Coordination of Benefits

PURPOSE: This rule establishes the policy of the board of trustees in regard to the coordination of benefits (COB) in the Missouri Consolidated Health Care Plan. (1) If a member is also covered under any other plan (as defined here) and is entitled to benefits or other services for which benefits are also payable under Missouri Consolidated Health Care Plan (MCHCP), the benefits under MCHCP will be adjusted as shown in this rule. (A) This coordination of benefits (COB) provision applies to MCHCP when a member has health care coverage under more than one (1) plan. (B) If this COB provision applies, the order of benefit determination rules should be looked at first. Those rules determine whether the benefits of MCHCP are determined before or after those of another plan. The benefits of MCHCP— 1. Shall not be reduced when, under the order of benefit determination rules, MCHCP determines its benefits before another plan; but 2. May be reduced when, under the order of benefits determination rules, another plan determines its benefits first. (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 expenses. 1. 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 coverage, 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 semi-private 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 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; (B) Claim. A request for benefits of a plan to be provided or paid is a claim. The benefit claimed may be in the form of— 1. Services (including supplies); 2. Payment for all or a portion of the expenses incurred; 3. A combination of paragraphs (2)(B)1. and 2.; or 4. An indemnification; (C) Claim determination period means a calendar year. However, it does not include any part of a year during which a person has no coverage under this plan or any part of a year before the date this COB provision or similar provision takes effect; (D) Coordination of benefits. This is a provision establishing an order in which plans pay their claims; (E) Plan includes— 1. Group insurance and group subscriber contracts; 2. Uninsured arrangements of group or group-type coverage; 3. Group or group-type coverage through HMOs and other prepayment, group practice, and individual practice plans; 4. Group-type contracts. Group-type contracts are contracts which are not available to the general public and can be obtained and maintained only because of membership in, or connection with, a particular organization or group. Grouptype contracts answering this description may be included in the definition of plan, at the option of the insurer or the service provider and the contract client, whether or not uninsured arrangements or individual contract forms are used and regardless of how the group-type coverage is designed (for example, franchise or blanket). Individually underwritten and issued guaranteed renewable policies would not be considered group-type, even though purchased through payroll deduction at a premium savings to the insured, since the insured would have the right to maintain or renew the policy independently of continued employment with the employer. Note: The purpose and intent of this provision are to identify certain plans of coverage which may utilize other than a group contract but are administered on a basis more characteristic of group insurance. These group-type contracts are distinguished by two (2) factors—1) they are not available to the general public, but may be obtained only through membership in, or connection with, the particular organization or group through which they are marketed (for example, through an employer payroll withholding system); and 2) they can be obtained only through that affiliation (for example, the contracts might provide that they cannot be renewed if the insured leaves the particular employer or organization, in which case they would meet the group-type definition). On the other hand, if these contracts are guaranteed renewable allowing the insured the right to renewal regardless of continued employment or affiliation with the organization, they would not be considered group-type; 5. Group or group-type hospital indemnity benefits which exceed one hundred dollars ($100) per day; 6. The medical benefits coverage in group, group-type, and individual automobile no-fault type contracts but, as to traditional automobile fault contracts, only the medical benefits written on a group or group-type basis may be included; and 7. Medicare or other governmental benefits. That part of the definition of plan may be limited to the hospital, medical, and surgical benefits of the governmental program; (F) Plan shall not include— 1. Individual or family insurance contracts; 2. Individual or family subscriber contracts; 3. Individual or family coverage under other prepayment, group practice, and individual practice plans; 4. Group or group-type hospital indemnity benefits of one hundred dollars ($100) per day or less; 5. School accident-type coverages. These contracts cover grammar, high school, and college students for accidents only, including athletic injuries, either on a twenty-four- (24-) hour basis or on a to-and-from-school basis; and 6. A state plan under Medicaid and shall not include a law or plan when its benefits are in excess of those of any private insurance plan or other non-governmental plan; and (G) Primary plan/secondary plan. The order of benefit determination rules state whether MCHCP is a primary plan or secondary plan as to another plan covering this person. When MCHCP is a primary plan, its benefits are determined before those of the other plan and without considering the other plan’s benefits. When MCHCP is a secondary plan, its benefits are determined after those of the other plan and may be reduced because of the other plan’s benefits. When there are more than two (2) plans covering the person, MCHCP may be a primary plan as to one (1) or more other plans and may be a secondary plan as to a different plan(s). (3) Order of Benefit Determination Rules. (A) General. When there is a basis for a claim under MCHCP and another plan, MCHCP is a secondary plan which has its benefits determined after those of the other plan, unless— 1. The other plan’s rules and MCHCP’s rules require MCHCP to be primary; or 2. The other plan’s rules conflict with MCHCP’s rules, then the plan that has been in effect the longest is primary. (B) Rules. MCHCP determines its order of benefits as follows: 1. Non-dependent/dependent. A. The plan which covers the member as an employee or subscriber is primary. B. The plan which covers the member as dependent is secondary; 2. Active/layoff. The plan that covers the member or dependent through the member’s active employment is primary to a plan that covers the member or dependent through the member’s status as a laid-off employee; 3. Retiree. The plan that covers the member or dependent through the member’s active employment is primary to a plan that covers the member or dependent through the member’s status as a retiree; 4. Medicare. A. If a member is an active employee and has Medicare, MCHCP is the primary plan for the active employee and his/ her dependents. Medicare is the secondary plan except for members with end stage renal disease (ESRD) as defined in subparagraph (3)(B)4.C. B. If a member is a retiree and has Medicare, Medicare is the primary plan for the retiree and his/her Medicare-eligible dependents. MCHCP is the secondary plan. C. If a member or his/her dependents are eligible for Medicare solely because of ESRD, the member’s MCHCP plan is primary to Medicare during the first thirty (30) months of Medicare eligibility for home peritoneal dialysis or home hemodialysis and thirty-three (33) months for in-center dialysis. After the thirty (30) or thirty-three (33) months, Medicare becomes primary, and claims are submitted first to Medicare, then to MCHCP for secondary coverage. The member is responsible for notifying MCHCP of his/her Medicare status; 5. Dependent child/parents not separated or divorced. When MCHCP and another plan cover the same child as a dependent of different parents— A. The benefits of the plan of the parent whose birthday falls earlier in a year are determined before those of the plan of the parent whose birthday falls later in that year; but B. If both parents have the same birthday, the benefits of the plan which covered one (1) parent longer are determined before those of the plans which covered the other parent for a shorter period of time; 6. Dependent child/separated or divorced, or never married. If two (2) or more plans cover a person as a dependent child of divorced, separated, or never married parents, benefits for the child are determined in this order— A. First, the plan of the parent with custody of the child; B. Then, the plan of the spouse of the parent with the custody of the child; C. Then, the plan of the parent not having custody of the child; and D. Finally, the plan of the spouse of the parent not having custody of the child. However, if the specific terms of a court decree state that one (1) of the parents is responsible for the health care expense of the child and the entity obligated to pay or provide the benefits of the plan of that parent or spouse of the other parent has actual knowledge of those terms, the benefits of that plan are determined first. The plan of the other parent shall be the secondary plan. This paragraph does not apply with respect to any claim determination period or plan year during which any benefits are actually paid or provided before the entity has that actual knowledge; 7. Joint custody. If the specific terms of a court decree state that the parents shall share joint custody, without stating that one (1) of the parents is responsible for the health care expenses of the child, the plans covering the child shall follow the order of benefit determination rules outlined in paragraph (3)(B)5.; 8. Dependent child/parents both parents covered by MCHCP. If both parents are covered by MCHCP and both parents cover the child as a dependent, MCHCP will not coordinate benefits with itself; 9. When an adult dependent is covered by both spouse and parent, the benefits of the plan which covered a person longer are determined before those of the plan which covered that person for the shorter term; and 10. Longer/shorter length of coverage. If none of the previous rules determines the order of benefits, the benefits of the plan which covered a person longer are determined before those of the plan which covered that person for the shorter term. (4) Effect on the benefits of MCHCP. This section applies when, in accordance with section (3), Order of Benefit Determination Rules, MCHCP is a secondary plan as to one (1) or more other plans. (A) In the event that MCHCP is a secondary plan as to one (1) or more other plans, the benefits of MCHCP’s PPO plans and Health Savings Account Plan (HSA Plan) may be reduced under this section so as not to duplicate the benefits of the other plan. The other plan’s payment is subtracted from what MCHCP or its claims administrator would have paid in absence of this COB provision using the following criteria. If there is any balance, MCHCP or its claims administrator will pay the difference not to exceed what it would have paid in absence of this COB provision. 1. In the case where Medicare is primary for physician and outpatient facility claims, Medicare’s allowed amount is used as MCHCP’s allowed amount to determine what MCHCP would have paid in absence of this COB provision. 2. In the case where Medicare is primary for inpatient facility claims, the amount the facility billed is used as MCHCP’s allowed amount to determine what MCHCP would have paid in absence of this COB provision. Medicare’s actual paid amount is combined with the provider’s Medicare contractual writeoff to determine what MCHCP considers the Medicare paid amount. Effective April 1, 2013, Medicare’s allowed amount will be used as MCHCP’s allowed amount for inpatient facility claims to determine what MCHCP would have paid in absence of this COB provision and the Medicare paid amount will no longer be combined with the provider’s Medicare contractual write-off. (5) Right to Receive and Release Needed Information. Certain facts are needed to apply these COB provisions. MCHCP or its claims administrator has the right to decide which facts it needs. MCHCP or its claims administrator may get needed facts from, or give them to, any other organization or person. MCHCP or its claims administrator need not tell, or get the consent of, any person to do this. Each person claiming benefits under MCHCP must give MCHCP or its claims administrator any facts it needs to pay the claim. (6) A payment made under another plan may include an amount which should have been paid under MCHCP. If it does, MCHCP or its claims administrator may pay that amount to the organization which made the payment. That amount will then be treated as though it were a benefit paid under MCHCP. MCHCP or its claims administrator will not have to pay that amount again. The term payment made includes providing benefits in the form of services, in which case payment made means reasonable cash value of the benefits provided in the form of services. (7) If the amount of the payments made by MCHCP or its claims administrator is more than it should have paid under this COB provision, MCHCP or its claims administrator may recover the excess from one (1) or more of— (A) The person it has paid or for whom it has paid; (B) Insurance companies; or (C) Other organizations. The amount of the payments made includes the reasonable cash value of any benefits provided in the form of services. (8) MCHCP shall, with respect to COB and recoupment of costs, exercise all rights and remedies as permitted by law. AUTHORITY: sections 103.059 and 103.089, RSMo 2016.* Emergency rule filed Dec. 20, 2004, effective Jan. 1, 2005, expired June 29, 2005. Original rule filed Dec. 20, 2004, effective June 30, 2005. Rescinded and readopted: Filed July 1, 2010, effective Dec. 30, 2010. Amended: Filed Nov. 1, 2011, effective May 30, 2012. Emergency amendment filed Oct. 30, 2012, effective Jan. 1, 2013, terminated May 29, 2013. Amended: Filed Oct. 30, 2012, effective May 30, 2013. Amended: Filed Oct. 29, 2014, effective May 30, 2015. Emergency amendment filed Oct. 28, 2015, effective Jan. 1, 2016, expired June 28, 2016. Amended: Filed Oct. 28, 2015, effective May 30, 2016. Emergency amendment filed Oct. 30, 2019, effective Jan. 1, 2020, expired June 28, 2020. Amended: Filed Oct. 30, 2019, effective May 30, 2020. Emergency amendment filed Oct. 27, 2023, effective Jan. 1, 2024, expired June 28, 2024. Amended: Filed Oct. 27, 2023, effective May 30, 2024. *Original authority: 103.059, RSMo 1992, and 103.089, RSMo 1992, amended 2011.