99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB4429

 

Introduced , by Rep. Elaine Nekritz

 

SYNOPSIS AS INTRODUCED:
 
5 ILCS 375/6.12
30 ILCS 540/3-2
215 ILCS 5/368a

    Amends the State Prompt Payment Act. Provides that after the effective date of the amendatory Act, any bill approved for payment under the Act and pursuant to a health benefit plan under the State Employees Group Insurance Act of 1971 or submitted under Article V of the Illinois Public Aid Code, except a bill for pharmacy or nursing facility services or goods, if payment is not issued to the payee in a timely manner under the Section, the following interest penalty shall apply to any amount approved and unpaid until final payment is made: the sum of the prime commercial rate plus 4.0% per year, applied pro rata for the amount of time the bill remains unpaid. Defines "prime commercial rate". Amends the Illinois Insurance Code. In provisions concerning timely payment for health care services, provides that the interest to be charged on late payments of periodic payments, payments by independent practice associations and physician-hospital organizations, and payments by health insurers, health maintenance organizations, managed care plans, health care plans, preferred provider organizations, and third party administrators shall be the sum of the prime commercial rate plus 4.0% per year. Defines "prime commercial rate". Amends the State Employees Group Insurance Act of 1971. Provides that the program of health benefits offered under the Act is subject to certain provisions of the Illinois Insurance Code concerning late payments and assignability except as otherwise provided.


LRB099 13077 MLM 36964 b

 

 

A BILL FOR

 

HB4429LRB099 13077 MLM 36964 b

1    AN ACT concerning government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Employees Group Insurance Act of 1971
5is amended by changing Section 6.12 as follows:
 
6    (5 ILCS 375/6.12)
7    Sec. 6.12. Payment for services. Except as otherwise
8provided, the The program of health benefits is subject to the
9provisions of Sections 368a and 370a of the Illinois Insurance
10Code, provided that, if a covered member or covered dependent
11assigns payments to a health care professional for covered
12services, then the health care professional shall only collect
13at point of service from that person the estimated amount not
14expected to be paid by the plan.
15(Source: P.A. 97-1086, eff. 8-24-12.)
 
16    Section 10. The State Prompt Payment Act is amended by
17changing Section 3-2 as follows:
 
18    (30 ILCS 540/3-2)
19    Sec. 3-2. Beginning July 1, 1993, in any instance where a
20State official or agency is late in payment of a vendor's bill
21or invoice for goods or services furnished to the State, as

 

 

HB4429- 2 -LRB099 13077 MLM 36964 b

1defined in Section 1, properly approved in accordance with
2rules promulgated under Section 3-3, the State official or
3agency shall pay interest to the vendor in accordance with the
4following:
5        (1) Any bill, except a bill submitted under Article V
6    of the Illinois Public Aid Code and except as provided
7    under paragraph (1.05) of this Section, approved for
8    payment under this Section must be paid or the payment
9    issued to the payee within 60 days of receipt of a proper
10    bill or invoice. If payment is not issued to the payee
11    within this 60-day period, an interest penalty of 1.0% of
12    any amount approved and unpaid shall be added for each
13    month or fraction thereof after the end of this 60-day
14    period, until final payment is made. Any bill, except a
15    bill for pharmacy or nursing facility services or goods,
16    and except as provided under paragraph (1.05) of this
17    Section, submitted under Article V of the Illinois Public
18    Aid Code approved for payment under this Section must be
19    paid or the payment issued to the payee within 60 days
20    after receipt of a proper bill or invoice, and, if payment
21    is not issued to the payee within this 60-day period, an
22    interest penalty of 2.0% of any amount approved and unpaid
23    shall be added for each month or fraction thereof after the
24    end of this 60-day period, until final payment is made. Any
25    bill for pharmacy or nursing facility services or goods
26    submitted under Article V of the Illinois Public Aid Code,

 

 

HB4429- 3 -LRB099 13077 MLM 36964 b

1    except as provided under paragraph (1.05) of this Section,
2    and approved for payment under this Section must be paid or
3    the payment issued to the payee within 60 days of receipt
4    of a proper bill or invoice. If payment is not issued to
5    the payee within this 60-day period, an interest penalty of
6    1.0% of any amount approved and unpaid shall be added for
7    each month or fraction thereof after the end of this 60-day
8    period, until final payment is made.
9        (1.05) For State fiscal year 2012 and future fiscal
10    years, any bill approved for payment under this Section
11    must be paid or the payment issued to the payee within 90
12    days of receipt of a proper bill or invoice. If payment is
13    not issued to the payee within this 90-day period, an
14    interest penalty of 1.0% of any amount approved and unpaid
15    shall be added for each month, or 0.033% (one-thirtieth of
16    one percent) of any amount approved and unpaid for each
17    day, after the end of this 90-day period, until final
18    payment is made.
19        (1.06) After the effective date of this amendatory Act
20    of the 99th General Assembly, for any bill approved for
21    payment under this Section and pursuant to a health benefit
22    plan under the State Employees Group Insurance Act of 1971
23    or submitted under Article V of the Illinois Public Aid
24    Code, except a bill for pharmacy or nursing facility
25    services or goods, if payment is not issued to the payee in
26    a timely manner under this Section, the following interest

 

 

HB4429- 4 -LRB099 13077 MLM 36964 b

1    penalty shall apply to any amount approved and unpaid until
2    final payment is made: the sum of the prime commercial rate
3    plus 4.0% per year, applied pro rata for the amount of time
4    the bill remains unpaid. As used in this paragraph, "prime
5    commercial rate" means the Wall Street Journal Prime Rate,
6    as published from time to time.
7        (1.1) A State agency shall review in a timely manner
8    each bill or invoice after its receipt. If the State agency
9    determines that the bill or invoice contains a defect
10    making it unable to process the payment request, the agency
11    shall notify the vendor requesting payment as soon as
12    possible after discovering the defect pursuant to rules
13    promulgated under Section 3-3; provided, however, that the
14    notice for construction related bills or invoices must be
15    given not later than 30 days after the bill or invoice was
16    first submitted. The notice shall identify the defect and
17    any additional information necessary to correct the
18    defect. If one or more items on a construction related bill
19    or invoice are disapproved, but not the entire bill or
20    invoice, then the portion that is not disapproved shall be
21    paid.
22        (2) Where a State official or agency is late in payment
23    of a vendor's bill or invoice properly approved in
24    accordance with this Act, and different late payment terms
25    are not reduced to writing as a contractual agreement, the
26    State official or agency shall automatically pay interest

 

 

HB4429- 5 -LRB099 13077 MLM 36964 b

1    penalties required by this Section amounting to $50 or more
2    to the appropriate vendor. Each agency shall be responsible
3    for determining whether an interest penalty is owed and for
4    paying the interest to the vendor. Except as provided in
5    paragraph (4), an individual interest payment amounting to
6    $5 or less shall not be paid by the State. Interest due to
7    a vendor that amounts to greater than $5 and less than $50
8    shall not be paid but shall be accrued until all interest
9    due the vendor for all similar warrants exceeds $50, at
10    which time the accrued interest shall be payable and
11    interest will begin accruing again, except that interest
12    accrued as of the end of the fiscal year that does not
13    exceed $50 shall be payable at that time. In the event an
14    individual has paid a vendor for services in advance, the
15    provisions of this Section shall apply until payment is
16    made to that individual.
17        (3) The provisions of Public Act 96-1501 reducing the
18    interest rate on pharmacy claims under Article V of the
19    Illinois Public Aid Code to 1.0% per month shall apply to
20    any pharmacy bills for services and goods under Article V
21    of the Illinois Public Aid Code received on or after the
22    date 60 days before January 25, 2011 (the effective date of
23    Public Act 96-1501) except as provided under paragraph
24    (1.05) of this Section.
25        (4) Interest amounting to less than $5 shall not be
26    paid by the State, except for claims (i) to the Department

 

 

HB4429- 6 -LRB099 13077 MLM 36964 b

1    of Healthcare and Family Services or the Department of
2    Human Services, (ii) pursuant to Article V of the Illinois
3    Public Aid Code, the Covering ALL KIDS Health Insurance
4    Act, or the Children's Health Insurance Program Act, and
5    (iii) made (A) by pharmacies for prescriptive services or
6    (B) by any federally qualified health center for
7    prescriptive services or any other services.
8(Source: P.A. 96-555, eff. 8-18-09; 96-802, eff. 1-1-10;
996-959, eff. 7-1-10; 96-1000, eff. 7-2-10; 96-1501, eff.
101-25-11; 96-1530, eff. 2-16-11; 97-72, eff. 7-1-11; 97-74, eff.
116-30-11; 97-348, eff. 8-12-11; 97-813, eff. 7-13-12; 97-932,
12eff. 8-10-12; 97-1142, eff. 12-28-12.)
 
13    Section 15. The Illinois Insurance Code is amended by
14changing Section 368a as follows:
 
15    (215 ILCS 5/368a)
16    Sec. 368a. Timely payment for health care services.
17    (a) This Section applies to insurers, health maintenance
18organizations, managed care plans, health care plans,
19preferred provider organizations, third party administrators,
20independent practice associations, and physician-hospital
21organizations (hereinafter referred to as "payors") that
22provide periodic payments, which are payments not requiring a
23claim, bill, capitation encounter data, or capitation
24reconciliation reports, such as prospective capitation

 

 

HB4429- 7 -LRB099 13077 MLM 36964 b

1payments, to health care professionals and health care
2facilities to provide medical or health care services for
3insureds or enrollees.
4        (1) A payor shall make periodic payments in accordance
5    with item (3). Failure to make periodic payments within the
6    period of time specified in item (3) shall entitle the
7    health care professional or health care facility to
8    interest at the rate of 9% per year from the date payment
9    was required to be made to the date of the late payment,
10    provided that interest amounting to less than $1 need not
11    be paid. For periodic payments due on or after the
12    effective date of this amendatory Act of the 99th General
13    Assembly, failure to make periodic payments within the
14    period of time specified in item (3) shall entitle the
15    health care professional or health care facility to
16    interest at the rate of the sum of the prime commercial
17    rate plus 4.0% per year from the date payment was required
18    to be made to the date of the late payment, provided that
19    interest amounting to less than $1 need not be paid. Any
20    required interest payments shall be made within 30 days
21    after the payment.
22        (2) When a payor requires selection of a health care
23    professional or health care facility, the selection shall
24    be completed by the insured or enrollee no later than 30
25    days after enrollment. The payor shall provide written
26    notice of this requirement to all insureds and enrollees.

 

 

HB4429- 8 -LRB099 13077 MLM 36964 b

1    Nothing in this Section shall be construed to require a
2    payor to select a health care professional or health care
3    facility for an insured or enrollee.
4        (3) A payor shall provide the health care professional
5    or health care facility with notice of the selection as a
6    health care professional or health care facility by an
7    insured or enrollee and the effective date of the selection
8    within 60 calendar days after the selection. No later than
9    the 60th day following the date an insured or enrollee has
10    selected a health care professional or health care facility
11    or the date that selection becomes effective, whichever is
12    later, or in cases of retrospective enrollment only, 30
13    days after notice by an employer to the payor of the
14    selection, a payor shall begin periodic payment of the
15    required amounts to the insured's or enrollee's health care
16    professional or health care facility, or the designee of
17    either, calculated from the date of selection or the date
18    the selection becomes effective, whichever is later. All
19    subsequent payments shall be made in accordance with a
20    monthly periodic cycle.
21    (b) Notwithstanding any other provision of this Section,
22independent practice associations and physician-hospital
23organizations shall make periodic payment of the required
24amounts in accordance with a monthly periodic schedule after an
25insured or enrollee has selected a health care professional or
26health care facility or after that selection becomes effective,

 

 

HB4429- 9 -LRB099 13077 MLM 36964 b

1whichever is later.
2    Notwithstanding any other provision of this Section,
3independent practice associations and physician-hospital
4organizations shall make all other payments for health services
5within 30 days after receipt of due proof of loss. Independent
6practice associations and physician-hospital organizations
7shall notify the insured, insured's assignee, health care
8professional, or health care facility of any failure to provide
9sufficient documentation for a due proof of loss within 30 days
10after receipt of the claim for health services.
11    Failure to pay within the required time period shall
12entitle the payee to interest at the rate of 9% per year from
13the date the payment is due to the date of the late payment,
14provided that interest amounting to less than $1 need not be
15paid. For any periodic payments or other payments due on or
16after the effective date of this amendatory Act of the 99th
17General Assembly, failure to pay within the required time
18period shall entitle the payee to interest at the rate of the
19sum of the prime commercial rate plus 4.0% per year from the
20date the payment is due to the date of the late payment,
21provided that interest amounting to less than $1 need not be
22paid. Any required interest payments shall be made within 30
23days after the payment.
24    (c) All insurers, health maintenance organizations,
25managed care plans, health care plans, preferred provider
26organizations, and third party administrators shall ensure

 

 

HB4429- 10 -LRB099 13077 MLM 36964 b

1that all claims and indemnities concerning health care services
2other than for any periodic payment shall be paid within 30
3days after receipt of due written proof of such loss. An
4insured, insured's assignee, health care professional, or
5health care facility shall be notified of any known failure to
6provide sufficient documentation for a due proof of loss within
730 days after receipt of the claim for health care services.
8Failure to pay within such period shall entitle the payee to
9interest at the rate of 9% per year from the 30th day after
10receipt of such proof of loss to the date of late payment,
11provided that interest amounting to less than one dollar need
12not be paid. For any claims and indemnities due on or after the
13effective date of this amendatory Act of the 99th General
14Assembly, failure to pay within such period shall entitle the
15payee to interest at the rate of the sum of the prime
16commercial rate plus 4.0% per year from the 30th day after
17receipt of such proof of loss to the date of late payment,
18provided that interest amounting to less than one dollar need
19not be paid. Any required interest payments shall be made
20within 30 days after the payment.
21    (d) The Department shall enforce the provisions of this
22Section pursuant to the enforcement powers granted to it by
23law.
24    (e) The Department is hereby granted specific authority to
25issue a cease and desist order, fine, or otherwise penalize
26independent practice associations and physician-hospital

 

 

HB4429- 11 -LRB099 13077 MLM 36964 b

1organizations that violate this Section. The Department shall
2adopt reasonable rules to enforce compliance with this Section
3by independent practice associations and physician-hospital
4organizations.
5    (f) As used in this Section, "prime commercial rate" means
6the Wall Street Journal Prime Rate, as published from time to
7time.
8(Source: P.A. 97-813, eff. 7-13-12.)