HB3923 Engrossed LRB096 08394 RPM 18506 b

1     AN ACT concerning 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 adding
5 Sections 359a.1 and 359a.2 and Article XLV and by changing
6 Section 370c as follows:
7     (215 ILCS 5/359a.1 new)
8     Sec. 359a.1. Standard small group applications. The
9 Director shall develop, by rule, a standard application form
10 for use by small employers applying for coverage under a health
11 benefit plan offered by small employer carriers. Small employer
12 carriers shall be required to use the standard application form
13 not less than 6 months after the rules developing the form
14 become effective. The Director shall revise the standard
15 application form at least every 3 years. For purposes of this
16 Section, "health benefit plan", "small employer", and "small
17 employer carrier" shall have the meaning given those terms in
18 the Small Employer Health Insurance Rating Act.
19     (215 ILCS 5/359a.2 new)
20     Sec. 359a.2. Standard individual market health statements.
21 The Director shall develop, by rule, a standard health
22 statement for use by individuals applying for a health benefit



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1 plan in the individual market. All carriers who offer health
2 benefit plans in the individual market and evaluate the health
3 status of individuals shall be required to use the standard
4 health statement not less than 6 months after the statement
5 becomes effective and thereafter may not use any other method
6 to determine the health status of an individual. Nothing in
7 this Section shall prevent a carrier from using health
8 information after enrollment for the purpose of providing
9 services or arranging for the provision of services under a
10 health benefit plan. For purposes of this Section, "health
11 benefit plan" shall have the meaning given the term in the
12 Small Employer Health Insurance Rating Act and "individual
13 market" shall have meaning given the term in the Illinois
14 Health Insurance Portability and Accountability Act.
15     (215 ILCS 5/370c)  (from Ch. 73, par. 982c)
16     Sec. 370c. Mental and emotional disorders.
17     (a) (1) On and after the effective date of this Section,
18 every insurer which delivers, issues for delivery or renews or
19 modifies group A&H policies providing coverage for hospital or
20 medical treatment or services for illness on an
21 expense-incurred basis shall offer to the applicant or group
22 policyholder subject to the insurers standards of
23 insurability, coverage for reasonable and necessary treatment
24 and services for mental, emotional or nervous disorders or
25 conditions, other than serious mental illnesses as defined in



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1 item (2) of subsection (b), up to the limits provided in the
2 policy for other disorders or conditions, except (i) the
3 insured may be required to pay up to 50% of expenses incurred
4 as a result of the treatment or services, and (ii) the annual
5 benefit limit may be limited to the lesser of $10,000 or 25% of
6 the lifetime policy limit.
7     (2) Each insured that is covered for mental, emotional or
8 nervous disorders or conditions shall be free to select the
9 physician licensed to practice medicine in all its branches,
10 licensed clinical psychologist, licensed clinical social
11 worker, licensed clinical professional counselor, or licensed
12 marriage and family therapist of his choice to treat such
13 disorders, and the insurer shall pay the covered charges of
14 such physician licensed to practice medicine in all its
15 branches, licensed clinical psychologist, licensed clinical
16 social worker, licensed clinical professional counselor, or
17 licensed marriage and family therapist up to the limits of
18 coverage, provided (i) the disorder or condition treated is
19 covered by the policy, and (ii) the physician, licensed
20 psychologist, licensed clinical social worker, licensed
21 clinical professional counselor, or licensed marriage and
22 family therapist is authorized to provide said services under
23 the statutes of this State and in accordance with accepted
24 principles of his profession.
25     (3) Insofar as this Section applies solely to licensed
26 clinical social workers, licensed clinical professional



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1 counselors, and licensed marriage and family therapists, those
2 persons who may provide services to individuals shall do so
3 after the licensed clinical social worker, licensed clinical
4 professional counselor, or licensed marriage and family
5 therapist has informed the patient of the desirability of the
6 patient conferring with the patient's primary care physician
7 and the licensed clinical social worker, licensed clinical
8 professional counselor, or licensed marriage and family
9 therapist has provided written notification to the patient's
10 primary care physician, if any, that services are being
11 provided to the patient. That notification may, however, be
12 waived by the patient on a written form. Those forms shall be
13 retained by the licensed clinical social worker, licensed
14 clinical professional counselor, or licensed marriage and
15 family therapist for a period of not less than 5 years.
16     (b) (1) An insurer that provides coverage for hospital or
17 medical expenses under a group policy of accident and health
18 insurance or health care plan amended, delivered, issued, or
19 renewed after the effective date of this amendatory Act of the
20 92nd General Assembly shall provide coverage under the policy
21 for treatment of serious mental illness under the same terms
22 and conditions as coverage for hospital or medical expenses
23 related to other illnesses and diseases. The coverage required
24 under this Section must provide for same durational limits,
25 amount limits, deductibles, and co-insurance requirements for
26 serious mental illness as are provided for other illnesses and



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1 diseases. This subsection does not apply to coverage provided
2 to employees by employers who have 50 or fewer employees.
3     (2) "Serious mental illness" means the following
4 psychiatric illnesses as defined in the most current edition of
5 the Diagnostic and Statistical Manual (DSM) published by the
6 American Psychiatric Association:
7         (A) schizophrenia;
8         (B) paranoid and other psychotic disorders;
9         (C) bipolar disorders (hypomanic, manic, depressive,
10     and mixed);
11         (D) major depressive disorders (single episode or
12     recurrent);
13         (E) schizoaffective disorders (bipolar or depressive);
14         (F) pervasive developmental disorders;
15         (G) obsessive-compulsive disorders;
16         (H) depression in childhood and adolescence;
17         (I) panic disorder;
18         (J) post-traumatic stress disorders (acute, chronic,
19     or with delayed onset); and
20         (K) anorexia nervosa and bulimia nervosa.
21     (3) (Blank). Upon request of the reimbursing insurer, a
22 provider of treatment of serious mental illness shall furnish
23 medical records or other necessary data that substantiate that
24 initial or continued treatment is at all times medically
25 necessary. An insurer shall provide a mechanism for the timely
26 review by a provider holding the same license and practicing in



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1 the same specialty as the patient's provider, who is
2 unaffiliated with the insurer, jointly selected by the patient
3 (or the patient's next of kin or legal representative if the
4 patient is unable to act for himself or herself), the patient's
5 provider, and the insurer in the event of a dispute between the
6 insurer and patient's provider regarding the medical necessity
7 of a treatment proposed by a patient's provider. If the
8 reviewing provider determines the treatment to be medically
9 necessary, the insurer shall provide reimbursement for the
10 treatment. Future contractual or employment actions by the
11 insurer regarding the patient's provider may not be based on
12 the provider's participation in this procedure. Nothing
13 prevents the insured from agreeing in writing to continue
14 treatment at his or her expense. When making a determination of
15 the medical necessity for a treatment modality for serous
16 mental illness, an insurer must make the determination in a
17 manner that is consistent with the manner used to make that
18 determination with respect to other diseases or illnesses
19 covered under the policy, including an appeals process.
20     (4) A group health benefit plan:
21         (A) shall provide coverage based upon medical
22     necessity for the following treatment of mental illness in
23     each calendar year:
24             (i) 45 days of inpatient treatment; and
25             (ii) beginning on June 26, 2006 (the effective date
26         of Public Act 94-921), 60 visits for outpatient



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1         treatment including group and individual outpatient
2         treatment; and
3             (iii) for plans or policies delivered, issued for
4         delivery, renewed, or modified after January 1, 2007
5         (the effective date of Public Act 94-906), 20
6         additional outpatient visits for speech therapy for
7         treatment of pervasive developmental disorders that
8         will be in addition to speech therapy provided pursuant
9         to item (ii) of this subparagraph (A);
10         (B) may not include a lifetime limit on the number of
11     days of inpatient treatment or the number of outpatient
12     visits covered under the plan; and
13         (C) shall include the same amount limits, deductibles,
14     copayments, and coinsurance factors for serious mental
15     illness as for physical illness.
16     (5) An issuer of a group health benefit plan may not count
17 toward the number of outpatient visits required to be covered
18 under this Section an outpatient visit for the purpose of
19 medication management and shall cover the outpatient visits
20 under the same terms and conditions as it covers outpatient
21 visits for the treatment of physical illness.
22     (6) An issuer of a group health benefit plan may provide or
23 offer coverage required under this Section through a managed
24 care plan.
25     (7) This Section shall not be interpreted to require a
26 group health benefit plan to provide coverage for treatment of:



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1         (A) an addiction to a controlled substance or cannabis
2     that is used in violation of law; or
3         (B) mental illness resulting from the use of a
4     controlled substance or cannabis in violation of law.
5     (8) (Blank).
6     (9) On and after June 1, 2010, coverage for the treatment
7 of mental and emotional disorders as provided by subsections
8 (a) and (b) of this Section shall not be denied under the
9 policy, provided that services are medically necessary as
10 determined by the insured's treating physician. For purposes of
11 this Section, "medically necessary" means health care services
12 appropriate, in terms of type, frequency, level, setting, and
13 duration, to the enrollee's diagnosis or condition, and
14 diagnostic testing and preventive services. Medically
15 necessary care must be consistent with generally accepted
16 practice parameters as determined by health care providers in
17 the same or similar general specialty as typically manages the
18 condition, procedure, or treatment at issue and must be
19 intended to either help restore or maintain the enrollee's
20 health or prevent deterioration of the enrollee's condition.
21 Upon request of the reimbursing insurer, a provider of
22 treatment of serious mental illness shall furnish medical
23 records or other necessary data that substantiate that initial
24 or continued treatment is at all times medically necessary.
25 (Source: P.A. 94-402, eff. 8-2-05; 94-584, eff. 8-15-05;
26 94-906, eff. 1-1-07; 94-921, eff. 6-26-06; 95-331, eff.



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1 8-21-07; 95-972, eff. 9-22-08; 95-973, eff. 1-1-09; revised
2 10-14-08.)
3     (215 ILCS 5/Art. XLV heading new)

5     (215 ILCS 5/1501 new)
6     Sec. 1501. Short title. This Law may be cited as the
7 Minimum Medical Loss Ratio Law.
8     (215 ILCS 5/1505 new)
9     Sec. 1505. Purpose. The General Assembly recognizes that a
10 significant share of the premium dollars paid by individuals
11 and small employers to health insurers and health maintenance
12 organizations is directed toward administrative and marketing
13 activities and profit. It is the intent of this Law to ensure
14 that premium costs for consumers more accurately reflect the
15 value of health care they receive by increasing the portion of
16 premium dollars dedicated to medical services.
17     (215 ILCS 5/1510 new)
18     Sec. 1510. Definitions. In this Law:
19     "Company" means any entity that provides health insurance
20 in this State. For the purposes of this Law, company includes a
21 licensed insurance company, a health maintenance organization,
22 or any other entity providing a plan of health insurance or



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1 health benefits subject to State insurance regulation.
2     "Division" means the Division of Insurance within the
3 Illinois Department of Financial and Professional Regulation.
4     "Health benefit plan" means any hospital or medical
5 expense-incurred policy, hospital or medical service plan
6 contract, or health maintenance organization subscriber
7 contract. "Health benefit plan" shall not include
8 accident-only, credit, dental, vision, Medicare supplement,
9 hospital indemnity, long term care, specific disease, stop loss
10 or disability income insurance, coverage issued as a supplement
11 to liability insurance, workers' compensation or similar
12 insurance, or automobile medical payment insurance.
13     "Health care benefits" means health care services that are
14 either provided or reimbursed by a managed care entity or its
15 contracted providers as benefits to its policyholders and
16 insurers. Health care benefits shall include:
17         (A) The costs of programs or activities, including
18     training and the provision of informational materials that
19     are determined as part of the regulation to improve the
20     provision of quality care, improve health care outcomes, or
21     encourage the use of evidence-based medicine.
22         (B) Disease management expenses using cost-effective
23     evidence-based guidelines.
24         (C) Plan medical advice by telephone.
25         (D) Payments to providers as risk pool payments of
26     pay-for-performance initiatives.



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1     "Health care benefits" shall not include administrative
2 costs as determined by the Division.
3     "Individual market" means the individual market as defined
4 by the Illinois Health Insurance Portability and
5 Accountability Act.
6     "Small group market" means small group market as defined by
7 the Illinois Health Insurance Portability and Accountability
8 Act.
9     (215 ILCS 5/1515 new)
10     Sec. 1515. Minimum medical loss requirement for companies
11 offering coverage in the individual and small group market.
12     (a) Any company selling a health benefit plan in the
13 individual or small group market shall, on and after June 1,
14 2011, expend in the form of health care benefits no less than
15 75% of the aggregate dues, fees, premiums, or other periodic
16 payments received by the company. For purposes of this Section,
17 the company may deduct from the aggregate dues, fees, premiums,
18 or other periodic payments received by the company the amount
19 of income taxes or other taxes that the company expensed.
20     (b) To assess compliance with this Section, a company with
21 a valid certificate of authority may average its total costs
22 across all health benefit plans issued, amended, or renewed in
23 Illinois, and all health benefit plans issued, amended, or
24 renewed by its affiliated companies that are licensed to
25 operate in Illinois.



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1     (c) The Division shall adopt rules to implement this
2 Section and to establish uniform reporting by companies of the
3 information necessary to determine compliance with this
4 Section.
5     (d) The Division may exclude from the determination of
6 compliance with the requirement of subsection (a) of this
7 Section any new health benefit plans for up to the first 2
8 years that these health benefit plans are offered for sale in
9 Illinois, provided that the Division determines that the new
10 health benefit plans are substantially different from the
11 existing health benefit plans being issued, amended, or renewed
12 by the company seeking the exclusion.
13     Section 10. The Managed Care Reform and Patient Rights Act
14 is amended by changing Section 90 as follows:
15     (215 ILCS 134/90)
16     Sec. 90. Office of Consumer Health Insurance.
17     (a) The Director of Insurance shall establish the Office of
18 Consumer Health Insurance within the Department of Insurance to
19 provide assistance and information to all health care consumers
20 within the State and to ensure that persons covered by health
21 insurance companies or health care plans are provided benefits
22 due under the Illinois Insurance Code and related statutes and
23 are protected from health insurance company and health care
24 plan actions or policy provisions that are unjust, unfair,



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1 inequitable, ambiguous, misleading, inconsistent, deceptive,
2 or contrary to the law or to the public policy of this State or
3 that unreasonably or deceptively affect the risk purposed to be
4 assumed. Within the appropriation allocated, the Office shall
5 provide information and assistance to all health care
6 consumers. by The responsibilities of the Office shall include,
7 but not be limited to, the following:
8         (1) assisting consumers in understanding health
9     insurance marketing materials and the coverage provisions
10     of individual plans;
11         (2) educating enrollees about their rights within
12     individual plans;
13         (3) assisting enrollees with the process of filing
14     formal grievances and appeals;
15         (4) establishing and operating a toll-free "800"
16     telephone number line to handle consumer inquiries;
17         (5) making related information available in languages
18     other than English that are spoken as a primary language by
19     a significant portion of the State's population, as
20     determined by the Department;
21         (6) analyzing, commenting on, monitoring, and making
22     publicly available reports on the development and
23     implementation of federal, State, and local laws,
24     regulations, and other governmental policies and actions
25     that pertain to the adequacy of health care plans,
26     facilities, and services in the State;



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1         (7) filing an annual report with the Governor, the
2     Director, and the General Assembly, which shall contain
3     recommendations for improvement of the regulation of
4     health insurance plans, including recommendations on
5     improving health care consumer assistance and patterns,
6     abuses, and progress that it has identified from its
7     interaction with health care consumers; and
8         (8) performing oversight of health insurance companies
9     and health care plans with respect to:
10             (A) improper claims practices as set forth in
11         Sections 154.5 and 154.6 of the Illinois Insurance
12         Code;
13             (B) emergency services;
14             (C) compliance with this Act;
15             (D) ensuring proper coverage for mental health
16         treatment;
17             (E) reviewing insurance company and health care
18         plan underwriting, rating, and rescission practices;
19         and
20             (F) reviewing insurance company and health care
21         plan billing practices, including, but not limited to,
22         consumer cost-sharing that results from co-pay,
23         deductible, and provider network provisions;
24         (9) assisting health insurance companies and health
25     care plan consumers with respect to the exercise of the
26     grievance and appeals rights established in the Illinois



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1     Insurance Code;
2         (10) if an external independent review decision
3     upholds a determination adverse to the patient, the patient
4     has the right to appeal the final decision to the Office;
5     if the external review decision is found by the Director
6     through the Office to have been arbitrary and capricious,
7     then the Director, with consultation from a licensed
8     medical professional, may overturn the external review
9     decision and require the health insurance company or health
10     care plan to pay for the health care service or treatment;
11     such decision, if any, shall be made solely on the legal or
12     medical merits of the claim; and
13         (11) (8) performing all duties assigned to the Office
14     by the Director.
15     (b) The report required under subsection (a)(7) shall be
16 filed by January 31, 2001 and each January 31 thereafter.
17     (c) Nothing in this Section shall be interpreted to
18 authorize access to or disclosure of individual patient or
19 health care professional or provider records.
20     (d) The Director, in his or her discretion, may issue a
21 Notice of Hearing requiring a health insurance company or
22 health care plan to appear at a hearing for the purpose of
23 determining the health insurance company or health care plan's
24 compliance with the duties and responsibilities listed in this
25 Act and in the Illinois Insurance Code.
26     (e) Nothing in this Section shall diminish or affect the



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1 powers and authority of the Director of Insurance otherwise set
2 forth in this Act and in the Illinois Insurance Code.
3 (Source: P.A. 91-617, eff. 1-1-00.)
4     Section 99. Effective date. This Act takes effect January
5 1, 2010.