Coordination of Benefits and Patient’s Share
Members occasionally have two or more benefit policies. When they do, the insurance carriers take this into consideration and this is known as Coordination of Benefits.
Prompt Pay Legislation – Coordination of Benefits
Coordination of benefits is necessary when more than one plan is responsible for claim payment. Claims that involve coordination of benefits are subject to special rules under the Texas Prompt Pay Act.
When providers are aware of multiple plans potentially involved in claim payment, information related to all applicable plans must be submitted in order for the claim to be clean. The Provider must submit the claim first to the primary plan and then to any secondary or tertiary plans. The order of payer responsibility is determined by TDI guidelines, which have adopted the uniform rules of the National Association of Insurance Commissioners (NAIC).18
When Blue Essentials, Blue Advantage HMO and Blue Premier are the secondary payer of a claim submitted in non- electronic format, the amount paid by the primary plan is a required data element and must be submitted in field 54 for the claim to be clean.19 Thus, the applicable statutory payment period for a secondary plan does not begin unless and until it receives the primary plan’s adjudication information.
In some cases, Blue Essentials, Blue Advantage HMO and Blue Premier acts as both the primary and secondary payer on a single claim. A claim submitted to the primary plan that includes all required secondary plan information is sufficient to allow processing under both policies. The secondary plan’s Texas Prompt Pay Act payment period does not begin until the claim is adjudicated by the primary plan.
If Blue Essentials, Blue Advantage HMO and Blue Premier determines that a secondary plan has paid an amount owed by the primary plan in error, it may recover the amount of its overpayment from the primary plan or from the provider if it has already been reimbursed by the primary plan.20 For purposes of calculating Texas Prompt Pay Act penalties for secondary claims, the contracted rate and billed charges are reduced in proportion to the percentage of the claim owed after the primary plan’s payment.
Subrogation is a contract provision that allows healthcare insurers to recover all or a portion of claims payments if the member is entitled to recover such amounts from a third party. The third party’s liability insurance carrier normally makes these payments. A third party is another carrier, person or company that is legally liable for payment from the treatment of the claimant’s illness or injury. All claims you submit to Blue Cross must indicate if work-related injuries or illnesses are involved and if the services are related to an accident.
• Not require the Blue Cross member or the member’s attorney to guarantee payment of the entire billed charge.
• Not require the Blue Cross member to pay the entire billed charge up front.
• Not bill the Blue Cross member for amounts above the reimbursement amount/allowable charge.
• Charge the member no more than is ordinarily charged other patients for the same or similar service.
• Bill the member only for any applicable deductible, coinsurance, co-pay and/or noncovered service.
If amounts in excess of the reimbursement amount/allowable charge were collected, you should refund that amount to the member.
In the case of OGB claims, Blue Cross pursues recovery of claims payments and Blue Cross makes payments as applicable.
As a participating provider with CarePlus we require that you notify the Plan of any third party information you may have received and that you assist the Plan in complying with the Medicare Secondary Payer rules. In addition, if you are notified of a Medicare Set-Aside Plan please notify the Plan immediately. You can contact the Plans COB / Subrogation department at 1-877-843-3870. Please refer to the COB questionnaire located in the “Forms” section of this manual to assist you in submitting information to the Plan.
CarePlus is subject to the rules and regulations as defined by the Social Security Act and the CMS Medicare Secondary Payment (MSP) provision. Medicare Advantage Organizations are allowed four (4) provisions in which Medicare is considered a secondary payer.
1. Employer Group Health Plans (EGHP) and Large Group Health Plans (LGHP)
2. Liability Insurance Plans
3. No-fault Insurance Plans
4. Workers’ Compensation Plans (WC)
Employer Group Health Plans (EGHP)
Policy: Coverage under a health plan offered by an employer in which a Medicare beneficiary is covered as:
1. An employee (age 65+) or
2. As a dependent under another subscriber (of any change) covered under such plan
NOTE: Medicare is the secondary payer for beneficiaries assigned to Medicare under the ESRD benefit for up to 30 months beginning when the individual becomes eligible for Medicare if the beneficiary was not otherwise eligible due to age or disability
Liability Insurance and No-Fault Insurance
Policy: Types of liability include, but are not limited to automobile liability, malpractice, homeowner’s liability, product liability, and general casualty insurance. Medicare is considered the secondary payer to all liability and no-fault insurance providers.
Workers’ Compensation (WC)
Policy: Medicare does not coordinate benefits with Workers Compensation payers. Workers’ Compensation assumes full liability for the payment of items and services related to a claim meeting their coverage requirements.
When a Member has coverage, other than with CarePlus, which requires or permits coordination of benefits from a third party payor in addition to CarePlus, CarePlus will coordinate its benefits with such other payor(s). In all cases, CarePlus will coordinate benefits payments in accordance with applicable laws and regulations and in accordance with the terms of its health benefits contracts. When permitted to do so by such laws and regulations and by its health benefits contracts, CarePlus will pay the lesser of: (i) the amount due under the prevailing agreement; (ii) the amount due under the prevailing agreement less the amount payable or to be paid by the other payor(s); or (iii) the difference between allowed billed charges and the amount paid by the other payor(s). In no event, however, will CarePlus, when its plan is a secondary payor, pay an amount, which, when combined with payments from the other payor(s), exceeds the rates set out in the prevailing agreement; provided, however, if Medicare is the primary payer, CarePlus will, to the extent required by applicable law, regulation or Center for Medicare/Medicaid Services (CMS) Office of Inspector General (OIG) guidance, pay Provider an amount up to the amount CarePlus would have paid, if it had been primary, toward any applicable unpaid Medicare deductible or coinsurance.
Recovery: Provider and CarePlus agree to use reasonable efforts to determine the availability of other benefits, including other party liability, and to obtain any information or documentation required by CarePlus and Provider to facilitate coordination of such other benefits. Upon request by CarePlus, Provider will provide CarePlus with a copy of any standard Provider forms used to obtain the necessary coordination of benefits information.
Payment Adjustment: Provider and CarePlus agree that retroactive adjustment to the payment including but not limited to claims payment errors, data entry and incorrectly submitted claims shall be submitted to Recovery of Over/Under Payment process.
Employment-related Injuries or Illness
There are generally three types of legal remedies available to members who sustain employment-related injuries or illnesses:
• Workers’ Compensation under state law – Workers’ Compensation under state law is a legal remedy whereby an employee who is injured within the course and scope of employment is usually entitled to certain benefits regardless of whether anyone was at fault.
• Longshore & Harbor Workers’ Compensation Act (LHWCA) – The LHWCA is a federal law that provides for the payment of medical care to employees who suffer “on the job” injuries that occur on the navigable waters of the United States or in adjoining areas used in loading, unloading, repairing or building certain vessels, regardless of whether anyone was at fault.
• Jones Act – The Jones Act is a federal law that provides protection only to “seamen” who are injured while working on a vessel.
Please understand that we do not make any coverage determinations as to which legal remedy would apply to a member’s injury.
We understand that it can be very difficult to determine which one of these legal remedies may cover a particular injury or illness; however, your patients may have medical benefits available to them under their Blue Cross contract. All claims for covered services, including those claims for which a third party may be liable, must be filed directly to Blue Cross. Please understand that services for injuries and illnesses that arise under the Jones Act, like any other covered services that do not fall under any workers’ compensation guideline, are not considered contractual exclusions, and therefore, must be filed with Blue Cross. Although services that fall under a workers’ compensation guideline are, in most circumstances, typically excluded under the terms of the member contracts/certificate of coverage, we strongly encourage our providers to file claims for these services with us. If the service is determined not to be covered by workers’ compensation or the particular contract does not exclude these types of services, you risk any future consideration by failing to meet administrative filing requirements. The current administrative claims process may deny an initial claim for employment related injuries however, please contact Customer Service so that we can work with your office to apply the appropriate member benefits.
Coordination of benefits does not apply in any of these scenarios.
Coordination of Benefits Guidelines from BCBS
The availability of benefits specified in this Contract is subject to Coordination of Benefits (COB) as described below.
This COB provision applies to This Plan when a Participant has health care coverage under more than one Plan.
If this COB provision applies, the order of benefit determination rules should be looked at first. Those rules determine whether the benefits of This Plan are determined before or after those of another Plan. The benefits of This Plan shall not be reduced when This Plan determines its benefits before another Plan; but may be reduced when another Plan determines its benefits first.
Coordination of Benefits – Definitions
1. Plan means any group insurance or group-type coverage, whether insured or uninsured. This includes:
a. group or blanket insurance;
b. franchise insurance that terminates upon cessation of employment;
c. group hospital or medical service plans and other group prepayment coverage;
d. any coverage under labor-management trustee arrangements, union welfare arrangements, or employer organization arrangements;
e. governmental plans, or coverage required or provided by law.
Plan does not include:
a. any coverage held by the Participant for hospitalization and/or medical-surgical expenses which is written as a part of or in conjunction with any automobile casualty insurance policy;
b. a policy of health insurance that is individually underwritten and individually issued;
c. school accident type coverage; or
d. a state plan under Medicaid (Title XIX, Grants to States for Medical Assistance Programs, of the United States Social Security Act, as amended).
Each contract or other arrangement for coverage is a separate Plan. Also, if an arrangement has two parts and COB rules apply only to one of the two, each of the parts is a separate Plan.
2. This Plan means the part of this Contract that provides benefits for health care expenses.
3. Primary Plan/Secondary Plan
The order of benefit determination rules state whether This Plan is a Primary Plan or Secondary Plan covering the Participant. A Primary Plan is a Plan whose benefits are determined before those of the other Plan and without considering the other Plan’s benefit. A Secondary Plan is a Plan whose benefits are determined after those of a Primary Plan and may be reduced because of the other Plan’s benefits.
When there are more than two Plans covering the Participant, This Plan may be a Primary Plan as to one or more other Plans, and may be a Secondary Plan as to a different Plan or Plans.
4. Allowable Expense means a necessary, reasonable, and customary item of expense for health care when the item of expense is covered at least in part by one or more Plans covering the Participant for whom claim is made.
5. Claim Determination Period means a Calendar Year. However, it does not include any part of a year during which a Participant has no coverage under This Plan, or any part of a year before the date this COB provision or a similar provision takes effect.
6. We or Us means Blue Cross and Blue Shield of Texas.
Order of Benefit Determination Rules
1. General Information
a. When there is a basis for a claim under This Plan and another Plan, This Plan is a Secondary Plan which has its benefits determined after those of the other Plan, unless (a) the other Plan has rules coordinating its benefits with those of This Plan, and (b) both those rules and This Plan’s rules require that This Plan’s benefits be determined before those of the other Plan.
b. If this Contract contains any dental or vision benefits, the benefits provided by the health portion of this contract will be the Secondary Plan.
This Plan determines its order of benefits using the first of the following rules which applies:
a. Non-Dependent/Dependent. The benefits of the Plan which covers the Participant as an Employee, member or subscriber are determined before those of the Plan which covers the Participant as a Dependent. However, if the Participant is also a Medicare beneficiary, and as a result of the rule established by Title XVIII of the Social Security Act and implementing regulations, Medicare is
(1) secondary to the Plan covering the Participant as a Dependent and
(2) primary to the Plan covering the Participant as other than a Dependent (e.g., a retired Employee), then the benefits of the Plan covering the Participant as a Dependent are determined before those of the Plan covering that Participant other than a Dependent.
b. Dependent Child/Parents Not Separated or Divorced. Except as stated in Paragraph c below, when This Plan and another Plan cover the same child as a Dependent of different parents:
(1) The benefits of the Plan of the parent whose birthday falls earlier in a Calendar Year are determined before those of the Plan of the parent whose birthday falls later in that Calendar Year; but
(2) If both parents have the same birthday, the benefits of the Plan which covered one parent longer are determined before those of the Plan which covered the other parent for a shorter period of time.
However, if the other Plan does not have the rule described in this Paragraph b, but instead has a rule based on gender of the parent, and if, as a result, the Plans do not agree on the order of benefits, the rule in the other Plan will determine the order of benefits.
c. Dependent Child/Parents Separated or Divorced. If two or more Plans cover a Participant as a Dependent child of divorced or separated parents, benefits for the child are determined in this order:
(1) First, the Plan of the parent with custody of the child;
(2) Then, the Plan of the spouse of the parent with custody, if applicable;
(3) Finally, the Plan of the parent not having custody of the child.
However, if the specific terms of a court decree state that one of the parents is responsible for the health care expense of the child, and the entity obligated to pay or provide the benefits of the Plan of that parent has actual knowledge of those terms, the benefits of that Plan are determined first. The Plan of the other parent shall be the Secondary Plan. This paragraph does not apply with respect to any Calendar Year during which any benefits are actually paid or provided before the entity has that actual knowledge.
d. Joint Custody. If the specific terms of a court decree state that the parents shall share joint custody, without stating that one of the parents is responsible for the health care expenses of the child, the Plans covering the child shall follow the order of benefit determination rules outlined in Paragraph b.
e. Active/Inactive Employee. The benefits of a Plan which covers a Participant as an Employee who is neither laid off nor retired are determined before those of a Plan which covers that Participant as a laid off or retired Employee. The same would hold true if a Participant is a Dependent of a person covered as a retired Employee and an Employee. If the other Plan does not have this rule, and if, as a result, the Plans do not agree on the order of benefits, this Paragraph e does not apply.
f. Continuation Coverage. If a Participant whose coverage is provided under a right of continuation pursuant to federal or state law is also covered under another Plan, the following shall be the order of benefit determination:
(1) First, the benefits of a Plan covering the Participant as an Employee, member or subscriber (or as that Participant’s Dependent);
(2) Second, the benefits under the continuation coverage.
If the other Plan does not have this rule, and if, as a result, the Plans do not agree on the order of benefits this Paragraph f does not apply.
g. Longer/Shorter Length of Coverage. If none of the above rules determine the order of benefits, the benefits of the Plan which covered an Employee, member or subscriber longer are determined before those of the Plan which covered that Participant for the shorter period of time.
Effect on the Benefits of This Plan
1. When This Section Applies
This section applies when This Plan is the Secondary Plan in accordance with the order of benefits determination outlined above. In that event, the benefits of This Plan may be reduced under this section.
2. Reduction in this Plan’s Benefits
The benefits of This Plan will be reduced when the sum of:
a. The benefits that would be payable for the Allowable Expense under This Plan in the absence of this COB provision; and
b. The benefits that would be payable for the Allowable Expense under the other Plans, in the absence of provisions with a purpose like that of this COB provision, whether or not claim is made exceeds those Allowable Expenses in a Claim Determination Period.
In that case, the benefits of This Plan will be reduced so that they and the benefits payable under the other Plans do not total more than those Allowable Expenses.
When the benefits of This Plan are reduced as previously described above, each benefit is reduced in proportion.
It is then charged against any applicable benefit limit of This Plan.
Right to Receive and Release Needed Information
We assume no obligation to discover the existence of another Plan, or the benefits available under the other Plan, if discovered. We have the right to decide what information we need to apply these COB rules. We may get needed information from or release information to any other organization or person without telling, or getting the consent of, any person. Each person claiming benefits under This Plan must give us any information concerning the existence of other Plans, the benefits thereof, and any other information needed to pay the claim.
Facility of Payment
A payment made under another Plan may include an amount that should have been paid under This Plan. If it does, We may pay that amount to the organization that made that payment. That amount will then be treated as though it were a benefit paid under This Plan. We will not have to pay that amount again.
Right to Recovery
If the amount of the payments We make is more than We should have paid under this COB provision, We may recover the excess from one or more of:
1. the persons We have paid or for whom We have paid;
2. insurance companies; or
3. Hospitals, Physicians, or Other Providers; or
4. any other person or organization.