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91_HB1331eng HB1331 Engrossed LRB9102355JSpc 1 AN ACT concerning external appeal procedures concerning 2 health care determinations, 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 State Employees Group Insurance Act of 6 1971 is amended by changing Section 6.11 as follows: 7 (5 ILCS 375/6.11) 8 Sec. 6.11. Required health benefits. The program of 9 health benefits shall provide the post-mastectomy care 10 benefits required to be covered by a policy of accident and 11 health insurance under Section 356t of the Illinois Insurance 12 Code. The program of health benefits shall provide the 13 coverage required under Sections 356u, 356w, and 356x of the 14 Illinois Insurance Code and comply with Article VII of the 15 Health Maintenance Organization Act. 16 (Source: P.A. 90-7, eff. 6-10-97; 90-655, eff. 7-30-98; 17 90-741, eff. 1-1-99.) 18 Section 10. The State Mandates Act is amended by adding 19 Section 8.23 as follows: 20 (30 ILCS 805/8.23 new) 21 Sec. 8.23. Exempt mandate. Notwithstanding Sections 6 22 and 8 of this Act, no reimbursement by the State is required 23 for the implementation of any mandate created by this 24 amendatory Act of the 91st General Assembly. 25 Section 15. The Counties Code is amended by changing 26 Section 5-1069.3 as follows: 27 (55 ILCS 5/5-1069.3) HB1331 Engrossed -2- LRB9102355JSpc 1 Sec. 5-1069.3. Required health benefits. If a county, 2 including a home rule county, is a self-insurer for purposes 3 of providing health insurance coverage for its employees, the 4 coverage shall include coverage for the post-mastectomy care 5 benefits required to be covered by a policy of accident and 6 health insurance under Section 356t and the coverage required 7 under Sections 356u, 356w, and 356x of the Illinois Insurance 8 Code and comply with Article VII of the Health Maintenance 9 Organization Act. The requirement that health benefits be 10 covered as provided in this Section is an exclusive power and 11 function of the State and is a denial and limitation under 12 Article VII, Section 6, subsection (h) of the Illinois 13 Constitution. A home rule county to which this Section 14 applies must comply with every provision of this Section. 15 (Source: P.A. 90-7, eff. 6-10-97; 90-741, eff. 1-1-99.) 16 Section 20. The Illinois Municipal Code is amended by 17 changing Section 10-4-2.3 as follows: 18 (65 ILCS 5/10-4-2.3) 19 Sec. 10-4-2.3. Required health benefits. If a 20 municipality, including a home rule municipality, is a 21 self-insurer for purposes of providing health insurance 22 coverage for its employees, the coverage shall include 23 coverage for the post-mastectomy care benefits required to be 24 covered by a policy of accident and health insurance under 25 Section 356t and the coverage required under Sections 356u, 26 356w, and 356x of the Illinois Insurance Code and comply with 27 Article VII of the Health Maintenance Organization Act. The 28 requirement that health benefits be covered as provided in 29 this is an exclusive power and function of the State and is a 30 denial and limitation under Article VII, Section 6, 31 subsection (h) of the Illinois Constitution. A home rule 32 municipality to which this Section applies must comply with HB1331 Engrossed -3- LRB9102355JSpc 1 every provision of this Section. 2 (Source: P.A. 90-7, eff. 6-10-97; 90-741, eff. 1-1-99.) 3 Section 25. The School Code is amended by changing 4 Section 10-22.3f as follows: 5 (105 ILCS 5/10-22.3f) 6 Sec. 10-22.3f. Required health benefits. Insurance 7 protection and benefits for employees shall provide the 8 post-mastectomy care benefits required to be covered by a 9 policy of accident and health insurance under Section 356t 10 and the coverage required under Sections 356u, 356w, and 356x 11 of the Illinois Insurance Code and comply with Article VII of 12 the Health Maintenance Organization Act. 13 (Source: P.A. 90-7, eff. 6-10-97; 90-741, eff. 1-1-99.) 14 Section 30. The Illinois Insurance Code is amended by 15 adding Sections 155.36, 370s, and 511.114 as follows: 16 (215 ILCS 5/155.36 new) 17 Sec. 155.36. Health care determination appeals. 18 Insurance companies that transact the kinds of insurance 19 authorized under Class 1(a) or Class 2(a) of Section 4 of 20 this Code shall comply with the requirements of Article VII 21 of the Health Maintenance Organization Act. 22 (215 ILCS 5/370s new) 23 Sec. 370s. Health care determination appeals. 24 Administrators shall comply with the requirements of Article 25 VII of the Health Maintenance Organization Act. 26 (215 ILCS 5/511.114 new) 27 Sec. 511.114. Health care determination appeals. 28 Administrators shall comply with the requirements of Article HB1331 Engrossed -4- LRB9102355JSpc 1 VII of the Health Maintenance Organization Act. 2 Section 35. The Health Maintenance Organization Act is 3 amended by adding Article VII as follows: 4 (215 ILCS 5/Art. VII heading new) 5 ARTICLE VII. EXTERNAL MEDICAL DETERMINATIONS APPEALS 6 (215 ILCS 125/7-105 new) 7 Sec. 7-105. Right to external appeal established. 8 (a) There is hereby established an enrollee's right to 9 an external appeal of a final adverse determination by a 10 health care plan. 11 (b) An enrollee, the enrollee's designee and, in 12 connection with retrospective adverse determinations, an 13 enrollee's health care provider, shall have the right to 14 request an external appeal when: 15 (1) the enrollee has had coverage of a health care 16 service that would otherwise be a covered benefit under a 17 subscriber contract denied on appeal, in whole or in 18 part, on the grounds that the health care service is not 19 medically necessary and the health care plan has rendered 20 a final adverse determination with respect to the health 21 care service or both the plan and the enrollee have 22 jointly agreed to waive any internal appeal; or 23 (2) the enrollee has had coverage of a health care 24 service denied on the basis that the service is 25 experimental or investigational; both the plan and the 26 enrollee have jointly agreed to waive any internal 27 appeal; the enrollee's attending physician has certified 28 that the enrollee has a life-threatening or disabling 29 condition or disease (a) for which standard health 30 services or procedures have been ineffective or would be 31 medically inappropriate, or (b) for which there does not HB1331 Engrossed -5- LRB9102355JSpc 1 exist a more beneficial standard health service or 2 procedure covered by the health care plan, or (c) for 3 which there exists a clinical trial; the enrollee's 4 attending physician, who must be a licensed, 5 board-certified or board-eligible physician qualified to 6 practice in the area of practice appropriate to treat the 7 enrollee's life threatening or disabling condition or 8 disease, has recommended either (A) a health service or 9 procedure (including a pharmaceutical product) that, 10 based on 2 documents from the available medical and 11 scientific evidence, is likely to be more beneficial to 12 the enrollee than any covered standard health service or 13 procedure or (B) a clinical trial for which the enrollee 14 is eligible; and the specific health service or procedure 15 recommended by the attending physician would otherwise be 16 covered under the policy except for the health care 17 plan's determination that the health service or procedure 18 is experimental or investigational. 19 Any physician certification provided under this 20 subsection shall include a statement of the evidence relied 21 upon by the physician in certifying his or her 22 recommendation. 23 (c) The health care plan may charge the enrollee a fee 24 of up to $50 per external appeal, provided that, in the event 25 the external appeal agent overturns the final adverse 26 determination of the plan, the fee shall be refunded to the 27 enrollee. Notwithstanding the foregoing, the health plan 28 shall not require the enrollee to pay a fee if the enrollee 29 is a recipient of medical assistance or if such fee shall 30 pose a hardship to the enrollee as determined by the plan. 31 (215 ILCS 125/7-110 new) 32 Sec. 7-110. Powers of the Director. 33 (a) The Director shall have the power to grant and HB1331 Engrossed -6- LRB9102355JSpc 1 revoke certifications of external appeal agents to conduct 2 external appeals requested pursuant to Section 7-105. 3 (b) If, after reviewing the application authorized by 4 Section 7-115, the Director is satisfied that the applicant 5 meets the requirements of this Section, the Director shall 6 issue a certificate to the applicant. A certificate issued 7 under this Section shall be valid for a period of not more 8 than 2 years. 9 (c) In order to be recertified, an external appeal agent 10 must demonstrate to the Director on forms prescribed by the 11 Director that it continues to meet all applicable standards 12 required by this Article. Recertification under this Section 13 shall be valid for a period of not more than 2 years. 14 (215 ILCS 125/7-115 new) 15 Sec. 7-115. Standards for certification. 16 (a) The Director shall develop an application for 17 certification. At a minimum, applicants shall provide: 18 (1) a description of the qualifications of the 19 clinical peer reviewers retained to conduct external 20 appeals of final adverse determinations, including the 21 reviewers' current and past employment history and 22 practice affiliations; 23 (2) a description of the procedures employed to 24 ensure that clinical peer reviewers conducting external 25 appeals are: 26 (A) appropriately licensed, registered, or 27 certified; 28 (B) trained in the principles, procedures, and 29 standards of the external appeal agent; and 30 (C) knowledgeable about the health care 31 service that is the subject of the final adverse 32 determination under appeal; 33 (3) a description of the methods of recruiting and HB1331 Engrossed -7- LRB9102355JSpc 1 selecting impartial clinical peer reviewers and matching 2 reviewers to specific cases; 3 (4) the number of clinical peer reviewers retained 4 by the external appeal agent, and a description of the 5 areas of expertise available from the reviewers and the 6 types of cases the reviewers are qualified to review; 7 (5) a description of the policies and procedures 8 employed to protect the confidentiality of individual 9 medical and treatment records in accordance with 10 applicable State and federal laws; 11 (6) a description of the quality assurance program 12 established by the external appeal agent pursuant to item 13 (3); 14 (7) the names of all corporations and organizations 15 owned or controlled by the external appeal agent or that 16 owns or controls such agent, and the nature and extent of 17 any such ownership or control; 18 (8) the names and biographies of all directors, 19 officers, and executives of the external appeal agent; 20 (9) an experimental and investigational treatment 21 review plan to conduct appeals pursuant to subsection (b) 22 of Section 7-125; and 23 (10) a description of the fees to be charged by 24 agents for external appeals. 25 (b) The Director shall, at a minimum, require an 26 external appeal agent to: 27 (1) appoint a medical director who is a physician 28 in possession of a current and valid non-restricted 29 license to practice medicine and who shall be responsible 30 for the supervision and oversight of the external appeal 31 process; 32 (2) develop written policies and procedures 33 governing all aspects of the appeal process, including, 34 at a minimum: HB1331 Engrossed -8- LRB9102355JSpc 1 (A) procedures to ensure that appeals are 2 conducted within the time frames specified in 3 Section 7-125 and any required notices are provided 4 in a timely manner; 5 (B) procedures to ensure the selection of 6 qualified and impartial clinical peer reviewers that 7 are qualified to render determinations relating to 8 the health care service that is the subject of the 9 final adverse determination under appeal; 10 (C) procedures to ensure the confidentiality 11 of medical and treatment records and review 12 materials; and 13 (D) procedures to ensure adherence to the 14 requirements of this Article by any contractor, 15 subcontractor, subvendor, agent, or employee 16 affiliated by contract or otherwise with the 17 external appeal agent; 18 (3) establish a quality assurance program that 19 includes written descriptions, to be provided to all 20 individuals involved in the program, of the 21 organizational arrangements and ongoing procedures for 22 the identification, evaluation, resolution, and follow-up 23 of potential and actual problems in external appeals 24 performed by the external appeal agent and to ensure the 25 maintenance of program standards pursuant to this 26 Section; 27 (4) establish a toll-free telephone service to 28 receive information relating to external appeals on a 29 24-hour-a-day, 7-day-a-week basis that is capable of 30 accepting, recording, or providing instruction to 31 incoming telephone calls during other than normal 32 business hours; and 33 (5) develop procedures to ensure that: 34 (A) appropriate personnel are reasonably HB1331 Engrossed -9- LRB9102355JSpc 1 accessible not less than 40 hours per week during 2 normal business hours to discuss patient care and to 3 allow response to telephone requests; and 4 (B) response to accepted or recorded messages 5 will be made not less than one business day after 6 the date on which the call was received. 7 (c) No entity shall be qualified to submit a request for 8 application if it owns or controls, is owned or controlled 9 by, or exercises common control with, any of the following: 10 (1) a national, state, or local illness, health 11 benefit, or public advocacy group; 12 (2) a national, state, or local society or 13 association of hospitals, physicians, or other providers 14 of health care services; or 15 (3) a national, state, or local association of 16 health care plans. 17 (d) A health care plan shall transmit, and an external 18 appeal agent shall be authorized to receive and review, an 19 enrollee's medical and treatment records in order to conduct 20 an external appeal pursuant to this Article. 21 (e) An external appeal agent shall provide ready access 22 to the Director to all data, records, and information 23 collected and maintained concerning the agent's external 24 appeal activities. 25 (f) An external appeal agent shall agree to provide the 26 Director such data, information, and reports as the Director 27 determines necessary to evaluate the external appeal process 28 established pursuant to this Article. 29 (g) The Director shall provide, upon the request of any 30 interested person, a copy of all nonproprietary information 31 filed with the Director by the external appeal agent. The 32 Director may charge a reasonable fee to the interested person 33 for reproducing the requested information. HB1331 Engrossed -10- LRB9102355JSpc 1 (215 ILCS 125/7-120 new) 2 Sec. 7-120. Conflict of interest. 3 (a) No external appeal agent or officer, director, or 4 management employee thereof and no clinical peer reviewer 5 employed or engaged thereby to conduct any external appeal 6 pursuant to this Article shall have any material professional 7 affiliation, material familial affiliation, material 8 financial affiliation, or other affiliation prescribed 9 pursuant to rule, with any of the following: 10 (1) the health care plan; 11 (2) an officer, director, or management employee of 12 the health care plan; 13 (3) a health care provider, physician's medical 14 group, independent practice association, or provider of 15 pharmaceutical products or services or durable medical 16 equipment, proposing to provide or supply the health 17 service; 18 (4) the facility at which the health service would 19 be provided; 20 (5) the developer or manufacturer of the principal 21 health service that is the subject of the appeal; or 22 (6) the enrollee whose health care service is the 23 subject of the appeal, or the enrollee's designee. 24 (b) Notwithstanding the provisions of subsection (a), 25 the Director shall promulgate rules to minimize any conflict 26 of interest when a conflict may be unavoidable. 27 (215 ILCS 125/7-125 new) 28 Sec. 7-125. Procedures for external appeals of adverse 29 determinations. 30 (a) The Director shall establish procedures by rule to 31 randomly assign an external appeal agent to conduct an 32 external appeal, provided that the Director may establish a 33 maximum fee that may be charged for any external appeal, but HB1331 Engrossed -11- LRB9102355JSpc 1 the Director may exclude from random assignment any external 2 appeal agent that charges a fee that he deems to be 3 unreasonable. 4 (b) The enrollee shall have 45 days to initiate an 5 external appeal after the enrollee receives notice from the 6 health care plan, or the plan's utilization review agent if 7 applicable, of a final adverse determination or denial or 8 after both the plan and the enrollee have jointly agreed to 9 waive any internal appeal. The request shall be in writing in 10 accordance with the instructions and in the form prescribed 11 by subsection (e) of this Section. The enrollee, and the 12 enrollee's health care provider when applicable, shall have 13 the opportunity to submit additional documentation with 14 respect to the appeal to the external appeal agent within the 15 45-day period, however, when the documentation represents a 16 material change from the documentation upon which the 17 utilization review agent based its adverse determination or 18 upon which the health plan based its denial, the health plan 19 shall have 3 business days to consider the documentation and 20 amend or confirm the adverse determination. 21 (c) The external appeal agent shall make a determination 22 with respect to the appeal within 30 days after the receipt 23 of the enrollee's request therefor, submitted in accordance 24 with the Director's instructions. The external appeal agent 25 shall have the opportunity to request additional information 26 from the enrollee, the enrollee's health care provider, and 27 the enrollee's health care plan within the 30-day period, in 28 which case the agent shall have up to 5 additional business 29 days if necessary to make a determination. The external 30 appeal agent shall notify the enrollee and the health care 31 plan, in writing, of the appeal determination within 2 32 business days after rendering the determination. 33 (d) Notwithstanding the provisions of subsections (b) 34 and (c) of this Section, if the enrollee's attending HB1331 Engrossed -12- LRB9102355JSpc 1 physician states that a delay in providing the health care 2 service would pose an imminent or serious threat to the 3 health of the enrollee, the external appeal shall be 4 completed within 3 days of the request therefor, and the 5 external appeal agent shall make every reasonable attempt to 6 immediately notify the enrollee and the health plan of its 7 determination by telephone or facsimile, followed immediately 8 by written notification of the determination. 9 (e) For external appeals requested pursuant to paragraph 10 (1) of subsection (b) of Section 7-105, the external appeal 11 agent shall review the utilization review agent's final 12 adverse determination and, in accordance with the provisions 13 of this Article, shall make a determination as to whether the 14 health care plan acted reasonably and with sound medical 15 judgment and in the best interest of the patient. When the 16 external appeal agent makes its determination, it shall 17 consider the clinical standards of the plan, the information 18 provided concerning the patient, the attending physician's 19 recommendation, and applicable generally accepted practice 20 guidelines developed by the federal government and national 21 or professional medical societies, boards, and associations. 22 The determination shall be: 23 (1) conducted only by one or a greater odd number 24 of clinical peer reviewers; 25 (2) accompanied by a notice of appeal determination 26 that includes the reasons for the determination, however, 27 when the final adverse determination is upheld on appeal, 28 the notice shall include the clinical rationale, if any, 29 for the determination; 30 (3) subject to the terms and conditions generally 31 applicable to benefits under the evidence of coverage 32 under the health care plan; 33 (4) binding on the plan and the enrollee; and 34 (5) admissible in any court proceeding. HB1331 Engrossed -13- LRB9102355JSpc 1 (f) For external appeals requested pursuant to paragraph 2 (2) of subsection (b) of Section 7-105, the external appeal 3 agent shall review the proposed health service or procedure 4 for which coverage has been denied and, in accordance with 5 the provisions of this Article and the external agent's 6 experimental and investigational treatment review plan, make 7 a determination as to whether the patient costs of the health 8 service or procedure shall be covered by the health care 9 plan. The determination shall: 10 (1) be conducted by a panel of 3 or a greater odd 11 number of clinical peer reviewers; 12 (2) be accompanied by a written statement: 13 (A) that the patient costs of the proposed 14 health service or procedure shall be covered by the 15 health care plan either when a majority of the panel 16 of reviewers determines upon review of the 17 applicable medical and scientific evidence (or upon 18 confirmation that the recommended treatment is a 19 clinical trial), the enrollee's medical record, and 20 any other pertinent information that the proposed 21 health service or treatment (including a 22 pharmaceutical product) is likely to be more 23 beneficial than any standard treatment or treatments 24 for the enrollee's life-threatening or disabling 25 condition or disease (or, in the case of a clinical 26 trial, is likely to benefit the enrollee in the 27 treatment of the enrollee's condition or disease) or 28 when a reviewing panel is evenly divided as to a 29 determination concerning coverage of the health 30 service or procedure; or 31 (B) upholding the health plan's denial of 32 coverage; 33 (3) be subject to the terms and conditions 34 generally applicable to benefits under the evidence of HB1331 Engrossed -14- LRB9102355JSpc 1 coverage under the health care plan; 2 (4) be binding on the plan and the enrollee; and 3 (5) be admissible in any court proceeding. 4 As used in this subsection (f) with respect to a clinical 5 trial, patient costs shall include all costs of health 6 services required to provide treatment to the enrollee 7 according to the design of the trial. Such costs shall not 8 include the costs of any investigational drugs or devices 9 themselves, the cost of any nonhealth services that might be 10 required for the enrollee to receive the treatment, the costs 11 of managing the research, or costs that would not be covered 12 under the policy for noninvestigational treatments. 13 (g) No external appeal agent or clinical peer reviewer 14 conducting an external appeal shall be liable in damages to 15 any person for any opinions rendered by the external appeal 16 agent or clinical peer reviewer upon completion of an 17 external appeal conducted pursuant to this Section, unless 18 the opinion was rendered in bad faith or involved gross 19 negligence. 20 (h) Payment for an external appeal shall be the 21 responsibility of the health care plan. The health care plan 22 shall make payment to the external appeal agent within 45 23 days after the date the appeal determination is received by 24 the health care plan, and the health care plan shall be 25 obligated to pay the amount together with interest thereon 26 calculated at a rate 12% per annum, to be computed from the 27 date the bill was required to be paid, in the event that 28 payment is not made within such 45 days. 29 (i) The Director shall promulgate by rule a standard 30 description of the external appeal process established under 31 this Section, which shall provide a standard form and 32 instructions for the initiation of an external appeal by an 33 enrollee. HB1331 Engrossed -15- LRB9102355JSpc 1 (215 ILCS 125/7-130 new) 2 Sec. 7-130. Prohibited practices. An external appeal 3 agent shall not, with respect to external appeal activities, 4 permit or provide compensation or anything of value to its 5 employees, agents, or contractors based on: 6 (1) either a percentage of the amount by which a 7 claim is reduced for payment or the number of claims or 8 the cost of services for which the person has denied 9 authorization or payment; or 10 (2) any other method that encourages the upholding 11 of an adverse determination. 12 (215 ILCS 125/7-135 new) 13 Sec. 7-135. Oversight and surveillance of the external 14 appeal process. 15 (a) The Director shall have the power to: 16 (1) review the activities of the health care plans 17 and external appeal agents pursuant to this Article, 18 including the extent to which the plans and agents adhere 19 to the standards and time frames required pursuant to 20 this Article; 21 (2) investigate complaints by enrollees regarding 22 requests for and processing of external appeals; and 23 (3) conduct random audits of health care plans and 24 external appeal agents to determine compliance with the 25 provisions of this Article. 26 (b) A health care plan and external appeal agent shall 27 annually, in such form as the Director shall require, report 28 the number of external appeals requested by enrollees and the 29 outcomes of any external appeals. 30 (c) The Director shall annually report, by plan and 31 agent, such information to the Governor and the General 32 Assembly, provided that no information shall be included that 33 would otherwise be deemed confidential information within the HB1331 Engrossed -16- LRB9102355JSpc 1 meaning of this Act. 2 Section 40. The Voluntary Health Services Plans Act is 3 amended by adding Section 15.30 as follows: 4 (215 ILCS 165/15.30 new) 5 Sec. 15.30. Health care determination appeals. A health 6 services plan is subject to the provisions of Article VII of 7 the Health Maintenance Organization Act.