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91_HB0161
LRB9100274JSgc
1 AN ACT concerning utilization review of health care
2 services.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 1. Short Title. This Act may be cited as the
6 Patient Protection in Utilization Review Act.
7 Section 5. Legislative intent. The General Assembly
8 finds and declares that:
9 (a) Utilization review by insurers and other third party
10 payers of the medical necessity and costs of health care
11 services is a widespread practice, affecting the delivery of
12 health care services throughout the State of Illinois. The
13 procedures and criteria used to conduct private utilization
14 review directly affect the ability of patients to access
15 health care services, the rights of patients who are
16 receiving needed health care services, and the quality of
17 health care services provided in the State. Patients and
18 providers have a right to know the procedures and criteria
19 used in utilization review.
20 (b) Private utilization review is conducted largely by
21 and for persons or entities licensed to engage in the
22 business of insurance, and it is proper for the State of
23 Illinois to oversee that activity as a part of the State's
24 regulation and supervision of the insurance industry.
25 Section 10. Purposes. The purposes of this Act are to:
26 (a) promote the delivery of quality health care services
27 in a cost effective manner;
28 (b) protect the rights of patients, businesses, and
29 providers of health care services by making information
30 about the practices of private review agents available;
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1 (c) ensure that private review agents maintain the
2 confidentiality of patient medical information in accordance
3 with applicable State and federal law; and
4 (d) improve coordination among patients, health care
5 providers, and third party payors.
6 Section 15. Definitions. As used in this Act:
7 "Certificate" means a certificate of registration granted
8 by the Director to a private review agent.
9 "Department" means the Department of Insurance.
10 "Director" means the Director of Insurance.
11 "Private review agent" means (1) any person or entity
12 performing utilization review in the State of Illinois or
13 (2) any person or entity performing utilization review in
14 the State of Illinois that is either affiliated with, under
15 contract with, or acting on behalf of:
16 (i) an Illinois business entity; or
17 (ii) a third party that is licensed to and does
18 provide or administer hospital or medical benefits to
19 citizens of this State including, but not limited to,
20 any insurance company authorized to transact health
21 insurance business in this State, any entity that is
22 registered under Article XX 1/2 of the Illinois
23 Insurance Code or licensed under Article XXXI 1/4 of the
24 Illinois Insurance Code, and any entity organized under
25 the Voluntary Health Services Plans Act or the Limited
26 Health Service Organization Act.
27 "Provider" means any licensed physician, dentist,
28 podiatrist, health facility, or other person or institution
29 that is duly licensed or otherwise authorized to deliver or
30 furnish health services.
31 "Utilization review" means a system for reviewing the
32 appropriate or effective allocation of health care services
33 given or proposed to be given to a patient or a group of
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1 patients for determining whether those services should be
2 covered or paid for by an insurer, health benefits plan, or
3 other entity. Utilization review includes but is not limited
4 to preadmission review, second surgical opinions, medical
5 necessity review, length-of-stay review, review relating to
6 the appropriateness of the site at which services were or
7 are to be delivered, and review of discharge planning.
8 "Utilization review plan" means a written description of
9 the procedures and other elements required by this Act under
10 which utilization review will be performed by a private
11 review agent.
12 Section 20. Certificate required.
13 (a) Except as specified in subsection (b) of this
14 Section, after January 1, 2000, no private review agent who
15 approves or denies payment, who recommends approval or
16 denial of payment, or whose review results in the approval
17 or denial of payment for hospital or medical services on a
18 case by case basis may conduct utilization review in this
19 State unless the Director has issued a certificate to the
20 private review agent.
21 (b) A certificate is not required for private review
22 agents:
23 (1) who are employees of or affiliated with a
24 hospital or other health care facility licensed in the
25 State of Illinois and who are conducting utilization
26 review for the patients of that hospital or health care
27 facility either for purposes of:
28 (A) the hospital or health care facility's
29 in-house utilization review activities,
30 (B) conducting review on a delegated basis for
31 an insurer, plan, or other entity provided that the
32 insurer, plan, or other entity has obtained a
33 certificate, or
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1 (C) compliance with the conditions of
2 participation for Medicare and Medicaid (Title XVIII
3 and Title XIX of the Social Security Act); or
4 (2) who operate solely under contract with the
5 State or Federal Government for utilization review of
6 patients eligible for services under Title XVIII or
7 Title XIX of the Social Security Act; or
8 (3) who are employees of or affiliated with a
9 health maintenance organization licensed in the State of
10 Illinois and who are conducting utilization review with
11 respect to the enrollees of that health maintenance
12 organization or who are conducting utilization review
13 with respect to enrollees that use an organization
14 operating in the State of Illinois that is an affiliate,
15 as defined in Section 131.1 of the Illinois Insurance
16 Code, of the health maintenance organization, provided
17 that the utilization review is substantially the same as
18 the utilization review performed for enrollees of the
19 health maintenance organization, including but not
20 limited to the clinical review criteria used, the
21 personnel performing the reviews, the quality assurance
22 standards used, the appeals processes, and the
23 confidentiality protections. The Department may request
24 information to verify that the conditions for exemption
25 under this paragraph are being satisfied.
26 Section 25. Procedure for certification.
27 (a) An applicant for a certificate shall:
28 (1) submit an application to the Department; and
29 (2) pay to the Department the application fee
30 established by the Director.
31 (b) The application shall:
32 (1) be on a form prescribed by the Department and
33 accompanied by any supporting documentation required by
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1 the Department; and
2 (2) be signed by the applicant.
3 (c) The private review agent shall submit with the
4 application the following information:
5 (1) The name and address of the applicant and the
6 name of the chief executive officer or person
7 responsible for managing the affairs of the private
8 review agent. When the private review agent is a
9 corporation, the date of incorporation and the names of
10 the officers and directors of the corporation shall also
11 be provided.
12 (2) Written policies and procedures to ensure that
13 the private review agent maintains a written utilization
14 review plan that includes, for each service that is to
15 be reviewed by the private review agent the specific
16 review standards, criteria, and procedures to be used in
17 evaluating the medical necessity, appropriateness, or
18 effectiveness of proposed or delivered health care
19 services. However, the specific review standards,
20 criteria, and procedures need not be submitted as part of
21 the application.
22 (3) The specific written policies and procedures
23 for implementation of the following elements of the
24 utilization review plan:
25 (A) a provision that no final determination or
26 recommendation adverse to a patient or to any
27 affected provider concerning the medical necessity
28 or appropriateness for any form of hospital,
29 medical, or other health care services shall be
30 made by the private review agent without prior
31 evaluation and concurrence by a provider who is
32 licensed to practice medicine in the same or similar
33 clinical specialty as the provider under review,
34 except for mental health services other than those
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1 provided by a psychiatrist, this determination or
2 recommendation shall be made by a provider who has
3 the same or similar professional education,
4 training, and qualifications as the mental health
5 provider under review;
6 (B) a description of the process for providing
7 timely written notification and explanation to the
8 patient and to all providers involved in the
9 patient's care of a recommendation of or a final
10 adverse decision by the private review agent, which
11 shall include requirements that (i) written
12 notification include references to the specific
13 review criteria, standards, and procedures upon
14 which any denial or reduction in services is based
15 and (ii) the written review criteria, standards,
16 and procedures relevant to the notification of
17 denial or reduction in services shall be provided
18 to the patient and all providers within one
19 business day of a request for the information;
20 (C) the manner in which patients or providers
21 may seek reconsideration, appeal, or expedited
22 review of adverse decisions by the private review
23 agent including a provision that (i) determinations
24 of all reviews of adverse decisions shall be made
25 in a timely fashion; (ii) when the private review
26 agent conducts review on a concurrent basis,
27 expedited review must be completed within 24 hours
28 of a request for review; (iii) all specific review
29 standards, criteria, and procedures relevant to a
30 particular case under review be disclosed in
31 writing to a provider or patient within 24 hours of
32 the receipt of a request for the information; and
33 (iv) any appeal or review of an adverse decision
34 shall include a review by a person other than the
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1 initial reviewer who recommended the adverse
2 action; and
3 (D) those circumstances, if any, under which
4 utilization review may be delegated to a hospital
5 or health care facility.
6 (4) A summary of the number, type, and
7 qualifications of the personnel either employed or under
8 contract to perform the utilization review.
9 (5) A summary of the average annual number of lives
10 for which the private review agent shall be responsible
11 for conducting utilization review.
12 (6) An annual summary of the number and types of
13 reviews undertaken; the number and types of denials or
14 recommendations for denials issued; the number, types,
15 and outcomes of appeals processed; and the number and
16 types of complaints received and the disposition of those
17 complaints.
18 (7) The written policies and procedures to ensure
19 that a representative of the private review agent is
20 reasonably accessible to patients and providers 5 days a
21 week during normal business hours in the State of
22 Illinois.
23 (8) The written policies and procedures to ensure
24 that all applicable State and federal laws to protect
25 the confidentiality of medical records or any other
26 patient information are followed including but not
27 limited to the Mental Health and Developmental
28 Disabilities Confidentiality Act and 42 CFR Part 2 -
29 Confidentiality of Alcohol and Drug Abuse Patient
30 Records.
31 (9) A copy of the materials used by the private
32 review agent to inform patients and providers of the
33 requirements of the utilization review plan affecting
34 those patients and providers.
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1 (10) A list of the insurers, plans, and other
2 entities for which the private review agent is
3 performing utilization review in this State.
4 (11) Any ownership interest by or in any insurer,
5 plan, or other entity for which the private review agent
6 performs utilization review.
7 (12) Any other information the Director may
8 require.
9 (d) The Director shall issue a certificate to an
10 applicant that has met all the requirements of this Section
11 and all applicable regulations of the Department.
12 (e) A certificate is not transferable.
13 Section 30. Private review agent certified in other
14 state.
15 (a) Upon payment of the required fee, the Director may
16 grant a certificate to conduct utilization review in
17 Illinois, without submission of an application, to a private
18 review agent that is certified, licensed, or otherwise
19 authorized to conduct utilization review under the laws of
20 another state. Certification without application shall be
21 granted only if the requirements for certification,
22 licensure, or other authorization of the other state are
23 substantially equal to those in force in this State and
24 require, at a minimum, that the private review agent
25 maintain the policies and procedures related to a
26 utilization review plan described in paragraphs (2) and (3)
27 of subsection (c) of Section 25.
28 (b) A private review agent that receives certification
29 under this Section 30 shall be subject to any laws of this
30 State or rules or regulations promulgated by the Department
31 that govern the practice of private utilization review.
32 Section 35. Expiration and renewal of certificate.
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1 (a) A certificate expires on the second anniversary of
2 its effective date unless the certificate is renewed for a 2
3 year term as provided in this Section.
4 (b) Before it expires, a certificate may be renewed for
5 an additional 2 year term if the applicant pays the renewal
6 fee set by the Director and submits to the Department:
7 (1) a renewal application on a form supplied by the
8 Department;
9 (2) satisfactory evidence of compliance with the
10 requirements of this Act for certification; and
11 (3) an update of the information required for an
12 application for certification under Section 25.
13 Before renewing a certificate the Department shall consider
14 complaints filed under Section 45 against a certificate
15 holder.
16 Section 40. Availability of information.
17 (a) On request of any provider or any patient whose care
18 is subject to review, the Department shall provide copies of
19 the application required under Section 25 of any private
20 review agent who has been issued a certificate to conduct
21 review in this State.
22 (b) Every 3 months the Department shall compile a list
23 of certified private review agents along with the renewal
24 dates of their certifications. This information shall be
25 made available upon request.
26 Section 45. Complaints and investigations.
27 (a) Any provider or any patient whose care is subject to
28 review may submit to the Director a written complaint
29 concerning the activities of a private review agent. When
30 the patient or provider receives an adverse decision
31 concerning the health care services provided to a particular
32 patient, that decision must be appealed through the policies
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1 and procedures described in paragraph (3) of subsection (c)
2 of Section 25 before a complaint may be submitted to the
3 Department.
4 (b) The Department shall establish a process for
5 reviewing written complaints. The process shall include at
6 a minimum the following:
7 (1) sending a copy of the complaint, within 10 days
8 of receipt, to the private review agent and requiring
9 that any written reply be sent to the Director within 10
10 days after receipt of the complaint by the private
11 review agent; and
12 (2) establishing a method to resolve disputes
13 between private review agents and providers and
14 patients.
15 (c) The Department may establish reporting requirements
16 to:
17 (1) evaluate the effectiveness of private review
18 agents; or
19 (2) determine if the utilization review conducted
20 by the private review agents is in compliance with the
21 provisions of this Act and any applicable regulations.
22 Section 50. Denial or revocation of certification.
23 (a) The Director shall deny a certificate to any
24 applicant if, upon review of the application, the Director
25 finds that the applicant proposing to conduct utilization
26 review does not:
27 (1) Have available the services of a sufficient
28 number of physicians, registered nurses, medical records
29 technicians, or similarly qualified medical professionals
30 supported and supervised by appropriate physicians to
31 carry out its utilization review.
32 (2) Provide assurances satisfactory to the
33 Department that the procedures and policies of the
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1 private review agent will:
2 (A) protect the confidentiality of patient
3 information in compliance with state and federal
4 law;
5 (B) ensure that the private review agent will
6 be reasonably accessible to patients and providers
7 for 5 working days a week during normal business
8 hours in this State; and
9 (C) provide for timely notification of adverse
10 decisions and timely processing of appeals or
11 reviews of adverse decisions to ensure that a
12 patient's care is not interrupted.
13 (3) Meet any applicable regulations the Department
14 may adopt under this Act relating to the qualifications
15 of private review agents or the performance of
16 utilization review.
17 (b) The Director may revoke or refuse to issue or renew
18 a certificate if the holder or applicant:
19 (1) violates any provision of this Act or its
20 rules;
21 (2) fraudulently or deceptively obtains, attempts
22 to obtain, or uses a certificate; or
23 (3) fails to substantially meet the standards and
24 qualifications set forth in this Act or any rules
25 promulgated by the Department.
26 (c) Before refusing to issue or renew or revoking a
27 certificate under this Section, the Director shall provide
28 the applicant or certificate holder with written notice of
29 the reasons for the refusal to issue or renew or revocation,
30 reasonable time to supply additional information
31 demonstrating compliance with the requirements of this Act,
32 and the opportunity to request a hearing. If an applicant or
33 certificate holder requests a hearing, the Director shall
34 send a hearing notice by certified mail, return receipt
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1 requested, and conduct a hearing in accordance with the
2 Illinois Administrative Procedure Act.
3 Section 55. Prohibited acts. Any private review agent
4 certified in Illinois is prohibited from:
5 (a) Disclosing any patient information obtained in
6 conducting utilization review, except that the private
7 review agent may disclose that information to the provider,
8 third party insurer, plan, or other entity responsible for
9 the coverage of the beneficiary. The provider shall be held
10 harmless for any abrogation of this obligation of the
11 private review agent, insurer, plan, or other entity.
12 (b) Offering or undertaking to offer:
13 (1) a contingent fee contract to conduct
14 utilization review under which compensation to the
15 private review entity is based in whole or in part upon
16 amounts or expenditures saved or reduced by the private
17 review agent;
18 (2) bonuses or commissions to be paid to the
19 private review agent based upon dollar reductions of
20 provider bills; or
21 (3) promises to reduce health care expenditures by
22 certain amounts or percentages.
23 (c) Refusing to identify the name of the agent or the
24 identity of a person employed or otherwise engaged by a
25 private review agent who is conducting utilization review
26 when requested to do so by a provider or patient.
27 (d) Releasing data obtained in the review process that
28 identifies individual patients, hospitals, or physicians
29 without prior consent of the patient, physician, or
30 hospital, as the case may be.
31 Section 60. Penalties.
32 (a) Any person or entity that acts as a private review
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1 agent in the State of Illinois without obtaining a
2 certificate or any certified private review agent who fails
3 to comply with the provisions of this Act or its rules is:
4 (1) guilty of a Class A misdemeanor, and upon
5 conviction is subject to a penalty not exceeding $1,000
6 with each day the violation continues after the first
7 violation constituting a separate offense; and
8 (2) prohibited from denying payment to any provider
9 or patient for services that the provider has rendered
10 to any patient whose care was reviewed by the person or
11 entity.
12 (b) Notwithstanding the existence or pursuit of any
13 other remedy, whenever the Attorney General has reason to
14 believe that any person or entity has engaged in or is about
15 to engage in any act or practice in violation of this Act
16 and that proceedings would be in the public interest, he or
17 she may bring an action in the name of the People of the
18 State against that person or entity to restrain, by
19 preliminary or permanent injunction, the prohibited act or
20 practice. The court, in its discretion, may exercise all
21 powers necessary, including but not limited to, injunction,
22 revocation of the certificate to engage in utilization
23 review, dissolution of a domestic corporation, suspension or
24 termination of the right of a foreign corporation to do
25 business in this State, and restitution. In addition to the
26 other remedies provided in this Section, the Attorney
27 General may request and the court may impose a civil penalty
28 in a sum not to exceed $50,000 against any person or entity
29 found by the court to have engaged in any act or practice
30 declared unlawful under this Act.
31 Section 65. Department rules. The Department shall
32 adopt rules necessary for the administration and enforcement
33 of this Act within 6 months of its effective date.
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1 Section 70. Judicial review. All final administrative
2 decisions of the Department are subject to judicial review
3 under the Administrative Review Law and its rules. The term
4 "administrative decision" is defined as in Section 3-101 of
5 the Code of Civil Procedure.
6 Section 75. Administrative Procedure Act. The Illinois
7 Administrative Procedure Act is expressly adopted and
8 incorporated as if all the provisions of that Act were
9 included in this Act. For the purposes of this Act, the
10 notice required under Section 10-25 of the Illinois
11 Administrative Procedure Act is considered sufficient when
12 mailed to the last known address of a party.
13 Section 80. Home rule. The regulation and certification
14 of private review agents are exclusive powers and functions
15 of the State. A home rule unit may not regulate or license
16 private review agents. This Section is a denial of home
17 rule powers and functions under subsection (h) of Section 6
18 of Article VII of the Illinois Constitution.
19 Section 999. Effective date. This Act takes effect on
20 January 1, 2000.