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Overview

Provider Type

  • Physicians
  • Participating Physician Groups (PPG)
  • Hospitals
  • Ancillary

Most group health plans contain a provision stating that, when a member is covered by two or more group health plans, payment is divided between them so that the combined coverage pays up to 100 percent of eligible expenses. This is known as coordination of benefits (COB).

Participating providers are required to apply COB when such provisions are a requirement of the benefit plans.

Contact Provider Services with any information identifying coverage requiring application of COB for a plan member.

COB allows group health plans to eliminate the opportunity for a person to profit from an illness or injury as the result of duplicate health plan coverage. Generally, one plan is determined by particular rules to be primary, and that plan pays without regard to the other. The secondary plan then makes only a supplemental payment, which results in a total payment of not more than the allowable expenses for the medical service provided.

Under Medicare secondary payor laws, if the plan's member does not have end-stage renal disease (ESRD), is entitled to Medicare based on being age 65 and has other coverage that is sponsored by an employer group plan of 20 or more employees through a current employer or the current employment of a spouse, the other coverage is primary. Similarly, if the member does not have ESRD, but has Medicare based on disability and is covered under other coverage that is sponsored by an employer group plan of 100 or more employees either through a current employer or the current employment of a spouse, other coverage is primary. In cases where the plan pays second to Medicare, the member only receives additional benefits as described in the Schedule of Benefits. The plan is only paid an amount by Medicare to cover such wrap-around benefits. A special rule applies for members who have or develop ESRD, as detailed below.

If any no-fault or liability insurance is available to the member, the benefits under that insurance must be applied to the costs of health care covered by that plan. Where the plan has provided benefits to a member and a judgment is obtained by, or settlement is made with, a no-fault or liability insurer, the member must reimburse the plan. Payment to the plan may be reduced by a share of procurement costs (for example, attorney fees and costs). Workers' compensation for treatment of a work-related illness or injury must also be applied to covered health care costs before benefits under the plan are available.

If a member has, or is diagnosed with, ESRD and is covered under an employer group plan, the member must use the benefits of that plan for the first 30 months after becoming eligible for Medicare based on ESRD. Medicare or the plan is the primary payer after this coordination period.

Medi-Cal is secondary to the plans. When a member is covered under a plan and Medi-Cal, no copayment is to be collected.

Last Updated: 10/30/2019