What does the term "coordination of benefits" refer to?

The term "coordination of benefits" refers specifically to the process of determining the order in which two or more insurance plans will pay claims for a patient. When an individual is covered by more than one health insurance policy, it is essential to establish which plan is considered the primary insurer (the one that pays first) and which is the secondary insurer (the one that pays after the primary has settled their portion). This process helps to prevent overpayment and ensures that the patient does not receive more than their entitled amount in coverage.

Understanding this concept is crucial for healthcare providers and insurance billers, as it allows them to correctly submit claims according to the established order of benefits, leading to accurate processing and payment. The other options, while related to healthcare and insurance, do not accurately describe the "coordination of benefits." They involve different aspects of the billing and claims process, but do not pertain to the ordering of insurance payouts.