Preproposal statement of inquiry was filed as WSR 08-12-099.
Title of Rule and Other Identifying Information: Standards for coordination of benefits.
Hearing Location(s): OIC Tumwater Office, Training Room 120, 5000 Capitol Boulevard, Tumwater, WA, http://www.insurance.wa.gov/about/directions.shtml, on June 9, 2009, at 1:30 p.m.
Date of Intended Adoption: June 19, 2009.
Submit Written Comments to: Kacy Scott, P.O. Box 40258, Olympia, WA 98504-0258, e-mail firstname.lastname@example.org, fax (360) 586-3109, by June 8, 2009.
Assistance for Persons with Disabilities: Contact Lorie Villaflores by June 5, 2009, TTY (360) 586-0241 or (360) 725-7087.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The commissioner proposes these amendments to chapter 284-51 WAC so that:
|•||Carrier processing and payment of claims in coordination of benefits (COB) situations occurs within clearly defined and understood time frames,|
|•||Carriers no longer make estimated payments if they are secondary payors, and|
|•||The regulations require efficient processing of claims in COB situations.|
Reasons Supporting Proposal: The proposed changes will promote more timely and efficient processing of claims in COB situations. They have been developed in response to suggestions from a work group sponsored by the Washington Healthcare Forum. The work group included a cross section of health care provider and health plan representatives. The elimination of the estimated payment requirement for secondary plans was identified in 2008 as a high priority opportunity for health care administrative simplification, http://www.insurance.wa.gov/legislative/reports/SimplificationRpt.pdf (pages 20-22).
Statutory Authority for Adoption: RCW 48.02.060, 48.21.200, 48.44.050, and 48.46.200.
Statute Being Implemented: RCW 48.21.200.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Office of insurance commissioner, governmental.
Name of Agency Personnel Responsible for Drafting: Pete Cutler, 302 Sid Snyder Avenue, Olympia, WA 98504-0258, (360) 725-9651; Implementation: Mary Childers, 5000 Capitol Boulevard, Tumwater, WA 98504-0255, (360) 725-7095; and Enforcement: Leslie Krier, 5000 Capitol Boulevard, Tumwater, WA 98504-0255, (360) 725-7216.
No small business economic impact statement has been prepared under chapter 19.85 RCW. There are no domestic health care insurers that meet the law's definition of "small business."
A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Kacy Scott, P.O. Box 40258, Olympia, WA 98504-0258, phone (360) 725-7041, fax (360) 586-3109, e-mail email@example.com.
April 28, 2009
AMENDATORY SECTION(Amending Matter No. R 2005-07, filed 6/8/07, effective 7/9/07)
WAC 284-51-195 Definitions. As used in this chapter, these words and terms have the following meanings, unless the context clearly indicates otherwise:
(1) "Allowable expense," except as outlined below means any health care expense, including coinsurance or copayments and without reduction for any applicable deductible, that is covered in full or in part by any of the plans covering the person. When coordinating benefits, any secondary plans must pay an amount which, together with the payment made by the primary plan, totals the higher of the allowable expenses. In no event will a secondary plan be required to pay an amount in excess of its maximum benefit plus accrued savings. When medicare, Part A and Part B or Part C are primary, medicare's allowable amount is the highest allowable expense.
(a) If an issuer is advised by a covered person that all plans covering the person are high-deductible health plans and the person intends to contribute to a health savings account established according to Section 223 of the Internal Revenue Code of 1986, the primary high-deductible health plan's deductible is not an allowable expense, except for any health care expense incurred that may not be subject to the deductible as described in Section 223 (c)(2)(C) of the Internal Revenue Code of 1986.
(b) An expense or a portion of an expense that is not covered by any of the plans is not an allowable expense.
(c) The following are examples of expenses that are not allowable expenses:
(i) If a person is confined in a private hospital room, the difference between the cost of a semiprivate room in the hospital and the private room is not an allowable expense, unless one of the plans provides coverage for private hospital room expenses.
(ii) If a person is covered by two or more plans that compute their benefit payments on the basis of usual and customary fees or relative value schedule reimbursement or other similar reimbursement method, any amount charged by the provider in excess of the highest reimbursement amount for a specified benefit is not an allowable expense.
(iii) If a person is covered by two or more plans that provide benefits or services on the basis of negotiated fees, any amount in excess of the highest of the negotiated fees is not an allowable expense.
(d) The definition of "allowable expense" may exclude certain types of coverage or benefits such as dental care, vision care, prescription drugs or hearing aids. A plan that limits the application of COB to certain coverages or benefits may limit the definition of allowable expense in its contract to expenses that are similar to the expenses that it provides. When COB is restricted to specific coverages or benefits in a contract, the definition of allowable expense must include similar expenses to which COB applies.
(e) When a plan provides benefits in the form of services, the reasonable cash value of each service will be considered an allowable expense and a benefit paid.
(f) If a secondary plan has been informed of the payment made by the primary plan but has not been informed of the amount of the primary plan's allowable expense within the period set forth in WAC 284-51-215 (2)(c), the secondary plan may use its allowable expense as the highest allowable expense.
(2) "Birthday" refers only to the month and day in a calendar year and does not include the year in which the individual is born.
(3) "Claim" means a request that benefits of a plan be provided or paid. The benefits claimed may be in the form of:
(a) Services (including supplies);
(b) Payment for all or a portion of the expenses incurred;
(c) A combination of (a) and (b) of this subsection; or
(d) An indemnification.
(4) "Claim determination period" means calendar year.
(5) "Closed panel plan" means a plan that provides health benefits to covered persons in the form of services primarily through a panel of providers that are employed by the plan, and that excludes benefits for services provided by other providers, except in cases of emergency or referral by a panel member.
(6) "Consolidated Omnibus Budget Reconciliation Act of 1985" or "COBRA" means coverage provided under a right of continuation according to federal law.
(7) "Coordination of benefits" or "COB" means a provision establishing the order that plans pay their claims, and permitting secondary plans to reduce their benefits so that the combined benefits of all plans do not exceed total allowable expenses.
(8) "Custodial parent" means:
(a) The parent awarded custody of a child by a court decree; or
(b) In the absence of a court decree, the parent with whom the child resides more than one-half of the calendar year without regard to any temporary visitation; or
(c) In cases where a court decree awards more than half of the calendar year's residential time to one parent without the use of "custodial" terminology, the parent to whom the greater residential time is awarded.
(9) "High-deductible health plan" has the meaning given the term under Section 223 of the Internal Revenue Code of 1986, as amended by the Medicare Prescription Drug, Improvement and Modernization Act of 2003.
(10)(a) "Hospital indemnity benefits" or "hospital fixed payment plan" means benefits not related to expenses incurred.
(b) "Hospital indemnity benefits" or "hospital fixed payment plan" does not include reimbursement-type benefits even if they are designed or administered to give the insured the right to elect indemnity-type benefits at the time of claim.
(11) "Issuer" means a disability carrier, health care service contractor, health maintenance organization, and any other entity issuing a plan as defined in this chapter.
(12) "Plan" means a form of coverage with which coordination is allowed. Separate parts of a plan for members of a group that are provided through alternative contracts that are intended to be part of a coordinated package of benefits are considered one plan and there is no COB among the separate parts of the plan.
(a) If a plan coordinates benefits, its contract must state the types of coverage that will be considered in applying the COB provision of that contract. Whether the contract uses the term "plan" or some other term such as "program," the contractual definition may be no broader than the definition of "plan" in this subsection.
(b) "Plan" includes:
(i) Group, individual or blanket disability insurance contracts, and group or individual contracts marketed by issuers as defined in this chapter;
(ii) Closed panel plans or other forms of group or individual coverage;
(iii) The medical care components of long-term care contracts, such as skilled nursing care; and
(iv) Medicare or other governmental benefits, as permitted by law, except as provided in (c)(vii) of this subsection. That part of the definition of plan may be limited to the hospital, medical and surgical benefits of the governmental program.
(c) "Plan" does not include:
(i) Hospital indemnity or fixed payment coverage benefits or other fixed indemnity or payment coverage;
(ii) Accident only coverage;
(iii) Specified disease or specified accident coverage;
(iv) Limited benefit health coverage, as defined in WAC 284-50-370;
(v) School accident and similar coverages that cover students for accidents only, including athletic injuries, either on a twenty-four-hour basis or on a "to and from school" basis;
(vi) Benefits provided in long-term care insurance policies for nonmedical services, for example, personal care, adult day care, homemaker services, assistance with activities of daily living, respite care and custodial care or for contracts that pay a fixed daily benefit without regard to expenses incurred or the receipt of services;
(vii) Medicare supplement policies;
(viii) A state plan under medicaid;
(ix) A governmental plan, which, by law, provides benefits that are in excess of those of any private insurance plan or other nongovernmental plan;
(x) Automobile insurance policies required by statute to provide medical benefits;
(xi) Benefits provided as part of a direct agreement with a direct patient-provider primary care practice as defined at section 3, chapter 267, Laws of 2007.
(13) "Policyholder" means the primary insured named in a nongroup insurance policy.
(14) "Primary plan" means a plan whose benefits for a person's health care coverage must be determined without taking the existence of any other plan into consideration. A plan subject to this chapter is a primary plan if:
(a) The plan either has no order of benefit determination rules, or its rules differ from those permitted by this chapter; or
(b) All plans that cover the person use the order of benefit determination rules required by this chapter, and under those rules the plan determines its benefits first.
(15) "Secondary plan" means a plan that is not a primary plan.
[Statutory Authority: RCW 48.20.60 [48.20.060], 48.21.200, 48.44.050, and 48.46.200. 07-13-008 (Matter No. R 2005-07), § 284-51-195, filed 6/8/07, effective 7/9/07.]
(2) The specific time limits for coordination of benefits processing include:
(a) When an issuer has been notified that more than one plan covers an enrollee who has submitted a claim, the issuer shall resolve with the other plan in not more than thirty calendar days which plan is primary. This deadline may be extended in situations involving court orders for dependent coverage, if the court order contains information needed to determine which plan is primary and has not been provided to the issuer. If agreement cannot be reached, both plans shall pay as set forth in WAC 284-51-205 (4)(f).
(b) Once the primary plan and secondary plan have been established, if the secondary plan receives a claim without the primary plan's explanation of benefit information or other primary payment details needed to process the claim, including at least the paid amount and the allowed amount, the secondary plan will notify the submitting provider and/or member as soon as possible and within thirty calendar days of receipt of the claim, that the secondary claim is incomplete without such primary plan information. The secondary plan will promptly process the claim after it has been resubmitted with the explanation of benefit information from the primary payer.
(c) If a primary plan has not adjudicated a claim within sixty calendar days of receipt of the claim and all supporting documentation, and if the primary plan is not waiting for information from the provider (e.g., medical records) or from the member (e.g., motor vehicle accident information), needed to adjudicate the claim, the provider or member may submit the claim and notice of the primary plan's failure to pay to the secondary plan which shall pay the provider's claim as primary within thirty calendar days.
(3) When payment is necessarily delayed for reasons other
than the application of a coordination of benefits provision,
investigation of other plan coverage must be conducted
concurrently to avoid delay in the ultimate payment of
benefits. Any issuer that is required by the time limit in
subsection (2) of this section to make payment as the primary
because it has insufficient information to make it a
secondary plan)) may exercise its rights under its "right of
recovery" provision for recovery of any excess payments. (( Any issuer that is knowingly responsible for payment as the
secondary plan must make a reasonable estimate of the primary
plan payment and base its secondary payment on that amount.))
After payment information is received from the primary plan,
the secondary plan may recover any excess amount paid under
its "right of recovery" provision.
[Statutory Authority: RCW 48.20.60 [48.20.060], 48.21.200, 48.44.050, and 48.46.200. 07-13-008 (Matter No. R 2005-07), § 284-51-215, filed 6/8/07, effective 7/9/07.]
"If you are covered by more than one health benefit plan,
you or your provider should file all your claims with each
plan at the same time. If medicare is your primary plan,
medicare may submit your claims to your secondary carrier for
you.")) and you do not know which is your primary plan, you or
your provider should contact any one of the health plans to
verify which plan is primary. The health plan you contact is
responsible for working with the other plan to determine which
is primary and will let you know within thirty calendar days.
CAUTION: All health plans have timely claim filing requirements. If you or your provider fail to submit your claim to a secondary health plan within that plan's claim filing time limit, the plan can deny the claim. If you experience delays in the processing of your claim by the primary health plan, you or your provider will need to submit your claim to the secondary health plan within its claim filing time limit to prevent a denial of the claim.
To avoid delays in claims processing, if you are covered by more than one plan you should promptly report to your providers and plans any changes in your coverage."
[Statutory Authority: RCW 48.20.60 [48.20.060], 48.21.200, 48.44.050, and 48.46.200. 07-13-008 (Matter No. R 2005-07), § 284-51-235, filed 6/8/07, effective 7/9/07.]
COORDINATION OF BENEFITS
|This is a summary of only a few of the provisions of your health plan to help you understand coordination of benefits, which can be very complicated. This is not a complete description of all of the coordination rules and procedures, and does not change or replace the language contained in your insurance contract, which determines your benefits.|
When you are covered by more than one health plan, state law permits issuers to follow a procedure called "coordination of benefits" to determine how much each should pay when you have a claim. The goal is to make sure that the combined payments of all plans do not add up to more than your covered health care expenses.
Coordination of benefits (COB) is complicated, and covers a wide variety of circumstances. This is only an outline of some of the most common ones. If your situation is not described, read your evidence of coverage or contact your state insurance department.
Any plan that does not contain your state's COB rules will always be primary.
Your Own Expenses
• The claim is for your own health care expenses, unless you are covered by medicare and both you and your spouse are retired.
Your Spouse's Expenses
• The claim is for your spouse, who is covered by medicare, and you are not both retired.
• Your child's expenses. The claim is for the health care expenses of your child who is covered by this plan; and
• You are married and your birthday is earlier in the year than your spouse's or you are living with another individual, regardless of whether or not you have ever been married to that individual, and your birthday is earlier than that other individual's birthday. This is known as the "birthday rule"; or
• You are separated or divorced and you have informed us of a court decree that makes you responsible for the child's health care expenses; or
• There is no court decree, but you have custody of the child.
We will be primary when any other provisions of state or federal law require us to be.
• If there is a difference between the amounts the plans allow, we will base our payment on the higher amount. However, if the primary plan has a contract with the provider, our combined payments will not be more than the amount called for in our contract or the amount called for in the contract of the primary plan, whichever is higher. Health maintenance organizations (HMOs) and health care service contractors usually have contracts with their providers as do some other plans.
• We will determine our payment by subtracting the amount
we estimate that)) paid by the primary plan (( will pay))
from the amount we would have paid if we had been primary. We
must make payment in an amount so that, when combined with the
amount paid by the primary plan, the total benefits paid or
provided by all plans for the claim equal to one hundred
percent of the total allowable expense (the highest of the
amounts allowed under each plan involved) for your claim. We
are not required to pay an amount in excess of our maximum
benefit plus any accrued savings. If your provider negotiates
reimbursement amounts with the plan(s) for the service
provided, your provider may not bill you for any excess
amounts once he/she has received payment for the highest of
the negotiated amounts. When our deductible is fully
credited, we will place any remaining amounts in a savings
account to cover future claims which might not otherwise have
been paid. For example, if the primary plan covers similar
kinds of health care expenses, but allows expenses that we do
not cover, we may pay for those expenses.
Contact Your State Insurance Department
[Statutory Authority: RCW 48.20.60 [48.20.060], 48.21.200, 48.44.050, and 48.46.200. 07-13-008 (Matter No. R 2005-07), § 284-51-260, filed 6/8/07, effective 7/9/07.]