Alabama Administrative Code › Title 482 - ALABAMA DEPARTMENT OF INSURANCE › Chapter 482-1-128 - GROUP COORDINATION OF BENEFITS (COB) › Section 482-1-128-.03 - Definitions

Current through Register Vol. 42, No. 9, June 28, 2024
As used in this chapter, these words and terms have the
				following meanings, unless the context clearly indicates otherwise:
(a)
1.
			 "Allowable expense," except as set forth below or where a statute requires a
			 different definition, 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.
2. 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.
3. An expense or a portion of
			 an expense that is not covered by any of the plans is not an allowable
			 expense.
4. 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.
5. 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 semi-private 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 (2) 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, 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 (2) 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.
(iv) 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, 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.
6. The
			 definition of "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.
7. 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.
8. The amount of the reduction may be
			 excluded from allowable expense when a covered person's benefits are reduced
			 under a primary plan for either of the following reasons:
(i) Because the covered person does not
			 comply with the plan provisions concerning second surgical opinions or
			 precertification of admissions or services.
(ii) Because the covered person has a lower
			 benefit because the covered person did not use a preferred provider.