What does coordination of benefits accomplish?

• A. It assigns a single payer for all claims, ignoring other plans.
• B. It prevents duplication and coordinates payment between multiple health plans so only available benefits are paid.
• C. It increases the total benefits by stacking all plans.
• D. It reduces the insurer's liability to zero.

Answer: (B)

Coordination of benefits is about handling payment when a person has more than one health plan. It sets how the plans work together so benefits aren’t paid twice and so the total payment doesn’t exceed the actual cost of the services.

In practice, one plan is designated as the primary payer and pays first up to its limits. The other plan acts as the secondary payer and may cover remaining eligible charges up to its own limits. This ensures the total benefits paid come from the plans in a coordinated way and reflect the real cost of care, rather than stacking benefits from multiple plans or leaving the patient with unexpected gaps.

So, the idea is to prevent duplication and to coordinate payment between multiple plans so only available benefits are paid. It’s not about selecting a single payer to ignore others, nor about stacking all benefits to increase total payments, nor about reducing liability to zero.