Third Party Payers Practice Test

Coordination of benefits determines which payer pays first when a patient has more than one health insurance policy. The statement that best captures this is that the payer order is decided by primary versus secondary rules, policy provisions, and dependent status. This hierarchy ensures that benefits are coordinated so the total payments don’t exceed the cost of care: the primary plan pays first up to its limits, and the secondary plan may cover remaining eligible expenses according to its own rules. Dependent status—such as a child covered by both parents’ plans—and specific policy provisions (like birthday rules or employer-based guidelines) drive which plan is primary. The other options describe different concepts. One refers to the order of providers within a network, which is a network arrangement rather than COB. Another mentions eligibility by age, which is not about payer sequencing. The last refers to setting the maximum allowable charge, which is about allowed amounts, not which insurer pays first.