Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 3 - LIFE, ACCIDENT, AND HEALTH INSURANCE AND ANNUITIES › Subchapter V - COORDINATION OF BENEFITS › Section 3.3505 - Allowable Expenses

Current through Reg. 49, No. 28; July 12, 2024
(a) If a covered
				  person advises a plan that all plans covering the person are high-deductible
				  health plans and the person intends to contribute to a health savings account
				  established in accord with §223 of the Internal Revenue Code of 1986, the
				  primary high-deductible 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 §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) Any expense that a
				  health care provider or physician is prohibited from charging a covered person
				  by law or in accord with a contractual agreement is not an allowable
				  expense.
(d) 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.
(e) If a person is
				  covered by two or more plans that do not have negotiated fees and that compute
				  their benefit payments on the basis of usual and customary fees, allowed
				  amounts, relative value schedule reimbursement, or other similar reimbursement
				  methodology, any amount charged by the health care provider or physician in
				  excess of the highest reimbursement amount for a specified benefit is not an
				  allowable expense.
(f) If a person
				  is covered by two or more plans that provide benefits or services based on
				  negotiated fees, any amount in excess of the highest of the negotiated fees is
				  not an allowable expense.
(g) If a
				  person is covered by one plan that does not have negotiated fees and that
				  calculates its benefits or services based on usual and customary fees, allowed
				  amounts, relative value schedule reimbursement, or other similar reimbursement
				  methodology and another plan that provides its benefits or services based on
				  negotiated fees, the primary plan's payment arrangement must be the allowable
				  expense for all plans. However, if the health care provider or physician 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 health care provider's or physician's
				  contract permits, that negotiated fee or payment must be the allowable expense
				  used by the secondary plan to determine its benefits.
(h) 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
				  expenses" 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.
(i) 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.
(j) The amount of the
				  reduction of benefits under a primary plan may be excluded from allowable
				  expense when a covered person's benefits are reduced under a primary plan
				  because:
(1) the covered person does not
				  comply with the plan provisions concerning second surgical opinions or prior
				  authorization of admissions or services; or
(2) the covered person has a lower benefit
				  because the covered person did not use a preferred health care provider or
				  preferred physician.