In today's healthcare environment, managing costs while ensuring high-quality care for members is more crucial than ever. Rising healthcare costs, increasing medical loss ratios, and the need to maintain member and employer satisfaction all underscore the importance of an effective payment integrity strategy. One significant area where health plans can achieve substantial savings and operational efficiency is through a robust coordination of benefits (COB) program.

A successful COB program can reduce medical costs and improve member satisfaction and provider relationships. Without this, health plans may struggle with determining the correct order of benefits for complex claims, leading to increased medical expenses, member dissatisfaction, and provider abrasion.

Yet many COB programs lack the necessary data, analytics, business rules, and expertise to accurately and efficiently coordinate benefit payments. This leads some health plans to default to managing COB internally with limited resources and expertise, often missing out on the full potential of what a comprehensive COB program can deliver. By attempting to manage COB programs internally, health plans can risk inefficiencies, increased costs, and potential compliance issues. Leveraging the expertise of a full-service COB partner can help mitigate these risks and ensure a more effective and efficient COB program.

This eBook will explore why an end-to-end COB program that goes beyond just entitlement data is essential. Let's dig into the importance of accurate data, advanced analytics, and specialized expertise, providing a clear path to achieving a high-value COB program.

Effective COB begins with sourcing the right data and supplementing it with additional sources such as contracts, eligibility files, third-party benefits agreements, and more. An effective COB program requires more than just superficial data collection—it needs a comprehensive approach that sources the right data, scrubs it for accuracy, and ensures the data remains up to date.

Sourcing the right data

The foundation of any successful COB program lies in its data sources. Relying solely on entitlement data is insufficient, as entitlement data often lacks the depth and breadth required to paint a complete picture of a member’s benefits landscape. Entitlement data can also be prone to inaccurate or outdated information. To overcome this, health plans must source data from multiple channels:

1. Contracts and eligibility files: These are primary sources of data that provide initial insights into a member's eligibility and entitlements. Contracts often outline the specific terms and conditions under which benefits are provided, while eligibility files track members' enrollment status.
2. Third-party benefits agreements: These agreements are crucial for understanding how benefits are coordinated across different health plans. They help in identifying instances where another insurer might be primary, thus allowing the plan to adjust its payment responsibilities accordingly.
3. Employment records: Employment status is a dynamic factor that significantly impacts COB scenarios. Employment records provide essential information about a member's current job status, which can affect their primary and secondary insurance coverage.
4. Additional data sources: Beyond the above, health plans should also tap into data sources such as provider records, claims history, and member-reported information. Each of these sources adds another layer of detail, enhancing the accuracy of the COB process.

Relying solely on standard data sources is often insufficient. For example, according to Cotiviti's analysis, about 40% of commercial other health insurance findings aren't present on the COB Smart file. This statistic underscores the need for health plans to cast a wider net when sourcing data.

Relying solely on standard data sources is often insufficient.

Scrubbing the data

Once the right data is sourced, the next step is to ensure its accuracy through a rigorous scrubbing process. Data scrubbing involves:

1. Validation: This step ensures that the data collected is accurate and up-to-date. For instance, verifying employment records against the latest information helps in maintaining the integrity of the COB program.
2. Deduplication: Often, the same data might be present in multiple sources. Deduplication ensures that only unique records are considered, which reduces redundancy and potential errors.
3. Normalization: Different data sources might have varied formats. Normalization standardizes these formats, making it easier to integrate and analyze the data comprehensively.
4. Error correction: This involves identifying and correcting inaccuracies in the data. For instance, incorrect member details or outdated employment information can lead to erroneous COB determinations. Regular audits and corrections are essential to maintain data integrity.

Updating the data

COB is not a one-time task; it is an ongoing process that requires continuous monitoring and updating of data. Employment status, for example, is a variable that can change frequently. To keep the COB data current, plans must engage in:

1. Regular updates: Health plans should establish protocols for regular data updates. This might involve monthly or quarterly checks to ensure that all records reflect the latest information.
2. Employment verification programs: Implementing a robust employment verification program can help track changes in members’ employment status promptly. This ensures that any shifts in primary or secondary coverage are quickly identified and adjusted.
3. Real-time data integration: Leveraging technology to integrate data in real-time can significantly enhance the efficiency of the COB process. Real-time data integration allows for immediate updates and adjustments, reducing the lag time between data changes and COB determinations.

Health plans should utilize additional data sources and must validate, monitor, and update the data continuously. By doing so, they can ensure that no stone is left unturned in the pursuit of accurate COB determinations. 

After ensuring the data is comprehensive and accurate, the next step in establishing a robust COB program is leveraging advanced analytics. Entitlement data alone is not enough; sophisticated data analysis tools and techniques are required to transform raw data into actionable insights. 
This process begins with selecting a COB partner that can effectively mine the data on your behalf. The right vendor will possess the capability to prioritize claims and focus efforts on those claims most likely to yield significant findings.

Working with a vendor that specializes in data analytics for COB can greatly enhance the efficiency and effectiveness of your program. These vendors use advanced algorithms and machine learning techniques to sift through vast amounts of data quickly and accurately. They identify patterns and anomalies that may indicate coordination issues, ensuring that no potential savings are overlooked. By prioritizing claims, they help health plans focus their resources on the most promising opportunities, optimizing the use of time and effort while maximizing potential savings.

Working with a vendor that specializes in data analytics for COB can greatly enhance the efficiency and effectiveness of your program.

Taking a "pause-and-review" approach

One of the critical aspects of using analytics in COB is the ability to pause and review claims before payment. This proactive step involves temporarily holding claims for a detailed review to verify their accuracy and the correct assignment of payment responsibility. By adding a prepay pause-and-review process to their COB program, health plans can intervene at the right time to prevent overpayments, reduce the incidence of erroneous payments, and ensure that primary responsibility for payment is correctly assigned.

The prepay review process is particularly effective because it addresses issues before they result in financial losses. By catching errors and discrepancies early, health plans can avoid the time-consuming and costly process of recovering overpaid funds. This approach also helps in maintaining positive relationships with providers, minimizing the disruptions caused by payment adjustments and recoveries after the fact.

Implementing a feedback loop

Advanced analytics also play a vital role in continuous improvement. The insights gained from analyzing claims data can inform future strategies and adjustments to the COB program. For example, by identifying common sources of inaccuracies or delays, health plans can implement targeted interventions to address these issues. This iterative process ensures that the COB program remains dynamic and responsive to changing conditions and challenges.

Furthermore, analytics can help in monitoring the performance of the COB program over time. Key performance indicators (KPIs) such as the accuracy of primary and secondary payer determinations, the rate of successful recovery of overpayments, and overall cost savings can be tracked and analyzed. This ongoing assessment allows health plans to measure the effectiveness of their COB efforts and make data-driven decisions to enhance the program's impact.

Successful COB requires auditors who are well-versed in the member lifecycle and the complex rules governing COB. These auditors need to stay current with the latest regulations and guidelines to ensure compliance and accuracy. This includes being knowledgeable about Medicare Secondary Payer (MSP) and National Association of Insurance Commissioners (NAIC) guidelines, as well as understanding state interpretations and various COB methodologies related to claim adjudication and processing. Expertise in this area is not just about understanding the rules but also about recognizing how life events such as births, marriages, or illnesses can impact a member's COB status. Continuous monitoring and up-to-date knowledge are vital in navigating these complexities effectively.

Successful COB requires auditors who are well-versed in the member lifecycle and the complex rules governing COB.

Finding the right partner

An experienced partner can offer a full-service solution, encompassing support for employer outreach, validation, and recovery work, and including both pre and postpay interventions. This includes verifying employment status through non-abrasive employer outreach, which is critical to avoiding gaps in information and errors in payment responsibility. A well-designed program starts with a customized communication strategy and incorporates suitable verification tools, tactics, and resources. This approach not only reduces the administrative workload but also enhances member interaction and helps maintain compliance with regulations.

Moreover, a qualified COB vendor can complement existing internal teams and other vendors, adding significant value. Cotiviti's experience shows that even when acting as a second-pass vendor, our solution can contribute up to 30% of total COB savings. This demonstrates the value of expert review and a comprehensive service offering. In scenarios where plans have already employed multiple vendors or have robust internal COB teams, Cotiviti's role as an additional layer of expertise has proven to be highly beneficial, as our auditors focus on claims most likely to yield a finding by analyzing member entitlement datasets and prioritizing claims. This targeted approach ensures that resources are allocated wisely, leading to more significant findings and better outcomes.

Health plans must recognize the limitations of a DIY approach to COB and the substantial benefits of partnering with a specialized COB vendor. Accurate data, advanced analytics, and expert guidance can help plans achieve significant savings, improve operational efficiency, and maintain a smooth, non-abrasive experience for members and provider partners. Health plans that invest in these COB solutions will be better positioned to navigate the complexities of benefits coordination, reduce costs, and enhance member satisfaction.

A well-executed COB program is not just a cost-saving measure: it is a strategic asset that can drive better financial and operational outcomes for health plans. By partnering with experienced COB vendors and embracing a holistic approach to benefits coordination, health plans can unlock the full potential of their COB programs and achieve lasting success in a competitive healthcare market.