What does "coordination of benefits" refer to?

"Coordination of benefits" refers to the process of clearly defining the responsibilities of multiple payers when a patient has more than one insurance policy. This is important to ensure that the claim process is streamlined and that the patient does not receive an overpayment for their healthcare services. In situations involving multiple insurance coverages, coordination of benefits determines the order in which the insurers will pay for the claims, which is essential in preventing duplication of benefits and ensuring that each payer meets its contractual obligations effectively.

Combining benefits from multiple insurance policies can occur as part of this process, but the critical aspect of coordination of benefits is specifically about clarifying which insurance is primary and which is secondary. This framework helps avoid issues such as claim denials or delays in payment, ultimately benefiting both healthcare providers and patients.