State of Illinois
90th General Assembly
Legislation

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[ Engrossed ][ House Amendment 001 ]

90_HB0643

      215 ILCS 5/370g           from Ch. 73, par. 982g
      215 ILCS 5/370i           from Ch. 73, par. 982i
      215 ILCS 5/370o           from Ch. 73, par. 982o
      215 ILCS 105/2            from Ch. 73, par. 1302
      215 ILCS 105/3            from Ch. 73, par. 1303
      215 ILCS 105/5            from Ch. 73, par. 1305
      215 ILCS 105/8            from Ch. 73, par. 1308
      215 ILCS 125/1-2          from Ch. 111 1/2, par. 1402
      215 ILCS 125/4-10         from Ch. 111 1/2, par. 1409.3
      215 ILCS 125/4-15         from Ch. 111 1/2, par. 1409.8
      215 ILCS 125/5-7.2 new
      305 ILCS 5/5-5.04 new
      305 ILCS 5/5-16.3
          Creates the Access to Emergency Services  Act.   Provides
      that   health  insurance  plans,  as  defined,  must  provide
      coverage  for  emergency  services  obtained  by  a   covered
      individual.  Provides for administration by the Department of
      Insurance.  Amends the Illinois Insurance Code, Comprehensive
      Health  Insurance  Plan  Act, Health Maintenance Organization
      Act, and Illinois Public Aid Code to require  coverage  under
      those Acts for emergency service.  Effective immediately.
                                                     LRB9002943JSgc
                                               LRB9002943JSgc
 1        AN  ACT  concerning access to emergency medical services,
 2    amending named Acts.
 3        Be it enacted by the People of  the  State  of  Illinois,
 4    represented in the General Assembly:
 5        Section  1.  Short  title.   This Act may be cited as the
 6    Access to Emergency Services Act.
 7        Section 5.  Legislative findings and purposes.
 8        (a)  The legislature recognizes  that  all  persons  need
 9    access  to emergency medical care, and that State and federal
10    laws require hospital emergency departments to  provide  that
11    care.    Federal   law   specifically   prohibits   emergency
12    physicians  and  hospital emergency departments from delaying
13    any treatment needed to evaluate or stabilize  an  individual
14    in  order  to  determine  the  health insurance status of the
15    individual.
16        However, health insurance  plans  may  impede  access  to
17    emergency  care by denying coverage or payment for failure to
18    obtain prior authorization or approval from the plan, failure
19    to seek  emergency  care  from  a  preferred  or  contractual
20    provider, or an after-the-fact determination that the medical
21    condition  did not require the use of emergency facilities or
22    services, including the 911 emergency telephone number.
23        These denials impose  significant  financial  burdens  on
24    patients  who  prudently  seek care for symptoms of a medical
25    emergency through the 911 system and in a hospital  emergency
26    department,  as  well  as  the  providers of such care.  This
27    serves  to  discourage  patients  from  seeking   appropriate
28    emergency  care,  and  threatens  the financial livelihood of
29    hospital  emergency  departments  and  trauma  centers  which
30    provide such necessary services to our entire population.
31        (b)  This Act intended to  promote  access  to  emergency
                            -2-                LRB9002943JSgc
 1    medical   care   by  establishing  a  uniform  definition  of
 2    emergency medical condition that  is  based  on  the  average
 3    knowledge  of  the prudent layperson, and requiring insurance
 4    plans to cover and pay for such services without restrictions
 5    that may impede or discourage access to such care.
 6        Section 10.  Definitions.  As used in this Act:
 7        "Department" means the Illinois Department of Insurance.
 8        "Emergency medical screening examination" means a medical
 9    screening examination and evaluation by a  physician  or,  to
10    the extent permitted by applicable laws, by other appropriate
11    personnel  under  the supervision of a physician to determine
12    whether the need for emergency services exists.
13        "Emergency services" means  those  health  care  services
14    provided  to  evaluate and treat medical conditions of recent
15    onset and severity  that  would  lead  a  prudent  layperson,
16    possessing  an  average  knowledge of medicine and health, to
17    believe that urgent and unscheduled medical care is required.
18        "Health insurance plan" means any policy, contract, plan,
19    or other arrangement  that  pays  for  or  furnishes  medical
20    services   pursuant  to  the  Illinois  Insurance  Code,  the
21    Comprehensive  Health  Insurance   Plan   Act,   the   Health
22    Maintenance  Organization  Act,  or  the  Illinois Public Aid
23    Code.
24        "Insured" means any person enrolled in or  covered  by  a
25    health insurance plan.
26        "Post-stabilization  services"  means  those  health care
27    services determined by a treating provider to be promptly and
28    medically necessary following stabilization of  an  emergency
29    condition.
30        "Provider"  means  any  physician,  hospital facility, or
31    other person that is  licensed  or  otherwise  authorized  to
32    furnish  or  arrange for the delivery or furnishing of health
33    care services.
                            -3-                LRB9002943JSgc
 1        Section 15.  Emergency services.
 2        (a)  Any health insurance plan subject to this Act  shall
 3    provide  the  insured  emergency  services coverage such that
 4    payment for this coverage is not dependent upon whether  such
 5    services   are  performed  by  a  preferred  or  nonpreferred
 6    provider, and such coverage shall  be  at  the  same  benefit
 7    level  as  if the service or treatment had been rendered by a
 8    plan provider.
 9        (b)  Prior authorization or approval by  the  plan  shall
10    not be required.
11        (c)  Coverage  and  payment  shall not be retrospectively
12    denied, with the following exceptions:
13             (1)  upon   reasonable   determination   that    the
14        emergency services claimed were never performed; or
15             (2)  upon reasonable determination that an emergency
16        medical  screening examination was performed on a patient
17        who personally sought emergency services knowing that  he
18        or  she did not have an emergency condition or necessity,
19        and who did not in fact require emergency services.
20        (d)  When an enrollee  presents  to  a  hospital  seeking
21    emergency   services,   as   defined   in   Section  10,  the
22    determination as to  whether  the  need  for  those  services
23    exists shall be made for purposes of treatment by a physician
24    of  the  hospital  or,  to the extent permitted by applicable
25    law,  by  other  appropriate  licensed  personnel  under  the
26    supervision  of  a  physician.   The   physician   or   other
27    appropriate  personnel  shall indicate in the patient's chart
28    the results of the emergency medical  screening  examination.
29    The  plan  shall  compensate  the  provider  for an emergency
30    medical screening examination that is  reasonably  calculated
31    to assist the health care provider in determining whether the
32    patient's  condition  requires  emergency services.  The plan
33    shall  compensate  the  provider  for  an  emergency  medical
34    screening examination as defined in Section 10.
                            -4-                LRB9002943JSgc
 1        (e)  The appropriate use of the 911  emergency  telephone
 2    number shall not be discouraged or penalized, and coverage or
 3    payment  shall  not  be  denied  solely on the basis that the
 4    insured used the 911 emergency  telephone  number  to  summon
 5    emergency services.
 6        Section 20.  Post-stabilization services.
 7        (a)  If   prior   authorization   for  post-stabilization
 8    services is required, the health insurance plan shall provide
 9    access 24 hours a day, 7 days a week to persons designated by
10    plan  to  make  such  determinations.   If  a  provider   has
11    attempted  to contact such person for prior authorization and
12    no designated persons were accessible  or  the  authorization
13    was  not  denied within 30 minutes of the request, the health
14    insurance plan is deemed to have  approved  the  request  for
15    prior authorization.
16        (b)  Coverage and payment for post-stabilization services
17    which  received  prior authorization or deemed approval shall
18    not be retrospectively denied.
19        Section 25.  Enforcement.
20        (a)  The Department shall enforce the provisions of  this
21    Act.   It  shall  promptly  investigate  complaints  which it
22    receives alleging violation of the Act.  If the complaint  is
23    found  to  be  valid,  the  Department shall immediately seek
24    appropriate corrective action by the  health  insurance  plan
25    including,  but  not  limited  to,  ceasing  the noncompliant
26    activity, restoring coverage, paying or  reimbursing  claims,
27    and other appropriate restitution.
28        (b)  Subject   to   the   provisions   of   the  Illinois
29    Administrative Procedure Act, the Department shall impose  an
30    administrative  fine on a health insurance plan found to have
31    violated any provision of this Act.
32             (1)  Failure to  comply  with  requested  corrective
                            -5-                LRB9002943JSgc
 1        action shall result in a fine of $5,000 per violation.
 2             (2)  A  repeated violation shall result in a fine of
 3        $10,000 per violation.
 4             (3)  A pattern of repeated violations  shall  result
 5        in a fine of $25,000.
 6        (c)  Notwithstanding  the  existence  or  pursuit  of any
 7    other  remedy,  the  Department  may,  through  the  Attorney
 8    General, seek an injunction to restrain or prevent any health
 9    insurance plan from violation or continuing  to  violate  any
10    provisions of this Act.
11        Section 30.  Rules.  The Department shall adopt emergency
12    rules  to implement the provisions of this Act, in accordance
13    with Section 5-45 of the  Illinois  Administrative  Procedure
14    Act.
15        Section  90.   The  Illinois Insurance Code is amended by
16    changing Sections 370g, 370i, and 370o as follows:
17        (215 ILCS 5/370g) (from Ch. 73, par. 982g)
18        Sec. 370g.  Definitions.  As used in  this  Article,  the
19    following definitions apply:
20        (a)  "Health care services" means health care services or
21    products  rendered  or sold by a provider within the scope of
22    the provider's license  or  legal  authorization.   The  term
23    includes, but is not limited to, hospital, medical, surgical,
24    dental, vision and pharmaceutical services or products.
25        (b)  "Insurer"  means  an  insurance  company or a health
26    service  corporation  authorized  in  this  State  to   issue
27    policies or subscriber contracts which reimburse for expenses
28    of health care services.
29        (c)  "Insured"    means   an   individual   entitled   to
30    reimbursement for expenses of health care  services  under  a
31    policy  or  subscriber  contract issued or administered by an
                            -6-                LRB9002943JSgc
 1    insurer.
 2        (d)  "Provider"  means  an  individual  or  entity   duly
 3    licensed   or  legally  authorized  to  provide  health  care
 4    services.
 5        (e)  "Noninstitutional   provider"   means   any   person
 6    licensed under the Medical Practice Act of 1987,  as  now  or
 7    hereafter amended.
 8        (f)  "Beneficiary"   means   an  individual  entitled  to
 9    reimbursement for expenses of or  the  discount  of  provider
10    fees  for  health  care  services  under  a program where the
11    beneficiary has an incentive to utilize  the  services  of  a
12    provider  which  has entered into an agreement or arrangement
13    with an administrator.
14        (g)  "Administrator" means  any  person,  partnership  or
15    corporation,  other  than  an  insurer  or health maintenance
16    organization holding a certificate  of  authority  under  the
17    "Health  Maintenance  Organization  Act", as now or hereafter
18    amended,  that  arranges,  contracts  with,  or   administers
19    contracts  with a provider whereby beneficiaries are provided
20    an incentive to use the services of such provider.
21        (h)  "Emergency  services"  means   those   health   care
22    services provided to evaluate and treat medical conditions of
23    recent   onset   and  severity  that  would  lead  a  prudent
24    layperson, possessing an average knowledge  of  medicine  and
25    health, to believe that urgent or unscheduled medical care is
26    required  an  accidental  bodily  injury or emergency medical
27    condition  which  reasonably  requires  the  beneficiary   or
28    insured to seek immediate medical care under circumstances or
29    at  locations  which  reasonably  preclude the beneficiary or
30    insured from obtaining needed medical care from  a  preferred
31    provider.
32        (i)  "Post-stabilization  services"  means  those  health
33    care  services  determined  by  a  treating  provider  to  be
34    promptly  and  medically necessary following stabilization of
                            -7-                LRB9002943JSgc
 1    an emergency condition.
 2        (j)  "Emergency medical screening  examination"  means  a
 3    medical  screening  examination and evaluation by a physician
 4    or, to the extent permitted  by  applicable  laws,  by  other
 5    appropriate personnel under the supervision of a physician to
 6    determine whether the need for emergency services exists.
 7    (Source: P.A. 88-400.)
 8        (215 ILCS 5/370i) (from Ch. 73, par. 982i)
 9        Sec.  370i.   Policies,  agreements  or arrangements with
10    incentives or limits on reimbursement authorized.
11        (a)  Policies, agreements or  arrangements  issued  under
12    this  Article  may not contain terms or conditions that would
13    operate unreasonably to restrict the access and  availability
14    of health care services for the insured.
15             (1)  If  prior  authorization for post-stabilization
16        services is required, the insurer or administrator  shall
17        provide  access  24 hours a day, 7 days a week to persons
18        designated by the insurer or administrator to  make  such
19        determinations.    If a provider has attempted to contact
20        such person for prior  authorization  and  no  designated
21        persons  were  accessible  or  the  authorization was not
22        denied within 30 minutes of the request, the  insurer  or
23        administrator  is deemed to have approved the request for
24        prior authorization.
25             Coverage and payment for post-stabilization services
26        which received prior  authorization  or  deemed  approval
27        shall not be retrospectively denied.
28             (2)  The   appropriate  use  of  the  911  emergency
29        telephone number shall not be discouraged  or  penalized,
30        and coverage or payment shall not be denied solely on the
31        basis  that  the  insured  or  beneficiary  used  the 911
32        emergency telephone number to summon emergency services.
33             (3)  When an enrollee presents to a hospital seeking
                            -8-                LRB9002943JSgc
 1        emergency services, as defined  in  Section  370(g),  the
 2        determination  as  to whether the need for those services
 3        exists shall be made  for  purposes  of  treatment  by  a
 4        physician  of the hospital or, to the extent permitted by
 5        applicable law, by other appropriate  licensed  personnel
 6        under  the  supervision of a physician.  The physician or
 7        other  appropriate  personnel  shall  indicate   in   the
 8        patient's  chart  the  results  of  the emergency medical
 9        screening examination.  The  plan  shall  compensate  the
10        provider  for  an emergency medical screening examination
11        that is reasonably calculated to assist the  health  care
12        provider  in determining  whether the patient's condition
13        requires emergency services.  The plan  shall  compensate
14        the   provider   for   an   emergency  medical  screening
15        examination as defined in Section 370(g).
16        (b)  Subject to the  provisions  of  subsection  (a),  an
17    insurer or administrator may:
18        (1)  enter  into agreements with certain providers of its
19    choice relating to health care services which may be rendered
20    to insureds or beneficiaries of the insurer or administrator,
21    including agreements relating to the amounts  to  be  charged
22    the insureds or beneficiaries for services rendered;
23        (2)  issue or administer programs, policies or subscriber
24    contracts  in  this  State  that  include  incentives for the
25    insured or beneficiary to utilize the services of a  provider
26    which  has  entered  into  an  agreement  with the insurer or
27    administrator pursuant to paragraph (1) above.
28    (Source: P.A. 84-618.)
29        (215 ILCS 5/370o) (from Ch. 73, par. 982o)
30        Sec. 370o.  Emergency services Care.
31        (a)  Any referred  provider  contract,  subject  to  this
32    Article  shall  provide  the beneficiary or insured emergency
33    services care coverage such that payment for this coverage is
                            -9-                LRB9002943JSgc
 1    not dependent upon whether such services are performed  by  a
 2    preferred or nonpreferred provider and such coverage shall be
 3    at  the same benefit level as if the service or treatment had
 4    been rendered by a plan provider.
 5        (b)  Prior authorization or approval by  the  plan  shall
 6    not be required.
 7        (c)  Coverage  and  payment  shall not be retrospectively
 8    denied, with the following exceptions:
 9             (1)  upon   reasonable   determination   that    the
10        emergency services claimed were never performed; or
11             (2)  upon reasonable determination that an emergency
12        medical  screening examination was performed on a patient
13        who personally sought emergency services knowing that  he
14        or  she did not have an emergency condition or necessity,
15        and who did not in fact require emergency services.
16             (3)  When an enrollee presents to a hospital seeking
17        emergency services, as defined  in  Section  370(g),  the
18        determination  as  to whether the need for those services
19        exists shall be made  for  purposes  of  treatment  by  a
20        physician  of the hospital or, to the extent permitted by
21        applicable law, by other appropriate  licensed  personnel
22        under  the  supervision of a physician.  The physician or
23        other  appropriate  personnel  shall  indicate   in   the
24        patient's  chart  the  results  of  the emergency medical
25        screening examination.  The  plan  shall  compensate  the
26        provider  for  an emergency medical screening examination
27        that is reasonably calculated to assist the  health  care
28        provider  in determining  whether the patient's condition
29        requires emergency services.  The plan  shall  compensate
30        the   provider   for   an   emergency  medical  screening
31        examination as defined in Section 370(g).
32    (Source: P.A. 85-476.)
33        Section 92.  The Comprehensive Health Insurance Plan  Act
                            -10-               LRB9002943JSgc
 1    is amended by changing Sections 2, 3, 5, and 8 as follows:
 2        (215 ILCS 105/2) (from Ch. 73, par. 1302)
 3        Sec.  2.   Definitions.   As used in this Act, unless the
 4    context otherwise requires:
 5        "Administering carrier" means the insurer or third  party
 6    administrator designated under Section 5 of this Act.
 7        "Benefits  plan"  means the coverage to be offered by the
 8    Plan to eligible persons pursuant to this Act.
 9        "Board" means the Illinois Comprehensive Health Insurance
10    Board.
11        "Department" means the Illinois Department of Insurance.
12        "Director" means the Director of the Illinois  Department
13    of Insurance.
14        "Eligible  person"  means  a  resident  of this State who
15    qualifies under Section 7.
16        "Emergency medical screening examination" means a medical
17    screening examination and evaluation by a  physician  or,  to
18    the extent permitted by applicable laws, by other appropriate
19    personnel  under  the supervision of a physician to determine
20    whether the need for emergency services exists.
21        "Emergency services" means  those  health  care  services
22    provided  to  evaluate and treat medical conditions of recent
23    onset and severity  that  would  lead  a  prudent  layperson,
24    possessing  an  average  knowledge of medicine and health, to
25    believe that urgent or unscheduled medical care is required.
26        "Employee" means a resident of this State who has entered
27    into the employment of or works under contract or service  of
28    an employer including the officers, managers and employees of
29    subsidiary  or  affiliated  corporations  and  the individual
30    proprietors, partners and employees of affiliated individuals
31    and firms when the business of the subsidiary  or  affiliated
32    corporations,  firms or individuals is controlled by a common
33    employer through stock ownership, contract, or otherwise.
                            -11-               LRB9002943JSgc
 1        "Family" means the eligible person and his or  her  legal
 2    spouse,  the  eligible  person's dependent children under the
 3    age of 19, the eligible person's dependent children under the
 4    age of 23 who are full-time students, the  eligible  person's
 5    dependent  disabled  children of any age, or any other member
 6    of the eligible person's family who is claimed as a dependent
 7    for purposes of filing federal income tax returns and resides
 8    in the eligible person's household.
 9        "Health  insurance"  means  any  hospital,  surgical,  or
10    medical coverage provided under an expense-incurred policy or
11    contract,  minimum  premium   plan,   stop   loss   coverage,
12    non-profit   health   care   service  plan  contract,  health
13    maintenance organization or other subscriber contract, or any
14    other health care  plan  or  arrangement  that  pays  for  or
15    furnishes  medical  or  health care services by a provider of
16    these services, whether by insurance  or  otherwise.   Health
17    insurance shall not include accident only, disability income,
18    hospital  confinement indemnity, dental, or credit insurance,
19    coverage issued  as  a  supplement  to  liability  insurance,
20    insurance  arising  out of a workers' compensation or similar
21    law, automobile medical-payment insurance, or insurance under
22    which benefits are payable with or without  regard  to  fault
23    and  which  is  statutorily  required  to be contained in any
24    liability insurance policy or equivalent self-insurance.
25        "Health Maintenance Organization" means  an  organization
26    as defined in the Health Maintenance Organization Act.
27        "Hospice"  means  a  program  as  defined in and licensed
28    under the Hospice Program Licensing Act.
29        "Hospital"  means  an  institution  as  defined  in   the
30    Hospital   Licensing  Act,  an  institution  that  meets  all
31    comparable conditions and requirements in effect in the state
32    in which  it  is  located,  or  the  University  of  Illinois
33    Hospital  as  defined  in the University of Illinois Hospital
34    Act.
                            -12-               LRB9002943JSgc
 1        "Insured" means any individual resident of this State who
 2    is eligible to receive benefits from any insurer or insurance
 3    arrangement as defined in this Section.
 4        "Insurer"  means  any  insurance  company  authorized  to
 5    transact health insurance business  in  this  State  and  any
 6    corporation  that  provides medical services and is organized
 7    under the Voluntary Health Services Plans Act or  the  Health
 8    Maintenance Organization Act.
 9        "Medical  assistance" means health care benefits provided
10    under  Articles  V  (Medical  Assistance)  and  VI   (General
11    Assistance)  of  the  Illinois  Public  Aid Code or under any
12    similar program of health care benefits in a state other than
13    Illinois.
14        "Medically necessary" means  that  a  service,  drug,  or
15    supply  is  necessary  and  appropriate  for the diagnosis or
16    treatment of an illness or injury in  accord  with  generally
17    accepted  standards  of  medical  practice  at  the  time the
18    service, drug,  or  supply  is  provided.  When  specifically
19    applied  to a confinement it further means that the diagnosis
20    or treatment of the  insured  person's  medical  symptoms  or
21    condition  cannot  be  safely  provided  to that person as an
22    outpatient. A service, drug, or supply shall not be medically
23    necessary if it: (i) is investigational, experimental, or for
24    research  purposes;  or  (ii)  is  provided  solely  for  the
25    convenience of the patient, the patient's family,  physician,
26    hospital,  or  any other provider; or (iii) exceeds in scope,
27    duration, or intensity that level of care that is  needed  to
28    provide   safe,   adequate,   and  appropriate  diagnosis  or
29    treatment; or (iv) could have been omitted without  adversely
30    affecting  the  insured  person's condition or the quality of
31    medical care; or (v) involves the use of  a  medical  device,
32    drug, or substance not formally approved by the United States
33    Food and Drug Administration.
34        "Medicare" means coverage under Title XVIII of the Social
                            -13-               LRB9002943JSgc
 1    Security Act, 42 U.S.C. Sec. 1395, et seq..
 2        "Minimum  premium  plan"  means  an arrangement whereby a
 3    specified amount of health care claims  is  self-funded,  but
 4    the  insurance  company  assumes  the  risk  that claims will
 5    exceed that amount.
 6        "Participating  transplant  center"  means   a   hospital
 7    designated  by the Board as a preferred or exclusive provider
 8    of services for one or more specified human organ  or  tissue
 9    transplants  for  which  the hospital has signed an agreement
10    with the Board to accept a transplant payment  allowance  for
11    all  expenses  related  to the transplant during a transplant
12    benefit period.
13        "Physician" means a person licensed to practice  medicine
14    pursuant to the Medical Practice Act of 1987.
15        "Plan"  means  the  comprehensive  health  insurance plan
16    established by this Act.
17        "Plan of operation" means the plan of  operation  of  the
18    Plan, including articles, bylaws and operating rules, adopted
19    by the board pursuant to this Act.
20        "Post-stabilization  services"  means  those  health care
21    services determined by a treating provider to be promptly and
22    medically necessary following stabilization of  an  emergency
23    condition.
24        "Resident"  means a person who has been legally domiciled
25    in this State for a period of at least 180 days and continues
26    to be domiciled in this State.
27        "Skilled nursing  facility"  means  a  facility  or  that
28    portion  of  a  facility  that  is  licensed  by the Illinois
29    Department of Public Health under the Nursing Home  Care  Act
30    or  a  comparable  licensing  authority  in  another state to
31    provide skilled nursing care.
32        "Stop-loss coverage"  means  an  arrangement  whereby  an
33    insurer  insures  against  the  risk  that any one claim will
34    exceed a specific dollar amount or that the entire loss of  a
                            -14-               LRB9002943JSgc
 1    self-insurance plan will exceed a specific amount.
 2        "Third  party  administrator"  means  an administrator as
 3    defined in Section 511.101 of the Illinois Insurance Code who
 4    is licensed under Article XXXI 1/4 of that Code.
 5    (Source: P.A. 87-560; 88-364.)
 6        (215 ILCS 105/3) (from Ch. 73, par. 1303)
 7        Sec. 3.  Operation of the Plan.
 8        a.  There is hereby  created  an  Illinois  Comprehensive
 9    Health Insurance Plan.
10        b.  The Plan shall operate subject to the supervision and
11    control  of  the  board.  The board is created as a political
12    subdivision and body politic and corporate and, as  such,  is
13    not  a  State  agency.   The board shall consist of 10 public
14    members, appointed  by  the  Governor  with  the  advice  and
15    consent of the Senate.
16        Initial  members  shall  be appointed to the Board by the
17    Governor as follows: 2 members to serve until July  1,  1988,
18    and  until  their  successors  are appointed and qualified; 2
19    members  to  serve  until  July  1,  1989,  and  until  their
20    successors are appointed and qualified; 3  members  to  serve
21    until  July 1, 1990, and until their successors are appointed
22    and qualified; and 3 members to serve until July 1, 1991, and
23    until their successors are appointed and qualified. As  terms
24    of   initial   members  expire,  their  successors  shall  be
25    appointed for terms to expire the first day in July  3  years
26    thereafter,  and  until  their  successors  are appointed and
27    qualified.
28        Any vacancy in the Board occurring for any  reason  other
29    than  the  expiration  of  a  term  shall  be  filled for the
30    unexpired  term  in  the  same   manner   as   the   original
31    appointment.
32        Any  member  of  the Board may be removed by the Governor
33    for neglect of duty, misfeasance, malfeasance, or nonfeasance
                            -15-               LRB9002943JSgc
 1    in office.
 2        In addition, a representative of the Illinois Health Care
 3    Cost Containment Council, a representative of the  Office  of
 4    the  Attorney  General  and  the  Director  or the Director's
 5    designated representative shall  be  members  of  the  board.
 6    Four  members  of the General Assembly, one each appointed by
 7    the President and Minority Leader of the Senate  and  by  the
 8    Speaker  and Minority Leader of the House of Representatives,
 9    shall serve as nonvoting members of the board.  At least 2 of
10    the public members shall be individuals  reasonably  expected
11    to  qualify for coverage under the Plan, the parent or spouse
12    of such an individual, or a surviving  family  member  of  an
13    individual  who  could have qualified for the plan during his
14    lifetime. The Director or Director's representative shall  be
15    the  chairperson  of  the  board.  Members of the board shall
16    receive  no  compensation,  but  shall  be   reimbursed   for
17    reasonable  expenses incurred in the necessary performance of
18    their duties.
19        c.  The board shall make an annual  report  in  September
20    and  shall  file  the report with the Secretary of the Senate
21    and the Clerk of the House of  Representatives.   The  report
22    shall  summarize  the activities of the Plan in the preceding
23    calendar year, including net written and earned premiums, the
24    expense of administration, the paid and incurred  losses  for
25    the  year  and  other  information as may be requested by the
26    General Assembly. The report shall also include analysis  and
27    recommendations   regarding   utilization   review,   quality
28    assurance and access to cost effective quality health care.
29        d.  In its plan of operation the board shall:
30             (1)  Establish    procedures    for   selecting   an
31        administering carrier in accordance  with  Section  5  of
32        this Act.
33             (2)  Establish  procedures  for the operation of the
34        board.
                            -16-               LRB9002943JSgc
 1             (3)  Create a Plan fund,  under  management  of  the
 2        board, to fund administrative expenses.
 3             (4)  Establish   procedures  for  the  handling  and
 4        accounting of assets and monies of the Plan.
 5             (5)  Develop and implement a  program  to  publicize
 6        the  existence  of the Plan, the eligibility requirements
 7        and procedures for  enrollment  and  to  maintain  public
 8        awareness of the Plan.
 9             (6)  Establish procedures under which applicants and
10        participants  may have grievances reviewed by a grievance
11        committee appointed by the board.  The  grievances  shall
12        be  reported to the board immediately after completion of
13        the review.  The Department and the  board  shall  retain
14        all  written complaints regarding the Plan for at least 3
15        years.  Oral complaints shall be reduced to written  form
16        and maintained for at least 3 years.
17             (7)  Provide  for  other matters as may be necessary
18        and proper for the execution of its  powers,  duties  and
19        obligations under the Plan.
20        e.  No later than 5 years after the Plan is operative the
21    board  and the Department shall conduct cooperatively a study
22    of the Plan and the persons insured by the Plan to determine:
23    (1)  claims  experience  including  a  breakdown  of  medical
24    conditions  for  which  claims   were   paid;   (2)   whether
25    availability  of  the  Plan affected employment opportunities
26    for  participants;  (3)  whether  availability  of  the  Plan
27    affected the receipt of medical assistance benefits  by  Plan
28    participants;  (4) whether a change occurred in the number of
29    personal bankruptcies due to medical or other health  related
30    costs;  (5)  data regarding all complaints received about the
31    Plan including its operation and services; (6) and any  other
32    significant  observations  regarding utilization of the Plan.
33    The study shall culminate in a written report to be presented
34    to the Governor, the President of the Senate, the Speaker  of
                            -17-               LRB9002943JSgc
 1    the  House  and  the  chairpersons  of  the  House and Senate
 2    Insurance Committees.  The report shall  be  filed  with  the
 3    Secretary  of  the  Senate  and  the  Clerk  of  the House of
 4    Representatives.  The  report  shall  also  be  available  to
 5    members of the general public upon request.
 6        f.  The board may:
 7             (1)  Prepare    and    distribute   certificate   of
 8        eligibility forms and  enrollment  instruction  forms  to
 9        insurance  producers  and  to  the general public in this
10        State.
11             (2)  Provide for reinsurance of  risks  incurred  by
12        the  Plan  and  enter  into  reinsurance  agreements with
13        insurers to establish a reinsurance  plan  for  risks  of
14        coverage  described  in  the  Plan,  or obtain commercial
15        reinsurance to reduce the risk of loss through the Plan.
16             (3)  Issue  additional  types  of  health  insurance
17        policies to provide optional coverages as  are  otherwise
18        permitted  by  this  Act  including a Medicare supplement
19        policy designed to supplement Medicare.
20             (4)  Provide  for  and   employ   cost   containment
21        measures  and requirements including, but not limited to,
22        preadmission  certification,  second  surgical   opinion,
23        concurrent  utilization  review  programs, and individual
24        case management for the purpose of making the  pool  more
25        cost   effective.   Prior   authorization  for  emergency
26        services shall not be required.  If  prior  authorization
27        for  post-stabilization services is required, the Plan or
28        administering carrier shall provide  access  24  hours  a
29        day,  7  days a week to persons designated by the Plan or
30        administering carrier to make such determinations.  If  a
31        health care provider has attempted to contact such person
32        for  prior  authorization  and no designated persons were
33        accessible or the authorization was not denied within  30
34        minutes of the request, the Plan or administering carrier
                            -18-               LRB9002943JSgc
 1        is   deemed  to  have  approved  the  request  for  prior
 2        authorization. When an enrollee presents  to  a  hospital
 3        seeking  emergency services, as defined in Section 2, the
 4        determination as to whether the need for  those  services
 5        exists  shall  be  made  for  purposes  of treatment by a
 6        physician of the hospital or, to the extent permitted  by
 7        applicable  law,  by other appropriate licensed personnel
 8        under the supervision of a physician.  The  physician  or
 9        other   appropriate   personnel  shall  indicate  in  the
10        patient's chart the  results  of  the  emergency  medical
11        screening  examination.   The  plan  shall compensate the
12        provider for an emergency medical  screening  examination
13        that  is  reasonably calculated to assist the health care
14        provider in determining  whether the patient's  condition
15        requires  emergency  services.  The plan shall compensate
16        the provider for emergency medical screening  examination
17        as defined in Section 2.
18             (5)  Design,  utilize,  or  contract  with preferred
19        provider    organizations    and    health    maintenance
20        organizations and otherwise arrange for the  delivery  of
21        cost effective health care services. Any such contract or
22        arrangement subject to this Act shall provide the insured
23        emergency  services  coverage  such that payment for this
24        coverage is not dependent upon whether such services  are
25        performed  by  a  preferred or nonpreferred provider, and
26        such coverage shall be a the same benefit level as if the
27        service  or  treatment  had  been  rendered  by  a   plan
28        provider.
29             (6)  Adopt  bylaws, rules, regulations, policies and
30        procedures as may be  necessary  or  convenient  for  the
31        implementation of the Act and the operation of the Plan.
32        g.  The  Director  may,  by  rule,  establish  additional
33    powers  and  duties  of the board and may adopt rules for any
34    other purposes, including the operation of the Plan,  as  are
                            -19-               LRB9002943JSgc
 1    necessary or proper to implement this Act.
 2        h.  The  board  is  not  liable for any obligation of the
 3    Plan.  There is no liability on the part  of  any  member  or
 4    employee  of  the  board  or  the Department, and no cause of
 5    action of any nature may arise against them, for  any  action
 6    taken  or  omission  made by them in the performance of their
 7    powers and duties  under  this  Act,  unless  the  action  or
 8    omission  constitutes willful or wanton misconduct. The board
 9    may provide in its bylaws or rules  for  indemnification  of,
10    and legal representation for, its members and employees.
11        i.  There  is  no  liability on the part of any insurance
12    producer for the failure of any applicant to be  accepted  by
13    the  Plan  unless the failure of the applicant to be accepted
14    by the Plan is due to an act or  omission  by  the  insurance
15    producer which constitutes willful or wanton misconduct.
16    (Source: P.A. 86-547; 86-1322; 87-560.)
17        (215 ILCS 105/5) (from Ch. 73, par. 1305)
18        Sec. 5.  Administering carrier.
19        a.  The  board  shall  select  an  administering  carrier
20    through a competitive bidding process to administer the plan.
21    The  board  shall  evaluate bids submitted under this Section
22    based on  criteria  established  by  the  board  which  shall
23    include:
24             (1)  The  carrier's  proven  ability to handle other
25        large group accident and health benefit plans.
26             (2)  The efficiency of the  carrier's  claim  paying
27        procedures.
28             (3)  An  estimate of total charges for administering
29        the plan.
30             (4)  The ability of the carrier  to  administer  the
31        plan in a cost-efficient manner.
32             (5)  The  financial  condition  and stability of the
33        carrier.
                            -20-               LRB9002943JSgc
 1        b.  The administering carrier shall serve for a period of
 2    5 years subject to removal  for  cause  and  subject  to  the
 3    terms, conditions and limitations of the contract between the
 4    board and the administering carrier.  At least one year prior
 5    to  the  expiration  of  each  5 year period of service by an
 6    administering carrier, the  board  shall  advertise  for  and
 7    accept  bids  to  serve  as the administering carrier for the
 8    succeeding 5 year period.   Selection  of  the  administering
 9    carrier  for  the  succeeding period shall be made at least 6
10    months prior to the end of the current 5 year period.
11        c.  The  administering   carrier   shall   perform   such
12    eligibility   and  administrative  claims  payment  functions
13    relating to the plan as may be assigned to it including:
14             (1)  The administering  carrier  shall  establish  a
15        premium billing procedure for collection of premiums from
16        plan  participants.  Billings shall be made on a periodic
17        basis as determined by the board.
18             (2)  The administering  carrier  shall  perform  all
19        necessary  functions to assure timely payment of benefits
20        to participants under the plan, including:
21        (a)  Making available information relating to the  proper
22    manner  of submitting a claim for benefits under the plan and
23    distributing forms upon which submissions shall be made.
24        (b)  Evaluating the eligibility of each claim for payment
25    under the plan. Coverage and payment for  emergency  services
26    shall  not  be retrospectively denied, except upon reasonable
27    determination that (1) the emergency  services  claimed  were
28    never   performed  or  (2)  an  emergency  medical  screening
29    examination was performed on a patient who personally  sought
30    emergency  services  knowing  that  he or she did not have an
31    emergency condition or necessity, and who  did  not  in  fact
32    require emergency services.
33        Coverage and payment for post-stabilization services that
34    received  prior authorization or deemed approval shall not be
                            -21-               LRB9002943JSgc
 1    retrospectively denied.
 2        When an enrollee presents to a hospital seeking emergency
 3    services, as defined in Section 2, the  determination  as  to
 4    whether  the need for those services exists shall be made for
 5    purposes of treatment by a physician of the hospital  or,  to
 6    the  extent permitted by applicable law, by other appropriate
 7    licensed personnel under the supervision of a physician.  The
 8    physician or other appropriate personnel  shall  indicate  in
 9    the  patient's  chart  the  results  of the emergency medical
10    screening  examination.   The  plan  shall   compensate   the
11    provider  for an emergency medical screening examination that
12    is reasonably calculated to assist the health  care  provider
13    in  determining   whether  the  patient's  condition requires
14    emergency services.  The plan shall compensate  the  provider
15    for  emergency  medical  screening  examination as defined in
16    Section 2.
17        (c)  The administering carrier shall be governed  by  the
18    requirements  of  Part  919  of  Title  50  of  the  Illinois
19    Administrative   Code,   promulgated  by  the  Department  of
20    Insurance, regarding the handling of claims under this Act.
21        d.  The  administering  carrier  shall   submit   regular
22    reports  to  the  board  regarding the operation of the plan.
23    The frequency, content and form of the  report  shall  be  as
24    determined by the board.
25        e.  The  administering  carrier shall pay claims expenses
26    from the premium payments received from or on behalf of  plan
27    participants.  If  the  administering  carrier's payments for
28    claims expenses exceed the portion of premiums  allocated  by
29    the  board  for  payment  of claims expenses, the board shall
30    provide to the administering  carrier  additional  funds  for
31    payment of claims expenses.
32        f.  The  administering  carrier shall be paid as provided
33    in the board's contract with the  administering  carrier  for
34    expenses incurred in the performance of its services.
                            -22-               LRB9002943JSgc
 1    (Source: P.A. 85-1013.)
 2        (215 ILCS 105/8) (from Ch. 73, par. 1308)
 3        Sec. 8.  Minimum benefits.
 4        a.  Availability.  The  Plan  shall  offer in an annually
 5    renewable policy major  medical  expense  coverage  to  every
 6    eligible  person  who  is  not  eligible for Medicare.  Major
 7    medical expense coverage offered by the  Plan  shall  pay  an
 8    eligible  person's  covered expenses, subject to limit on the
 9    deductible  and   coinsurance   payments   authorized   under
10    paragraph  (4)  of  subsection  d  of  this  Section, up to a
11    lifetime benefit limit of $500,000  per  covered  individual.
12    The  maximum limit under this subsection shall not be altered
13    by the Board, and no  actuarial  equivalent  benefit  may  be
14    substituted  by  the  Board.  Any  person who otherwise would
15    qualify for coverage under the Plan, but is excluded  because
16    he or she is eligible for Medicare, shall be eligible for any
17    separate  Medicare  supplement  policy  which  the  Board may
18    offer.
19        b.  Covered expenses.  Covered expenses shall be  limited
20    to  the reasonable and customary charge, including negotiated
21    fees, in the locality for the following services and articles
22    when medically necessary and prescribed by a person  licensed
23    and  practicing  within the scope of his or her profession as
24    authorized by State law:
25             (1)  Hospital room and board and any other  hospital
26        services   including   emergency  and  post-stabilization
27        services, except that inpatient hospitalization  for  the
28        treatment of mental and emotional disorders shall only be
29        covered for a maximum of 45 days in a calendar year.
30             (2)  Professional  services  for  the  diagnosis  or
31        treatment  of  injuries,  illnesses  or conditions, other
32        than  dental,  or  outpatient  mental  as  described   in
33        paragraph  (17),  which  are  rendered  by a physician or
                            -23-               LRB9002943JSgc
 1        chiropractor, or by other licensed professionals  at  the
 2        physician's or chiropractor's direction.
 3             (3)  If  surgery  has  been  recommended,  a  second
 4        opinion  may be required. The charge for a second opinion
 5        as to whether the surgery is required  will  be  paid  in
 6        full   without   regard   to   deductible  or  co-payment
 7        requirements.  If the second  opinion  differs  from  the
 8        first,  the  charge for a third opinion, if desired, will
 9        also be paid in full  without  regard  to  deductible  or
10        co-payment   requirements.   Regardless  of  whether  the
11        second opinion or third  opinion  confirms  the  original
12        recommendation,  it  is the patient's decision whether to
13        undergo surgery.
14             (4)  Drugs requiring a physician's or other  legally
15        authorized prescription.
16             (5)  Skilled  nursing  care  provided  in  a skilled
17        nursing facility for not more than 120 days in a calendar
18        year, provided  the  service  commences  within  14  days
19        following a confinement of at least 3 consecutive days in
20        a hospital for the same condition.
21             (6)  Services of a home health agency in accord with
22        a  home  health  care plan, up to a maximum of 270 visits
23        per year.
24             (7)  Services of a licensed  hospice  for  not  more
25        than 180 days during a policy year.
26             (8)  Use of radium or other radioactive materials.
27             (9)  Oxygen.
28             (10)  Anesthetics.
29             (11)  Orthoses and prostheses other than dental.
30             (12)  Rental  or  purchase  in accordance with Board
31        policies or  procedures  of  durable  medical  equipment,
32        other than eyeglasses or hearing aids, for which there is
33        no personal use in the absence of the condition for which
34        it is prescribed.
                            -24-               LRB9002943JSgc
 1             (13)  Diagnostic x-rays and laboratory tests.
 2             (14)  Oral  surgery  for  excision  of  partially or
 3        completely unerupted  impacted  teeth  or  the  gums  and
 4        tissues  of  the  mouth, when not performed in connection
 5        with the routine extraction or repair of teeth, and  oral
 6        surgery   and   procedures,  including  orthodontics  and
 7        prosthetics necessary for craniofacial  or  maxillofacial
 8        conditions  and to correct congenital defects or injuries
 9        due to accident.
10             (15)  Physical, speech, and functional  occupational
11        therapy   as   medically   necessary   and   provided  by
12        appropriate licensed professionals.
13             (16)  Transportation summoned  by  use  of  the  911
14        emergency  telephone  number or other means provided by a
15        licensed ambulance service to  the  nearest  health  care
16        facility  qualified  to  treat  the  illness,  injury  or
17        condition,  subject  to  the  provisions of the Emergency
18        Medical Services (EMS) Systems (EMS) Act.
19             (17)  The first 50  professional  outpatient  visits
20        for  diagnosis  and  treatment  of  mental  and emotional
21        disorders rendered during the year, up to  a  maximum  of
22        $80 per visit.
23             (18)  Human organ or tissue transplants specified by
24        the  Board that are performed at a hospital designated by
25        the Board as a participating transplant center  for  that
26        specific organ or tissue transplant.
27        c.  Exclusion.   Covered  expenses  of the Plan shall not
28    include the following:
29             (1)  Any charge for treatment for cosmetic  purposes
30        other than for reconstructive surgery when the service is
31        incidental  to  or follows surgery resulting from injury,
32        sickness or  other  diseases  of  the  involved  part  or
33        surgery  for  the  repair  or  treatment  of a congenital
34        bodily defect to restore normal bodily functions.
                            -25-               LRB9002943JSgc
 1             (2)  Any charge for care that is primarily for rest,
 2        custodial, educational, or domiciliary purposes.
 3             (3)  Any charge for services in a  private  room  to
 4        the  extent  it  is in excess of the institution's charge
 5        for its most common semiprivate room,  unless  a  private
 6        room is prescribed as medically necessary by a physician.
 7             (4)  That  part  of any charge for room and board or
 8        for  services  rendered  or  articles  prescribed  by   a
 9        physician,  dentist,  or other health care personnel that
10        exceeds  the  reasonable  and  customary  charge  in  the
11        locality or for any services or  supplies  not  medically
12        necessary for the diagnosed injury or illness.
13             (5)  Any   charge   for  services  or  articles  the
14        provision of which is not within the scope  of  licensure
15        of  the  institution or individual providing the services
16        or articles.
17             (6)  Any expense incurred  prior  to  the  effective
18        date  of  coverage  by  the  Plan for the person on whose
19        behalf the expense is incurred.
20             (7)  Dental care, dental surgery,  dental  treatment
21        or  dental  appliances,  except  as provided in paragraph
22        (14) of subsection b of this Section.
23             (8)  Eyeglasses, contact  lenses,  hearing  aids  or
24        their fitting.
25             (9)  Illness or injury due to (A) war or any acts of
26        war;  (B)  commission of, or attempt to commit, a felony;
27        or (C) aviation activities, except when  traveling  as  a
28        fare-paying passenger on a commercial airline.
29             (10)  Services  of  blood  donors  and  any  fee for
30        failure to replace blood provided to an  eligible  person
31        each policy year.
32             (11)  Personal  supplies  or  services provided by a
33        hospital or nursing home,  or  any  other  nonmedical  or
34        nonprescribed supply or service.
                            -26-               LRB9002943JSgc
 1             (12)  Routine  maternity  charges  for  a pregnancy,
 2        except where added as optional coverage with  payment  of
 3        an   additional  premium  for  pregnancy  resulting  from
 4        conception occurring after  the  effective  date  of  the
 5        optional coverage.
 6             (13)  Expenses  of  obtaining  an  abortion, induced
 7        miscarriage or induced premature  birth  unless,  in  the
 8        opinion  of  a  physician, those procedures are necessary
 9        for the preservation of life of the  woman  seeking  such
10        treatment,  or except an induced premature birth intended
11        to produce a live  viable  child  and  the  procedure  is
12        necessary for the health of the mother or unborn child.
13             (14)  Any  expense or charge for services, drugs, or
14        supplies that  are:  (i)  not  provided  in  accord  with
15        generally accepted standards of current medical practice;
16        (ii)  for procedures, treatments, equipment, transplants,
17        or  implants,   any   of   which   are   investigational,
18        experimental,    or    for   research   purposes;   (iii)
19        investigative and not proven safe and effective; or  (iv)
20        for,   or   resulting   from,   a  gender  transformation
21        operation.
22             (15)  Any expense or  charge  for  routine  physical
23        examinations or tests.
24             (16)  Any  expense for which a charge is not made in
25        the absence of insurance or for which there is  no  legal
26        obligation on the part of the patient to pay.
27             (17)  Any  expense  incurred  for  benefits provided
28        under the laws of  the  United  States  and  this  State,
29        including   Medicare   and  Medicaid  and  other  medical
30        assistance,   military    service-connected    disability
31        payments,  medical  services  provided for members of the
32        armed forces and their dependents  or  employees  of  the
33        armed  forces  of the United States, and medical services
34        financed on behalf of all citizens by the United States.
                            -27-               LRB9002943JSgc
 1             (18)  Any   expense   or   charge   for   in   vitro
 2        fertilization,  artificial  insemination,  or  any  other
 3        artificial means used to cause pregnancy.
 4             (19)  Any expense or charge for oral  contraceptives
 5        used  for  birth  control  or  any  other temporary birth
 6        control measures.
 7             (20)  Any expense or  charge  for  sterilization  or
 8        sterilization reversals.
 9             (21)  Any   expense   or   charge  for  weight  loss
10        programs, exercise equipment, or  treatment  of  obesity,
11        except  when  certified  by a physician as morbid obesity
12        (at least 2 times normal body weight).
13             (22)  Any  expense   or   charge   for   acupuncture
14        treatment  unless  used  as  an  anesthetic  agent  for a
15        covered surgery.
16             (23)  Any expense or charge for or related to  organ
17        or  tissue  transplants  other  than those performed at a
18        hospital with a Board approved organ  transplant  program
19        that  has  been designated by the Board as a preferred or
20        exclusive provider organization for that  specific  organ
21        or tissue.
22             (24)  Any   expense   or   charge   for  procedures,
23        treatments, equipment, or services that are  provided  in
24        special settings for research purposes or in a controlled
25        environment,  are  being  studied for safety, efficiency,
26        and effectiveness, and are awaiting  endorsement  by  the
27        appropriate   national  medical  speciality  college  for
28        general use within the medical community.
29        d.  Premiums, deductibles, and coinsurance.
30             (1)  Premiums charged for  coverage  issued  by  the
31        Plan  may not be unreasonable in relation to the benefits
32        provided, the risk experience and the reasonable expenses
33        of providing the coverage.
34             (2)  Separate schedules of premium  rates  based  on
                            -28-               LRB9002943JSgc
 1        sex,  age  and  geographical  location  shall  apply  for
 2        individual risks.
 3             (3)  The Plan may provide for separate premium rates
 4        for  optional  family  coverage  for the spouse or one or
 5        more dependents of any  person  eligible  to  be  insured
 6        under the Plan who is also the oldest adult member of the
 7        family  and  remains continuously enrolled in the Plan as
 8        the primary enrollee. The rates shall be such  percentage
 9        of  the  applicable individual Plan rate as the Board, in
10        accordance with appropriate actuarial  principles,  shall
11        establish for each spouse or dependent.
12             (4)  The  Board  shall determine, in accordance with
13        appropriate actuarial principles, the average rates  that
14        individual standard risks in this State are charged by at
15        least  5  of  the  largest insurers providing coverage to
16        residents of Illinois that is  substantially  similar  to
17        the  Plan  coverage.  In the event at least 5 insurers do
18        not offer substantially similar coverage, the rates shall
19        be established using reasonable actuarial techniques  and
20        shall  reflect  anticipated  claims experience, expenses,
21        and other appropriate risk factors relating to the  Plan.
22        Rates  for  Plan  coverage  shall  be  135%  of  rates so
23        established as applicable for individual standard  risks;
24        provided,   however,   if   after  determining  that  the
25        appropriations made pursuant to Section 12  of  this  Act
26        are  insufficient  to  ensure  that total income from all
27        sources will equal or exceed the total incurred costs and
28        expenses for the current number of enrollees,  the  board
29        shall raise premium rates above this 135% standard to the
30        level it deems necessary to ensure the financial solvency
31        of  the Plan for enrollees already in the Plan. All rates
32        and rate schedules shall be submitted to  the  board  for
33        approval.
34             (5)  The  Plan  coverage  defined in Section 6 shall
                            -29-               LRB9002943JSgc
 1        provide for a choice of deductibles as authorized by  the
 2        Board  per individual per annum.  If 2 individual members
 3        of a family satisfy the same applicable  deductibles,  no
 4        other  member of that family who is eligible for coverage
 5        under the Plan shall be required to meet any  deductibles
 6        for  the  balance of that calendar year.  The deductibles
 7        must be applied first to the authorized amount of covered
 8        expenses incurred by the  covered  person.   A  mandatory
 9        coinsurance  requirement  shall  be  imposed  at the rate
10        authorized by  the  Board  in  excess  of  the  mandatory
11        deductible,  the  coinsurance  in  the  aggregate  not to
12        exceed such amounts as are authorized by  the  Board  per
13        annum.   At  its discretion the Board may, however, offer
14        catastrophic coverages or other policies that provide for
15        larger   deductibles   with   or   without    coinsurance
16        requirements.   The  deductibles  and coinsurance factors
17        may  be  adjusted  annually  according  to  the   Medical
18        Component of the Consumer Price Index.
19             (6)  The  Plan  may  provide  for  and  employ  cost
20        containment  measures and requirements including, but not
21        limited to, preadmission certification,  second  surgical
22        opinion,    concurrent   utilization   review   programs,
23        individual   case    management,    preferred    provider
24        organizations,  and other cost effective arrangements for
25        paying for covered expenses.
26        e.  Scope of coverage.  Except as provided in  subsection
27    c  of  this  Section, if the covered expenses incurred by the
28    eligible person  exceed  the  deductible  for  major  medical
29    expense  coverage  in  a calendar year, the Plan shall pay at
30    least 80% of any additional covered expenses incurred by  the
31    person during the calendar year.
32        f.  Preexisting conditions.
33             (1)  Six months: Plan coverage shall exclude charges
34        or  expenses incurred during the first 6 months following
                            -30-               LRB9002943JSgc
 1        the effective date of coverage as to  any  condition  if:
 2        (a)  the  condition  had  manifested  itself within the 6
 3        month period immediately preceding the effective date  of
 4        coverage  in  such  a manner as would cause an ordinarily
 5        prudent person to seek diagnosis, care or  treatment;  or
 6        (b)  medical advice, care or treatment was recommended or
 7        received within the 6 month period immediately  preceding
 8        the effective date of coverage.
 9             (2)  (Blank).
10             (3)  Waiver: The preexisting condition exclusions as
11        set  forth  in  paragraph (1) of this subsection shall be
12        waived to the extent to which the  eligible  person:  (a)
13        has  satisfied  similar exclusions under any prior health
14        insurance  policy  or   plan   that   was   involuntarily
15        terminated;  (b)  is  ineligible  for any continuation or
16        conversion  rights  that  would   continue   or   provide
17        substantially    similar    coverage    following    that
18        termination;  and  (c)  has applied for Plan coverage not
19        later than 30 days following the involuntary termination.
20        No  policy  or  plan  shall  be  deemed  to   have   been
21        involuntarily  terminated  if  the master policyholder or
22        other  controlling  party  elected  to  change  insurance
23        coverage from one company or plan to another even if that
24        decision resulted in a discontinuation  of  coverage  for
25        any  individual under the plan, either totally or for any
26        medical condition. For each eligible person who qualifies
27        for and elects this waiver, there shall be added to  each
28        payment  of  premium, on a prorated basis, a surcharge of
29        up to 10% of the otherwise applicable annual premium  for
30        as  long  as  that  individual's  coverage under the Plan
31        remains in effect or 60 months, whichever is less.
32        g.  Other sources primary;  nonduplication of benefits.
33             (1)  The Plan shall be the last  payor  of  benefits
34        whenever  any  other  benefit  or  source  of third party
                            -31-               LRB9002943JSgc
 1        payment is  available.   Subject  to  the  provisions  of
 2        subsection  e  of  Section  7, benefits otherwise payable
 3        under Plan coverage shall be reduced by all amounts  paid
 4        or payable by Medicare or any other government program or
 5        through  any  health  insurance  or  other health benefit
 6        plan, whether insured or otherwise, or through any  third
 7        party   liability,   settlement,   judgment,   or  award,
 8        regardless of the date of the  settlement,  judgment,  or
 9        award,  whether  the settlement, judgment, or award is in
10        the form of a contract, agreement, or trust on behalf  of
11        a   minor   or  otherwise  and  whether  the  settlement,
12        judgment, or award is payable to the covered person,  his
13        or  her  dependent,  estate,  personal representative, or
14        guardian in a lump sum or over time, and by all  hospital
15        or  medical  expense  benefits  paid or payable under any
16        worker's  compensation   coverage,   automobile   medical
17        payment,  or liability insurance, whether provided on the
18        basis of fault  or  nonfault,  and  by  any  hospital  or
19        medical  benefits  paid  or  payable  under  or  provided
20        pursuant to any State or federal law or program.
21             (2)  The  Plan  shall have a cause of action against
22        any covered person or any other person or entity for  the
23        recovery  of any amount paid to the extent the amount was
24        for treatment, services, or supplies not covered in  this
25        Section  or  in  excess  of benefits as set forth in this
26        Section.
27             (3)  Whenever benefits are due from the Plan because
28        of sickness or an injury to a  covered  person  resulting
29        from  a  third party's wrongful act or negligence and the
30        covered person has recovered or may recover damages  from
31        a  third  party  or  its insurer, the Plan shall have the
32        right to reduce benefits or to  refuse  to  pay  benefits
33        that  otherwise  may  be payable by the amount of damages
34        that the covered person  has  recovered  or  may  recover
                            -32-               LRB9002943JSgc
 1        regardless  of  the date of the sickness or injury or the
 2        date of any settlement, judgment, or award resulting from
 3        that sickness or injury.
 4             During the pendency of any action or claim  that  is
 5        brought  by  or  on  behalf of a covered person against a
 6        third party or  its  insurer,  any  benefits  that  would
 7        otherwise  be  payable  except for the provisions of this
 8        paragraph (3) shall be paid if  payment  by  or  for  the
 9        third  party has not yet been made and the covered person
10        or, if  incapable,  that  person's  legal  representative
11        agrees  in writing to pay back promptly the benefits paid
12        as a result of the sickness or injury to  the  extent  of
13        any  future  payments  made by or for the third party for
14        the sickness or  injury.   This  agreement  is  to  apply
15        whether  or not liability for the payments is established
16        or admitted by the third party or whether those  payments
17        are itemized.
18             Any  amounts  due  the plan to repay benefits may be
19        deducted from other benefits payable by  the  Plan  after
20        payments by or for the third party are made.
21             (4)  Benefits  due  from  the Plan may be reduced or
22        refused  as  an  offset  against  any  amount   otherwise
23        recoverable under this Section.
24        h.  Right of subrogation; recoveries.
25             (1)  Whenever  the Plan has paid benefits because of
26        sickness or an injury to  any  covered  person  resulting
27        from  a  third party's wrongful act or negligence, or for
28        which  an  insurer  is  liable  in  accordance  with  the
29        provisions of any policy of insurance,  and  the  covered
30        person  has recovered or may recover damages from a third
31        party that is liable for the damages, the Plan shall have
32        the right to  recover  the  benefits  it  paid  from  any
33        amounts  that  the  covered  person  has  received or may
34        receive regardless of the date of the sickness or  injury
                            -33-               LRB9002943JSgc
 1        or  the  date  of  any  settlement,  judgment,  or  award
 2        resulting  from  that sickness or injury.  The Plan shall
 3        be subrogated to any right of recovery the covered person
 4        may have under the terms of any private or public  health
 5        care  coverage  or liability coverage, including coverage
 6        under the  Workers'  Compensation  Act  or  the  Workers'
 7        Occupational  Diseases  Act,  without  the  necessity  of
 8        assignment  of claim or other authorization to secure the
 9        right of recovery.  To enforce its subrogation right, the
10        Plan may (i) intervene or join in an action or proceeding
11        brought  by  the   covered   person   or   his   personal
12        representative,   including  his  guardian,  conservator,
13        estate, dependents, or survivors, against any third party
14        or the third party's insurer that may be liable  or  (ii)
15        institute  and  prosecute  legal  proceedings against any
16        third party or the third  party's  insurer  that  may  be
17        liable for the sickness or injury in an appropriate court
18        either  in  the  name  of  the Plan or in the name of the
19        covered person or his personal representative,  including
20        his   guardian,   conservator,   estate,  dependents,  or
21        survivors.
22             (2)  If any action or claim  is  brought  by  or  on
23        behalf  of  a covered person against a third party or the
24        third party's insurer, the covered person or his personal
25        representative,  including  his  guardian,   conservator,
26        estate,  dependents,  or survivors, shall notify the Plan
27        by personal service or registered mail of the  action  or
28        claim and of the name of the court in which the action or
29        claim  is  brought, filing proof thereof in the action or
30        claim.  The Plan may, at any time thereafter, join in the
31        action or claim upon its motion so  that  all  orders  of
32        court  after  hearing  and judgment shall be made for its
33        protection.  No release or  settlement  of  a  claim  for
34        damages  and  no  satisfaction  of judgment in the action
                            -34-               LRB9002943JSgc
 1        shall be valid without the written consent of the Plan to
 2        the extent of its interest in the settlement or  judgment
 3        and of the covered person or his personal representative.
 4             (3)  In  the  event  that  the covered person or his
 5        personal representative fails to institute  a  proceeding
 6        against  any  appropriate  third  party  before the fifth
 7        month before the action would be barred, the Plan may, in
 8        its own name or in the name  of  the  covered  person  or
 9        personal  representative,  commence  a proceeding against
10        any appropriate third party for the recovery  of  damages
11        on  account  of  any  sickness,  injury,  or death to the
12        covered person.  The covered person  shall  cooperate  in
13        doing  what is reasonably necessary to assist the Plan in
14        any recovery and shall not take  any  action  that  would
15        prejudice  the  Plan's right to recovery.  The Plan shall
16        pay to the covered person or his personal  representative
17        all  sums  collected  from any third party by judgment or
18        otherwise in excess of amounts paid in benefits under the
19        Plan and amounts paid or to be paid as  costs,  attorneys
20        fees,  and  reasonable  expenses  incurred by the Plan in
21        making the collection or enforcing the judgment.
22             (4)  In the event  that  a  covered  person  or  his
23        personal    representative,   including   his   guardian,
24        conservator, estate, dependents, or  survivors,  recovers
25        damages  from a third party for sickness or injury caused
26        to the covered person, the covered person or the personal
27        representative shall pay to the  Plan  from  the  damages
28        recovered  the  amount  of benefits paid or to be paid on
29        behalf of the covered person.
30             (5)  When the action or  claim  is  brought  by  the
31        covered  person  alone  and  the  covered person incurs a
32        personal liability to pay attorney's fees  and  costs  of
33        litigation,  the  Plan's  claim  for reimbursement of the
34        benefits provided to the covered person shall be the full
                            -35-               LRB9002943JSgc
 1        amount of benefits paid to or on behalf  of  the  covered
 2        person  under  this  Act  less  a  pro  rata  share  that
 3        represents the Plan's reasonable share of attorney's fees
 4        paid  by  the covered person and that portion of the cost
 5        of litigation expenses determined by multiplying  by  the
 6        ratio  of the full amount of the expenditures to the full
 7        amount of the judgement, award, or settlement.
 8             (6)  In the event of judgment or award in a suit  or
 9        claim  against  a third party or insurer, the court shall
10        first  order  paid  from  any  judgement  or  award   the
11        reasonable  litigation  expenses  incurred in preparation
12        and prosecution of the action  or  claim,  together  with
13        reasonable  attorney's  fees.   After  payment  of  those
14        expenses  and  attorney's fees, the court shall apply out
15        of the  balance  of  the  judgment  or  award  an  amount
16        sufficient  to  reimburse  the  Plan  the  full amount of
17        benefits paid on behalf of the covered person under  this
18        Act,  provided  the  court  may  reduce and apportion the
19        Plan's portion of  the  judgement  proportionate  to  the
20        recovery  of the covered person.  The burden of producing
21        evidence sufficient to support the exercise by the  court
22        of its discretion to reduce the amount of a proven charge
23        sought  to  be  enforced  against the recovery shall rest
24        with the party seeking  the  reduction.   The  court  may
25        consider  the  nature  and extent of the injury, economic
26        and non-economic  loss,  settlement  offers,  comparative
27        negligence  as  it  applies to the case at hand, hospital
28        costs, physician costs, and all other appropriate  costs.
29        The  Plan  shall  pay  its pro rata share of the attorney
30        fees based on the Plan's recovery as it compares  to  the
31        total  judgment.   Any  reimbursement  rights of the Plan
32        shall take priority over  all  other  liens  and  charges
33        existing  under the laws of this State with the exception
34        of any attorney liens filed under the Attorneys Lien Act.
                            -36-               LRB9002943JSgc
 1             (7)  The Plan may compromise or settle  and  release
 2        any  claim  for benefits provided under this Act or waive
 3        any claims for benefits, in whole or  in  part,  for  the
 4        convenience  of  the  Plan or if the Plan determines that
 5        collection  would  result  in  undue  hardship  upon  the
 6        covered person.
 7    (Source: P.A. 89-486, eff. 6-21-96.)
 8        Section 93.  The Health Maintenance Organization  Act  is
 9    amended  by  changing Sections 1-2, 4-10, and 4-15 and adding
10    Section 5-7.2 as follows:
11        (215 ILCS 125/1-2) (from Ch. 111 1/2, par. 1402)
12        Sec. 1-2.  Definitions. As used in this Act,  unless  the
13    context  otherwise  requires,  the following terms shall have
14    the meanings ascribed to them:
15        (1)  "Advertisement"  means  any  printed  or   published
16    material,  audiovisual material and descriptive literature of
17    the  health  care  plan  used  in  direct  mail,  newspapers,
18    magazines, radio scripts, television scripts, billboards  and
19    similar  displays;  and  any  descriptive literature or sales
20    aids of all kinds disseminated by  a  representative  of  the
21    health  care  plan  for presentation to the public including,
22    but  not   limited   to,   circulars,   leaflets,   booklets,
23    depictions,  illustrations,  form  letters and prepared sales
24    presentations.
25        (2)  "Director" means the Director of Insurance.
26        (3)  "Basic Health Care Services" means  emergency  care,
27    and inpatient hospital and physician care, outpatient medical
28    services,  mental  health  services  and care for alcohol and
29    drug  abuse,  including  any   reasonable   deductibles   and
30    co-payments,  all of which are subject to such limitations as
31    are determined by the Director pursuant to rule.
32        (4)  "Enrollee" means an individual who has been enrolled
                            -37-               LRB9002943JSgc
 1    in a health care plan.
 2        (5)  "Evidence  of  Coverage"  means   any   certificate,
 3    agreement,  or contract issued to an enrollee setting out the
 4    coverage to which he is entitled in exchange for a per capita
 5    prepaid sum.
 6        (6)  "Group Contract" means a contract  for  health  care
 7    services  which by its terms limits eligibility to members of
 8    a specified group.
 9        (7)  "Health Care Plan" means any arrangement whereby any
10    organization undertakes to provide or arrange for and pay for
11    or reimburse the cost of  basic  health  care  services  from
12    providers selected by the Health Maintenance Organization and
13    such  arrangement  consists of arranging for or the provision
14    of such health care  services,  as  distinguished  from  mere
15    indemnification  against the cost of such services, except as
16    otherwise authorized by Section 2-3 of this  Act,  on  a  per
17    capita  prepaid  basis,  through  insurance  or otherwise.  A
18    "health care plan" also includes any arrangement  whereby  an
19    organization  undertakes to provide or arrange for or pay for
20    or reimburse the cost of any health care service for  persons
21    who  are  enrolled  in  the  integrated  health  care program
22    established under Section 5-16.3 of the Illinois  Public  Aid
23    Code  through  providers selected by the organization and the
24    arrangement consists of making provision for the delivery  of
25    health    care   services,   as   distinguished   from   mere
26    indemnification.   Nothing  in  this   definition,   however,
27    affects  the  total  medical  services  available  to persons
28    eligible for medical assistance under the Illinois Public Aid
29    Code.
30        (8)  "Health Care Services" means any  services  included
31    in  the  furnishing  to  any  individual of medical or dental
32    care, or the hospitalization or incident to the furnishing of
33    such care or hospitalization as well as the furnishing to any
34    person of any and all  other  services  for  the  purpose  of
                            -38-               LRB9002943JSgc
 1    preventing,  alleviating,  curing or healing human illness or
 2    injury.
 3        (9)  "Health   Maintenance   Organization"   means    any
 4    organization  formed  under the laws of this or another state
 5    to provide or arrange for one or more health care plans under
 6    a system which causes any part of the  risk  of  health  care
 7    delivery to be borne by the organization or its providers.
 8        (10)  "Net  Worth"  means  admitted assets, as defined in
 9    Section 1-3 of this Act, minus liabilities.
10        (11)  "Organization" means any insurance  company,  or  a
11    nonprofit  corporation  authorized  under the Medical Service
12    Plan Act, the Dental Service Plan  Act,  the  Vision  Service
13    Plan  Act, the Pharmaceutical Service Plan Act, the Voluntary
14    Health Services Plans  Act  or  the  Non-profit  Health  Care
15    Service  Plan  Act, or a corporation organized under the laws
16    of this or another state for the purpose of operating one  or
17    more  health care plans and doing no business other than that
18    of a Health Maintenance Organization or an insurance company.
19    Organization shall  also  mean  the  University  of  Illinois
20    Hospital  as  defined  in the University of Illinois Hospital
21    Act.
22        (12)  "Provider" means any physician, hospital  facility,
23    or  other person which is licensed or otherwise authorized to
24    furnish health care services  and  also  includes  any  other
25    entity that arranges for the delivery or furnishing of health
26    care service.
27        (13)  "Producer"  means  a  person directly or indirectly
28    associated  with  a  health  care   plan   who   engages   in
29    solicitation or enrollment.
30        (14)  "Per capita prepaid" means a basis of prepayment by
31    which  a  fixed  amount of money is prepaid per individual or
32    any  other  enrollment  unit  to   the   Health   Maintenance
33    Organization  or  for health care services which are provided
34    during a definite time period regardless of the frequency  or
                            -39-               LRB9002943JSgc
 1    extent  of  the  services  rendered by the Health Maintenance
 2    Organization,  except  for  copayments  and  deductibles  and
 3    except as provided in subsection (f) of Section 5-3  of  this
 4    Act.
 5        (15)  "Subscriber"  means a person who has entered into a
 6    contractual  relationship   with   the   Health   Maintenance
 7    Organization  for the provision of or arrangement of at least
 8    basic health care  services  to  the  beneficiaries  of  such
 9    contract.
10        (16)  "Emergency  medical  screening examination" means a
11    medical screening examination and evaluation by  a  physician
12    or,  to  the  extent  permitted  by applicable laws, by other
13    appropriate personnel under the supervision of a physician to
14    determine whether the need for emergency services exists.
15        (17)  "Emergency  services"  means  those   health   care
16    services provided to evaluate and treat medical conditions of
17    recent   onset   and  severity  that  would  lead  a  prudent
18    layperson, possessing an average knowledge  of  medicine  and
19    health, to believe that urgent or unscheduled medical care is
20    required.
21        (18)  Post-stabilization  services"  means  those  health
22    care  services  determined  by  a  treating  provider  to  be
23    promptly  and  medically necessary following stabilization of
24    an emergency condition.
25    (Source: P.A. 88-554, eff. 7-26-94; 89-90, eff. 6-30-95.)
26        (215 ILCS 125/4-10) (from Ch. 111 1/2, par. 1409.3)
27        Sec. 4-10. (a)  Medical  necessity;  dispute  resolution;
28    independent; second opinion; post-stabilization service.
29        (a)  Each Health Maintenance Organization shall provide a
30    mechanism  for  the  timely review by a physician holding the
31    same class of license as the primary care physician,  who  is
32    unaffiliated   with   the  Health  Maintenance  Organization,
33    jointly selected by the patient (or the patient's next of kin
                            -40-               LRB9002943JSgc
 1    or legal representative if the patient is unable to  act  for
 2    himself),  primary  care physician and the Health Maintenance
 3    Organization in the event of a dispute  between  the  primary
 4    care   physician  and  the  Health  Maintenance  Organization
 5    regarding the medical necessity of a covered service proposed
 6    by a primary care physician.  In the event that the reviewing
 7    physician determines the  covered  service  to  be  medically
 8    necessary,  the Health Maintenance Organization shall provide
 9    the covered service.  Future contractual or employment action
10    by the Health Maintenance Organization regarding the  primary
11    care  physician  shall not be based solely on the physician's
12    participation in this procedure.
13        (b)  If  prior   authorization   for   post-stabilization
14    services  is  required,  the  health  care plan shall provide
15    access 24 hours a day, 7 days a week to persons designated by
16    the plan to make  such  determinations.   If  a  health  care
17    provider  has  attempted  to  contact  such  person for prior
18    authorization and no designated persons  were  accessible  or
19    the  authorization  was  not  denied within 30 minutes of the
20    request, the health care plan is deemed to have approved  the
21    request for prior authorization.
22    (Source: P.A. 85-20; 85-850.)
23        (215 ILCS 125/4-15) (from Ch. 111 1/2, par. 1409.8)
24        Sec. 4-15.  Emergency transportation.
25        (a)  No contract or evidence of coverage for basic health
26    care services delivered,  issued  for  delivery,  renewed  or
27    amended by a Health Maintenance Organization shall discourage
28    or  penalize  use  of  the  911 emergency telephone number or
29    exclude coverage or require prior authorization for emergency
30    transportation by ambulance or emergency services rendered by
31    any provider.   Payment  for  emergency  services  shall  not
32    depend   upon  whether  such  services  are  performed  by  a
33    preferred or nonpreferred provider and such coverage shall be
                            -41-               LRB9002943JSgc
 1    at the same level as if the service  or  treatment  had  been
 2    rendered  by  a  plan  provider.  For  the  purposes  of this
 3    Section, the term "emergency"  means  a  need  for  immediate
 4    medical attention resulting from a life threatening condition
 5    or  situation  or  a  need for immediate medical attention as
 6    otherwise reasonably determined by a physician, public safety
 7    official or other emergency medical personnel.
 8        (b)  Upon reasonable demand by a  provider  of  emergency
 9    transportation    by    ambulance,   a   Health   Maintenance
10    Organization shall promptly pay to the provider,  subject  to
11    coverage  limitations  stated  in the contract or evidence of
12    coverage,  the  charges  for  emergency   transportation   by
13    ambulance  provided  to  an  enrollee  in  a health care plan
14    arranged for by  the  Health  Maintenance  Organization.   By
15    accepting  any  such  payment  from  the  Health  Maintenance
16    Organization,  the  provider  of  emergency transportation by
17    ambulance agrees not to seek any payment  from  the  enrollee
18    for services provided to the enrollee.
19    (Source: P.A. 86-833; 86-1028.)
20        (215 ILCS 125/5-7.2 new)
21        Sec. 5-7.2.  Retrospective denials.
22        (a)  No  health  care  plan  shall  retrospectively  deny
23    coverage  and  payment  for  emergency  services  except upon
24    reasonable determination that:
25             (1)  the  emergency  services  claimed  were   never
26        performed; or
27             (2)  an  emergency medical screening examination was
28        performed on a patient who  personally  sought  emergency
29        services knowing that he or she did not have an emergency
30        condition  or  necessity, and who did not in fact require
31        emergency services.
32        (b)  No  health  care  plan  shall  retrospectively  deny
33    coverage and payment for  post-stabilization  services  which
                            -42-               LRB9002943JSgc
 1    received prior authorization or deemed approval.
 2        (c)  No  health  care  plan  shall  retrospectively  deny
 3    payment for emergency medical screening examinations.
 4        Section  96.   The Illinois Public Aid Code is amended by
 5    changing Section 5-16.3 and adding Section 5-5.04 as follows:
 6        (305 ILCS 5/5-5.04 new)
 7        Sec. 5-5.04.  Emergency services.
 8        (a)  As used in this Act,  "emergency  medical  screening
 9    examination"   means  a  medical  screening  examination  and
10    evaluation by a physician or,  to  the  extent  permitted  by
11    applicable  laws,  by  other  appropriate personnel under the
12    supervision of a physician to determine whether the need  for
13    emergency  services  exists  and  "emergency  services" means
14    those health care services provided  to  evaluate  and  treat
15    medical  conditions  of  recent onset and severity that would
16    lead a prudent layperson, possessing an average knowledge  of
17    medicine  and  health,  to believe that urgent or unscheduled
18    medical care is required.  No prior authorization or approval
19    shall be required in order  to  seek  and  receive  emergency
20    services.
21        (b)  Coverage  and  payment  for emergency services shall
22    not  be  retrospectively  denied   except   upon   reasonable
23    determination by the Illinois Department that:
24             (1)  the  emergency  medical  services  claimed were
25        never performed; or
26             (2)  an emergency medical screening examination  was
27        performed  on  a  patient who personally sought emergency
28        services knowing that he or she did not have an emergency
29        condition or necessity, and who did not in  fact  require
30        emergency services.
31        (305 ILCS 5/5-16.3)
                            -43-               LRB9002943JSgc
 1        (Text of Section before amendment by P.A. 89-507)
 2        Sec. 5-16.3.  System for integrated health care services.
 3        (a)  It shall be the public policy of the State to adopt,
 4    to  the  extent  practicable,  a  health  care  program  that
 5    encourages  the  integration  of  health  care  services  and
 6    manages the health care of program enrollees while preserving
 7    reasonable  choice  within  a  competitive and cost-efficient
 8    environment.  In  furtherance  of  this  public  policy,  the
 9    Illinois Department shall develop and implement an integrated
10    health  care  program  consistent with the provisions of this
11    Section.  The provisions of this Section apply  only  to  the
12    integrated  health  care  program created under this Section.
13    Persons enrolled in the integrated health  care  program,  as
14    determined  by  the  Illinois  Department  by  rule, shall be
15    afforded a choice among health care delivery  systems,  which
16    shall  include,  but  are not limited to, (i) fee for service
17    care managed by a primary care physician licensed to practice
18    medicine in  all  its  branches,  (ii)  managed  health  care
19    entities,   and  (iii)  federally  qualified  health  centers
20    (reimbursed according  to  a  prospective  cost-reimbursement
21    methodology)  and  rural health clinics (reimbursed according
22    to  the  Medicare  methodology),  where  available.   Persons
23    enrolled in the integrated health care program  also  may  be
24    offered indemnity insurance plans, subject to availability.
25        For  purposes  of  this  Section,  a "managed health care
26    entity" means a health maintenance organization or a  managed
27    care community network as defined in this Section.  A "health
28    maintenance   organization"   means   a   health  maintenance
29    organization   as   defined   in   the   Health   Maintenance
30    Organization Act.  A "managed care community  network"  means
31    an entity, other than a health maintenance organization, that
32    is  owned,  operated, or governed by providers of health care
33    services within this State  and  that  provides  or  arranges
34    primary, secondary, and tertiary managed health care services
                            -44-               LRB9002943JSgc
 1    under  contract  with  the Illinois Department exclusively to
 2    enrollees of the integrated health care  program.  A  managed
 3    care   community  network  may  contract  with  the  Illinois
 4    Department to provide only pediatric health care services.  A
 5    county  provider  as defined in Section 15-1 of this Code may
 6    contract with the Illinois Department to provide services  to
 7    enrollees  of the integrated health care program as a managed
 8    care community  network  without  the  need  to  establish  a
 9    separate   entity   that  provides  services  exclusively  to
10    enrollees of the integrated health care program and shall  be
11    deemed  a managed care community network for purposes of this
12    Code only to the extent of the provision of services to those
13    enrollees in conjunction  with  the  integrated  health  care
14    program.   A  county  provider  shall be entitled to contract
15    with the Illinois Department with respect to any  contracting
16    region  located  in  whole  or  in part within the county.  A
17    county provider shall not be required to accept enrollees who
18    do not reside within the county.
19        Each managed care community network must demonstrate  its
20    ability to bear the financial risk of serving enrollees under
21    this  program.   The  Illinois Department shall by rule adopt
22    criteria  for  assessing  the  financial  soundness  of  each
23    managed care community network. These  rules  shall  consider
24    the  extent  to  which  a  managed  care community network is
25    comprised of providers who directly render  health  care  and
26    are  located  within  the  community  in  which  they seek to
27    contract rather than solely arrange or finance  the  delivery
28    of health care.  These rules shall further consider a variety
29    of  risk-bearing  and  management  techniques,  including the
30    sufficiency of quality assurance and  utilization  management
31    programs  and  whether  a  managed care community network has
32    sufficiently demonstrated  its  financial  solvency  and  net
33    worth.  The  Illinois  Department's criteria must be based on
34    sound actuarial, financial, and  accounting  principles.   In
                            -45-               LRB9002943JSgc
 1    adopting  these  rules, the Illinois Department shall consult
 2    with the  Illinois  Department  of  Insurance.  The  Illinois
 3    Department  is  responsible  for  monitoring  compliance with
 4    these rules.
 5        This Section may not be implemented before the  effective
 6    date  of  these  rules, the approval of any necessary federal
 7    waivers, and the completion of the review of  an  application
 8    submitted,  at  least  60  days  before the effective date of
 9    rules adopted under this Section, to the Illinois  Department
10    by a managed care community network.
11        All  health  care delivery systems that contract with the
12    Illinois Department under the integrated health care  program
13    shall  clearly  recognize  a  health care provider's right of
14    conscience under the Right of Conscience Act.  In addition to
15    the provisions of that Act, no health  care  delivery  system
16    that   contracts  with  the  Illinois  Department  under  the
17    integrated health care program shall be required to  provide,
18    arrange  for,  or pay for any health care or medical service,
19    procedure, or product if that health care delivery system  is
20    owned,  controlled,  or  sponsored  by  or  affiliated with a
21    religious institution or religious  organization  that  finds
22    that health care or medical service, procedure, or product to
23    violate its religious and moral teachings and beliefs.
24        (b)  The  Illinois  Department  may, by rule, provide for
25    different  benefit  packages  for  different  categories   of
26    persons  enrolled  in  the  program.  Mental health services,
27    alcohol and substance abuse  services,  services  related  to
28    children   with   chronic   or   acute  conditions  requiring
29    longer-term treatment and follow-up, and rehabilitation  care
30    provided  by  a  free-standing  rehabilitation  hospital or a
31    hospital rehabilitation unit may be excluded from  a  benefit
32    package  if  the  State  ensures that those services are made
33    available through a separate delivery system.   An  exclusion
34    does not prohibit the Illinois Department from developing and
                            -46-               LRB9002943JSgc
 1    implementing demonstration projects for categories of persons
 2    or  services.   Benefit  packages  for  persons  eligible for
 3    medical assistance under Articles V, VI,  and  XII  shall  be
 4    based  on  the  requirements  of  those Articles and shall be
 5    consistent with the Title XIX of  the  Social  Security  Act.
 6    Nothing  in  this Act shall be construed to apply to services
 7    purchased by the Department of Children and  Family  Services
 8    and   the  Department  of  Mental  Health  and  Developmental
 9    Disabilities under the provisions of Title 59 of the Illinois
10    Administrative Code, Part  132  ("Medicaid  Community  Mental
11    Health Services Program").
12        (c)  The  program  established  by  this  Section  may be
13    implemented by the Illinois Department in various contracting
14    areas at various times.  The health care delivery systems and
15    providers available under the program may vary throughout the
16    State.  For purposes of contracting with managed health  care
17    entities   and   providers,  the  Illinois  Department  shall
18    establish contracting areas similar to the  geographic  areas
19    designated   by   the  Illinois  Department  for  contracting
20    purposes  under   the   Illinois   Competitive   Access   and
21    Reimbursement  Equity  Program (ICARE) under the authority of
22    Section 3-4 of the Illinois  Health  Finance  Reform  Act  or
23    similarly-sized  or  smaller  geographic areas established by
24    the Illinois Department by rule. A managed health care entity
25    shall be permitted to contract in any  geographic  areas  for
26    which  it  has  a  sufficient  provider network and otherwise
27    meets the  contracting  terms  of  the  State.  The  Illinois
28    Department  is  not  prohibited from entering into a contract
29    with a managed health care entity at any time.
30        (d)  A managed health care entity that contracts with the
31    Illinois Department for the provision of services  under  the
32    program shall do all of the following, solely for purposes of
33    the integrated health care program:
34             (1)  Provide  that any individual physician licensed
                            -47-               LRB9002943JSgc
 1        to practice medicine in all its branches,  any  pharmacy,
 2        any   federally   qualified   health   center,   and  any
 3        podiatrist, that consistently meets the reasonable  terms
 4        and  conditions  established  by  the managed health care
 5        entity,  including  but  not  limited  to   credentialing
 6        standards,   quality   assurance   program  requirements,
 7        utilization    management     requirements,     financial
 8        responsibility     standards,     contracting     process
 9        requirements, and provider network size and accessibility
10        requirements, must be accepted by the managed health care
11        entity  for  purposes  of  the Illinois integrated health
12        care program.  Any individual who  is  either  terminated
13        from  or  denied  inclusion in the panel of physicians of
14        the managed health care entity shall be given, within  10
15        business   days   after  that  determination,  a  written
16        explanation of the reasons for his or  her  exclusion  or
17        termination  from  the panel. This paragraph (1) does not
18        apply to the following:
19                  (A)  A  managed   health   care   entity   that
20             certifies to the Illinois Department that:
21                       (i)  it  employs  on a full-time basis 125
22                  or  more  Illinois   physicians   licensed   to
23                  practice medicine in all of its branches; and
24                       (ii)  it  will  provide  medical  services
25                  through  its  employees to more than 80% of the
26                  recipients enrolled  with  the  entity  in  the
27                  integrated health care program; or
28                  (B)  A   domestic   stock   insurance   company
29             licensed under clause (b) of class 1 of Section 4 of
30             the  Illinois  Insurance Code if (i) at least 66% of
31             the stock of the insurance company  is  owned  by  a
32             professional   corporation   organized   under   the
33             Professional Service Corporation Act that has 125 or
34             more   shareholders   who  are  Illinois  physicians
                            -48-               LRB9002943JSgc
 1             licensed to practice medicine in all of its branches
 2             and (ii) the  insurance  company  certifies  to  the
 3             Illinois  Department  that  at  least  80%  of those
 4             physician  shareholders  will  provide  services  to
 5             recipients  enrolled  with  the   company   in   the
 6             integrated health care program.
 7             (2)  Provide  for  reimbursement  for  providers for
 8        emergency services care, as defined by subsection (a)  of
 9        Section  5-5.04  of  this Code the Illinois Department by
10        rule, that must be provided to its  enrollees,  including
11        an  emergency  department  room screening fee, and urgent
12        care that it authorizes for its enrollees, regardless  of
13        the  provider's  affiliation with the managed health care
14        entity.  Providers  shall  be  reimbursed  for  emergency
15        services  care  at  an  amount  equal  to  the   Illinois
16        Department's  fee-for-service  rates  for  those  medical
17        services  rendered  by  providers not under contract with
18        the managed  health  care  entity  to  enrollees  of  the
19        entity.
20                  (A)  Coverage   and   payment   for   emergency
21             services  shall not be retrospectively denied except
22             upon  reasonable  determination  by   the   Illinois
23             Department  that  (1) the emergency services claimed
24             were never performed or  (2)  an  emergency  medical
25             screening examination was performed on a patient who
26             personally sought emergency services knowing that he
27             or  she  did  not  have  an  emergency  condition or
28             necessity, and who did not in fact require emergency
29             services.
30                  (B)  The appropriate use of the  911  emergency
31             telephone   number   shall  not  be  discouraged  or
32             penalized, and coverage  or  payment  shall  not  be
33             denied  solely  on  the basis that the enrollee used
34             the  911  emergency  telephone  number   to   summon
                            -49-               LRB9002943JSgc
 1             emergency   services.   Coverage   and  payment  for
 2             emergency medical screening examinations  shall  not
 3             be retrospectively denied.
 4             (2.5)  Provide       for      reimbursement      for
 5        post-stabilization services, which are those health  care
 6        services determined by a treating provider to be promptly
 7        and  medically  necessary  following  stabilization of an
 8        emergency condition.
 9                  (A)  If      prior      authorization       for
10             post-stabilization services is required, the managed
11             health  care  entity shall provide access 24 hours a
12             day, 7 days a week  to  persons  designated  by  the
13             entity  to  make  such  determinations.  If a health
14             care provider has attempted to contact  such  person
15             for  prior  authorization  and no designated persons
16             were accessible or the authorization was not  denied
17             within 30 minutes of the request, the managed health
18             care  entity  is deemed to have approved the request
19             for prior authorization.
20                  (B)  Coverage       and       payment       for
21             post-stabilization  services  which  received  prior
22             authorization  or  deemed  approval  shall  not   be
23             retrospectively denied.
24             (3)  Provide  that  any  provider  affiliated with a
25        managed health care entity may also provide services on a
26        fee-for-service basis to Illinois Department clients  not
27        enrolled in a managed health care entity.
28             (4)  Provide client education services as determined
29        and  approved  by  the Illinois Department, including but
30        not  limited  to  (i)  education  regarding   appropriate
31        utilization  of  health  care  services in a managed care
32        system, (ii) written disclosure of treatment policies and
33        any  restrictions  or  limitations  on  health  services,
34        including,  but  not  limited  to,   physical   services,
                            -50-               LRB9002943JSgc
 1        clinical   laboratory   tests,   hospital   and  surgical
 2        procedures,  prescription  drugs   and   biologics,   and
 3        radiological  examinations, and (iii) written notice that
 4        the enrollee may  receive  from  another  provider  those
 5        services covered under this program that are not provided
 6        by the managed health care entity.
 7             (5)  Provide  that  enrollees  within its system may
 8        choose the site for provision of services and  the  panel
 9        of health care providers.
10             (6)  Not   discriminate   in   its   enrollment   or
11        disenrollment   practices  among  recipients  of  medical
12        services or program enrollees based on health status.
13             (7)  Provide a  quality  assurance  and  utilization
14        review   program   that   (i)   for   health  maintenance
15        organizations  meets  the  requirements  of  the   Health
16        Maintenance  Organization  Act  and (ii) for managed care
17        community networks meets the requirements established  by
18        the  Illinois  Department in rules that incorporate those
19        standards   set   forth   in   the   Health   Maintenance
20        Organization Act.
21             (8)  Issue   a   managed    health    care    entity
22        identification  card  to  each  enrollee upon enrollment.
23        The card must contain all of the following:
24                  (A)  The enrollee's signature.
25                  (B)  The enrollee's health plan.
26                  (C)  The  name  and  telephone  number  of  the
27             enrollee's primary care physician.
28                  (D)  A  telephone  number  to   be   used   for
29             emergency service 24 hours per day, 7 days per week.
30             The  telephone  number  required  to  be  maintained
31             pursuant to this subparagraph by each managed health
32             care   entity  shall,  at  minimum,  be  staffed  by
33             medically  trained   personnel   and   be   provided
34             directly,  or  under  arrangement,  at  an office or
                            -51-               LRB9002943JSgc
 1             offices in  locations maintained solely  within  the
 2             State    of   Illinois.   For   purposes   of   this
 3             subparagraph, "medically  trained  personnel"  means
 4             licensed   practical  nurses  or  registered  nurses
 5             located in the State of Illinois  who  are  licensed
 6             pursuant to the Illinois Nursing Act of 1987.
 7             (9)  Ensure  that  every  primary care physician and
 8        pharmacy in the managed  health  care  entity  meets  the
 9        standards  established  by  the  Illinois  Department for
10        accessibility  and  quality   of   care.   The   Illinois
11        Department shall arrange for and oversee an evaluation of
12        the  standards  established  under this paragraph (9) and
13        may recommend any necessary changes to  these  standards.
14        The  Illinois Department shall submit an annual report to
15        the Governor and the General Assembly by April 1 of  each
16        year  regarding  the  effect of the standards on ensuring
17        access and quality of care to enrollees.
18             (10)  Provide a procedure  for  handling  complaints
19        that  (i)  for health maintenance organizations meets the
20        requirements of the Health Maintenance  Organization  Act
21        and  (ii)  for  managed care community networks meets the
22        requirements established by the  Illinois  Department  in
23        rules  that  incorporate those standards set forth in the
24        Health Maintenance Organization Act.
25             (11)  Maintain, retain, and make  available  to  the
26        Illinois  Department records, data, and information, in a
27        uniform manner determined  by  the  Illinois  Department,
28        sufficient   for   the  Illinois  Department  to  monitor
29        utilization, accessibility, and quality of care.
30             (12)  Except for providers who are prepaid, pay  all
31        approved  claims  for covered services that are completed
32        and submitted to the managed health care entity within 30
33        days after  receipt  of  the  claim  or  receipt  of  the
34        appropriate capitation payment or payments by the managed
                            -52-               LRB9002943JSgc
 1        health  care entity from the State for the month in which
 2        the  services  included  on  the  claim  were   rendered,
 3        whichever  is  later. If payment is not made or mailed to
 4        the provider by the managed health care entity by the due
 5        date under this subsection, an interest penalty of 1%  of
 6        any  amount  unpaid  shall  be  added  for  each month or
 7        fraction of a month  after  the  due  date,  until  final
 8        payment  is  made. Nothing in this Section shall prohibit
 9        managed health care entities and providers from  mutually
10        agreeing to terms that require more timely payment.
11             (13)  Provide   integration   with   community-based
12        programs  provided  by certified local health departments
13        such as Women, Infants, and  Children  Supplemental  Food
14        Program  (WIC),  childhood  immunization programs, health
15        education programs, case management programs, and  health
16        screening programs.
17             (14)  Provide  that the pharmacy formulary used by a
18        managed health care entity and its contract providers  be
19        no   more  restrictive  than  the  Illinois  Department's
20        pharmaceutical program on  the  effective  date  of  this
21        amendatory Act of 1994 and as amended after that date.
22             (15)  Provide   integration   with   community-based
23        organizations,   including,   but  not  limited  to,  any
24        organization  that  has  operated   within   a   Medicaid
25        Partnership  as  defined  by  this Code or by rule of the
26        Illinois Department, that may continue to operate under a
27        contract with the Illinois Department or a managed health
28        care entity under this Section to provide case management
29        services to  Medicaid  clients  in  designated  high-need
30        areas.
31        The   Illinois   Department   may,   by  rule,  determine
32    methodologies to limit financial liability for managed health
33    care  entities  resulting  from  payment  for   services   to
34    enrollees provided under the Illinois Department's integrated
                            -53-               LRB9002943JSgc
 1    health  care  program.  Any  methodology so determined may be
 2    considered or implemented by the Illinois Department  through
 3    a  contract  with  a  managed  health  care entity under this
 4    integrated health care program.
 5        The Illinois Department shall contract with an entity  or
 6    entities  to  provide  external  peer-based quality assurance
 7    review for the integrated health  care  program.  The  entity
 8    shall  be  representative  of Illinois physicians licensed to
 9    practice medicine in all  its  branches  and  have  statewide
10    geographic  representation in all specialties of medical care
11    that are provided within the integrated health care  program.
12    The  entity may not be a third party payer and shall maintain
13    offices in locations around the State  in  order  to  provide
14    service   and   continuing  medical  education  to  physician
15    participants within the integrated health care program.   The
16    review  process  shall be developed and conducted by Illinois
17    physicians licensed to practice medicine in all its branches.
18    In consultation with the entity, the Illinois Department  may
19    contract  with  other  entities  for  professional peer-based
20    quality assurance review of individual categories of services
21    other than services provided, supervised, or  coordinated  by
22    physicians licensed to practice medicine in all its branches.
23    The Illinois Department shall establish, by rule, criteria to
24    avoid  conflicts  of  interest  in  the  conduct  of  quality
25    assurance activities consistent with professional peer-review
26    standards.   All   quality   assurance  activities  shall  be
27    coordinated by the Illinois Department.
28        (e)  All  persons  enrolled  in  the  program  shall   be
29    provided   with   a   full   written   explanation   of   all
30    fee-for-service  and  managed  health care plan options and a
31    reasonable  opportunity  to  choose  among  the  options   as
32    provided  by  rule.  The Illinois Department shall provide to
33    enrollees, upon enrollment  in  the  integrated  health  care
34    program  and  at  least  annually  thereafter,  notice of the
                            -54-               LRB9002943JSgc
 1    process  for  requesting  an  appeal   under   the   Illinois
 2    Department's      administrative      appeal      procedures.
 3    Notwithstanding  any other Section of this Code, the Illinois
 4    Department may provide by rule for the Illinois Department to
 5    assign a  person  enrolled  in  the  program  to  a  specific
 6    provider  of  medical  services  or to a specific health care
 7    delivery system if an enrollee has failed to exercise  choice
 8    in  a  timely  manner.  An  enrollee assigned by the Illinois
 9    Department shall be afforded the opportunity to disenroll and
10    to select a  specific  provider  of  medical  services  or  a
11    specific health care delivery system within the first 30 days
12    after  the assignment. An enrollee who has failed to exercise
13    choice in a timely manner may be assigned only if there are 3
14    or more managed health care  entities  contracting  with  the
15    Illinois Department within the contracting area, except that,
16    outside  the  City of Chicago, this requirement may be waived
17    for an area by rules adopted by the Illinois Department after
18    consultation with all hospitals within the contracting  area.
19    The Illinois Department shall establish by rule the procedure
20    for  random  assignment  of  enrollees  who  fail to exercise
21    choice in a timely manner to a specific managed  health  care
22    entity  in  proportion  to  the  available  capacity  of that
23    managed health care entity. Assignment to a specific provider
24    of medical services or to  a  specific  managed  health  care
25    entity may not exceed that provider's or entity's capacity as
26    determined  by  the  Illinois Department.  Any person who has
27    chosen a specific provider of medical services or a  specific
28    managed  health  care  entity,  or  any  person  who has been
29    assigned  under  this  subsection,   shall   be   given   the
30    opportunity to change that choice or assignment at least once
31    every  12 months, as determined by the Illinois Department by
32    rule. The Illinois  Department  shall  maintain  a  toll-free
33    telephone  number  for  program  enrollees'  use in reporting
34    problems with managed health care entities.
                            -55-               LRB9002943JSgc
 1        (f)  If a person becomes eligible  for  participation  in
 2    the  integrated  health  care  program  while  he  or  she is
 3    hospitalized, the Illinois Department  may  not  enroll  that
 4    person  in  the  program  until  after  he  or  she  has been
 5    discharged from the hospital.  This subsection does not apply
 6    to  newborn  infants  whose  mothers  are  enrolled  in   the
 7    integrated health care program.
 8        (g)  The  Illinois  Department  shall, by rule, establish
 9    for managed health care entities rates that (i) are certified
10    to be actuarially sound, as determined by an actuary  who  is
11    an  associate  or  a  fellow of the Society of Actuaries or a
12    member of the American  Academy  of  Actuaries  and  who  has
13    expertise  and  experience  in  medical insurance and benefit
14    programs,  in  accordance  with  the  Illinois   Department's
15    current  fee-for-service  payment  system, and (ii) take into
16    account any difference of cost  to  provide  health  care  to
17    different  populations  based  on  gender, age, location, and
18    eligibility category.  The  rates  for  managed  health  care
19    entities shall be determined on a capitated basis.
20        The  Illinois Department by rule shall establish a method
21    to adjust its payments to managed health care entities  in  a
22    manner intended to avoid providing any financial incentive to
23    a  managed  health  care entity to refer patients to a county
24    provider, in an Illinois county having a  population  greater
25    than  3,000,000,  that  is  paid  directly  by  the  Illinois
26    Department.   The Illinois Department shall by April 1, 1997,
27    and  annually  thereafter,  review  the  method   to   adjust
28    payments.  Payments  by the Illinois Department to the county
29    provider,  for  persons  not  enrolled  in  a  managed   care
30    community  network  owned  or  operated by a county provider,
31    shall be paid on a fee-for-service basis under Article XV  of
32    this Code.
33        The  Illinois Department by rule shall establish a method
34    to reduce its payments to managed  health  care  entities  to
                            -56-               LRB9002943JSgc
 1    take  into  consideration (i) any adjustment payments paid to
 2    hospitals under subsection (h) of this Section to the  extent
 3    those  payments,  or  any  part  of those payments, have been
 4    taken into account in establishing capitated rates under this
 5    subsection (g) and (ii) the implementation  of  methodologies
 6    to limit financial liability for managed health care entities
 7    under subsection (d) of this Section.
 8        (h)  For  hospital  services  provided by a hospital that
 9    contracts with  a  managed  health  care  entity,  adjustment
10    payments  shall  be  paid  directly  to  the  hospital by the
11    Illinois Department.  Adjustment  payments  may  include  but
12    need    not   be   limited   to   adjustment   payments   to:
13    disproportionate share hospitals under Section 5-5.02 of this
14    Code; primary care access health care education payments  (89
15    Ill. Adm. Code 149.140); payments for capital, direct medical
16    education,  indirect  medical education, certified registered
17    nurse anesthetist, and kidney acquisition costs (89 Ill. Adm.
18    Code 149.150(c)); uncompensated care payments (89  Ill.  Adm.
19    Code  148.150(h));  trauma center payments (89 Ill. Adm. Code
20    148.290(c)); rehabilitation hospital payments (89  Ill.  Adm.
21    Code  148.290(d));  perinatal  center  payments (89 Ill. Adm.
22    Code 148.290(e)); obstetrical care  payments  (89  Ill.  Adm.
23    Code 148.290(f)); targeted access payments (89 Ill. Adm. Code
24    148.290(g)); Medicaid high volume payments (89 Ill. Adm. Code
25    148.290(h));  and  outpatient indigent volume adjustments (89
26    Ill. Adm. Code 148.140(b)(5)).
27        (i)  For  any  hospital  eligible  for   the   adjustment
28    payments described in subsection (h), the Illinois Department
29    shall  maintain,  through  the  period  ending June 30, 1995,
30    reimbursement levels in accordance with statutes and rules in
31    effect on April 1, 1994.
32        (j)  Nothing contained in this Code in any way limits  or
33    otherwise  impairs  the  authority  or  power of the Illinois
34    Department to enter into a negotiated  contract  pursuant  to
                            -57-               LRB9002943JSgc
 1    this  Section  with  a managed health care entity, including,
 2    but not limited to, a health maintenance  organization,  that
 3    provides  for  termination  or  nonrenewal  of  the  contract
 4    without  cause  upon  notice  as provided in the contract and
 5    without a hearing.
 6        (k)  Section  5-5.15  does  not  apply  to  the   program
 7    developed and implemented pursuant to this Section.
 8        (l)  The Illinois Department shall, by rule, define those
 9    chronic or acute medical conditions of childhood that require
10    longer-term  treatment  and  follow-up  care.   The  Illinois
11    Department shall ensure that services required to treat these
12    conditions are available through a separate delivery system.
13        A  managed  health  care  entity  that contracts with the
14    Illinois Department may refer a child with medical conditions
15    described in the rules adopted under this subsection directly
16    to a children's hospital or  to  a  hospital,  other  than  a
17    children's  hospital,  that is qualified to provide inpatient
18    and outpatient  services  to  treat  those  conditions.   The
19    Illinois    Department    shall    provide    fee-for-service
20    reimbursement  directly  to  a  children's hospital for those
21    services pursuant to Title 89 of the Illinois  Administrative
22    Code,  Section  148.280(a),  at  a rate at least equal to the
23    rate in effect on March 31, 1994. For hospitals,  other  than
24    children's hospitals, that are qualified to provide inpatient
25    and  outpatient  services  to  treat  those  conditions,  the
26    Illinois  Department  shall  provide  reimbursement for those
27    services on a fee-for-service basis, at a rate at least equal
28    to the rate in effect for those other hospitals on March  31,
29    1994.
30        A  children's  hospital  shall be directly reimbursed for
31    all  services  provided  at  the  children's  hospital  on  a
32    fee-for-service basis pursuant to Title 89  of  the  Illinois
33    Administrative  Code,  Section 148.280(a), at a rate at least
34    equal to the rate in effect on  March  31,  1994,  until  the
                            -58-               LRB9002943JSgc
 1    later  of  (i)  implementation  of the integrated health care
 2    program under this Section  and  development  of  actuarially
 3    sound  capitation rates for services other than those chronic
 4    or  acute  medical  conditions  of  childhood  that   require
 5    longer-term  treatment  and  follow-up care as defined by the
 6    Illinois  Department  in  the  rules   adopted   under   this
 7    subsection or (ii) March 31, 1996.
 8        Notwithstanding   anything  in  this  subsection  to  the
 9    contrary, a managed health care  entity  shall  not  consider
10    sources  or methods of payment in determining the referral of
11    a child.   The  Illinois  Department  shall  adopt  rules  to
12    establish   criteria   for  those  referrals.   The  Illinois
13    Department by rule shall establish a  method  to  adjust  its
14    payments to managed health care entities in a manner intended
15    to  avoid  providing  any  financial  incentive  to a managed
16    health care entity to refer patients to  a  provider  who  is
17    paid directly by the Illinois Department.
18        (m)  Behavioral health services provided or funded by the
19    Department  of  Mental Health and Developmental Disabilities,
20    the  Department  of  Alcoholism  and  Substance  Abuse,   the
21    Department  of Children and Family Services, and the Illinois
22    Department  shall  be  excluded  from  a   benefit   package.
23    Conditions  of  an  organic  or  physical  origin  or nature,
24    including  medical  detoxification,  however,  may   not   be
25    excluded.   In  this subsection, "behavioral health services"
26    means  mental  health  services  and  subacute  alcohol   and
27    substance   abuse  treatment  services,  as  defined  in  the
28    Illinois Alcoholism and Other Drug Dependency Act.   In  this
29    subsection,  "mental health services" includes, at a minimum,
30    the following services funded by the Illinois Department, the
31    Department of Mental Health and  Developmental  Disabilities,
32    or  the  Department  of  Children  and  Family  Services: (i)
33    inpatient  hospital  services,  including  related  physician
34    services,    related    psychiatric    interventions,     and
                            -59-               LRB9002943JSgc
 1    pharmaceutical  services  provided  to  an eligible recipient
 2    hospitalized  with  a  primary   diagnosis   of   psychiatric
 3    disorder;  (ii)  outpatient mental health services as defined
 4    and specified in Title  59  of  the  Illinois  Administrative
 5    Code,  Part  132;  (iii)  any  other outpatient mental health
 6    services funded by the Illinois Department  pursuant  to  the
 7    State    of    Illinois    Medicaid    Plan;   (iv)   partial
 8    hospitalization; and (v) follow-up stabilization  related  to
 9    any of those services.  Additional behavioral health services
10    may  be  excluded under this subsection as mutually agreed in
11    writing by the Illinois Department  and  the  affected  State
12    agency  or  agencies.   The exclusion of any service does not
13    prohibit  the  Illinois  Department   from   developing   and
14    implementing demonstration projects for categories of persons
15    or   services.    The   Department   of   Mental  Health  and
16    Developmental Disabilities, the Department  of  Children  and
17    Family   Services,  and  the  Department  of  Alcoholism  and
18    Substance  Abuse  shall  each  adopt  rules   governing   the
19    integration  of  managed  care in the provision of behavioral
20    health services.  The  State  shall  integrate  managed  care
21    community  networks  and  affiliated providers, to the extent
22    practicable, in  any  separate  delivery  system  for  mental
23    health services.
24        (n)  The   Illinois   Department  shall  adopt  rules  to
25    establish reserve requirements  for  managed  care  community
26    networks,   as   required   by  subsection  (a),  and  health
27    maintenance organizations to protect against  liabilities  in
28    the  event  that  a  managed  health  care entity is declared
29    insolvent or bankrupt.  If a managed health care entity other
30    than a county provider is  declared  insolvent  or  bankrupt,
31    after  liquidation  and  application of any available assets,
32    resources, and reserves, the Illinois Department shall pay  a
33    portion of the amounts owed by the managed health care entity
34    to  providers  for  services  rendered to enrollees under the
                            -60-               LRB9002943JSgc
 1    integrated health care program under this  Section  based  on
 2    the  following  schedule: (i) from April 1, 1995 through June
 3    30, 1998, 90% of the amounts owed; (ii)  from  July  1,  1998
 4    through  June  30,  2001,  80% of the amounts owed; and (iii)
 5    from July 1, 2001 through June 30, 2005, 75% of  the  amounts
 6    owed.   The  amounts  paid  under  this  subsection  shall be
 7    calculated based on the total  amount  owed  by  the  managed
 8    health  care  entity  to  providers before application of any
 9    available assets, resources, and reserves.   After  June  30,
10    2005, the Illinois Department may not pay any amounts owed to
11    providers  as  a  result  of an insolvency or bankruptcy of a
12    managed health care entity occurring after that  date.    The
13    Illinois Department is not obligated, however, to pay amounts
14    owed  to  a provider that has an ownership or other governing
15    interest in the managed health care entity.  This  subsection
16    applies only to managed health care entities and the services
17    they  provide  under the integrated health care program under
18    this Section.
19        (o)  Notwithstanding  any  other  provision  of  law   or
20    contractual agreement to the contrary, providers shall not be
21    required to accept from any other third party payer the rates
22    determined   or   paid   under  this  Code  by  the  Illinois
23    Department, managed health care entity, or other health  care
24    delivery system for services provided to recipients.
25        (p)  The  Illinois  Department  may  seek  and obtain any
26    necessary  authorization  provided  under  federal   law   to
27    implement  the  program,  including the waiver of any federal
28    statutes or regulations. The Illinois Department may  seek  a
29    waiver   of   the   federal  requirement  that  the  combined
30    membership of Medicare and Medicaid enrollees  in  a  managed
31    care community network may not exceed 75% of the managed care
32    community   network's   total   enrollment.    The   Illinois
33    Department  shall  not  seek a waiver of this requirement for
34    any other  category  of  managed  health  care  entity.   The
                            -61-               LRB9002943JSgc
 1    Illinois  Department shall not seek a waiver of the inpatient
 2    hospital reimbursement methodology in Section  1902(a)(13)(A)
 3    of  Title  XIX of the Social Security Act even if the federal
 4    agency responsible for  administering  Title  XIX  determines
 5    that  Section  1902(a)(13)(A)  applies to managed health care
 6    systems.
 7        Notwithstanding any other provisions of this Code to  the
 8    contrary,  the  Illinois  Department  shall  seek a waiver of
 9    applicable federal law in order to impose a co-payment system
10    consistent with this  subsection  on  recipients  of  medical
11    services  under  Title XIX of the Social Security Act who are
12    not enrolled in a managed health  care  entity.   The  waiver
13    request  submitted  by  the Illinois Department shall provide
14    for co-payments of up to $0.50 for prescribed drugs and up to
15    $0.50 for x-ray services and shall provide for co-payments of
16    up to $10 for non-emergency services provided in  a  hospital
17    emergency  department  room  and  up to $10 for non-emergency
18    ambulance services.  The purpose of the co-payments shall  be
19    to  deter  those  recipients from seeking unnecessary medical
20    care.  Co-payments may not be used to deter  recipients  from
21    seeking  or  accessing emergency services and other necessary
22    medical care.  No recipient shall be  required  to  pay  more
23    than a total of $150 per year in co-payments under the waiver
24    request  required by this subsection.  A recipient may not be
25    required to pay more than $15 of any amount  due  under  this
26    subsection in any one month.
27        Co-payments  authorized  under this subsection may not be
28    imposed when the care was  necessitated  by  a  true  medical
29    condition  as  described  in  the  definition  of  "emergency
30    services  under  subsection  (a) of Section 5-5.04 emergency.
31    Copayments for non-emergency services in a hospital emergency
32    department shall not be imposed retrospectively  except  upon
33    reasonable  determination by the Illinois Department that (1)
34    the emergency services claimed were never performed or (2) an
                            -62-               LRB9002943JSgc
 1    emergency medical screening examination was  performed  on  a
 2    patient who personally sought emergency services knowing that
 3    he  or  she did not have an emergency condition or necessity,
 4    and  who  did  not  in  fact  require   emergency   services.
 5    Co-payments  may  not  be  imposed  for  any of the following
 6    classifications of services:
 7             (1)  Services furnished to person under 18 years  of
 8        age.
 9             (2)  Services furnished to pregnant women.
10             (3)  Services  furnished to any individual who is an
11        inpatient in a hospital, nursing  facility,  intermediate
12        care  facility,  or  other  medical  institution, if that
13        person is required to spend for costs of medical care all
14        but a minimal amount of his or her  income  required  for
15        personal needs.
16             (4)  Services furnished to a person who is receiving
17        hospice care.
18        Co-payments authorized under this subsection shall not be
19    deducted  from  or  reduce  in  any  way payments for medical
20    services from  the  Illinois  Department  to  providers.   No
21    provider  may  deny  those services to an individual eligible
22    for services based on the individual's inability to  pay  the
23    co-payment.
24        Recipients  who  are  subject  to  co-payments  shall  be
25    provided  notice,  in plain and clear language, of the amount
26    of the co-payments, the circumstances under which co-payments
27    are exempted, the circumstances under which  co-payments  may
28    be assessed, and their manner of collection.
29        The   Illinois  Department  shall  establish  a  Medicaid
30    Co-Payment Council to assist in the development of co-payment
31    policies for the medical assistance  program.   The  Medicaid
32    Co-Payment  Council shall also have jurisdiction to develop a
33    program to provide financial or non-financial  incentives  to
34    Medicaid  recipients in order to encourage recipients to seek
                            -63-               LRB9002943JSgc
 1    necessary health care.  The Council shall be chaired  by  the
 2    Director  of  the  Illinois  Department,  and  shall  have  6
 3    additional members.  Two of the 6 additional members shall be
 4    appointed by the Governor, and one each shall be appointed by
 5    the  President  of  the  Senate,  the  Minority Leader of the
 6    Senate, the Speaker of the House of Representatives, and  the
 7    Minority Leader of the House of Representatives.  The Council
 8    may be convened and make recommendations upon the appointment
 9    of a majority of its members.  The Council shall be appointed
10    and convened no later than September 1, 1994 and shall report
11    its   recommendations   to   the  Director  of  the  Illinois
12    Department and the General Assembly no later than October  1,
13    1994.   The  chairperson  of  the Council shall be allowed to
14    vote only in the case of  a  tie  vote  among  the  appointed
15    members of the Council.
16        The  Council  shall be guided by the following principles
17    as it considers recommendations to be developed to  implement
18    any  approved  waivers that the Illinois Department must seek
19    pursuant to this subsection:
20             (1)  Co-payments should not be used to deter  access
21        to adequate medical care.
22             (2)  Co-payments should be used to reduce fraud.
23             (3)  Co-payment   policies  should  be  examined  in
24        consideration  of  other  states'  experience,  and   the
25        ability   of   successful  co-payment  plans  to  control
26        unnecessary  or  inappropriate  utilization  of  services
27        should be promoted.
28             (4)  All   participants,   both    recipients    and
29        providers,   in   the  medical  assistance  program  have
30        responsibilities to both the State and the program.
31             (5)  Co-payments are primarily a tool to educate the
32        participants  in  the  responsible  use  of  health  care
33        resources.
34             (6)  Co-payments should  not  be  used  to  penalize
                            -64-               LRB9002943JSgc
 1        providers.
 2             (7)  A   successful  medical  program  requires  the
 3        elimination of improper utilization of medical resources.
 4        The integrated health care program, or any part  of  that
 5    program,   established   under   this   Section  may  not  be
 6    implemented if matching federal funds under Title XIX of  the
 7    Social  Security  Act are not available for administering the
 8    program.
 9        The Illinois Department shall submit for  publication  in
10    the Illinois Register the name, address, and telephone number
11    of  the  individual  to  whom a request may be directed for a
12    copy of the request for a waiver of provisions of  Title  XIX
13    of  the  Social  Security  Act  that  the Illinois Department
14    intends to submit to the Health Care Financing Administration
15    in order to implement this Section.  The Illinois  Department
16    shall  mail  a  copy  of  that  request  for  waiver  to  all
17    requestors  at  least  16 days before filing that request for
18    waiver with the Health Care Financing Administration.
19        (q)  After  the  effective  date  of  this  Section,  the
20    Illinois Department may take  all  planning  and  preparatory
21    action  necessary  to  implement this Section, including, but
22    not limited to, seeking requests for  proposals  relating  to
23    the   integrated  health  care  program  created  under  this
24    Section.
25        (r)  In  order  to  (i)  accelerate  and  facilitate  the
26    development of integrated health care  in  contracting  areas
27    outside  counties with populations in excess of 3,000,000 and
28    counties adjacent to those counties  and  (ii)  maintain  and
29    sustain  the high quality of education and residency programs
30    coordinated and associated with  local  area  hospitals,  the
31    Illinois Department may develop and implement a demonstration
32    program  for managed care community networks owned, operated,
33    or governed by State-funded medical  schools.   The  Illinois
34    Department  shall  prescribe by rule the criteria, standards,
                            -65-               LRB9002943JSgc
 1    and procedures for effecting this demonstration program.
 2        (s)  (Blank).
 3        (t)  On April 1, 1995 and every 6 months thereafter,  the
 4    Illinois  Department shall report to the Governor and General
 5    Assembly on  the  progress  of  the  integrated  health  care
 6    program   in  enrolling  clients  into  managed  health  care
 7    entities.  The report shall indicate the  capacities  of  the
 8    managed  health care entities with which the State contracts,
 9    the number of clients enrolled by each contractor, the  areas
10    of  the State in which managed care options do not exist, and
11    the progress toward  meeting  the  enrollment  goals  of  the
12    integrated health care program.
13        (u)  The  Illinois  Department may implement this Section
14    through the use of emergency rules in accordance with Section
15    5-45 of  the  Illinois  Administrative  Procedure  Act.   For
16    purposes of that Act, the adoption of rules to implement this
17    Section  is  deemed an emergency and necessary for the public
18    interest, safety, and welfare.
19    (Source: P.A.  88-554,  eff.  7-26-94;  89-21,  eff.  7-1-95;
20    89-673, eff. 8-14-96; revised 8-26-96.)
21        (Text of Section after amendment by P.A. 89-507)
22        Sec. 5-16.3.  System for integrated health care services.
23        (a)  It shall be the public policy of the State to adopt,
24    to  the  extent  practicable,  a  health  care  program  that
25    encourages  the  integration  of  health  care  services  and
26    manages the health care of program enrollees while preserving
27    reasonable  choice  within  a  competitive and cost-efficient
28    environment.  In  furtherance  of  this  public  policy,  the
29    Illinois Department shall develop and implement an integrated
30    health  care  program  consistent with the provisions of this
31    Section.  The provisions of this Section apply  only  to  the
32    integrated  health  care  program created under this Section.
33    Persons enrolled in the integrated health  care  program,  as
34    determined  by  the  Illinois  Department  by  rule, shall be
                            -66-               LRB9002943JSgc
 1    afforded a choice among health care delivery  systems,  which
 2    shall  include,  but  are not limited to, (i) fee for service
 3    care managed by a primary care physician licensed to practice
 4    medicine in  all  its  branches,  (ii)  managed  health  care
 5    entities,   and  (iii)  federally  qualified  health  centers
 6    (reimbursed according  to  a  prospective  cost-reimbursement
 7    methodology)  and  rural health clinics (reimbursed according
 8    to  the  Medicare  methodology),  where  available.   Persons
 9    enrolled in the integrated health care program  also  may  be
10    offered indemnity insurance plans, subject to availability.
11        For  purposes  of  this  Section,  a "managed health care
12    entity" means a health maintenance organization or a  managed
13    care community network as defined in this Section.  A "health
14    maintenance   organization"   means   a   health  maintenance
15    organization   as   defined   in   the   Health   Maintenance
16    Organization Act.  A "managed care community  network"  means
17    an entity, other than a health maintenance organization, that
18    is  owned,  operated, or governed by providers of health care
19    services within this State  and  that  provides  or  arranges
20    primary, secondary, and tertiary managed health care services
21    under  contract  with  the Illinois Department exclusively to
22    enrollees of the integrated health care  program.  A  managed
23    care   community  network  may  contract  with  the  Illinois
24    Department to provide only pediatric health care services.  A
25    county  provider  as defined in Section 15-1 of this Code may
26    contract with the Illinois Department to provide services  to
27    enrollees  of the integrated health care program as a managed
28    care community  network  without  the  need  to  establish  a
29    separate   entity   that  provides  services  exclusively  to
30    enrollees of the integrated health care program and shall  be
31    deemed  a managed care community network for purposes of this
32    Code only to the extent of the provision of services to those
33    enrollees in conjunction  with  the  integrated  health  care
34    program.   A  county  provider  shall be entitled to contract
                            -67-               LRB9002943JSgc
 1    with the Illinois Department with respect to any  contracting
 2    region  located  in  whole  or  in part within the county.  A
 3    county provider shall not be required to accept enrollees who
 4    do not reside within the county.
 5        Each managed care community network must demonstrate  its
 6    ability to bear the financial risk of serving enrollees under
 7    this  program.   The  Illinois Department shall by rule adopt
 8    criteria  for  assessing  the  financial  soundness  of  each
 9    managed care community network. These  rules  shall  consider
10    the  extent  to  which  a  managed  care community network is
11    comprised of providers who directly render  health  care  and
12    are  located  within  the  community  in  which  they seek to
13    contract rather than solely arrange or finance  the  delivery
14    of health care.  These rules shall further consider a variety
15    of  risk-bearing  and  management  techniques,  including the
16    sufficiency of quality assurance and  utilization  management
17    programs  and  whether  a  managed care community network has
18    sufficiently demonstrated  its  financial  solvency  and  net
19    worth.  The  Illinois  Department's criteria must be based on
20    sound actuarial, financial, and  accounting  principles.   In
21    adopting  these  rules, the Illinois Department shall consult
22    with the  Illinois  Department  of  Insurance.  The  Illinois
23    Department  is  responsible  for  monitoring  compliance with
24    these rules.
25        This Section may not be implemented before the  effective
26    date  of  these  rules, the approval of any necessary federal
27    waivers, and the completion of the review of  an  application
28    submitted,  at  least  60  days  before the effective date of
29    rules adopted under this Section, to the Illinois  Department
30    by a managed care community network.
31        All  health  care delivery systems that contract with the
32    Illinois Department under the integrated health care  program
33    shall  clearly  recognize  a  health care provider's right of
34    conscience under the Right of Conscience Act.  In addition to
                            -68-               LRB9002943JSgc
 1    the provisions of that Act, no health  care  delivery  system
 2    that   contracts  with  the  Illinois  Department  under  the
 3    integrated health care program shall be required to  provide,
 4    arrange  for,  or pay for any health care or medical service,
 5    procedure, or product if that health care delivery system  is
 6    owned,  controlled,  or  sponsored  by  or  affiliated with a
 7    religious institution or religious  organization  that  finds
 8    that health care or medical service, procedure, or product to
 9    violate its religious and moral teachings and beliefs.
10        (b)  The  Illinois  Department  may, by rule, provide for
11    different  benefit  packages  for  different  categories   of
12    persons  enrolled  in  the  program.  Mental health services,
13    alcohol and substance abuse  services,  services  related  to
14    children   with   chronic   or   acute  conditions  requiring
15    longer-term treatment and follow-up, and rehabilitation  care
16    provided  by  a  free-standing  rehabilitation  hospital or a
17    hospital rehabilitation unit may be excluded from  a  benefit
18    package  if  the  State  ensures that those services are made
19    available through a separate delivery system.   An  exclusion
20    does not prohibit the Illinois Department from developing and
21    implementing demonstration projects for categories of persons
22    or  services.   Benefit  packages  for  persons  eligible for
23    medical assistance under Articles V, VI,  and  XII  shall  be
24    based  on  the  requirements  of  those Articles and shall be
25    consistent with the Title XIX of  the  Social  Security  Act.
26    Nothing  in  this Act shall be construed to apply to services
27    purchased by the Department of Children and  Family  Services
28    and  the  Department  of  Human Services (as successor to the
29    Department of Mental Health and  Developmental  Disabilities)
30    under   the   provisions   of   Title   59  of  the  Illinois
31    Administrative Code, Part  132  ("Medicaid  Community  Mental
32    Health Services Program").
33        (c)  The  program  established  by  this  Section  may be
34    implemented by the Illinois Department in various contracting
                            -69-               LRB9002943JSgc
 1    areas at various times.  The health care delivery systems and
 2    providers available under the program may vary throughout the
 3    State.  For purposes of contracting with managed health  care
 4    entities   and   providers,  the  Illinois  Department  shall
 5    establish contracting areas similar to the  geographic  areas
 6    designated   by   the  Illinois  Department  for  contracting
 7    purposes  under   the   Illinois   Competitive   Access   and
 8    Reimbursement  Equity  Program (ICARE) under the authority of
 9    Section 3-4 of the Illinois  Health  Finance  Reform  Act  or
10    similarly-sized  or  smaller  geographic areas established by
11    the Illinois Department by rule. A managed health care entity
12    shall be permitted to contract in any  geographic  areas  for
13    which  it  has  a  sufficient  provider network and otherwise
14    meets the  contracting  terms  of  the  State.  The  Illinois
15    Department  is  not  prohibited from entering into a contract
16    with a managed health care entity at any time.
17        (d)  A managed health care entity that contracts with the
18    Illinois Department for the provision of services  under  the
19    program shall do all of the following, solely for purposes of
20    the integrated health care program:
21             (1)  Provide  that any individual physician licensed
22        to practice medicine in all its branches,  any  pharmacy,
23        any   federally   qualified   health   center,   and  any
24        podiatrist, that consistently meets the reasonable  terms
25        and  conditions  established  by  the managed health care
26        entity,  including  but  not  limited  to   credentialing
27        standards,   quality   assurance   program  requirements,
28        utilization    management     requirements,     financial
29        responsibility     standards,     contracting     process
30        requirements, and provider network size and accessibility
31        requirements, must be accepted by the managed health care
32        entity  for  purposes  of  the Illinois integrated health
33        care program.  Any individual who  is  either  terminated
34        from  or  denied  inclusion in the panel of physicians of
                            -70-               LRB9002943JSgc
 1        the managed health care entity shall be given, within  10
 2        business   days   after  that  determination,  a  written
 3        explanation of the reasons for his or  her  exclusion  or
 4        termination  from  the panel. This paragraph (1) does not
 5        apply to the following:
 6                  (A)  A  managed   health   care   entity   that
 7             certifies to the Illinois Department that:
 8                       (i)  it  employs  on a full-time basis 125
 9                  or  more  Illinois   physicians   licensed   to
10                  practice medicine in all of its branches; and
11                       (ii)  it  will  provide  medical  services
12                  through  its  employees to more than 80% of the
13                  recipients enrolled  with  the  entity  in  the
14                  integrated health care program; or
15                  (B)  A   domestic   stock   insurance   company
16             licensed under clause (b) of class 1 of Section 4 of
17             the  Illinois  Insurance Code if (i) at least 66% of
18             the stock of the insurance company  is  owned  by  a
19             professional   corporation   organized   under   the
20             Professional Service Corporation Act that has 125 or
21             more   shareholders   who  are  Illinois  physicians
22             licensed to practice medicine in all of its branches
23             and (ii) the  insurance  company  certifies  to  the
24             Illinois  Department  that  at  least  80%  of those
25             physician  shareholders  will  provide  services  to
26             recipients  enrolled  with  the   company   in   the
27             integrated health care program.
28             (2)  Provide  for  reimbursement  for  providers for
29        emergency services care, as defined by subsection (a)  of
30        Section  5-5.04  of  this Code the Illinois Department by
31        rule, that must be provided to its  enrollees,  including
32        an  emergency  department  room screening fee, and urgent
33        care that it authorizes for its enrollees, regardless  of
34        the  provider's  affiliation with the managed health care
                            -71-               LRB9002943JSgc
 1        entity.  Providers  shall  be  reimbursed  for  emergency
 2        services  care  at  an  amount  equal  to  the   Illinois
 3        Department's  fee-for-service  rates  for  those  medical
 4        services  rendered  by  providers not under contract with
 5        the managed  health  care  entity  to  enrollees  of  the
 6        entity.
 7                  (A)  Coverage   and   payment   for   emergency
 8             services  shall not be retrospectively denied except
 9             upon  reasonable  determination  by   the   Illinois
10             Department  that  (1) the emergency services claimed
11             were never performed or  (2)  an  emergency  medical
12             screening examination was performed on a patient who
13             personally sought emergency services knowing that he
14             or  she  did  not  have  an  emergency  condition or
15             necessity, and who did not in fact require emergency
16             services.
17                  (B)  The appropriate use of the  911  emergency
18             telephone   number   shall  not  be  discouraged  or
19             penalized, and coverage  or  payment  shall  not  be
20             denied  solely  on  the basis that the enrollee used
21             the  911  emergency  telephone  number   to   summon
22             emergency   services.   Coverage   and  payment  for
23             emergency medical screening examinations  shall  not
24             be retrospectively denied.
25             (2.5)  Provide       for      reimbursement      for
26        post-stabilization services, which are those health  care
27        services determined by a treating provider to be promptly
28        and  medically  necessary  following  stabilization of an
29        emergency condition.
30                  (A)  If      prior      authorization       for
31             post-stabilization services is required, the managed
32             health  care  entity shall provide access 24 hours a
33             day, 7 days a week  to  persons  designated  by  the
34             entity  to  make  such  determinations.  If a health
                            -72-               LRB9002943JSgc
 1             care provider has attempted to contact  such  person
 2             for  prior  authorization  and no designated persons
 3             were accessible or the authorization was not  denied
 4             within 30 minutes of the request, the managed health
 5             care  entity  is deemed to have approved the request
 6             for prior authorization.
 7                  (B)  Coverage       and       payment       for
 8             post-stabilization  services  which  received  prior
 9             authorization  or  deemed  approval  shall  not   be
10             retrospectively denied.
11             (3)  Provide  that  any  provider  affiliated with a
12        managed health care entity may also provide services on a
13        fee-for-service basis to Illinois Department clients  not
14        enrolled in a managed health care entity.
15             (4)  Provide client education services as determined
16        and  approved  by  the Illinois Department, including but
17        not  limited  to  (i)  education  regarding   appropriate
18        utilization  of  health  care  services in a managed care
19        system, (ii) written disclosure of treatment policies and
20        any  restrictions  or  limitations  on  health  services,
21        including,  but  not  limited  to,   physical   services,
22        clinical   laboratory   tests,   hospital   and  surgical
23        procedures,  prescription  drugs   and   biologics,   and
24        radiological  examinations, and (iii) written notice that
25        the enrollee may  receive  from  another  provider  those
26        services covered under this program that are not provided
27        by the managed health care entity.
28             (5)  Provide  that  enrollees  within its system may
29        choose the site for provision of services and  the  panel
30        of health care providers.
31             (6)  Not   discriminate   in   its   enrollment   or
32        disenrollment   practices  among  recipients  of  medical
33        services or program enrollees based on health status.
34             (7)  Provide a  quality  assurance  and  utilization
                            -73-               LRB9002943JSgc
 1        review   program   that   (i)   for   health  maintenance
 2        organizations  meets  the  requirements  of  the   Health
 3        Maintenance  Organization  Act  and (ii) for managed care
 4        community networks meets the requirements established  by
 5        the  Illinois  Department in rules that incorporate those
 6        standards   set   forth   in   the   Health   Maintenance
 7        Organization Act.
 8             (8)  Issue   a   managed    health    care    entity
 9        identification  card  to  each  enrollee upon enrollment.
10        The card must contain all of the following:
11                  (A)  The enrollee's signature.
12                  (B)  The enrollee's health plan.
13                  (C)  The  name  and  telephone  number  of  the
14             enrollee's primary care physician.
15                  (D)  A  telephone  number  to   be   used   for
16             emergency service 24 hours per day, 7 days per week.
17             The  telephone  number  required  to  be  maintained
18             pursuant to this subparagraph by each managed health
19             care   entity  shall,  at  minimum,  be  staffed  by
20             medically  trained   personnel   and   be   provided
21             directly,  or  under  arrangement,  at  an office or
22             offices in  locations maintained solely  within  the
23             State    of   Illinois.   For   purposes   of   this
24             subparagraph, "medically  trained  personnel"  means
25             licensed   practical  nurses  or  registered  nurses
26             located in the State of Illinois  who  are  licensed
27             pursuant to the Illinois Nursing Act of 1987.
28             (9)  Ensure  that  every  primary care physician and
29        pharmacy in the managed  health  care  entity  meets  the
30        standards  established  by  the  Illinois  Department for
31        accessibility  and  quality   of   care.   The   Illinois
32        Department shall arrange for and oversee an evaluation of
33        the  standards  established  under this paragraph (9) and
34        may recommend any necessary changes to  these  standards.
                            -74-               LRB9002943JSgc
 1        The  Illinois Department shall submit an annual report to
 2        the Governor and the General Assembly by April 1 of  each
 3        year  regarding  the  effect of the standards on ensuring
 4        access and quality of care to enrollees.
 5             (10)  Provide a procedure  for  handling  complaints
 6        that  (i)  for health maintenance organizations meets the
 7        requirements of the Health Maintenance  Organization  Act
 8        and  (ii)  for  managed care community networks meets the
 9        requirements established by the  Illinois  Department  in
10        rules  that  incorporate those standards set forth in the
11        Health Maintenance Organization Act.
12             (11)  Maintain, retain, and make  available  to  the
13        Illinois  Department records, data, and information, in a
14        uniform manner determined  by  the  Illinois  Department,
15        sufficient   for   the  Illinois  Department  to  monitor
16        utilization, accessibility, and quality of care.
17             (12)  Except for providers who are prepaid, pay  all
18        approved  claims  for covered services that are completed
19        and submitted to the managed health care entity within 30
20        days after  receipt  of  the  claim  or  receipt  of  the
21        appropriate capitation payment or payments by the managed
22        health  care entity from the State for the month in which
23        the  services  included  on  the  claim  were   rendered,
24        whichever  is  later. If payment is not made or mailed to
25        the provider by the managed health care entity by the due
26        date under this subsection, an interest penalty of 1%  of
27        any  amount  unpaid  shall  be  added  for  each month or
28        fraction of a month  after  the  due  date,  until  final
29        payment  is  made. Nothing in this Section shall prohibit
30        managed health care entities and providers from  mutually
31        agreeing to terms that require more timely payment.
32             (13)  Provide   integration   with   community-based
33        programs  provided  by certified local health departments
34        such as Women, Infants, and  Children  Supplemental  Food
                            -75-               LRB9002943JSgc
 1        Program  (WIC),  childhood  immunization programs, health
 2        education programs, case management programs, and  health
 3        screening programs.
 4             (14)  Provide  that the pharmacy formulary used by a
 5        managed health care entity and its contract providers  be
 6        no   more  restrictive  than  the  Illinois  Department's
 7        pharmaceutical program on  the  effective  date  of  this
 8        amendatory Act of 1994 and as amended after that date.
 9             (15)  Provide   integration   with   community-based
10        organizations,   including,   but  not  limited  to,  any
11        organization  that  has  operated   within   a   Medicaid
12        Partnership  as  defined  by  this Code or by rule of the
13        Illinois Department, that may continue to operate under a
14        contract with the Illinois Department or a managed health
15        care entity under this Section to provide case management
16        services to  Medicaid  clients  in  designated  high-need
17        areas.
18        The   Illinois   Department   may,   by  rule,  determine
19    methodologies to limit financial liability for managed health
20    care  entities  resulting  from  payment  for   services   to
21    enrollees provided under the Illinois Department's integrated
22    health  care  program.  Any  methodology so determined may be
23    considered or implemented by the Illinois Department  through
24    a  contract  with  a  managed  health  care entity under this
25    integrated health care program.
26        The Illinois Department shall contract with an entity  or
27    entities  to  provide  external  peer-based quality assurance
28    review for the integrated health  care  program.  The  entity
29    shall  be  representative  of Illinois physicians licensed to
30    practice medicine in all  its  branches  and  have  statewide
31    geographic  representation in all specialties of medical care
32    that are provided within the integrated health care  program.
33    The  entity may not be a third party payer and shall maintain
34    offices in locations around the State  in  order  to  provide
                            -76-               LRB9002943JSgc
 1    service   and   continuing  medical  education  to  physician
 2    participants within the integrated health care program.   The
 3    review  process  shall be developed and conducted by Illinois
 4    physicians licensed to practice medicine in all its branches.
 5    In consultation with the entity, the Illinois Department  may
 6    contract  with  other  entities  for  professional peer-based
 7    quality assurance review of individual categories of services
 8    other than services provided, supervised, or  coordinated  by
 9    physicians licensed to practice medicine in all its branches.
10    The Illinois Department shall establish, by rule, criteria to
11    avoid  conflicts  of  interest  in  the  conduct  of  quality
12    assurance activities consistent with professional peer-review
13    standards.   All   quality   assurance  activities  shall  be
14    coordinated by the Illinois Department.
15        (e)  All  persons  enrolled  in  the  program  shall   be
16    provided   with   a   full   written   explanation   of   all
17    fee-for-service  and  managed  health care plan options and a
18    reasonable  opportunity  to  choose  among  the  options   as
19    provided  by  rule.  The Illinois Department shall provide to
20    enrollees, upon enrollment  in  the  integrated  health  care
21    program  and  at  least  annually  thereafter,  notice of the
22    process  for  requesting  an  appeal   under   the   Illinois
23    Department's      administrative      appeal      procedures.
24    Notwithstanding  any other Section of this Code, the Illinois
25    Department may provide by rule for the Illinois Department to
26    assign a  person  enrolled  in  the  program  to  a  specific
27    provider  of  medical  services  or to a specific health care
28    delivery system if an enrollee has failed to exercise  choice
29    in  a  timely  manner.  An  enrollee assigned by the Illinois
30    Department shall be afforded the opportunity to disenroll and
31    to select a  specific  provider  of  medical  services  or  a
32    specific health care delivery system within the first 30 days
33    after  the assignment. An enrollee who has failed to exercise
34    choice in a timely manner may be assigned only if there are 3
                            -77-               LRB9002943JSgc
 1    or more managed health care  entities  contracting  with  the
 2    Illinois Department within the contracting area, except that,
 3    outside  the  City of Chicago, this requirement may be waived
 4    for an area by rules adopted by the Illinois Department after
 5    consultation with all hospitals within the contracting  area.
 6    The Illinois Department shall establish by rule the procedure
 7    for  random  assignment  of  enrollees  who  fail to exercise
 8    choice in a timely manner to a specific managed  health  care
 9    entity  in  proportion  to  the  available  capacity  of that
10    managed health care entity. Assignment to a specific provider
11    of medical services or to  a  specific  managed  health  care
12    entity may not exceed that provider's or entity's capacity as
13    determined  by  the  Illinois Department.  Any person who has
14    chosen a specific provider of medical services or a  specific
15    managed  health  care  entity,  or  any  person  who has been
16    assigned  under  this  subsection,   shall   be   given   the
17    opportunity to change that choice or assignment at least once
18    every  12 months, as determined by the Illinois Department by
19    rule. The Illinois  Department  shall  maintain  a  toll-free
20    telephone  number  for  program  enrollees'  use in reporting
21    problems with managed health care entities.
22        (f)  If a person becomes eligible  for  participation  in
23    the  integrated  health  care  program  while  he  or  she is
24    hospitalized, the Illinois Department  may  not  enroll  that
25    person  in  the  program  until  after  he  or  she  has been
26    discharged from the hospital.  This subsection does not apply
27    to  newborn  infants  whose  mothers  are  enrolled  in   the
28    integrated health care program.
29        (g)  The  Illinois  Department  shall, by rule, establish
30    for managed health care entities rates that (i) are certified
31    to be actuarially sound, as determined by an actuary  who  is
32    an  associate  or  a  fellow of the Society of Actuaries or a
33    member of the American  Academy  of  Actuaries  and  who  has
34    expertise  and  experience  in  medical insurance and benefit
                            -78-               LRB9002943JSgc
 1    programs,  in  accordance  with  the  Illinois   Department's
 2    current  fee-for-service  payment  system, and (ii) take into
 3    account any difference of cost  to  provide  health  care  to
 4    different  populations  based  on  gender, age, location, and
 5    eligibility category.  The  rates  for  managed  health  care
 6    entities shall be determined on a capitated basis.
 7        The  Illinois Department by rule shall establish a method
 8    to adjust its payments to managed health care entities  in  a
 9    manner intended to avoid providing any financial incentive to
10    a  managed  health  care entity to refer patients to a county
11    provider, in an Illinois county having a  population  greater
12    than  3,000,000,  that  is  paid  directly  by  the  Illinois
13    Department.   The Illinois Department shall by April 1, 1997,
14    and  annually  thereafter,  review  the  method   to   adjust
15    payments.  Payments  by the Illinois Department to the county
16    provider,  for  persons  not  enrolled  in  a  managed   care
17    community  network  owned  or  operated by a county provider,
18    shall be paid on a fee-for-service basis under Article XV  of
19    this Code.
20        The  Illinois Department by rule shall establish a method
21    to reduce its payments to managed  health  care  entities  to
22    take  into  consideration (i) any adjustment payments paid to
23    hospitals under subsection (h) of this Section to the  extent
24    those  payments,  or  any  part  of those payments, have been
25    taken into account in establishing capitated rates under this
26    subsection (g) and (ii) the implementation  of  methodologies
27    to limit financial liability for managed health care entities
28    under subsection (d) of this Section.
29        (h)  For  hospital  services  provided by a hospital that
30    contracts with  a  managed  health  care  entity,  adjustment
31    payments  shall  be  paid  directly  to  the  hospital by the
32    Illinois Department.  Adjustment  payments  may  include  but
33    need    not   be   limited   to   adjustment   payments   to:
34    disproportionate share hospitals under Section 5-5.02 of this
                            -79-               LRB9002943JSgc
 1    Code; primary care access health care education payments  (89
 2    Ill. Adm. Code 149.140); payments for capital, direct medical
 3    education,  indirect  medical education, certified registered
 4    nurse anesthetist, and kidney acquisition costs (89 Ill. Adm.
 5    Code 149.150(c)); uncompensated care payments (89  Ill.  Adm.
 6    Code  148.150(h));  trauma center payments (89 Ill. Adm. Code
 7    148.290(c)); rehabilitation hospital payments (89  Ill.  Adm.
 8    Code  148.290(d));  perinatal  center  payments (89 Ill. Adm.
 9    Code 148.290(e)); obstetrical care  payments  (89  Ill.  Adm.
10    Code 148.290(f)); targeted access payments (89 Ill. Adm. Code
11    148.290(g)); Medicaid high volume payments (89 Ill. Adm. Code
12    148.290(h));  and  outpatient indigent volume adjustments (89
13    Ill. Adm. Code 148.140(b)(5)).
14        (i)  For  any  hospital  eligible  for   the   adjustment
15    payments described in subsection (h), the Illinois Department
16    shall  maintain,  through  the  period  ending June 30, 1995,
17    reimbursement levels in accordance with statutes and rules in
18    effect on April 1, 1994.
19        (j)  Nothing contained in this Code in any way limits  or
20    otherwise  impairs  the  authority  or  power of the Illinois
21    Department to enter into a negotiated  contract  pursuant  to
22    this  Section  with  a managed health care entity, including,
23    but not limited to, a health maintenance  organization,  that
24    provides  for  termination  or  nonrenewal  of  the  contract
25    without  cause  upon  notice  as provided in the contract and
26    without a hearing.
27        (k)  Section  5-5.15  does  not  apply  to  the   program
28    developed and implemented pursuant to this Section.
29        (l)  The Illinois Department shall, by rule, define those
30    chronic or acute medical conditions of childhood that require
31    longer-term  treatment  and  follow-up  care.   The  Illinois
32    Department shall ensure that services required to treat these
33    conditions are available through a separate delivery system.
34        A  managed  health  care  entity  that contracts with the
                            -80-               LRB9002943JSgc
 1    Illinois Department may refer a child with medical conditions
 2    described in the rules adopted under this subsection directly
 3    to a children's hospital or  to  a  hospital,  other  than  a
 4    children's  hospital,  that is qualified to provide inpatient
 5    and outpatient  services  to  treat  those  conditions.   The
 6    Illinois    Department    shall    provide    fee-for-service
 7    reimbursement  directly  to  a  children's hospital for those
 8    services pursuant to Title 89 of the Illinois  Administrative
 9    Code,  Section  148.280(a),  at  a rate at least equal to the
10    rate in effect on March 31, 1994. For hospitals,  other  than
11    children's hospitals, that are qualified to provide inpatient
12    and  outpatient  services  to  treat  those  conditions,  the
13    Illinois  Department  shall  provide  reimbursement for those
14    services on a fee-for-service basis, at a rate at least equal
15    to the rate in effect for those other hospitals on March  31,
16    1994.
17        A  children's  hospital  shall be directly reimbursed for
18    all  services  provided  at  the  children's  hospital  on  a
19    fee-for-service basis pursuant to Title 89  of  the  Illinois
20    Administrative  Code,  Section 148.280(a), at a rate at least
21    equal to the rate in effect on  March  31,  1994,  until  the
22    later  of  (i)  implementation  of the integrated health care
23    program under this Section  and  development  of  actuarially
24    sound  capitation rates for services other than those chronic
25    or  acute  medical  conditions  of  childhood  that   require
26    longer-term  treatment  and  follow-up care as defined by the
27    Illinois  Department  in  the  rules   adopted   under   this
28    subsection or (ii) March 31, 1996.
29        Notwithstanding   anything  in  this  subsection  to  the
30    contrary, a managed health care  entity  shall  not  consider
31    sources  or methods of payment in determining the referral of
32    a child.   The  Illinois  Department  shall  adopt  rules  to
33    establish   criteria   for  those  referrals.   The  Illinois
34    Department by rule shall establish a  method  to  adjust  its
                            -81-               LRB9002943JSgc
 1    payments to managed health care entities in a manner intended
 2    to  avoid  providing  any  financial  incentive  to a managed
 3    health care entity to refer patients to  a  provider  who  is
 4    paid directly by the Illinois Department.
 5        (m)  Behavioral health services provided or funded by the
 6    Department  of Human Services, the Department of Children and
 7    Family  Services,  and  the  Illinois  Department  shall   be
 8    excluded from a benefit package.  Conditions of an organic or
 9    physical  origin or nature, including medical detoxification,
10    however,  may  not  be   excluded.    In   this   subsection,
11    "behavioral health services" means mental health services and
12    subacute  alcohol  and substance abuse treatment services, as
13    defined in the Illinois Alcoholism and Other Drug  Dependency
14    Act.   In this subsection, "mental health services" includes,
15    at a minimum, the following services funded by  the  Illinois
16    Department, the Department of Human Services (as successor to
17    the   Department   of   Mental   Health   and   Developmental
18    Disabilities),  or  the  Department  of  Children  and Family
19    Services: (i) inpatient hospital services, including  related
20    physician  services,  related  psychiatric interventions, and
21    pharmaceutical services provided  to  an  eligible  recipient
22    hospitalized   with   a   primary  diagnosis  of  psychiatric
23    disorder; (ii) outpatient mental health services  as  defined
24    and  specified  in  Title  59  of the Illinois Administrative
25    Code, Part 132; (iii)  any  other  outpatient  mental  health
26    services  funded  by  the Illinois Department pursuant to the
27    State   of   Illinois    Medicaid    Plan;    (iv)    partial
28    hospitalization;  and  (v) follow-up stabilization related to
29    any of those services.  Additional behavioral health services
30    may be excluded under this subsection as mutually  agreed  in
31    writing  by  the  Illinois  Department and the affected State
32    agency or agencies.  The exclusion of any  service  does  not
33    prohibit   the   Illinois   Department  from  developing  and
34    implementing demonstration projects for categories of persons
                            -82-               LRB9002943JSgc
 1    or services.  The Department of Children and Family  Services
 2    and  the  Department of Human Services shall each adopt rules
 3    governing the integration of managed care in the provision of
 4    behavioral health services. The State shall integrate managed
 5    care community networks  and  affiliated  providers,  to  the
 6    extent  practicable,  in  any  separate  delivery  system for
 7    mental health services.
 8        (n)  The  Illinois  Department  shall  adopt   rules   to
 9    establish  reserve  requirements  for  managed care community
10    networks,  as  required  by  subsection   (a),   and   health
11    maintenance  organizations  to protect against liabilities in
12    the event that a  managed  health  care  entity  is  declared
13    insolvent or bankrupt.  If a managed health care entity other
14    than  a  county  provider  is declared insolvent or bankrupt,
15    after liquidation and application of  any  available  assets,
16    resources,  and reserves, the Illinois Department shall pay a
17    portion of the amounts owed by the managed health care entity
18    to providers for services rendered  to  enrollees  under  the
19    integrated  health  care  program under this Section based on
20    the following schedule: (i) from April 1, 1995  through  June
21    30,  1998,  90%  of  the amounts owed; (ii) from July 1, 1998
22    through June 30, 2001, 80% of the  amounts  owed;  and  (iii)
23    from  July  1, 2001 through June 30, 2005, 75% of the amounts
24    owed.  The  amounts  paid  under  this  subsection  shall  be
25    calculated  based  on  the  total  amount owed by the managed
26    health care entity to providers  before  application  of  any
27    available  assets,  resources,  and reserves.  After June 30,
28    2005, the Illinois Department may not pay any amounts owed to
29    providers as a result of an insolvency  or  bankruptcy  of  a
30    managed  health  care entity occurring after that date.   The
31    Illinois Department is not obligated, however, to pay amounts
32    owed to a provider that has an ownership or  other  governing
33    interest  in the managed health care entity.  This subsection
34    applies only to managed health care entities and the services
                            -83-               LRB9002943JSgc
 1    they provide under the integrated health care  program  under
 2    this Section.
 3        (o)  Notwithstanding   any  other  provision  of  law  or
 4    contractual agreement to the contrary, providers shall not be
 5    required to accept from any other third party payer the rates
 6    determined  or  paid  under  this  Code   by   the   Illinois
 7    Department,  managed health care entity, or other health care
 8    delivery system for services provided to recipients.
 9        (p)  The Illinois Department  may  seek  and  obtain  any
10    necessary   authorization   provided  under  federal  law  to
11    implement the program, including the waiver  of  any  federal
12    statutes  or  regulations. The Illinois Department may seek a
13    waiver  of  the  federal  requirement   that   the   combined
14    membership  of  Medicare  and Medicaid enrollees in a managed
15    care community network may not exceed 75% of the managed care
16    community   network's   total   enrollment.    The   Illinois
17    Department shall not seek a waiver of  this  requirement  for
18    any  other  category  of  managed  health  care  entity.  The
19    Illinois Department shall not seek a waiver of the  inpatient
20    hospital  reimbursement methodology in Section 1902(a)(13)(A)
21    of Title XIX of the Social Security Act even if  the  federal
22    agency  responsible  for  administering  Title XIX determines
23    that Section 1902(a)(13)(A) applies to  managed  health  care
24    systems.
25        Notwithstanding  any other provisions of this Code to the
26    contrary, the Illinois Department  shall  seek  a  waiver  of
27    applicable federal law in order to impose a co-payment system
28    consistent  with  this  subsection  on  recipients of medical
29    services under Title XIX of the Social Security Act  who  are
30    not  enrolled  in  a  managed health care entity.  The waiver
31    request submitted by the Illinois  Department  shall  provide
32    for co-payments of up to $0.50 for prescribed drugs and up to
33    $0.50 for x-ray services and shall provide for co-payments of
34    up  to  $10 for non-emergency services provided in a hospital
                            -84-               LRB9002943JSgc
 1    emergency department room and up  to  $10  for  non-emergency
 2    ambulance  services.  The purpose of the co-payments shall be
 3    to deter those recipients from  seeking  unnecessary  medical
 4    care.    Co-payments may not be used to deter recipients from
 5    seeking or accessing emergency services  or  other  necessary
 6    medical  care.   No  recipient  shall be required to pay more
 7    than a total of $150 per year in co-payments under the waiver
 8    request required by this subsection.  A recipient may not  be
 9    required  to  pay  more than $15 of any amount due under this
10    subsection in any one month.
11        Co-payments authorized under this subsection may  not  be
12    imposed when the care was necessitated by a medical condition
13    as  described in the definition of "emergency services" under
14    subsection (a) of  Section  5-5.04  true  medical  emergency.
15    Copayments for non-emergency services in a hospital emergency
16    department  shall  not be imposed retrospectively except upon
17    reasonable determination by the Illinois Department that  (1)
18    the emergency services claimed were never performed or (2) an
19    emergency  medical  screening  examination was performed on a
20    patient who personally sought emergency services knowing that
21    he or she did not have an emergency condition  or  necessity,
22    and   who   did  not  in  fact  require  emergency  services.
23    Co-payments may not be  imposed  for  any  of  the  following
24    classifications of services:
25             (1)  Services  furnished to person under 18 years of
26        age.
27             (2)  Services furnished to pregnant women.
28             (3)  Services furnished to any individual who is  an
29        inpatient  in  a hospital, nursing facility, intermediate
30        care facility, or  other  medical  institution,  if  that
31        person is required to spend for costs of medical care all
32        but  a  minimal  amount of his or her income required for
33        personal needs.
34             (4)  Services furnished to a person who is receiving
                            -85-               LRB9002943JSgc
 1        hospice care.
 2        Co-payments authorized under this subsection shall not be
 3    deducted from or reduce  in  any  way  payments  for  medical
 4    services  from  the  Illinois  Department  to  providers.  No
 5    provider may deny those services to  an  individual  eligible
 6    for  services  based on the individual's inability to pay the
 7    co-payment.
 8        Recipients  who  are  subject  to  co-payments  shall  be
 9    provided notice, in plain and clear language, of  the  amount
10    of the co-payments, the circumstances under which co-payments
11    are  exempted,  the circumstances under which co-payments may
12    be assessed, and their manner of collection.
13        The  Illinois  Department  shall  establish  a   Medicaid
14    Co-Payment Council to assist in the development of co-payment
15    policies  for  the  medical assistance program.  The Medicaid
16    Co-Payment Council shall also have jurisdiction to develop  a
17    program  to  provide financial or non-financial incentives to
18    Medicaid recipients in order to encourage recipients to  seek
19    necessary  health  care.  The Council shall be chaired by the
20    Director  of  the  Illinois  Department,  and  shall  have  6
21    additional members.  Two of the 6 additional members shall be
22    appointed by the Governor, and one each shall be appointed by
23    the President of the  Senate,  the  Minority  Leader  of  the
24    Senate,  the Speaker of the House of Representatives, and the
25    Minority Leader of the House of Representatives.  The Council
26    may be convened and make recommendations upon the appointment
27    of a majority of its members.  The Council shall be appointed
28    and convened no later than September 1, 1994 and shall report
29    its  recommendations  to  the  Director   of   the   Illinois
30    Department  and the General Assembly no later than October 1,
31    1994.  The chairperson of the Council  shall  be  allowed  to
32    vote  only  in  the  case  of  a tie vote among the appointed
33    members of the Council.
34        The Council shall be guided by the  following  principles
                            -86-               LRB9002943JSgc
 1    as  it considers recommendations to be developed to implement
 2    any approved waivers that the Illinois Department  must  seek
 3    pursuant to this subsection:
 4             (1)  Co-payments  should not be used to deter access
 5        to adequate medical care.
 6             (2)  Co-payments should be used to reduce fraud.
 7             (3)  Co-payment  policies  should  be  examined   in
 8        consideration   of  other  states'  experience,  and  the
 9        ability  of  successful  co-payment  plans   to   control
10        unnecessary  or  inappropriate  utilization  of  services
11        should be promoted.
12             (4)  All    participants,    both   recipients   and
13        providers,  in  the  medical  assistance   program   have
14        responsibilities to both the State and the program.
15             (5)  Co-payments are primarily a tool to educate the
16        participants  in  the  responsible  use  of  health  care
17        resources.
18             (6)  Co-payments  should  not  be  used  to penalize
19        providers.
20             (7)  A  successful  medical  program  requires   the
21        elimination of improper utilization of medical resources.
22        The  integrated  health care program, or any part of that
23    program,  established  under  this   Section   may   not   be
24    implemented  if matching federal funds under Title XIX of the
25    Social Security Act are not available for  administering  the
26    program.
27        The  Illinois  Department shall submit for publication in
28    the Illinois Register the name, address, and telephone number
29    of the individual to whom a request may  be  directed  for  a
30    copy  of  the request for a waiver of provisions of Title XIX
31    of the Social  Security  Act  that  the  Illinois  Department
32    intends to submit to the Health Care Financing Administration
33    in  order to implement this Section.  The Illinois Department
34    shall  mail  a  copy  of  that  request  for  waiver  to  all
                            -87-               LRB9002943JSgc
 1    requestors at least 16 days before filing  that  request  for
 2    waiver with the Health Care Financing Administration.
 3        (q)  After  the  effective  date  of  this  Section,  the
 4    Illinois  Department  may  take  all planning and preparatory
 5    action necessary to implement this  Section,  including,  but
 6    not  limited  to,  seeking requests for proposals relating to
 7    the  integrated  health  care  program  created  under   this
 8    Section.
 9        (r)  In  order  to  (i)  accelerate  and  facilitate  the
10    development  of  integrated  health care in contracting areas
11    outside counties with populations in excess of 3,000,000  and
12    counties  adjacent  to  those  counties and (ii) maintain and
13    sustain the high quality of education and residency  programs
14    coordinated  and  associated  with  local area hospitals, the
15    Illinois Department may develop and implement a demonstration
16    program for managed care community networks owned,  operated,
17    or  governed  by  State-funded medical schools.  The Illinois
18    Department shall prescribe by rule the  criteria,  standards,
19    and procedures for effecting this demonstration program.
20        (s)  (Blank).
21        (t)  On  April 1, 1995 and every 6 months thereafter, the
22    Illinois Department shall report to the Governor and  General
23    Assembly  on  the  progress  of  the  integrated  health care
24    program  in  enrolling  clients  into  managed  health   care
25    entities.   The  report  shall indicate the capacities of the
26    managed health care entities with which the State  contracts,
27    the  number of clients enrolled by each contractor, the areas
28    of the State in which managed care options do not exist,  and
29    the  progress  toward  meeting  the  enrollment  goals of the
30    integrated health care program.
31        (u)  The Illinois Department may implement  this  Section
32    through the use of emergency rules in accordance with Section
33    5-45  of  the  Illinois  Administrative  Procedure  Act.  For
34    purposes of that Act, the adoption of rules to implement this
                            -88-               LRB9002943JSgc
 1    Section is deemed an emergency and necessary for  the  public
 2    interest, safety, and welfare.
 3    (Source:  P.A.  88-554,  eff.  7-26-94;  89-21,  eff. 7-1-95;
 4    89-507, eff. 7-1-97; 89-673, eff. 8-14-96; revised 8-26-96.)
 5        Section 95.  No acceleration or delay.   Where  this  Act
 6    makes changes in a statute that is represented in this Act by
 7    text  that  is not yet or no longer in effect (for example, a
 8    Section represented by multiple versions), the  use  of  that
 9    text  does  not  accelerate or delay the taking effect of (i)
10    the changes made by this Act or (ii) provisions derived  from
11    any other Public Act.
12        Section  99.  Effective date.  This Act takes effect upon
13    becoming law.

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