What does the term "COB" mean in insurance billing?

The term "COB" refers to Coordination of Benefits in insurance billing. This process is used when a patient has multiple insurance policies. The primary goal of COB is to ensure that the total benefits paid by all insurers do not exceed the total cost of the medical services received, thereby preventing overpayment or excessive reimbursement.

In situations where a patient is covered by more than one plan, the Coordination of Benefits helps determine which insurance is the primary payer and which one is secondary. The primary payer covers the initial claim, while the secondary payer may cover any remaining costs that the primary does not pay, up to the allowed amount. This system helps streamline the billing process and ensures proper payment allocation among the various insurers involved, allowing healthcare providers to receive fair compensation for their services without confusion about the payment responsibilities of each insurance provider.