Coordination of Benefits (COB)

Coordination of benefits are the rules for how insurance pays when a patient has coverage under more than one plan. You can set up defaults in Family Module Preferences. There are many different ways to calculate COB, made even more complicated by various State laws. Non-duplication rules can vary depending on the carrier. For an explanation on how secondary insurance works in Open Dental, see Secondary Insurance Claims.

So far, Open Dental has the following different COB options.

**Basic**: Secondary pays the lesser of:

- The amount that it would have paid in the absence of any other coverage.
- The secondary allowed amount minus what primary paid.

For example, on a $100 procedure, primary might pay $80 (80% of its allowed fee).

- If the secondary allowed amount was $110, secondary would pay the lesser of $88 or ($110 - $80), so $30.
- If the secondary allowed amount was $90, secondary would pay the lesser of $72 or ($90 - $80), so $10.
- As a second example, on a $100 procedure, primary might pay $50 (50% of its allowed fee).
- If the secondary allowed amount was $110, secondary would pay the lesser of $55 or ($110 - $50), so $55.
- If the secondary allowed amount was $90, secondary would pay the lesser of $45 or ($90 - $50), so $40.

**Standard**: Secondary pays the lesser of:

- The amount that it would have paid in the absence of any other coverage.
- The patient's portion under the primary plan.

For example, on a $100 procedure, primary might pay $80 (80% of its allowed fee).

- If the secondary allowed amount was $110, secondary would pay the lesser of $88 or $20, so $20.
- If the secondary allowed amount was $90, secondary would pay the lesser of $72 or $20, so $20.
- As a second example, on a $100 procedure, primary might pay $50 (50% of its allowed fee).
- If the secondary allowed amount was $110, secondary would pay the lesser of $55 or $50, so $50.
- If the secondary allowed amount was $90, secondary would pay the lesser of $45 or $50, so $45.

**Secondary Medicaid:** Secondary reduces what they pay by what primary pays. The estimated patient portion becomes a write-off for the secondary insurance.

Only use this rule if you are allowed to use Medicaid as secondary.

Calculation used: ProcFee - Pri Ins Pay Est (or Ins Pay) - Pri WO - Sec Ins Est

Examples: On a $100 procedure, primary insurance might allow $70, pay $35, and write off $30. Secondary insurance might allow $20, pay $0, and write off $35. The patient will pay $0.

On a $100 procedure, primary insurance might allow $40, pay $20 and write off $60. Secondary insurance might allow $30, pay $10 and write off $10. The patient will pay $0.

**Carve Out with Deductible**: Secondary reduces what they will pay by what primary paid.

Calculation used: Secondary InsEst = (Secondary Allowed - Secondary Deductible) * Secondary Percentage - PaidOther

For example, on a $1500 procedure, primary might pay $750 (50% of its allowed fee).

- If secondary allowed amount was $1200, secondary deductible was $50 and secondary percentage was 80%, then secondary would pay: $170
- 170 = (1200 - 50) * .8 - 750

**Carve Out (Non-Duplication)**: Secondary reduces what they will pay by what primary paid.

For example, on a $100 procedure, primary might pay $80 (80% of its allowed fee).

- For example, on a $100 procedure, primary might pay $80 (80% of its allowed fee).
- If secondary allowed amount was $110, secondary would pay $88 - $80 = $8.
- If secondary allowed amount was $90, secondary would pay $72 - $80 = $0.
- As a second example, on a $100 procedure, primary might pay $50 (50% of its allowed fee).
- If secondary allowed amount was $110, secondary would pay $55 - $50 = $5.
- If secondary allowed amount was $90, secondary would pay $45 - $50 = $0.

**Birthday Rule**: This is a method used to determine when a plan is primary or secondary for a dependent child when covered by both parents' benefit plan. The parent whose birthday (month and day only) falls first in a calendar year is the parent with the primary coverage for the dependent.

**Dual PPO, so two insurance companies, COB is Basic, Primary Allowed is greater than Secondary Allowed (see Unit Test #1). Why is there no secondary writeoff of $250? **

The provider is allowed to collect up to the Primary Allowed amount. A secondary writeoff would prevent this.

**When the Primary Allowed is less than the Secondary Allowed (Unit Test #2), sometimes Open Dental reduces the Primary Writeoff and allows the provider to collect more than the Primary Allowed.**

Because of COB Basic rules, sometimes in this case the secondary pays enough that the writeoff is reduced by the amount of InsPay1+InsPay2 - Primary Allowed. Thus we say that writeoff1 is reduced as a consequence of InsPay2 causing the sum to otherwise go over the total fee. Another way to look at this is that we calculate the writeoff based on the Primary Allowed, and then reduce it if the COB rules allow a greater total payment.

**I am confused by Dual PPO Insurance. I see that with Unit Tests 1, 2 and 17, the COB rules and the order of insurance (which is Primary) change both what I am paid and the patient portion. Isn't that wrong?**

We write Open Dental to match with what our customers see on EOBs. It is difficult to accept, but quite true that you can be paid different amounts in total and that the patient portion differs by insurance order. But neither the provider nor the patient chooses the order, it is determined by rules (which one is the patient the subscriber on first, then the birthday rule usually). The only way out of this is to get out of your PPO agreement or change the laws.