What does coordination of benefits help determine?

Coordination of benefits is a crucial concept in health insurance that specifically addresses the roles of primary and secondary insurance. When an individual has more than one insurance policy, coordination of benefits helps establish which insurance is responsible for paying a claim first (the primary insurer) and which one will cover any remaining costs after the primary insurance has paid (the secondary insurer). This process ensures that there is no duplication of benefits and that payments are made correctly between the different insurers.

Understanding this is essential for accurate claims processing and helps avoid potential disputes between insurance companies over payment responsibilities. This concept also plays a significant role in ensuring that patients do not face unexpected out-of-pocket costs due to miscommunication between their insurers.