SB1568 EngrossedLRB103 28639 BMS 55020 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 July 23, 2021 (the effective date of
10Public Act 102-135), every insurer that amends, delivers,
11issues, or renews a group or individual policy of accident and
12health insurance or a qualified health plan offered through
13the Health Insurance Marketplace in this State providing
14coverage for hospital or medical treatment and for the
15treatment of mental, emotional, nervous, or substance use
16disorders or conditions shall ensure prior to policy issuance
17that:
18        (1) the financial requirements applicable to such
19    mental, emotional, nervous, or substance use disorder or
20    condition benefits are no more restrictive than the
21    predominant financial requirements applied to
22    substantially all hospital and medical benefits covered by
23    the policy and that there are no separate cost-sharing

 

 

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1    requirements that are applicable only with respect to
2    mental, emotional, nervous, or substance use disorder or
3    condition benefits; and
4        (2) the treatment limitations applicable to such
5    mental, emotional, nervous, or substance use disorder or
6    condition benefits are no more restrictive than the
7    predominant treatment limitations applied to substantially
8    all hospital and medical benefits covered by the policy
9    and that there are no separate treatment limitations that
10    are applicable only with respect to mental, emotional,
11    nervous, or substance use disorder or condition benefits.
12    (b) The following provisions shall apply concerning
13aggregate lifetime limits:
14        (1) In the case of a group or individual policy of
15    accident and health insurance or a qualified health plan
16    offered through the Health Insurance Marketplace amended,
17    delivered, issued, or renewed in this State on or after
18    September 9, 2015 (the effective date of Public Act
19    99-480) that provides coverage for hospital or medical
20    treatment and for the treatment of mental, emotional,
21    nervous, or substance use disorders or conditions the
22    following provisions shall apply:
23            (A) if the policy does not include an aggregate
24        lifetime limit on substantially all hospital and
25        medical benefits, then the policy may not impose any
26        aggregate lifetime limit on mental, emotional,

 

 

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

 

 

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1    nervous, or substance use disorder or condition benefits
2    by substituting for the applicable lifetime limit an
3    average aggregate lifetime limit that is computed taking
4    into account the weighted average of the aggregate
5    lifetime limits applicable to such categories.
6    (c) The following provisions shall apply concerning annual
7limits:
8        (1) In the case of a group or individual policy of
9    accident and health insurance or a qualified health plan
10    offered through the Health Insurance Marketplace amended,
11    delivered, issued, or renewed in this State on or after
12    September 9, 2015 (the effective date of Public Act
13    99-480) that provides coverage for hospital or medical
14    treatment and for the treatment of mental, emotional,
15    nervous, or substance use disorders or conditions the
16    following provisions shall apply:
17            (A) if the policy does not include an annual limit
18        on substantially all hospital and medical benefits,
19        then the policy may not impose any annual limits on
20        mental, emotional, nervous, or substance use disorder
21        or condition benefits; or
22            (B) if the policy includes an annual limit on
23        substantially all hospital and medical benefits (in
24        this subsection referred to as the "applicable annual
25        limit"), then the policy shall either:
26                (i) apply the applicable annual limit both to

 

 

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

 

 

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1mental, emotional, nervous, or substance use disorder or
2condition treatment drugs on their formulary that are no less
3favorable to the insured as those policies and procedures the
4insurer uses for the selection and placement of drugs for
5medical or surgical conditions and shall follow the expedited
6coverage determination requirements for substance abuse
7treatment drugs set forth in Section 45.2 of the Managed Care
8Reform and Patient Rights Act.
9    (e) This Section shall be interpreted in a manner
10consistent with all applicable federal parity regulations
11including, but not limited to, the Paul Wellstone and Pete
12Domenici Mental Health Parity and Addiction Equity Act of
132008, final regulations issued under the Paul Wellstone and
14Pete Domenici Mental Health Parity and Addiction Equity Act of
152008 and final regulations applying the Paul Wellstone and
16Pete Domenici Mental Health Parity and Addiction Equity Act of
172008 to Medicaid managed care organizations, the Children's
18Health Insurance Program, and alternative benefit plans.
19    (f) The provisions of subsections (b) and (c) of this
20Section shall not be interpreted to allow the use of lifetime
21or annual limits otherwise prohibited by State or federal law.
22    (g) As used in this Section:
23    "Financial requirement" includes deductibles, copayments,
24coinsurance, and out-of-pocket maximums, but does not include
25an aggregate lifetime limit or an annual limit subject to
26subsections (b) and (c).

 

 

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1    "Mental, emotional, nervous, or substance use disorder or
2condition" means a condition or disorder that involves a
3mental health condition or substance use disorder that falls
4under any of the diagnostic categories listed in the mental
5and behavioral disorders chapter of the current edition of the
6International Classification of Disease or that is listed in
7the most recent version of the Diagnostic and Statistical
8Manual of Mental Disorders.
9    "Treatment limitation" includes limits on benefits based
10on the frequency of treatment, number of visits, days of
11coverage, days in a waiting period, or other similar limits on
12the scope or duration of treatment. "Treatment limitation"
13includes both quantitative treatment limitations, which are
14expressed numerically (such as 50 outpatient visits per year),
15and nonquantitative treatment limitations, which otherwise
16limit the scope or duration of treatment. A permanent
17exclusion of all benefits for a particular condition or
18disorder shall not be considered a treatment limitation.
19"Nonquantitative treatment" means those limitations as
20described under federal regulations (26 CFR 54.9812-1).
21"Nonquantitative treatment limitations" include, but are not
22limited to, those limitations described under federal
23regulations 26 CFR 54.9812-1, 29 CFR 2590.712, and 45 CFR
24146.136.
25    (h) The Department of Insurance shall implement the
26following education initiatives:

 

 

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1        (1) By January 1, 2016, the Department shall develop a
2    plan for a Consumer Education Campaign on parity. The
3    Consumer Education Campaign shall focus its efforts
4    throughout the State and include trainings in the
5    northern, southern, and central regions of the State, as
6    defined by the Department, as well as each of the 5 managed
7    care regions of the State as identified by the Department
8    of Healthcare and Family Services. Under this Consumer
9    Education Campaign, the Department shall: (1) by January
10    1, 2017, provide at least one live training in each region
11    on parity for consumers and providers and one webinar
12    training to be posted on the Department website and (2)
13    establish a consumer hotline to assist consumers in
14    navigating the parity process by March 1, 2017. By January
15    1, 2018 the Department shall issue a report to the General
16    Assembly on the success of the Consumer Education
17    Campaign, which shall indicate whether additional training
18    is necessary or would be recommended.
19        (2) The Department, in coordination with the
20    Department of Human Services and the Department of
21    Healthcare and Family Services, shall convene a working
22    group of health care insurance carriers, mental health
23    advocacy groups, substance abuse patient advocacy groups,
24    and mental health physician groups for the purpose of
25    discussing issues related to the treatment and coverage of
26    mental, emotional, nervous, or substance use disorders or

 

 

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

 

 

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1        Equity Act of 2008 and 42 U.S.C. 18031(j).
2            (B) Cover the methodology the Departments use to
3        check for compliance with this Section and Sections
4        356z.23 and 370c of this Code.
5            (C) Identify market conduct examinations or, in
6        the case of the Department of Healthcare and Family
7        Services, audits conducted or completed during the
8        preceding 12-month period regarding compliance with
9        parity in mental, emotional, nervous, and substance
10        use disorder or condition benefits under State and
11        federal laws and summarize the results of such market
12        conduct examinations and audits. This shall include:
13                (i) the number of market conduct examinations
14            and audits initiated and completed;
15                (ii) the benefit classifications examined by
16            each market conduct examination and audit;
17                (iii) the subject matter of each market
18            conduct examination and audit, including
19            quantitative and nonquantitative treatment
20            limitations; and
21                (iv) a summary of the basis for the final
22            decision rendered in each market conduct
23            examination and audit.
24            Individually identifiable information shall be
25        excluded from the reports consistent with federal
26        privacy protections.

 

 

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

 

 

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

 

 

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1        (1) claims denials due to benefit limits, if
2    applicable;
3        (2) administrative denials for no prior authorization;
4        (3) denials due to not meeting medical necessity;
5        (4) denials that went to external review and whether
6    they were upheld or overturned for medical necessity;
7        (5) out-of-network claims;
8        (6) emergency care claims;
9        (7) network directory providers in the outpatient
10    benefits classification who filed no claims in the last 6
11    months, if applicable;
12        (8) the impact of existing and pertinent limitations
13    and restrictions related to approved services, licensed
14    providers, reimbursement levels, and reimbursement
15    methodologies within the Division of Mental Health, the
16    Division of Substance Use Prevention and Recovery
17    programs, the Department of Healthcare and Family
18    Services, and, to the extent possible, federal regulations
19    and law; and
20        (9) when reporting and publishing should begin.
21    Representatives from the Department of Healthcare and
22Family Services, representatives from the Division of Mental
23Health, and representatives from the Division of Substance Use
24Prevention and Recovery shall provide technical advice to the
25workgroup.
26    (j-5) The Department of Insurance shall collect the

 

 

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1following information:
2        (1) The number of employment disability insurance
3    plans offered in this State, including, but not limited
4    to:
5            (A) individual short-term policies;
6            (B) individual long-term policies;
7            (C) group short-term policies; and
8            (D) group long-term policies.
9        (2) The number of policies referenced in paragraph (1)
10    of this subsection that limit mental health and substance
11    use disorder benefits.
12        (3) The average defined benefit period for the
13    policies referenced in paragraph (1) of this subsection,
14    both for those policies that limit and those policies that
15    have no limitation on mental health and substance use
16    disorder benefits.
17        (4) Whether the policies referenced in paragraph (1)
18    of this subsection are purchased on a voluntary or
19    non-voluntary basis.
20        (5) The identities of the individuals, entities, or a
21    combination of the 2, that assume the cost associated with
22    covering the policies referenced in paragraph (1) of this
23    subsection.
24        (6) The average defined benefit period for plans that
25    cover physical disability and mental health and substance
26    abuse without limitation, including, but not limited to:

 

 

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1            (A) individual short-term policies;
2            (B) individual long-term policies;
3            (C) group short-term policies; and
4            (D) group long-term policies.
5        (7) The average premiums for disability income
6    insurance issued in this State for:
7            (A) individual short-term policies that limit
8        mental health and substance use disorder benefits;
9            (B) individual long-term policies that limit
10        mental health and substance use disorder benefits;
11            (C) group short-term policies that limit mental
12        health and substance use disorder benefits;
13            (D) group long-term policies that limit mental
14        health and substance use disorder benefits;
15            (E) individual short-term policies that include
16        mental health and substance use disorder benefits
17        without limitation;
18            (F) individual long-term policies that include
19        mental health and substance use disorder benefits
20        without limitation;
21            (G) group short-term policies that include mental
22        health and substance use disorder benefits without
23        limitation; and
24            (H) group long-term policies that include mental
25        health and substance use disorder benefits without
26        limitation.

 

 

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1    The Department shall present its findings regarding
2information collected under this subsection (j-5) to the
3General Assembly no later than April 30, 2024. Information
4regarding a specific insurance provider's contributions to the
5Department's report shall be exempt from disclosure under
6paragraph (t) of subsection (1) of Section 7 of the Freedom of
7Information Act. The aggregated information gathered by the
8Department shall not be exempt from disclosure under paragraph
9(t) of subsection (1) of Section 7 of the Freedom of
10Information Act.
11    (k) An insurer that amends, delivers, issues, or renews a
12group or individual policy of accident and health insurance or
13a qualified health plan offered through the health insurance
14marketplace in this State providing coverage for hospital or
15medical treatment and for the treatment of mental, emotional,
16nervous, or substance use disorders or conditions shall submit
17an annual report, the format and definitions for which will be
18developed by the workgroup in subsection (j), to the
19Department, or, with respect to medical assistance, the
20Department of Healthcare and Family Services starting on or
21before July 1, 2020 that contains the following information
22separately for inpatient in-network benefits, inpatient
23out-of-network benefits, outpatient in-network benefits,
24outpatient out-of-network benefits, emergency care benefits,
25and prescription drug benefits in the case of accident and
26health insurance or qualified health plans, or inpatient,

 

 

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1outpatient, emergency care, and prescription drug benefits in
2the case of medical assistance:
3        (1) A summary of the plan's pharmacy management
4    processes for mental, emotional, nervous, or substance use
5    disorder or condition benefits compared to those for other
6    medical benefits.
7        (2) A summary of the internal processes of review for
8    experimental benefits and unproven technology for mental,
9    emotional, nervous, or substance use disorder or condition
10    benefits and those for other medical benefits.
11        (3) A summary of how the plan's policies and
12    procedures for utilization management for mental,
13    emotional, nervous, or substance use disorder or condition
14    benefits compare to those for other medical benefits.
15        (4) A description of the process used to develop or
16    select the medical necessity criteria for mental,
17    emotional, nervous, or substance use disorder or condition
18    benefits and the process used to develop or select the
19    medical necessity criteria for medical and surgical
20    benefits.
21        (5) Identification of all nonquantitative treatment
22    limitations that are applied to both mental, emotional,
23    nervous, or substance use disorder or condition benefits
24    and medical and surgical benefits within each
25    classification of benefits.
26        (6) The results of an analysis that demonstrates that

 

 

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

 

 

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1        nonquantitative treatment limitation, as written, for
2        mental, emotional, nervous, or substance use disorder
3        or condition benefits are comparable to, and are
4        applied no more stringently than, the processes and
5        strategies used to design each nonquantitative
6        treatment limitation, as written, for medical and
7        surgical benefits;
8            (D) provide the comparative analyses, including
9        the results of the analyses, performed to determine
10        that the processes and strategies used to apply each
11        nonquantitative treatment limitation, in operation,
12        for mental, emotional, nervous, or substance use
13        disorder or condition benefits are comparable to, and
14        applied no more stringently than, the processes or
15        strategies used to apply each nonquantitative
16        treatment limitation, in operation, for medical and
17        surgical benefits; and
18            (E) disclose the specific findings and conclusions
19        reached by the insurer that the results of the
20        analyses described in subparagraphs (C) and (D)
21        indicate that the insurer is in compliance with this
22        Section and the Mental Health Parity and Addiction
23        Equity Act of 2008 and its implementing regulations,
24        which includes 42 CFR Parts 438, 440, and 457 and 45
25        CFR 146.136 and any other related federal regulations
26        found in the Code of Federal Regulations.

 

 

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1        (7) Any other information necessary to clarify data
2    provided in accordance with this Section requested by the
3    Director, including information that may be proprietary or
4    have commercial value, under the requirements of Section
5    30 of the Viatical Settlements Act of 2009.
6    (l) An insurer that amends, delivers, issues, or renews a
7group or individual policy of accident and health insurance or
8a qualified health plan offered through the health insurance
9marketplace in this State providing coverage for hospital or
10medical treatment and for the treatment of mental, emotional,
11nervous, or substance use disorders or conditions on or after
12January 1, 2019 (the effective date of Public Act 100-1024)
13shall, in advance of the plan year, make available to the
14Department or, with respect to medical assistance, the
15Department of Healthcare and Family Services and to all plan
16participants and beneficiaries the information required in
17subparagraphs (C) through (E) of paragraph (6) of subsection
18(k). For plan participants and medical assistance
19beneficiaries, the information required in subparagraphs (C)
20through (E) of paragraph (6) of subsection (k) shall be made
21available on a publicly-available website whose web address is
22prominently displayed in plan and managed care organization
23informational and marketing materials.
24    (m) In conjunction with its compliance examination program
25conducted in accordance with the Illinois State Auditing Act,
26the Auditor General shall undertake a review of compliance by

 

 

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1the Department and the Department of Healthcare and Family
2Services with Section 370c and this Section. Any findings
3resulting from the review conducted under this Section shall
4be included in the applicable State agency's compliance
5examination report. Each compliance examination report shall
6be issued in accordance with Section 3-14 of the Illinois
7State Auditing Act. A copy of each report shall also be
8delivered to the head of the applicable State agency and
9posted on the Auditor General's website.
10(Source: P.A. 102-135, eff. 7-23-21; 102-579, eff. 8-25-21;
11102-813, eff. 5-13-22.)