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90_SB0505
215 ILCS 5/155.31 new
215 ILCS 5/155.32 new
215 ILCS 5/155.33 new
215 ILCS 5/155.34 new
215 ILCS 5/370n from Ch. 73, par. 982n
215 ILCS 5/370n.1 new
215 ILCS 5/511.114 new
215 ILCS 125/5-3 from Ch. 111 1/2, par. 1411.2
215 ILCS 130/4003 from Ch. 73, par. 1504-3
215 ILCS 165/10 from Ch. 32, par. 604
Amends the Illinois Insurance Code, Health Maintenance
Organization Act, Limited Health Service Organization Act,
and Voluntary Health Services Plans Act. Provides that if a
covered individual is a student attending a college or
university at a location outside of the service area of a
health care plan, the student may obtain services from a
provider at the college location at no greater cost than the
service would cost from a designated provider. Provides that
managed care plans under those Acts must contain a
point-of-service option allowing covered individuals the
option of obtaining service from providers not included in
the health care plan panel of providers. Establishes
requirements for disclosure of terms and conditions of health
care plans. Provides that health care plans operated under
those Acts must cover emergency medical care provided by
non-designated providers when designated providers are not
reasonably available or accessible. Establishes utilization
review appeal requirements for patients and providers.
Requires private review agents to provide for dispute
resolution. Prohibits an adverse decision with respect to
treatment unless the claim has been evaluated by a physician
practicing in the same field as the provider whose decision
is the subject of the review. Requires the Department of
Insurance to issue rules regulating grievance procedures.
LRB9002228JSgc
LRB9002228JSgc
1 AN ACT concerning coverage for health care services,
2 amending named Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Insurance Code is amended by
6 changing Section 370n and adding Sections 155.31, 155.32,
7 155.33, 155.34, 370n.1, and 511.114 as follows:
8 (215 ILCS 5/155.31 new)
9 Sec. 155.31. Access to service; college attendance.
10 (a) A company that is subject to this Article and that
11 provides coverage for health care services under individual
12 or group policies of accident and health insurance or
13 administers, arranges, pays for, or provides health care
14 services as a health care plan, as defined in the Health
15 Maintenance Organization Act, must comply with this Section.
16 (b) If a covered dependent is a student attending a
17 public or private junior college, college, or university
18 authorized to award an associate, baccalaureate, or higher
19 degree at a location outside of the service area of the
20 company and no provider designated by the company is
21 available, the covered dependent may obtain the service from
22 any provider, and the company shall pay the provider of the
23 service or reimburse the covered dependent for the service at
24 the rate that would have been paid had the service been
25 provided by a designated provider. The recipient of the
26 service is responsible for amounts by which the charges for
27 the service exceed the amount that would have been paid to a
28 designated provider. For purposes of this Section "provider"
29 means a physician, dentist, podiatrist, clinic, hospital,
30 federally qualified health center, rural health clinic,
31 ambulatory surgical treatment center, pharmacy, laboratory,
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1 physician organization, preferred provider organization,
2 independent practice association, or other appropriately
3 licensed provider of health care services or supplies. This
4 Section applies to all coverage described in subsection (a)
5 that is amended, delivered, issued, or renewed after the
6 effective date of this amendatory Act of 1997.
7 (215 ILCS 5/155.32 new)
8 Sec. 155.32. Point-of-service option.
9 (a) A company that is subject to this Article and that
10 provides coverage for health care services under individual
11 or group policies of accident and health insurance or
12 administers, arranges, pays for, or provides health care
13 services as a health care plan, as defined in the Health
14 Maintenance Organization Act, must comply with this Section.
15 (b) A company subject to this Section must offer a
16 point-of-service option to the individuals covered under the
17 health care plan at the individual's option to accept or
18 reject. This Section applies to all health care plans
19 amended, delivered, issued, or renewed after the effective
20 date of this amendatory Act of 1997.
21 (c) An individual that accepts the additional coverage
22 under a point-of-service option is responsible for payment of
23 the additional premium, if any, required for the
24 point-of-service option.
25 (d) In this Section, "point-of-service option" means a
26 delivery system that permits a covered individual to receive
27 services outside the provider panel of the company under
28 terms and conditions of the contract extending the coverage,
29 and "provider panel" means those providers with which a
30 company contracts to provide services to the covered
31 individuals under the health care plan.
32 (215 ILCS 5/155.33 new)
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1 Sec. 155.33. Managed care plans; disclosure.
2 (a) A company that is subject to this Article and that
3 provides coverage for health care services under individual
4 or group policies of accident and health insurance or
5 administers, arranges, pays for, or provides health care
6 services as a health care plan, as defined in the Health
7 Maintenance Organization Act, must comply with this Section.
8 (b) Prospective covered individuals shall be provided
9 information as to the terms and conditions of the coverage
10 that they will receive from the health care plan so that they
11 can make informed decisions about accepting the coverage.
12 When the coverage is described orally, easily understood,
13 truthful, and objective terms shall be used. All written
14 descriptions shall be in a readable and understandable
15 format, consistent with standards developed for supplemental
16 insurance coverage under Title XVII of the Social Security
17 Act. This format shall be standardized so that potential
18 covered individuals can compare the attributes of the various
19 health care plans. Specific items that must be included in
20 any oral or written description of the managed care entity
21 are:
22 (1) covered provisions, benefits, and any
23 exclusions by category of service, provider, or physician
24 and, if applicable, by specific service;
25 (2) any and all prior authorization or other review
26 requirements, including preauthorization review,
27 concurrent review, post-service review, post-payment
28 review, and any procedures that may lead the member to be
29 denied coverage or not be provided a particular service;
30 (3) financial arrangements or contractual
31 provisions with providers, utilization review companies,
32 and third party administrators that would limit the
33 services offered, restrict referral or treatment options,
34 or negatively affect any provider's fiduciary
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1 responsibility to the provider's patients, including but
2 not limited to financial incentives not to provide
3 medical or other services;
4 (4) explanation of how coverage limitations affect
5 covered individuals, including information on financial
6 responsibility for cost-sharing requirements, for payment
7 of noncovered services, and for payment of out-of-plan
8 services;
9 (5) loss ratios of the health care plan; and
10 (6) satisfaction statistics, including but not
11 limited to, percent of re-enrollment and reasons for
12 leaving the coverage.
13 (215 ILCS 5/155.34 new)
14 Sec. 155.34. Access to emergency health care services.
15 (a) A company that is subject to this Article and that
16 provides coverage for health care services under individual
17 or group policies of accident and health insurance or
18 administers, arranges, pays for, or provides health care
19 services as a health care plan, as defined in the Health
20 Maintenance Organization Act, must comply with this Section.
21 (b) If at the time of an emergency providers designated
22 by the company as providers the utilization of which will
23 result in a lower cost to the covered individual are not
24 reasonably available or accessible for provision of a covered
25 service, the covered individual may obtain the service from
26 any provider at no greater cost to the covered individual.
27 The provisions of this Section apply to all health care plan
28 coverage amended, delivered, issued, or renewed after the
29 effective date of this amendatory Act of 1997.
30 (c) As used in this Section, "emergency" means a medical
31 condition of recent onset and severity that would lead a
32 prudent lay person, possessing an average knowledge of
33 medicine and health, to believe that urgent or unscheduled
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1 medical care is required.
2 (215 ILCS 5/370n) (from Ch. 73, par. 982n)
3 Sec. 370n. Utilization review requirements.: Any
4 preferred provider organization providing hospital, medical
5 or dental services must include a program of utilization
6 review that complies with the requirements of Section 370n.1.
7 This Section applies to insurers and administrators.
8 (Source: P.A. 84-1431.)
9 (215 ILCS 5/370n.1 new)
10 Sec. 370n.1. Utilization review; appeals.
11 (a) This Section applies to all providers, preferred
12 providers, and third party payors.
13 (b) As used in this Section the following terms have the
14 meanings given in this subsection.
15 (1) "Peer review committee" means a group of at
16 least 4 licensed physicians who practice in the same
17 field of medicine as the physician whose decision is
18 subject to review and who are retained to review the
19 documentation related to a disputed health benefit claim.
20 (2) "Private review agent" means a person or entity
21 that performs utilization review in this State or in
22 regard to a patient, provider, or third party payor in
23 this State.
24 (3) "Third party payor" means a person or entity
25 that is licensed to and does provide or administer health
26 care services or hospital or medical benefits to Illinois
27 residents including, but not limited to, insurance
28 companies, health maintenance organizations, and
29 administrators subject to Article XXX 1/4.
30 (4) "Utilization review" means a system for
31 evaluating the allocation of health care services
32 provided or proposed to be provided to a patient for the
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1 purpose determining whether those services or the costs
2 associated with providing those services shall be covered
3 or paid by a third party payor or other entity.
4 (c) A private review agent may not make a final
5 determination or recommendation that is adverse to a patient
6 or to a provider concerning the medical necessity,
7 appropriateness, or charge for any care without an evaluation
8 and concurrence by a practicing licensed physician.
9 (d) A private review agent must make a method of review
10 for disputed claims available to the provider and patient.
11 If a disagreement persists following review, a licensed
12 physician agreed to by the parties shall perform an
13 independent examination. The third party payor shall pay the
14 examination fee. If the parties cannot agree upon an
15 examiner, the provider and the third party payor may each
16 have its own independent examination made. The results of
17 the independent examinations and prior clinical records shall
18 be presented to the peer review committee for adjudication.
19 The documentation presented to the peer review committee must
20 be presented in a manner that maintains the anonymity of the
21 physician and patient. A member of the peer review committee
22 must take a leave of absence when any known conflict of
23 interest exists.
24 (e) The Director shall issue rules consistent with this
25 Section for grievance procedures established under this
26 Section. The rules shall establish standards for:
27 (1) the process for initiating a grievance;
28 (2) notice to enrollees and providers their right
29 to file grievances and the procedures to initiate a
30 grievance;
31 (3) reviews of grievances; and
32 (4) notification to enrollees and providers of
33 resolution of a grievance, including appropriate time
34 frames.
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1 (215 ILCS 5/511.114 new)
2 Sec. 511.114. Utilization review. Administrators shall
3 comply with the utilization review requirements of Section
4 370n.1.
5 Section 10. The Health Maintenance Organization Act is
6 amended by changing Section 5-3 as follows:
7 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
8 Sec. 5-3. Insurance Code provisions.
9 (a) Health Maintenance Organizations shall be subject to
10 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
11 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
12 154.6, 154.7, 154.8, 155.04, 155.31, 155.32, 155.33, 155.34,
13 355.2, 356m, 367i, 401, 401.1, 402, 403, 403A, 408, 408.2,
14 and 412, paragraph (c) of subsection (2) of Section 367, and
15 Articles VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, and XXVI of
16 the Illinois Insurance Code.
17 (b) For purposes of the Illinois Insurance Code, except
18 for Articles XIII and XIII 1/2, Health Maintenance
19 Organizations in the following categories are deemed to be
20 "domestic companies":
21 (1) a corporation authorized under the Medical
22 Service Plan Act, the Dental Service Plan Act, the Vision
23 Service Plan Act, the Pharmaceutical Service Plan Act,
24 the Voluntary Health Services Plan Act, or the Nonprofit
25 Health Care Service Plan Act;
26 (2) a corporation organized under the laws of this
27 State; or
28 (3) a corporation organized under the laws of
29 another state, 30% or more of the enrollees of which are
30 residents of this State, except a corporation subject to
31 substantially the same requirements in its state of
32 organization as is a "domestic company" under Article
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1 VIII 1/2 of the Illinois Insurance Code.
2 (c) In considering the merger, consolidation, or other
3 acquisition of control of a Health Maintenance Organization
4 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
5 (1) the Director shall give primary consideration
6 to the continuation of benefits to enrollees and the
7 financial conditions of the acquired Health Maintenance
8 Organization after the merger, consolidation, or other
9 acquisition of control takes effect;
10 (2)(i) the criteria specified in subsection (1)(b)
11 of Section 131.8 of the Illinois Insurance Code shall not
12 apply and (ii) the Director, in making his determination
13 with respect to the merger, consolidation, or other
14 acquisition of control, need not take into account the
15 effect on competition of the merger, consolidation, or
16 other acquisition of control;
17 (3) the Director shall have the power to require
18 the following information:
19 (A) certification by an independent actuary of
20 the adequacy of the reserves of the Health
21 Maintenance Organization sought to be acquired;
22 (B) pro forma financial statements reflecting
23 the combined balance sheets of the acquiring company
24 and the Health Maintenance Organization sought to be
25 acquired as of the end of the preceding year and as
26 of a date 90 days prior to the acquisition, as well
27 as pro forma financial statements reflecting
28 projected combined operation for a period of 2
29 years;
30 (C) a pro forma business plan detailing an
31 acquiring party's plans with respect to the
32 operation of the Health Maintenance Organization
33 sought to be acquired for a period of not less than
34 3 years; and
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1 (D) such other information as the Director
2 shall require.
3 (d) The provisions of Article VIII 1/2 of the Illinois
4 Insurance Code and this Section 5-3 shall apply to the sale
5 by any health maintenance organization of greater than 10% of
6 its enrollee population (including without limitation the
7 health maintenance organization's right, title, and interest
8 in and to its health care certificates).
9 (e) In considering any management contract or service
10 agreement subject to Section 141.1 of the Illinois Insurance
11 Code, the Director (i) shall, in addition to the criteria
12 specified in Section 141.2 of the Illinois Insurance Code,
13 take into account the effect of the management contract or
14 service agreement on the continuation of benefits to
15 enrollees and the financial condition of the health
16 maintenance organization to be managed or serviced, and (ii)
17 need not take into account the effect of the management
18 contract or service agreement on competition.
19 (f) Except for small employer groups as defined in the
20 Small Employer Rating, Renewability and Portability Health
21 Insurance Act and except for medicare supplement policies as
22 defined in Section 363 of the Illinois Insurance Code, a
23 Health Maintenance Organization may by contract agree with a
24 group or other enrollment unit to effect refunds or charge
25 additional premiums under the following terms and conditions:
26 (i) the amount of, and other terms and conditions
27 with respect to, the refund or additional premium are set
28 forth in the group or enrollment unit contract agreed in
29 advance of the period for which a refund is to be paid or
30 additional premium is to be charged (which period shall
31 not be less than one year); and
32 (ii) the amount of the refund or additional premium
33 shall not exceed 20% of the Health Maintenance
34 Organization's profitable or unprofitable experience with
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1 respect to the group or other enrollment unit for the
2 period (and, for purposes of a refund or additional
3 premium, the profitable or unprofitable experience shall
4 be calculated taking into account a pro rata share of the
5 Health Maintenance Organization's administrative and
6 marketing expenses, but shall not include any refund to
7 be made or additional premium to be paid pursuant to this
8 subsection (f)). The Health Maintenance Organization and
9 the group or enrollment unit may agree that the
10 profitable or unprofitable experience may be calculated
11 taking into account the refund period and the immediately
12 preceding 2 plan years.
13 The Health Maintenance Organization shall include a
14 statement in the evidence of coverage issued to each enrollee
15 describing the possibility of a refund or additional premium,
16 and upon request of any group or enrollment unit, provide to
17 the group or enrollment unit a description of the method used
18 to calculate (1) the Health Maintenance Organization's
19 profitable experience with respect to the group or enrollment
20 unit and the resulting refund to the group or enrollment unit
21 or (2) the Health Maintenance Organization's unprofitable
22 experience with respect to the group or enrollment unit and
23 the resulting additional premium to be paid by the group or
24 enrollment unit.
25 In no event shall the Illinois Health Maintenance
26 Organization Guaranty Association be liable to pay any
27 contractual obligation of an insolvent organization to pay
28 any refund authorized under this Section.
29 (Source: P.A. 88-313; 89-90, eff. 6-30-95.)
30 Section 15. The Limited Health Service Organization Act
31 is amended by changing Section 4003 as follows:
32 (215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
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1 Sec. 4003. Illinois Insurance Code provisions. Limited
2 health service organizations shall be subject to the
3 provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
4 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
5 154.6, 154.7, 154.8, 155.04, 155.31, 155.32, 155.33, 155.34,
6 355.2, 401, 401.1, 402, 403, 403A, 408, 408.2, and 412, and
7 Articles VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, and XXVI of
8 the Illinois Insurance Code. For purposes of the Illinois
9 Insurance Code, except for Articles XIII and XIII 1/2,
10 limited health service organizations in the following
11 categories are deemed to be domestic companies:
12 (1) a corporation under the laws of this State; or
13 (2) a corporation organized under the laws of
14 another state, 30% of more of the enrollees of which are
15 residents of this State, except a corporation subject to
16 substantially the same requirements in its state of
17 organization as is a domestic company under Article VIII
18 1/2 of the Illinois Insurance Code.
19 (Source: P.A. 86-600; 87-587; 87-1090.)
20 Section 20. The Voluntary Health Services Plans Act is
21 amended by changing Section 10 as follows:
22 (215 ILCS 165/10) (from Ch. 32, par. 604)
23 Sec. 10. Application of Insurance Code provisions.
24 Health services plan corporations and all persons interested
25 therein or dealing therewith shall be subject to the
26 provisions of Article XII 1/2 and Sections 3.1, 133, 140,
27 143, 143c, 149, 155.31, 155.32, 155.33, 155.34, 354, 355.2,
28 356r, 367.2, 401, 401.1, 402, 403, 403A, 408, 408.2, and 412,
29 and paragraphs (7) and (15) of Section 367 of the Illinois
30 Insurance Code.
31 (Source: P.A. 89-514, eff. 7-17-96.)