093_HB1074sam001

 










                                     LRB093 05507 RCE 16172 a

 1                    AMENDMENT TO HOUSE BILL 1074

 2        AMENDMENT NO.     .  Amend House Bill 1074  by  replacing
 3    everything after the enacting clause with the following:

 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
 
                            -2-      LRB093 05507 RCE 16172 a
 1    health  care  provider  to  whom the contract is offered, the
 2    network  provider  administration  manual,  and   a   summary
 3    capitation  schedule,  if  payment  is  made  on a capitation
 4    basis. If 50 codes do not exist for a  particular  specialty,
 5    the  health care professional or health care provider offered
 6    a contract shall be given the opportunity to review or obtain
 7    a copy of a fee schedule sample with the codes applicable  to
 8    that  particular  specialty. This information may be provided
 9    electronically. An insurer, health maintenance  organization,
10    independent   practice  association,  or  physician  hospital
11    organization may substitute the fee schedule  sample  with  a
12    document  providing  reference  to  the information needed to
13    calculate the fee schedule that is available to the public at
14    no charge and the percentage or conversion  factor  at  which
15    the   insurer,  health  maintenance  organization,  preferred
16    provider organization, independent practice  association,  or
17    physician hospital organization sets its rates.
18        (b)  The  fee  schedule, the capitation schedule, and the
19    network    provider    administration    manual    constitute
20    confidential, proprietary, and trade secret  information  and
21    are  subject  to the provisions of the Illinois Trade Secrets
22    Act. The health care professional  or  health  care  provider
23    receiving   such   protected  information  may  disclose  the
24    information on a need to know basis and only  to  individuals
25    and  entities  that  provide services directly related to the
26    health care professional's or health care provider's decision
27    to enter into the contract or keep the contract in force. Any
28    person  or  entity  receiving  or  reviewing  such  protected
29    information pursuant to this Section shall not  disclose  the
30    information  to  any  other  person, organization, or entity,
31    unless the disclosure is requested pursuant to a valid  court
32    order  or  required  by a state or federal government agency.
33    Individuals or entities receiving  such  information  from  a
34    health   care   professional   or  health  care  provider  as
 
                            -3-      LRB093 05507 RCE 16172 a
 1    delineated in this subsection are subject to  the  provisions
 2    of the Illinois Trade Secrets Act.
 3        (c)  The health care professional or health care provider
 4    shall  be  allowed at least 30 days to review the health care
 5    professional  or  health  care  provider  services  contract,
 6    including exhibits and attachments, if any,  before  signing.
 7    The  30-day  review  period begins upon receipt of the health
 8    care  professional or health care provider services contract,
 9    unless the information available upon request  in  subsection
10    (a)  is  not  included. If information is not included in the
11    professional services contract and is requested  pursuant  to
12    subsection  (a),  the 30-day review period begins on the date
13    of receipt of the information.  Nothing  in  this  subsection
14    shall  prohibit  a  health  care  professional or health care
15    provider from signing a contract prior to the  expiration  of
16    the 30-day review period.
17        (d)  The   insurer,   health   maintenance  organization,
18    independent  practice  association,  or  physician   hospital
19    organization   shall   provide  all  contracted  health  care
20    professionals or health care providers with  any  changes  to
21    the fee schedule provided under subsection (a) not later than
22    35  days after the effective date of the changes, unless such
23    changes are specified in the contract  and  the  health  care
24    professional or health care provider is able to calculate the
25    changed  rates  based  on  information  in  the  contract and
26    information available to the public at  no  charge.  For  the
27    purposes  of  this subsection, "changes" means an increase or
28    decrease in the fee schedule referred to in  subsection  (a).
29    This  information  may  be  made  available  by mail, e-mail,
30    newsletter, website listing, or other reasonable method. Upon
31    request, a health care professional or health  care  provider
32    may  request  an updated copy of the fee schedule referred to
33    in subsection (a) every calendar quarter.
34        (e)  Upon termination of  a  contract  with  an  insurer,
 
                            -4-      LRB093 05507 RCE 16172 a
 1    health   maintenance   organization,   independent   practice
 2    association,  or  physician  hospital organization and at the
 3    request of the patient, a health care professional or  health
 4    care  provider shall transfer copies of the patient's medical
 5    records. Any other  provision  of  law  notwithstanding,  the
 6    costs  for copying and transferring copies of medical records
 7    shall be assigned per the arrangements agreed upon,  if  any,
 8    in  the  health  care  professional  or  health care provider
 9    services contract.

10        (215 ILCS 5/368c new)
11        Sec. 368c.  Remittance advice and procedures.
12        (a)  A remittance advice shall be furnished to  a  health
13    care professional or health care provider that identifies the
14    disposition  of  each  claim.   The  remittance  advice shall
15    identify the services billed; the patient responsibility,  if
16    any; the actual payment, if any, for the services billed; and
17    the  reason  for  any  reduction  to the amount for which the
18    claim was submitted.  For any reductions to  the  amount  for
19    which  the claim was submitted, the remittance shall identify
20    any withholds and the reason for any denial or reduction.
21        A remittance advice for capitation or prospective payment
22    arrangements shall be furnished to a health care professional
23    or health care  provider  pursuant  to  a  contract  with  an
24    insurer,   health   maintenance   organization,   independent
25    practice  association,  or physician hospital organization in
26    accordance with the terms of the contract.
27        (b)  Health care professionals and health care  providers
28    may  not  provide  a statement that requires payment from the
29    patient or group contract holder, or  collect  and  have  any
30    recourse  against an insured patient or group contract holder
31    for services provided pursuant to  a  contract  in  which  an
32    insurer,   health   maintenance   organization,   independent
33    practice  association, or physician hospital organization has
 
                            -5-      LRB093 05507 RCE 16172 a
 1    contractually agreed  with  a  health  care  professional  or
 2    health  care  provider  that  the health care professional or
 3    health care provider does not have such a  right  or  rights,
 4    except   as   otherwise   provided   by   law.   Health  care
 5    professionals and health care providers shall be  allowed  to
 6    collect payment for applicable co-payments, co-insurance, and
 7    deductibles  and  payment  for  non-covered services directly
 8    from patients, except as  otherwise  provided  by  law.  When
 9    health  care  services  are  provided  by a non-participating
10    health care professional or health care provider, an insurer,
11    health   maintenance   organization,   independent   practice
12    association, or physician hospital organization may  pay  for
13    covered  services  either  to  a  patient  directly or to the
14    non-participating health care  professional  or  health  care
15    provider.
16        (c)  When  a person presents a benefits information card,
17    a health care professional or health care provider shall make
18    a good faith effort to inform the person if the  health  care
19    professional  or  health  care  provider  has a participation
20    contract with the insurer, health  maintenance  organization,
21    or other entity identified on the card.

22        (215 ILCS 5/368d new)
23        Sec. 368d.  Recoupments.
24        (a)  A  health  care professional or health care provider
25    shall be provided a remittance advice, which must include  an
26    explanation  of  a  recoupment or offset taken by an insurer,
27    health   maintenance   organization,   independent   practice
28    association, or physician hospital organization, if any.  The
29    recoupment  explanation shall, at a minimum, include the name
30    of the patient; the date of service; the service code  or  if
31    no  service  code  is  available  a  service description; the
32    recoupment amount; and  the  reason  for  the  recoupment  or
33    offset.   In   addition,   an   insurer,  health  maintenance
 
                            -6-      LRB093 05507 RCE 16172 a
 1    organization, independent practice association, or  physician
 2    hospital  organization  shall  provide  with  the  remittance
 3    advice  a  telephone number or mailing address to initiate an
 4    appeal of the recoupment or offset.
 5        (b)  It  is  not  a  recoupment  when   a   health   care
 6    professional  or  health  care  provider  is  paid  an amount
 7    prospectively  or  concurrently  under  a  contract  with  an
 8    insurer,   health   maintenance   organization,   independent
 9    practice association, or physician hospital organization that
10    requires a retrospective reconciliation based  upon  specific
11    conditions outlined in the contract.

12        (215 ILCS 5/368e new)
13        Sec. 368e.  Administration and enforcement.
14        (a)  Other   than  the  duties  specifically  created  in
15    Sections 368b, 368c, and 368d, nothing in those  Sections  is
16    intended  to  preclude,  prevent,  or  require  the adoption,
17    modification, or termination of any  utilization  management,
18    quality  management,  or  claims  processing methodologies or
19    other  provisions  of  a  contract  applicable  to   services
20    provided   under   a  contract  between  an  insurer,  health
21    maintenance organization, independent  practice  association,
22    or   physician   hospital  organization  and  a  health  care
23    professional or health care provider.
24        (b)  Nothing in Sections 368b, 368c, and 368d  precludes,
25    prevents,   or   requires   the  adoption,  modification,  or
26    termination of any health plan  term,  benefit,  coverage  or
27    eligibility provision, or payment methodology.
28        (c)  The  provisions of Sections 368b, 368c, and 368d are
29    deemed incorporated into health care professional and  health
30    care provider service contracts entered into on or before the
31    effective  date  of  this  amendatory Act of the 93rd General
32    Assembly and do not require an  insurer,  health  maintenance
33    organization,  independent practice association, or physician
 
                            -7-      LRB093 05507 RCE 16172 a
 1    hospital organization to renew or renegotiate  the  contracts
 2    with a health care professional or health care provider.
 3        (d)  The  Department shall enforce the provisions of this
 4    Section and Sections 368b, 368c, and  368d  pursuant  to  the
 5    enforcement powers granted to it by law.
 6        (e)  The  Department is hereby granted specific authority
 7    to issue a cease and desist order against, fine, or otherwise
 8    penalize    independent     practice     associations     and
 9    physician-hospital organizations for violations.
10        (f)  The  Department  shall  adopt  reasonable  rules  to
11    enforce compliance with this Section and Sections 368b, 368c,
12    and 368d.

13        (215 ILCS 5/370k) (from Ch. 73, par. 982k)
14        Sec. 370k. Registration.
15        (a)  All  administrators  of a preferred provider program
16    subject to this Article shall register with the Department of
17    Insurance, which shall by rule establish  criteria  for  such
18    registration  including  minimum solvency requirements and an
19    annual registration fee for each administrator.
20        (b)  The  Department  of  Insurance  shall  compile   and
21    maintain   a   listing   updated   at   least   annually   of
22    administrators  and  insurers  offering agreements authorized
23    under this Article.
24        (c)  Preferred provider administrators are subject to the
25    provisions of Sections 368b, 368c, 368d,  and  368e  of  this
26    Code.
27    (Source: P.A. 84-618.)

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

30        (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
31        Sec. 5-3.  Insurance Code provisions.
 
                            -8-      LRB093 05507 RCE 16172 a
 1        (a)  Health Maintenance Organizations shall be subject to
 2    the provisions of Sections 133, 134, 137, 140, 141.1,  141.2,
 3    141.3,  143,  143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
 4    154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v,  356w,  356x,
 5    356y, 356z.2, 367i, 368a, 368b, 368c, 368d, 368e, 401, 401.1,
 6    402,  403,  403A,  408,  408.2,  409,  412,  444,  and 444.1,
 7    paragraph (c) of subsection (2) of Section 367, and  Articles
 8    IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of
 9    the Illinois Insurance Code.
10        (b)  For  purposes of the Illinois Insurance Code, except
11    for Sections 444 and 444.1 and Articles XIII  and  XIII  1/2,
12    Health  Maintenance Organizations in the following categories
13    are deemed to be "domestic companies":
14             (1)  a  corporation  authorized  under  the   Dental
15        Service  Plan  Act or the Voluntary Health Services Plans
16        Act;
17             (2)  a corporation organized under the laws of  this
18        State; or
19             (3)  a  corporation  organized  under  the  laws  of
20        another  state, 30% or more of the enrollees of which are
21        residents of this State, except a corporation subject  to
22        substantially  the  same  requirements  in  its  state of
23        organization as is a  "domestic  company"  under  Article
24        VIII 1/2 of the Illinois Insurance Code.
25        (c)  In  considering  the merger, consolidation, or other
26    acquisition of control of a Health  Maintenance  Organization
27    pursuant to Article VIII 1/2 of the Illinois Insurance Code,
28             (1)  the  Director  shall give primary consideration
29        to the continuation of  benefits  to  enrollees  and  the
30        financial  conditions  of the acquired Health Maintenance
31        Organization after the merger,  consolidation,  or  other
32        acquisition of control takes effect;
33             (2)(i)  the  criteria specified in subsection (1)(b)
34        of Section 131.8 of the Illinois Insurance Code shall not
 
                            -9-      LRB093 05507 RCE 16172 a
 1        apply and (ii) the Director, in making his  determination
 2        with  respect  to  the  merger,  consolidation,  or other
 3        acquisition of control, need not take  into  account  the
 4        effect  on  competition  of the merger, consolidation, or
 5        other acquisition of control;
 6             (3)  the Director shall have the  power  to  require
 7        the following information:
 8                  (A)  certification by an independent actuary of
 9             the   adequacy   of   the  reserves  of  the  Health
10             Maintenance Organization sought to be acquired;
11                  (B)  pro forma financial statements  reflecting
12             the combined balance sheets of the acquiring company
13             and the Health Maintenance Organization sought to be
14             acquired  as of the end of the preceding year and as
15             of a date 90 days prior to the acquisition, as  well
16             as   pro   forma   financial  statements  reflecting
17             projected combined  operation  for  a  period  of  2
18             years;
19                  (C)  a  pro  forma  business  plan detailing an
20             acquiring  party's  plans  with   respect   to   the
21             operation  of  the  Health  Maintenance Organization
22             sought to be acquired for a period of not less  than
23             3 years; and
24                  (D)  such  other  information  as  the Director
25             shall require.
26        (d)  The provisions of Article VIII 1/2 of  the  Illinois
27    Insurance  Code  and this Section 5-3 shall apply to the sale
28    by any health maintenance organization of greater than 10% of
29    its enrollee population  (including  without  limitation  the
30    health  maintenance organization's right, title, and interest
31    in and to its health care certificates).
32        (e)  In considering any management  contract  or  service
33    agreement  subject to Section 141.1 of the Illinois Insurance
34    Code, the Director (i) shall, in  addition  to  the  criteria
 
                            -10-     LRB093 05507 RCE 16172 a
 1    specified  in  Section  141.2 of the Illinois Insurance Code,
 2    take into account the effect of the  management  contract  or
 3    service   agreement   on  the  continuation  of  benefits  to
 4    enrollees  and  the  financial  condition   of   the   health
 5    maintenance  organization to be managed or serviced, and (ii)
 6    need not take into  account  the  effect  of  the  management
 7    contract or service agreement on competition.
 8        (f)  Except  for  small employer groups as defined in the
 9    Small Employer Rating, Renewability  and  Portability  Health
10    Insurance  Act and except for medicare supplement policies as
11    defined in Section 363 of  the  Illinois  Insurance  Code,  a
12    Health  Maintenance Organization may by contract agree with a
13    group or other enrollment unit to effect  refunds  or  charge
14    additional premiums under the following terms and conditions:
15             (i)  the  amount  of, and other terms and conditions
16        with respect to, the refund or additional premium are set
17        forth in the group or enrollment unit contract agreed  in
18        advance of the period for which a refund is to be paid or
19        additional  premium  is to be charged (which period shall
20        not be less than one year); and
21             (ii)  the amount of the refund or additional premium
22        shall  not  exceed  20%   of   the   Health   Maintenance
23        Organization's profitable or unprofitable experience with
24        respect  to  the  group  or other enrollment unit for the
25        period (and, for  purposes  of  a  refund  or  additional
26        premium,  the profitable or unprofitable experience shall
27        be calculated taking into account a pro rata share of the
28        Health  Maintenance  Organization's  administrative   and
29        marketing  expenses,  but shall not include any refund to
30        be made or additional premium to be paid pursuant to this
31        subsection (f)).  The Health Maintenance Organization and
32        the  group  or  enrollment  unit  may  agree   that   the
33        profitable  or  unprofitable experience may be calculated
34        taking into account the refund period and the immediately
 
                            -11-     LRB093 05507 RCE 16172 a
 1        preceding 2 plan years.
 2        The  Health  Maintenance  Organization  shall  include  a
 3    statement in the evidence of coverage issued to each enrollee
 4    describing the possibility of a refund or additional premium,
 5    and upon request of any group or enrollment unit, provide  to
 6    the group or enrollment unit a description of the method used
 7    to   calculate  (1)  the  Health  Maintenance  Organization's
 8    profitable experience with respect to the group or enrollment
 9    unit and the resulting refund to the group or enrollment unit
10    or (2) the  Health  Maintenance  Organization's  unprofitable
11    experience  with  respect to the group or enrollment unit and
12    the resulting additional premium to be paid by the  group  or
13    enrollment unit.
14        In   no  event  shall  the  Illinois  Health  Maintenance
15    Organization  Guaranty  Association  be  liable  to  pay  any
16    contractual obligation of an insolvent  organization  to  pay
17    any refund authorized under this Section.
18    (Source: P.A.  91-357,  eff.  7-29-99;  91-406,  eff. 1-1-00;
19    91-549, eff. 8-14-99; 91-605,  eff.  12-14-99;  91-788,  eff.
20    6-9-00; 92-764, eff. 1-1-03.)

21        Section 99. Effective date. This Act takes effect January
22    1, 2004.".