Payer Types and Coordination of Benefits (COB) Flashcards

A 67-year-old patient has Medicare and is also covered by an Employer Group Health Plan (EGHP) from their current, active employment. The employer has 50 employees. Which plan is primary?

Answer: The Employer Group Health Plan (EGHP)

According to Medicare Secondary Payer (MSP) rules, if an individual is age 65 or older and covered by an EGHP due to their own or a spouse's current employment with an employer of 20 or more employees, the EGHP is primary. Medicare pays secondary.

A child is covered by insurance plans from both parents. The mother's birthday is April 10, 1985, and the father's birthday is February 25, 1983. According to the standard 'birthday rule', which parent's plan is primary?

Answer: The father's plan

The 'birthday rule' states that the plan of the parent whose birthday (month and day only) occurs earlier in the calendar year is primary. February 25th comes before April 10th, so the father's plan is primary, regardless of the parents' ages.

Which of the following best describes a key feature of a Health Maintenance Organization (HMO) plan?

Answer: It requires a referral from a Primary Care Physician (PCP) to see a specialist.

HMO plans are a type of managed care that typically requires members to use providers within its network. A central feature is the role of the Primary Care Physician (PCP) as a 'gatekeeper' who must provide a referral for specialist care.

What is the primary purpose of Coordination of Benefits (COB)?

Answer: To determine the primary and secondary payer to prevent overpayment

COB is a process used by insurance companies when a patient is covered by more than one health plan. It establishes the order of payment (primary, secondary, etc.) to ensure that the total payment does not exceed 100% of the allowed charges for a service.

For a patient who is dually eligible for both Medicare and Medicaid, which plan is considered the 'payer of last resort'?

Answer: Medicaid

When a patient has both Medicare and Medicaid, Medicare is always the primary payer for Medicare-covered services. Medicaid serves as a safety net and is always the payer of last resort, covering costs only after Medicare and any other insurers have paid.

A major advantage for a patient with a Preferred Provider Organization (PPO) plan compared to an HMO is:

Answer: They have the flexibility to see out-of-network providers.

The defining feature of a PPO is flexibility. Members can see providers both in-network and out-of-network without a referral, though their out-of-pocket costs (copays, coinsurance) are typically much lower when they stay in-network.