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91_SB1511enr
SB1511 Enrolled LRB9111306JSpc
1 AN ACT relating to payment for certain services, amending
2 named Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The State Employees Group Insurance Act of
6 1971 is amended by changing Section 6.12 as follows:
7 (5 ILCS 375/6.12)
8 Sec. 6.12. Payment for services. The program of health
9 benefits is subject to the provisions of Section 368a, 356z,
10 356y of the Illinois Insurance Code.
11 (Source: P.A. 91-605, eff. 12-14-99; revised 10-18-99.)
12 Section 10. The Illinois Insurance Code is amended by
13 renumbering Section 356y, as added by Public Act 91-605, and
14 changing Section 370a as follows:
15 (215 ILCS 5/356y)
16 Sec. 368a. 356y. 356z. Timely payment for health care
17 services.
18 (a) This Section applies to insurers, health maintenance
19 organizations, managed care plans, health care plans,
20 preferred provider organizations, third party administrators,
21 independent practice associations, and physician-hospital
22 organizations (hereinafter referred to as "payors") that
23 provide periodic payments, which are payments not requiring a
24 claim, bill, capitation encounter data, or capitation
25 reconciliation reports, such as prospective capitation
26 payments, to health care professionals and health care
27 facilities to provide medical or health care services for
28 insureds or enrollees.
29 (1) A payor shall make periodic payments in
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1 accordance with item (3). Failure to make periodic
2 payments within the period of time specified in item (3)
3 shall entitle the health care professional or health care
4 facility to interest at the rate of 9% per year from the
5 date payment was required to be made to the date of the
6 late payment, provided that interest amounting to less
7 than $1 need not be paid. Any required interest payments
8 shall be made within 30 days after the payment.
9 (2) When a payor requires selection of a health
10 care professional or health care facility, the selection
11 shall be completed by the insured or enrollee no later
12 than 30 days after enrollment. The payor shall provide
13 written notice of this requirement to all insureds and
14 enrollees. Nothing in this Section shall be construed to
15 require a payor to select a health care professional or
16 health care facility for an insured or enrollee.
17 (3) A payor shall provide the health care
18 professional or health care facility with notice of the
19 selection as a health care professional or health care
20 facility by an insured or enrollee and the effective date
21 of the selection within 60 calendar days after the
22 selection. No later than the 60th day following the date
23 an insured or enrollee has selected a health care
24 professional or health care facility or the date that
25 selection becomes effective, whichever is later, or in
26 cases of retrospective enrollment only, 30 days after
27 notice by an employer to the payor of the selection, a
28 payor shall begin periodic payment of the required
29 amounts to the insured's or enrollee's health care
30 professional or health care facility, or the designee of
31 either, calculated from the date of selection or the date
32 the selection becomes effective, whichever is later. All
33 subsequent payments shall be made in accordance with a
34 monthly periodic cycle.
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1 (b) Notwithstanding any other provision of this Section,
2 independent practice associations and physician-hospital
3 organizations shall begin making periodic payment of the
4 required amounts within 60 days after an insured or enrollee
5 has selected a health care professional or health care
6 facility or the date that selection becomes effective,
7 whichever is later. Before January 1, 2001, subsequent
8 periodic payments shall be made in accordance with a 60-day
9 periodic schedule, and after December 31, 2000, subsequent
10 periodic payments shall be made in accordance with a monthly
11 periodic schedule.
12 Notwithstanding any other provision of this Section,
13 independent practice associations and physician-hospital
14 organizations shall make all other payments for health
15 services within 60 days after receipt of due proof of loss
16 received before January 1, 2001 and within 30 days after
17 receipt of due proof of loss received after December 31,
18 2000. Independent practice associations and
19 physician-hospital organizations shall notify the insured,
20 insured's assignee, health care professional, or health care
21 facility of any failure to provide sufficient documentation
22 for a due proof of loss within 30 days after receipt of the
23 claim for health services.
24 Failure to pay within the required time period shall
25 entitle the payee to interest at the rate of 9% per year from
26 the date the payment is due to the date of the late payment,
27 provided that interest amounting to less that $1 need not be
28 paid. Any required interest payments shall be made within 30
29 days after the payment.
30 (c) All insurers, health maintenance organizations,
31 managed care plans, health care plans, preferred provider
32 organizations, and third party administrators shall ensure
33 that all claims and indemnities concerning health care
34 services other than for any periodic payment shall be paid
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1 within 30 days after receipt of due written proof of such
2 loss. An insured, insured's assignee, health care
3 professional, or health care facility shall be notified of
4 any known failure to provide sufficient documentation for a
5 due proof of loss within 30 days after receipt of the claim
6 for health care services. Failure to pay within such period
7 shall entitle the payee to interest at the rate of 9% per
8 year from the 30th day after receipt of such proof of loss to
9 the date of late payment, provided that interest amounting to
10 less than one dollar need not be paid. Any required interest
11 payments shall be made within 30 days after the payment.
12 (d) The Department shall enforce the provisions of this
13 Section pursuant to the enforcement powers granted to it by
14 law.
15 (e) The Department is hereby granted specific authority
16 to issue a cease and desist order, fine, or otherwise
17 penalize independent practice associations and
18 physician-hospital organizations that violate this Section.
19 The Department shall adopt reasonable rules to enforce
20 compliance with this Section by independent practice
21 associations and physician-hospital organizations.
22 (Source: P.A. 91-605, eff. 12-14-99; revised 10-18-99.)
23 (215 ILCS 5/370a) (from Ch. 73, par. 982a)
24 Sec. 370a. Assignability of Accident and Health
25 Insurance.
26 No provision of the Illinois Insurance Code, or any other
27 law, prohibits an insured under any policy of accident and
28 health insurance or any other person who may be the owner of
29 any rights under such policy from making an assignment of all
30 or any part of his rights and privileges under the policy
31 including but not limited to the right to designate a
32 beneficiary and to have an individual policy issued in
33 accordance with its terms. Subject to the terms of the policy
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1 or any contract relating thereto, an assignment by an insured
2 or by any other owner of rights under the policy, made before
3 or after the effective date of this amendatory Act of 1969 is
4 valid for the purpose of vesting in the assignee, in
5 accordance with any provisions included therein as to the
6 time at which it is effective, all rights and privileges so
7 assigned. However, such assignment is without prejudice to
8 the company on account of any payment it makes or individual
9 policy it issues before receipt of notice of the assignment.
10 This amendatory Act of 1969 acknowledges, declares and
11 codifies the existing right of assignment of interests under
12 accident and health insurance policies. If an enrollee or
13 insured of an insurer, health maintenance organization,
14 managed care plan, health care plan, preferred provider
15 organization, or third party administrator assigns a claim to
16 a health care professional or health care facility, then
17 payment shall be made directly to the health care
18 professional or health care facility including any interest
19 required under Section 368a, 356z, 356y of this Code for
20 failure to pay claims within 30 days after receipt by the
21 insurer of due proof of loss. Nothing in this Section shall
22 be construed to prevent any parties from reconciling
23 duplicate payments.
24 (Source: P.A. 91-605, eff. 12-14-99; revised 10-18-99.)
25 Section 15. The Health Maintenance Organization Act is
26 amended by changing Section 5-3 as follows:
27 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
28 Sec. 5-3. Insurance Code provisions.
29 (a) Health Maintenance Organizations shall be subject to
30 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
31 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
32 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
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1 356y, 356z, 367i, 368a, 401, 401.1, 402, 403, 403A, 408,
2 408.2, 409, 412, 444, and 444.1, paragraph (c) of subsection
3 (2) of Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2,
4 XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
5 (b) For purposes of the Illinois Insurance Code, except
6 for Sections 444 and 444.1 and Articles XIII and XIII 1/2,
7 Health Maintenance Organizations in the following categories
8 are deemed to be "domestic companies":
9 (1) a corporation authorized under the Dental
10 Service Plan Act or the Voluntary Health Services Plans
11 Act;
12 (2) a corporation organized under the laws of this
13 State; or
14 (3) a corporation organized under the laws of
15 another state, 30% or more of the enrollees of which are
16 residents of this State, except a corporation subject to
17 substantially the same requirements in its state of
18 organization as is a "domestic company" under Article
19 VIII 1/2 of the Illinois Insurance Code.
20 (c) In considering the merger, consolidation, or other
21 acquisition of control of a Health Maintenance Organization
22 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
23 (1) the Director shall give primary consideration
24 to the continuation of benefits to enrollees and the
25 financial conditions of the acquired Health Maintenance
26 Organization after the merger, consolidation, or other
27 acquisition of control takes effect;
28 (2)(i) the criteria specified in subsection (1)(b)
29 of Section 131.8 of the Illinois Insurance Code shall not
30 apply and (ii) the Director, in making his determination
31 with respect to the merger, consolidation, or other
32 acquisition of control, need not take into account the
33 effect on competition of the merger, consolidation, or
34 other acquisition of control;
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1 (3) the Director shall have the power to require
2 the following information:
3 (A) certification by an independent actuary of
4 the adequacy of the reserves of the Health
5 Maintenance Organization sought to be acquired;
6 (B) pro forma financial statements reflecting
7 the combined balance sheets of the acquiring company
8 and the Health Maintenance Organization sought to be
9 acquired as of the end of the preceding year and as
10 of a date 90 days prior to the acquisition, as well
11 as pro forma financial statements reflecting
12 projected combined operation for a period of 2
13 years;
14 (C) a pro forma business plan detailing an
15 acquiring party's plans with respect to the
16 operation of the Health Maintenance Organization
17 sought to be acquired for a period of not less than
18 3 years; and
19 (D) such other information as the Director
20 shall require.
21 (d) The provisions of Article VIII 1/2 of the Illinois
22 Insurance Code and this Section 5-3 shall apply to the sale
23 by any health maintenance organization of greater than 10% of
24 its enrollee population (including without limitation the
25 health maintenance organization's right, title, and interest
26 in and to its health care certificates).
27 (e) In considering any management contract or service
28 agreement subject to Section 141.1 of the Illinois Insurance
29 Code, the Director (i) shall, in addition to the criteria
30 specified in Section 141.2 of the Illinois Insurance Code,
31 take into account the effect of the management contract or
32 service agreement on the continuation of benefits to
33 enrollees and the financial condition of the health
34 maintenance organization to be managed or serviced, and (ii)
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1 need not take into account the effect of the management
2 contract or service agreement on competition.
3 (f) Except for small employer groups as defined in the
4 Small Employer Rating, Renewability and Portability Health
5 Insurance Act and except for medicare supplement policies as
6 defined in Section 363 of the Illinois Insurance Code, a
7 Health Maintenance Organization may by contract agree with a
8 group or other enrollment unit to effect refunds or charge
9 additional premiums under the following terms and conditions:
10 (i) the amount of, and other terms and conditions
11 with respect to, the refund or additional premium are set
12 forth in the group or enrollment unit contract agreed in
13 advance of the period for which a refund is to be paid or
14 additional premium is to be charged (which period shall
15 not be less than one year); and
16 (ii) the amount of the refund or additional premium
17 shall not exceed 20% of the Health Maintenance
18 Organization's profitable or unprofitable experience with
19 respect to the group or other enrollment unit for the
20 period (and, for purposes of a refund or additional
21 premium, the profitable or unprofitable experience shall
22 be calculated taking into account a pro rata share of the
23 Health Maintenance Organization's administrative and
24 marketing expenses, but shall not include any refund to
25 be made or additional premium to be paid pursuant to this
26 subsection (f)). The Health Maintenance Organization and
27 the group or enrollment unit may agree that the
28 profitable or unprofitable experience may be calculated
29 taking into account the refund period and the immediately
30 preceding 2 plan years.
31 The Health Maintenance Organization shall include a
32 statement in the evidence of coverage issued to each enrollee
33 describing the possibility of a refund or additional premium,
34 and upon request of any group or enrollment unit, provide to
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1 the group or enrollment unit a description of the method used
2 to calculate (1) the Health Maintenance Organization's
3 profitable experience with respect to the group or enrollment
4 unit and the resulting refund to the group or enrollment unit
5 or (2) the Health Maintenance Organization's unprofitable
6 experience with respect to the group or enrollment unit and
7 the resulting additional premium to be paid by the group or
8 enrollment unit.
9 In no event shall the Illinois Health Maintenance
10 Organization Guaranty Association be liable to pay any
11 contractual obligation of an insolvent organization to pay
12 any refund authorized under this Section.
13 (Source: P.A. 90-25, eff. 1-1-98; 90-177, eff. 7-23-97;
14 90-372, eff. 7-1-98; 90-583, eff. 5-29-98; 90-655, eff.
15 7-30-98; 90-741, eff. 1-1-99; 91-357, eff. 7-29-99; 91-406,
16 eff. 1-1-00; 91-549, eff. 8-14-99; 91-605, eff. 12-14-99;
17 revised 10-18-99.)
18 Section 20. The Limited Health Service Organization Act
19 is amended by changing Section 4003 as follows:
20 (215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
21 Sec. 4003. Illinois Insurance Code provisions. Limited
22 health service organizations shall be subject to the
23 provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
24 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
25 154.6, 154.7, 154.8, 155.04, 355.2, 356v, 368a, 356z, 356y,
26 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and
27 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII
28 1/2, XXV, and XXVI of the Illinois Insurance Code. For
29 purposes of the Illinois Insurance Code, except for Sections
30 444 and 444.1 and Articles XIII and XIII 1/2, limited health
31 service organizations in the following categories are deemed
32 to be domestic companies:
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1 (1) a corporation under the laws of this State; or
2 (2) a corporation organized under the laws of
3 another state, 30% of more of the enrollees of which are
4 residents of this State, except a corporation subject to
5 substantially the same requirements in its state of
6 organization as is a domestic company under Article VIII
7 1/2 of the Illinois Insurance Code.
8 (Source: P.A. 90-25, eff. 1-1-98; 90-583, eff. 5-29-98;
9 90-655, eff. 7-30-98; 91-549, eff. 8-14-99; 91-605, eff.
10 12-14-99; revised 10-18-99.)
11 Section 25. The Voluntary Health Services Plans Act is
12 amended by changing Section 10 as follows:
13 (215 ILCS 165/10) (from Ch. 32, par. 604)
14 Sec. 10. Application of Insurance Code provisions.
15 Health services plan corporations and all persons interested
16 therein or dealing therewith shall be subject to the
17 provisions of Articles IIA and XII 1/2 and Sections 3.1, 133,
18 140, 143, 143c, 149, 354, 355.2, 356r, 356t, 356u, 356v,
19 356w, 356x, 356y, 356z, 367.2, 368a, 401, 401.1, 402, 403,
20 403A, 408, 408.2, and 412, and paragraphs (7) and (15) of
21 Section 367 of the Illinois Insurance Code.
22 (Source: P.A. 90-7, eff. 6-10-97; 90-25, eff. 1-1-98; 90-655,
23 eff. 7-30-98; 90-741, eff. 1-1-99; 91-406, eff. 1-1-00;
24 91-549, eff. 8-14-99; 91-605, eff. 12-14-99; revised
25 10-18-99.)
26 Section 99. Effective date. This Act takes effect upon
27 becoming law.
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