State of Illinois
92nd General Assembly
Legislation

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92_SB1848

 
                                              LRB9211442JSpcB

 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           ARTICLE XIXE. 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 notice of  the  terms  and  conditions  of
14    individual  or  group health care professional or health care
15    provider service contracts.

16        (215 ILCS 5/351E-10 new)
17        Sec. 351E-10.  Definitions.
18        "Company" means a person that establishes,  operates,  or
19    maintains   a   network,  panel,  or  group  of  health  care
20    professionals   or   health   care   providers   where    the
21    professionals  or providers have entered into an agreement or
22    contract with the company to provide health care services  to
23    enrollees, beneficiaries, or insureds.
24        "Contract"  means any written agreement between a company
25    and a health care professional or health  care  provider  for
26    the provision of health care services.
27        "Covered  services"  means  health care services that are
28    eligible for coverage under the company's product, policy, or
 
                            -2-               LRB9211442JSpcB
 1    benefit plan.
 2        "Health care professional" means  a  physician,  dentist,
 3    podiatric  physician, nurse, optometrist, physical therapist,
 4    clinical psychologist, pharmacist,  or  other  individual  or
 5    group,   appropriately   licensed   to  provide  health  care
 6    services.
 7        "Health care provider"  means  any  hospital,  ambulatory
 8    surgical treatment center, pharmacy, long term care facility,
 9    or  other  facility  or  group, that is licensed or otherwise
10    authorized to deliver  health  care  services.  "Health  care
11    provider" also includes independent practice associations and
12    physician-hospital organizations.
13        "Health  care  services"  means  any services included in
14    furnishing to any  individual  medical  or  dental  care  and
15    hospitalization  incident  to  the  furnishing  of medical or
16    dental care, as well as the furnishing to any  individual  of
17    any   other   services   for   the   purpose  of  preventing,
18    alleviating, curing, or healing human illness, condition,  or
19    injury, including home health and pharmaceutical services and
20    devices.
21        "Material"  means  a fact or situation that is not merely
22    technical  in  nature  and  results  or  could  result  in  a
23    substantial change in the situation.
24        "Person"  means  an   individual,   group,   corporation,
25    association,  partnership,  limited  liability  company, sole
26    proprietorship, or any other legal entity.
27        "Physician" means a person  licensed  under  the  Medical
28    Practice Act of 1987.

29        (215 ILCS 5/351E-15 new)
30        Sec.  351E-15.  Fairness  in  contracting  procedures.  A
31    company  shall  provide  a  complete  copy  of  the  proposed
32    contract  with  all attachments and exhibits. The health care
33    professional or health care  provider  shall  be  allowed  at
 
                            -3-               LRB9211442JSpcB
 1    least  30  days  to review the complete contract before being
 2    required to sign the contract.

 3        (215 ILCS 5/351E-20 new)
 4        Sec. 351E-20.  All products clauses. A company shall  not
 5    require  a  health care professional or health care provider,
 6    as a condition of  participating  in  one  of  the  company's
 7    networks,  to  sign  a  contract  to  provide  services under
 8    another of the company's networks.  Copayments,  coinsurance,
 9    deductibles,  and  covered  services may vary from patient to
10    patient within a network.

11        (215 ILCS 5/351E-25 new)
12        Sec. 351E-25.  Payment rates.
13        (a)  A company shall  make  payments  to  a  health  care
14    professional  or  health care provider in accordance with its
15    contract with the professional or provider. A company may not
16    make  payments  under  a  contract   to   the   health   care
17    professional  or health care provider based upon rates agreed
18    to by the professional or provider in another contract.
19        (b)  A company  may  not  reduce  or  attempt  to  reduce
20    payment  to  a professional or provider for services provided
21    using an amount, discount, or payment  reduction  formula  or
22    methodology that the company and the professional or provider
23    have  not directly and specifically agreed upon and stated in
24    the written contract as applying to the service in question.
25        (c)  The company must provide a method  or  process  that
26    allows  the professional or provider to determine the payment
27    amounts for each health care service  prior  to  signing  the
28    contract  and, if the health care professional or health care
29    provider is not paid on  a  service  by  service  basis,  the
30    amounts  payable  and terms of payment under that alternative
31    payment system.
 
                            -4-               LRB9211442JSpcB
 1        (215 ILCS 5/351E-30 new)
 2        Sec.  351E-30.  Payment   responsibility.   The   company
 3    contracting  with the health care professional or health care
 4    provider is directly  responsible  for  the  payment  to  the
 5    health  care  professional  or  health  care  provider at the
 6    payment rates specified in  the  contract  for  any  services
 7    provided  and  payable  under  the  contract. Nothing in this
 8    Section shall prohibit  the  company  from  contracting  with
 9    another person to process payments on its behalf.

10        (215 ILCS 5/351E-35 new)
11        Sec.  351E-35.  Payment advice. A company shall provide a
12    payment statement to a health  care  professional  or  health
13    care  provider that identifies the disposition of each claim,
14    including services billed, the contracted payment rates,  the
15    actual  payment,  if any, for the services billed, the reason
16    for any payment reduction to the  claim  submitted,  and  the
17    reason for any denial of the claim.   Nothing in this Section
18    requires  a  company  to  pay  health  care professionals and
19    health  care  providers  on  a  service  by  service   basis.
20    Companies   may  enter  into  capitation  and  other  payment
21    arrangements.  Health  care  professionals  and  health  care
22    providers  shall be allowed to collect any difference between
23    the amount paid by the company and the amount due  under  the
24    contract between the company and the health care professional
25    or health care provider.

26        (215 ILCS 5/351E-40 new)
27        Sec.  351E-40.  Proposed changes. A company shall provide
28    a health care professional or health  care  provider  written
29    notice  of  any proposed material changes to the contract and
30    shall provide the professional or provider the opportunity to
31    terminate the contract prior to the  effective  date  of  the
32    proposed  change.  A  company  shall provide at least 90 days
 
                            -5-               LRB9211442JSpcB
 1    notice of any proposed change.

 2        (215 ILCS 5/351E-45 new)
 3        Sec. 351E-45.  Unilateral terms prohibited. A company may
 4    not  require  a  health  care  professional  or  health  care
 5    provider to accept unilateral terms  concerning  termination,
 6    indemnification,  or  arbitration. These provisions shall all
 7    apply  equally  to  both  the   company   and   health   care
 8    professional  or  health  care  provider.  Immediate  written
 9    notice  of  termination  may  be  provided when a health care
10    professional's or provider's license has been disciplined  by
11    a State licensing board.

12        (215 ILCS 5/351E-50 new)
13        Sec.   351E-50.  Noncovered  services.  A  company  shall
14    acknowledge that a health care professional and  health  care
15    provider   may  bill  and  collect  payments  for  noncovered
16    services  from   enrollees,   beneficiaries,   insureds,   or
17    patients.

18        (215 ILCS 5/351E-55 new)
19        Sec. 351E-55.  Changing service codes.
20        (a)  A  company  may  not  change a service code (current
21    procedural  terminology  (CPT),  current  dental  terminology
22    (CDT), ICD-9-CM, diagnosis related groups  (DRGs),  or  other
23    system)  submitted  by the health care professional or health
24    care provider without prior notification,  consultation,  and
25    agreement. The company shall determine the manner in which it
26    adjudicates   claims.   Notwithstanding  the  preceding,  the
27    company may correct errors in submitted claims  that  prevent
28    the  claims  from  being  processed and adjudicated, provided
29    that the company informs the professional or provider of  the
30    corrections  and  provides  the professional or provider with
31    the opportunity to appeal any corrections.
 
                            -6-               LRB9211442JSpcB
 1        (b)  Nothing in this Section is  intended  to  require  a
 2    company  to  pay  specific  codes.  The company may limit the
 3    service codes it pays for based upon factors  including,  but
 4    not  limited  to,  the  bundling  of  services  and  multiple
 5    surgeries.  In any case, the company must comply with Section
 6    351E-35.

 7        (215 ILCS 5/351E-60 new)
 8        Sec.  351E-60.  Billing  for  covered services. A company
 9    shall  allow  a  health  care  professional  or  health  care
10    provider to submit an initial claim  for  services  within  6
11    months,  and  any final claim within one year, after the date
12    services were rendered.

13        (215 ILCS 5/351E-65 new)
14        Sec. 351E-65.  Recoupments. Any attempt by a  company  to
15    recoup  payments  shall  be  initiated by providing a written
16    explanation of any proposed  recoupment  including,  but  not
17    limited to, the name of the patient, the date of service, the
18    service  code, and the payment amount, the details concerning
19    the reasons for the recoupment, and  an  explanation  of  the
20    appeal  process.  A  health  care professional or health care
21    provider shall be  given  30  days  to  appeal  the  proposed
22    recoupment   or  to  repay  the  recoupment  amount.  If  the
23    professional or  provider  chooses  to  appeal  the  proposed
24    recoupment  and,  upon  appeal,  the  proposed  recoupment is
25    determined to be appropriate, the  professional  or  provider
26    must  pay  the  recoupment  within  30  days of receiving the
27    notice of the final appeal's decision. If the professional or
28    provider does not make any required recoupment payment within
29    these time frames, the company may offset future payments  to
30    effectuate  the  recoupment.  Company  attempts to recoup any
31    payments shall be initiated within 24 months after  the  date
32    of  service,  except  in an instance in which the health care
 
                            -7-               LRB9211442JSpcB
 1    professional or health care provider has  been  convicted  of
 2    insurance fraud.

 3        (215 ILCS 5/351E-70 new)
 4        Sec.  351E-70.  Silent  networks.  A  company  may  rent,
 5    lease, or otherwise assign its network to another person. The
 6    company   shall  provide  notification  to  the  health  care
 7    professionals and health care providers when the  company  is
 8    renting,  leasing,  or  otherwise  assigning  its  network to
 9    another person in those instances when the rental, lease,  or
10    assignment will result in any material difference in how care
11    is  approved or paid. The notification shall include the name
12    and address of the  person  renting,  leasing,  or  otherwise
13    utilizing  the  network  and  the  procedures  for submitting
14    claims.
15        A person  renting,  leasing,  or  otherwise  utilizing  a
16    company's  network  may rent, lease, or use either the entire
17    network or any portion thereof.
18        The person renting, leasing,  or  otherwise  utilizing  a
19    company's  network  or any portion thereof shall agree to use
20    the payment rates agreed to  in  the  contracts  between  the
21    company and the professionals and providers.
22        The  person  renting,  leasing,  or otherwise utilizing a
23    company's network or any portion thereof  shall  comply  with
24    Sections  351E-30,  351E-35,  351E-50,  351E-60, and 351E-65,
25    which may not be waived.

26        (215 ILCS 5/351E-75 new)
27        Sec. 351E-75.  Prohibition of waiver of requirements  and
28    prohibitions.  A company contract or policy, either formal or
29    informal, shall not contain any provision,  term,  condition,
30    or  procedure that limits, restricts, or otherwise waives any
31    of the  requirements  and  prohibitions  set  forth  in  this
32    Article.  Any  provision  purporting to make such a waiver is
 
                            -8-               LRB9211442JSpcB
 1    void and unenforceable.

 2        (215 ILCS 5/351E-80 new)
 3        Sec.  351E-80.  Employment  contracts.  Nothing  in  this
 4    Article shall  be  construed  to  mean  that  a  health  care
 5    professional  employment  contract  is  addressed  under this
 6    Article.

 7        (215 ILCS 5/351E-85 new)
 8        Sec. 351E-85. Rulemaking. The Director shall  issue  such
 9    rules  as  he  or she shall deem necessary to administer this
10    Article.

11        (215 ILCS 5/351E-90 new)
12        Sec. 351E-90.  Enforcement. The Department shall  enforce
13    the  provisions  of  this Article pursuant to the enforcement
14    powers granted it by law. The Department  is  hereby  granted
15    specific  authority to issue a cease and desist order, impose
16    a civil penalty, or otherwise penalize persons violating this
17    Article.

18        (215 ILCS 5/351E-95 new)
19        Sec. 351E-95.  Applicability.  This  Article  applies  to
20    policies and contracts amended, delivered, issued, or renewed
21    on  or after the effective date of this amendatory Act of the
22    92nd General Assembly.  This  Article  does  not  diminish  a
23    company's  duties and responsibilities under other federal or
24    State law or rules promulgated thereunder.

25        Section 90.  The Health Maintenance Organization  Act  is
26    amended by changing Section 4-6.5 as follows:

27        (215 ILCS 125/4-6.5)
28        Sec. 4-6.5.  Required health benefits; Illinois Insurance
 
                            -9-               LRB9211442JSpcB
 1    Code  requirements.   A  health  maintenance  organization is
 2    subject to  the  provisions  of  Article  XIXE  and  Sections
 3    155.37,  356t,  356u,  and  356z.1  of the Illinois Insurance
 4    Code.
 5    (Source: P.A. 92-130, eff.  7-20-01;  92-440,  eff.  8-17-01;
 6    revised 9-12-01.)

 7        Section  99.  Effective  date.  This Act takes effect 180
 8    days after becoming law.
 
                            -10-              LRB9211442JSpcB
 1                                INDEX
 2               Statutes amended in order of appearance
 3    215 ILCS 5/Art. XIXE heading new
 4    215 ILCS 5/351E-1 new
 5    215 ILCS 5/351E-5 new
 6    215 ILCS 5/351E-10 new
 7    215 ILCS 5/351E-15 new
 8    215 ILCS 5/351E-20 new
 9    215 ILCS 5/351E-25 new
10    215 ILCS 5/351E-30 new
11    215 ILCS 5/351E-35 new
12    215 ILCS 5/351E-40 new
13    215 ILCS 5/351E-45 new
14    215 ILCS 5/351E-50 new
15    215 ILCS 5/351E-55 new
16    215 ILCS 5/351E-60 new
17    215 ILCS 5/351E-65 new
18    215 ILCS 5/351E-70 new
19    215 ILCS 5/351E-75 new
20    215 ILCS 5/351E-80 new
21    215 ILCS 5/351E-85 new
22    215 ILCS 5/351E-90 new
23    215 ILCS 5/351E-95 new
24    215 ILCS 125/4-6.5

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