093_HB1074enr HB1074 Enrolled LRB093 05507 JLS 05598 b 1 AN ACT in relation to insurance. 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 changing Section 370k and adding Sections 368b, 368c, 368d, 6 and 368e as follows: 7 (215 ILCS 5/368b new) 8 Sec. 368b. Contracting procedures. 9 (a) A health care professional or health care provider 10 offered a contract by an insurer, health maintenance 11 organization, independent practice association, or physician 12 hospital organization for signature after the effective date 13 of this amendatory Act of the 93rd General Assembly shall be 14 provided with a proposed health care professional or health 15 care provider services contract including, if any, exhibits 16 and attachments that the contract indicates are to be 17 attached. Within 35 days after a written request, the health 18 care professional or health care provider offered a contract 19 shall be given the opportunity to review and obtain a copy of 20 the following: a specialty-specific fee schedule sample based 21 on a minimum of the 50 highest volume fee schedule codes with 22 the rates applicable to the health care professional or 23 health care provider to whom the contract is offered, the 24 network provider administration manual, and a summary 25 capitation schedule, if payment is made on a capitation 26 basis. If 50 codes do not exist for a particular specialty, 27 the health care professional or health care provider offered 28 a contract shall be given the opportunity to review or obtain 29 a copy of a fee schedule sample with the codes applicable to 30 that particular specialty. This information may be provided 31 electronically. An insurer, health maintenance organization, HB1074 Enrolled -2- LRB093 05507 JLS 05598 b 1 independent practice association, or physician hospital 2 organization may substitute the fee schedule sample with a 3 document providing reference to the information needed to 4 calculate the fee schedule that is available to the public at 5 no charge and the percentage or conversion factor at which 6 the insurer, health maintenance organization, preferred 7 provider organization, independent practice association, or 8 physician hospital organization sets its rates. 9 (b) The fee schedule, the capitation schedule, and the 10 network provider administration manual constitute 11 confidential, proprietary, and trade secret information and 12 are subject to the provisions of the Illinois Trade Secrets 13 Act. The health care professional or health care provider 14 receiving such protected information may disclose the 15 information on a need to know basis and only to individuals 16 and entities that provide services directly related to the 17 health care professional's or health care provider's decision 18 to enter into the contract or keep the contract in force. Any 19 person or entity receiving or reviewing such protected 20 information pursuant to this Section shall not disclose the 21 information to any other person, organization, or entity, 22 unless the disclosure is requested pursuant to a valid court 23 order or required by a state or federal government agency. 24 Individuals or entities receiving such information from a 25 health care professional or health care provider as 26 delineated in this subsection are subject to the provisions 27 of the Illinois Trade Secrets Act. 28 (c) The health care professional or health care provider 29 shall be allowed at least 30 days to review the health care 30 professional or health care provider services contract, 31 including exhibits and attachments, if any, before signing. 32 The 30-day review period begins upon receipt of the health 33 care professional or health care provider services contract, 34 unless the information available upon request in subsection HB1074 Enrolled -3- LRB093 05507 JLS 05598 b 1 (a) is not included. If information is not included in the 2 professional services contract and is requested pursuant to 3 subsection (a), the 30-day review period begins on the date 4 of receipt of the information. Nothing in this subsection 5 shall prohibit a health care professional or health care 6 provider from signing a contract prior to the expiration of 7 the 30-day review period. 8 (d) The insurer, health maintenance organization, 9 independent practice association, or physician hospital 10 organization shall provide all contracted health care 11 professionals or health care providers with any changes to 12 the fee schedule provided under subsection (a) not later than 13 35 days after the effective date of the changes, unless such 14 changes are specified in the contract and the health care 15 professional or health care provider is able to calculate the 16 changed rates based on information in the contract and 17 information available to the public at no charge. For the 18 purposes of this subsection, "changes" means an increase or 19 decrease in the fee schedule referred to in subsection (a). 20 This information may be made available by mail, e-mail, 21 newsletter, website listing, or other reasonable method. Upon 22 request, a health care professional or health care provider 23 may request an updated copy of the fee schedule referred to 24 in subsection (a) every calendar quarter. 25 (e) Upon termination of a contract with an insurer, 26 health maintenance organization, independent practice 27 association, or physician hospital organization and at the 28 request of the patient, a health care professional or health 29 care provider shall transfer copies of the patient's medical 30 records. Any other provision of law notwithstanding, the 31 costs for copying and transferring copies of medical records 32 shall be assigned per the arrangements agreed upon, if any, 33 in the health care professional or health care provider 34 services contract. HB1074 Enrolled -4- LRB093 05507 JLS 05598 b 1 (215 ILCS 5/368c new) 2 Sec. 368c. Remittance advice and procedures. 3 (a) A remittance advice shall be furnished to a health 4 care professional or health care provider that identifies the 5 disposition of each claim. The remittance advice shall 6 identify the services billed; the patient responsibility, if 7 any; the actual payment, if any, for the services billed; and 8 the reason for any reduction to the amount for which the 9 claim was submitted. For any reductions to the amount for 10 which the claim was submitted, the remittance shall identify 11 any withholds and the reason for any denial or reduction. 12 A remittance advice for capitation or prospective payment 13 arrangements shall be furnished to a health care professional 14 or health care provider pursuant to a contract with an 15 insurer, health maintenance organization, independent 16 practice association, or physician hospital organization in 17 accordance with the terms of the contract. 18 (b) When health care services are provided by a 19 non-participating health care professional or health care 20 provider, an insurer, health maintenance organization, 21 independent practice association, or physician hospital 22 organization may pay for covered services either to a patient 23 directly or to the non-participating health care professional 24 or health care provider. 25 (c) When a person presents a benefits information card, 26 a health care professional or health care provider shall make 27 a good faith effort to inform the person if the health care 28 professional or health care provider has a participation 29 contract with the insurer, health maintenance organization, 30 or other entity identified on the card. 31 (215 ILCS 5/368d new) 32 Sec. 368d. Recoupments. 33 (a) A health care professional or health care provider HB1074 Enrolled -5- LRB093 05507 JLS 05598 b 1 shall be provided a remittance advice, which must include an 2 explanation of a recoupment or offset taken by an insurer, 3 health maintenance organization, independent practice 4 association, or physician hospital organization, if any. The 5 recoupment explanation shall, at a minimum, include the name 6 of the patient; the date of service; the service code or if 7 no service code is available a service description; the 8 recoupment amount; and the reason for the recoupment or 9 offset. In addition, an insurer, health maintenance 10 organization, independent practice association, or physician 11 hospital organization shall provide with the remittance 12 advice a telephone number or mailing address to initiate an 13 appeal of the recoupment or offset. 14 (b) It is not a recoupment when a health care 15 professional or health care provider is paid an amount 16 prospectively or concurrently under a contract with an 17 insurer, health maintenance organization, independent 18 practice association, or physician hospital organization that 19 requires a retrospective reconciliation based upon specific 20 conditions outlined in the contract. 21 (215 ILCS 5/368e new) 22 Sec. 368e. Administration and enforcement. 23 (a) Other than the duties specifically created in 24 Sections 368b, 368c, and 368d, nothing in those Sections is 25 intended to preclude, prevent, or require the adoption, 26 modification, or termination of any utilization management, 27 quality management, or claims processing methodologies or 28 other provisions of a contract applicable to services 29 provided under a contract between an insurer, health 30 maintenance organization, independent practice association, 31 or physician hospital organization and a health care 32 professional or health care provider. 33 (b) Nothing in Sections 368b, 368c, and 368d precludes, HB1074 Enrolled -6- LRB093 05507 JLS 05598 b 1 prevents, or requires the adoption, modification, or 2 termination of any health plan term, benefit, coverage or 3 eligibility provision, or payment methodology. 4 (c) The provisions of Sections 368b, 368c, and 368d are 5 deemed incorporated into health care professional and health 6 care provider service contracts entered into on or before the 7 effective date of this amendatory Act of the 93rd General 8 Assembly and do not require an insurer, health maintenance 9 organization, independent practice association, or physician 10 hospital organization to renew or renegotiate the contracts 11 with a health care professional or health care provider. 12 (d) The Department shall enforce the provisions of this 13 Section and Sections 368b, 368c, and 368d pursuant to the 14 enforcement powers granted to it by law. 15 (e) The Department is hereby granted specific authority 16 to issue a cease and desist order against, fine, or otherwise 17 penalize independent practice associations and 18 physician-hospital organizations for violations. 19 (f) The Department shall adopt reasonable rules to 20 enforce compliance with this Section and Sections 368b, 368c, 21 and 368d. 22 (215 ILCS 5/370k) (from Ch. 73, par. 982k) 23 Sec. 370k. Registration. 24 (a) All administrators of a preferred provider program 25 subject to this Article shall register with the Department of 26 Insurance, which shall by rule establish criteria for such 27 registration including minimum solvency requirements and an 28 annual registration fee for each administrator. 29 (b) The Department of Insurance shall compile and 30 maintain a listing updated at least annually of 31 administrators and insurers offering agreements authorized 32 under this Article. 33 (c) Preferred provider administrators are subject to the HB1074 Enrolled -7- LRB093 05507 JLS 05598 b 1 provisions of Sections 368b, 368c, 368d, and 368e of this 2 Code. 3 (Source: P.A. 84-618.) 4 Section 10. The Health Maintenance Organization Act is 5 amended by changing Section 5-3 as follows: 6 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2) 7 Sec. 5-3. Insurance Code provisions. 8 (a) Health Maintenance Organizations shall be subject to 9 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2, 10 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 11 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x, 12 356y, 356z.2, 367i, 368a, 368b, 368c, 368d, 368e, 401, 401.1, 13 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1, 14 paragraph (c) of subsection (2) of Section 367, and Articles 15 IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of 16 the Illinois Insurance Code. 17 (b) For purposes of the Illinois Insurance Code, except 18 for Sections 444 and 444.1 and Articles XIII and XIII 1/2, 19 Health Maintenance Organizations in the following categories 20 are deemed to be "domestic companies": 21 (1) a corporation authorized under the Dental 22 Service Plan Act or the Voluntary Health Services Plans 23 Act; 24 (2) a corporation organized under the laws of this 25 State; or 26 (3) a corporation organized under the laws of 27 another state, 30% or more of the enrollees of which are 28 residents of this State, except a corporation subject to 29 substantially the same requirements in its state of 30 organization as is a "domestic company" under Article 31 VIII 1/2 of the Illinois Insurance Code. 32 (c) In considering the merger, consolidation, or other HB1074 Enrolled -8- LRB093 05507 JLS 05598 b 1 acquisition of control of a Health Maintenance Organization 2 pursuant to Article VIII 1/2 of the Illinois Insurance Code, 3 (1) the Director shall give primary consideration 4 to the continuation of benefits to enrollees and the 5 financial conditions of the acquired Health Maintenance 6 Organization after the merger, consolidation, or other 7 acquisition of control takes effect; 8 (2)(i) the criteria specified in subsection (1)(b) 9 of Section 131.8 of the Illinois Insurance Code shall not 10 apply and (ii) the Director, in making his determination 11 with respect to the merger, consolidation, or other 12 acquisition of control, need not take into account the 13 effect on competition of the merger, consolidation, or 14 other acquisition of control; 15 (3) the Director shall have the power to require 16 the following information: 17 (A) certification by an independent actuary of 18 the adequacy of the reserves of the Health 19 Maintenance Organization sought to be acquired; 20 (B) pro forma financial statements reflecting 21 the combined balance sheets of the acquiring company 22 and the Health Maintenance Organization sought to be 23 acquired as of the end of the preceding year and as 24 of a date 90 days prior to the acquisition, as well 25 as pro forma financial statements reflecting 26 projected combined operation for a period of 2 27 years; 28 (C) a pro forma business plan detailing an 29 acquiring party's plans with respect to the 30 operation of the Health Maintenance Organization 31 sought to be acquired for a period of not less than 32 3 years; and 33 (D) such other information as the Director 34 shall require. HB1074 Enrolled -9- LRB093 05507 JLS 05598 b 1 (d) The provisions of Article VIII 1/2 of the Illinois 2 Insurance Code and this Section 5-3 shall apply to the sale 3 by any health maintenance organization of greater than 10% of 4 its enrollee population (including without limitation the 5 health maintenance organization's right, title, and interest 6 in and to its health care certificates). 7 (e) In considering any management contract or service 8 agreement subject to Section 141.1 of the Illinois Insurance 9 Code, the Director (i) shall, in addition to the criteria 10 specified in Section 141.2 of the Illinois Insurance Code, 11 take into account the effect of the management contract or 12 service agreement on the continuation of benefits to 13 enrollees and the financial condition of the health 14 maintenance organization to be managed or serviced, and (ii) 15 need not take into account the effect of the management 16 contract or service agreement on competition. 17 (f) Except for small employer groups as defined in the 18 Small Employer Rating, Renewability and Portability Health 19 Insurance Act and except for medicare supplement policies as 20 defined in Section 363 of the Illinois Insurance Code, a 21 Health Maintenance Organization may by contract agree with a 22 group or other enrollment unit to effect refunds or charge 23 additional premiums under the following terms and conditions: 24 (i) the amount of, and other terms and conditions 25 with respect to, the refund or additional premium are set 26 forth in the group or enrollment unit contract agreed in 27 advance of the period for which a refund is to be paid or 28 additional premium is to be charged (which period shall 29 not be less than one year); and 30 (ii) the amount of the refund or additional premium 31 shall not exceed 20% of the Health Maintenance 32 Organization's profitable or unprofitable experience with 33 respect to the group or other enrollment unit for the 34 period (and, for purposes of a refund or additional HB1074 Enrolled -10- LRB093 05507 JLS 05598 b 1 premium, the profitable or unprofitable experience shall 2 be calculated taking into account a pro rata share of the 3 Health Maintenance Organization's administrative and 4 marketing expenses, but shall not include any refund to 5 be made or additional premium to be paid pursuant to this 6 subsection (f)). The Health Maintenance Organization and 7 the group or enrollment unit may agree that the 8 profitable or unprofitable experience may be calculated 9 taking into account the refund period and the immediately 10 preceding 2 plan years. 11 The Health Maintenance Organization shall include a 12 statement in the evidence of coverage issued to each enrollee 13 describing the possibility of a refund or additional premium, 14 and upon request of any group or enrollment unit, provide to 15 the group or enrollment unit a description of the method used 16 to calculate (1) the Health Maintenance Organization's 17 profitable experience with respect to the group or enrollment 18 unit and the resulting refund to the group or enrollment unit 19 or (2) the Health Maintenance Organization's unprofitable 20 experience with respect to the group or enrollment unit and 21 the resulting additional premium to be paid by the group or 22 enrollment unit. 23 In no event shall the Illinois Health Maintenance 24 Organization Guaranty Association be liable to pay any 25 contractual obligation of an insolvent organization to pay 26 any refund authorized under this Section. 27 (Source: P.A. 91-357, eff. 7-29-99; 91-406, eff. 1-1-00; 28 91-549, eff. 8-14-99; 91-605, eff. 12-14-99; 91-788, eff. 29 6-9-00; 92-764, eff. 1-1-03.) 30 Section 99. Effective date. This Act takes effect January 31 1, 2004.