101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB1697

 

Introduced 2/15/2019, by Sen. Heather A. Steans

 

SYNOPSIS AS INTRODUCED:
 
305 ILCS 5/5-30.1
305 ILCS 5/5-30.11 new

    Amends the Medical Assistance Article of the Illinois Public Aid Code. Require managed care organizations (MCOs) to ensure (i) that contracted providers shall be paid for any medically necessary service rendered to any of the MCO's enrollees, regardless of inclusion on the MCO's published and publicly available roster of available providers; and (ii) that all contracted providers are contained on an updated roster within 7 days of entering into a contract with the MCO and that such roster be readily accessible by all medical assistance enrollees for purposes of selecting an approved healthcare provider. Requires the Department of Healthcare and Family Services to develop a single standard list of all additional clinical information that shall be considered essential information and may be requested from a hospital to adjudicate a claim. Provides that a provider shall not be required to submit additional information, justifying medical necessity, for a service which has previously received a service authorization by the MCO or its agent. Contains provisions concerning a timely payment interest penalty; an expedited provider payment schedule; a single list of standard codes to identify the reason for nonpayment on a claim; payments under the Department's fee-for-service system; a 90-day correction period for providers to correct errors or omissions in a payment claim; service authorization requests; discharge notification and facility placement; and other matters. Defines terms. Effective immediately.


LRB101 09318 KTG 54413 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1697LRB101 09318 KTG 54413 b

1    AN ACT concerning public aid.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Public Aid Code is amended by
5changing Section 5-30.1 and by adding Section 5-30.11 as
6follows:
 
7    (305 ILCS 5/5-30.1)
8    Sec. 5-30.1. Managed care protections.
9    (a) As used in this Section:
10    "Managed care organization" or "MCO" means any entity which
11contracts with the Department to provide services where payment
12for medical services is made on a capitated basis.
13    "Emergency services" include:
14        (1) emergency services, as defined by Section 10 of the
15    Managed Care Reform and Patient Rights Act;
16        (2) emergency medical screening examinations, as
17    defined by Section 10 of the Managed Care Reform and
18    Patient Rights Act;
19        (3) post-stabilization medical services, as defined by
20    Section 10 of the Managed Care Reform and Patient Rights
21    Act; and
22        (4) emergency medical conditions, as defined by
23    Section 10 of the Managed Care Reform and Patient Rights

 

 

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1    Act.
2    "Claim Rejection" means a claim which is not correctly
3formatted and therefore cannot be processed when submitted for
4payment due to errors that cannot be corrected by the MCO.
5    "Claim payment rate adjustment" means any retroactive
6change to the rate or rates of payment from an MCO to a
7provider that results in a change in the total payment to the
8provider from the amount originally paid to the provider for
9the service. Such rate adjustments shall include, but not be
10limited to, either positive or negative rate adjustments,
11incentive payments, bonuses, or settlement adjustments.
12    "Claim recoupment adjustment" means any reduction to the
13initial final claim payment amount that is applied as an
14off-set for the purpose of recouping amounts due from the
15provider and owed to the MCO or the Department. All recoupment
16adjustments must be clearly and separately noted on any
17remittance advice when paying the provider. The rate-based
18total payment amount must be clearly and separately delineated
19from any applied recoupment adjustment.
20    "Claim denial" means a determination of nonpayment by the
21MCO of a properly formatted claim for services rendered by the
22provider. "Denial" means the MCO has determined that it has no
23liability under the Medical Assistance Program, the MCO
24contract with the Department, an existing contract with the
25provider, or other applicable provisions of law. Examples of an
26acceptable denial include, but are not limited to: (i) the

 

 

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1determination that the service rendered is not covered under
2the Medical Assistance Program, the MCO contract with the
3Department, an existing contract with the provider, or other
4applicable provisions of law; (ii) the beneficiary listed on
5the claim is not enrolled in the MCO; or (iii) a contractually
6required service authorization was not requested by the
7provider.
8    "Service authorization" means any service for which an MCO
9requires a provider, as specified in its service agreement,
10contract, or handbook, to submit a request for medical review
11authorizing the service, either prior to, concurrent with, or
12following the delivery of the service. Service authorization
13includes, but is not limited to, the following terms:
14precertification, preadmission review, pre-service review,
15prior authorization, prior approval, notification, concurrent
16review, retrospective review, prepayment review, and post
17payment review.
18    (b) As provided by Section 5-16.12, managed care
19organizations are subject to the provisions of the Managed Care
20Reform and Patient Rights Act.
21    (c) An MCO shall pay any provider of emergency services
22that does not have in effect a contract with the contracted
23Medicaid MCO. The default rate of reimbursement shall be the
24rate paid under Illinois Medicaid fee-for-service program
25methodology, including all policy adjusters, including but not
26limited to Medicaid High Volume Adjustments, Medicaid

 

 

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1Percentage Adjustments, Outpatient High Volume Adjustments,
2and all outlier add-on adjustments to the extent such
3adjustments are incorporated in the development of the
4applicable MCO capitated rates.
5    (d) An MCO shall pay for all post-stabilization services as
6a covered service in any of the following situations:
7        (1) the MCO authorized such services;
8        (2) such services were administered to maintain the
9    enrollee's stabilized condition within one hour after a
10    request to the MCO for authorization of further
11    post-stabilization services;
12        (3) the MCO did not respond to a request to authorize
13    such services within one hour;
14        (4) the MCO could not be contacted; or
15        (5) the MCO and the treating provider, if the treating
16    provider is a non-affiliated provider, could not reach an
17    agreement concerning the enrollee's care and an affiliated
18    provider was unavailable for a consultation, in which case
19    the MCO must pay for such services rendered by the treating
20    non-affiliated provider until an affiliated provider was
21    reached and either concurred with the treating
22    non-affiliated provider's plan of care or assumed
23    responsibility for the enrollee's care. Such payment shall
24    be made at the default rate of reimbursement paid under
25    Illinois Medicaid fee-for-service program methodology,
26    including all policy adjusters, including but not limited

 

 

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1    to Medicaid High Volume Adjustments, Medicaid Percentage
2    Adjustments, Outpatient High Volume Adjustments and all
3    outlier add-on adjustments to the extent that such
4    adjustments are incorporated in the development of the
5    applicable MCO capitated rates.
6    (e) The following requirements apply to MCOs in determining
7payment for all emergency services:
8        (1) MCOs shall not impose any requirements for prior
9    approval of emergency services.
10        (2) The MCO shall cover emergency services provided to
11    enrollees who are temporarily away from their residence and
12    outside the contracting area to the extent that the
13    enrollees would be entitled to the emergency services if
14    they still were within the contracting area.
15        (3) The MCO shall have no obligation to cover medical
16    services provided on an emergency basis that are not
17    covered services under the contract.
18        (4) The MCO shall not condition coverage for emergency
19    services on the treating provider notifying the MCO of the
20    enrollee's screening and treatment within 10 days after
21    presentation for emergency services.
22        (5) The determination of the attending emergency
23    physician, or the provider actually treating the enrollee,
24    of whether an enrollee is sufficiently stabilized for
25    discharge or transfer to another facility, shall be binding
26    on the MCO. The MCO shall cover emergency services for all

 

 

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1    enrollees whether the emergency services are provided by an
2    affiliated or non-affiliated provider.
3        (6) The MCO's financial responsibility for
4    post-stabilization care services it has not pre-approved
5    ends when:
6            (A) a plan physician with privileges at the
7        treating hospital assumes responsibility for the
8        enrollee's care;
9            (B) a plan physician assumes responsibility for
10        the enrollee's care through transfer;
11            (C) a contracting entity representative and the
12        treating physician reach an agreement concerning the
13        enrollee's care; or
14            (D) the enrollee is discharged.
15    (f) Network adequacy and transparency.
16        (1) The Department shall:
17            (A) ensure that an adequate provider network is in
18        place, taking into consideration health professional
19        shortage areas and medically underserved areas;
20            (B) publicly release an explanation of its process
21        for analyzing network adequacy;
22            (C) periodically ensure that an MCO continues to
23        have an adequate network in place; and
24            (D) require MCOs, including Medicaid Managed Care
25        Entities as defined in Section 5-30.2, to meet provider
26        directory requirements under Section 5-30.3; and .

 

 

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1            (E) require MCOs to: (i) ensure that any provider
2        under contract with an MCO on the date of service is
3        paid for any medically necessary service rendered to
4        any of the MCO's enrollees, regardless of inclusion on
5        the MCO's published and publicly available roster of
6        available providers; and (ii) ensure that all
7        contracted providers are listed on an updated roster
8        within 7 days of entering into a contract with the MCO
9        and that such roster is readily accessible to all
10        medical assistance enrollees for purposes of selecting
11        an approved healthcare provider.
12        (2) Each MCO shall confirm its receipt of information
13    submitted specific to physician or dentist additions or
14    physician or dentist deletions from the MCO's provider
15    network within 3 days after receiving all required
16    information from contracted physicians or dentists, and
17    electronic physician and dental directories must be
18    updated consistent with current rules as published by the
19    Centers for Medicare and Medicaid Services or its successor
20    agency.
21    (g) Timely payment of claims.
22        (1) The MCO shall pay a claim within 30 days of
23    receiving a claim that contains all the essential
24    information needed to adjudicate the claim.
25            (A) The Department shall develop a single standard
26        list of all additional clinical information, beyond

 

 

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1        the standard uniform national billing requirements,
2        which shall be considered essential information that
3        may be requested from a hospital to adjudicate a claim.
4        An MCO shall not require a hospital to provide
5        information to adjudicate a claim, other than
6        information stated on the standard list developed by
7        the Department.
8            (B) The Department shall include the standard list
9        of essential information in the agreement between each
10        MCO and the Department and the Department shall publish
11        the standard list of essential information on its
12        website.
13            (C) The standard list of essential information
14        shall be developed by the Department, in consultation
15        with MCOs and the statewide association representing a
16        majority of hospitals in the State. The Department may
17        update the standard list of all essential information
18        to adjudicate a claim no more frequently than annually.
19        (2) If an MCO requires information from the standard
20    list of essential information to adjudicate a claim, it
21    must request this additional information within 5 business
22    days of receipt of the claim. The MCO shall notify the
23    billing party of its inability to adjudicate a claim within
24    30 days of receiving that claim.
25            (A) Under no circumstance shall a provider be
26        required to submit additional information, justifying

 

 

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1        medical necessity, for a service which has previously
2        received a service authorization by the MCO or its
3        agent. All services rendered in good faith by a
4        provider based on a service authorization from an MCO
5        or its agent shall be timely paid by the MCO at a rate
6        associated with the service authorized and consistent
7        with the contractual agreement between the MCO and the
8        provider or, if there is no contractual agreement, at a
9        rate otherwise required by law.
10            (B) Any request for additional information,
11        necessary for the final adjudication of payment, may
12        only temporarily suspend the 30-day timely payment
13        requirement from the date additional information is
14        requested from the provider until the date it is
15        received from the provider.
16        (3) The MCO shall pay a penalty that is at least equal
17    to the timely payment interest penalty imposed under the
18    Illinois Insurance Code for any claims not timely paid.
19            (A) When an MCO is required to pay a timely payment
20        interest penalty to a provider, the MCO must
21        automatically calculate and pay the timely payment
22        interest penalty that is due to the provider within 30
23        days after the payment of the claim. In no event shall
24        a provider be required to request or apply for payment
25        of any owed timely payment interest penalties.
26            (B) A MCO shall report at the time of payment to

 

 

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1        each provider all timely payment interest penalty
2        payments made to that provider, with such payments
3        being reported separately from the claim payment for
4        services rendered to the MCO's enrollee. Timely
5        interest penalty payments shall not be considered a
6        claim payment rate adjustment, as defined in this
7        Section, and shall be considered separately due and
8        payable by the MCO to the provider.
9        (4) The Department shall require MCOs to expedite
10    payments to providers based on criteria that include, but
11    are not limited to: The Department may establish a process
12    for MCOs to expedite payments to providers based on
13    criteria established by the Department.
14            (A) At a minimum, each MCO shall ensure that
15        providers identified on the Department's expedited
16        provider list, determined in accordance with 89 Ill.
17        Adm. Code 140.71(b), are paid by the MCO on a schedule
18        at least as frequently as the providers are paid under
19        the Department's fee-for-service expedited provider
20        schedule.
21            (B) Compliance with the expedited provider
22        requirement may be satisfied by an MCO through the use
23        of a Periodic Interim Payment (PIP) program that has
24        been mutually agreed to and documented between the MCO
25        and the provider, if the PIP program ensures that any
26        expedited provider receives regular and periodic

 

 

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1        payments based on prior period payment experience from
2        that MCO. Total payments under the PIP program may be
3        reconciled against future PIP payments on a schedule
4        mutually agreed to between the MCO and the provider.
5        (5) The Department shall establish a single list of
6    standard codes, by provider industry, to identify the
7    reason or reasons a claim is not to be paid. The list must
8    include an explanation of each code and the action or
9    actions required by the provider to correct all errors, if
10    any.
11            (A) The Department and each MCO shall use the
12        standard code set and descriptions published by the
13        Department on the Explanation of Payment, and make
14        available a system which maps the standard codes and
15        descriptions to the applicable American National
16        Standard Institute codes and includes all necessary
17        corrective actions, if possible to move the claim,
18        whether submitted in electronic format or
19        non-electronic, to a payable status.
20            (B) The requirement under this Section is meant to
21        provide a more descriptive supplement to any required
22        notifications subject to the ASC X12 electronic
23        transaction standards adopted under the federal Health
24        Insurance Portability and Accountability Act.
25            (C) The single list of standard codes shall be
26        developed in consultation with industry

 

 

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1        representatives of the Medicaid managed care health
2        plans and representatives of provider associations
3        representing the majority of providers within the
4        identified provider industry.
5    (g-5) Recognizing that the rapid transformation of the
6Illinois Medicaid program may have unintended operational
7challenges for both payers and providers:
8        (1) in no instance shall a medically necessary covered
9    service rendered in good faith, based upon eligibility
10    information documented by the provider, be denied coverage
11    or diminished in payment amount if the eligibility or
12    coverage information available at the time the service was
13    rendered is later found to be inaccurate; and
14        (2) the Department shall, by December 31, 2016, adopt
15    rules establishing policies that shall be included in the
16    Medicaid managed care policy and procedures manual
17    addressing payment resolutions in situations in which a
18    provider renders services based upon information obtained
19    after verifying a patient's eligibility and coverage plan
20    through either the Department's current enrollment system
21    or a system operated by the coverage plan identified by the
22    patient presenting for services:
23            (A) such medically necessary covered services
24        shall be considered rendered in good faith;
25            (B) such policies and procedures shall be
26        developed in consultation with industry

 

 

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1        representatives of the Medicaid managed care health
2        plans and representatives of provider associations
3        representing the majority of providers within the
4        identified provider industry; and
5            (C) such rules shall be published for a review and
6        comment period of no less than 30 days on the
7        Department's website with final rules remaining
8        available on the Department's website.
9        (3) The rules on payment resolutions shall include, but
10    not be limited to:
11            (A) the extension of the timely filing period;
12            (B) retroactive prior authorizations; and
13            (C) guaranteed minimum payment rate of no less than
14        the current, as of the date of service, fee-for-service
15        rate, plus all applicable add-ons, when the resulting
16        service relationship is out of network.
17        (4) The rules shall be applicable for both MCO coverage
18    and fee-for-service coverage.
19    (g-6) MCO Performance Metrics Report.
20        (1) The Department shall publish, on at least a
21    quarterly basis, each MCO's operational performance,
22    including, but not limited to, the following categories of
23    metrics:
24            (A) claims payment, including timeliness and
25        accuracy;
26            (B) prior authorizations;

 

 

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1            (C) grievance and appeals;
2            (D) utilization statistics;
3            (E) provider disputes;
4            (F) provider credentialing; and
5            (G) member and provider customer service.
6        (2) The Department shall ensure that the metrics report
7    is accessible to providers online by January 1, 2017.
8        (3) The metrics shall be developed in consultation with
9    industry representatives of the Medicaid managed care
10    health plans and representatives of associations
11    representing the majority of providers within the
12    identified industry.
13        (4) Metrics shall be defined and incorporated into the
14    applicable Managed Care Policy Manual issued by the
15    Department.
16    (g-7) MCO claims processing and performance analysis. In
17order to monitor MCO payments to hospital providers, pursuant
18to this amendatory Act of the 100th General Assembly, the
19Department shall post an analysis of MCO claims processing and
20payment performance on its website every 6 months. Such
21analysis shall include a review and evaluation of a
22representative sample of hospital claims that are rejected and
23denied for clean and unclean claims and the top 5 reasons for
24such actions and timeliness of claims adjudication, which
25identifies the percentage of claims adjudicated within 30, 60,
2690, and over 90 days, and the dollar amounts associated with

 

 

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1those claims. The Department shall post the contracted claims
2report required by HealthChoice Illinois on its website every 3
3months.
4    (g-8) Notwithstanding any other law, whenever the
5resolution of a dispute between an MCO and a provider related
6to the MCO's obligation to pay a claim results in the
7determination that the recipient's coverage on the date of
8service was under the Department's fee-for-service system, the
9provider shall be afforded an additional 120 days from the date
10of notice of such determination to submit the claim to the
11Department for payment under the fee-for-service system. The
12Department shall expedite the processing and adjudication of
13such claims.
14            (A) In such instances, there shall be no dispute as
15        to the Department's liability under the
16        fee-for-service system for a validly rendered service.
17            (B) Any requirement of prior service authorization
18        by the State shall be waived in such circumstances.
19            (C) In such instances, if a claim for payment
20        derives from a transfer from one hospital to another,
21        resulting in continuous care by both hospitals, there
22        shall be no dispute in the assignment of coverage for
23        the service, such that if the initiating hospital
24        service was covered under the Department's
25        fee-for-service system, then the liability for the
26        entire claim shall remain under the Department's

 

 

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1        fee-for-service system.
2    (9-9) Notwithstanding any other provisions of law, if the
3Department or an MCO requires submission of a claim for payment
4in a non-electronic format, a provider shall always be afforded
5a period of no less than 90 business days, as a correction
6period, following any notification of rejection by either the
7Department or the MCO to correct errors or omissions in the
8original submission.
9    Under no circumstances, either by an MCO or under the
10Department's fee-for-service system, shall a provider be
11denied payment for failure to comply with any timely claims
12submission requirements of this Code or under any existing
13contract, unless the non-electronic format claim submission
14occurs after the initial 180 days following the latest date of
15service on the claim, or after the 90 business days correction
16period following notification to the provider of rejection or
17denial of payment.
18    (g-10) Medical necessity determination.
19        (1) Any MCO under contract with the Department that
20    requires service authorization for any service, in order
21    for payment to be made, must have an electronic system that
22    accepts and preserves electronically for both parties all
23    service authorization requests, related clinical
24    documentation, and service authorization determinations. A
25    transaction tracking number must be issued to the provider
26    at the time of the request, noting the level of care

 

 

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1    requested for the service authorization, and must be
2    transmitted to the requesting provider either
3    electronically or provided telephonically.
4        (2) A MCO must authorize or reject a request for
5    service authorization, submitted prior to the delivery of
6    the service, within 4 calendar days of the day when all
7    information requested by the MCO, in order to rule on the
8    request, has been provided. Such service authorization or
9    rejection must contain the transaction tracking number and
10    level of care being authorized or rejected. If the
11    enrollee's medical condition is such that a time frame of 4
12    days could seriously jeopardize the enrollee's life or
13    health, the MCO must authorize or reject a request within
14    48 hours. Time frames for authorization of
15    post-stabilization services are governed by subsection (d)
16    of this Section. If no authorization or denial is provided
17    within the appropriate time frame outlined in this
18    subsection, the request for service authorization shall be
19    considered approved, and the service associated with the
20    authorization shall be deemed payable by the MCO at the
21    standard contractual rate of reimbursement for the service
22    or as required by law.
23        (3) If a service authorization is given, the MCO cannot
24    request further clinical data for the purpose of a medical
25    necessity review prior to payment when a claim for the
26    service is received by the MCO, unless the service on the

 

 

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1    claim differs significantly from the service which was
2    approved. Unless the service is deemed to significantly
3    differ from the service authorized when the service
4    authorization was given by the MCO, the service shall be
5    deemed medically necessary and authorized for payment at
6    the rate consistent with the service initially authorized
7    by the MCO and shall be paid.
8        (4) If the service on a claim differs significantly
9    from the service previously approved, the provider must
10    have at least 30 days from receiving a request from the MCO
11    to submit clinical information to show medical necessity of
12    the service that was billed. If the clinical information
13    demonstrates that the billed service was medically
14    necessary, the claim shall be paid.
15        (5) If a service did not require a service
16    authorization under the MCO's policies, and the MCO
17    undertakes a medical necessity review prior to paying the
18    claim, the MCO must request all necessary information for
19    the review from the provider within 5 business days of the
20    receipt of the claim and the provider shall have at least
21    30 business days from the receipt of the request to provide
22    the information requested by the MCO.
23        (6) Before an MCO can recover payments made based on a
24    post-payment audit, the MCO must give the provider a 60 day
25    written notice of each claim for which recovery is sought
26    and the reasons for the recovery using a standard code from

 

 

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1    the list established under paragraph (5) of subsection (g).
2    Record requests in a post payment audit may not exceed the
3    standards set forth in the Medicare Fee for Service
4    Recovery Audit Program for the provider type being audited,
5    adjusted for the provider's Medicaid volumes. Post-payment
6    recovery based on lack of medical necessity for claims that
7    were previously approved based on a medical necessity
8    review can only occur if it is demonstrated by the MCO that
9    the information provided at the time of the previous review
10    was knowingly materially inaccurate or incomplete at the
11    time the information was provided by the provider.
12        (7) If an MCO denies payment of or reduces the rate of
13    payment of a claim for a service which was:
14            (A) provided in good faith following the receipt of
15        a service authorization by the MCO and the denial is
16        for lack of service authorization, the MCO shall be
17        required to pay the provider double the amount due the
18        provider as a penalty add-on, in addition to the
19        standard contractual rate of reimbursement, or as
20        required by law, that would have been due for the
21        service if no denial had occurred; or
22            (B) provided in good faith and denied for
23        insufficient documentation and subsequently determined
24        that the claim contained all information necessary to
25        process and approve payment of the claim, the MCO shall
26        be required to pay the provider a penalty add-on, in

 

 

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1        addition to the standard contractual rate of
2        reimbursement or as required by law, equal to the value
3        of the amount owed the provider pursuant to the
4        standard contractual rate of reimbursement or as
5        required by law. Such penalty add-on shall be due and
6        payable to the provider within 30 days of payment of
7        the original claim payment.
8        The penalties imposed under this paragraph shall be due
9    in addition to any interest owed pursuant to the timely
10    payment provisions of subsection (g).
11    (h) The Department shall not expand mandatory MCO
12enrollment into new counties beyond those counties already
13designated by the Department as of June 1, 2014 for the
14individuals whose eligibility for medical assistance is not the
15seniors or people with disabilities population until the
16Department provides an opportunity for accountable care
17entities and MCOs to participate in such newly designated
18counties.
19    (i) The requirements of this Section apply to contracts
20with accountable care entities and MCOs entered into, amended,
21or renewed after June 16, 2014 (the effective date of Public
22Act 98-651).
23    (j) The requirements of this Section added by this
24amendatory Act of the 101st General Assembly shall apply to
25services provided on or after the first day of the month that
26begins 60 days after the effective date of this amendatory Act

 

 

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1of the 101st General Assembly.
2(Source: P.A. 99-725, eff. 8-5-16; 99-751, eff. 8-5-16;
3100-201, eff. 8-18-17; 100-580, eff. 3-12-18; 100-587, eff.
46-4-18.)
 
5    (305 ILCS 5/5-30.11 new)
6    Sec. 5-30.11. Discharge notification and facility
7placement of individuals; managed care. Whenever a hospital
8provides notice to a managed care organization (MCO) that an
9individual covered under the State's medical assistance
10program has received a discharge order from the attending
11physician and is ready for discharge from an inpatient hospital
12stay to another level of care, the MCO shall secure the
13individual's placement in or transfer to another facility
14within 24 hours of receiving the hospital's notification, or
15shall pay the hospital a daily rate equal to the hospital's
16daily rate associated with the stay ending, including all
17applicable add-on adjustment payments.
 
18    Section 99. Effective date. This Act takes effect upon
19becoming law.