Coordination of Benefits

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    GW - Technical Writer

    There are now three options for coordination of benefits. This is set to reference the source of payment for the primary plan. 

    In this instance, the primary is set to be Commercial insurance, so the carve out option will be used when the primary plan has a commercial insurance source of payment. For any other source of payment, the traditional calculation method will be used. 

    Traditional - max allowed fee * coverage table for primary and secondary up to the full amount of the UCR Fee/charge

    Maintenance of benefits - Primary calculated normally. Secondary max allow amount has primary paid portion subtracted before being multiplied by coverage table. That amount is expected from insurance. Any amount remaining up to the lowest contracted fee goes to the guarantor portion. Above that lowest in network max allowed fee is written off.

    In this example, the second procedure the primary paid $75. Deduct that from the $125 amount for the secondary allowable amount leaving $75. That multiplied by the coverage table of 75% results in a secondary insurance payment of $37.50. $12.50 goes to the guarantor portion and $25 is written off. 

    Carve Out/Non Duplication - Primary calculated normally. Secondary is calculated normally and that amount has from it subtracted the amount paid by the primary. The remainder is estimated from insurance. Any amount remaining after primary and secondary payment amounts are combined up to the contracted fee are moved to the guarantor portion. Above the contracted fee for in network carriers is written off.

    In this example, the secondary is estimated to pay 75% of the $125 contrated fee, which is $93.75. When the amount the primary is subtracted from that amount, the balance is greater than 0, so that becomes the insurance estimate ($93.75-$75=$18.75) The amount between the UCR and contracted fee is written off. The difference between both insurance payments and the lowest contracted fee moves to the gurantor portion ($25 write off and $31.25 guarantor portion)

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    GW - Technical Writer

    For a detailed, technical explanation of insurance calculations, which includes coordination of benefits, refer to the article about understanding insurance estimates.

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