Current through Register Vol. 56, No. 18, September 16, 2024
(a) A plan
determined to be a secondary plan pursuant to
11:4-28.6 may reduce its benefits
so that the total benefits paid or provided by all plans during a claim
determination period are not more than the total allowable expenses. Where a
benefit is payable by both the primary and secondary plans on the basis of
usual, customary and reasonable fees (UCR), the secondary plan shall pay the
difference between billed charges for allowable expenses and the amount paid by
the primary plan as long as such amount is no greater than the amount the
secondary plan would have paid if primary. The amount by which the secondary
plan's benefits have been reduced shall be used by the secondary plan to pay
allowable expenses, not otherwise paid, which were incurred during the claim
determination period by the person for whom the claim is made. As each claim is
submitted, the secondary plan shall determine its obligation to pay for
allowable expenses based on all claims which were submitted up to that time
during the claim determination period. This guideline is illustrated in
examples W, X, Y, Z and AA of Appendix B.
(b) The benefits of the secondary plan shall
be reduced when the sum of the benefits that would be payable for the allowable
expenses under the secondary plan in the absence of this COB provision, and the
benefits that would be payable for the allowable expenses under the other
plans, in the absence of provisions with a purpose like that of this COB
provision, whether or not a claim is made, exceeds those allowable expenses in
a claim determination period. In this case, the benefits of the secondary plan
shall be reduced so that they and the benefits payable under the other plans do
not total more than those allowable expenses.
(c) When the benefits of This Plan are
reduced as described in (a) or (b) above, each benefit shall be reduced in
proportion, and the amount paid shall then be charged against any applicable
benefit limit of This Plan.
(d) The
requirements of (c) above may be omitted if the plan provides only one benefit,
or may be altered to suit the coverage provided.
(e) For the purpose of this subsection, plans
that pay network providers on the basis of contractual fee schedules shall
include HMO plans, HMO POS plans as permitted by N.J.A.C. 8:38-14, indemnity
plans using an SCA as permitted by N.J.A.C. 11:4-37 and those indemnity plans
that have contracted with providers who have agreed to accept a negotiated
payment.
1. Where both the primary and
secondary plans pay network providers on the basis of contractual fee
schedules, and the provider who provides or arranges for the services or
supplies is a network provider of the primary and secondary plans, the
allowable expense shall be considered to be the contractual fee of the primary
plan. The primary plan shall pay the benefit it would have paid without regard
to the existence of other coverage, and the secondary plan shall pay any
deductible, coinsurance or copayment for which the covered person is liable up
to the amount the secondary plan would have been required to pay if primary and
provided that the total amount received by the provider from the primary plan,
the secondary plan and the covered person does not exceed the contractual fee
of the primary plan. In no event shall the covered person be responsible for
any payment in excess of the copayment, coinsurance or deductible for the
secondary plan. This guideline is illustrated in examples A, B, C, D, E, F and
G of Appendix B.
2. Where the
primary plan pays a benefit on the basis of UCR, and the secondary plan pays on
the basis of a contractual fee schedule, and the provider who provides or
arranges for the services or supplies is a network provider of the secondary
plan, the primary plan shall pay the benefit it would have paid without regard
to the existence of other coverage. The secondary plan shall pay the difference
between the provider's billed charges and the benefit paid by the primary plan
up to the amount the secondary plan would have paid if primary. The payment of
the secondary plan shall be applied first toward satisfaction of the covered
person's liability for any copayment, coinsurance or deductible of the primary
plan. The covered person shall only be liable for the copayment, deductible and
coinsurance under the secondary plan if the covered person has no liability for
a copayment, coinsurance or deductible under the primary plan and the total
payments by both the primary and secondary plans are less than the provider's
billed charges. The covered person shall not be liable for any billed charges
in excess of the sum of the benefits paid by the primary plan, the benefits
paid by the secondary plan, and the copayment, deductible or coinsurance paid
by the covered person under either the primary or the secondary plans. In no
event shall the covered person be responsible for any payment in excess of the
copayment, coinsurance or deductible of the secondary plan. This guideline is
illustrated in examples H, I, J, K, L and M of Appendix B.
3. Where the primary plan pays providers on
the basis of a contractual fee schedule, and the secondary plan pays for the
particular benefit on the basis of UCR, and a service or supply is provided by
a network provider of the primary plan, the allowable expense considered by the
secondary plan shall be the contractual fee of the primary plan. The secondary
plan shall pay any copayment, coinsurance or deductible for which the covered
person is liable under the terms of the primary plan up to the amount that the
secondary plan would have been required to pay if primary. This guideline is
illustrated in examples N and O of Appendix B.
4. Where an HMO plan, other than an HMO POS
plan, is primary, and the provider is not a network provider of the HMO, and
the services and supplies are not covered by the HMO as urgent care, emergency
care or a referral to an out-of-network provider, and an HMO POS, SCA or
indemnity plan is secondary, the secondary plan shall pay as if it were
primary. This guideline is illustrated in example P of Appendix B.
5. Where the primary plan pays providers on
the basis of capitation, and the secondary plan is either an HMO plan that pays
network providers on the basis of a contractual fee schedule or an SCA, and a
service or supply is provided by a network provider of both the primary and
secondary plans, the secondary plan shall pay any copayment, coinsurance or
deductible for which the covered person is liable under the terms of the
primary plan up to the amount the secondary plan would have been required to
pay if primary. This guideline is illustrated in examples Q and R of Appendix
B.
6. Where the primary plan pays
network providers on a basis of capitation or a contractual fee schedule or
pays a benefit on the basis of UCR, and the secondary plan pays network
providers on the basis of capitation, and a service or supply is provided by a
network provider of the secondary plan, the secondary plan shall not be
obligated to pay to such network provider any amount other than the capitation
payment required under the contract between the secondary plan and the network
provider, and shall not be liable for any deductible, coinsurance or copayment
imposed by the primary plan. The covered person shall not be responsible for
the payment of any amount for eligible services. This guideline is illustrated
in examples S, T, U and V of Appendix B.
7. Where both the primary and secondary plans
are HMO plans, and the covered person obtains services or supplies from a
provider who is in the secondary HMO plan's network but is not in the primary
HMO's plan's network, the primary HMO plan shall have no liability and the
secondary HMO plan shall pay or provide benefits as if it were primary except
for emergency services or services and supplies authorized by the primary
plan.
(f) The secondary
plan shall not reduce allowable expenses on the basis that precertification,
notification or second surgical opinions were not given where the services or
supplies in question were determined to have been medically
necessary.
