A Primer for Employers on Medicare Coordination of Benefits

     When a plan participant or beneficiary has Medicare and other health insurance, such as group health plan insurance, retiree coverage or Medicaid, there can often be confusion as to which insurance pays first on claims. Coordination of benefits (COB) rules, which are specified in plan documents or insurance policies, decide which insurance pays first. One plan is considered the primary payer that covers most expenses, while the secondary plan covers any remaining allowable expenses not covered by the primary plan. The COB allows health plans to provide health or prescription drug coverage to individuals receiving Medicare to determine their payment responsibilities. This helps ensure that the total amount paid by all insurance plans does not exceed the total costs of the health care expenses for Medicare-covered services and items

This article provides a general overview of COB rules under Medicare.

How Does Medicare Work With Other Insurance?

There are many important facts to remember regarding how other insurance works with Medicare-covered services and items, such as the following:

  • The primary payer pays first and up to its coverage limits.
  • The secondary payer only pays if there are costs the primary payer doesn’t cover.
  • The secondary payer, which may be Medicare in certain situations, might not pay all the uncovered costs from the primary payer.
  • If a group health plan or retiree coverage is the secondary payer, the individual may need to enroll in Medicare Part B before that insurance would pay.

If a Medicare-covered individual’s other health insurance is the primary payer and fails to promptly pay a claim, typically within 120 days, that individual’s doctor or service provider may bill Medicare. Medicare can make a conditional payment for the individual’s claim, recovering any payments the primary payer should have paid at a later date.

What’s a Conditional Payment?

A conditional payment is a payment Medicare makes for services for which another payer may be responsible. Medicare makes this payment, so the plan participant or beneficiary won’t have to pay the claim. The payment is conditional because it must be repaid to Medicare if the Medicare-covered individual receives a settlement, judgment, award, or other payment later.

Who Pays First?

When an individual has Medicare and other insurance, there are rules for whether Medicare or the other insurance is the primary payer for Medicare-covered services and items

Download the full PDF here –  A Primer for Employers on Medicare Coordination of Benefits

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