97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1475

 

Introduced , by Rep. Mary E. Flowers

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/368b
215 ILCS 5/368c
215 ILCS 5/368d
215 ILCS 5/368e
215 ILCS 5/370  from Ch. 73, par. 982
215 ILCS 5/370a  from Ch. 73, par. 982a
215 ILCS 5/370b  from Ch. 73, par. 982b

    Amends the Illinois Insurance Code. In the provisions concerning remittance advice and procedures and recoupment, provides that no recoupment or offset may be requested or withheld from future payments 60 or more days after the original payment was made. Provides that the provisions concerning administration and enforcement are deemed incorporated into health care professional and health care provider service contracts entered into on or before the effective date of the amendatory Act. Provides that the Director may require an insurance company that issues a policy in wilful violation of the Act to pay a penalty in a sum not exceeding $5,000 (instead of $1,000). Makes other changes.


LRB097 06647 RPM 46733 b

 

 

A BILL FOR

 

HB1475LRB097 06647 RPM 46733 b

1    AN ACT concerning insurance.
 
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 Sections 368b, 368c, 368d, 368e, 370, 370a, and 370b
6as follows:
 
7    (215 ILCS 5/368b)
8    Sec. 368b. Contracting procedures.
9    (a) A health care professional or health care provider
10offered a contract by an insurer, health maintenance
11organization, independent practice association, or physician
12hospital organization for signature after the effective date of
13this amendatory Act of the 93rd General Assembly shall be
14provided with a proposed health care professional or health
15care provider services contract including, if any, exhibits and
16attachments that the contract indicates are to be attached.
17Within 35 days after a written request, the health care
18professional or health care provider offered a contract shall
19be given the opportunity to review and obtain a copy of the
20following: a specialty-specific fee schedule sample based on a
21minimum of the 50 highest volume fee schedule codes with the
22rates applicable to the health care professional or health care
23provider to whom the contract is offered, the network provider

 

 

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1administration manual, and a summary capitation schedule, if
2payment is made on a capitation basis. If 50 codes do not exist
3for a particular specialty, the health care professional or
4health care provider offered a contract shall be given the
5opportunity to review or obtain a copy of a fee schedule sample
6with the codes applicable to that particular specialty. This
7information may be provided electronically. An insurer, health
8maintenance organization, independent practice association, or
9physician hospital organization may substitute the fee
10schedule sample with a document providing reference to the
11information needed to calculate the fee schedule that is
12available to the public at no charge and the percentage or
13conversion factor at which the insurer, health maintenance
14organization, preferred provider organization, independent
15practice association, or physician hospital organization sets
16its rates.
17    (b) The fee schedule, the capitation schedule, and the
18network provider administration manual constitute
19confidential, proprietary, and trade secret information and
20are subject to the provisions of the Illinois Trade Secrets
21Act. The health care professional or health care provider
22receiving such protected information may disclose the
23information on a need to know basis and only to individuals and
24entities that provide services directly related to the health
25care professional's or health care provider's decision to enter
26into the contract or keep the contract in force. Any person or

 

 

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1entity receiving or reviewing such protected information
2pursuant to this Section shall not disclose the information to
3any other person, organization, or entity, unless the
4disclosure is requested pursuant to a valid court order or
5required by a state or federal government agency. Individuals
6or entities receiving such information from a health care
7professional or health care provider as delineated in this
8subsection are subject to the provisions of the Illinois Trade
9Secrets Act.
10    (c) The health care professional or health care provider
11shall be allowed at least 30 days to review the health care
12professional or health care provider services contract,
13including exhibits and attachments, if any, before signing. The
1430-day review period begins upon receipt of the health care
15professional or health care provider services contract, unless
16the information available upon request in subsection (a) is not
17included. If information is not included in the professional
18services contract and is requested pursuant to subsection (a),
19the 30-day review period begins on the date of receipt of the
20information. Nothing in this subsection shall prohibit a health
21care professional or health care provider from signing a
22contract prior to the expiration of the 30-day review period.
23    (d) The insurer, health maintenance organization,
24independent practice association, or physician hospital
25organization shall provide all contracted health care
26professionals or health care providers with any changes to the

 

 

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1fee schedule provided under subsection (a) not later than 35
2days after the effective date of the changes, unless such
3changes are specified in the contract and the health care
4professional or health care provider is able to calculate the
5changed rates based on information in the contract and
6information available to the public at no charge. For the
7purposes of this subsection, "changes" means an increase or
8decrease in the fee schedule referred to in subsection (a).
9This information may be made available by mail, e-mail,
10newsletter, website listing, or other reasonable method. Upon
11request, a health care professional or health care provider may
12request an updated copy of the fee schedule referred to in
13subsection (a) every calendar quarter.
14    (e) Upon termination of a contract with an insurer, health
15maintenance organization, independent practice association, or
16physician hospital organization and at the request of the
17patient, a health care professional or health care provider
18shall provide transfer copies of the patient's medical records.
19Any other provision of law notwithstanding, the costs for
20copying and transferring copies of medical records shall be
21assigned per the arrangements agreed upon, if any, in the
22health care professional or health care provider services
23contract.
24(Source: P.A. 93-261, eff. 1-1-04.)
 
25    (215 ILCS 5/368c)

 

 

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1    Sec. 368c. Remittance advice and procedures.
2    (a) A remittance advice shall be furnished to a health care
3professional or health care provider that identifies the
4disposition of each claim. The remittance advice shall identify
5the services billed; the patient responsibility, if any; the
6actual payment, if any, for the services billed; and the reason
7for any reduction to the amount for which the claim was
8submitted. For any reductions to the amount for which the claim
9was submitted, the remittance shall identify any withholds and
10the reason for any denial or reduction.
11    A remittance advice for capitation or prospective payment
12arrangements shall be furnished to a health care professional
13or health care provider pursuant to a contract with an insurer,
14health maintenance organization, independent practice
15association, or physician hospital organization in accordance
16with the terms of the contract.
17    (b) When health care services are provided by a
18non-participating health care professional or health care
19provider, an insurer, health maintenance organization,
20independent practice association, or physician hospital
21organization shall may pay for covered services either to a
22patient directly or to the non-participating health care
23professional or health care provider, if the benefits have been
24assigned by the patient.
25    (c) When a person presents a benefits information card, a
26health care professional or health care provider shall make a

 

 

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1good faith effort to inform the person if the health care
2professional or health care provider has a participation
3contract with the insurer, health maintenance organization, or
4other entity identified on the card.
5    (d) No recoupment or offset may be requested or withheld
6from future payments 60 or more days after the original payment
7was made.
8(Source: P.A. 93-261, eff. 1-1-04.)
 
9    (215 ILCS 5/368d)
10    Sec. 368d. Recoupments.
11    (a) A health care professional or health care provider
12shall be provided a remittance advice, which must include an
13explanation of a recoupment or offset taken by an insurer,
14health maintenance organization, independent practice
15association, or physician hospital organization, if any. The
16recoupment explanation shall, at a minimum, include the name of
17the patient; the date of service; the service code or if no
18service code is available a service description; the recoupment
19amount; and the reason for the recoupment or offset. In
20addition, an insurer, health maintenance organization,
21independent practice association, or physician hospital
22organization shall provide with the remittance advice a
23telephone number or mailing address to initiate an appeal of
24the recoupment or offset.
25    (b) It is not a recoupment when a health care professional

 

 

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1or health care provider is paid an amount prospectively or
2concurrently under a contract with an insurer, health
3maintenance organization, independent practice association, or
4physician hospital organization that requires a retrospective
5reconciliation based upon specific conditions outlined in the
6contract.
7    (c) No recoupment or offset may be requested or withheld
8from future payments 60 or more days after the original payment
9was made.
10(Source: P.A. 93-261, eff. 1-1-04.)
 
11    (215 ILCS 5/368e)
12    Sec. 368e. Administration and enforcement.
13    (a) Other than the duties specifically created in Sections
14368b, 368c, and 368d, nothing in those Sections is intended to
15preclude, prevent, or require the adoption, modification, or
16termination of any utilization management, quality management,
17or claims processing methodologies or other provisions of a
18contract applicable to services provided under a contract
19between an insurer, health maintenance organization,
20independent practice association, or physician hospital
21organization and a health care professional or health care
22provider.
23    (b) Nothing in Sections 368b, 368c, and 368d precludes,
24prevents, or requires the adoption, modification, or
25termination of any health plan term, benefit, coverage or

 

 

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1eligibility provision, or payment methodology.
2    (c) The provisions of Sections 368b, 368c, and 368d are
3deemed incorporated into health care professional and health
4care provider service contracts entered into on or before
5January 1, 2004 (the effective date of Public Act 93-261) this
6amendatory Act of the 93rd General Assembly and do not require
7an insurer, health maintenance organization, independent
8practice association, or physician hospital organization to
9renew or renegotiate the contracts with a health care
10professional or health care provider.
11    (c-5) The amendatory provisions of Sections 368b, 368c,
12368d, 370a, and 370b are deemed incorporated into health care
13professional and health care provider service contracts
14entered into on or before the effective date of this amendatory
15Act of the 97th General Assembly and do not require an insurer,
16health maintenance organization, independent practice
17association, or physician hospital organization to renew or
18renegotiate the contracts with a health care professional or
19health care provider.
20    (d) The Department shall enforce the provisions of this
21Section and Sections 368b, 368c, and 368d pursuant to the
22enforcement powers granted to it by law.
23    (e) The Department is hereby granted specific authority to
24issue a cease and desist order against, fine, or otherwise
25penalize independent practice associations and
26physician-hospital organizations for violations.

 

 

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1    (f) The Department shall adopt reasonable rules to enforce
2compliance with this Section and Sections 368b, 368c, and 368d.
3(Source: P.A. 93-261, eff. 1-1-04.)
 
4    (215 ILCS 5/370)  (from Ch. 73, par. 982)
5    Sec. 370. Policies issued in violation of article-Penalty.
6    (1) Any company, or any officer or agent thereof, issuing
7or delivering to any person in this State any policy in wilful
8violation of the provision of this article shall be guilty of a
9petty offense.
10    (2) The Director may revoke the license of any foreign or
11alien company, or of the agent thereof wilfully violating any
12provision of this article or suspend such license for any
13period of time up to, but not to exceed, two years; or may by
14order require such insurance company or agent to pay to the
15people of the State of Illinois a penalty in a sum not
16exceeding $5,000 $1,000, and upon the failure of such insurance
17company or agent to pay such penalty within twenty days after
18the mailing of such order, postage prepaid, registered, and
19addressed to the last known place of business of such insurance
20company or agent, unless such order is stayed by an order of a
21court of competent jurisdiction, the Director of Insurance may
22revoke or suspend the license of such insurance company or
23agent for any period of time up to, but not exceeding a period
24of, two years.
25(Source: P.A. 93-32, eff. 7-1-03.)
 

 

 

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1    (215 ILCS 5/370a)  (from Ch. 73, par. 982a)
2    Sec. 370a. Assignability of Accident and Health Insurance.
3    (a) No provision of the Illinois Insurance Code, or any
4other law, prohibits an insured under any policy of accident
5and health insurance or any other person who may be the owner
6of any rights under such policy from making an assignment of
7all or any part of his rights and privileges under the policy
8including but not limited to the right to designate a
9beneficiary and to have an individual policy issued in
10accordance with its terms. Subject to the terms of the policy
11or any contract relating thereto, an assignment by an insured
12or by any other owner of rights under the policy, made before
13or after the effective date of this amendatory Act of 1969 is
14valid for the purpose of vesting in the assignee, in accordance
15with any provisions included therein as to the time at which it
16is effective, all rights and privileges so assigned. However,
17such assignment is without prejudice to the company on account
18of any payment it makes or individual policy it issues before
19receipt of notice of the assignment. This amendatory Act of
201969 acknowledges, declares and codifies the existing right of
21assignment of interests under accident and health insurance
22policies.
23    (b) For the purposes of payment for covered services, if If
24an enrollee or insured of an insurer, health maintenance
25organization, managed care plan, health care plan, preferred

 

 

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1provider organization, or third party administrator assigns a
2claim to a health care professional or health care facility,
3then payment shall be made directly to the health care
4professional or health care facility regardless of whether the
5professional is a participating or non-participating provider,
6including any interest required under Section 368a, of this
7Code for failure to pay claims within 30 days after receipt by
8the insurer of due proof of loss. Nothing in this Section shall
9be construed to prevent any parties from reconciling duplicate
10payments.
11(Source: P.A. 91-605, eff. 12-14-99; 91-788, eff. 6-9-00.)
 
12    (215 ILCS 5/370b)  (from Ch. 73, par. 982b)
13    Sec. 370b. Reimbursement on equal basis. Notwithstanding
14any provision of any individual or group policy of accident and
15health insurance, or any provision of a policy, contract, plan
16or agreement for hospital or medical service or indemnity,
17wherever such policy, contract, plan or agreement provides for
18reimbursement for any service provided by persons licensed
19under the Medical Practice Act of 1987 or the Podiatric Medical
20Practice Act of 1987, the person entitled to benefits or person
21performing services under such policy, contract, plan or
22agreement is entitled to reimbursement on an equal basis for
23such service, when the service is performed by a person
24licensed under the Medical Practice Act of 1987 or the
25Podiatric Medical Practice Act of 1987 whether the person is a

 

 

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1participating or non-participating provider. The provisions of
2this Section do not apply to any policy, contract, plan or
3agreement in effect prior to September 19, 1969 or to preferred
4provider arrangements or benefit agreements.
5(Source: P.A. 90-14, eff. 7-1-97.)