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Division 020 - Health Insurance

Use of Coordination of Benefit

Provisions in Group and Blanket

Health Insurance

Information Rights; Coordination Procedures; Time Limit; Small Claim Waivers

          836-020-0740 (1) A group or blanket health insurance policy which provides for coordination of benefits shall contain a provision as follows:

"RIGHT TO RECEIVE AND RELEASE NECESSARY INFORMATION: Certain facts are needed to apply these coordination of benefits provisions. The Company has the right to decide which facts it needs. It may get needed facts from or give them to any other organization or person. The Company need not tell, or get the consent of, any person to do this. Each person claiming benefits under This Plan must give the Company any facts it needs to pay the claim."

          (2) Insurers shall use the following claims administration procedures to expedite claim payments where coordination of benefits is involved:
          (a) There should be continuing education of claim personnel, stressing accurate and prompt completion of the Health Insurance Council's Duplicate Coverage Inquiry Form (DUP-1) by the inquiring carrier and the responding carrier. This education effort should also be encouraged through local claim associations;
          (b) Claim personnel should be encouraged to make every effort, including use of the telephone, to speed up exchange of coordination of benefits information;
          (c) Insurers should encourage building a local data file with at least basic information on group health plans for major employers in the local area.
          (3) ORS 743.552 specifies a time limit of 14 days for the insurer to be allowed to delay payment of a claim by reason of the application of a coordination of benefits provision. When a claim involves application of a coordination of benefits provision, the 14-day period is applied as follows:
          (a) When payment of a claim is necessarily delayed solely for the reason of application of a coordination of benefits provision:
          (A) The 14-day period is allowed only if the insurer notifies the claimant in writing of the delay and the reason therefor, not later than the 30th day after receipt of notification of the claim;
          (B) The 14-day period begins on the 30th day after receipt of notification of the claim; and
          (C) The insurer shall pay the claim not later than the end of the 14-day period;
          (b) When payment of a claim is necessarily delayed for reasons other than the application of a coordination of benefits provision and the insurer takes advantage of the additional period of time allowed by OAR 836-080-0235 for advising a claimant of the acceptance or denial of a claim, the insurer:
          (A) Shall document in its claims log relating to the insured the fact that the issue of application of the coordination of benefits provision was resolved not later than the 44th day after the initial notice of claim payment delay was given, and shall make the documentation in a manner that enables the Director easily to review and verify actions taken by the insurer; and
          (B) Shall conduct the investigation of other Plan coverage concurrently, so as to create no further delay in the ultimate payment of benefits.
          (4) If an insurer is required by the time limit to make payment as the primary Plan because it then has insufficient information to make it a secondary Plan, it may exercise its rights as set forth in the policy's "Right of Recovery" provision to recover any excess payments made thereby.
          (5) Insurers are urged to waive the investigation of possible other Plan coverage on claims less than $50, but if additional liability is incurred which raises the claim above $50, the entire liability may be included in the coordination of benefits computation.

Stat. Auth.: ORS 731.244 and 743.552
Stats. Implemented: ORS 743.549 and 743.552

Division 80

Trade Practices - General

(ORS 746.005 to 746.270)

Required Claim Communication Practices
          836-080-0225 An insurer shall:
          (1) Not later than the 30th day after receipt of notification of claim, acknowledge the notification or pay the claim. An appropriate and dated notation of the acknowledgment shall be included in the insurer's claim file.
          (2) Not later than the 21st day after receipt of an inquiry from the Director about a claim, furnish the Director with an adequate response.
          (3) Make an appropriate reply, not later than the 30th day after receipt, to all other pertinent communications about a claim from a claimant that reasonably indicate a response is expected.
          (4) Upon receiving notification of claim from a first party claimant, promptly provide necessary claim forms, instructions and assistance that is reasonable in the light of the information possessed by the insurer, so that the claimant can comply with the policy conditions and the insurer's reasonable requirements. Compliance with this section not later than the 30th day after receipt of notification of a claim constitutes compliance with section (1) of this rule.

Stat. Auth.: ORS 731.244
Stats. Implemented: ORS 746.230

Standard for Prompt Claim Investigation
          836-080-0230 An insurer shall complete its claim investigation not later than the 45th day after its receipt of notification of claim, unless the investigation cannot reasonably be completed within that time.

Stat. Auth.: ORS 731.244
Stats. Implemented: ORS 746.230

Standards for Prompt and Fair Settlements -- Generally
          836-080-0235 (1) An insurer shall, not later than the 30th day after its receipt of properly executed proofs of loss from a first party claimant, advise the claimant of the acceptance or denial of the claim. An insurer shall not deny a claim on the grounds of a specific policy provision, condition or exclusion unless the denial includes reference to the provision, condition or exclusion. A claim denial must be in writing, with either a copy or the capability of reproducing its text included in the insurer's claim file.
          (2) If a claim is made on a health insurance policy and the claim involves a coordination of benefits issue to which OAR 836-020-0700 to 836-020-0765 apply, the time allowed in OAR 836-020-0740 to an insurer for applying a coordination of benefit provision shall added to the time period provided in section (1) of this rule.
          (3) If a claim is denied for reasons other than those described in section (1) of this rule and is made by any other means than in writing, an appropriate notation shall be made in the insurer's claim file.
          (4) If an insurer needs more time to determine whether the claim of a first party claimant should be accepted or denied, it shall so notify the claimant not later than the 30th day after receipt of the proofs of loss, giving the reason more time is needed. Forty-five days from the date of such initial notification and every 45 days thereafter while the investigation remains incomplete, the insurer shall notify the claimant in writing of the reason additional time is needed for investigation.
          (5) An insurer shall not fail to settle claims of first party claimants on the grounds that responsibility for payment should be assumed by others, except as may be provided otherwise by the provisions of the insurance policy issued by the insurer.
          (6) If an insurer continues negotiations for settlement of a claim directly with a claimant who is neither an attorney nor represented by an attorney until the claimant's rights may be affected by a statute of limitations or policy time limit, the insurer shall give the claimant written notice that the time limit may be expiring and may affect the claimant's rights. The notice shall be given to first party claimants not less than 30 days before, and to third party claimants not less than 60 days before, the date on which the insurer believes the time limit may expire.
          (7) An insurer shall not make a statement that indicates that the rights of a third party claimant may be impaired if a form or release is not completed within a given period of time, unless the statement is given for the purpose of notifying the third party claimant of the provision of a relevant statute of limitations.

Stat. Auth.: ORS 731.230
Stats. Implemented: ORS 746.230(1) & 746.240

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This document was last revised on December 21, 2000.