in
Loop ID-2320. Any total amounts paid at the claim level go in the AMT segment
in Loop ID-2300. Any claim level adjustments codes are retrieved from the 835
from Payer A and put in the CAS (Claims Adjustment) segment in Loop ID-2300.
Claim level amounts are placed in the AMT at the Loop ID 2320 level. Line Level
adjustment reason codes are retrieved similarly from the 835 and go in the CAS
segment in the 2430 loop. Payer B adjudicates the claim and sends the provider
an electronic remittance advice.
Step 3. If there are additional payers (not shown in figure 1, Provider-to-
Payer-to-Provider COB Model), step 2 is repeated with the Subscriber loop
(Loop ID-2000B) having information about the subscriber who holds the policy
from Payer C, the tertiary payer. COB information specific to Payer B is included
by running the Loop ID-2320 again and specifying the payer as secondary, and, if
necessary, by running Loop ID-2430 again for any line level adjudications.

And the next method given in the IG can be ignored as of now as it is about crossover of the payer.

Lets see which are the segments to be considered in 835 for COB, following is the excerpt from 835 IG

CROSSOVER CARRIER NAME
Loop: 2100 - CLAIM PAYMENT INFORMATION
Usage: SITUATIONAL
Repeat: 1
1724 Notes: 1. Use this NM1 segment to provide information about the crossover
carrier. Provide any reference numbers in NM109. The crossover
carrier is defined as any payer to which the claim is transferred for
further payment after being finalized by the current payer.
1636 Example: NM1*TT*2*ACME INSURANCE*****XV*123456789~



in the above example ACME ins is the next payer to which the claim has to be sent according to COB order.

And page 114-118 of 835 IG will give you all necessary description and detail about COB.

any more clarification pls revert.

Reassociation of Dollar (payment) with data (Remittance)

The association of Dollar (Payment) with Data (Remittance) is called as reassociation and it is the Buzz word in the Medical Banking industry..Ok, let me give some idea about 'Medical Banking'

It is the convergence of the traditional Treasury Management activity with that of the Healthcare clearinghouse,mainly the Treasury mgmt activities Viz Lockbox processing,Electronic payment processing or can be simply pointed to Collections.

This is very clearly mentioned in the 835 implementation guide as follows

The 835 is capable of sending health care claim payment remittance data with or without the dollars represented by the data. It is important to facilitate reassociation when the remittance data is sent separately from the monetary amounts. Reassociation requires that both remittance and monetary data contain information that allows a system to match the items received. The provider should have a method to ensure that payment and remittance advice are reconciled in the patient accounting/accounts receivable system.
Two key pieces of information facilitate reassociation — the trace number in the Reassociation Key Segment, TRN02, and the Company ID Number, TRN03. The trace number in conjunction with the company ID number provides a unique number that identifies the transaction.
The two ways of sending payment for health care remittance data are check or Automated Clearing House (ACH). In the case of a payment received by check, the check number is the trace number in TRN02, and the company ID number is in TRN03. When the check is processed, the check number and account information is captured. A table could be required to cross reference the account information from the check to the company ID number received in TRN03. This information should be gathered when the transaction is implemented with the payer. When sending a separate ACH payment, the CCD+ ACH format is used. Using this method, the Reassociation Key Segment in its entirety is contained in the ACH Addenda Record.

Provider Identification

Lot of confusions and Ideas float in identifying a Healthcare provider.. Let it be from a remittance or any other sources, as standardization of Provider Id number is still on papers in US. So, directly coming to the point.. Lets first under stand what are the different types of provider Identification numbers used in the Healthcare Industry in this post.. and in the next post lets discuss how we can identify a Provider by reading or cracking a X12 835 / Remittance..
Lets see the different types of Identification number for providers in the Industry

1. Provider Tax Id or Federal Taxpayer’s Identification Number

2. HCFA NPI or Health Care Financing Administration National Provider Identifier now CMS NPI

3. State License Number

4. Blue Cross Provider Number

5. Blue Shield Provider Number

6. Medicare Provider Number

7. Medicaid Provider Number

8. Dentist License Number

9. Anesthesia License Number

10. Provider UPIN Number

11. CHAMPUS Identification Number

12. National Association of Boards of Pharmacy Number

13. Provider Commercial Number

14. Provider Plan Network Identification Number

15. Payee Identification

17. Unique Physician Identification Number (UPIN).

18. Facility ID Number

19. SSN

Out of these 19 different types of provider identification numbers Blue Cross Provider Number, Blue Shield Provider Number, Medicare Provider Number, Dentist License Number, Anesthesia License Number, CHAMPUS Identification Number, Provider Commercial Number, Provider Plan Network Identification Number are not commonly used..

Lets discuss about the other types of Numbers one by one.

Provider Tax Id or Federal Taxpayer’s Identification Number

Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States for the purposes of identification

HCFA NPI or Health Care Financing Administration National Provider Identifier now CMS NPI

A National Provider Identifier or NPI is a unique 10-digit identification number issued to health care providers in the United States by the Centers for Medicare and Medicaid Services (CMS).
Provider UPIN Number A unique physician identification number, or UPIN, is used by Medicare to identify doctors across the United States. UPINs are six-place alpha numeric identifiers assigned to all physicians. And this will be replaced by NPI in future, previously scheduled to discontinue on second quarter of 2007.

State License Number

An Identification number given in the state of practice it varies state to state.

National Association of Boards of Pharmacy Number

This is a professional association representing the state boards of pharmacy and it provides a unique number to the pharmacists for identification these numbers are used for billing
Facility ID Number These numbers are assigned by the plan after enrolling a particular facility of a provider in its list ,this helps in locating the right facility of a Provider

Social Security number (SSN)

In the United States, a Social Security number (SSN) is a 9-digit number issued to citizens, permanent residents, and temporary (working) residents under section 205(c)(2) of the Social Security Act, codified as 42 U.S.C. § 405(c)(2). The number is issued to an individual by the Social Security Administration, an agency of the U.S. Federal Government. Its primary purpose is to track individuals for taxation purposes this number is also used to identify a provider.

In this post we saw the types of provider identification numbers ,in the next post we will see how to do a Provider Identification and validation with these numbers available in the remittance /835