Authority: IC 27-1-3-7

Affected: IC 27-8-5-19

Sec. 2. (a) As used in this rule, "allowable expenses" means any health care expense, including:

1. (1) coinsurance or copayments; and
2. (2) without reduction for any applicable deductible;

that is covered at least in part under any of the plans covering the person, except where a statute requires a different definition.

(b) If:

1. (1) a plan is advised by a covered person that all plans covering the person are high-deductible health plans; and
2. (2) 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.

(c) An expense or a portion of an expense that is not covered by any of the plans is not an allowable expense.

(d) Any expense that a provider:

1. (1) by law; or
2. (2) in accordance with a contractual agreement;

is prohibited from charging a covered person is not an allowable expense.

(e) Notwithstanding subsection (a), items of expense under coverages, such as dental care, vision care, prescription drug, or hearing aid programs, may be excluded from the definition of allowable expense. A plan that limits the application of coordination of benefits to certain coverages or benefits may limit definition of allowable in its contract to expenses that are similar to the expenses that it provides. When coordination of benefits is restricted to specific coverages or benefits in a contract, the definition of allowable expense shall include similar expense to which coordination of benefits applies.

(f) When a plan provides benefits in the form of service, the reasonable cash value of each service will be considered as both of the following:

1. (1) An allowable expense.
2. (2) A benefit paid.

(g) The difference between the cost of a:

1. (1) private hospital room; and
2. (2) semiprivate room;

is not considered an allowable expense under subsection (a) unless the patient's stay in a private hospital room is medically necessary in terms of generally accepted medical practice.

(h) When benefits are reduced under a primary plan because a covered person does not comply with the plan provisions related to:

1. (1) second surgical opinions;
2. (2) precertification of admissions or services; and
3. (3) preferred provider arrangements;

the amount of the reduction will not be considered an allowable expense.

(i) If a person is covered as follows by two (2) or more plans that:

1. (1) Compute their benefits payments on the basis of:

   1. (A) usual and customary fees;
   2. (B) relative value schedule reimbursement; or
   3. (C) other similar reimbursement methodology;
2. any amount charged by the provider in excess of the highest reimbursement amount for a specified benefit is not an allowable expense.
3. (2) 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.

(j) If a person is covered by:

1. (1) one (1) plan that calculates its benefits or services on the basis of:

   1. (A) usual and customary fees;
   2. (B) relative value schedule reimbursement; or
   3. (C) other similar reimbursement methodology; and
2. (2) 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.

(Department of Insurance; 760 IAC 1-38.1-2; filed Feb 14, 1990, 3:30 p.m.: 13 IR 1169; readopted filed Sep 14, 2001, 12:22 p.m.: 25 IR 531; filed Sep 15, 2006, 2:02 p.m.: 20061011-IR-760050265FRA; readopted filed Nov 21, 2012, 4:15 p.m.: 20121219-IR-760120454RFA; readopted filed Nov 13, 2018, 10:02 a.m.: 20181212-IR-760180372RFA; readopted filed Oct 31, 2024, 3:52 p.m.: 20241127-IR-760230814RFA)