SB2965 96TH GENERAL ASSEMBLY

LRB096 16719 RPM 32011 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB2965

Introduced 2/3/2010, by Sen. Michael Noland

SYNOPSIS AS INTRODUCED:

215 ILCS 5/368g new

Amends the Illinois Insurance Code. Sets forth provisions concerning restrictions on payment and reimbursement. Provides that a contracting entity, insurer, or third-party administrator may not grant access to a provider's health care services and contractual discounts pursuant to a provider network contract or reimburse a physician or other provider on a discounted fee basis for covered services that are provided to an insured unless certain conditions are met. Provides that a party to a preferred provider contract may not sell, lease, or otherwise transfer information regarding the payment or reimbursement terms of the contract without notification to and the authority of the other contracting parties. Sets forth requirements for a contracting entity, insurer, or third-party administrator that grants access to a provider's health care services and contractual discounts pursuant to a provider network contract. Provides that the Department of Insurance shall enforce the provisions concerning restrictions on payment and reimbursement. Sets forth penalties for violations of the Act.

A BILL FOR

AN ACT concerning insurance.

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

Section 5. The Illinois Insurance Code is amended by adding Section 368g as follows:

(215 ILCS 5/368g new)

Sec. 368g. Restrictions on payment and reimbursement.

(a) A contracting entity, an insurer, or third-party administrator licensed to do business in this State may not grant access to a provider's health care services and contractual discounts pursuant to a provider network contract or reimburse a physician or other practitioner, institutional provider, or organization of physicians and health care providers on a discounted fee basis for covered services that are provided to an insured unless:

(1) the provider network contract specifically states that the contracting entity may enter into an agreement with a third party allowing the third party to obtain the contracting entity, insurer, or third-party administrator's rights and responsibilities under the provider network contract as if the third party were the contracting entity, an insurer, or third-party administrator; any changes shall require a prior-approval signature from the provider; however, the provider may refuse to comply with the assignment without consequence and without material change to the original contract with the contracting entity;

(2) the third party accessing the provider network contract is contractually obligated to comply with all applicable terms, contracted rates, limitations, and conditions of the provider network contract; and

(3) the insurer or third-party administrator has agreed to provide coverage for those health care services under the health insurance policy.

(b) A party to a preferred provider contract, including a contract with a preferred provider organization, may not sell, lease, or otherwise transfer information regarding the payment or reimbursement terms of the contract without prior adequate notification to and the express authority of the other contracting parties.

(c) A contracting entity, insurer, or third-party administrator who grants access to a provider's health care services and contractual discounts pursuant to a provider network contract shall do all of the following:

(1) Identify and provide to the provider, at the time a provider network contract is entered into with a provider, a written or electronic list of all third parties to whom the contracting entity has or will grant access to the provider's health care services and contractual discounts pursuant to a provider network contract.

(2) Maintain a web site or other readily available mechanism, such as a toll-free telephone number, through which a provider may obtain a listing, updated at least every 90 days, of the third parties with whom the contracting entity or another third party has executed contracts to grant access to the provider's health care services and contractual discounts pursuant to a provider network contract.

(3) Provide the third party with sufficient information regarding the provider network contract to enable the third party to comply with all relevant terms, limitations, and conditions of the provider network contract.

(4) Require that the third party who contracts with the contracting entity, insurer, or third-party administrator to gain access to the provider network contract identify the source of the contractual discount taken by the third party on each remittance advice or explanation of payment form furnished to a health care provider when the discount is pursuant to the contracting entity's provider network contract.

(5) Notify the third party who contracts with the contracting entity to gain access to the provider network contract of the termination of the provider network contract no later than 7 days prior to the effective date of the final termination of the provider network contract. The notice can be provided through any reasonable means, including, but not limited to, written notice, electronic communication, or an update to an electronic database or other provider listing.

(6) Require those parties are by contract eligible to claim the right to access a provider's discounted rate to cease claiming entitlement to those rates or other contracted rights or obligations for services rendered after termination of the provider network contract.

(7) Have both the contracting entity's name and the contracting third party's name included on all member identification cards and require that the card be presented at the time of service.

(8) Attach a complete payer list to the contract and require the plan to provide notice of changes to the list.

(9) Define "payer" clearly to identify the entity obligated to pay and include a statement that the provider has a right to take legal action against that entity.

(10) Have a provision in the contract requiring the forfeiture of all discounts that do not comply with the preferred provider organization agreement.

(11) Include a contract clause that allows the provider to audit the preferred provider organization's records that are related to patient activity.

(d) A contracting entity, an insurer, a third-party administrator, any third party accessing the provider network contract, or a party to a preferred provider contract that violates this Section shall be guilty of a business offense and may be fined not less than $200 and not more than $5,000 for each offense. The Department shall enforce the provisions of this Section pursuant to the enforcement powers granted to it by law. The Department is hereby granted specific authority to issue a cease and desist order, fine, or otherwise penalize the contracting entity, the insurer, third-party administrator, any third party accessing the provider network contract, or a party to a preferred provider contract that violates this Section. The Department shall adopt reasonable rules to enforce compliance with this Section.