093_HB1074enr

 
HB1074 Enrolled                      LRB093 05507 JLS 05598 b

 1        AN ACT in relation to 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
 5    changing  Section  370k and adding Sections 368b, 368c, 368d,
 6    and 368e as follows:

 7        (215 ILCS 5/368b new)
 8        Sec. 368b.  Contracting procedures.
 9        (a)  A health care professional or health  care  provider
10    offered   a   contract  by  an  insurer,  health  maintenance
11    organization, independent practice association, or  physician
12    hospital  organization for signature after the effective date
13    of this amendatory Act of the 93rd General Assembly shall  be
14    provided  with  a proposed health care professional or health
15    care provider services contract including, if  any,  exhibits
16    and  attachments  that  the  contract  indicates  are  to  be
17    attached.  Within 35 days after a written request, the health
18    care professional or health care provider offered a  contract
19    shall be given the opportunity to review and obtain a copy of
20    the following: a specialty-specific fee schedule sample based
21    on a minimum of the 50 highest volume fee schedule codes with
22    the  rates  applicable  to  the  health  care professional or
23    health care provider to whom the  contract  is  offered,  the
24    network   provider   administration  manual,  and  a  summary
25    capitation schedule, if  payment  is  made  on  a  capitation
26    basis.  If  50 codes do not exist for a particular specialty,
27    the health care professional or health care provider  offered
28    a contract shall be given the opportunity to review or obtain
29    a  copy of a fee schedule sample with the codes applicable to
30    that particular specialty. This information may  be  provided
31    electronically.  An insurer, health maintenance organization,
 
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 1    independent  practice  association,  or  physician   hospital
 2    organization  may  substitute  the fee schedule sample with a
 3    document providing reference to  the  information  needed  to
 4    calculate the fee schedule that is available to the public at
 5    no  charge  and  the percentage or conversion factor at which
 6    the  insurer,  health  maintenance  organization,   preferred
 7    provider  organization,  independent practice association, or
 8    physician hospital organization sets its rates.
 9        (b)  The fee schedule, the capitation schedule,  and  the
10    network    provider    administration    manual    constitute
11    confidential,  proprietary,  and trade secret information and
12    are subject to the provisions of the Illinois  Trade  Secrets
13    Act.  The  health  care  professional or health care provider
14    receiving  such  protected  information  may   disclose   the
15    information  on  a need to know basis and only to individuals
16    and entities that provide services directly  related  to  the
17    health care professional's or health care provider's decision
18    to enter into the contract or keep the contract in force. Any
19    person  or  entity  receiving  or  reviewing  such  protected
20    information  pursuant  to this Section shall not disclose the
21    information to any other  person,  organization,  or  entity,
22    unless  the disclosure is requested pursuant to a valid court
23    order or required by a state or  federal  government  agency.
24    Individuals  or  entities  receiving  such information from a
25    health  care  professional  or  health   care   provider   as
26    delineated  in  this subsection are subject to the provisions
27    of the Illinois Trade Secrets Act.
28        (c)  The health care professional or health care provider
29    shall be allowed at least 30 days to review the  health  care
30    professional  or  health  care  provider  services  contract,
31    including  exhibits  and attachments, if any, before signing.
32    The 30-day review period begins upon receipt  of  the  health
33    care  professional or health care provider services contract,
34    unless  the  information available upon request in subsection
 
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 1    (a) is not included. If information is not  included  in  the
 2    professional  services  contract and is requested pursuant to
 3    subsection (a), the 30-day review period begins on  the  date
 4    of  receipt  of  the  information. Nothing in this subsection
 5    shall prohibit a health  care  professional  or  health  care
 6    provider  from  signing a contract prior to the expiration of
 7    the 30-day review period.
 8        (d)  The  insurer,   health   maintenance   organization,
 9    independent   practice  association,  or  physician  hospital
10    organization  shall  provide  all  contracted   health   care
11    professionals  or  health  care providers with any changes to
12    the fee schedule provided under subsection (a) not later than
13    35 days after the effective date of the changes, unless  such
14    changes  are  specified  in  the contract and the health care
15    professional or health care provider is able to calculate the
16    changed rates  based  on  information  in  the  contract  and
17    information  available  to  the  public at no charge. For the
18    purposes of this subsection, "changes" means an  increase  or
19    decrease  in  the fee schedule referred to in subsection (a).
20    This information may  be  made  available  by  mail,  e-mail,
21    newsletter, website listing, or other reasonable method. Upon
22    request,  a  health care professional or health care provider
23    may request an updated copy of the fee schedule  referred  to
24    in subsection (a) every calendar quarter.
25        (e)  Upon  termination  of  a  contract  with an insurer,
26    health   maintenance   organization,   independent   practice
27    association, or physician hospital organization  and  at  the
28    request  of the patient, a health care professional or health
29    care provider shall transfer copies of the patient's  medical
30    records.  Any  other  provision  of  law notwithstanding, the
31    costs for copying and transferring copies of medical  records
32    shall  be  assigned per the arrangements agreed upon, if any,
33    in the health  care  professional  or  health  care  provider
34    services contract.
 
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 1        (215 ILCS 5/368c new)
 2        Sec. 368c.  Remittance advice and procedures.
 3        (a)  A  remittance  advice shall be furnished to a health
 4    care professional or health care provider that identifies the
 5    disposition of  each  claim.   The  remittance  advice  shall
 6    identify  the services billed; the patient responsibility, if
 7    any; the actual payment, if any, for the services billed; and
 8    the reason for any reduction to  the  amount  for  which  the
 9    claim  was  submitted.   For any reductions to the amount for
10    which the claim was submitted, the remittance shall  identify
11    any withholds and the reason for any denial or reduction.
12        A remittance advice for capitation or prospective payment
13    arrangements shall be furnished to a health care professional
14    or  health  care  provider  pursuant  to  a  contract with an
15    insurer,   health   maintenance   organization,   independent
16    practice association, or physician hospital  organization  in
17    accordance with the terms of the contract.
18        (b)  When   health   care  services  are  provided  by  a
19    non-participating health care  professional  or  health  care
20    provider,   an   insurer,  health  maintenance  organization,
21    independent  practice  association,  or  physician   hospital
22    organization may pay for covered services either to a patient
23    directly or to the non-participating health care professional
24    or health care provider.
25        (c)  When  a person presents a benefits information card,
26    a health care professional or health care provider shall make
27    a good faith effort to inform the person if the  health  care
28    professional  or  health  care  provider  has a participation
29    contract with the insurer, health  maintenance  organization,
30    or other entity identified on the card.

31        (215 ILCS 5/368d new)
32        Sec. 368d.  Recoupments.
33        (a)  A  health  care professional or health care provider
 
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 1    shall be provided a remittance advice, which must include  an
 2    explanation  of  a  recoupment or offset taken by an insurer,
 3    health   maintenance   organization,   independent   practice
 4    association, or physician hospital organization, if any.  The
 5    recoupment  explanation shall, at a minimum, include the name
 6    of the patient; the date of service; the service code  or  if
 7    no  service  code  is  available  a  service description; the
 8    recoupment amount; and  the  reason  for  the  recoupment  or
 9    offset.   In   addition,   an   insurer,  health  maintenance
10    organization, independent practice association, or  physician
11    hospital  organization  shall  provide  with  the  remittance
12    advice  a  telephone number or mailing address to initiate an
13    appeal of the recoupment or offset.
14        (b)  It  is  not  a  recoupment  when   a   health   care
15    professional  or  health  care  provider  is  paid  an amount
16    prospectively  or  concurrently  under  a  contract  with  an
17    insurer,   health   maintenance   organization,   independent
18    practice association, or physician hospital organization that
19    requires a retrospective reconciliation based  upon  specific
20    conditions outlined in the contract.

21        (215 ILCS 5/368e new)
22        Sec. 368e.  Administration and enforcement.
23        (a)  Other   than  the  duties  specifically  created  in
24    Sections 368b, 368c, and 368d, nothing in those  Sections  is
25    intended  to  preclude,  prevent,  or  require  the adoption,
26    modification, or termination of any  utilization  management,
27    quality  management,  or  claims  processing methodologies or
28    other  provisions  of  a  contract  applicable  to   services
29    provided   under   a  contract  between  an  insurer,  health
30    maintenance organization, independent  practice  association,
31    or   physician   hospital  organization  and  a  health  care
32    professional or health care provider.
33        (b)  Nothing in Sections 368b, 368c, and 368d  precludes,
 
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 1    prevents,   or   requires   the  adoption,  modification,  or
 2    termination of any health plan  term,  benefit,  coverage  or
 3    eligibility provision, or payment methodology.
 4        (c)  The  provisions of Sections 368b, 368c, and 368d are
 5    deemed incorporated into health care professional and  health
 6    care provider service contracts entered into on or before the
 7    effective  date  of  this  amendatory Act of the 93rd General
 8    Assembly and do not require an  insurer,  health  maintenance
 9    organization,  independent practice association, or physician
10    hospital organization to renew or renegotiate  the  contracts
11    with a health care professional or health care provider.
12        (d)  The  Department shall enforce the provisions of this
13    Section and Sections 368b, 368c, and  368d  pursuant  to  the
14    enforcement powers granted to it by law.
15        (e)  The  Department is hereby granted specific authority
16    to issue a cease and desist order against, fine, or otherwise
17    penalize    independent     practice     associations     and
18    physician-hospital organizations for violations.
19        (f)  The  Department  shall  adopt  reasonable  rules  to
20    enforce compliance with this Section and Sections 368b, 368c,
21    and 368d.

22        (215 ILCS 5/370k) (from Ch. 73, par. 982k)
23        Sec. 370k. Registration.
24        (a)  All  administrators  of a preferred provider program
25    subject to this Article shall register with the Department of
26    Insurance, which shall by rule establish  criteria  for  such
27    registration  including  minimum solvency requirements and an
28    annual registration fee for each administrator.
29        (b)  The  Department  of  Insurance  shall  compile   and
30    maintain   a   listing   updated   at   least   annually   of
31    administrators  and  insurers  offering agreements authorized
32    under this Article.
33        (c)  Preferred provider administrators are subject to the
 
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 1    provisions of Sections 368b, 368c, 368d,  and  368e  of  this
 2    Code.
 3    (Source: P.A. 84-618.)

 4        Section  10.   The Health Maintenance Organization Act is
 5    amended by changing Section 5-3 as follows:

 6        (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
 7        Sec. 5-3.  Insurance Code provisions.
 8        (a)  Health Maintenance Organizations shall be subject to
 9    the provisions of Sections 133, 134, 137, 140, 141.1,  141.2,
10    141.3,  143,  143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
11    154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v,  356w,  356x,
12    356y, 356z.2, 367i, 368a, 368b, 368c, 368d, 368e, 401, 401.1,
13    402,  403,  403A,  408,  408.2,  409,  412,  444,  and 444.1,
14    paragraph (c) of subsection (2) of Section 367, and  Articles
15    IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of
16    the Illinois Insurance Code.
17        (b)  For  purposes of the Illinois Insurance Code, except
18    for Sections 444 and 444.1 and Articles XIII  and  XIII  1/2,
19    Health  Maintenance Organizations in the following categories
20    are deemed to be "domestic companies":
21             (1)  a  corporation  authorized  under  the   Dental
22        Service  Plan  Act or the Voluntary Health Services Plans
23        Act;
24             (2)  a corporation organized under the laws of  this
25        State; or
26             (3)  a  corporation  organized  under  the  laws  of
27        another  state, 30% or more of the enrollees of which are
28        residents of this State, except a corporation subject  to
29        substantially  the  same  requirements  in  its  state of
30        organization as is a  "domestic  company"  under  Article
31        VIII 1/2 of the Illinois Insurance Code.
32        (c)  In  considering  the merger, consolidation, or other
 
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 1    acquisition of control of a Health  Maintenance  Organization
 2    pursuant to Article VIII 1/2 of the Illinois Insurance Code,
 3             (1)  the  Director  shall give primary consideration
 4        to the continuation of  benefits  to  enrollees  and  the
 5        financial  conditions  of the acquired Health Maintenance
 6        Organization after the merger,  consolidation,  or  other
 7        acquisition of control takes effect;
 8             (2)(i)  the  criteria specified in subsection (1)(b)
 9        of Section 131.8 of the Illinois Insurance Code shall not
10        apply and (ii) the Director, in making his  determination
11        with  respect  to  the  merger,  consolidation,  or other
12        acquisition of control, need not take  into  account  the
13        effect  on  competition  of the merger, consolidation, or
14        other acquisition of control;
15             (3)  the Director shall have the  power  to  require
16        the following information:
17                  (A)  certification by an independent actuary of
18             the   adequacy   of   the  reserves  of  the  Health
19             Maintenance Organization sought to be acquired;
20                  (B)  pro forma financial statements  reflecting
21             the combined balance sheets of the acquiring company
22             and the Health Maintenance Organization sought to be
23             acquired  as of the end of the preceding year and as
24             of a date 90 days prior to the acquisition, as  well
25             as   pro   forma   financial  statements  reflecting
26             projected combined  operation  for  a  period  of  2
27             years;
28                  (C)  a  pro  forma  business  plan detailing an
29             acquiring  party's  plans  with   respect   to   the
30             operation  of  the  Health  Maintenance Organization
31             sought to be acquired for a period of not less  than
32             3 years; and
33                  (D)  such  other  information  as  the Director
34             shall require.
 
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 1        (d)  The provisions of Article VIII 1/2 of  the  Illinois
 2    Insurance  Code  and this Section 5-3 shall apply to the sale
 3    by any health maintenance organization of greater than 10% of
 4    its enrollee population  (including  without  limitation  the
 5    health  maintenance organization's right, title, and interest
 6    in and to its health care certificates).
 7        (e)  In considering any management  contract  or  service
 8    agreement  subject to Section 141.1 of the Illinois Insurance
 9    Code, the Director (i) shall, in  addition  to  the  criteria
10    specified  in  Section  141.2 of the Illinois Insurance Code,
11    take into account the effect of the  management  contract  or
12    service   agreement   on  the  continuation  of  benefits  to
13    enrollees  and  the  financial  condition   of   the   health
14    maintenance  organization to be managed or serviced, and (ii)
15    need not take into  account  the  effect  of  the  management
16    contract or service agreement on competition.
17        (f)  Except  for  small employer groups as defined in the
18    Small Employer Rating, Renewability  and  Portability  Health
19    Insurance  Act and except for medicare supplement policies as
20    defined in Section 363 of  the  Illinois  Insurance  Code,  a
21    Health  Maintenance Organization may by contract agree with a
22    group or other enrollment unit to effect  refunds  or  charge
23    additional premiums under the following terms and conditions:
24             (i)  the  amount  of, and other terms and conditions
25        with respect to, the refund or additional premium are set
26        forth in the group or enrollment unit contract agreed  in
27        advance of the period for which a refund is to be paid or
28        additional  premium  is to be charged (which period shall
29        not be less than one year); and
30             (ii)  the amount of the refund or additional premium
31        shall  not  exceed  20%   of   the   Health   Maintenance
32        Organization's profitable or unprofitable experience with
33        respect  to  the  group  or other enrollment unit for the
34        period (and, for  purposes  of  a  refund  or  additional
 
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 1        premium,  the profitable or unprofitable experience shall
 2        be calculated taking into account a pro rata share of the
 3        Health  Maintenance  Organization's  administrative   and
 4        marketing  expenses,  but shall not include any refund to
 5        be made or additional premium to be paid pursuant to this
 6        subsection (f)).  The Health Maintenance Organization and
 7        the  group  or  enrollment  unit  may  agree   that   the
 8        profitable  or  unprofitable experience may be calculated
 9        taking into account the refund period and the immediately
10        preceding 2 plan years.
11        The  Health  Maintenance  Organization  shall  include  a
12    statement in the evidence of coverage issued to each enrollee
13    describing the possibility of a refund or additional premium,
14    and upon request of any group or enrollment unit, provide  to
15    the group or enrollment unit a description of the method used
16    to   calculate  (1)  the  Health  Maintenance  Organization's
17    profitable experience with respect to the group or enrollment
18    unit and the resulting refund to the group or enrollment unit
19    or (2) the  Health  Maintenance  Organization's  unprofitable
20    experience  with  respect to the group or enrollment unit and
21    the resulting additional premium to be paid by the  group  or
22    enrollment unit.
23        In   no  event  shall  the  Illinois  Health  Maintenance
24    Organization  Guaranty  Association  be  liable  to  pay  any
25    contractual obligation of an insolvent  organization  to  pay
26    any refund authorized under this Section.
27    (Source: P.A.  91-357,  eff.  7-29-99;  91-406,  eff. 1-1-00;
28    91-549, eff. 8-14-99; 91-605,  eff.  12-14-99;  91-788,  eff.
29    6-9-00; 92-764, eff. 1-1-03.)

30        Section 99. Effective date. This Act takes effect January
31    1, 2004.