Procedures to be Followed by the Secondary Plan to Calculate Benefits. In order to determine which procedure to follow it is necessary to consider:
Procedures to be Followed by the Secondary Plan to Calculate Benefits. In order to determine which procedure to follow it is necessary to consider: the basis on which the Primary Plan and the Secondary Plan pay benefits; and whether the provider who provides or arranges the services and supplies is in the network of either the Primary Plan or the Secondary Plan. Benefits may be based on the Allowed Charge (AC), or some similar term. This means that the provider bills a charge and the [Member] may be held liable for the full amount of the billed charge. In this section, a Plan that bases benefits on an Allowed Charge is called an “AC Plan.” Benefits may be based on a contractual fee schedule, sometimes called a negotiated fee schedule, or some similar term. This means that although a provider, called a network provider, bills a charge, the [Member] may be held liable only for an amount up to the negotiated fee. In this section, a Plan that bases benefits on a negotiated fee schedule is called a “Fee Schedule Plan.” Fee Schedule Plans may require that [Members] use network providers. Examples of such plans are Health Maintenance Organization plans (HMO) and Exclusive Provider organization plans (EPO). If the [Member] uses the services of a non-network provider, the plan will be treated as an AC Plan even though the plan under which he or she is covered allows for a fee schedule. Examples of such plans are Preferred provider organization plans (PPO) and Point of Service plans (POS). Payment to the provider may be based on a “capitation”. This means that the HMO, EPO or other plans pays the provider a fixed amount per [Member]. The [Member] is liable only for the applicable deductible, coinsurance or copayment. If the [Member] uses the services of a non-network provider, the HMO or other plans will only pay benefits in the event of emergency care or urgent care. In this section, a Plan that pays providers based upon capitation is called a “Capitation Plan.” In the rules below, “provider” refers to the provider who provides or arranges the services or supplies and “HMO” refers to a health maintenance organization plan and “EPO” refers to Exclusive Provider Organization. Primary Plan is an AC Plan and Secondary Plan is an AC Plan The Secondary Plan shall pay the lesser of: the difference between the amount of the billed charges and the amount paid by the Primary Plan; or the amount the Secondary Plan would have paid if it had been the Primary Plan. When the benefits of the Secondary Plan are reduced as a result of this calculation,...
