State of Illinois
91st General Assembly
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[ Engrossed ][ Senate Amendment 001 ]

91_SB0436

 
                                              LRB9102556JSpcB

 1        AN  ACT  to  amend  the Illinois Insurance Code by adding
 2    Sections 143.32, 143.33,  and  143.34  and  changing  Section
 3    357.9.

 4        Be  it  enacted  by  the People of the State of Illinois,
 5    represented in the General Assembly:

 6        Section 5.  The Illinois Insurance  Code  is  amended  by
 7    adding  Sections  143.32,  143.33,  and  143.34  and changing
 8    Section 357.9 as follows:

 9        (215 ILCS 5/143.32 new)
10        Sec. 143.32.  Timely  payment  of  health  care  services
11    claims.
12        (a)  An insurer, health maintenance organization, managed
13    care  plan,  preferred  provider  organization,  third  party
14    administrator, and any entity responsible for payment under a
15    contract  shall provide payment for all claims or indemnities
16    payable  under  the  terms  of  the  policy  within  30  days
17    following receipt of due proof of loss. Payment shall be made
18    directly to the insured or enrollee who submits the claim  or
19    to  the  health care professional or health care provider who
20    submits a claim on behalf of an insured or enrollee.
21        (b)  Failure to pay within such period shall entitle  the
22    insured  or  health care professional or health care provider
23    who submitted the claim to interest at the  rate  of  9%  per
24    year  from the 30th day after receipt of proof of loss to the
25    date of late payment, provided  that  interest  amounting  to
26    less than $1 need not be paid.

27        (215 ILCS 5/143.33 new)
28        Sec.  143.33.  Timely  payment  of  periodic payments for
29    health care services.
30        (a)  This Section applies to insurers, health maintenance
 
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 1    organizations,  managed  care   plans,   preferred   provider
 2    organizations,  third  party  administrators,  and  any other
 3    entity responsible for payment under a contract  (hereinafter
 4    referred to as "payors") that provide periodic payments, such
 5    as  capitation  payments,  to physicians licensed to practice
 6    medicine in all its branches to  provide  medical  or  health
 7    care services for insureds or enrollees.
 8        (b)  A  payor  shall make periodic payments in accordance
 9    with subsection  (c).   Failure  to  make  periodic  payments
10    within  the  period of time specified in subsection (c) shall
11    entitle the physician licensed to practice  medicine  in  all
12    its  branches to interest at the rate of 9% per year from the
13    date payment was  due  to  the  date  of  the  late  payment,
14    provided  that interest amounting to less than $1 need not be
15    paid.
16        (c)  A payor shall  provide  the  physician  licensed  to
17    practice  medicine in all its branches with written notice of
18    the assignment or selection as a physician by an  insured  or
19    enrollee  within  30  working  days  after  the  selection or
20    assignment.  No later than the 45th day following the date an
21    insured or enrollee has  selected  or  has  been  assigned  a
22    physician,  a  payor  shall  begin  periodic  payment  of the
23    required amounts to the insured's or enrollee's physician  or
24    physician's  designee calculated from the time of enrollment.
25    If selection or assignment does not  occur  at  the  time  of
26    enrollment,  periodic payments that would otherwise have been
27    paid to a physician had selection been made shall be reserved
28    as a payable periodic payments until the time as  an  insured
29    or enrollee makes a selection.

30        (215 ILCS 5/143.34 new)
31        Sec.  143.34.  Resolution of health care services payment
32    disputes. The Department shall establish by rule a process to
33    resolve payment disputes between insurers, health maintenance
 
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 1    organizations,  managed  care   plans,   preferred   provider
 2    organizations,  third  party  administrators,  and  any other
 3    entity responsible for payment under a  contract  and  health
 4    care professionals and health care providers.

 5        (215 ILCS 5/357.9) (from Ch. 73, par. 969.9)
 6        Sec.  357.9.   "TIME  OF  PAYMENT  OF CLAIMS: Indemnities
 7    payable under this policy for any loss other  than  loss  for
 8    which  this policy provides any periodic payment will be paid
 9    immediately upon receipt of due written proof of  such  loss.
10    Subject to due written proof of loss, all accrued indemnities
11    for loss for which this policy provides periodic payment will
12    be  paid  . (insert period for payment which must not be less
13    frequently than monthly) and  any  balance  remaining  unpaid
14    upon  the  termination of liability, will be paid immediately
15    upon  receipt  of  due  written  proof."   All   claims   and
16    indemnities  payable  under the terms of a policy of accident
17    and health insurance shall be paid within 30  days  following
18    receipt by the insurer of due proof of loss. Payment shall be
19    made  directly  to  the  insured  or enrollee who submits the
20    claim or to the  health  care  professional  or  health  care
21    provider  who  submits  a  claim  on  behalf of an insured or
22    enrollee. Failure to pay within such period shall entitle the
23    insured or health care professional or health  care  provider
24    to interest at the rate of 9 per cent per annum from the 30th
25    day  after  receipt of such proof of loss to the date of late
26    payment, provided that interest amounting to  less  than  one
27    dollar need not be paid.
28        The  requirements  of  this  Section  shall  apply to any
29    policy of accident and health insurance delivered, issued for
30    delivery, renewed or amended on or after 180  days  following
31    the  effective  date  of  this  amendatory  Act  of 1985. The
32    requirements of this Section also shall specifically apply to
33    any group policy of dental insurance only, delivered,  issued
 
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 1    for  delivery,  renewed  or  amended  on  or  after  180 days
 2    following the effective date of this amendatory Act of 1987.
 3    (Source: P.A. 85-395.)

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

 6        (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
 7        Sec. 5-3.  Insurance Code provisions.
 8        (a)  Health Maintenance Organizations shall be subject to
 9    the  provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
10    141.3, 143, 143.32, 143.33, 143.34, 143c, 147, 148, 149, 151,
11    152, 153, 154, 154.5, 154.6,  154.7,  154.8,  155.04,  355.2,
12    356m,  356v,  356w,  356x,  367i, 401, 401.1, 402, 403, 403A,
13    408, 408.2, 409,  412,  444,  and  444.1,  paragraph  (c)  of
14    subsection  (2)  of  Section 367, and Articles VIII 1/2, XII,
15    XII 1/2, XIII, XIII  1/2,  XXV,  and  XXVI  of  the  Illinois
16    Insurance Code.
17        (b)  For  purposes of the Illinois Insurance Code, except
18    for Sections 444 and 444.1 and Articles XIII  and  XIII  1/2,
19    Health  Maintenance Organizations in the following categories
20    are deemed to be "domestic companies":
21             (1)  a  corporation  authorized  under  the   Dental
22        Service  Plan  Act or the Voluntary Health Services Plans
23        Act;
24             (2)  a corporation organized under the laws of  this
25        State; or
26             (3)  a  corporation  organized  under  the  laws  of
27        another  state, 30% or more of the enrollees of which are
28        residents of this State, except a corporation subject  to
29        substantially  the  same  requirements  in  its  state of
30        organization as is a  "domestic  company"  under  Article
31        VIII 1/2 of the Illinois Insurance Code.
32        (c)  In  considering  the merger, consolidation, or other
 
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 1    acquisition of control of a Health  Maintenance  Organization
 2    pursuant to Article VIII 1/2 of the Illinois Insurance Code,
 3             (1)  the  Director  shall give primary consideration
 4        to the continuation of  benefits  to  enrollees  and  the
 5        financial  conditions  of the acquired Health Maintenance
 6        Organization after the merger,  consolidation,  or  other
 7        acquisition of control takes effect;
 8             (2)(i)  the  criteria specified in subsection (1)(b)
 9        of Section 131.8 of the Illinois Insurance Code shall not
10        apply and (ii) the Director, in making his  determination
11        with  respect  to  the  merger,  consolidation,  or other
12        acquisition of control, need not take  into  account  the
13        effect  on  competition  of the merger, consolidation, or
14        other acquisition of control;
15             (3)  the Director shall have the  power  to  require
16        the following information:
17                  (A)  certification by an independent actuary of
18             the   adequacy   of   the  reserves  of  the  Health
19             Maintenance Organization sought to be acquired;
20                  (B)  pro forma financial statements  reflecting
21             the combined balance sheets of the acquiring company
22             and the Health Maintenance Organization sought to be
23             acquired  as of the end of the preceding year and as
24             of a date 90 days prior to the acquisition, as  well
25             as   pro   forma   financial  statements  reflecting
26             projected combined  operation  for  a  period  of  2
27             years;
28                  (C)  a  pro  forma  business  plan detailing an
29             acquiring  party's  plans  with   respect   to   the
30             operation  of  the  Health  Maintenance Organization
31             sought to be acquired for a period of not less  than
32             3 years; and
33                  (D)  such  other  information  as  the Director
34             shall require.
 
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 1        (d)  The provisions of Article VIII 1/2 of  the  Illinois
 2    Insurance  Code  and this Section 5-3 shall apply to the sale
 3    by any health maintenance organization of greater than 10% of
 4    its enrollee population  (including  without  limitation  the
 5    health  maintenance organization's right, title, and interest
 6    in and to its health care certificates).
 7        (e)  In considering any management  contract  or  service
 8    agreement  subject to Section 141.1 of the Illinois Insurance
 9    Code, the Director (i) shall, in  addition  to  the  criteria
10    specified  in  Section  141.2 of the Illinois Insurance Code,
11    take into account the effect of the  management  contract  or
12    service   agreement   on  the  continuation  of  benefits  to
13    enrollees  and  the  financial  condition   of   the   health
14    maintenance  organization to be managed or serviced, and (ii)
15    need not take into  account  the  effect  of  the  management
16    contract or service agreement on competition.
17        (f)  Except  for  small employer groups as defined in the
18    Small Employer Rating, Renewability  and  Portability  Health
19    Insurance  Act and except for medicare supplement policies as
20    defined in Section 363 of  the  Illinois  Insurance  Code,  a
21    Health  Maintenance Organization may by contract agree with a
22    group or other enrollment unit to effect  refunds  or  charge
23    additional premiums under the following terms and conditions:
24             (i)  the  amount  of, and other terms and conditions
25        with respect to, the refund or additional premium are set
26        forth in the group or enrollment unit contract agreed  in
27        advance of the period for which a refund is to be paid or
28        additional  premium  is to be charged (which period shall
29        not be less than one year); and
30             (ii)  the amount of the refund or additional premium
31        shall  not  exceed  20%   of   the   Health   Maintenance
32        Organization's profitable or unprofitable experience with
33        respect  to  the  group  or other enrollment unit for the
34        period (and, for  purposes  of  a  refund  or  additional
 
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 1        premium,  the profitable or unprofitable experience shall
 2        be calculated taking into account a pro rata share of the
 3        Health  Maintenance  Organization's  administrative   and
 4        marketing  expenses,  but shall not include any refund to
 5        be made or additional premium to be paid pursuant to this
 6        subsection (f)).  The Health Maintenance Organization and
 7        the  group  or  enrollment  unit  may  agree   that   the
 8        profitable  or  unprofitable experience may be calculated
 9        taking into account the refund period and the immediately
10        preceding 2 plan years.
11        The  Health  Maintenance  Organization  shall  include  a
12    statement in the evidence of coverage issued to each enrollee
13    describing the possibility of a refund or additional premium,
14    and upon request of any group or enrollment unit, provide  to
15    the group or enrollment unit a description of the method used
16    to   calculate  (1)  the  Health  Maintenance  Organization's
17    profitable experience with respect to the group or enrollment
18    unit and the resulting refund to the group or enrollment unit
19    or (2) the  Health  Maintenance  Organization's  unprofitable
20    experience  with  respect to the group or enrollment unit and
21    the resulting additional premium to be paid by the  group  or
22    enrollment unit.
23        In   no  event  shall  the  Illinois  Health  Maintenance
24    Organization  Guaranty  Association  be  liable  to  pay  any
25    contractual obligation of an insolvent  organization  to  pay
26    any refund authorized under this Section.
27    (Source: P.A.   89-90,  eff.  6-30-95;  90-25,  eff.  1-1-98;
28    90-177, eff.  7-23-97;  90-372,  eff.  7-1-98;  90-583,  eff.
29    5-29-98;  90-655,  eff. 7-30-98; 90-741, eff. 1-1-99; revised
30    9-8-98.)

31        Section 15.  The Limited Health Service Organization  Act
32    is amended by changing Section 4003 as follows:
 
                            -8-               LRB9102556JSpcB
 1        (215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
 2        Sec.  4003.  Illinois Insurance Code provisions.  Limited
 3    health  service  organizations  shall  be  subject   to   the
 4    provisions  of  Sections  133,  134,  137, 140, 141.1, 141.2,
 5    141.3, 143, 143.32, 143.33, 143.34, 143c, 147, 148, 149, 151,
 6    152, 153, 154, 154.5, 154.6,  154.7,  154.8,  155.04,  355.2,
 7    356v,  401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444,
 8    and 444.1 and Articles VIII 1/2, XII,  XII  1/2,  XIII,  XIII
 9    1/2,  XXV,  and  XXVI  of  the  Illinois Insurance Code.  For
10    purposes of the Illinois Insurance Code, except for  Sections
11    444  and 444.1 and Articles XIII and XIII 1/2, limited health
12    service organizations in the following categories are  deemed
13    to be domestic companies:
14             (1)  a corporation under the laws of this State; or
15             (2)  a  corporation  organized  under  the  laws  of
16        another  state, 30% of more of the enrollees of which are
17        residents of this State, except a corporation subject  to
18        substantially  the  same  requirements  in  its  state of
19        organization as is a domestic company under Article  VIII
20        1/2 of the Illinois Insurance Code.
21    (Source: P.A.  90-25,  eff.  1-1-98;  90-583,  eff.  5-29-98;
22    90-655, eff. 7-30-98.)

23        Section  20.   The Voluntary Health Services Plans Act is
24    amended by changing Section 10 as follows:

25        (215 ILCS 165/10) (from Ch. 32, par. 604)
26        Sec.  10.  Application  of  Insurance  Code   provisions.
27    Health  services plan corporations and all persons interested
28    therein  or  dealing  therewith  shall  be  subject  to   the
29    provisions  of  Article  XII  1/2 and Sections 3.1, 133, 140,
30    143, 143.32, 143.33, 143.34, 143c,  149,  354,  355.2,  356r,
31    356t,  356u,  356v,  356w, 356x, 367.2, 401, 401.1, 402, 403,
32    403A, 408, 408.2, and 412, and paragraphs  (7)  and  (15)  of
 
                            -9-               LRB9102556JSpcB
 1    Section 367 of the Illinois Insurance Code.
 2    (Source: P.A.  89-514,  eff.  7-17-96;  90-7,  eff.  6-10-97;
 3    90-25,  eff.  1-1-98;  90-655,  eff.  7-30-98;  90-741,  eff.
 4    1-1-99.)

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