20 CSR 400-2.030 Group Coordination of Benefits

PURPOSE: This rule restricts the use of coordination of benefits provisions in group health insurance plans to those situations where they may be equitably applied

(1) Applicability. The purpose of this rule is to— (A) Permit, but not require, plans to include a coordination of benefits (COB) provision;

(B) Establish an order in which plans pay their claims; 

(C) Provide the authority for orderly transfer of information needed to pay claims promptly; 

(D) Reduce duplication of benefits by permitting a reduction of the benefits paid by a plan where the plan, pursuant to rules established by this rule, does not have to pay its benefits first; 

(E) Reduce claims payment delays; and 

(F) Make all contracts that contain a COB provision consistent with this rule.

(2) Definitions. The following words and terms, when used in this rule, shall have the following meanings unless the context clearly indicates otherwise: 

(A) Allowable or Allowable expense. 

1. Allowable or Allowable expense means the necessary, reasonable and customary item of expense for health care when the item of expense is covered at least in part under any of the plans involved, except where a statute requires a different definition. 

2. Notwithstanding this definition, items of expense under coverages, such as dental care, vision care, prescription drug or hearing- aid programs, may be excluded from the definition of allowable expense. A plan which provides benefits only for any of these items of expense may limit its definition of allowable expenses to like items of expense. 

3. When a plan provides benefits in the form of service, the reasonable cash value of each service will be considered as both an allowable expense and a benefit paid. 

4. The difference between the cost of a private hospital room and the cost of a semiprivate hospital room is not considered an allowable expense under this definition unless the patient’s stay in a private hospital room is medically necessary in terms of generally accepted medical practice. 

5. When COB is restricted in its use to specific coverage in a contract (for example, major medical or dental), the definition of allowable expense must include the corresponding expenses or services to which COB applies.

6. When benefits are reduced under a primary plan because a covered person does not comply with the plan provisions, the amount of this reduction will not be considered an allowable expense. Examples of these provisions are those related to second surgical opinions, precertification of admissions or services and preferred provider arrangements.

A. Only benefit reductions based upon provisions similar in purpose to those described previously and which are contained in the primary plan may be excluded from allowable expenses.

 B. This provision shall not be used by a secondary plan to refuse to pay benefits because a health maintenance organization (HMO) member has elected to have health care services provided by a non-HMO provider and the HMO, pursuant to its contract, is not obligated to pay for providing those services. Note: Paragraph (2)(A)6. Is not intended to allow a secondary plan toexclude expenses that are applied towards the satisfaction of the deductible, copayments or coinsurance amounts required by the primary plan, except for the benefit reductions expressly described in this paragraph;