093_HB2358

 
                                     LRB093 06064 JLS 06167 b

 1        AN ACT concerning insurance.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The Illinois Insurance  Code  is  amended  by
 5    changing Section 368a as follows:

 6        (215 ILCS 5/368a)
 7        Sec. 368a.  Timely payment for health care services.
 8        (a)  This Section applies to insurers, health maintenance
 9    organizations,   managed   care  plans,  health  care  plans,
10    preferred provider organizations, third party administrators,
11    independent  practice  associations,  and  physician-hospital
12    organizations (hereinafter  referred  to  as  "payors")  that
13    provide periodic payments, which are payments not requiring a
14    claim,   bill,   capitation  encounter  data,  or  capitation
15    reconciliation  reports,  such  as   prospective   capitation
16    payments,  to  health  care  professionals  and  health  care
17    facilities  to  provide  medical  or health care services for
18    insureds or enrollees.
19             (1)  A  payor  shall  make  periodic   payments   in
20        accordance  with  item  (3).   Failure  to  make periodic
21        payments within the period of time specified in item  (3)
22        shall entitle the health care professional or health care
23        facility  to interest at the rate of 9% per year from the
24        date payment was required to be made to the date  of  the
25        late  payment,  provided  that interest amounting to less
26        than $1 need not be paid.  Any required interest payments
27        shall be made within 30 days after the payment.
28             (2)  When a payor requires  selection  of  a  health
29        care  professional or health care facility, the selection
30        shall be completed by the insured or  enrollee  no  later
31        than  30  days after enrollment.  The payor shall provide
 
                            -2-      LRB093 06064 JLS 06167 b
 1        written notice of this requirement to  all  insureds  and
 2        enrollees.  Nothing in this Section shall be construed to
 3        require a payor to select a health care  professional  or
 4        health care facility for an insured or enrollee.
 5             (3)  A   payor   shall   provide   the  health  care
 6        professional or health care facility with notice  of  the
 7        selection  as  a  health care professional or health care
 8        facility by an insured or enrollee and the effective date
 9        of the  selection  within  60  calendar  days  after  the
10        selection.  No later than the 60th day following the date
11        an  insured  or  enrollee  has  selected  a  health  care
12        professional  or  health  care  facility or the date that
13        selection becomes effective, whichever is  later,  or  in
14        cases  of  retrospective  enrollment  only, 30 days after
15        notice by an employer to the payor of  the  selection,  a
16        payor  shall  begin  periodic  payment  of  the  required
17        amounts  to  the  insured's  or  enrollee's  health  care
18        professional  or health care facility, or the designee of
19        either, calculated from the date of selection or the date
20        the selection becomes effective, whichever is later.  All
21        subsequent  payments  shall  be made in accordance with a
22        monthly periodic cycle.
23        (b)  Notwithstanding any other provision of this Section,
24    independent  practice  associations  and   physician-hospital
25    organizations  shall  make  periodic  payment of the required
26    amounts in accordance with a monthly periodic schedule  after
27    an   insured   or   enrollee   has  selected  a  health  care
28    professional or health care facility or after that  selection
29    becomes effective, whichever is later.
30        Notwithstanding  any  other  provision  of  this Section,
31    independent  practice  associations  and   physician-hospital
32    organizations  shall  make  all  other  payments  for  health
33    services  within  30 days after receipt of due proof of loss.
34    Independent  practice  associations  and   physician-hospital
 
                            -3-      LRB093 06064 JLS 06167 b
 1    organizations  shall  notify the insured, insured's assignee,
 2    health care professional, or  health  care  facility  of  any
 3    failure  to  provide sufficient documentation for a due proof
 4    of loss within 30 days after receipt of the claim for  health
 5    services.
 6        Failure  to  pay  within  the  required time period shall
 7    entitle the payee to interest at the rate of 9% per year from
 8    the date the payment is due to the date of the late  payment,
 9    provided  that interest amounting to less that $1 need not be
10    paid.  Any required interest payments shall be made within 30
11    days after the payment.
12        (c)  All  insurers,  health  maintenance   organizations,
13    managed  care  plans,  health  care plans, preferred provider
14    organizations, and third party  administrators  shall  ensure
15    that  all  claims  and  indemnities  concerning  health  care
16    services  other  than  for any periodic payment shall be paid
17    within 30 days after receipt of due  written  proof  of  such
18    loss.   An   insured,   insured's   assignee,   health   care
19    professional,  or  health  care facility shall be notified of
20    any known failure to provide sufficient documentation  for  a
21    due  proof  of loss within 30 days after receipt of the claim
22    for health care services. Failure to pay within  such  period
23    shall  entitle  the  payee  to interest at the rate of 9% per
24    year from the 30th day after receipt of such proof of loss to
25    the date of late payment, provided that interest amounting to
26    less than one dollar need not be paid.  Any required interest
27    payments shall be made within 30 days after the payment.
28        (d)  The Department shall enforce the provisions of  this
29    Section  pursuant  to the enforcement powers granted to it by
30    law.
31        (e)  The Department is hereby granted specific  authority
32    to  issue  a  cease  and  desist  order,  fine,  or otherwise
33    penalize    independent     practice     associations     and
34    physician-hospital  organizations  that violate this Section.
 
                            -4-      LRB093 06064 JLS 06167 b
 1    The  Department  shall  adopt  reasonable  rules  to  enforce
 2    compliance  with  this  Section   by   independent   practice
 3    associations and physician-hospital organizations.
 4        (f)  Beginning  6  months  after  the  date  specified in
 5    Section 262 of the federal Health Insurance  Portability  and
 6    Accountability  Act  of  1996,  pursuant to which third-party
 7    payors  are  required  to   comply   with   a   standard   or
 8    implementation  specification  for the electronic exchange of
 9    health information as adopted or established  by  the  United
10    States  Secretary  of  Health  and Human Services pursuant to
11    that Act, the provisions of this Section apply only to claims
12    submitted electronically to a third-party payor.
13        A provider and a  third-party  payor  may  enter  into  a
14    contractual  arrangement  under  which  the third-party payor
15    agrees   to   process   claims   that   are   not   submitted
16    electronically  because  of  the  financial   hardship   that
17    electronic submission of claims would create for the provider
18    or because of any other extenuating circumstance.
19        The  provisions  of  this  subsection  do  not  apply  to
20    long-term care facilities.
21    (Source: P.A.  91-605,  eff.  12-14-99;  91-788, eff. 6-9-00;
22    92-745, eff. 1-1-03.)