What is coordination of benefits?

Coordination of benefits refers to the process by which Medicare coordinates payment of healthcare claims when an individual has additional health insurance coverage. When a person has multiple sources of healthcare coverage, such as through an employer or a spouse's policy, coordination of benefits ensures that the total benefits received do not exceed the actual cost of the medical services rendered. Medicare rules determine the primary and secondary payer, outlining which insurance pays first and how much each will cover. The primary payer acts as the main source of coverage, while the secondary payer takes care of any remaining costs. Overall, coordination of benefits is crucial in preventing duplicate payments and keeping healthcare expenses manageable for beneficiaries with multiple insurance policies.