Coordination of benefits (COB) is a key component of any effective payment integrity program. But determining primacy for members with multiple plans and ensuring claims are not overpaid can be a complicated process. Whether verifying employment status or examining complicated claims, COB is time-consuming to achieve maximum accuracy. And while health plans focus on the complexities of an effective COB strategy, many overlook the possibilities that a comprehensive prepaid COB solution can offer as a valuable component.
Prepayment or prospective COB takes effective COB one step further, eliminating the need to correct errors after the fact by pausing the claims process to confirm accurate information and the correct order of benefits before payment. When done correctly, prepaid COB has the potential to not only prevent overpayments, but also ensure accurate member profiles, increase cost avoidance, and determine primary payment liability sooner. All of these things combine to reduce provider and member abrasion and increase value.
While most, if not all, payers agree that there is significant value in prepaid COB as part of an overall COB strategy, and for payment integrity efforts in general, taking prepaid COB from a concept to a reality remains somewhat of a mystery for most plans. This may be due to a lack of clarity around the distinction between an asset and a solution, as well as common misconceptions about how a large-scale prepaid COB solution works and the value it can deliver.
The value of prepaid COB
Prepaid COB offers three main benefits: administrative cost savings, speed and long-term value.
Administrative cost savings
Perhaps the most obvious benefit of forward-looking COB is administrative savings. Rather than deploying talent and incurring significant costs to recover funds from a provider who was paid in error, COB prepayment prevents incorrect payment in the first place, reducing the effort required to enable payments based on a precise order of benefit determination. By pausing the claims process, plans save significant costs that would otherwise be spent chasing overpayments. By eliminating the need to recover medical expenses, prepaid COB reduces the burden on plan resources and providers and helps plans optimize administrative efforts from the start, while creating capacity to redeploy talent to other valuable jobs.
Speed
As a result of this, the need to chase down payment has been eliminated and speed also becomes a major benefit of prepaid COB. To comply with prompt payment regulations, speed is a crucial benefit to avoid fines or be able to recover payments. For example, in Texas, plans can only recover payments from providers within a six-month period. If that time expires, the opportunity to achieve payment accuracy is gone. COB prepaid can help capture maximum value before time runs out.
Long term value
Administrative costs and speed to value are important on their own, but forward-looking COB also creates a system that inherently provides perpetual value. Over time, prepaid COB helps save costs by using accurate, prepared data that is up-to-date and has expertise tailored to a particular health plan. It’s not just about executing a set of linear steps: prepaid COB done right is a sophisticated process that requires understanding when, how, and where to use data.
For example, a national plan that adopted prepaid COB was able to save approximately $48 million in 2025 alone and create a considerable feedback loop by applying insights to inform future strategies. This plan was also able to achieve savings on over 99% of all claims identified for early payment.
Prepaid COB in action
Prepaid COB can be applied in a variety of different scenarios. Some specific top candidates include:
- Medicare Other Disability Insurance (OHI): Identifying Medicare for members who are eligible for disability benefits is especially valuable because these cases often lack prominent indicators such as age and defined medical conditions. Without these triggers, disability-based Medicare coverage may remain hidden, creating incorrect primary liability for the health plan. By confirming this coverage and determining the order of benefits before a claim is paid, plans can ensure accurate COB, avoid unnecessary payments, and shift costs appropriately, generating savings while protecting the integrity of benefits.
- newborns: Automatic newborn coverage covers a newborn for a set period under the parent’s existing plan. This ensures immediate coverage at birth, even before the child is formally added to a policy. Consider a scenario in which there are multiple newborns. Taking advantage of a prepaid COB solution may allow a plan to suspend a claim for a newborn, correct the order of benefits, and apply that conclusion to the remaining siblings, assuming the same dual coverage applies. In scenarios like these, prepaid COB processes can ensure timely payment to suppliers without sacrificing accuracy.
Beyond data assets
Complex data goes hand in hand with complex statements. However, there is a common misinterpretation that prepaid COB is simply the ability to run regular COB processes using data sources. In theory, having access to data assets should provide enough information to be able to pause claims and perform a COB review, but in practice this is often difficult to scale. Plans cannot stop every claim that comes in and can easily become overwhelmed by the need for administrative resources, expertise, and data cleansing to make prepaid COB work effectively.
Having good data is just one piece of the prepaid COB puzzle. A complete review requires that experts not only verify the data, but also have the experience to understand where there are gaps and how to interpret the data once obtained.
An effective prepaid COB strategy builds, anticipates and navigates a process that is often non-linear. Being able to capture prepayment savings is not just about determining whether another policy exists that covers the member, but may also require a close examination of variables such as:
- Affiliate’s employment status.
- Employer group size
- Exhaustion of benefits
- OHI Related Nuance
Executing prospective COB well means being familiar with all components of a claim and knowing what to look for, not just relying on data assets.
Setting yourself up for success
Going above and beyond to execute prepaid COB depends on having strong components and team. Consider whether your plan can: perform data enrichment, prioritize prepaid COB-eligible claims, and incorporate true pause and prospective review functionality.
Perform data enrichment
A single data set is not sufficient to identify payment liability and determine primacy, and manual management of this data is not scalable for many. Consider investing in a solution that can detect areas where data is missing, incorrect, duplicated or outdated, and leverage the expertise of COB data professionals to rectify and improve the data set. Data may need to be supplemented with a variety of public and private sources to close gaps.
Prioritize claims eligible for prepaid COB
It is not feasible to review each claim prospectively for COB, nor to examine vast sets of rights data. An effective prepaid COB solution must analyze data to determine priority, incorporating machine learning to identify potential cases for other primary health insurance coverage.
keep it human
As much as artificial intelligence and automation can speed up processes, a complex area like prepaid COB requires human expertise and decision-making. Auditors can uncover crucial details to accurately establish the order of benefits that would not be possible with technology alone. Staying current and complying with various COB requirements, including those codified in the Medicare Secondary Payer (MSP) Act and National Association of Insurance Commissioners (NAIC) guidelines, as well as state laws, makes talent even more valuable.
Prepaid COB is a valuable component of an overall payment integrity program and any COB strategy. By pausing claims and determining the exact order of benefits before payment, plans can explore a litany of benefits. They save administrative costs, speed up the process, and realize incremental value over time by refining data and limiting provider and member abrasion. While it takes more than a robust data resource, investing in the right partner, solution, and experts can provide a significant return on investment.
About Naomi Murphy, JD
Naomi Murphy oversees operations and product strategy for Cotivitis COB validation and data mining solutions, providing optimized value generation for clients. A versatile operations leader, Naomi has a proven track record of delivering operational excellence, leveraging predictive analytics, and accelerating growth.
