093_HB1074sam001
LRB093 05507 RCE 16172 a
1 AMENDMENT TO HOUSE BILL 1074
2 AMENDMENT NO. . Amend House Bill 1074 by replacing
3 everything after the enacting clause with the following:
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
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1 health care provider to whom the contract is offered, the
2 network provider administration manual, and a summary
3 capitation schedule, if payment is made on a capitation
4 basis. If 50 codes do not exist for a particular specialty,
5 the health care professional or health care provider offered
6 a contract shall be given the opportunity to review or obtain
7 a copy of a fee schedule sample with the codes applicable to
8 that particular specialty. This information may be provided
9 electronically. An insurer, health maintenance organization,
10 independent practice association, or physician hospital
11 organization may substitute the fee schedule sample with a
12 document providing reference to the information needed to
13 calculate the fee schedule that is available to the public at
14 no charge and the percentage or conversion factor at which
15 the insurer, health maintenance organization, preferred
16 provider organization, independent practice association, or
17 physician hospital organization sets its rates.
18 (b) The fee schedule, the capitation schedule, and the
19 network provider administration manual constitute
20 confidential, proprietary, and trade secret information and
21 are subject to the provisions of the Illinois Trade Secrets
22 Act. The health care professional or health care provider
23 receiving such protected information may disclose the
24 information on a need to know basis and only to individuals
25 and entities that provide services directly related to the
26 health care professional's or health care provider's decision
27 to enter into the contract or keep the contract in force. Any
28 person or entity receiving or reviewing such protected
29 information pursuant to this Section shall not disclose the
30 information to any other person, organization, or entity,
31 unless the disclosure is requested pursuant to a valid court
32 order or required by a state or federal government agency.
33 Individuals or entities receiving such information from a
34 health care professional or health care provider as
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1 delineated in this subsection are subject to the provisions
2 of the Illinois Trade Secrets Act.
3 (c) The health care professional or health care provider
4 shall be allowed at least 30 days to review the health care
5 professional or health care provider services contract,
6 including exhibits and attachments, if any, before signing.
7 The 30-day review period begins upon receipt of the health
8 care professional or health care provider services contract,
9 unless the information available upon request in subsection
10 (a) is not included. If information is not included in the
11 professional services contract and is requested pursuant to
12 subsection (a), the 30-day review period begins on the date
13 of receipt of the information. Nothing in this subsection
14 shall prohibit a health care professional or health care
15 provider from signing a contract prior to the expiration of
16 the 30-day review period.
17 (d) The insurer, health maintenance organization,
18 independent practice association, or physician hospital
19 organization shall provide all contracted health care
20 professionals or health care providers with any changes to
21 the fee schedule provided under subsection (a) not later than
22 35 days after the effective date of the changes, unless such
23 changes are specified in the contract and the health care
24 professional or health care provider is able to calculate the
25 changed rates based on information in the contract and
26 information available to the public at no charge. For the
27 purposes of this subsection, "changes" means an increase or
28 decrease in the fee schedule referred to in subsection (a).
29 This information may be made available by mail, e-mail,
30 newsletter, website listing, or other reasonable method. Upon
31 request, a health care professional or health care provider
32 may request an updated copy of the fee schedule referred to
33 in subsection (a) every calendar quarter.
34 (e) Upon termination of a contract with an insurer,
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1 health maintenance organization, independent practice
2 association, or physician hospital organization and at the
3 request of the patient, a health care professional or health
4 care provider shall transfer copies of the patient's medical
5 records. Any other provision of law notwithstanding, the
6 costs for copying and transferring copies of medical records
7 shall be assigned per the arrangements agreed upon, if any,
8 in the health care professional or health care provider
9 services contract.
10 (215 ILCS 5/368c new)
11 Sec. 368c. Remittance advice and procedures.
12 (a) A remittance advice shall be furnished to a health
13 care professional or health care provider that identifies the
14 disposition of each claim. The remittance advice shall
15 identify the services billed; the patient responsibility, if
16 any; the actual payment, if any, for the services billed; and
17 the reason for any reduction to the amount for which the
18 claim was submitted. For any reductions to the amount for
19 which the claim was submitted, the remittance shall identify
20 any withholds and the reason for any denial or reduction.
21 A remittance advice for capitation or prospective payment
22 arrangements shall be furnished to a health care professional
23 or health care provider pursuant to a contract with an
24 insurer, health maintenance organization, independent
25 practice association, or physician hospital organization in
26 accordance with the terms of the contract.
27 (b) Health care professionals and health care providers
28 may not provide a statement that requires payment from the
29 patient or group contract holder, or collect and have any
30 recourse against an insured patient or group contract holder
31 for services provided pursuant to a contract in which an
32 insurer, health maintenance organization, independent
33 practice association, or physician hospital organization has
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1 contractually agreed with a health care professional or
2 health care provider that the health care professional or
3 health care provider does not have such a right or rights,
4 except as otherwise provided by law. Health care
5 professionals and health care providers shall be allowed to
6 collect payment for applicable co-payments, co-insurance, and
7 deductibles and payment for non-covered services directly
8 from patients, except as otherwise provided by law. When
9 health care services are provided by a non-participating
10 health care professional or health care provider, an insurer,
11 health maintenance organization, independent practice
12 association, or physician hospital organization may pay for
13 covered services either to a patient directly or to the
14 non-participating health care professional or health care
15 provider.
16 (c) When a person presents a benefits information card,
17 a health care professional or health care provider shall make
18 a good faith effort to inform the person if the health care
19 professional or health care provider has a participation
20 contract with the insurer, health maintenance organization,
21 or other entity identified on the card.
22 (215 ILCS 5/368d new)
23 Sec. 368d. Recoupments.
24 (a) A health care professional or health care provider
25 shall be provided a remittance advice, which must include an
26 explanation of a recoupment or offset taken by an insurer,
27 health maintenance organization, independent practice
28 association, or physician hospital organization, if any. The
29 recoupment explanation shall, at a minimum, include the name
30 of the patient; the date of service; the service code or if
31 no service code is available a service description; the
32 recoupment amount; and the reason for the recoupment or
33 offset. In addition, an insurer, health maintenance
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1 organization, independent practice association, or physician
2 hospital organization shall provide with the remittance
3 advice a telephone number or mailing address to initiate an
4 appeal of the recoupment or offset.
5 (b) It is not a recoupment when a health care
6 professional or health care provider is paid an amount
7 prospectively or concurrently under a contract with an
8 insurer, health maintenance organization, independent
9 practice association, or physician hospital organization that
10 requires a retrospective reconciliation based upon specific
11 conditions outlined in the contract.
12 (215 ILCS 5/368e new)
13 Sec. 368e. Administration and enforcement.
14 (a) Other than the duties specifically created in
15 Sections 368b, 368c, and 368d, nothing in those Sections is
16 intended to preclude, prevent, or require the adoption,
17 modification, or termination of any utilization management,
18 quality management, or claims processing methodologies or
19 other provisions of a contract applicable to services
20 provided under a contract between an insurer, health
21 maintenance organization, independent practice association,
22 or physician hospital organization and a health care
23 professional or health care provider.
24 (b) Nothing in Sections 368b, 368c, and 368d precludes,
25 prevents, or requires the adoption, modification, or
26 termination of any health plan term, benefit, coverage or
27 eligibility provision, or payment methodology.
28 (c) The provisions of Sections 368b, 368c, and 368d are
29 deemed incorporated into health care professional and health
30 care provider service contracts entered into on or before the
31 effective date of this amendatory Act of the 93rd General
32 Assembly and do not require an insurer, health maintenance
33 organization, independent practice association, or physician
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1 hospital organization to renew or renegotiate the contracts
2 with a health care professional or health care provider.
3 (d) The Department shall enforce the provisions of this
4 Section and Sections 368b, 368c, and 368d pursuant to the
5 enforcement powers granted to it by law.
6 (e) The Department is hereby granted specific authority
7 to issue a cease and desist order against, fine, or otherwise
8 penalize independent practice associations and
9 physician-hospital organizations for violations.
10 (f) The Department shall adopt reasonable rules to
11 enforce compliance with this Section and Sections 368b, 368c,
12 and 368d.
13 (215 ILCS 5/370k) (from Ch. 73, par. 982k)
14 Sec. 370k. Registration.
15 (a) All administrators of a preferred provider program
16 subject to this Article shall register with the Department of
17 Insurance, which shall by rule establish criteria for such
18 registration including minimum solvency requirements and an
19 annual registration fee for each administrator.
20 (b) The Department of Insurance shall compile and
21 maintain a listing updated at least annually of
22 administrators and insurers offering agreements authorized
23 under this Article.
24 (c) Preferred provider administrators are subject to the
25 provisions of Sections 368b, 368c, 368d, and 368e of this
26 Code.
27 (Source: P.A. 84-618.)
28 Section 10. The Health Maintenance Organization Act is
29 amended by changing Section 5-3 as follows:
30 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
31 Sec. 5-3. Insurance Code provisions.
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1 (a) Health Maintenance Organizations shall be subject to
2 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
3 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
4 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
5 356y, 356z.2, 367i, 368a, 368b, 368c, 368d, 368e, 401, 401.1,
6 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1,
7 paragraph (c) of subsection (2) of Section 367, and Articles
8 IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of
9 the Illinois Insurance Code.
10 (b) For purposes of the Illinois Insurance Code, except
11 for Sections 444 and 444.1 and Articles XIII and XIII 1/2,
12 Health Maintenance Organizations in the following categories
13 are deemed to be "domestic companies":
14 (1) a corporation authorized under the Dental
15 Service Plan Act or the Voluntary Health Services Plans
16 Act;
17 (2) a corporation organized under the laws of this
18 State; or
19 (3) a corporation organized under the laws of
20 another state, 30% or more of the enrollees of which are
21 residents of this State, except a corporation subject to
22 substantially the same requirements in its state of
23 organization as is a "domestic company" under Article
24 VIII 1/2 of the Illinois Insurance Code.
25 (c) In considering the merger, consolidation, or other
26 acquisition of control of a Health Maintenance Organization
27 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
28 (1) the Director shall give primary consideration
29 to the continuation of benefits to enrollees and the
30 financial conditions of the acquired Health Maintenance
31 Organization after the merger, consolidation, or other
32 acquisition of control takes effect;
33 (2)(i) the criteria specified in subsection (1)(b)
34 of Section 131.8 of the Illinois Insurance Code shall not
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1 apply and (ii) the Director, in making his determination
2 with respect to the merger, consolidation, or other
3 acquisition of control, need not take into account the
4 effect on competition of the merger, consolidation, or
5 other acquisition of control;
6 (3) the Director shall have the power to require
7 the following information:
8 (A) certification by an independent actuary of
9 the adequacy of the reserves of the Health
10 Maintenance Organization sought to be acquired;
11 (B) pro forma financial statements reflecting
12 the combined balance sheets of the acquiring company
13 and the Health Maintenance Organization sought to be
14 acquired as of the end of the preceding year and as
15 of a date 90 days prior to the acquisition, as well
16 as pro forma financial statements reflecting
17 projected combined operation for a period of 2
18 years;
19 (C) a pro forma business plan detailing an
20 acquiring party's plans with respect to the
21 operation of the Health Maintenance Organization
22 sought to be acquired for a period of not less than
23 3 years; and
24 (D) such other information as the Director
25 shall require.
26 (d) The provisions of Article VIII 1/2 of the Illinois
27 Insurance Code and this Section 5-3 shall apply to the sale
28 by any health maintenance organization of greater than 10% of
29 its enrollee population (including without limitation the
30 health maintenance organization's right, title, and interest
31 in and to its health care certificates).
32 (e) In considering any management contract or service
33 agreement subject to Section 141.1 of the Illinois Insurance
34 Code, the Director (i) shall, in addition to the criteria
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1 specified in Section 141.2 of the Illinois Insurance Code,
2 take into account the effect of the management contract or
3 service agreement on the continuation of benefits to
4 enrollees and the financial condition of the health
5 maintenance organization to be managed or serviced, and (ii)
6 need not take into account the effect of the management
7 contract or service agreement on competition.
8 (f) Except for small employer groups as defined in the
9 Small Employer Rating, Renewability and Portability Health
10 Insurance Act and except for medicare supplement policies as
11 defined in Section 363 of the Illinois Insurance Code, a
12 Health Maintenance Organization may by contract agree with a
13 group or other enrollment unit to effect refunds or charge
14 additional premiums under the following terms and conditions:
15 (i) the amount of, and other terms and conditions
16 with respect to, the refund or additional premium are set
17 forth in the group or enrollment unit contract agreed in
18 advance of the period for which a refund is to be paid or
19 additional premium is to be charged (which period shall
20 not be less than one year); and
21 (ii) the amount of the refund or additional premium
22 shall not exceed 20% of the Health Maintenance
23 Organization's profitable or unprofitable experience with
24 respect to the group or other enrollment unit for the
25 period (and, for purposes of a refund or additional
26 premium, the profitable or unprofitable experience shall
27 be calculated taking into account a pro rata share of the
28 Health Maintenance Organization's administrative and
29 marketing expenses, but shall not include any refund to
30 be made or additional premium to be paid pursuant to this
31 subsection (f)). The Health Maintenance Organization and
32 the group or enrollment unit may agree that the
33 profitable or unprofitable experience may be calculated
34 taking into account the refund period and the immediately
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1 preceding 2 plan years.
2 The Health Maintenance Organization shall include a
3 statement in the evidence of coverage issued to each enrollee
4 describing the possibility of a refund or additional premium,
5 and upon request of any group or enrollment unit, provide to
6 the group or enrollment unit a description of the method used
7 to calculate (1) the Health Maintenance Organization's
8 profitable experience with respect to the group or enrollment
9 unit and the resulting refund to the group or enrollment unit
10 or (2) the Health Maintenance Organization's unprofitable
11 experience with respect to the group or enrollment unit and
12 the resulting additional premium to be paid by the group or
13 enrollment unit.
14 In no event shall the Illinois Health Maintenance
15 Organization Guaranty Association be liable to pay any
16 contractual obligation of an insolvent organization to pay
17 any refund authorized under this Section.
18 (Source: P.A. 91-357, eff. 7-29-99; 91-406, eff. 1-1-00;
19 91-549, eff. 8-14-99; 91-605, eff. 12-14-99; 91-788, eff.
20 6-9-00; 92-764, eff. 1-1-03.)
21 Section 99. Effective date. This Act takes effect January
22 1, 2004.".