093_SB1776sam001
LRB093 03728 JLS 12984 a
1 AMENDMENT TO SENATE BILL 1776
2 AMENDMENT NO. . Amend Senate Bill 1776 by replacing
3 the title with the following:
4 "AN ACT concerning insurance."; and
5 by replacing everything after the enacting clause with the
6 following:
7 "Section 5. The Illinois Insurance Code is amended by
8 adding Sections 368b, 368c, and 368e as follows:
9 (215 ILCS 5/368b new)
10 Sec. 368b. Prohibition of waiver of requirements and
11 prohibitions. No contract between an insurer, health
12 maintenance organization, independent practice association,
13 or physician hospital organization and a health care
14 professional or health care provider shall contain any
15 provision, term, or condition that limits, restricts, or
16 otherwise waives any of the requirements and prohibitions set
17 forth in this Article. Any provision purporting to make such
18 a waiver is void and unenforceable.
19 (215 ILCS 5/368c new)
20 Sec. 368c. Payments.
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1 (a) After the effective date of this amendatory Act of
2 the 93rd General Assembly, health care professionals or
3 health care providers offered a contract for signature by an
4 insurer, health maintenance organization, independent
5 practice association, or physician hospital organization to
6 be paid on a service by service basis shall, upon request, be
7 provided copies of the fee schedule or payment arrangement
8 and amounts for each health care service to be provided under
9 the contract prior to signing the contract. If the health
10 care professional or health care provider is not paid on a
11 service by service basis, the amounts payable and terms of
12 payment under that alternative payment system shall be
13 provided upon request.
14 (b) Payments under a contract with a health care
15 professional or health care provider shall not be changed
16 based upon rates agreed to by the professional or provider in
17 another contract with an insurer, health maintenance
18 organization, independent practice association, or physician
19 hospital organization. Nothing in this Section shall be
20 construed to prevent an insurer, health maintenance
21 organization, independent practice association, or physician
22 hospital organization from renegotiating its payments under a
23 contract with a health care professional or health care
24 provider.
25 (c) A payment statement shall be furnished to a health
26 care professional or health care provider paid on a service
27 by service basis for services provided under the contract
28 that identifies the disposition of each claim, including
29 services billed, the patient responsibility, if any, the
30 actual payment, if any, for the services billed by CPT or
31 other appropriate code, and the reason for any payment
32 reduction to the claim submitted, including any withholds,
33 and the reason for denial of any claim. Nothing in this
34 Section requires that a health care professional or health
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1 care provider be paid on a service by service basis. Payments
2 may be made based on capitation and other payment
3 arrangements. Health care professionals and health care
4 providers shall be allowed to collect co-payments,
5 co-insurance, deductibles, and payment for non-covered
6 services directly from patients except as otherwise provided
7 by law. An insurer, health maintenance organization,
8 independent practice association, or physician hospital
9 organization may pay for covered services either to a patient
10 directly or a non-participating health care professional or
11 health care provider.
12 (d) When a person presents a health care service
13 benefits information card, a health care professional or
14 health care provider shall inform the person if he or she is
15 not participating with the insurer, health maintenance
16 organization, independent practice organization, or physician
17 hospital organization issuing the card.
18 (215 ILCS 5/368e new)
19 Sec. 368e. Recoupments. Any attempt to recoup payment
20 made to a health care professional or health care provider by
21 an insurer, health maintenance organization, independent
22 practice association, or physician-hospital organization
23 shall be initiated by providing a written explanation of any
24 proposed recoupment, including, but not limited to, the name
25 of the patient, the date of service, the service code, and
26 the payment amount, the details concerning the reasons for
27 the recoupment, and an explanation of the appeal process. A
28 health care professional or health care provider shall be
29 given 60 days to appeal the proposed recoupment or to repay
30 the recoupment amount. If the health care professional or
31 health care provider chooses to appeal the proposed
32 recoupment and, upon appeal, the proposed recoupment is
33 determined to be appropriate, the health care professional or
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1 health care provider must pay the recoupment within 30 days
2 of receiving the notice of the final appeal's decision. If
3 the health care professional or health care provider does not
4 make any required recoupment payment within these time
5 frames, the insurer, health maintenance organization,
6 independent practice association, or physician hospital
7 organization may offset future payments to effectuate the
8 recoupment. Except in an instance in which the health care
9 professional or health care provider has been found guilty of
10 committing civil or criminal insurance fraud, no recoupment
11 of any payments may be initiated 24 months after the date the
12 moneys were paid, except when requested or initiated by a
13 governmental unit. It is not a recoupment when a health care
14 professional or health care provider is paid an amount
15 prospectively under a contract with an insurer, health
16 maintenance organization, independent practice association,
17 or physician hospital organization that includes a
18 retrospective reconciliation based on the services provided.
19 Section 10. The Health Maintenance Organization Act is
20 amended by changing Section 5-3 as follows:
21 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
22 Sec. 5-3. Insurance Code provisions.
23 (a) Health Maintenance Organizations shall be subject to
24 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
25 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
26 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
27 356y, 356z.2, 367i, 368a, 368b, 368c, 368e, 401, 401.1, 402,
28 403, 403A, 408, 408.2, 409, 412, 444, and 444.1, paragraph
29 (c) of subsection (2) of Section 367, and Articles IIA, VIII
30 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the
31 Illinois Insurance Code.
32 (b) For purposes of the Illinois Insurance Code, except
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1 for Sections 444 and 444.1 and Articles XIII and XIII 1/2,
2 Health Maintenance Organizations in the following categories
3 are deemed to be "domestic companies":
4 (1) a corporation authorized under the Dental
5 Service Plan Act or the Voluntary Health Services Plans
6 Act;
7 (2) a corporation organized under the laws of this
8 State; or
9 (3) a corporation organized under the laws of
10 another state, 30% or more of the enrollees of which are
11 residents of this State, except a corporation subject to
12 substantially the same requirements in its state of
13 organization as is a "domestic company" under Article
14 VIII 1/2 of the Illinois Insurance Code.
15 (c) In considering the merger, consolidation, or other
16 acquisition of control of a Health Maintenance Organization
17 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
18 (1) the Director shall give primary consideration
19 to the continuation of benefits to enrollees and the
20 financial conditions of the acquired Health Maintenance
21 Organization after the merger, consolidation, or other
22 acquisition of control takes effect;
23 (2)(i) the criteria specified in subsection (1)(b)
24 of Section 131.8 of the Illinois Insurance Code shall not
25 apply and (ii) the Director, in making his determination
26 with respect to the merger, consolidation, or other
27 acquisition of control, need not take into account the
28 effect on competition of the merger, consolidation, or
29 other acquisition of control;
30 (3) the Director shall have the power to require
31 the following information:
32 (A) certification by an independent actuary of
33 the adequacy of the reserves of the Health
34 Maintenance Organization sought to be acquired;
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1 (B) pro forma financial statements reflecting
2 the combined balance sheets of the acquiring company
3 and the Health Maintenance Organization sought to be
4 acquired as of the end of the preceding year and as
5 of a date 90 days prior to the acquisition, as well
6 as pro forma financial statements reflecting
7 projected combined operation for a period of 2
8 years;
9 (C) a pro forma business plan detailing an
10 acquiring party's plans with respect to the
11 operation of the Health Maintenance Organization
12 sought to be acquired for a period of not less than
13 3 years; and
14 (D) such other information as the Director
15 shall require.
16 (d) The provisions of Article VIII 1/2 of the Illinois
17 Insurance Code and this Section 5-3 shall apply to the sale
18 by any health maintenance organization of greater than 10% of
19 its enrollee population (including without limitation the
20 health maintenance organization's right, title, and interest
21 in and to its health care certificates).
22 (e) In considering any management contract or service
23 agreement subject to Section 141.1 of the Illinois Insurance
24 Code, the Director (i) shall, in addition to the criteria
25 specified in Section 141.2 of the Illinois Insurance Code,
26 take into account the effect of the management contract or
27 service agreement on the continuation of benefits to
28 enrollees and the financial condition of the health
29 maintenance organization to be managed or serviced, and (ii)
30 need not take into account the effect of the management
31 contract or service agreement on competition.
32 (f) Except for small employer groups as defined in the
33 Small Employer Rating, Renewability and Portability Health
34 Insurance Act and except for medicare supplement policies as
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1 defined in Section 363 of the Illinois Insurance Code, a
2 Health Maintenance Organization may by contract agree with a
3 group or other enrollment unit to effect refunds or charge
4 additional premiums under the following terms and conditions:
5 (i) the amount of, and other terms and conditions
6 with respect to, the refund or additional premium are set
7 forth in the group or enrollment unit contract agreed in
8 advance of the period for which a refund is to be paid or
9 additional premium is to be charged (which period shall
10 not be less than one year); and
11 (ii) the amount of the refund or additional premium
12 shall not exceed 20% of the Health Maintenance
13 Organization's profitable or unprofitable experience with
14 respect to the group or other enrollment unit for the
15 period (and, for purposes of a refund or additional
16 premium, the profitable or unprofitable experience shall
17 be calculated taking into account a pro rata share of the
18 Health Maintenance Organization's administrative and
19 marketing expenses, but shall not include any refund to
20 be made or additional premium to be paid pursuant to this
21 subsection (f)). The Health Maintenance Organization and
22 the group or enrollment unit may agree that the
23 profitable or unprofitable experience may be calculated
24 taking into account the refund period and the immediately
25 preceding 2 plan years.
26 The Health Maintenance Organization shall include a
27 statement in the evidence of coverage issued to each enrollee
28 describing the possibility of a refund or additional premium,
29 and upon request of any group or enrollment unit, provide to
30 the group or enrollment unit a description of the method used
31 to calculate (1) the Health Maintenance Organization's
32 profitable experience with respect to the group or enrollment
33 unit and the resulting refund to the group or enrollment unit
34 or (2) the Health Maintenance Organization's unprofitable
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1 experience with respect to the group or enrollment unit and
2 the resulting additional premium to be paid by the group or
3 enrollment unit.
4 In no event shall the Illinois Health Maintenance
5 Organization Guaranty Association be liable to pay any
6 contractual obligation of an insolvent organization to pay
7 any refund authorized under this Section.
8 (Source: P.A. 91-357, eff. 7-29-99; 91-406, eff. 1-1-00;
9 91-549, eff. 8-14-99; 91-605, eff. 12-14-99; 91-788, eff.
10 6-9-00; 92-764, eff. 1-1-03.)
11 Section 15. 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, 155.37, 354, 355.2, 356r, 356t, 356u,
19 356v, 356w, 356x, 356y, 356z.1, 356z.2, 367.2, 368a, 368b,
20 368c, 368e, 401, 401.1, 402, 403, 403A, 408, 408.2, and 412,
21 and paragraphs (7) and (15) of Section 367 of the Illinois
22 Insurance Code.
23 (Source: P.A. 91-406, eff. 1-1-00; 91-549, eff. 8-14-99;
24 91-605, eff. 12-14-99; 91-788, eff. 6-9-00; 92-130, eff.
25 7-20-01; 92-440, eff. 8-17-01; 92-651, eff. 7-11-02; 92-764,
26 eff. 1-1-03.)
27 Section 99. Effective date. This Act takes effect
28 December 1, 2003.".