093_HB3595

 
                                     LRB093 09876 JLS 10124 b

 1        AN ACT concerning pharmaceutical benefits.

 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    adding Section 356z.4 as follows:
 6        (215 ILCS 5/356z.4 new)
 7        Sec.  356z.4.  Immunosuppresive  agents.   A   group   or
 8    individual  policy  of accident and health insurance amended,
 9    delivered, issued, or renewed after  the  effective  date  of
10    this  amendatory  Act  of  the  93rd  General  Assembly  that
11    provides coverage for organ transplants must provide coverage
12    for  immunosuppresive agents (anti-rejection medications). If
13    the policy provides coverage for prescription  drugs  through
14    the  use  of  a  drug formulary, the generic immunosuppresive
15    agents must be included  with  the  drug  formulary.  If  the
16    immunosuppresive  agent is non-generic it must be included in
17    the drug formulary as the least  expensive  co-payment  level
18    higher than the co-payment required for generic drugs.

19        Section  10.  The Comprehensive Health Insurance Plan Act
20    is amended by changing Section 8 as follows:

21        (215 ILCS 105/8) (from Ch. 73, par. 1308)
22        Sec. 8.  Minimum benefits.
23        a.  Availability. The Plan shall  offer  in  an  annually
24    renewable  policy  major  medical  expense  coverage to every
25    eligible person who is  not  eligible  for  Medicare.   Major
26    medical  expense  coverage  offered  by the Plan shall pay an
27    eligible person's covered expenses, subject to limit  on  the
28    deductible   and   coinsurance   payments   authorized  under
29    paragraph (4) of subsection  d  of  this  Section,  up  to  a
30    lifetime  benefit limit of $1,000,000 per covered individual.
 
                            -2-      LRB093 09876 JLS 10124 b
 1    The maximum limit under this subsection shall not be  altered
 2    by  the  Board,  and  no  actuarial equivalent benefit may be
 3    substituted by the Board.  Any  person  who  otherwise  would
 4    qualify  for coverage under the Plan, but is excluded because
 5    he or she is eligible for Medicare, shall be eligible for any
 6    separate Medicare supplement policy  or  policies  which  the
 7    Board may offer.
 8        b.  Outline  of  benefits.   Covered  expenses  shall  be
 9    limited   to   the  usual  and  customary  charge,  including
10    negotiated fees, in the locality for the  following  services
11    and articles when prescribed by a physician and determined by
12    the Plan to be medically necessary for the following areas of
13    services,  subject to such separate deductibles, co-payments,
14    exclusions, and other limitations on benefits  as  the  Board
15    shall establish and approve, and the other provisions of this
16    Section:
17             (1)  Hospital  services,  except  that  any services
18        provided by a hospital that is located more than 75 miles
19        outside the State of Illinois shall be covered only for a
20        maximum of 45 days in any calendar year.  With respect to
21        covered expenses incurred during any calendar year ending
22        on or after December 31, 1999, inpatient  hospitalization
23        of an eligible person for the treatment of mental illness
24        at  a hospital located within the State of Illinois shall
25        be subject to the same terms and conditions  as  for  any
26        other illness.
27             (2)  Professional  services  for  the  diagnosis  or
28        treatment  of  injuries,  illnesses  or conditions, other
29        than dental and mental and nervous disorders as described
30        in paragraph (17), which are rendered by a physician,  or
31        by   other  licensed  professionals  at  the  physician's
32        direction. This includes reconstruction of the breast  on
33        which   a   mastectomy   was   performed;   surgery   and
34        reconstruction   of   the   other  breast  to  produce  a
 
                            -3-      LRB093 09876 JLS 10124 b
 1        symmetrical appearance; and prostheses and  treatment  of
 2        physical  complications  at all stages of the mastectomy,
 3        including lymphedemas.
 4             (2.5)  Professional services provided by a physician
 5        to children under  the  age  of  16  years  for  physical
 6        examinations and age appropriate immunizations ordered by
 7        a  physician  licensed  to  practice  medicine in all its
 8        branches.
 9             (3)  (Blank).
10             (4)  Outpatient  prescription  drugs  that  by   law
11        require a prescription written by a physician licensed to
12        practice  medicine  in  all  its branches subject to such
13        separate deductible, copayment, and other limitations  or
14        restrictions  as  the  Board shall approve, including the
15        use of a prescription drug card or any other program,  or
16        both.
17             (5)  Skilled  nursing services of a licensed skilled
18        nursing facility for not more  than  120  days  during  a
19        policy year.
20             (6)  Services of a home health agency in accord with
21        a  home  health  care plan, up to a maximum of 270 visits
22        per year.
23             (7)  Services of a licensed  hospice  for  not  more
24        than 180 days during a policy year.
25             (8)  Use of radium or other radioactive materials.
26             (9)  Oxygen.
27             (10)  Anesthetics.
28             (11)  Orthoses and prostheses other than dental.
29             (12)  Rental  or  purchase  in accordance with Board
30        policies or  procedures  of  durable  medical  equipment,
31        other than eyeglasses or hearing aids, for which there is
32        no personal use in the absence of the condition for which
33        it is prescribed.
34             (13)  Diagnostic x-rays and laboratory tests.
 
                            -4-      LRB093 09876 JLS 10124 b
 1             (14)  Oral  surgery (i) for excision of partially or
 2        completely unerupted impacted teeth when not performed in
 3        connection with  the  routine  extraction  or  repair  of
 4        teeth;  (ii) for excision of tumors or cysts of the jaws,
 5        cheeks, lips, tongue, and roof and floor  of  the  mouth;
 6        (iii) required for correction of cleft lip and palate and
 7        other  craniofacial  and  maxillofacial birth defects; or
 8        (iv) for treatment of injuries  to  natural  teeth  or  a
 9        fractured jaw due to an accident.
10             (15)  Physical,  speech, and functional occupational
11        therapy  as   medically   necessary   and   provided   by
12        appropriate licensed professionals.
13             (16)  Emergency   and   other   medically  necessary
14        transportation provided by a licensed  ambulance  service
15        to  the nearest health care facility qualified to treat a
16        covered illness, injury, or  condition,  subject  to  the
17        provisions of the Emergency Medical Systems (EMS) Act.
18             (17)  Outpatient    services   for   diagnosis   and
19        treatment of mental and nervous disorders provided that a
20        covered person shall be required to make a copayment  not
21        to  exceed  50%  and  that  the  Plan's payment shall not
22        exceed such amounts as are established by the Board.
23             (18)  Human organ or tissue transplants specified by
24        the Board that are performed at a hospital designated  by
25        the  Board  as a participating transplant center for that
26        specific   organ   or   tissue   transplant,    including
27        immunosuppresive  agents as required under Section 356z.4
28        of the Illinois Insurance Code.
29             (19)  Naprapathic services, as appropriate, provided
30        by a licensed naprapathic practitioner.
31        c.  Exclusions.  Covered expenses of the Plan  shall  not
32    include the following:
33             (1)  Any  charge for treatment for cosmetic purposes
34        other than for reconstructive surgery when the service is
 
                            -5-      LRB093 09876 JLS 10124 b
 1        incidental to or follows surgery resulting  from  injury,
 2        sickness  or  other  diseases  of  the  involved  part or
 3        surgery for the  repair  or  treatment  of  a  congenital
 4        bodily defect to restore normal bodily functions.
 5             (2)  Any charge for care that is primarily for rest,
 6        custodial, educational, or domiciliary purposes.
 7             (3)  Any  charge  for  services in a private room to
 8        the extent it is in excess of  the  institution's  charge
 9        for  its  most  common semiprivate room, unless a private
10        room is prescribed as medically necessary by a physician.
11             (4)  That part of any charge for room and  board  or
12        for   services  rendered  or  articles  prescribed  by  a
13        physician, dentist, or other health care  personnel  that
14        exceeds  the  reasonable  and  customary  charge  in  the
15        locality  or  for  any services or supplies not medically
16        necessary for the diagnosed injury or illness.
17             (5)  Any  charge  for  services  or   articles   the
18        provision  of  which is not within the scope of licensure
19        of the institution or individual providing  the  services
20        or articles.
21             (6)  Any  expense  incurred  prior  to the effective
22        date of coverage by the Plan  for  the  person  on  whose
23        behalf the expense is incurred.
24             (7)  Dental  care, dental surgery, dental treatment,
25        any  other  dental  procedure  involving  the  teeth   or
26        periodontium, or any dental appliances, including crowns,
27        bridges,  implants,  or  partial  or  complete  dentures,
28        except  as  specifically  provided  in  paragraph (14) of
29        subsection b of this Section.
30             (8)  Eyeglasses, contact  lenses,  hearing  aids  or
31        their fitting.
32             (9)  Illness or injury due to acts of war.
33             (10)  Services  of  blood  donors  and  any  fee for
34        failure to replace the first 3 pints of blood provided to
 
                            -6-      LRB093 09876 JLS 10124 b
 1        a covered  person each policy year.
 2             (11)  Personal supplies or services  provided  by  a
 3        hospital  or  nursing  home,  or  any other nonmedical or
 4        nonprescribed supply or service.
 5             (12)  Routine maternity  charges  for  a  pregnancy,
 6        except  where  added as optional coverage with payment of
 7        an  additional  premium  for  pregnancy  resulting   from
 8        conception  occurring  after  the  effective  date of the
 9        optional coverage.
10             (13)  (Blank).
11             (14)  Any expense or charge for services, drugs,  or
12        supplies  that  are:  (i)  not  provided  in  accord with
13        generally accepted standards of current medical practice;
14        (ii) for procedures, treatments, equipment,  transplants,
15        or   implants,   any   of   which   are  investigational,
16        experimental,   or   for   research    purposes;    (iii)
17        investigative  and not proven safe and effective; or (iv)
18        for,  or  resulting   from,   a   gender   transformation
19        operation.
20             (15)  Any  expense  or  charge  for routine physical
21        examinations or tests except as provided in item (2.5) of
22        subsection b of this Section.
23             (16)  Any expense for which a charge is not made  in
24        the  absence  of insurance or for which there is no legal
25        obligation on the part of the patient to pay.
26             (17)  Any expense  incurred  for  benefits  provided
27        under  the  laws  of  the  United  States and this State,
28        including   Medicare,   Medicaid,   and   other   medical
29        assistance, maternal and child health  services  and  any
30        other  program  that  is  administered  or  funded by the
31        Department of Human Services, Department of  Public  Aid,
32        or     Department     of    Public    Health,    military
33        service-connected disability payments,  medical  services
34        provided  for  members  of  the  armed  forces  and their
 
                            -7-      LRB093 09876 JLS 10124 b
 1        dependents or employees of the armed forces of the United
 2        States, and medical services financed on  behalf  of  all
 3        citizens by the United States.
 4             (18)  Any   expense   or   charge   for   in   vitro
 5        fertilization,  artificial  insemination,  or  any  other
 6        artificial means used to cause pregnancy.
 7             (19)  Any  expense or charge for oral contraceptives
 8        used for birth  control  or  any  other  temporary  birth
 9        control measures.
10             (20)  Any  expense  or  charge  for sterilization or
11        sterilization reversals.
12             (21)  Any  expense  or  charge   for   weight   loss
13        programs,  exercise  equipment,  or treatment of obesity,
14        except when certified by a physician  as  morbid  obesity
15        (at least 2 times normal body weight).
16             (22)  Any   expense   or   charge   for  acupuncture
17        treatment unless  used  as  an  anesthetic  agent  for  a
18        covered surgery.
19             (23)  Any  expense or charge for or related to organ
20        or tissue transplants other than  those  performed  at  a
21        hospital  with  a Board approved organ transplant program
22        that has been designated by the Board as a  preferred  or
23        exclusive  provider  organization for that specific organ
24        or tissue transplant.
25             (24)  Any  expense   or   charge   for   procedures,
26        treatments,  equipment,  or services that are provided in
27        special settings for research purposes or in a controlled
28        environment, are being studied  for  safety,  efficiency,
29        and  effectiveness,  and  are awaiting endorsement by the
30        appropriate  national  medical  speciality  college   for
31        general use within the medical community.
32        d.  Deductibles and coinsurance.
33        The  Plan coverage defined in Section 6 shall provide for
34    a choice of deductibles per individual as authorized  by  the
 
                            -8-      LRB093 09876 JLS 10124 b
 1    Board.  If 2 individual members of the same family household,
 2    who are both covered persons under the Plan, satisfy the same
 3    applicable deductibles, no other member of that family who is
 4    also  a  covered  person  under the Plan shall be required to
 5    meet any deductibles for the balance of that  calendar  year.
 6    The  deductibles  must  be  applied  first  to the authorized
 7    amount of covered expenses incurred by the covered person.  A
 8    mandatory coinsurance requirement shall  be  imposed  at  the
 9    rate  authorized  by  the  Board  in  excess of the mandatory
10    deductible, the coinsurance in the aggregate  not  to  exceed
11    such  amounts  as  are authorized by the Board per annum.  At
12    its discretion the Board  may,  however,  offer  catastrophic
13    coverages   or   other   policies  that  provide  for  larger
14    deductibles with or without  coinsurance  requirements.   The
15    deductibles  and coinsurance factors may be adjusted annually
16    according to the Medical  Component  of  the  Consumer  Price
17    Index.
18        e.  Scope of coverage.
19             (1)  In  approving  any  of  the benefit plans to be
20        offered by the  Plan,  the  Board  shall  establish  such
21        benefit   levels,   deductibles,   coinsurance   factors,
22        exclusions,  and  limitations  as it may deem appropriate
23        and that it believes to be generally  reflective  of  and
24        commensurate  with  health  insurance  coverage  that  is
25        provided in the individual market in this State.
26             (2)  The  benefit  plans  approved  by the Board may
27        also provide for  and  employ  various  cost  containment
28        measures   and  other  requirements  including,  but  not
29        limited to, preadmission certification,  prior  approval,
30        second  surgical  opinions, concurrent utilization review
31        programs, individual case management, preferred  provider
32        organizations,   health  maintenance  organizations,  and
33        other cost effective arrangements for paying for  covered
34        expenses.
 
                            -9-      LRB093 09876 JLS 10124 b
 1        f.  Preexisting conditions.
 2             (1)  Except   for   federally  eligible  individuals
 3        qualifying for Plan coverage under Section 15 of this Act
 4        or eligible persons who qualify for the waiver authorized
 5        in paragraph (3) of this subsection, plan coverage  shall
 6        exclude  charges  or expenses incurred during the first 6
 7        months following the effective date of coverage as to any
 8        condition for which medical advice, care or treatment was
 9        recommended  or  received  during  the  6  month   period
10        immediately preceding the effective date of coverage.
11             (2)  (Blank).
12             (3)  Waiver: The preexisting condition exclusions as
13        set  forth  in  paragraph (1) of this subsection shall be
14        waived to the extent to which the eligible person (a) has
15        satisfied similar exclusions under any  prior  individual
16        health insurance policy that was involuntarily terminated
17        because of the insolvency of the issuer of the policy and
18        (b)   has  applied  for  Plan  coverage  within  90  days
19        following the involuntary termination of that  individual
20        health insurance coverage.
21        g.  Other sources primary;  nonduplication of benefits.
22             (1)  The  Plan  shall  be the last payor of benefits
23        whenever any other  benefit  or  source  of  third  party
24        payment  is  available.   Subject  to  the  provisions of
25        subsection e of Section  7,  benefits  otherwise  payable
26        under  Plan coverage shall be reduced by all amounts paid
27        or payable by Medicare or any other government program or
28        through any health insurance  coverage  or  group  health
29        plan,  whether by insurance, reimbursement, or otherwise,
30        or  through  any  third  party   liability,   settlement,
31        judgment,  or  award,  regardless  of  the  date  of  the
32        settlement,  judgment,  or award, whether the settlement,
33        judgment,  or  award  is  in  the  form  of  a  contract,
34        agreement, or trust on behalf of a minor or otherwise and
 
                            -10-     LRB093 09876 JLS 10124 b
 1        whether the settlement, judgment, or award is payable  to
 2        the   covered  person,  his  or  her  dependent,  estate,
 3        personal representative, or guardian in  a  lump  sum  or
 4        over  time,  and  by  all  hospital  or  medical  expense
 5        benefits  paid or payable under any worker's compensation
 6        coverage,  automobile  medical  payment,   or   liability
 7        insurance,  whether  provided  on  the  basis of fault or
 8        nonfault, and by any hospital or medical benefits paid or
 9        payable under  or  provided  pursuant  to  any  State  or
10        federal law or program.
11             (2)  The  Plan  shall have a cause of action against
12        any covered person or any other person or entity for  the
13        recovery  of any amount paid to the extent the amount was
14        for treatment, services, or supplies not covered in  this
15        Section  or  in  excess  of benefits as set forth in this
16        Section.
17             (3)  Whenever benefits are due from the Plan because
18        of sickness or an injury to a  covered  person  resulting
19        from  a  third party's wrongful act or negligence and the
20        covered person has recovered or may recover damages  from
21        a  third  party  or  its insurer, the Plan shall have the
22        right to reduce benefits or to  refuse  to  pay  benefits
23        that  otherwise  may  be payable by the amount of damages
24        that the covered person  has  recovered  or  may  recover
25        regardless  of  the date of the sickness or injury or the
26        date of any settlement, judgment, or award resulting from
27        that sickness or injury.
28             During the pendency of any action or claim  that  is
29        brought  by  or  on  behalf of a covered person against a
30        third party or  its  insurer,  any  benefits  that  would
31        otherwise  be  payable  except for the provisions of this
32        paragraph (3) shall be paid if  payment  by  or  for  the
33        third  party has not yet been made and the covered person
34        or, if  incapable,  that  person's  legal  representative
 
                            -11-     LRB093 09876 JLS 10124 b
 1        agrees  in writing to pay back promptly the benefits paid
 2        as a result of the sickness or injury to  the  extent  of
 3        any  future  payments  made by or for the third party for
 4        the sickness or  injury.   This  agreement  is  to  apply
 5        whether  or not liability for the payments is established
 6        or admitted by the third party or whether those  payments
 7        are itemized.
 8             Any  amounts  due  the plan to repay benefits may be
 9        deducted from other benefits payable by  the  Plan  after
10        payments by or for the third party are made.
11             (4)  Benefits  due  from  the Plan may be reduced or
12        refused  as  an  offset  against  any  amount   otherwise
13        recoverable under this Section.
14        h.  Right of subrogation; recoveries.
15             (1)  Whenever  the Plan has paid benefits because of
16        sickness or an injury to  any  covered  person  resulting
17        from  a  third party's wrongful act or negligence, or for
18        which  an  insurer  is  liable  in  accordance  with  the
19        provisions of any policy of insurance,  and  the  covered
20        person  has recovered or may recover damages from a third
21        party that is liable for the damages, the Plan shall have
22        the right to  recover  the  benefits  it  paid  from  any
23        amounts  that  the  covered  person  has  received or may
24        receive regardless of the date of the sickness or  injury
25        or  the  date  of  any  settlement,  judgment,  or  award
26        resulting  from  that sickness or injury.  The Plan shall
27        be subrogated to any right of recovery the covered person
28        may have under the terms of any private or public  health
29        care  coverage  or liability coverage, including coverage
30        under the  Workers'  Compensation  Act  or  the  Workers'
31        Occupational  Diseases  Act,  without  the  necessity  of
32        assignment  of claim or other authorization to secure the
33        right of recovery.  To enforce its subrogation right, the
34        Plan may (i) intervene or join in an action or proceeding
 
                            -12-     LRB093 09876 JLS 10124 b
 1        brought  by  the   covered   person   or   his   personal
 2        representative,   including  his  guardian,  conservator,
 3        estate, dependents, or survivors, against any third party
 4        or the third party's insurer that may be liable  or  (ii)
 5        institute  and  prosecute  legal  proceedings against any
 6        third party or the third  party's  insurer  that  may  be
 7        liable for the sickness or injury in an appropriate court
 8        either  in  the  name  of  the Plan or in the name of the
 9        covered person or his personal representative,  including
10        his   guardian,   conservator,   estate,  dependents,  or
11        survivors.
12             (2)  If any action or claim  is  brought  by  or  on
13        behalf  of  a covered person against a third party or the
14        third party's insurer, the covered person or his personal
15        representative,  including  his  guardian,   conservator,
16        estate,  dependents,  or survivors, shall notify the Plan
17        by personal service or registered mail of the  action  or
18        claim and of the name of the court in which the action or
19        claim  is  brought, filing proof thereof in the action or
20        claim.  The Plan may, at any time thereafter, join in the
21        action or claim upon its motion so  that  all  orders  of
22        court  after  hearing  and judgment shall be made for its
23        protection.  No release or  settlement  of  a  claim  for
24        damages  and  no  satisfaction  of judgment in the action
25        shall be valid without the written consent of the Plan to
26        the extent of its interest in the settlement or  judgment
27        and of the covered person or his personal representative.
28             (3)  In  the  event  that  the covered person or his
29        personal representative fails to institute  a  proceeding
30        against  any  appropriate  third  party  before the fifth
31        month before the action would be barred, the Plan may, in
32        its own name or in the name  of  the  covered  person  or
33        personal  representative,  commence  a proceeding against
34        any appropriate third party for the recovery  of  damages
 
                            -13-     LRB093 09876 JLS 10124 b
 1        on  account  of  any  sickness,  injury,  or death to the
 2        covered person.  The covered person  shall  cooperate  in
 3        doing  what is reasonably necessary to assist the Plan in
 4        any recovery and shall not take  any  action  that  would
 5        prejudice  the  Plan's right to recovery.  The Plan shall
 6        pay to the covered person or his personal  representative
 7        all  sums  collected  from any third party by judgment or
 8        otherwise in excess of amounts paid in benefits under the
 9        Plan and amounts paid or to be paid as  costs,  attorneys
10        fees,  and  reasonable  expenses  incurred by the Plan in
11        making the collection or enforcing the judgment.
12             (4)  In the event  that  a  covered  person  or  his
13        personal    representative,   including   his   guardian,
14        conservator, estate, dependents, or  survivors,  recovers
15        damages  from a third party for sickness or injury caused
16        to the covered person, the covered person or the personal
17        representative shall pay to the  Plan  from  the  damages
18        recovered  the  amount  of benefits paid or to be paid on
19        behalf of the covered person.
20             (5)  When the action or  claim  is  brought  by  the
21        covered  person  alone  and  the  covered person incurs a
22        personal liability to pay attorney's fees  and  costs  of
23        litigation,  the  Plan's  claim  for reimbursement of the
24        benefits provided to the covered person shall be the full
25        amount of benefits paid to or on behalf  of  the  covered
26        person  under  this  Act  less  a  pro  rata  share  that
27        represents the Plan's reasonable share of attorney's fees
28        paid  by  the covered person and that portion of the cost
29        of litigation expenses determined by multiplying  by  the
30        ratio  of the full amount of the expenditures to the full
31        amount of the judgement, award, or settlement.
32             (6)  In the event of judgment or award in a suit  or
33        claim  against  a third party or insurer, the court shall
34        first  order  paid  from  any  judgement  or  award   the
 
                            -14-     LRB093 09876 JLS 10124 b
 1        reasonable  litigation  expenses  incurred in preparation
 2        and prosecution of the action  or  claim,  together  with
 3        reasonable  attorney's  fees.   After  payment  of  those
 4        expenses  and  attorney's fees, the court shall apply out
 5        of the  balance  of  the  judgment  or  award  an  amount
 6        sufficient  to  reimburse  the  Plan  the  full amount of
 7        benefits paid on behalf of the covered person under  this
 8        Act,  provided  the  court  may  reduce and apportion the
 9        Plan's portion of  the  judgement  proportionate  to  the
10        recovery  of the covered person.  The burden of producing
11        evidence sufficient to support the exercise by the  court
12        of its discretion to reduce the amount of a proven charge
13        sought  to  be  enforced  against the recovery shall rest
14        with the party seeking  the  reduction.   The  court  may
15        consider  the  nature  and extent of the injury, economic
16        and non-economic  loss,  settlement  offers,  comparative
17        negligence  as  it  applies to the case at hand, hospital
18        costs, physician costs, and all other appropriate costs.
19        The Plan shall pay its pro rata  share  of  the  attorney
20        fees  based  on the Plan's recovery as it compares to the
21        total judgment.  Any reimbursement  rights  of  the  Plan
22        shall  take  priority  over  all  other liens and charges
23        existing under the laws of this State with the  exception
24        of any attorney liens filed under the Attorneys Lien Act.
25             (7)  The  Plan  may compromise or settle and release
26        any claim for benefits provided under this Act  or  waive
27        any  claims  for  benefits,  in whole or in part, for the
28        convenience of the Plan or if the  Plan  determines  that
29        collection  would  result  in  undue  hardship  upon  the
30        covered person.
31    (Source: P.A.  91-639,  eff.  8-20-99;  91-735,  eff. 6-2-00;
32    92-2, eff. 5-1-01; 92-630, eff. 7-11-02.)

33        Section 15.  The Health Maintenance Organization  Act  is
 
                            -15-     LRB093 09876 JLS 10124 b
 1    amended by changing Section 5-3 as follows:

 2        (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
 3        Sec. 5-3.  Insurance Code provisions.
 4        (a)  Health Maintenance Organizations shall be subject to
 5    the  provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
 6    141.3, 143, 143c, 147, 148, 149, 151, 152, 153,  154,  154.5,
 7    154.6,  154.7,  154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
 8    356y, 356z.2, 356z.4, 367i, 368a, 401, 401.1, 402, 403, 403A,
 9    408, 408.2, 409,  412,  444,  and  444.1,  paragraph  (c)  of
10    subsection  (2)  of  Section 367, and Articles IIA, VIII 1/2,
11    XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of  the  Illinois
12    Insurance Code.
13        (b)  For  purposes of the Illinois Insurance Code, except
14    for Sections 444 and 444.1 and Articles XIII  and  XIII  1/2,
15    Health  Maintenance Organizations in the following categories
16    are deemed to be "domestic companies":
17             (1)  a  corporation  authorized  under  the   Dental
18        Service  Plan  Act or the Voluntary Health Services Plans
19        Act;
20             (2)  a corporation organized under the laws of  this
21        State; or
22             (3)  a  corporation  organized  under  the  laws  of
23        another  state, 30% or more of the enrollees of which are
24        residents of this State, except a corporation subject  to
25        substantially  the  same  requirements  in  its  state of
26        organization as is a  "domestic  company"  under  Article
27        VIII 1/2 of the Illinois Insurance Code.
28        (c)  In  considering  the merger, consolidation, or other
29    acquisition of control of a Health  Maintenance  Organization
30    pursuant to Article VIII 1/2 of the Illinois Insurance Code,
31             (1)  the  Director  shall give primary consideration
32        to the continuation of  benefits  to  enrollees  and  the
33        financial  conditions  of the acquired Health Maintenance
 
                            -16-     LRB093 09876 JLS 10124 b
 1        Organization after the merger,  consolidation,  or  other
 2        acquisition of control takes effect;
 3             (2)(i)  the  criteria specified in subsection (1)(b)
 4        of Section 131.8 of the Illinois Insurance Code shall not
 5        apply and (ii) the Director, in making his  determination
 6        with  respect  to  the  merger,  consolidation,  or other
 7        acquisition of control, need not take  into  account  the
 8        effect  on  competition  of the merger, consolidation, or
 9        other acquisition of control;
10             (3)  the Director shall have the  power  to  require
11        the following information:
12                  (A)  certification by an independent actuary of
13             the   adequacy   of   the  reserves  of  the  Health
14             Maintenance Organization sought to be acquired;
15                  (B)  pro forma financial statements  reflecting
16             the combined balance sheets of the acquiring company
17             and the Health Maintenance Organization sought to be
18             acquired  as of the end of the preceding year and as
19             of a date 90 days prior to the acquisition, as  well
20             as   pro   forma   financial  statements  reflecting
21             projected combined  operation  for  a  period  of  2
22             years;
23                  (C)  a  pro  forma  business  plan detailing an
24             acquiring  party's  plans  with   respect   to   the
25             operation  of  the  Health  Maintenance Organization
26             sought to be acquired for a period of not less  than
27             3 years; and
28                  (D)  such  other  information  as  the Director
29             shall require.
30        (d)  The provisions of Article VIII 1/2 of  the  Illinois
31    Insurance  Code  and this Section 5-3 shall apply to the sale
32    by any health maintenance organization of greater than 10% of
33    its enrollee population  (including  without  limitation  the
34    health  maintenance organization's right, title, and interest
 
                            -17-     LRB093 09876 JLS 10124 b
 1    in and to its health care certificates).
 2        (e)  In considering any management  contract  or  service
 3    agreement  subject to Section 141.1 of the Illinois Insurance
 4    Code, the Director (i) shall, in  addition  to  the  criteria
 5    specified  in  Section  141.2 of the Illinois Insurance Code,
 6    take into account the effect of the  management  contract  or
 7    service   agreement   on  the  continuation  of  benefits  to
 8    enrollees  and  the  financial  condition   of   the   health
 9    maintenance  organization to be managed or serviced, and (ii)
10    need not take into  account  the  effect  of  the  management
11    contract or service agreement on competition.
12        (f)  Except  for  small employer groups as defined in the
13    Small Employer Rating, Renewability  and  Portability  Health
14    Insurance  Act and except for medicare supplement policies as
15    defined in Section 363 of  the  Illinois  Insurance  Code,  a
16    Health  Maintenance Organization may by contract agree with a
17    group or other enrollment unit to effect  refunds  or  charge
18    additional premiums under the following terms and conditions:
19             (i)  the  amount  of, and other terms and conditions
20        with respect to, the refund or additional premium are set
21        forth in the group or enrollment unit contract agreed  in
22        advance of the period for which a refund is to be paid or
23        additional  premium  is to be charged (which period shall
24        not be less than one year); and
25             (ii)  the amount of the refund or additional premium
26        shall  not  exceed  20%   of   the   Health   Maintenance
27        Organization's profitable or unprofitable experience with
28        respect  to  the  group  or other enrollment unit for the
29        period (and, for  purposes  of  a  refund  or  additional
30        premium,  the profitable or unprofitable experience shall
31        be calculated taking into account a pro rata share of the
32        Health  Maintenance  Organization's  administrative   and
33        marketing  expenses,  but shall not include any refund to
34        be made or additional premium to be paid pursuant to this
 
                            -18-     LRB093 09876 JLS 10124 b
 1        subsection (f)).  The Health Maintenance Organization and
 2        the  group  or  enrollment  unit  may  agree   that   the
 3        profitable  or  unprofitable experience may be calculated
 4        taking into account the refund period and the immediately
 5        preceding 2 plan years.
 6        The  Health  Maintenance  Organization  shall  include  a
 7    statement in the evidence of coverage issued to each enrollee
 8    describing the possibility of a refund or additional premium,
 9    and upon request of any group or enrollment unit, provide  to
10    the group or enrollment unit a description of the method used
11    to   calculate  (1)  the  Health  Maintenance  Organization's
12    profitable experience with respect to the group or enrollment
13    unit and the resulting refund to the group or enrollment unit
14    or (2) the  Health  Maintenance  Organization's  unprofitable
15    experience  with  respect to the group or enrollment unit and
16    the resulting additional premium to be paid by the  group  or
17    enrollment unit.
18        In   no  event  shall  the  Illinois  Health  Maintenance
19    Organization  Guaranty  Association  be  liable  to  pay  any
20    contractual obligation of an insolvent  organization  to  pay
21    any refund authorized under this Section.
22    (Source: P.A.  91-357,  eff.  7-29-99;  91-406,  eff. 1-1-00;
23    91-549, eff. 8-14-99; 91-605,  eff.  12-14-99;  91-788,  eff.
24    6-9-00; 92-764, eff. 1-1-03.)

25        Section  20.   The Voluntary Health Services Plans Act is
26    amended by changing Section 10 as follows:

27        (215 ILCS 165/10) (from Ch. 32, par. 604)
28        Sec.  10.  Application  of  Insurance  Code   provisions.
29    Health  services plan corporations and all persons interested
30    therein  or  dealing  therewith  shall  be  subject  to   the
31    provisions of Articles IIA and XII 1/2 and Sections 3.1, 133,
32    140,  143,  143c,  149, 155.37, 354, 355.2, 356r, 356t, 356u,
 
                            -19-     LRB093 09876 JLS 10124 b
 1    356v, 356w, 356x, 356y, 356z.1, 356z.2, 356z.4, 367.2,  368a,
 2    401,  401.1,  402,  403,  403A,  408,  408.2,  and  412,  and
 3    paragraphs  (7)  and  (15)  of  Section  367  of the Illinois
 4    Insurance Code.
 5    (Source: P.A. 91-406,  eff.  1-1-00;  91-549,  eff.  8-14-99;
 6    91-605,  eff.  12-14-99;  91-788,  eff.  6-9-00; 92-130, eff.
 7    7-20-01; 92-440, eff. 8-17-01; 92-651, eff. 7-11-02;  92-764,
 8    eff. 1-1-03.)

 9        Section  25.   The  Senior  Citizens and Disabled Persons
10    Property Tax Relief  and  Pharmaceutical  Assistance  Act  is
11    amended by changing Section 3.15 as follows:

12        (320 ILCS 25/3.15) (from Ch. 67 1/2, par. 403.15)
13        Sec.  3.15.   "Covered  prescription  drug" means (1) any
14    cardiovascular agent  or  drug;  (2)  any  insulin  or  other
15    prescription   drug   used  in  the  treatment  of  diabetes,
16    including syringe and needles used to administer the insulin;
17    (3) any prescription drug used in the treatment of arthritis,
18    (4) beginning on January 1, 2001, any prescription drug  used
19    in the treatment of cancer, (5) beginning on January 1, 2001,
20    any  prescription  drug  used in the treatment of Alzheimer's
21    disease, (6) beginning on January 1, 2001,  any  prescription
22    drug  used  in  the  treatment  of  Parkinson's  disease, (7)
23    beginning on January 1, 2001, any prescription drug  used  in
24    the  treatment of glaucoma, (8) beginning on January 1, 2001,
25    any prescription drug used in the treatment of  lung  disease
26    and  smoking  related illnesses, and (9) beginning on July 1,
27    2001,  any  prescription  drug  used  in  the  treatment   of
28    osteoporosis,   and   (10)   beginning   January   1,   2004,
29    immunosuppresive  agents  (anti-rejection medication) used in
30    connection with organ transplants.  The  specific  agents  or
31    products to be included under such categories shall be listed
32    in   a  handbook  to  be  prepared  and  distributed  by  the
 
                            -20-     LRB093 09876 JLS 10124 b
 1    Department.  The general types of covered prescription  drugs
 2    shall be indicated by rule.
 3    (Source:  P.A.  91-699,  eff.  1-1-01;  92-10,  eff. 6-11-01;
 4    92-790, eff. 8-6-02.)