Illinois General Assembly - Full Text of SB1703
Illinois General Assembly

Previous General Assemblies

Full Text of SB1703  101st General Assembly




State of Illinois
2019 and 2020


Introduced 2/15/2019, by Sen. Don Harmon


305 ILCS 5/5-30.1

    Amends the Medical Assistance Article of the Illinois Public Aid Code. Provides that a provider who has exhausted the written internal appeals process of a managed care organization (MCO) shall be entitled to an external independent third-party review of the MCO's final decision that denies, in whole or in part, a health care service to an enrollee or a claim for reimbursement to a provider for a health care service rendered to an enrollee of the Medicaid managed care organization. Requires a MCO's final decision letter to a provider to include: (i) a statement that the provider's internal appeal rights within the MCO have been exhausted; (ii) a statement that the provider is entitled to an external independent third-party review; (iii) the time period granted to request an external independent third-party review; and (iv) the mailing address to initiate an external independent third-party review. Provides that a party shall be entitled to appeal a final decision of the external independent third-party review within 30 days after the date upon which the appealing party receives the external independent third-party review. Provides that a final decision by the Director of Healthcare and Family Services shall be final and reviewable under the Administrative Review Law. Contains provisions concerning fees to help defray the cost of the administrative hearings; the specific claims of services that are appealable; and the Department's rulemaking authority. Effective immediately.

LRB101 09316 KTG 54411 b






SB1703LRB101 09316 KTG 54411 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 as follows:
6    (305 ILCS 5/5-30.1)
7    Sec. 5-30.1. Managed care protections.
8    (a) As used in this Section:
9    "Managed care organization" or "MCO" means any entity which
10contracts with the Department to provide services where payment
11for medical services is made on a capitated basis.
12    "Emergency services" include:
13        (1) emergency services, as defined by Section 10 of the
14    Managed Care Reform and Patient Rights Act;
15        (2) emergency medical screening examinations, as
16    defined by Section 10 of the Managed Care Reform and
17    Patient Rights Act;
18        (3) post-stabilization medical services, as defined by
19    Section 10 of the Managed Care Reform and Patient Rights
20    Act; and
21        (4) emergency medical conditions, as defined by
22    Section 10 of the Managed Care Reform and Patient Rights
23    Act.



SB1703- 2 -LRB101 09316 KTG 54411 b

1    (b) As provided by Section 5-16.12, managed care
2organizations are subject to the provisions of the Managed Care
3Reform and Patient Rights Act.
4    (c) An MCO shall pay any provider of emergency services
5that does not have in effect a contract with the contracted
6Medicaid MCO. The default rate of reimbursement shall be the
7rate paid under Illinois Medicaid fee-for-service program
8methodology, including all policy adjusters, including but not
9limited to Medicaid High Volume Adjustments, Medicaid
10Percentage Adjustments, Outpatient High Volume Adjustments,
11and all outlier add-on adjustments to the extent such
12adjustments are incorporated in the development of the
13applicable MCO capitated rates.
14    (d) An MCO shall pay for all post-stabilization services as
15a covered service in any of the following situations:
16        (1) the MCO authorized such services;
17        (2) such services were administered to maintain the
18    enrollee's stabilized condition within one hour after a
19    request to the MCO for authorization of further
20    post-stabilization services;
21        (3) the MCO did not respond to a request to authorize
22    such services within one hour;
23        (4) the MCO could not be contacted; or
24        (5) the MCO and the treating provider, if the treating
25    provider is a non-affiliated provider, could not reach an
26    agreement concerning the enrollee's care and an affiliated



SB1703- 3 -LRB101 09316 KTG 54411 b

1    provider was unavailable for a consultation, in which case
2    the MCO must pay for such services rendered by the treating
3    non-affiliated provider until an affiliated provider was
4    reached and either concurred with the treating
5    non-affiliated provider's plan of care or assumed
6    responsibility for the enrollee's care. Such payment shall
7    be made at the default rate of reimbursement paid under
8    Illinois Medicaid fee-for-service program methodology,
9    including all policy adjusters, including but not limited
10    to Medicaid High Volume Adjustments, Medicaid Percentage
11    Adjustments, Outpatient High Volume Adjustments and all
12    outlier add-on adjustments to the extent that such
13    adjustments are incorporated in the development of the
14    applicable MCO capitated rates.
15    (e) The following requirements apply to MCOs in determining
16payment for all emergency services:
17        (1) MCOs shall not impose any requirements for prior
18    approval of emergency services.
19        (2) The MCO shall cover emergency services provided to
20    enrollees who are temporarily away from their residence and
21    outside the contracting area to the extent that the
22    enrollees would be entitled to the emergency services if
23    they still were within the contracting area.
24        (3) The MCO shall have no obligation to cover medical
25    services provided on an emergency basis that are not
26    covered services under the contract.



SB1703- 4 -LRB101 09316 KTG 54411 b

1        (4) The MCO shall not condition coverage for emergency
2    services on the treating provider notifying the MCO of the
3    enrollee's screening and treatment within 10 days after
4    presentation for emergency services.
5        (5) The determination of the attending emergency
6    physician, or the provider actually treating the enrollee,
7    of whether an enrollee is sufficiently stabilized for
8    discharge or transfer to another facility, shall be binding
9    on the MCO. The MCO shall cover emergency services for all
10    enrollees whether the emergency services are provided by an
11    affiliated or non-affiliated provider.
12        (6) The MCO's financial responsibility for
13    post-stabilization care services it has not pre-approved
14    ends when:
15            (A) a plan physician with privileges at the
16        treating hospital assumes responsibility for the
17        enrollee's care;
18            (B) a plan physician assumes responsibility for
19        the enrollee's care through transfer;
20            (C) a contracting entity representative and the
21        treating physician reach an agreement concerning the
22        enrollee's care; or
23            (D) the enrollee is discharged.
24    (f) Network adequacy and transparency.
25        (1) The Department shall:
26            (A) ensure that an adequate provider network is in



SB1703- 5 -LRB101 09316 KTG 54411 b

1        place, taking into consideration health professional
2        shortage areas and medically underserved areas;
3            (B) publicly release an explanation of its process
4        for analyzing network adequacy;
5            (C) periodically ensure that an MCO continues to
6        have an adequate network in place; and
7            (D) require MCOs, including Medicaid Managed Care
8        Entities as defined in Section 5-30.2, to meet provider
9        directory requirements under Section 5-30.3.
10        (2) Each MCO shall confirm its receipt of information
11    submitted specific to physician or dentist additions or
12    physician or dentist deletions from the MCO's provider
13    network within 3 days after receiving all required
14    information from contracted physicians or dentists, and
15    electronic physician and dental directories must be
16    updated consistent with current rules as published by the
17    Centers for Medicare and Medicaid Services or its successor
18    agency.
19    (g) Timely payment of claims.
20        (1) The MCO shall pay a claim within 30 days of
21    receiving a claim that contains all the essential
22    information needed to adjudicate the claim.
23        (2) The MCO shall notify the billing party of its
24    inability to adjudicate a claim within 30 days of receiving
25    that claim.
26        (3) The MCO shall pay a penalty that is at least equal



SB1703- 6 -LRB101 09316 KTG 54411 b

1    to the penalty imposed under the Illinois Insurance Code
2    for any claims not timely paid.
3        (4) The Department may establish a process for MCOs to
4    expedite payments to providers based on criteria
5    established by the Department.
6    (g-5) Recognizing that the rapid transformation of the
7Illinois Medicaid program may have unintended operational
8challenges for both payers and providers:
9        (1) in no instance shall a medically necessary covered
10    service rendered in good faith, based upon eligibility
11    information documented by the provider, be denied coverage
12    or diminished in payment amount if the eligibility or
13    coverage information available at the time the service was
14    rendered is later found to be inaccurate; and
15        (2) the Department shall, by December 31, 2016, adopt
16    rules establishing policies that shall be included in the
17    Medicaid managed care policy and procedures manual
18    addressing payment resolutions in situations in which a
19    provider renders services based upon information obtained
20    after verifying a patient's eligibility and coverage plan
21    through either the Department's current enrollment system
22    or a system operated by the coverage plan identified by the
23    patient presenting for services:
24            (A) such medically necessary covered services
25        shall be considered rendered in good faith;
26            (B) such policies and procedures shall be



SB1703- 7 -LRB101 09316 KTG 54411 b

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



SB1703- 8 -LRB101 09316 KTG 54411 b

1            (B) prior authorizations;
2            (C) grievance and appeals;
3            (D) utilization statistics;
4            (E) provider disputes;
5            (F) provider credentialing; and
6            (G) member and provider customer service.
7        (2) The Department shall ensure that the metrics report
8    is accessible to providers online by January 1, 2017.
9        (3) The metrics shall be developed in consultation with
10    industry representatives of the Medicaid managed care
11    health plans and representatives of associations
12    representing the majority of providers within the
13    identified industry.
14        (4) Metrics shall be defined and incorporated into the
15    applicable Managed Care Policy Manual issued by the
16    Department.
17    (g-7) MCO claims processing and performance analysis. In
18order to monitor MCO payments to hospital providers, pursuant
19to this amendatory Act of the 100th General Assembly, the
20Department shall post an analysis of MCO claims processing and
21payment performance on its website every 6 months. Such
22analysis shall include a review and evaluation of a
23representative sample of hospital claims that are rejected and
24denied for clean and unclean claims and the top 5 reasons for
25such actions and timeliness of claims adjudication, which
26identifies the percentage of claims adjudicated within 30, 60,



SB1703- 9 -LRB101 09316 KTG 54411 b

190, and over 90 days, and the dollar amounts associated with
2those claims. The Department shall post the contracted claims
3report required by HealthChoice Illinois on its website every 3
5    (g-8) External independent review and administrative
6appeal hearing.
7        (1) Notwithstanding any other law to the contrary, a
8    provider who has exhausted the written internal appeals
9    process of an MCO shall be entitled to an external
10    independent third-party review of the MCO's final decision
11    that denies, in whole or in part, a health care service to
12    an enrollee or a claim for reimbursement to a provider for
13    a health care service rendered by the provider to an
14    enrollee of the Medicaid managed care organization.
15    Multiple claims may be determined in one action upon
16    request of a party in accordance with administrative rules
17    adopted by the Department.
18        (2) An MCO's letter to a provider reflecting the final
19    decision of the provider's internal appeal shall include:
20            (A) a statement that the provider's internal
21        appeal rights within the MCO have been exhausted;
22            (B) a statement that the provider is entitled to an
23        external independent third-party review;
24            (C) the time period granted to request an external
25        independent third-party review; and
26            (D) the mailing address to initiate an external



SB1703- 10 -LRB101 09316 KTG 54411 b

1        independent third-party review.
2        (3) A party shall be entitled to appeal a final
3    decision of the external independent third-party review
4    through the administrative hearing process within the
5    Department, in accordance with 89 Ill. Adm. Code 104.200
6    through 104.295. An appeal shall be filed within 30 days
7    after the date upon which the appealing party receives the
8    final decision of the external independent third-party
9    review. A final decision by the Director shall be final and
10    reviewable under the Administrative Review Law. The
11    Department may, by rule, establish reasonable fees, not to
12    exceed $1,000, to defray expenses associated with an
13    administrative hearing that shall be paid by the party who
14    does not prevail in the Director's final decision after an
15    administrative hearing.
16        (4) The requirements of this subsection shall apply to
17    claims for services provided on or after the first day of
18    the month that begins 120 days after the effective date of
19    this amendatory Act of the 101st General Assembly. Within
20    120 days after the effective date of this amendatory Act of
21    the 101st General Assembly, the Department shall adopt
22    administrative rules to implement this subsection.
23    (h) The Department shall not expand mandatory MCO
24enrollment into new counties beyond those counties already
25designated by the Department as of June 1, 2014 for the
26individuals whose eligibility for medical assistance is not the



SB1703- 11 -LRB101 09316 KTG 54411 b

1seniors or people with disabilities population until the
2Department provides an opportunity for accountable care
3entities and MCOs to participate in such newly designated
5    (i) The requirements of this Section apply to contracts
6with accountable care entities and MCOs entered into, amended,
7or renewed after June 16, 2014 (the effective date of Public
8Act 98-651).
9(Source: P.A. 99-725, eff. 8-5-16; 99-751, eff. 8-5-16;
10100-201, eff. 8-18-17; 100-580, eff. 3-12-18; 100-587, eff.
12    Section 99. Effective date. This Act takes effect upon
13becoming law.