1. (a) A secondary plan which provides benefits in the form of services may recover the reasonable cash value of providing the services from the primary plan, to the extent that benefits for the services are covered by the primary plan and have not already been paid or provided by the primary plan. Nothing in this provision shall be interpreted to require a plan to reimburse a covered person in cash for the value of services provided by a plan which provides benefits in the form of services.

2. (b) This subsection concerns excess and other nonconforming provisions.

   1. (1) Some plans have order of benefit determination rules not consistent with this subchapter which declare that the plan's coverage is "excess" to all others, or "always secondary." This occurs because certain plans may not be subject to insurance regulation, or because some group or group-type contracts have not yet been conformed with this subchapter.

   2. (2) A plan with order of benefit determination rules which comply with this subchapter (complying plan) may coordinate its benefits with a plan which is "excess" or "always secondary" or which uses order of benefit determination rules which are inconsistent with those contained in this regulation (noncomplying plan) on the following basis:

      1. (A) if the complying plan is the primary plan, it shall pay or provide its benefits on a primary basis;
      2. (B) if the complying plan is the secondary plan, it shall, nevertheless, pay or provide its benefits first, but the amount of the benefits payable shall be determined as if the complying plan were the secondary plan. In such a situation, such payment shall be the limit of the complying plan's liability; and
      3. (C) if the noncomplying plan does not provide the information needed by the complying plan to determine its benefits within a reasonable time after it is requested to do so, the complying plan shall assume that the benefits of the noncomplying plan are identical to its own, and shall pay its benefits accordingly. However, the complying plan must adjust any payments it makes based on such assumption whenever information becomes available as to the actual benefits of the noncomplying plan.
   3. (3) If the noncomplying plan reduces its benefits so that the employee, subscriber, or member receives less in benefits than he or she would have received had the coordination of benefits occurred in compliance with the provisions of this subchapter, then the complying plan shall advance to or on behalf of the employee, subscriber, or member an amount equal to such difference. However, in no event shall the complying plan advance more than the complying plan would have paid had it been the primary plan less any amount it previously paid. In consideration of such advance, the complying plan shall be subrogated to all rights of the employee, subscriber, or member against the noncomplying plan, in accordance with applicable subrogation provisions. Such advance by the complying plan shall also be without prejudice to any claim it may have against the noncomplying plan in the absence of such subrogation.
3. (c) With respect to allowable expenses, a term such as "usual and customary," "usual and prevailing," or "reasonable and customary" may be substituted for the term "necessary, reasonable and customary." Terms such as "medical care" or "dental care" may be substituted for "health care" to describe the coverages to which the COB provisions apply.
4. (d) The COB concept clearly differs from that of subrogation. Provisions for one may be included in health care benefits contracts without compelling the inclusion or exclusion of the other.

Source Note:The provisions of this §3.3510 adopted to be effective June 3, 1994, 19 TexReg 3938.