Eligibility Verification and Coordination of Benefits (COB)

Eligibility Verification and Coordination of Benefits#

Eligibility verification confirms, before service, that a patient has active coverage and what their benefits are — plan, effective dates, covered services, copay, coinsurance, deductible status, and whether prior authorization is required. It is done electronically via the 270/271 transaction and is the single most effective front-end denial-prevention step.

Why it prevents denials: verifying eligibility up front stops the most common administrative denials — coverage terminated, patient not eligible on the date of service, or the claim sent to the wrong payer (CARC 109). It also surfaces patient cost-sharing so the PR balance is not a surprise later.

Coordination of Benefits (COB). When a patient has more than one health plan, COB rules decide which plan pays primary and which pays secondary. The primary plan adjudicates first; the secondary plan then considers the remaining balance, using the primary plan's remittance. Common COB rules:

• For dependents covered by two parents' plans, the birthday rule generally makes primary the plan of the parent whose birthday falls earlier in the calendar year.
• Medicare is usually secondary to an active employer group health plan in defined working-aged scenarios (Medicare Secondary Payer rules).

COB failures cause denials. Submitting to the secondary payer before the primary has paid, or to the wrong payer entirely, yields denials such as CARC 109 (wrong payer) or COB-related adjustments. The fix is determining the correct payer order at registration and submitting in sequence, attaching the primary's remittance to the secondary claim.

In RCM: robust front-end eligibility + COB determination converts would-be back-end denials into clean first-pass claims, lowering days in A/R and protecting net collection rate.