State of Illinois
92nd General Assembly
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[ House Amendment 001 ]


92_HB2115

 
                                              LRB9205489JSpcB

 1        AN ACT concerning health care service contracts.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The Illinois Insurance  Code  is  amended  by
 5    adding Article XIXE as follows:

 6        (215 ILCS 5/Art. XIXE heading new)
 7                  HEALTH CARE SERVICES CONTRACTING

 8        (215 ILCS 5/351E-1 new)
 9        Sec.  351E-1.  Short title.  This Article may be cited as
10    the Fairness in Health Care Services Contracting Law.

11        (215 ILCS 5/351E-5 new)
12        Sec. 351E-5.  Purpose. The purpose of this Article is  to
13    provide  reasonable  standardization  and  simplification  of
14    terms  and  conditions  of  individual  or  group health care
15    professional or health care provider service contracts with a
16    company to facilitate understanding and  comparisons  and  to
17    eliminate provisions contained in individual or group service
18    contracts  that  may  be  unfair,  deceptive,  misleading, or
19    unreasonably confusing in connection with the  administrative
20    requirements  or  services  covered and with reimbursement or
21    payment for those services.

22        (215 ILCS 5/351E-10 new)
23        Sec. 351E-10.  Definitions.
24        "Company" means a company that establishes, operates,  or
25    maintains   a   network,  panel,  or  group  of  health  care
26    professionals or health care  providers  that  have   entered
27    into  an  agreement  or  contract with the company to provide
28    health care services.
 
                            -2-               LRB9205489JSpcB
 1        "Contract" means any written agreement for the  provision
 2    of health care services.
 3        "Health  care  professional"  means a physician, dentist,
 4    podiatric physician, nurse, optometrist, physical  therapist,
 5    clinical  psychologist,  pharmacist,  or other individual, or
 6    group,  appropriately  licensed  to   provide   health   care
 7    services.
 8        "Health  care  provider"  means  a  hospital,  ambulatory
 9    surgical treatment center, pharmacy, long term care facility,
10    or  other  facility  or  group, that is licensed or otherwise
11    authorized to deliver health  care  services.   "Health  care
12    provider" also includes independent practice associations and
13    physician-hospital organizations.
14        "Health  care  services"  means  any services included in
15    furnishing   to   any   individual     medical    care    and
16    hospitalization  incident  to the furnishing of medical care,
17    as well as furnishing to any individual  any  other  services
18    for  the  purpose  of  preventing,  alleviating,  curing,  or
19    healing  human  illness, condition, or injury, including home
20    health and pharmaceutical services and products.
21        "Person"  means  an   individual,   group,   corporation,
22    association,  partnership,  limited  liability  company, sole
23    proprietorship, or any other legal entity.
24        "Physician" means a person  licensed  under  the  Medical
25    Practice Act of 1987.

26        (215 ILCS 5/351E-15 new)
27        Sec.    351E-15.  Unfair,    misleading,   or   deceptive
28    contracting acts or practices.
29        (a)  Contracts with a company for the provision of health
30    care services shall fully and fairly disclose the  terms  and
31    conditions   of   the   contracts.   Unfair,  misleading,  or
32    deceptive contracting acts or practices are unlawful.
33        (b)  A contract term, condition, or policy, either formal
 
                            -3-               LRB9205489JSpcB
 1    or informal,  may  not  mandate  or  require  a  health  care
 2    professional  or  health  care  provider,  as  a condition of
 3    participation, as a condition of higher reimbursement, or  as
 4    a   condition   of   continuation   of   participation  on  a
 5    professional or provider panel for one plan  or  contract  of
 6    the  company,  to  also  serve  on  another  professional  or
 7    provider  panel  or  accept reimbursement for another plan or
 8    contract of the company.
 9        (c)  A contract term, condition, or policy, either formal
10    or  informal,  may  not  mandate  or  require   health   care
11    professionals  or  health  care  providers  to  automatically
12    accept  from  the  company  any  payment amounts for services
13    agreed to in contract with any other companies or  for  other
14    than those payment amounts stated in the contract between the
15    company  and  the  health  care  professional  or health care
16    provider.
17        (d)  A contract term, or  condition,  or  policy,  either
18    formal  or  informal,  may  not  reduce  or attempt to reduce
19    payment to a health care professional or health care provider
20    for services provided using an amount, discount,  or  payment
21    reduction  formula  or  methodology  that the company and the
22    professional or provider have not directly  and  specifically
23    agreed upon and stated in the written contract, signed by the
24    company  and  the  health  care  professional  or health care
25    provider, as  applying  to  the  service  in  question.   The
26    contract  shall  specify  the payment amount for each covered
27    service.  For each claim billed to the company  by  a  health
28    care  professional or health care provider, the company shall
29    provide a payment statement to the health  care  professional
30    or  health  care  provider that identifies the disposition of
31    each claim, including the contracted payment  rates  and  the
32    actual  payment  for  the services billed, if any, the reason
33    for any payment reduction to the  claim  submitted,  and  the
34    reason for denial of any claim.
 
                            -4-               LRB9205489JSpcB
 1        (e)  A contract term, condition, or policy, either formal
 2    or  informal,  may  not  authorize  a  company or health care
 3    professional or health care provider  to  unilaterally  amend
 4    any  term  or  condition  of  the  agreement.  Any unilateral
 5    change in payment, policy, or practice is void. Changes to  a
 6    contract  must  be  in writing and approved by all parties to
 7    the contract.
 8        (f)  A  contract  term,   condition,  or  policy,  either
 9    formal  or  informal,  may  not  authorize   a   company   to
10    unilaterally  offset or otherwise deduct or change in any way
11    payment amounts to a professional or  provider  to  reconcile
12    accounts.    A   requested  offset  must  include  a  written
13    explanation of the proposed offset,  the  details  concerning
14    the  reasons for the offset, and an explanation of the appeal
15    process.  An offset is only permissible if agreed to  by  the
16    professional  or  provider in writing or after the exhaustion
17    of an appeal process.
18        (g)  A contract term, condition, or policy, either formal
19    or informal, may not authorize or result  in  the  unilateral
20    alteration  of a service code (current procedural terminology
21    (CPT), current dental terminology (CDT), ICD-9-CM,  or  other
22    system)  submitted  by the health care professional or health
23    care provider without prior notification,  consultation,  and
24    agreement.
25        (h)  A contract term, condition, or policy, either formal
26    or  informal,  may  not be unilateral concerning termination,
27    indemnification, or arbitration.  These provisions shall  all
28    apply   equally   to   both   the  company  and  health  care
29    professional or health care provider.
30        (i)  A contract term, condition, or policy, either formal
31    or informal, may not fail to  include  and  fully  honor  the
32    required provisions in Section 351E-25.

33        (215 ILCS 5/351E-20 new)
 
                            -5-               LRB9205489JSpcB
 1        Sec.  351E-20.  Fairness  in  contracting  procedures.  A
 2    company  shall  provide  a  complete  copy  of  the  proposed
 3    contract   complete   with   all   attachments  and  exhibits
 4    including, but not limited  to,  service  code  standards  at
 5    least  30 days before the deadline for signing a contract.  A
 6    company may not require signature of a contract  without  all
 7    the attachments and exhibits included.

 8        (215 ILCS 5/351E-25 new)
 9        Sec.  351E-25.  Required  contract  terms and conditions.
10    Company health care professional  and  health  care  provider
11    contracts  for the provision of health care services shall at
12    a minimum including all of the following provisions:
13             (1)  ""Medically necessary" and "medical  necessity"
14        means  health  care  services  that a prudent health care
15        professional or health care provider would provide  to  a
16        patient  for  the  purpose  of preventing, diagnosing, or
17        treating an illness, injury, disease, or its symptoms  in
18        a  manner  that  is  (a)  in  accordance  with  generally
19        accepted   standards   of   professional   practice;  (b)
20        clinically  appropriate  in  terms  of  type,  frequency,
21        extent, site, and duration; and (c) not primarily for the
22        convenience of the patient, health care professional,  or
23        health care provider.".
24             (2)  "The  company  is  directly responsible for the
25        payment to the health care professional  or  health  care
26        provider   for   covered  services  provided  under  this
27        contract.  Under no conditions shall the company make the
28        negotiated rates herein described available to any  party
29        other  than  the  company,  unless specially agreed to in
30        writing by the health care professional  or  health  care
31        provider in a separate distinct agreement.".
32             (3)  "Nothing in this contract shall be construed to
33        require  health care professional or health care provider
 
                            -6-               LRB9205489JSpcB
 1        to participate in all of company's plans as  a  condition
 2        of  participating in any individual plan or plans. "Plan"
 3        means an individual set of health  service  delivery  and
 4        compensation   procedures  offered  by  the  company,  or
 5        administered by the company, on behalf of a payor for the
 6        benefit of enrollees,  and  all  the  terms,  conditions,
 7        limitations,    exclusions,    benefits,    rights,   and
 8        obligations thereof to which company  and  enrollees  are
 9        subject.".
10             (4)  "Billing  for  Covered Services.  A health care
11        professional or health care provider shall submit a claim
12        to company and, in the event payment  is  required  under
13        the terms of this contract, company shall pay health care
14        professional or health care provider for covered services
15        rendered  to enrollees or insureds in accordance with the
16        terms of this contract.  A health  care  professional  or
17        health care provider shall arrange for all initial claims
18        for  covered services to be submitted to company within 6
19        months and any final claim should be submitted within one
20        year after the date services were rendered.  The  company
21        shall  notify the health care professional or health care
22        provider within 30 days of any reasons the  bills  cannot
23        be  processed.  A health care professional or health care
24        provider shall  submit  claims  electronically  or  on  a
25        billing  form  in  accordance  with Section 143.31 of the
26        Illinois Insurance Code.".
27             (5)  "Coding  for  Bills  Submitted.   The   company
28        hereby  agrees that claims submitted for covered services
29        rendered by the health care professional or  health  care
30        provider  shall  be  presumed to be coded correctly.  The
31        company may rebut this presumption with evidence  that  a
32        claim  fails  to  satisfy the standards set forth for the
33        billing code or in this contract.   If  any  exist,  this
34        contract   shall   include   a  detailed  description  of
 
                            -7-               LRB9205489JSpcB
 1        company's coding standards and  requirements,  including,
 2        but  not  limited  to,  the  rules on modifiers, multiple
 3        surgeries,  evaluation  and  management,   and   bundling
 4        policies   such  as  edits,  including  "correct  coding"
 5        initiatives.  The company  may  not  adjust  the  billing
 6        codes submitted by the health care professional or health
 7        care   provider  on  a  claim  without  first  requesting
 8        additional documentation to satisfy the coding  standards
 9        described  in  this  contract.  The company  must provide
10        adequate notice if it wishes to adjust a  code  and  must
11        allow sufficient time for the health care professional or
12        health  care  provider to submit additional documentation
13        or explanation.  The health care professional  or  health
14        care  provider  has  the  right  to  appeal  any  adverse
15        decision  regarding  the payment of claims based upon the
16        level of coding with rights and duties as  set  forth  in
17        this contract.  If the company reduces payment of a claim
18        in   contravention   of  this  section,  the  company  is
19        obligated to reimburse the health  care  professional  or
20        health  care  provider  for  the  full  amount  of billed
21        charges for the claim.".
22             (6)  "Noncovered  services.   The   company   hereby
23        acknowledges  that  all  health  care  professionals  and
24        health  care  providers may bill and collect payments for
25        noncovered services from enrollees or patients.".
26             (7)  "Recoupment.  Company attempts  to  recoup  any
27        reimbursements  shall  be  limited  to 6 months after the
28        reimbursement has been paid. Any such recoupment  efforts
29        must   provide  detailed  explanation  of  the  need  for
30        reimbursement including a line by line statement  of  the
31        patient  payments  being  recouped by date of service and
32        service code.".

33        (215 ILCS 5/351E-30 new)
 
                            -8-               LRB9205489JSpcB
 1        Sec. 351E-30.  Rulemaking.
 2        (a)  The Director shall issue such rules  as  he  or  she
 3    shall  deem  necessary  or  desirable  to  establish specific
 4    standards, including standards of full  and  fair  disclosure
 5    that sets forth the form and content of contracts in rules.
 6        (b)  The Director may issue rules that specify prohibited
 7    contractual  terms  or  conditions  or policies not otherwise
 8    specifically authorized by statute that in the opinion of the
 9    Director are unjust, unfair, or misleading.

10        (215 ILCS 5/351E-35 new)
11        Sec. 351E-35.  Statement of charges.
12        (a)  Whenever the Director finds that any  company  doing
13    business  in this State is engaging in any unfair or improper
14    practice and that a proceeding under this Code  would  be  in
15    the public interest, he or she shall issue and serve upon the
16    company  a  statement  of the charges and a notice of hearing
17    pursuant to Article XXIV. The notice shall set a hearing date
18    not less than 10 days after the date of the notice.
19        (b)  The failure of a company  to  appear  at  a  hearing
20    after  receipt  of  a  statement of the charges and notice of
21    hearing is considered a  waiver  of  notice  and  hearing,  a
22    stipulation  that  the  charges against the company are true,
23    immediately suspends the company's certificate  of  authority
24    for 30 days, and subjects the company to any other applicable
25    provisions  of  this  Code.    The  Director  must notify the
26    company of any suspension or action taken under this Section.

27        (215 ILCS 5/351E-40 new)
28        Sec. 351E-40.  Sanctions; judicial review.
29        (a)  If after a hearing pursuant to Section 351E-35,  the
30    Director  finds  that  company  has  engaged  in an unfair or
31    improper practice, he or she shall order the company to cease
32    and  desist  from  those  practices.  In  the   exercise   of
 
                            -9-               LRB9205489JSpcB
 1    reasonable discretion, the Director may suspend the company's
 2    certificate  of authority for a period not to exceed 6 months
 3    or impose a  civil  penalty  of  up  to  $250,000,  or  both.
 4    Pursuant  to  Section  401,  the  Director  shall  promulgate
 5    reasonable    rules    establishing    standards    for   the
 6    implementation of this Section.
 7        (b)  An order of the Director under Section is subject to
 8    judicial review under Section 407 of this Code.

 9        (215 ILCS 5/351E-45 new)
10        Sec. 351E-45.  Attorney fees.
11        (a)  If, in an action by or against a company,  there  is
12    in issue a violation of this Article or an unreasonable delay
13    in  settling  a  claim,  the  court  may allow as part of the
14    taxable costs in the action reasonable attorney  fees,  other
15    costs,  plus an amount not to exceed any one of the following
16    amounts:
17             (1)  25% of the amount which the court or jury finds
18        the party is entitled to  recover  against  the  company,
19        exclusive of all costs;
20             (2)  $25,000;
21             (3)  the excess of the amount that the court or jury
22        finds  the  party  is  entitled  to recover, exclusive of
23        costs, over the amount, if any, that the company  offered
24        to pay in settlement of the claim prior to the action.

25        (215 ILCS 5/351E-50 new)
26        Sec.  351E-50.  Purchase of health care services. Nothing
27    in this Article or any contract may deny  an  individual  the
28    right   to  purchase  any  health  care  services  with  that
29    individual's own funds.

30        (215 ILCS 5/351E-55 new)
31        Sec. 351E-55.  Prohibition of waiver of terms, conditions
 
                            -10-              LRB9205489JSpcB
 1    and prohibitions. A company contract or policy, either formal
 2    or informal, may not contain any provision, term,  condition,
 3    or  procedure that limits, restricts, or otherwise waives any
 4    of the terms, conditions, and prohibition set forth  in  this
 5    Article.   Any provision purporting to make  such a waiver is
 6    void and unenforceable.

 7        (215 ILCS 5/351E-60 new)
 8        Sec.  351E-60.  Employment  Contracts.  Nothing  in  this
 9    Article shall  be  construed  to  mean  that  a  health  care
10    professional  employment  contract  is  addressed  under this
11    Article.

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