96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB5250

 

Introduced 2/3/2010, by Rep. Linda Chapa LaVia

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/368g new

    Amends the Illinois Insurance Code. Sets forth provisions concerning restrictions on payment and reimbursement. Provides that a contracting entity, insurer, or third-party administrator may not grant access to a provider's health care services and contractual discounts pursuant to a provider network contract or reimburse a physician or other provider on a discounted fee basis for covered services that are provided to an insured unless certain conditions are met. Provides that a party to a preferred provider contract may not sell, lease, or otherwise transfer information regarding the payment or reimbursement terms of the contract without notification to and the authority of the other contracting parties. Sets forth requirements for a contracting entity, insurer, or third-party administrator that grants access to a provider's health care services and contractual discounts pursuant to a provider network contract. Provides that the Department of Insurance shall enforce the provisions concerning restrictions on payment and reimbursement. Sets forth penalties for violations of the Act.


LRB096 16721 RPM 32013 b

 

 

A BILL FOR

 

HB5250 LRB096 16721 RPM 32013 b

1     AN ACT concerning insurance.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Insurance Code is amended by adding
5 Section 368g as follows:
 
6     (215 ILCS 5/368g new)
7     Sec. 368g. Restrictions on payment and reimbursement.
8     (a) A contracting entity, an insurer, or third-party
9 administrator licensed to do business in this State may not
10 grant access to a provider's health care services and
11 contractual discounts pursuant to a provider network contract
12 or reimburse a physician or other practitioner, institutional
13 provider, or organization of physicians and health care
14 providers on a discounted fee basis for covered services that
15 are provided to an insured unless:
16         (1) the provider network contract specifically states
17     that the contracting entity may enter into an agreement
18     with a third party allowing the third party to obtain the
19     contracting entity, insurer, or third-party
20     administrator's rights and responsibilities under the
21     provider network contract as if the third party were the
22     contracting entity, an insurer, or third-party
23     administrator; any changes shall require a prior-approval

 

 

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1     signature from the provider; however, the provider may
2     refuse to comply with the assignment without consequence
3     and without material change to the original contract with
4     the contracting entity;
5         (2) the third party accessing the provider network
6     contract is contractually obligated to comply with all
7     applicable terms, contracted rates, limitations, and
8     conditions of the provider network contract; and
9         (3) the insurer or third-party administrator has
10     agreed to provide coverage for those health care services
11     under the health insurance policy.
12     (b) A party to a preferred provider contract, including a
13 contract with a preferred provider organization, may not sell,
14 lease, or otherwise transfer information regarding the payment
15 or reimbursement terms of the contract without prior adequate
16 notification to and the express authority of the other
17 contracting parties.
18     (c) A contracting entity, insurer, or third-party
19 administrator who grants access to a provider's health care
20 services and contractual discounts pursuant to a provider
21 network contract shall do all of the following:
22         (1) Identify and provide to the provider, at the time a
23     provider network contract is entered into with a provider,
24     a written or electronic list of all third parties to whom
25     the contracting entity has or will grant access to the
26     provider's health care services and contractual discounts

 

 

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1     pursuant to a provider network contract.
2         (2) Maintain a web site or other readily available
3     mechanism, such as a toll-free telephone number, through
4     which a provider may obtain a listing, updated at least
5     every 90 days, of the third parties with whom the
6     contracting entity or another third party has executed
7     contracts to grant access to the provider's health care
8     services and contractual discounts pursuant to a provider
9     network contract.
10         (3) Provide the third party with sufficient
11     information regarding the provider network contract to
12     enable the third party to comply with all relevant terms,
13     limitations, and conditions of the provider network
14     contract.
15         (4) Require that the third party who contracts with the
16     contracting entity, insurer, or third-party administrator
17     to gain access to the provider network contract identify
18     the source of the contractual discount taken by the third
19     party on each remittance advice or explanation of payment
20     form furnished to a health care provider when the discount
21     is pursuant to the contracting entity's provider network
22     contract.
23         (5) Notify the third party who contracts with the
24     contracting entity to gain access to the provider network
25     contract of the termination of the provider network
26     contract no later than 7 days prior to the effective date

 

 

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1     of the final termination of the provider network contract.
2     The notice can be provided through any reasonable means,
3     including, but not limited to, written notice, electronic
4     communication, or an update to an electronic database or
5     other provider listing.
6         (6) Require those parties are by contract eligible to
7     claim the right to access a provider's discounted rate to
8     cease claiming entitlement to those rates or other
9     contracted rights or obligations for services rendered
10     after termination of the provider network contract.
11         (7) Have both the contracting entity's name and the
12     contracting third party's name included on all member
13     identification cards and require that the card be presented
14     at the time of service.
15         (8) Attach a complete payer list to the contract and
16     require the plan to provide notice of changes to the list.
17         (9) Define "payer" clearly to identify the entity
18     obligated to pay and include a statement that the provider
19     has a right to take legal action against that entity.
20         (10) Have a provision in the contract requiring the
21     forfeiture of all discounts that do not comply with the
22     preferred provider organization agreement.
23         (11) Include a contract clause that allows the provider
24     to audit the preferred provider organization's records
25     that are related to patient activity.
26     (d) A contracting entity, an insurer, a third-party

 

 

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1 administrator, any third party accessing the provider network
2 contract, or a party to a preferred provider contract that
3 violates this Section shall be guilty of a business offense and
4 may be fined not less than $200 and not more than $5,000 for
5 each offense. The Department shall enforce the provisions of
6 this Section pursuant to the enforcement powers granted to it
7 by law. The Department is hereby granted specific authority to
8 issue a cease and desist order, fine, or otherwise penalize the
9 contracting entity, the insurer, third-party administrator,
10 any third party accessing the provider network contract, or a
11 party to a preferred provider contract that violates this
12 Section. The Department shall adopt reasonable rules to enforce
13 compliance with this Section.