N.J. Admin. Code § 11:4-28.7

Current through Register Vol. 56, No. 24, December 18, 2024

Section 11:4-28.7 - Procedure to be followed by other than primary plans to calculate benefits

(a) A plan determined to be a secondary plan pursuant to N.J.A.C. 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.

N.J. Admin. Code § 11:4-28.7

Amended by R.2002 d.106, effective 4/1/2002 (operative January 1, 2003).
See: 33 New Jersey Register 2578(a), 34 New Jersey Register 1440(a).
Rewrote (a); added (e) and (f).
Amended by R.2004 d.102, effective 3/15/2004.
See: 35 New Jersey Register 5007(a), 36 New Jersey Register 1591(a).
In (e)7, substituted "services and supplies" for "referrals" following "emergency services or".