How good is your eligibility verification?

Company says it can do it better

A Cleveland-based company called the COB Clearinghouse Corp. has issued an invitation — and a bit of a challenge — to the nation’s health care providers, and the subject matter is something that access managers struggle with every day. COB Clearinghouse promises to provide "one-stop shopping" for eligibility data on every patient admitted to a hospital through the automation of "coordination of benefits." Coordination of benefits is the process of determining which insurance policy is primary for a particular patient. The purpose of what is called the National COB Demonstration Project, company officials say, is to bring the national eligibility record together for the first time.

What COB Clearinghouse is offering is "a report card on how we’re doing," says Susan Brock, regional manager of access services for Providence Health System in Portland, OR, the first health care provider to accept the company’s challenge and join the demonstration project. The idea, Brock explains, is "to see what is the quality of the information you’re getting, as opposed to what you would get if [insurance eligibility checks] were running through the Clearinghouse.

"Our belief is that we have excellent systems in place," she says. "The plus for us is the opportunity to check the accuracy of what we’ve done. If it’s not what we thought, we know there’s an option out there available to us if their system proves to be a tool with greater accuracy."

As part of the project, Providence will share with COB Clearinghouse the insurance eligibility data it received for three days in March, June, and September of 2000 using the systems the health care provider currently has in place, she says. That data include:

  • the insured person’s name, Social Security number (SSN), and date of birth (DOB);
  • the name, SSN, and DOB of each covered dependent of the insured;
  • each person’s coverage status;
  • each person’s effective date;
  • each person’s termination date;
  • the insured’s address or residence ZIP code;
  • the insurance plan number;
  • the identity of the plan sponsor;
  • any "other coverage" data known to the Providence system.

Using its proprietary software program, COB Clearinghouse will examine the identities of the individuals in the combined data provided by all the demonstration participants, and will report to Providence:

— "false negatives" in the "other insurance" record provided by Providence, indicating the existence of other insurance for the individual where the Providence record indicates there is no other insurance for that person;

— "false positives" in the "other insurance" record provided by Providence, indicating the absence of other insurance for the individual where the Providence record indicates there is no other insurance for that person;

— the changes in eligibility, double coverage, false-negative and false-positive results over time between March, June, and September;

Also as part of its agreement with Providence — and with other organizations that participate in the project — COB Clearinghouse will distinguish the identity matches that are "unequivocal" from those that are possible, probable, or indefinite.

The Washington, DC-based National Association for Healthcare Access Management (NAHAM) has endorsed the project, and provides information about COB Clearinghouse on its web site at "We’re hoping to show that an automated system will take out misdirections in coordination of benefits, double payments, [and] all the problems that the hospital network faces in trying to verify eligibility and primacy," says Jeff Patton, director of national accounts for COB Clearinghouse. "The key is getting the plan sponsors to recognize the savings there can be with accurate eligibility information and proper coordination of benefits testing," he adds. "It becomes a direct savings to them, therefore saving throughout the system."

In addition to health care systems, project participants include insurance plan sponsors (employer groups), third-party payers, pharmacy benefit managers, and preferred provider organizations, Patton notes.

To be a part of the demonstration project, participants pay $1,000. That fee, company president Patrick Lawlor explains in a question-and-answer (Q&A) document on the NAHAM web site, will be used to help cover the cost of merging as many as 10,000 data files to conduct the project. The file will be so large that the programs will have to be run at a Hewlett-Packard Performance Center.

Although the COB Clearinghouse model appears to require the centralization of all the eligibility data in the country, that isn’t quite the case, Lawlor explains in the Q&A exchange with NAHAM. "Actually, the model doesn’t require a perfectly centralized database," he says. "HIPAA requires health plans to open an eligibility gateway, and the Clearinghouse can use those gateways to complete a search of all possible payers."

It would be much more economical, however, for a payer to put its eligibility data into the centralized database, Lawlor explains, and making that point is part of the purpose of the demonstration project. The project aims to show payers and their clients, the corporate and governmental health plan sponsors, that it is in their financial interest to maintain eligibility data this way, he adds.

According to information on the NAHAM site, a number of organizations where NAHAM members are employed have postponed buying decisions on electronic eligibility tools pending the results of the demonstration.

[Editor’s note: More information on COB Clearinghouse is available at NAHAM’s web site, and at the company’s own site,, or by calling Jeff Patton at (216) 861-2300.]