Illinois General Assembly - Full Text of HB0465
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Full Text of HB0465  101st General Assembly


Rep. Gregory Harris

Filed: 4/9/2019





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2    AMENDMENT NO. ______. Amend House Bill 465, AS AMENDED, by
3replacing everything after the enacting clause with the
5    "Section 1. The Freedom of Information Act is amended by
6changing Sections 7 and 7.5 as follows:
7    (5 ILCS 140/7)  (from Ch. 116, par. 207)
8    Sec. 7. Exemptions.
9    (1) When a request is made to inspect or copy a public
10record that contains information that is exempt from disclosure
11under this Section, but also contains information that is not
12exempt from disclosure, the public body may elect to redact the
13information that is exempt. The public body shall make the
14remaining information available for inspection and copying.
15Subject to this requirement, the following shall be exempt from
16inspection and copying:



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1        (a) Information specifically prohibited from
2    disclosure by federal or State law or rules and regulations
3    implementing federal or State law.
4        (b) Private information, unless disclosure is required
5    by another provision of this Act, a State or federal law or
6    a court order.
7        (b-5) Files, documents, and other data or databases
8    maintained by one or more law enforcement agencies and
9    specifically designed to provide information to one or more
10    law enforcement agencies regarding the physical or mental
11    status of one or more individual subjects.
12        (c) Personal information contained within public
13    records, the disclosure of which would constitute a clearly
14    unwarranted invasion of personal privacy, unless the
15    disclosure is consented to in writing by the individual
16    subjects of the information. "Unwarranted invasion of
17    personal privacy" means the disclosure of information that
18    is highly personal or objectionable to a reasonable person
19    and in which the subject's right to privacy outweighs any
20    legitimate public interest in obtaining the information.
21    The disclosure of information that bears on the public
22    duties of public employees and officials shall not be
23    considered an invasion of personal privacy.
24        (d) Records in the possession of any public body
25    created in the course of administrative enforcement
26    proceedings, and any law enforcement or correctional



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1    agency for law enforcement purposes, but only to the extent
2    that disclosure would:
3            (i) interfere with pending or actually and
4        reasonably contemplated law enforcement proceedings
5        conducted by any law enforcement or correctional
6        agency that is the recipient of the request;
7            (ii) interfere with active administrative
8        enforcement proceedings conducted by the public body
9        that is the recipient of the request;
10            (iii) create a substantial likelihood that a
11        person will be deprived of a fair trial or an impartial
12        hearing;
13            (iv) unavoidably disclose the identity of a
14        confidential source, confidential information
15        furnished only by the confidential source, or persons
16        who file complaints with or provide information to
17        administrative, investigative, law enforcement, or
18        penal agencies; except that the identities of
19        witnesses to traffic accidents, traffic accident
20        reports, and rescue reports shall be provided by
21        agencies of local government, except when disclosure
22        would interfere with an active criminal investigation
23        conducted by the agency that is the recipient of the
24        request;
25            (v) disclose unique or specialized investigative
26        techniques other than those generally used and known or



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1        disclose internal documents of correctional agencies
2        related to detection, observation or investigation of
3        incidents of crime or misconduct, and disclosure would
4        result in demonstrable harm to the agency or public
5        body that is the recipient of the request;
6            (vi) endanger the life or physical safety of law
7        enforcement personnel or any other person; or
8            (vii) obstruct an ongoing criminal investigation
9        by the agency that is the recipient of the request.
10        (d-5) A law enforcement record created for law
11    enforcement purposes and contained in a shared electronic
12    record management system if the law enforcement agency that
13    is the recipient of the request did not create the record,
14    did not participate in or have a role in any of the events
15    which are the subject of the record, and only has access to
16    the record through the shared electronic record management
17    system.
18        (e) Records that relate to or affect the security of
19    correctional institutions and detention facilities.
20        (e-5) Records requested by persons committed to the
21    Department of Corrections, Department of Human Services
22    Division of Mental Health, or a county jail if those
23    materials are available in the library of the correctional
24    institution or facility or jail where the inmate is
25    confined.
26        (e-6) Records requested by persons committed to the



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1    Department of Corrections, Department of Human Services
2    Division of Mental Health, or a county jail if those
3    materials include records from staff members' personnel
4    files, staff rosters, or other staffing assignment
5    information.
6        (e-7) Records requested by persons committed to the
7    Department of Corrections or Department of Human Services
8    Division of Mental Health if those materials are available
9    through an administrative request to the Department of
10    Corrections or Department of Human Services Division of
11    Mental Health.
12        (e-8) Records requested by a person committed to the
13    Department of Corrections, Department of Human Services
14    Division of Mental Health, or a county jail, the disclosure
15    of which would result in the risk of harm to any person or
16    the risk of an escape from a jail or correctional
17    institution or facility.
18        (e-9) Records requested by a person in a county jail or
19    committed to the Department of Corrections or Department of
20    Human Services Division of Mental Health, containing
21    personal information pertaining to the person's victim or
22    the victim's family, including, but not limited to, a
23    victim's home address, home telephone number, work or
24    school address, work telephone number, social security
25    number, or any other identifying information, except as may
26    be relevant to a requester's current or potential case or



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1    claim.
2        (e-10) Law enforcement records of other persons
3    requested by a person committed to the Department of
4    Corrections, Department of Human Services Division of
5    Mental Health, or a county jail, including, but not limited
6    to, arrest and booking records, mug shots, and crime scene
7    photographs, except as these records may be relevant to the
8    requester's current or potential case or claim.
9        (f) Preliminary drafts, notes, recommendations,
10    memoranda and other records in which opinions are
11    expressed, or policies or actions are formulated, except
12    that a specific record or relevant portion of a record
13    shall not be exempt when the record is publicly cited and
14    identified by the head of the public body. The exemption
15    provided in this paragraph (f) extends to all those records
16    of officers and agencies of the General Assembly that
17    pertain to the preparation of legislative documents.
18        (g) Trade secrets and commercial or financial
19    information obtained from a person or business where the
20    trade secrets or commercial or financial information are
21    furnished under a claim that they are proprietary,
22    privileged or confidential, and that disclosure of the
23    trade secrets or commercial or financial information would
24    cause competitive harm to the person or business, and only
25    insofar as the claim directly applies to the records
26    requested.



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1        The information included under this exemption includes
2    all trade secrets and commercial or financial information
3    obtained by a public body, including a public pension fund,
4    from a private equity fund or a privately held company
5    within the investment portfolio of a private equity fund as
6    a result of either investing or evaluating a potential
7    investment of public funds in a private equity fund. The
8    exemption contained in this item does not apply to the
9    aggregate financial performance information of a private
10    equity fund, nor to the identity of the fund's managers or
11    general partners. The exemption contained in this item does
12    not apply to the identity of a privately held company
13    within the investment portfolio of a private equity fund,
14    unless the disclosure of the identity of a privately held
15    company may cause competitive harm.
16        Nothing contained in this paragraph (g) shall be
17    construed to prevent a person or business from consenting
18    to disclosure.
19        (h) Proposals and bids for any contract, grant, or
20    agreement, including information which if it were
21    disclosed would frustrate procurement or give an advantage
22    to any person proposing to enter into a contractor
23    agreement with the body, until an award or final selection
24    is made. Information prepared by or for the body in
25    preparation of a bid solicitation shall be exempt until an
26    award or final selection is made.



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1        (i) Valuable formulae, computer geographic systems,
2    designs, drawings and research data obtained or produced by
3    any public body when disclosure could reasonably be
4    expected to produce private gain or public loss. The
5    exemption for "computer geographic systems" provided in
6    this paragraph (i) does not extend to requests made by news
7    media as defined in Section 2 of this Act when the
8    requested information is not otherwise exempt and the only
9    purpose of the request is to access and disseminate
10    information regarding the health, safety, welfare, or
11    legal rights of the general public.
12        (j) The following information pertaining to
13    educational matters:
14            (i) test questions, scoring keys and other
15        examination data used to administer an academic
16        examination;
17            (ii) information received by a primary or
18        secondary school, college, or university under its
19        procedures for the evaluation of faculty members by
20        their academic peers;
21            (iii) information concerning a school or
22        university's adjudication of student disciplinary
23        cases, but only to the extent that disclosure would
24        unavoidably reveal the identity of the student; and
25            (iv) course materials or research materials used
26        by faculty members.



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1        (k) Architects' plans, engineers' technical
2    submissions, and other construction related technical
3    documents for projects not constructed or developed in
4    whole or in part with public funds and the same for
5    projects constructed or developed with public funds,
6    including but not limited to power generating and
7    distribution stations and other transmission and
8    distribution facilities, water treatment facilities,
9    airport facilities, sport stadiums, convention centers,
10    and all government owned, operated, or occupied buildings,
11    but only to the extent that disclosure would compromise
12    security.
13        (l) Minutes of meetings of public bodies closed to the
14    public as provided in the Open Meetings Act until the
15    public body makes the minutes available to the public under
16    Section 2.06 of the Open Meetings Act.
17        (m) Communications between a public body and an
18    attorney or auditor representing the public body that would
19    not be subject to discovery in litigation, and materials
20    prepared or compiled by or for a public body in
21    anticipation of a criminal, civil or administrative
22    proceeding upon the request of an attorney advising the
23    public body, and materials prepared or compiled with
24    respect to internal audits of public bodies.
25        (n) Records relating to a public body's adjudication of
26    employee grievances or disciplinary cases; however, this



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1    exemption shall not extend to the final outcome of cases in
2    which discipline is imposed.
3        (o) Administrative or technical information associated
4    with automated data processing operations, including but
5    not limited to software, operating protocols, computer
6    program abstracts, file layouts, source listings, object
7    modules, load modules, user guides, documentation
8    pertaining to all logical and physical design of
9    computerized systems, employee manuals, and any other
10    information that, if disclosed, would jeopardize the
11    security of the system or its data or the security of
12    materials exempt under this Section.
13        (p) Records relating to collective negotiating matters
14    between public bodies and their employees or
15    representatives, except that any final contract or
16    agreement shall be subject to inspection and copying.
17        (q) Test questions, scoring keys, and other
18    examination data used to determine the qualifications of an
19    applicant for a license or employment.
20        (r) The records, documents, and information relating
21    to real estate purchase negotiations until those
22    negotiations have been completed or otherwise terminated.
23    With regard to a parcel involved in a pending or actually
24    and reasonably contemplated eminent domain proceeding
25    under the Eminent Domain Act, records, documents and
26    information relating to that parcel shall be exempt except



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1    as may be allowed under discovery rules adopted by the
2    Illinois Supreme Court. The records, documents and
3    information relating to a real estate sale shall be exempt
4    until a sale is consummated.
5        (s) Any and all proprietary information and records
6    related to the operation of an intergovernmental risk
7    management association or self-insurance pool or jointly
8    self-administered health and accident cooperative or pool.
9    Insurance or self insurance (including any
10    intergovernmental risk management association or self
11    insurance pool) claims, loss or risk management
12    information, records, data, advice or communications.
13        (t) Information contained in or related to
14    examination, operating, or condition reports prepared by,
15    on behalf of, or for the use of a public body responsible
16    for the regulation or supervision of financial
17    institutions, or insurance companies, or pharmacy benefit
18    managers, unless disclosure is otherwise required by State
19    law.
20        (u) Information that would disclose or might lead to
21    the disclosure of secret or confidential information,
22    codes, algorithms, programs, or private keys intended to be
23    used to create electronic or digital signatures under the
24    Electronic Commerce Security Act.
25        (v) Vulnerability assessments, security measures, and
26    response policies or plans that are designed to identify,



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1    prevent, or respond to potential attacks upon a community's
2    population or systems, facilities, or installations, the
3    destruction or contamination of which would constitute a
4    clear and present danger to the health or safety of the
5    community, but only to the extent that disclosure could
6    reasonably be expected to jeopardize the effectiveness of
7    the measures or the safety of the personnel who implement
8    them or the public. Information exempt under this item may
9    include such things as details pertaining to the
10    mobilization or deployment of personnel or equipment, to
11    the operation of communication systems or protocols, or to
12    tactical operations.
13        (w) (Blank).
14        (x) Maps and other records regarding the location or
15    security of generation, transmission, distribution,
16    storage, gathering, treatment, or switching facilities
17    owned by a utility, by a power generator, or by the
18    Illinois Power Agency.
19        (y) Information contained in or related to proposals,
20    bids, or negotiations related to electric power
21    procurement under Section 1-75 of the Illinois Power Agency
22    Act and Section 16-111.5 of the Public Utilities Act that
23    is determined to be confidential and proprietary by the
24    Illinois Power Agency or by the Illinois Commerce
25    Commission.
26        (z) Information about students exempted from



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1    disclosure under Sections 10-20.38 or 34-18.29 of the
2    School Code, and information about undergraduate students
3    enrolled at an institution of higher education exempted
4    from disclosure under Section 25 of the Illinois Credit
5    Card Marketing Act of 2009.
6        (aa) Information the disclosure of which is exempted
7    under the Viatical Settlements Act of 2009.
8        (bb) Records and information provided to a mortality
9    review team and records maintained by a mortality review
10    team appointed under the Department of Juvenile Justice
11    Mortality Review Team Act.
12        (cc) Information regarding interments, entombments, or
13    inurnments of human remains that are submitted to the
14    Cemetery Oversight Database under the Cemetery Care Act or
15    the Cemetery Oversight Act, whichever is applicable.
16        (dd) Correspondence and records (i) that may not be
17    disclosed under Section 11-9 of the Illinois Public Aid
18    Code or (ii) that pertain to appeals under Section 11-8 of
19    the Illinois Public Aid Code.
20        (ee) The names, addresses, or other personal
21    information of persons who are minors and are also
22    participants and registrants in programs of park
23    districts, forest preserve districts, conservation
24    districts, recreation agencies, and special recreation
25    associations.
26        (ff) The names, addresses, or other personal



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1    information of participants and registrants in programs of
2    park districts, forest preserve districts, conservation
3    districts, recreation agencies, and special recreation
4    associations where such programs are targeted primarily to
5    minors.
6        (gg) Confidential information described in Section
7    1-100 of the Illinois Independent Tax Tribunal Act of 2012.
8        (hh) The report submitted to the State Board of
9    Education by the School Security and Standards Task Force
10    under item (8) of subsection (d) of Section 2-3.160 of the
11    School Code and any information contained in that report.
12        (ii) Records requested by persons committed to or
13    detained by the Department of Human Services under the
14    Sexually Violent Persons Commitment Act or committed to the
15    Department of Corrections under the Sexually Dangerous
16    Persons Act if those materials: (i) are available in the
17    library of the facility where the individual is confined;
18    (ii) include records from staff members' personnel files,
19    staff rosters, or other staffing assignment information;
20    or (iii) are available through an administrative request to
21    the Department of Human Services or the Department of
22    Corrections.
23        (jj) Confidential information described in Section
24    5-535 of the Civil Administrative Code of Illinois.
25    (1.5) Any information exempt from disclosure under the
26Judicial Privacy Act shall be redacted from public records



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1prior to disclosure under this Act.
2    (2) A public record that is not in the possession of a
3public body but is in the possession of a party with whom the
4agency has contracted to perform a governmental function on
5behalf of the public body, and that directly relates to the
6governmental function and is not otherwise exempt under this
7Act, shall be considered a public record of the public body,
8for purposes of this Act.
9    (3) This Section does not authorize withholding of
10information or limit the availability of records to the public,
11except as stated in this Section or otherwise provided in this
13(Source: P.A. 99-298, eff. 8-6-15; 99-346, eff. 1-1-16; 99-642,
14eff. 7-28-16; 100-26, eff. 8-4-17; 100-201, eff. 8-18-17;
15100-732, eff. 8-3-18.)
16    (5 ILCS 140/7.5)
17    Sec. 7.5. Statutory exemptions. To the extent provided for
18by the statutes referenced below, the following shall be exempt
19from inspection and copying:
20        (a) All information determined to be confidential
21    under Section 4002 of the Technology Advancement and
22    Development Act.
23        (b) Library circulation and order records identifying
24    library users with specific materials under the Library
25    Records Confidentiality Act.



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1        (c) Applications, related documents, and medical
2    records received by the Experimental Organ Transplantation
3    Procedures Board and any and all documents or other records
4    prepared by the Experimental Organ Transplantation
5    Procedures Board or its staff relating to applications it
6    has received.
7        (d) Information and records held by the Department of
8    Public Health and its authorized representatives relating
9    to known or suspected cases of sexually transmissible
10    disease or any information the disclosure of which is
11    restricted under the Illinois Sexually Transmissible
12    Disease Control Act.
13        (e) Information the disclosure of which is exempted
14    under Section 30 of the Radon Industry Licensing Act.
15        (f) Firm performance evaluations under Section 55 of
16    the Architectural, Engineering, and Land Surveying
17    Qualifications Based Selection Act.
18        (g) Information the disclosure of which is restricted
19    and exempted under Section 50 of the Illinois Prepaid
20    Tuition Act.
21        (h) Information the disclosure of which is exempted
22    under the State Officials and Employees Ethics Act, and
23    records of any lawfully created State or local inspector
24    general's office that would be exempt if created or
25    obtained by an Executive Inspector General's office under
26    that Act.



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1        (i) Information contained in a local emergency energy
2    plan submitted to a municipality in accordance with a local
3    emergency energy plan ordinance that is adopted under
4    Section 11-21.5-5 of the Illinois Municipal Code.
5        (j) Information and data concerning the distribution
6    of surcharge moneys collected and remitted by carriers
7    under the Emergency Telephone System Act.
8        (k) Law enforcement officer identification information
9    or driver identification information compiled by a law
10    enforcement agency or the Department of Transportation
11    under Section 11-212 of the Illinois Vehicle Code.
12        (l) Records and information provided to a residential
13    health care facility resident sexual assault and death
14    review team or the Executive Council under the Abuse
15    Prevention Review Team Act.
16        (m) Information provided to the predatory lending
17    database created pursuant to Article 3 of the Residential
18    Real Property Disclosure Act, except to the extent
19    authorized under that Article.
20        (n) Defense budgets and petitions for certification of
21    compensation and expenses for court appointed trial
22    counsel as provided under Sections 10 and 15 of the Capital
23    Crimes Litigation Act. This subsection (n) shall apply
24    until the conclusion of the trial of the case, even if the
25    prosecution chooses not to pursue the death penalty prior
26    to trial or sentencing.



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1        (o) Information that is prohibited from being
2    disclosed under Section 4 of the Illinois Health and
3    Hazardous Substances Registry Act.
4        (p) Security portions of system safety program plans,
5    investigation reports, surveys, schedules, lists, data, or
6    information compiled, collected, or prepared by or for the
7    Regional Transportation Authority under Section 2.11 of
8    the Regional Transportation Authority Act or the St. Clair
9    County Transit District under the Bi-State Transit Safety
10    Act.
11        (q) Information prohibited from being disclosed by the
12    Personnel Record Records Review Act.
13        (r) Information prohibited from being disclosed by the
14    Illinois School Student Records Act.
15        (s) Information the disclosure of which is restricted
16    under Section 5-108 of the Public Utilities Act.
17        (t) All identified or deidentified health information
18    in the form of health data or medical records contained in,
19    stored in, submitted to, transferred by, or released from
20    the Illinois Health Information Exchange, and identified
21    or deidentified health information in the form of health
22    data and medical records of the Illinois Health Information
23    Exchange in the possession of the Illinois Health
24    Information Exchange Authority due to its administration
25    of the Illinois Health Information Exchange. The terms
26    "identified" and "deidentified" shall be given the same



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1    meaning as in the Health Insurance Portability and
2    Accountability Act of 1996, Public Law 104-191, or any
3    subsequent amendments thereto, and any regulations
4    promulgated thereunder.
5        (u) Records and information provided to an independent
6    team of experts under the Developmental Disability and
7    Mental Health Safety Act (also known as Brian's Law).
8        (v) Names and information of people who have applied
9    for or received Firearm Owner's Identification Cards under
10    the Firearm Owners Identification Card Act or applied for
11    or received a concealed carry license under the Firearm
12    Concealed Carry Act, unless otherwise authorized by the
13    Firearm Concealed Carry Act; and databases under the
14    Firearm Concealed Carry Act, records of the Concealed Carry
15    Licensing Review Board under the Firearm Concealed Carry
16    Act, and law enforcement agency objections under the
17    Firearm Concealed Carry Act.
18        (w) Personally identifiable information which is
19    exempted from disclosure under subsection (g) of Section
20    19.1 of the Toll Highway Act.
21        (x) Information which is exempted from disclosure
22    under Section 5-1014.3 of the Counties Code or Section
23    8-11-21 of the Illinois Municipal Code.
24        (y) Confidential information under the Adult
25    Protective Services Act and its predecessor enabling
26    statute, the Elder Abuse and Neglect Act, including



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1    information about the identity and administrative finding
2    against any caregiver of a verified and substantiated
3    decision of abuse, neglect, or financial exploitation of an
4    eligible adult maintained in the Registry established
5    under Section 7.5 of the Adult Protective Services Act.
6        (z) Records and information provided to a fatality
7    review team or the Illinois Fatality Review Team Advisory
8    Council under Section 15 of the Adult Protective Services
9    Act.
10        (aa) Information which is exempted from disclosure
11    under Section 2.37 of the Wildlife Code.
12        (bb) Information which is or was prohibited from
13    disclosure by the Juvenile Court Act of 1987.
14        (cc) Recordings made under the Law Enforcement
15    Officer-Worn Body Camera Act, except to the extent
16    authorized under that Act.
17        (dd) Information that is prohibited from being
18    disclosed under Section 45 of the Condominium and Common
19    Interest Community Ombudsperson Act.
20        (ee) Information that is exempted from disclosure
21    under Section 30.1 of the Pharmacy Practice Act.
22        (ff) Information that is exempted from disclosure
23    under the Revised Uniform Unclaimed Property Act.
24        (gg) Information that is prohibited from being
25    disclosed under Section 7-603.5 of the Illinois Vehicle
26    Code.



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1        (hh) Records that are exempt from disclosure under
2    Section 1A-16.7 of the Election Code.
3        (ii) Information which is exempted from disclosure
4    under Section 2505-800 of the Department of Revenue Law of
5    the Civil Administrative Code of Illinois.
6        (jj) Information and reports that are required to be
7    submitted to the Department of Labor by registering day and
8    temporary labor service agencies but are exempt from
9    disclosure under subsection (a-1) of Section 45 of the Day
10    and Temporary Labor Services Act.
11        (kk) Information prohibited from disclosure under the
12    Seizure and Forfeiture Reporting Act.
13        (ll) Information the disclosure of which is restricted
14    and exempted under Section 5-30.8 of the Illinois Public
15    Aid Code.
16        (mm) (ll) Records that are exempt from disclosure under
17    Section 4.2 of the Crime Victims Compensation Act.
18        (nn) (ll) Information that is exempt from disclosure
19    under Section 70 of the Higher Education Student Assistance
20    Act.
21        (oo) Information that is exempt from disclosure under
22    subsections (f) and (j) of Section 5-36 of the Illinois
23    Public Aid Code.
24(Source: P.A. 99-78, eff. 7-20-15; 99-298, eff. 8-6-15; 99-352,
25eff. 1-1-16; 99-642, eff. 7-28-16; 99-776, eff. 8-12-16;
2699-863, eff. 8-19-16; 100-20, eff. 7-1-17; 100-22, eff. 1-1-18;



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1100-201, eff. 8-18-17; 100-373, eff. 1-1-18; 100-464, eff.
28-28-17; 100-465, eff. 8-31-17; 100-512, eff. 7-1-18; 100-517,
3eff. 6-1-18; 100-646, eff. 7-27-18; 100-690, eff. 1-1-19;
4100-863, eff. 8-14-18; 100-887, eff. 8-14-18; revised
6    Section 5. The State Employees Group Insurance Act of 1971
7is amended by changing Section 6.11 as follows:
8    (5 ILCS 375/6.11)
9    (Text of Section after amendment by P.A. 100-1170)
10    Sec. 6.11. Required health benefits; Illinois Insurance
11Code requirements. The program of health benefits shall provide
12the post-mastectomy care benefits required to be covered by a
13policy of accident and health insurance under Section 356t of
14the Illinois Insurance Code. The program of health benefits
15shall provide the coverage required under Sections 356g,
16356g.5, 356g.5-1, 356m, 356u, 356w, 356x, 356z.2, 356z.4,
17356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 356z.13,
18356z.14, 356z.15, 356z.17, 356z.22, 356z.25, 356z.26, 356z.29,
19and 356z.32 of the Illinois Insurance Code. The program of
20health benefits must comply with Sections 155.22a, 155.37,
21355b, 356z.19, 370c, and 370c.1, and Article XXXIIB of the
22Illinois Insurance Code. The Department of Insurance shall
23enforce the requirements of this Section with respect to
24Sections 370c and 370c.1 of the Illinois Insurance Code; all



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1other requirements of this Section shall be enforced by the
2Department of Central Management Services.
3    Rulemaking authority to implement Public Act 95-1045, if
4any, is conditioned on the rules being adopted in accordance
5with all provisions of the Illinois Administrative Procedure
6Act and all rules and procedures of the Joint Committee on
7Administrative Rules; any purported rule not so adopted, for
8whatever reason, is unauthorized.
9(Source: P.A. 99-480, eff. 9-9-15; 100-24, eff. 7-18-17;
10100-138, eff. 8-18-17; 100-863, eff. 8-14-18; 100-1024, eff.
111-1-19; 100-1057, eff. 1-1-19; 100-1102, eff. 1-1-19;
12100-1170, eff. 6-1-19.)
13    Section 10. The Illinois Insurance Code is amended by
14adding Article XXXIIB as follows:
15    (215 ILCS 5/Art. XXXIIB heading new)

17    (215 ILCS 5/513b1 new)
18    Sec. 513b1. Pharmacy benefit manager contracts.
19    (a) As used in this Section:
20    "Biological product" has the meaning ascribed to that term
21in Section 19.5 of the Pharmacy Practice Act.
22    "Maximum allowable cost" means the maximum amount that a
23pharmacy benefit manager will reimburse a pharmacy for the cost



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1of a drug.
2    "Maximum allowable cost list" means a list of drugs for
3which a maximum allowable cost has been established by a
4pharmacy benefit manager.
5    "Pharmacy benefit manager" means a person, business, or
6entity, including a wholly or partially owned or controlled
7subsidiary of a pharmacy benefit manager, that provides claims
8processing services or other prescription drug or device
9services, or both, for health benefit plans.
10    "Retail price" means the price an individual without
11prescription drug coverage would pay at a retail pharmacy, not
12including a pharmacist dispensing fee.
13    (b) A contract between a health insurer and a pharmacy
14benefit manager must require that the pharmacy benefit manager:
15        (1) Update maximum allowable cost pricing information
16    at least every 7 calendar days.
17        (2) Maintain a process that will, in a timely manner,
18    eliminate drugs from maximum allowable cost lists or modify
19    drug prices to remain consistent with changes in pricing
20    data used in formulating maximum allowable cost prices and
21    product availability.
22        (3) Provide access to its maximum allowable cost list
23    to each pharmacy or pharmacy services administrative
24    organization subject to the maximum allowable cost list.
25    Access may include a real-time pharmacy website portal to
26    be able to view the maximum allowable cost list. As used in



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1    this Section, "pharmacy services administrative
2    organization" means an entity operating within the State
3    that contracts with independent pharmacies to conduct
4    business on their behalf with third-party payers. A
5    pharmacy services administrative organization may provide
6    administrative services to pharmacies and negotiate and
7    enter into contracts with third-party payers or pharmacy
8    benefit managers on behalf of pharmacies.
9        (4) Provide a process by which a contracted pharmacy
10    can appeal the provider's reimbursement for a drug subject
11    to maximum allowable cost pricing. The appeals process
12    must, at a minimum, include the following:
13            (A) A requirement that a contracted pharmacy has 14
14        calendar days after the applicable fill date to appeal
15        a maximum allowable cost if the reimbursement for the
16        drug is less than the net amount that the network
17        provider paid to the supplier of the drug.
18            (B) A requirement that a pharmacy benefit manager
19        must respond to a challenge within 14 calendar days of
20        the contracted pharmacy making the claim for which the
21        appeal has been submitted.
22            (C) A telephone number and e-mail address or
23        website to network providers, at which the provider can
24        contact the pharmacy benefit manager to process and
25        submit an appeal.
26            (D) A requirement that, if an appeal is denied, the



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1        pharmacy benefit manager must provide the reason for
2        the denial and the name and the national drug code
3        number from national or regional wholesalers.
4            (E) A requirement that, if an appeal is sustained,
5        the pharmacy benefit manager must make an adjustment in
6        the drug price effective the date the challenge is
7        resolved and make the adjustment applicable to all
8        similarly situated network pharmacy providers, as
9        determined by the managed care organization or
10        pharmacy benefit manager.
11        (5) Allow a plan sponsor contracting with a pharmacy
12    benefit manager an annual right to audit compliance with
13    the terms of the contract by the pharmacy benefit manager,
14    including, but not limited to, full disclosure of any and
15    all rebate amounts secured, whether product specific or
16    generalized rebates, that were provided to the pharmacy
17    benefit manager by a pharmaceutical manufacturer.
18        (6) Allow a plan sponsor contracting with a pharmacy
19    benefit manager to request that the pharmacy benefit
20    manager disclose the actual amounts paid by the pharmacy
21    benefit manager to the pharmacy.
22        (7) Provide notice to the party contracting with the
23    pharmacy benefit manager of any consideration that the
24    pharmacy benefit manager receives from the manufacturer
25    for dispense as written prescriptions once a generic or
26    biologically similar product becomes available.



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1    (c) In order to place a particular prescription drug on a
2maximum allowable cost list, the pharmacy benefit manager must,
3at a minimum, ensure that:
4        (1) if the drug is a generically equivalent drug, it is
5    listed as therapeutically equivalent and pharmaceutically
6    equivalent "A" or "B" rated in the United States Food and
7    Drug Administration's most recent version of the "Orange
8    Book" or have an NR or NA rating by Medi-Span, Gold
9    Standard, or a similar rating by a nationally recognized
10    reference;
11        (2) the drug is available for purchase by each pharmacy
12    in the State from national or regional wholesalers
13    operating in Illinois; and
14        (3) the drug is not obsolete.
15    (d) A pharmacy benefit manager is prohibited from limiting
16a pharmacist's ability to disclose whether the cost-sharing
17obligation exceeds the retail price for a covered prescription
18drug, and the availability of a more affordable alternative
19drug, if one is available in accordance with Section 42 of the
20Pharmacy Practice Act.
21    (e) A health insurer or pharmacy benefit manager shall not
22require an insured to make a payment for a prescription drug at
23the point of sale in an amount that exceeds the lesser of:
24        (1) the applicable cost-sharing amount; or
25        (2) the retail price of the drug in the absence of
26    prescription drug coverage.



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1    (f) This Section applies to contracts entered into or
2renewed on or after July 1, 2020.
3    (g) This Section applies to any group or individual policy
4of accident and health insurance or managed care plan that
5provides coverage for prescription drugs and that is amended,
6delivered, issued, or renewed on or after July 1, 2020.
7    (215 ILCS 5/513b2 new)
8    Sec. 513b2. Licensure requirements.
9    (a) Beginning on July 1, 2020, to conduct business in this
10State, a pharmacy benefit manager must register with the
11Director. To initially register or renew a registration, a
12pharmacy benefit manager shall submit:
13        (1) A nonrefundable fee not to exceed $500.
14        (2) A copy of the registrant's corporate charter,
15    articles of incorporation, or other charter document.
16        (3) A completed registration form adopted by the
17    Director containing:
18            (A) The name and address of the registrant.
19            (B) The name, address, and official position of
20        each officer and director of the registrant.
21    (b) The registrant shall report any change in information
22required under this Section to the Director in writing within
2360 days after the change occurs.
24    (c) Upon receipt of a completed registration form, the
25required documents, and the registration fee, the Director



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1shall issue a registration certificate. The certificate may be
2in paper or electronic form, and shall clearly indicate the
3expiration date of the registration. Registration certificates
4are nontransferable.
5    (d) A registration certificate is valid for 2 years after
6its date of issue. The Director shall adopt by rule an initial
7registration fee not to exceed $500 and a registration renewal
8fee not to exceed $500, both of which shall be nonrefundable.
9Total fees may not exceed the cost of administering this
11    (e) The Department shall adopt any rules necessary to
12implement this Section.
13    (215 ILCS 5/513b3 new)
14    Sec. 513b3. Examination.
15    (a) The Director, or his or her designee, may examine a
16registered pharmacy benefit manager.
17    (b) Any pharmacy benefit manager being examined shall
18provide to the Director, or his or her designee, convenient and
19free access to all books, records, documents, and other papers
20relating to such pharmacy benefit manager's business affairs at
21all reasonable hours at its offices.
22    (c) The Director, or his or her designee, may administer
23oaths and thereafter examine the pharmacy benefit manager's
24designee, representative, or any officer or senior manager as
25listed on the license or registration certificate about the



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1business of the pharmacy benefit manager.
2    (d) The examiners designated by the Director under this
3Section may make reports to the Director. Any report alleging
4substantive violations of this Article, any applicable
5provisions of this Code, or any applicable Part of Title 50 of
6the Illinois Administrative Code shall be in writing and be
7based upon facts obtained by the examiners. The report shall be
8verified by the examiners.
9    (e) If a report is made, the Director shall either deliver
10a duplicate report to the pharmacy benefit manager being
11examined or send such duplicate by certified or registered mail
12to the pharmacy benefit manager's address specified in the
13records of the Department. The Director shall afford the
14pharmacy benefit manager an opportunity to request a hearing to
15object to the report. The pharmacy benefit manager may request
16a hearing within 30 days after receipt of the duplicate report
17by giving the Director written notice of such request together
18with written objections to the report. Any hearing shall be
19conducted in accordance with Sections 402 and 403 of this Code.
20The right to a hearing is waived if the delivery of the report
21is refused or the report is otherwise undeliverable or the
22pharmacy benefit manager does not timely request a hearing.
23After the hearing or upon expiration of the time period during
24which a pharmacy benefit manager may request a hearing, if the
25examination reveals that the pharmacy benefit manager is
26operating in violation of any applicable provision of this



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1Code, any applicable Part of Title 50 of the Illinois
2Administrative Code, a provision of this Article, or prior
3order, the Director, in the written order, may require the
4pharmacy benefit manager to take any action the Director
5considers necessary or appropriate in accordance with the
6report or examination hearing. If the Director issues an order,
7it shall be issued within 90 days after the report is filed, or
8if there is a hearing, within 90 days after the conclusion of
9the hearing. The order is subject to review under the
10Administrative Review Law.
11    (215 ILCS 5/513b4 new)
12    Sec. 513b4. Denial, revocation, or suspension of
13registration; administrative fines.
14    (a) Denial of an application or suspension or revocation of
15a registration in accordance with this Section shall be by
16written order sent to the applicant or registrant by certified
17or registered mail at the address specified in the records of
18the Department. The written order shall state the grounds,
19charges, or conduct on which denial, suspension, or revocation
20is based. The applicant or registrant may in writing request a
21hearing within 30 days from the date of mailing. Upon receipt
22of a written request, the Director shall issue an order
23setting: (i) a specific time for the hearing, which may not be
24less than 20 nor more than 30 days after receipt of the
25request; and (ii) a specific place for the hearing, which may



10100HB0465ham002- 32 -LRB101 03398 KTG 59484 a

1be in either the city of Springfield or in the county in
2Illinois where the applicant's or registrant's principal place
3of business is located. If no written request is received by
4the Director, such order shall be final upon the expiration of
5said 30 days.
6    (b) If the Director finds that one or more grounds exist
7for the revocation or suspension of a registration issued under
8this Article, the Director may, in lieu of or in addition to
9such suspension or revocation, impose a fine upon the pharmacy
10benefit manager as provided under subsection (c).
11    (c) With respect to any knowing and willful violation of a
12lawful order of the Director, any applicable portion of this
13Code, Part of Title 50 of the Illinois Administrative Code, or
14provision of this Article, the Director may impose a fine upon
15the pharmacy benefit manager in an amount not to exceed $50,000
16for each violation.
17    (215 ILCS 5/513b5 new)
18    Sec. 513b5. Failure to register. Any pharmacy benefit
19manager that operates without a registration or fails to
20register with the Director and pay the fee prescribed by this
21Article is an unauthorized insurer as defined in Article VII of
22this Code and shall be subject to all penalties provided for
24    (215 ILCS 5/513b6 new)



10100HB0465ham002- 33 -LRB101 03398 KTG 59484 a

1    Sec. 513b6. Insurance Producer Administration Fund. All
2fees and fines paid to and collected by the Director under this
3Article shall be paid promptly after receipt thereof, together
4with a detailed statement of such fees, into the Insurance
5Producer Administration Fund. The moneys deposited into the
6Insurance Producer Administration Fund may be transferred to
7the Professions Indirect Cost Fund, as authorized under Section
82105-300 of the Department of Professional Regulation Law of
9the Civil Administrative Code of Illinois.
10    Section 15. The Health Maintenance Organization Act is
11amended by changing Section 5-3 as follows:
12    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
13    Sec. 5-3. Insurance Code provisions.
14    (a) Health Maintenance Organizations shall be subject to
15the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1,
16141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154,
17154.5, 154.6, 154.7, 154.8, 155.04, 155.22a, 355.2, 355.3,
18355b, 356g.5-1, 356m, 356v, 356w, 356x, 356y, 356z.2, 356z.4,
19356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12,
20356z.13, 356z.14, 356z.15, 356z.17, 356z.18, 356z.19, 356z.21,
21356z.22, 356z.25, 356z.26, 356z.29, 356z.30, 356z.32, 364,
22364.01, 367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e,
23370c, 370c.1, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412,
24444, and 444.1, paragraph (c) of subsection (2) of Section 367,



10100HB0465ham002- 34 -LRB101 03398 KTG 59484 a

1and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV,
2and XXVI, and XXXIIB of the Illinois Insurance Code.
3    (b) For purposes of the Illinois Insurance Code, except for
4Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
5Maintenance Organizations in the following categories are
6deemed to be "domestic companies":
7        (1) a corporation authorized under the Dental Service
8    Plan Act or the Voluntary Health Services Plans Act;
9        (2) a corporation organized under the laws of this
10    State; or
11        (3) a corporation organized under the laws of another
12    state, 30% or more of the enrollees of which are residents
13    of this State, except a corporation subject to
14    substantially the same requirements in its state of
15    organization as is a "domestic company" under Article VIII
16    1/2 of the Illinois Insurance Code.
17    (c) In considering the merger, consolidation, or other
18acquisition of control of a Health Maintenance Organization
19pursuant to Article VIII 1/2 of the Illinois Insurance Code,
20        (1) the Director shall give primary consideration to
21    the continuation of benefits to enrollees and the financial
22    conditions of the acquired Health Maintenance Organization
23    after the merger, consolidation, or other acquisition of
24    control takes effect;
25        (2)(i) the criteria specified in subsection (1)(b) of
26    Section 131.8 of the Illinois Insurance Code shall not



10100HB0465ham002- 35 -LRB101 03398 KTG 59484 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 the
7    following information:
8            (A) certification by an independent actuary of the
9        adequacy of the reserves of the Health Maintenance
10        Organization sought to be acquired;
11            (B) pro forma financial statements reflecting the
12        combined balance sheets of the acquiring company and
13        the Health Maintenance Organization sought to be
14        acquired as of the end of the preceding year and as of
15        a date 90 days prior to the acquisition, as well as pro
16        forma financial statements reflecting projected
17        combined operation for a period of 2 years;
18            (C) a pro forma business plan detailing an
19        acquiring party's plans with respect to the operation
20        of the Health Maintenance Organization sought to be
21        acquired for a period of not less than 3 years; and
22            (D) such other information as the Director shall
23        require.
24    (d) The provisions of Article VIII 1/2 of the Illinois
25Insurance Code and this Section 5-3 shall apply to the sale by
26any health maintenance organization of greater than 10% of its



10100HB0465ham002- 36 -LRB101 03398 KTG 59484 a

1enrollee population (including without limitation the health
2maintenance organization's right, title, and interest in and to
3its health care certificates).
4    (e) In considering any management contract or service
5agreement subject to Section 141.1 of the Illinois Insurance
6Code, the Director (i) shall, in addition to the criteria
7specified in Section 141.2 of the Illinois Insurance Code, take
8into account the effect of the management contract or service
9agreement on the continuation of benefits to enrollees and the
10financial condition of the health maintenance organization to
11be managed or serviced, and (ii) need not take into account the
12effect of the management contract or service agreement on
14    (f) Except for small employer groups as defined in the
15Small Employer Rating, Renewability and Portability Health
16Insurance Act and except for medicare supplement policies as
17defined in Section 363 of the Illinois Insurance Code, a Health
18Maintenance Organization may by contract agree with a group or
19other enrollment unit to effect refunds or charge additional
20premiums under the following terms and conditions:
21        (i) the amount of, and other terms and conditions with
22    respect to, the refund or additional premium are set forth
23    in the group or enrollment unit contract agreed in advance
24    of the period for which a refund is to be paid or
25    additional premium is to be charged (which period shall not
26    be less than one year); and



10100HB0465ham002- 37 -LRB101 03398 KTG 59484 a

1        (ii) the amount of the refund or additional premium
2    shall not exceed 20% of the Health Maintenance
3    Organization's profitable or unprofitable experience with
4    respect to the group or other enrollment unit for the
5    period (and, for purposes of a refund or additional
6    premium, the profitable or unprofitable experience shall
7    be calculated taking into account a pro rata share of the
8    Health Maintenance Organization's administrative and
9    marketing expenses, but shall not include any refund to be
10    made or additional premium to be paid pursuant to this
11    subsection (f)). The Health Maintenance Organization and
12    the group or enrollment unit may agree that the profitable
13    or unprofitable experience may be calculated taking into
14    account the refund period and the immediately preceding 2
15    plan years.
16    The Health Maintenance Organization shall include a
17statement in the evidence of coverage issued to each enrollee
18describing the possibility of a refund or additional premium,
19and upon request of any group or enrollment unit, provide to
20the group or enrollment unit a description of the method used
21to calculate (1) the Health Maintenance Organization's
22profitable experience with respect to the group or enrollment
23unit and the resulting refund to the group or enrollment unit
24or (2) the Health Maintenance Organization's unprofitable
25experience with respect to the group or enrollment unit and the
26resulting additional premium to be paid by the group or



10100HB0465ham002- 38 -LRB101 03398 KTG 59484 a

1enrollment unit.
2    In no event shall the Illinois Health Maintenance
3Organization Guaranty Association be liable to pay any
4contractual obligation of an insolvent organization to pay any
5refund authorized under this Section.
6    (g) Rulemaking authority to implement Public Act 95-1045,
7if any, is conditioned on the rules being adopted in accordance
8with all provisions of the Illinois Administrative Procedure
9Act and all rules and procedures of the Joint Committee on
10Administrative Rules; any purported rule not so adopted, for
11whatever reason, is unauthorized.
12(Source: P.A. 99-761, eff. 1-1-18; 100-24, eff. 7-18-17;
13100-138, eff. 8-18-17; 100-863, eff. 8-14-18; 100-1026, eff.
148-22-18; 100-1057, eff. 1-1-19; 100-1102, eff. 1-1-19; revised
16    Section 20. The Managed Care Reform and Patient Rights Act
17is amended by changing Sections 10 and 30 as follows:
18    (215 ILCS 134/10)
19    Sec. 10. Definitions.
20    "Adverse determination" means a determination by a health
21care plan under Section 45 or by a utilization review program
22under Section 85 that a health care service is not medically
24    "Clinical peer" means a health care professional who is in



10100HB0465ham002- 39 -LRB101 03398 KTG 59484 a

1the same profession and the same or similar specialty as the
2health care provider who typically manages the medical
3condition, procedures, or treatment under review.
4    "Department" means the Department of Insurance.
5    "Emergency medical condition" means a medical condition
6manifesting itself by acute symptoms of sufficient severity,
7regardless of the final diagnosis given, (including, but not
8limited to, severe pain) such that a prudent layperson, who
9possesses an average knowledge of health and medicine, could
10reasonably expect the absence of immediate medical attention to
11result in:
12        (1) placing the health of the individual (or, with
13    respect to a pregnant woman, the health of the woman or her
14    unborn child) in serious jeopardy;
15        (2) serious impairment to bodily functions; or
16        (3) serious dysfunction of any bodily organ or part; .
17        (4) inadequately controlled pain; or
18        (5) with respect to a pregnant woman who is having
19    contractions:
20            (A) inadequate time to complete a safe transfer to
21        another hospital before delivery; or
22            (B) a transfer to another hospital may pose a
23        threat to the health or safety of the woman or unborn
24        child.
25    "Emergency medical screening examination" means a medical
26screening examination and evaluation by a physician licensed to



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1practice medicine in all its branches, or to the extent
2permitted by applicable laws, by other appropriately licensed
3personnel under the supervision of or in collaboration with a
4physician licensed to practice medicine in all its branches to
5determine whether the need for emergency services exists.
6    "Emergency services" means, with respect to an enrollee of
7a health care plan, transportation services, including but not
8limited to ambulance services, and covered inpatient and
9outpatient hospital services furnished by a provider qualified
10to furnish those services that are needed to evaluate or
11stabilize an emergency medical condition. "Emergency services"
12does not refer to post-stabilization medical services.
13    "Enrollee" means any person and his or her dependents
14enrolled in or covered by a health care plan.
15    "Health care plan" means a plan, including, but not limited
16to, a health maintenance organization, a managed care community
17network as defined in the Illinois Public Aid Code, or an
18accountable care entity as defined in the Illinois Public Aid
19Code that receives capitated payments to cover medical services
20from the Department of Healthcare and Family Services, that
21establishes, operates, or maintains a network of health care
22providers that has entered into an agreement with the plan to
23provide health care services to enrollees to whom the plan has
24the ultimate obligation to arrange for the provision of or
25payment for services through organizational arrangements for
26ongoing quality assurance, utilization review programs, or



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1dispute resolution. Nothing in this definition shall be
2construed to mean that an independent practice association or a
3physician hospital organization that subcontracts with a
4health care plan is, for purposes of that subcontract, a health
5care plan.
6    For purposes of this definition, "health care plan" shall
7not include the following:
8        (1) indemnity health insurance policies including
9    those using a contracted provider network;
10        (2) health care plans that offer only dental or only
11    vision coverage;
12        (3) preferred provider administrators, as defined in
13    Section 370g(g) of the Illinois Insurance Code;
14        (4) employee or employer self-insured health benefit
15    plans under the federal Employee Retirement Income
16    Security Act of 1974;
17        (5) health care provided pursuant to the Workers'
18    Compensation Act or the Workers' Occupational Diseases
19    Act; and
20        (6) not-for-profit voluntary health services plans
21    with health maintenance organization authority in
22    existence as of January 1, 1999 that are affiliated with a
23    union and that only extend coverage to union members and
24    their dependents.
25    "Health care professional" means a physician, a registered
26professional nurse, or other individual appropriately licensed



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1or registered to provide health care services.
2    "Health care provider" means any physician, hospital
3facility, facility licensed under the Nursing Home Care Act,
4long-term care facility as defined in Section 1-113 of the
5Nursing Home Care Act, or other person that is licensed or
6otherwise authorized to deliver health care services. Nothing
7in this Act shall be construed to define Independent Practice
8Associations or Physician-Hospital Organizations as health
9care providers.
10    "Health care services" means any services included in the
11furnishing to any individual of medical care, or the
12hospitalization incident to the furnishing of such care, as
13well as the furnishing to any person of any and all other
14services for the purpose of preventing, alleviating, curing, or
15healing human illness or injury including home health and
16pharmaceutical services and products.
17    "Medical director" means a physician licensed in any state
18to practice medicine in all its branches appointed by a health
19care plan.
20    "Person" means a corporation, association, partnership,
21limited liability company, sole proprietorship, or any other
22legal entity.
23    "Physician" means a person licensed under the Medical
24Practice Act of 1987.
25    "Post-stabilization medical services" means health care
26services provided to an enrollee that are furnished in a



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1licensed hospital by a provider that is qualified to furnish
2such services, and determined to be medically necessary and
3directly related to the emergency medical condition following
5    "Stabilization" means, with respect to an emergency
6medical condition, to provide such medical treatment of the
7condition as may be necessary to assure, within reasonable
8medical probability, that no material deterioration of the
9condition is likely to result.
10    "Utilization review" means the evaluation of the medical
11necessity, appropriateness, and efficiency of the use of health
12care services, procedures, and facilities.
13    "Utilization review program" means a program established
14by a person to perform utilization review.
15(Source: P.A. 98-651, eff. 6-16-14; 98-841, eff. 8-1-14; 99-78,
16eff. 7-20-15.)
17    (215 ILCS 134/30)
18    Sec. 30. Prohibitions.
19    (a) No health care plan or its subcontractors may prohibit
20or discourage health care providers by contract or policy from
21discussing any health care services and health care providers,
22utilization review and quality assurance policies, terms and
23conditions of plans and plan policy with enrollees, prospective
24enrollees, providers, or the public.
25    (b) No health care plan by contract, written policy, or



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1procedure may permit or allow an individual or entity to
2dispense a different drug in place of the drug or brand of drug
3ordered or prescribed without the express permission of the
4person ordering or prescribing the drug, except as provided
5under Section 3.14 of the Illinois Food, Drug and Cosmetic Act.
6    (c) No health care plan or its subcontractors may by
7contract, written policy, procedure, or otherwise mandate or
8require an enrollee to substitute his or her participating
9primary care physician under the plan during inpatient
10hospitalization, such as with a hospitalist physician licensed
11to practice medicine in all its branches, without the agreement
12of that enrollee's participating primary care physician.
13"Participating primary care physician" for health care plans
14and subcontractors that do not require coordination of care by
15a primary care physician means the participating physician
16treating the patient. All health care plans shall inform
17enrollees of any policies, recommendations, or guidelines
18concerning the substitution of the enrollee's primary care
19physician when hospitalization is necessary in the manner set
20forth in subsections (d) and (e) of Section 15.
21    (d) A health care plan shall apply any third-party
22payments, financial assistance, discount, product vouchers, or
23any other reduction in out-of-pocket expenses made by or on
24behalf of such insured for prescription drugs toward a covered
25individual's deductible, copay, or cost-sharing
26responsibility, or out-of-pocket maximum associated with the



10100HB0465ham002- 45 -LRB101 03398 KTG 59484 a

1individual's health insurance.
2    (e) (d) Any violation of this Section shall be subject to
3the penalties under this Act.
4(Source: P.A. 94-866, eff. 6-16-06.)
5    Section 25. The Pharmacy Practice Act is amended by adding
6Section 42 as follows:
7    (225 ILCS 85/42 new)
8    Sec. 42. Information disclosure. A pharmacist or her or his
9authorized employee must inform customers of a less expensive,
10generically equivalent drug product for her or his prescription
11and whether the cost-sharing obligation to the customer exceeds
12the retail price of the prescription in the absence of
13prescription drug coverage.
14    Section 30. The Illinois Public Aid Code is amended by
15adding Section 5-36 as follows:
16    (305 ILCS 5/5-36 new)
17    Sec. 5-36. Pharmacy benefits.
18    (a)(1) The Department may enter into a contract with a
19third party on a fee-for-service reimbursement model for the
20purpose of administering pharmacy benefits as provided in this
21Section for members not enrolled in a Medicaid managed care
22organization; however, these services shall be approved by the



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1Department. The Department shall ensure coordination of care
2between the third-party administrator and managed care
3organizations as a consideration in any contracts established
4in accordance with this Section. Any managed care techniques,
5principles, or administration of benefits utilized in
6accordance with this subsection shall comply with State law.
7    (2) The following shall apply to contracts between entities
8contracting relating to the Department's third-party
9administrators and pharmacies:
10        (A) the Department shall approve any contract between a
11    third-party administrator and a pharmacy;
12        (B) the Department's third-party administrator shall
13    not change the terms of a contract between a third-party
14    administrator and a pharmacy without written approval by
15    the Department; and
16        (C) the Department's third-party administrator shall
17    not create, modify, implement, or indirectly establish any
18    fee on a pharmacy, pharmacist, or a recipient of medical
19    assistance without written approval by the Department.
20    (b) The provisions of this Section shall not apply to
21outpatient pharmacy services provided by a health care facility
22registered as a covered entity pursuant to 42 U.S.C. 256b or
23any pharmacy owned by or contracted with the covered entity. A
24Medicaid managed care organization shall, either directly or
25through a pharmacy benefit manager, administer and reimburse
26outpatient pharmacy claims submitted by a health care facility



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1registered as a covered entity pursuant to 42 U.S.C. 256b, its
2owned pharmacies, and contracted pharmacies in accordance with
3the contractual agreements the Medicaid managed care
4organization or its pharmacy benefit manager has with such
5facilities and pharmacies. Any pharmacy benefit manager that
6contracts with a Medicaid managed care organization to
7administer and reimburse pharmacy claims as provided in this
8Section must be registered with the Director of Insurance in
9accordance with Section 513b2 of the Illinois Insurance Code.
10    (c) On at least an annual basis, the Director of the
11Department of Healthcare and Family Services shall submit a
12report beginning no later than one year after the effective
13date of this amendatory Act of the 101st General Assembly that
14provides an update on any contract, contract issues, formulary,
15dispensing fees, and maximum allowable cost concerns regarding
16a third-party administrator and managed care. The requirement
17for reporting to the General Assembly shall be satisfied by
18filing copies of the report with the Speaker, the Minority
19Leader, and the Clerk of the House of Representatives and with
20the President, the Minority leader, and the Secretary of the
21Senate. The Department shall take care that no proprietary
22information is included in the report required under this
24    (d) A pharmacy benefit manager shall notify the Department
25in writing of any activity, policy, or practice of the pharmacy
26benefit manager that directly or indirectly presents a conflict



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1of interest that interferes with the discharge of the pharmacy
2benefit manager's duty to a managed care organization to
3exercise its contractual duties. "Conflict of interest" shall
4be defined by rule by the Department.
5    (e) A pharmacy benefit manager shall, upon request,
6disclose to the Department the following information:
7        (1) whether the pharmacy benefit manager has a
8    contract, agreement, or other arrangement with a
9    pharmaceutical manufacturer to exclusively dispense or
10    provide a drug to a managed care organization's enrollees,
11    and the aggregate amounts of consideration of economic
12    benefits collected or received pursuant to that
13    arrangement;
14        (2) the percentage of claims payments made by the
15    pharmacy benefit manager to pharmacies owned, managed, or
16    controlled by the pharmacy benefit manager or any of the
17    pharmacy benefit manager's management companies, parent
18    companies, subsidiary companies, or jointly held
19    companies;
20        (3) the aggregate amount of the fees or assessments
21    imposed on, or collected from, pharmacy providers; and
22        (4) the average annualized percentage of revenue
23    collected by the pharmacy benefit manager as a result of
24    each contract it has executed with a managed care
25    organization contracted by the Department to provide
26    medical assistance benefits which is not paid by the



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1    pharmacy benefit manager to pharmacy providers and
2    pharmaceutical manufacturers or labelers or in order to
3    perform administrative functions pursuant to its contracts
4    with managed care organizations.
5    (f) The information disclosed under subsection (e) shall
6include all retail, mail order, specialty, and compounded
7prescription products. All information made available to the
8Department under subsection (e) is confidential and not subject
9to disclosure under the Freedom of Information Act. All
10information made available to the Department under subsection
11(e) shall not be reported or distributed in any way that
12compromises its competitive, proprietary, or financial value.
13The information shall only be used by the Department to assess
14the contract, agreement, or other arrangements made between a
15pharmacy benefit manager and a pharmacy provider,
16pharmaceutical manufacturer or labeler, managed care
17organization, or other entity, as applicable.
18    (g) A pharmacy benefit manager shall disclose directly in
19writing to a pharmacy provider or pharmacy services
20administrative organization contracting with the pharmacy
21benefit manager of any material change to a contract provision
22that affects the terms of the reimbursement, the process for
23verifying benefits and eligibility, dispute resolution,
24procedures for verifying drugs included on the formulary, and
25contract termination at least 30 days prior to the date of the
26change to the provision. The terms of this subsection shall be



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1deemed met if the pharmacy benefit manager posts the
2information on a website, viewable by the public. A pharmacy
3service administration organization shall notify all contract
4pharmacies of any material change, as described in this
5subsection, within 2 days of notification. As used in this
6Section, "pharmacy services administrative organization" means
7an entity operating within the State that contracts with
8independent pharmacies to conduct business on their behalf with
9third-party payers. A pharmacy services administrative
10organization may provide administrative services to pharmacies
11and negotiate and enter into contracts with third-party payers
12or pharmacy benefit managers on behalf of pharmacies.
13    (h) A pharmacy benefit manager shall not include the
14following in a contract with a pharmacy provider:
15        (1) a provision prohibiting the provider from
16    informing a patient of a less costly alternative to a
17    prescribed medication; or
18        (2) a provision that prohibits the provider from
19    dispensing a particular amount of a prescribed medication,
20    if the pharmacy benefit manager allows that amount to be
21    dispensed through a pharmacy owned or controlled by the
22    pharmacy benefit manager, unless the prescription drug is
23    subject to restricted distribution by the United States
24    Food and Drug Administration or requires special handling,
25    provider coordination, or patient education that cannot be
26    provided by a retail pharmacy.



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1    (i) Nothing in this Section shall be construed to prohibit
2a pharmacy benefit manager from requiring the same
3reimbursement and terms and conditions for a pharmacy provider
4as for a pharmacy owned, controlled, or otherwise associated
5with the pharmacy benefit manager.
6    (j) A pharmacy benefit manager shall establish and
7implement a process for the resolution of disputes arising out
8of this Section, which shall be approved by the Department.
9    (k) The Department shall adopt rules establishing
10reasonable dispensing fees for fee-for-service payments in
11accordance with guidance or guidelines from the federal Centers
12for Medicare and Medicaid Services.
13    Section 97. Severability. If any provision of this Act or
14the application of this Act to any person or circumstance is
15held invalid, the invalidity shall not affect other provisions
16or applications of this Act which can be given effect without
17the invalid provision or application, and to this end, the
18provisions of this Act are declared severable.".