093_SB1776sam001

 










                                     LRB093 03728 JLS 12984 a

 1                    AMENDMENT TO SENATE BILL 1776

 2        AMENDMENT NO.     .  Amend Senate Bill 1776 by  replacing
 3    the title with the following:
 4        "AN ACT concerning insurance."; and

 5    by  replacing  everything  after the enacting clause with the
 6    following:

 7        "Section 5.  The Illinois Insurance Code  is  amended  by
 8    adding Sections 368b, 368c, and 368e as follows:

 9        (215 ILCS 5/368b new)
10        Sec.  368b.  Prohibition  of  waiver  of requirements and
11    prohibitions.  No  contract  between   an   insurer,   health
12    maintenance  organization,  independent practice association,
13    or  physician  hospital  organization  and  a   health   care
14    professional  or  health  care  provider  shall  contain  any
15    provision,  term,  or  condition  that  limits, restricts, or
16    otherwise waives any of the requirements and prohibitions set
17    forth in this Article. Any provision purporting to make  such
18    a waiver is void and unenforceable.

19        (215 ILCS 5/368c new)
20        Sec. 368c.  Payments.
 
                            -2-      LRB093 03728 JLS 12984 a
 1        (a)  After  the  effective date of this amendatory Act of
 2    the 93rd  General  Assembly,  health  care  professionals  or
 3    health  care providers offered a contract for signature by an
 4    insurer,   health   maintenance   organization,   independent
 5    practice association, or physician hospital  organization  to
 6    be paid on a service by service basis shall, upon request, be
 7    provided  copies  of  the fee schedule or payment arrangement
 8    and amounts for each health care service to be provided under
 9    the contract prior to signing the  contract.  If  the  health
10    care  professional  or  health care provider is not paid on a
11    service by service basis, the amounts payable  and  terms  of
12    payment  under  that  alternative  payment  system  shall  be
13    provided upon request.
14        (b)  Payments   under  a  contract  with  a  health  care
15    professional or health care provider  shall  not  be  changed
16    based upon rates agreed to by the professional or provider in
17    another   contract   with   an  insurer,  health  maintenance
18    organization, independent practice association, or  physician
19    hospital  organization.  Nothing  in  this  Section  shall be
20    construed  to  prevent   an   insurer,   health   maintenance
21    organization,  independent practice association, or physician
22    hospital organization from renegotiating its payments under a
23    contract with a  health  care  professional  or  health  care
24    provider.
25        (c)  A  payment  statement shall be furnished to a health
26    care professional or health care provider paid on  a  service
27    by  service  basis  for  services provided under the contract
28    that identifies the  disposition  of  each  claim,  including
29    services  billed,  the  patient  responsibility,  if any, the
30    actual payment, if any, for the services  billed  by  CPT  or
31    other  appropriate  code,  and  the  reason  for  any payment
32    reduction to the claim submitted,  including  any  withholds,
33    and  the  reason  for  denial  of  any claim. Nothing in this
34    Section requires that a health care  professional  or  health
 
                            -3-      LRB093 03728 JLS 12984 a
 1    care provider be paid on a service by service basis. Payments
 2    may   be   made   based   on  capitation  and  other  payment
 3    arrangements.  Health  care  professionals  and  health  care
 4    providers  shall   be   allowed   to   collect   co-payments,
 5    co-insurance,   deductibles,   and  payment  for  non-covered
 6    services directly from patients except as otherwise  provided
 7    by   law.   An   insurer,  health  maintenance  organization,
 8    independent  practice  association,  or  physician   hospital
 9    organization may pay for covered services either to a patient
10    directly  or  a non-participating health care professional or
11    health care provider.
12        (d)  When  a  person  presents  a  health  care   service
13    benefits  information  card,  a  health  care professional or
14    health care provider shall inform the person if he or she  is
15    not   participating  with  the  insurer,  health  maintenance
16    organization, independent practice organization, or physician
17    hospital organization issuing the card.

18        (215 ILCS 5/368e new)
19        Sec. 368e.  Recoupments. Any attempt  to  recoup  payment
20    made to a health care professional or health care provider by
21    an  insurer,  health  maintenance  organization,  independent
22    practice   association,  or  physician-hospital  organization
23    shall be initiated by providing a written explanation of  any
24    proposed  recoupment, including, but not limited to, the name
25    of the patient, the date of service, the  service  code,  and
26    the  payment  amount,  the details concerning the reasons for
27    the recoupment, and an explanation of the appeal  process.  A
28    health  care  professional  or  health care provider shall be
29    given 60 days to appeal the proposed recoupment or  to  repay
30    the  recoupment  amount.  If  the health care professional or
31    health  care  provider  chooses  to   appeal   the   proposed
32    recoupment  and,  upon  appeal,  the  proposed  recoupment is
33    determined to be appropriate, the health care professional or
 
                            -4-      LRB093 03728 JLS 12984 a
 1    health care provider must pay the recoupment within  30  days
 2    of  receiving  the  notice of the final appeal's decision. If
 3    the health care professional or health care provider does not
 4    make  any  required  recoupment  payment  within  these  time
 5    frames,  the  insurer,   health   maintenance   organization,
 6    independent   practice  association,  or  physician  hospital
 7    organization may offset future  payments  to  effectuate  the
 8    recoupment.   Except  in an instance in which the health care
 9    professional or health care provider has been found guilty of
10    committing civil or criminal insurance fraud,  no  recoupment
11    of any payments may be initiated 24 months after the date the
12    moneys  were  paid,  except  when requested or initiated by a
13    governmental unit.  It is not a recoupment when a health care
14    professional or  health  care  provider  is  paid  an  amount
15    prospectively  under  a  contract  with  an  insurer,  health
16    maintenance  organization,  independent practice association,
17    or  physician   hospital   organization   that   includes   a
18    retrospective reconciliation based on the services provided.

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

21        (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
22        Sec. 5-3.  Insurance Code provisions.
23        (a)  Health Maintenance Organizations shall be subject to
24    the provisions of Sections 133, 134, 137, 140, 141.1,  141.2,
25    141.3,  143,  143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
26    154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v,  356w,  356x,
27    356y,  356z.2, 367i, 368a, 368b, 368c, 368e, 401, 401.1, 402,
28    403, 403A, 408, 408.2, 409, 412, 444,  and  444.1,  paragraph
29    (c)  of subsection (2) of Section 367, and Articles IIA, VIII
30    1/2, XII, XII 1/2, XIII, XIII  1/2,  XXV,  and  XXVI  of  the
31    Illinois Insurance Code.
32        (b)  For  purposes of the Illinois Insurance Code, except
 
                            -5-      LRB093 03728 JLS 12984 a
 1    for Sections 444 and 444.1 and Articles XIII  and  XIII  1/2,
 2    Health  Maintenance Organizations in the following categories
 3    are deemed to be "domestic companies":
 4             (1)  a  corporation  authorized  under  the   Dental
 5        Service  Plan  Act or the Voluntary Health Services Plans
 6        Act;
 7             (2)  a corporation organized under the laws of  this
 8        State; or
 9             (3)  a  corporation  organized  under  the  laws  of
10        another  state, 30% or more of the enrollees of which are
11        residents of this State, except a corporation subject  to
12        substantially  the  same  requirements  in  its  state of
13        organization as is a  "domestic  company"  under  Article
14        VIII 1/2 of the Illinois Insurance Code.
15        (c)  In  considering  the merger, consolidation, or other
16    acquisition of control of a Health  Maintenance  Organization
17    pursuant to Article VIII 1/2 of the Illinois Insurance Code,
18             (1)  the  Director  shall give primary consideration
19        to the continuation of  benefits  to  enrollees  and  the
20        financial  conditions  of the acquired Health Maintenance
21        Organization after the merger,  consolidation,  or  other
22        acquisition of control takes effect;
23             (2)(i)  the  criteria specified in subsection (1)(b)
24        of Section 131.8 of the Illinois Insurance Code shall not
25        apply and (ii) the Director, in making his  determination
26        with  respect  to  the  merger,  consolidation,  or other
27        acquisition of control, need not take  into  account  the
28        effect  on  competition  of the merger, consolidation, or
29        other acquisition of control;
30             (3)  the Director shall have the  power  to  require
31        the following information:
32                  (A)  certification by an independent actuary of
33             the   adequacy   of   the  reserves  of  the  Health
34             Maintenance Organization sought to be acquired;
 
                            -6-      LRB093 03728 JLS 12984 a
 1                  (B)  pro forma financial statements  reflecting
 2             the combined balance sheets of the acquiring company
 3             and the Health Maintenance Organization sought to be
 4             acquired  as of the end of the preceding year and as
 5             of a date 90 days prior to the acquisition, as  well
 6             as   pro   forma   financial  statements  reflecting
 7             projected combined  operation  for  a  period  of  2
 8             years;
 9                  (C)  a  pro  forma  business  plan detailing an
10             acquiring  party's  plans  with   respect   to   the
11             operation  of  the  Health  Maintenance Organization
12             sought to be acquired for a period of not less  than
13             3 years; and
14                  (D)  such  other  information  as  the Director
15             shall require.
16        (d)  The provisions of Article VIII 1/2 of  the  Illinois
17    Insurance  Code  and this Section 5-3 shall apply to the sale
18    by any health maintenance organization of greater than 10% of
19    its enrollee population  (including  without  limitation  the
20    health  maintenance organization's right, title, and interest
21    in and to its health care certificates).
22        (e)  In considering any management  contract  or  service
23    agreement  subject to Section 141.1 of the Illinois Insurance
24    Code, the Director (i) shall, in  addition  to  the  criteria
25    specified  in  Section  141.2 of the Illinois Insurance Code,
26    take into account the effect of the  management  contract  or
27    service   agreement   on  the  continuation  of  benefits  to
28    enrollees  and  the  financial  condition   of   the   health
29    maintenance  organization to be managed or serviced, and (ii)
30    need not take into  account  the  effect  of  the  management
31    contract or service agreement on competition.
32        (f)  Except  for  small employer groups as defined in the
33    Small Employer Rating, Renewability  and  Portability  Health
34    Insurance  Act and except for medicare supplement policies as
 
                            -7-      LRB093 03728 JLS 12984 a
 1    defined in Section 363 of  the  Illinois  Insurance  Code,  a
 2    Health  Maintenance Organization may by contract agree with a
 3    group or other enrollment unit to effect  refunds  or  charge
 4    additional premiums under the following terms and conditions:
 5             (i)  the  amount  of, and other terms and conditions
 6        with respect to, the refund or additional premium are set
 7        forth in the group or enrollment unit contract agreed  in
 8        advance of the period for which a refund is to be paid or
 9        additional  premium  is to be charged (which period shall
10        not be less than one year); and
11             (ii)  the amount of the refund or additional premium
12        shall  not  exceed  20%   of   the   Health   Maintenance
13        Organization's profitable or unprofitable experience with
14        respect  to  the  group  or other enrollment unit for the
15        period (and, for  purposes  of  a  refund  or  additional
16        premium,  the profitable or unprofitable experience shall
17        be calculated taking into account a pro rata share of the
18        Health  Maintenance  Organization's  administrative   and
19        marketing  expenses,  but shall not include any refund to
20        be made or additional premium to be paid pursuant to this
21        subsection (f)).  The Health Maintenance Organization and
22        the  group  or  enrollment  unit  may  agree   that   the
23        profitable  or  unprofitable experience may be calculated
24        taking into account the refund period and the immediately
25        preceding 2 plan years.
26        The  Health  Maintenance  Organization  shall  include  a
27    statement in the evidence of coverage issued to each enrollee
28    describing the possibility of a refund or additional premium,
29    and upon request of any group or enrollment unit, provide  to
30    the group or enrollment unit a description of the method used
31    to   calculate  (1)  the  Health  Maintenance  Organization's
32    profitable experience with respect to the group or enrollment
33    unit and the resulting refund to the group or enrollment unit
34    or (2) the  Health  Maintenance  Organization's  unprofitable
 
                            -8-      LRB093 03728 JLS 12984 a
 1    experience  with  respect to the group or enrollment unit and
 2    the resulting additional premium to be paid by the  group  or
 3    enrollment unit.
 4        In   no  event  shall  the  Illinois  Health  Maintenance
 5    Organization  Guaranty  Association  be  liable  to  pay  any
 6    contractual obligation of an insolvent  organization  to  pay
 7    any refund authorized under this Section.
 8    (Source: P.A.  91-357,  eff.  7-29-99;  91-406,  eff. 1-1-00;
 9    91-549, eff. 8-14-99; 91-605,  eff.  12-14-99;  91-788,  eff.
10    6-9-00; 92-764, eff. 1-1-03.)

11        Section  15.  The  Voluntary Health Services Plans Act is
12    amended by changing Section 10 as follows:

13        (215 ILCS 165/10) (from Ch. 32, par. 604)
14        Sec.  10.  Application  of  Insurance  Code   provisions.
15    Health  services plan corporations and all persons interested
16    therein  or  dealing  therewith  shall  be  subject  to   the
17    provisions of Articles IIA and XII 1/2 and Sections 3.1, 133,
18    140,  143,  143c,  149, 155.37, 354, 355.2, 356r, 356t, 356u,
19    356v, 356w, 356x, 356y, 356z.1, 356z.2,  367.2,  368a,  368b,
20    368c,  368e, 401, 401.1, 402, 403, 403A, 408, 408.2, and 412,
21    and paragraphs (7) and (15) of Section 367  of  the  Illinois
22    Insurance Code.
23    (Source: P.A.  91-406,  eff.  1-1-00;  91-549,  eff. 8-14-99;
24    91-605, eff. 12-14-99;  91-788,  eff.  6-9-00;  92-130,  eff.
25    7-20-01;  92-440, eff. 8-17-01; 92-651, eff. 7-11-02; 92-764,
26    eff. 1-1-03.)

27        Section  99.  Effective  date.  This  Act  takes   effect
28    December 1, 2003.".