Code of Massachusetts Regulations
211 CMR - DIVISION OF INSURANCE
Title 211 CMR 38.00 - Coordination of Benefits (COB)
Section 38.02 - Definitions
As used in 211 CMR 38.00, these words and terms shall have the following meanings, unless the context clearly indicates otherwise:
Allowable Expense.
(a) Except as set forth in 211 CMR 38.02 or elsewhere in 211 CMR 38.00, or where a statute requires a different definition, Allowable Expense 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.
(b) If a Plan 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 in accordance with 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.
(c) An expense or a portion of an expense that is not covered by any of the Plans is not an Allowable Expense.
(d) Any expense that a provider by law or in accordance with a contractual agreement is prohibited from charging a covered person is not an Allowable Expense.
(e) When a Plan provides benefits in the form of services, the reasonable cash value of each service will be considered as both an Allowable Expense and a benefit paid.
(f) Expenses that are not Allowable Expenses include, but are not limited to:
1. If a person is confined in a private hospital room, 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, unless one of the Plans provides coverage for private hospital room expenses.
2. 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 methodology, then any amount charged by the provider in excess of the highest reimbursement amount for a specified benefit is not an Allowable Expense.
3. If a person is covered by two or more Plans that provide benefits or services on the basis of negotiated fees, then any amount in excess of the highest of the negotiated fees is not an Allowable Expense.
4. If a person is covered by one Plan that calculates its benefits or services on the basis of usual and customary fees or relative value schedule reimbursement or other similar reimbursement methodology and another Plan that provides its benefits or services on the basis of negotiated fees, then the Primary Plan's payment arrangement shall be the Allowable Expense for all Plans. However, if the provider has contracted with the Secondary Plan to provide the benefit or service for a specific negotiated fee or payment amount that is different than the Primary Plan's payment arrangement and if the provider's contract permits, that negotiated fee or payment shall be the Allowable Expense used by the Secondary Plan to determine its benefits.
(g) Allowable Expense may exclude certain types of coverage or benefits such as dental care, vision care, prescription drug 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 shall include similar expenses to which COB applies.
(h) The amount of the reduction may be excluded from Allowable Expense when a covered person's benefits are reduced under a Primary Plan:
1. Because the covered person does not comply with the Plan provisions concerning second surgical opinions or precertification of admissions or services; or
2. Because the covered person has a lower benefit because the covered person did not use a preferred provider.
(i) Nothing in 211 CMR 38.02: Allowable Expense shall be interpreted to require a Plan that makes its provider payments on the basis of capitation or other similar reimbursement methodology to make any reimbursements beyond the negotiated capitation arrangement between the provider and carrier.
Birthday. Refers only to month and day in a calendar year and does not include the year in which the individual is born.
Claim. 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 211 CMR 38.02: Claim(a) and (b); or
(d) an indemnification.
Closed Panel Plan. A Health Benefit Plan that provides health benefits to covered persons primarily in the form of services through a panel of providers that have contracted with or are employed by the Health Benefit Plan, and that excludes benefits for services provided by other providers, except in cases of emergency or referral approved by the Health Benefit Plan.
Consolidated Omnibus Budget Reconciliation Act of 1985 or COBRA. Coverage provided under a right of continuation pursuant to federal law.
Coordination of Benefits or (COB). A provision establishing an order in which 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.
Custodial Parent. The parent awarded custody of a child by a court decree. 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, is the Custodial Parent.
Group-type Contract. A contract for coverage which is not available to the general public and can be obtained and maintained only because of membership in or a connection with a particular organization or group, including blanket coverage. A Group-type Contract does not include an individually underwritten and issued guaranteed renewable policy even if the policy is 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.
Health Benefit Plan. A policy, contract, certificate or agreement entered into, offered or issued to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services. For the purposes of 211 CMR 38.00, Medical Payments Coverage and Personal Injury Protection shall not be considered a Health Benefit Plan.
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.
Hospital Indemnity Benefits. Insurance policies offered as independent, non-coordinated benefits which for the purposes of 211 CMR 38.00 shall mean policies issued under M.G.L. c. 175 which provide a benefit to be paid to an insured or a dependent, including the spouse of an insured, on the basis of a hospitalization of the insured or a dependent, that are sold as a supplement and not as a substitute for a health benefit plan.
Medical Payments Coverage. Medical coverage that may be purchased by a person pursuant to M.G.L. c. 175, § 113C in conjunction with the purchase of a Massachusetts motor vehicle insurance policy.
Personal Injury Protection (PIP). The coverage included in a Massachusetts motor vehicle liability policy as set forth and defined by M.G.L. c. 90, §§ 34A and 34M.
Plan. 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. If a Plan coordinates benefits, its contract must state the types of coverage which will be considered in applying the COB provision of that contract.
(a) Plan shall include:
1. group and nongroup insurance contracts and group and nongroup subscriber contracts;
2. uninsured arrangements of group coverage or group-type coverage;
3. group and nongroup coverage through Closed Panel Plans;
4. Group type Contracts;
5. the medical care components of long term care contracts, such as skilled nursing care;
6. the medical benefits coverage in automobile "no fault" and traditional automobile "fault" type contracts, to the extent permitted by law;
7. Medicare or other governmental benefits, as permitted by law, except as provided in 211CMR38.02: Plan(b)(8). 211CMR38.02: Plan(a)(7) may be limited to the hospital, medical and surgical benefits of the governmental program;
8. Group and nongroup insurance contracts and subscriber contracts that pay or reimburse for the cost of dental care; and
9. Group and nongroup insurance contracts and subscriber contracts that pay or reimburse for the cost of vision care.
(b) Plan shall not include:
1. Hospital Indemnity Benefits coverage or other fixed indemnity coverage;
2. Accident only coverage;
3. Specified disease or specified accident coverage;
4. Insured contracts that pay a fixed daily benefit without regard to which expenses are incurred or services received;
5. Medicare Supplement policies;
6. School accident-type coverages that cover students for accidents only, including those contracts covering students for accidents or athletic injuries, either on a 24 hour basis or on a "to and from school" basis;
7. Benefits provided in long-term care insurance policies for non-medical services or for contracts that pay a fixed daily benefit without regard to expenses incurred or the receipt of services;
8. A state plan under Medicaid; or
9. A governmental plan when, by law, its benefits are in excess of those of any private insurance plan or other nongovernmental plan.
Policyholder. The primary insured named in a nongroup insurance policy.
Primary Plan. A Plan whose benefits for a person's health care coverage must be determined without taking the existence of any other Plan into consideration. Except as otherwise provided in 211 CMR 38.00, a Plan is a Primary Plan if either:
(a) the Plan either has no order of benefit determination rules, or it has rules which differ from those permitted by 211 CMR 38.00; or
(b) all Plans which cover the person use the order of benefit determination rules required by 211 CMR 38.00, and under those rules the Plan determines its benefits first.
Secondary Plan. A Plan which is not a Primary Plan.
