101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB1449

 

Introduced 2/13/2019, by Sen. Julie A. Morrison

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/370c.1

    Amends the Illinois Insurance Code. Provides that every insurer that amends, delivers, issues, or renews a group or individual policy or certificate of disability insurance or disability income insurance shall ensure parity for the payment of mental, emotional, nervous, or substance use disorders or conditions. Changes the definition of "treatment limitation" to include benefit payments under disability insurance or disability income insurance.


LRB101 05881 SMS 50901 b

 

 

A BILL FOR

 

SB1449LRB101 05881 SMS 50901 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Section 370c.1 as follows:
 
6    (215 ILCS 5/370c.1)
7    Sec. 370c.1. Mental, emotional, nervous, or substance use
8disorder or condition parity.
9    (a) On and after the effective date of this amendatory Act
10of the 99th General Assembly, every insurer that amends,
11delivers, issues, or renews a group or individual policy of
12accident and health insurance or a qualified health plan
13offered through the Health Insurance Marketplace in this State
14providing coverage for hospital or medical treatment and for
15the treatment of mental, emotional, nervous, or substance use
16disorders or conditions shall ensure that:
17        (1) the financial requirements applicable to such
18    mental, emotional, nervous, or substance use disorder or
19    condition benefits are no more restrictive than the
20    predominant financial requirements applied to
21    substantially all hospital and medical benefits covered by
22    the policy and that there are no separate cost-sharing
23    requirements that are applicable only with respect to

 

 

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1    mental, emotional, nervous, or substance use disorder or
2    condition benefits; and
3        (2) the treatment limitations applicable to such
4    mental, emotional, nervous, or substance use disorder or
5    condition benefits are no more restrictive than the
6    predominant treatment limitations applied to substantially
7    all hospital and medical benefits covered by the policy and
8    that there are no separate treatment limitations that are
9    applicable only with respect to mental, emotional,
10    nervous, or substance use disorder or condition benefits.
11    (a-5) On and after the effective date of this amendatory
12Act of the 101st General Assembly, every insurer that amends,
13delivers, issues, or renews a group or individual policy or
14certificate of disability insurance or disability income
15insurance in or to any person in this State shall ensure that:
16        (1) the benefits applicable to such mental, emotional,
17    nervous, or substance use disorders or conditions are no
18    more restrictive than the benefits available for all other
19    medical conditions covered by the policy or certificate and
20    that there are no separate requirements that are applicable
21    only with respect to mental, emotional, nervous, or
22    substance use disorder or condition benefits; and
23        (2) the treatment limitations or other coverage
24    limitations applicable to such mental, emotional, nervous,
25    or substance use disorder or condition benefits are no more
26    restrictive than the benefits available for other

 

 

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1    physiologic conditions covered by the policy and that there
2    are no separate payment limitations that may be applied
3    specifically with respect to mental, emotional, nervous,
4    or substance use disorder or condition benefits.
5    (b) The following provisions shall apply concerning
6aggregate lifetime limits:
7        (1) In the case of a group or individual policy of
8    accident and health insurance or a qualified health plan
9    offered through the Health Insurance Marketplace amended,
10    delivered, issued, or renewed in this State on or after the
11    effective date of this amendatory Act of the 99th General
12    Assembly that provides coverage for hospital or medical
13    treatment and for the treatment of mental, emotional,
14    nervous, or substance use disorders or conditions the
15    following provisions shall apply:
16            (A) if the policy does not include an aggregate
17        lifetime limit on substantially all hospital and
18        medical benefits, then the policy may not impose any
19        aggregate lifetime limit on mental, emotional,
20        nervous, or substance use disorder or condition
21        benefits; or
22            (B) if the policy includes an aggregate lifetime
23        limit on substantially all hospital and medical
24        benefits (in this subsection referred to as the
25        "applicable lifetime limit"), then the policy shall
26        either:

 

 

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1                (i) apply the applicable lifetime limit both
2            to the hospital and medical benefits to which it
3            otherwise would apply and to mental, emotional,
4            nervous, or substance use disorder or condition
5            benefits and not distinguish in the application of
6            the limit between the hospital and medical
7            benefits and mental, emotional, nervous, or
8            substance use disorder or condition benefits; or
9                (ii) not include any aggregate lifetime limit
10            on mental, emotional, nervous, or substance use
11            disorder or condition benefits that is less than
12            the applicable lifetime limit.
13        (2) In the case of a policy that is not described in
14    paragraph (1) of subsection (b) of this Section and that
15    includes no or different aggregate lifetime limits on
16    different categories of hospital and medical benefits, the
17    Director shall establish rules under which subparagraph
18    (B) of paragraph (1) of subsection (b) of this Section is
19    applied to such policy with respect to mental, emotional,
20    nervous, or substance use disorder or condition benefits by
21    substituting for the applicable lifetime limit an average
22    aggregate lifetime limit that is computed taking into
23    account the weighted average of the aggregate lifetime
24    limits applicable to such categories.
25    (c) The following provisions shall apply concerning annual
26limits:

 

 

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1        (1) In the case of a group or individual policy of
2    accident and health insurance or a qualified health plan
3    offered through the Health Insurance Marketplace amended,
4    delivered, issued, or renewed in this State on or after the
5    effective date of this amendatory Act of the 99th General
6    Assembly that provides coverage for hospital or medical
7    treatment and for the treatment of mental, emotional,
8    nervous, or substance use disorders or conditions the
9    following provisions shall apply:
10            (A) if the policy does not include an annual limit
11        on substantially all hospital and medical benefits,
12        then the policy may not impose any annual limits on
13        mental, emotional, nervous, or substance use disorder
14        or condition benefits; or
15            (B) if the policy includes an annual limit on
16        substantially all hospital and medical benefits (in
17        this subsection referred to as the "applicable annual
18        limit"), then the policy shall either:
19                (i) apply the applicable annual limit both to
20            the hospital and medical benefits to which it
21            otherwise would apply and to mental, emotional,
22            nervous, or substance use disorder or condition
23            benefits and not distinguish in the application of
24            the limit between the hospital and medical
25            benefits and mental, emotional, nervous, or
26            substance use disorder or condition benefits; or

 

 

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1                (ii) not include any annual limit on mental,
2            emotional, nervous, or substance use disorder or
3            condition benefits that is less than the
4            applicable annual limit.
5        (2) In the case of a policy that is not described in
6    paragraph (1) of subsection (c) of this Section and that
7    includes no or different annual limits on different
8    categories of hospital and medical benefits, the Director
9    shall establish rules under which subparagraph (B) of
10    paragraph (1) of subsection (c) of this Section is applied
11    to such policy with respect to mental, emotional, nervous,
12    or substance use disorder or condition benefits by
13    substituting for the applicable annual limit an average
14    annual limit that is computed taking into account the
15    weighted average of the annual limits applicable to such
16    categories.
17    (d) With respect to mental, emotional, nervous, or
18substance use disorders or conditions, an insurer shall use
19policies and procedures for the election and placement of
20mental, emotional, nervous, or substance use disorder or
21condition treatment drugs on their formulary that are no less
22favorable to the insured as those policies and procedures the
23insurer uses for the selection and placement of drugs for
24medical or surgical conditions and shall follow the expedited
25coverage determination requirements for substance abuse
26treatment drugs set forth in Section 45.2 of the Managed Care

 

 

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1Reform and Patient Rights Act.
2    (e) This Section shall be interpreted in a manner
3consistent with all applicable federal parity regulations
4including, but not limited to, the Paul Wellstone and Pete
5Domenici Mental Health Parity and Addiction Equity Act of 2008,
6final regulations issued under the Paul Wellstone and Pete
7Domenici Mental Health Parity and Addiction Equity Act of 2008
8and final regulations applying the Paul Wellstone and Pete
9Domenici Mental Health Parity and Addiction Equity Act of 2008
10to Medicaid managed care organizations, the Children's Health
11Insurance Program, and alternative benefit plans.
12    (f) The provisions of subsections (b) and (c) of this
13Section shall not be interpreted to allow the use of lifetime
14or annual limits otherwise prohibited by State or federal law.
15    (g) As used in this Section:
16    "Financial requirement" includes deductibles, copayments,
17coinsurance, and out-of-pocket maximums, but does not include
18an aggregate lifetime limit or an annual limit subject to
19subsections (b) and (c).
20    "Mental, emotional, nervous, or substance use disorder or
21condition" means a condition or disorder that involves a mental
22health condition or substance use disorder that falls under any
23of the diagnostic categories listed in the mental and
24behavioral disorders chapter of the current edition of the
25International Classification of Disease or that is listed in
26the most recent version of the Diagnostic and Statistical

 

 

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1Manual of Mental Disorders.
2    "Treatment limitation" includes limits on benefits based
3on the frequency of treatment, number of visits, days of
4coverage, days in a waiting period, or other similar limits on
5the scope or duration of treatment, and shall also include
6benefit payments under disability insurance or disability
7income insurance policies or certificates. "Treatment
8limitation" includes both quantitative treatment limitations,
9which are expressed numerically (such as 50 outpatient visits
10per year), and nonquantitative treatment limitations, which
11otherwise limit the scope or duration of treatment, or the
12duration of benefit payments under the terms of a disability
13insurance policy or certificate or disability income insurance
14policy or certificate. A permanent exclusion of all benefits
15for a particular condition or disorder shall not be considered
16a treatment limitation. "Nonquantitative treatment" means
17those limitations as described under federal regulations (26
18CFR 54.9812-1). "Nonquantitative treatment limitations"
19include, but are not limited to, those limitations described
20under federal regulations 26 CFR 54.9812-1, 29 CFR 2590.712,
21and 45 CFR 146.136.
22    (h) The Department of Insurance shall implement the
23following education initiatives:
24        (1) By January 1, 2016, the Department shall develop a
25    plan for a Consumer Education Campaign on parity. The
26    Consumer Education Campaign shall focus its efforts

 

 

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1    throughout the State and include trainings in the northern,
2    southern, and central regions of the State, as defined by
3    the Department, as well as each of the 5 managed care
4    regions of the State as identified by the Department of
5    Healthcare and Family Services. Under this Consumer
6    Education Campaign, the Department shall: (1) by January 1,
7    2017, provide at least one live training in each region on
8    parity for consumers and providers and one webinar training
9    to be posted on the Department website and (2) establish a
10    consumer hotline to assist consumers in navigating the
11    parity process by March 1, 2017. By January 1, 2018 the
12    Department shall issue a report to the General Assembly on
13    the success of the Consumer Education Campaign, which shall
14    indicate whether additional training is necessary or would
15    be recommended.
16        (2) The Department, in coordination with the
17    Department of Human Services and the Department of
18    Healthcare and Family Services, shall convene a working
19    group of health care insurance carriers, mental health
20    advocacy groups, substance abuse patient advocacy groups,
21    and mental health physician groups for the purpose of
22    discussing issues related to the treatment and coverage of
23    mental, emotional, nervous, or substance use disorders or
24    conditions and compliance with parity obligations under
25    State and federal law. Compliance shall be measured,
26    tracked, and shared during the meetings of the working

 

 

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1    group. The working group shall meet once before January 1,
2    2016 and shall meet semiannually thereafter. The
3    Department shall issue an annual report to the General
4    Assembly that includes a list of the health care insurance
5    carriers, mental health advocacy groups, substance abuse
6    patient advocacy groups, and mental health physician
7    groups that participated in the working group meetings,
8    details on the issues and topics covered, and any
9    legislative recommendations developed by the working
10    group.
11        (3) Not later than August 1 of each year, the
12    Department, in conjunction with the Department of
13    Healthcare and Family Services, shall issue a joint report
14    to the General Assembly and provide an educational
15    presentation to the General Assembly. The report and
16    presentation shall:
17            (A) Cover the methodology the Departments use to
18        check for compliance with the federal Paul Wellstone
19        and Pete Domenici Mental Health Parity and Addiction
20        Equity Act of 2008, 42 U.S.C. 18031(j), and any federal
21        regulations or guidance relating to the compliance and
22        oversight of the federal Paul Wellstone and Pete
23        Domenici Mental Health Parity and Addiction Equity Act
24        of 2008 and 42 U.S.C. 18031(j).
25            (B) Cover the methodology the Departments use to
26        check for compliance with this Section and Sections

 

 

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1        356z.23 and 370c of this Code.
2            (C) Identify market conduct examinations or, in
3        the case of the Department of Healthcare and Family
4        Services, audits conducted or completed during the
5        preceding 12-month period regarding compliance with
6        parity in mental, emotional, nervous, and substance
7        use disorder or condition benefits under State and
8        federal laws and summarize the results of such market
9        conduct examinations and audits. This shall include:
10                (i) the number of market conduct examinations
11            and audits initiated and completed;
12                (ii) the benefit classifications examined by
13            each market conduct examination and audit;
14                (iii) the subject matter of each market
15            conduct examination and audit, including
16            quantitative and nonquantitative treatment
17            limitations; and
18                (iv) a summary of the basis for the final
19            decision rendered in each market conduct
20            examination and audit.
21            Individually identifiable information shall be
22        excluded from the reports consistent with federal
23        privacy protections.
24            (D) Detail any educational or corrective actions
25        the Departments have taken to ensure compliance with
26        the federal Paul Wellstone and Pete Domenici Mental

 

 

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1        Health Parity and Addiction Equity Act of 2008, 42
2        U.S.C. 18031(j), this Section, and Sections 356z.23
3        and 370c of this Code.
4            (E) The report must be written in non-technical,
5        readily understandable language and shall be made
6        available to the public by, among such other means as
7        the Departments find appropriate, posting the report
8        on the Departments' websites.
9    (i) The Parity Advancement Fund is created as a special
10fund in the State treasury. Moneys from fines and penalties
11collected from insurers for violations of this Section shall be
12deposited into the Fund. Moneys deposited into the Fund for
13appropriation by the General Assembly to the Department shall
14be used for the purpose of providing financial support of the
15Consumer Education Campaign, parity compliance advocacy, and
16other initiatives that support parity implementation and
17enforcement on behalf of consumers.
18    (j) The Department of Insurance and the Department of
19Healthcare and Family Services shall convene and provide
20technical support to a workgroup of 11 members that shall be
21comprised of 3 mental health parity experts recommended by an
22organization advocating on behalf of mental health parity
23appointed by the President of the Senate; 3 behavioral health
24providers recommended by an organization that represents
25behavioral health providers appointed by the Speaker of the
26House of Representatives; 2 representing Medicaid managed care

 

 

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1organizations recommended by an organization that represents
2Medicaid managed care plans appointed by the Minority Leader of
3the House of Representatives; 2 representing commercial
4insurers recommended by an organization that represents
5insurers appointed by the Minority Leader of the Senate; and a
6representative of an organization that represents Medicaid
7managed care plans appointed by the Governor.
8    The workgroup shall provide recommendations to the General
9Assembly on health plan data reporting requirements that
10separately break out data on mental, emotional, nervous, or
11substance use disorder or condition benefits and data on other
12medical benefits, including physical health and related health
13services no later than December 31, 2019. The recommendations
14to the General Assembly shall be filed with the Clerk of the
15House of Representatives and the Secretary of the Senate in
16electronic form only, in the manner that the Clerk and the
17Secretary shall direct. This workgroup shall take into account
18federal requirements and recommendations on mental health
19parity reporting for the Medicaid program. This workgroup shall
20also develop the format and provide any needed definitions for
21reporting requirements in subsection (k). The research and
22evaluation of the working group shall include, but not be
23limited to:
24        (1) claims denials due to benefit limits, if
25    applicable;
26        (2) administrative denials for no prior authorization;

 

 

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1        (3) denials due to not meeting medical necessity;
2        (4) denials that went to external review and whether
3    they were upheld or overturned for medical necessity;
4        (5) out-of-network claims;
5        (6) emergency care claims;
6        (7) network directory providers in the outpatient
7    benefits classification who filed no claims in the last 6
8    months, if applicable;
9        (8) the impact of existing and pertinent limitations
10    and restrictions related to approved services, licensed
11    providers, reimbursement levels, and reimbursement
12    methodologies within the Division of Mental Health, the
13    Division of Substance Use Prevention and Recovery
14    programs, the Department of Healthcare and Family
15    Services, and, to the extent possible, federal regulations
16    and law; and
17        (9) when reporting and publishing should begin.
18    Representatives from the Department of Healthcare and
19Family Services, representatives from the Division of Mental
20Health, and representatives from the Division of Substance Use
21Prevention and Recovery shall provide technical advice to the
22workgroup.
23    (k) An insurer that amends, delivers, issues, or renews a
24group or individual policy of accident and health insurance or
25a qualified health plan offered through the health insurance
26marketplace in this State providing coverage for hospital or

 

 

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1medical treatment and for the treatment of mental, emotional,
2nervous, or substance use disorders or conditions shall submit
3an annual report, the format and definitions for which will be
4developed by the workgroup in subsection (j), to the
5Department, or, with respect to medical assistance, the
6Department of Healthcare and Family Services starting on or
7before July 1, 2020 that contains the following information
8separately for inpatient in-network benefits, inpatient
9out-of-network benefits, outpatient in-network benefits,
10outpatient out-of-network benefits, emergency care benefits,
11and prescription drug benefits in the case of accident and
12health insurance or qualified health plans, or inpatient,
13outpatient, emergency care, and prescription drug benefits in
14the case of medical assistance:
15        (1) A summary of the plan's pharmacy management
16    processes for mental, emotional, nervous, or substance use
17    disorder or condition benefits compared to those for other
18    medical benefits.
19        (2) A summary of the internal processes of review for
20    experimental benefits and unproven technology for mental,
21    emotional, nervous, or substance use disorder or condition
22    benefits and those for other medical benefits.
23        (3) A summary of how the plan's policies and procedures
24    for utilization management for mental, emotional, nervous,
25    or substance use disorder or condition benefits compare to
26    those for other medical benefits.

 

 

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1        (4) A description of the process used to develop or
2    select the medical necessity criteria for mental,
3    emotional, nervous, or substance use disorder or condition
4    benefits and the process used to develop or select the
5    medical necessity criteria for medical and surgical
6    benefits.
7        (5) Identification of all nonquantitative treatment
8    limitations that are applied to both mental, emotional,
9    nervous, or substance use disorder or condition benefits
10    and medical and surgical benefits within each
11    classification of benefits.
12        (6) The results of an analysis that demonstrates that
13    for the medical necessity criteria described in
14    subparagraph (A) and for each nonquantitative treatment
15    limitation identified in subparagraph (B), as written and
16    in operation, the processes, strategies, evidentiary
17    standards, or other factors used in applying the medical
18    necessity criteria and each nonquantitative treatment
19    limitation to mental, emotional, nervous, or substance use
20    disorder or condition benefits within each classification
21    of benefits are comparable to, and are applied no more
22    stringently than, the processes, strategies, evidentiary
23    standards, or other factors used in applying the medical
24    necessity criteria and each nonquantitative treatment
25    limitation to medical and surgical benefits within the
26    corresponding classification of benefits; at a minimum,

 

 

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1    the results of the analysis shall:
2            (A) identify the factors used to determine that a
3        nonquantitative treatment limitation applies to a
4        benefit, including factors that were considered but
5        rejected;
6            (B) identify and define the specific evidentiary
7        standards used to define the factors and any other
8        evidence relied upon in designing each nonquantitative
9        treatment limitation;
10            (C) provide the comparative analyses, including
11        the results of the analyses, performed to determine
12        that the processes and strategies used to design each
13        nonquantitative treatment limitation, as written, for
14        mental, emotional, nervous, or substance use disorder
15        or condition benefits are comparable to, and are
16        applied no more stringently than, the processes and
17        strategies used to design each nonquantitative
18        treatment limitation, as written, for medical and
19        surgical benefits;
20            (D) provide the comparative analyses, including
21        the results of the analyses, performed to determine
22        that the processes and strategies used to apply each
23        nonquantitative treatment limitation, in operation,
24        for mental, emotional, nervous, or substance use
25        disorder or condition benefits are comparable to, and
26        applied no more stringently than, the processes or

 

 

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1        strategies used to apply each nonquantitative
2        treatment limitation, in operation, for medical and
3        surgical benefits; and
4            (E) disclose the specific findings and conclusions
5        reached by the insurer that the results of the analyses
6        described in subparagraphs (C) and (D) indicate that
7        the insurer is in compliance with this Section and the
8        Mental Health Parity and Addiction Equity Act of 2008
9        and its implementing regulations, which includes 42
10        CFR Parts 438, 440, and 457 and 45 CFR 146.136 and any
11        other related federal regulations found in the Code of
12        Federal Regulations.
13        (7) Any other information necessary to clarify data
14    provided in accordance with this Section requested by the
15    Director, including information that may be proprietary or
16    have commercial value, under the requirements of Section 30
17    of the Viatical Settlements Act of 2009.
18    (l) An insurer that amends, delivers, issues, or renews a
19group or individual policy of accident and health insurance or
20a qualified health plan offered through the health insurance
21marketplace in this State providing coverage for hospital or
22medical treatment and for the treatment of mental, emotional,
23nervous, or substance use disorders or conditions on or after
24the effective date of this amendatory Act of the 100th General
25Assembly shall, in advance of the plan year, make available to
26the Department or, with respect to medical assistance, the

 

 

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1Department of Healthcare and Family Services and to all plan
2participants and beneficiaries the information required in
3subparagraphs (C) through (E) of paragraph (6) of subsection
4(k). For plan participants and medical assistance
5beneficiaries, the information required in subparagraphs (C)
6through (E) of paragraph (6) of subsection (k) shall be made
7available on a publicly-available website whose web address is
8prominently displayed in plan and managed care organization
9informational and marketing materials.
10    (m) In conjunction with its compliance examination program
11conducted in accordance with the Illinois State Auditing Act,
12the Auditor General shall undertake a review of compliance by
13the Department and the Department of Healthcare and Family
14Services with Section 370c and this Section. Any findings
15resulting from the review conducted under this Section shall be
16included in the applicable State agency's compliance
17examination report. Each compliance examination report shall
18be issued in accordance with Section 3-14 of the Illinois State
19Auditing Act. A copy of each report shall also be delivered to
20the head of the applicable State agency and posted on the
21Auditor General's website.
22(Source: P.A. 99-480, eff. 9-9-15; 100-1024, eff. 1-1-19.)