97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB2165

 

Introduced 2/10/2011, by Sen. Dave Syverson

 

SYNOPSIS AS INTRODUCED:
 
5 ILCS 375/6.11
55 ILCS 5/5-1069.3
65 ILCS 5/10-4-2.3
105 ILCS 5/10-22.3f
215 ILCS 5/356z.3a
215 ILCS 125/5-3  from Ch. 111 1/2, par. 1411.2
215 ILCS 165/10  from Ch. 32, par. 604

    If House Bill 5085 of the 96th General Assembly becomes law, amends the State Employees Group Insurance Act of 1971, the Counties Code, the Illinois Municipal Code, the School Code, the Illinois Insurance Code, the Health Maintenance Organization Act, and the Voluntary Health Services Plans Act to provide that a nonparticipating facility-based physician or provider may bill the beneficiary, insured, or enrollee for services determined by the insurer or health plan to be a noncovered service if the basis for denial is other than lack of medical necessity. Provides that a nonparticipating facility-based physician's or provider's acceptance of payment from an insurer or health plan regarding a claim in dispute prior to the initiation of arbitration shall not bar the initiation of arbitration by the nonparticipating facility-based physician or provider. Provides that nothing in the provision concerning nonparticipating facility-based physicians and providers shall be interpreted to change the prudent layperson provisions with respect to emergency services under the Managed Care Reform and Patient Rights Act. Sets forth provisions concerning arbitration. Effective upon becoming law or on the effective date of House Bill 5085 of the 96th General Assembly, whichever is later.


LRB097 08167 RPM 48291 b

FISCAL NOTE ACT MAY APPLY
HOME RULE NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning insurance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. If and only if House Bill 5085 of the 96th
5General Assembly becomes law, then the State Employees Group
6Insurance Act of 1971 is amended by changing Section 6.11 as
7follows:
 
8    (5 ILCS 375/6.11)
9    Sec. 6.11. Required health benefits; Illinois Insurance
10Code requirements. The program of health benefits shall provide
11the post-mastectomy care benefits required to be covered by a
12policy of accident and health insurance under Section 356t of
13the Illinois Insurance Code. The program of health benefits
14shall provide the coverage required under Sections 356g,
15356g.5, 356g.5-1, 356m, 356u, 356w, 356x, 356z.2, 356z.3a,
16356z.4, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12,
17356z.13, 356z.14, 356z.15, and 356z.17 of the Illinois
18Insurance Code. The program of health benefits must comply with
19Section 155.37 of the Illinois Insurance Code.
20    Rulemaking authority to implement Public Act 95-1045, if
21any, is conditioned on the rules being adopted in accordance
22with all provisions of the Illinois Administrative Procedure
23Act and all rules and procedures of the Joint Committee on

 

 

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1Administrative Rules; any purported rule not so adopted, for
2whatever reason, is unauthorized.
3(Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07;
495-520, eff. 8-28-07; 95-876, eff. 8-21-08; 95-958, eff.
56-1-09; 95-978, eff. 1-1-09; 95-1005, eff. 12-12-08; 95-1044,
6eff. 3-26-09; 95-1045, eff. 3-27-09; 95-1049, eff. 1-1-10;
796-139, eff. 1-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10;
896-1000, eff. 7-2-10.)
 
9    Section 10. If and only if House Bill 5085 of the 96th
10General Assembly becomes law, then the Counties Code is amended
11by changing Section 5-1069.3 as follows:
 
12    (55 ILCS 5/5-1069.3)
13    Sec. 5-1069.3. Required health benefits. If a county,
14including a home rule county, is a self-insurer for purposes of
15providing health insurance coverage for its employees, the
16coverage shall include coverage for the post-mastectomy care
17benefits required to be covered by a policy of accident and
18health insurance under Section 356t and the coverage required
19under Sections 356g, 356g.5, 356g.5-1, 356u, 356w, 356x,
20356z.3a, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12,
21356z.13, 356z.14, and 356z.15 of the Illinois Insurance Code.
22The requirement that health benefits be covered as provided in
23this Section is an exclusive power and function of the State
24and is a denial and limitation under Article VII, Section 6,

 

 

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1subsection (h) of the Illinois Constitution. A home rule county
2to which this Section applies must comply with every provision
3of this Section.
4    Rulemaking authority to implement Public Act 95-1045, if
5any, is conditioned on the rules being adopted in accordance
6with all provisions of the Illinois Administrative Procedure
7Act and all rules and procedures of the Joint Committee on
8Administrative Rules; any purported rule not so adopted, for
9whatever reason, is unauthorized.
10(Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07;
1195-520, eff. 8-28-07; 95-876, eff. 8-21-08; 95-958, eff.
126-1-09; 95-978, eff. 1-1-09; 95-1005, eff. 12-12-08; 95-1045,
13eff. 3-27-09; 95-1049, eff. 1-1-10; 96-139, eff. 1-1-10;
1496-328, eff. 8-11-09; 96-1000, eff. 7-2-10.)
 
15    Section 15. If and only if House Bill 5085 of the 96th
16General Assembly becomes law, then the Illinois Municipal Code
17is amended by changing Section 10-4-2.3 as follows:
 
18    (65 ILCS 5/10-4-2.3)
19    Sec. 10-4-2.3. Required health benefits. If a
20municipality, including a home rule municipality, is a
21self-insurer for purposes of providing health insurance
22coverage for its employees, the coverage shall include coverage
23for the post-mastectomy care benefits required to be covered by
24a policy of accident and health insurance under Section 356t

 

 

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1and the coverage required under Sections 356g, 356g.5,
2356g.5-1, 356u, 356w, 356x, 356z.3a, 356z.6, 356z.8, 356z.9,
3356z.10, 356z.11, 356z.12, 356z.13, 356z.14, and 356z.15 of the
4Illinois Insurance Code. The requirement that health benefits
5be covered as provided in this is an exclusive power and
6function of the State and is a denial and limitation under
7Article VII, Section 6, subsection (h) of the Illinois
8Constitution. A home rule municipality to which this Section
9applies must comply with every provision of this Section.
10    Rulemaking authority to implement Public Act 95-1045, if
11any, is conditioned on the rules being adopted in accordance
12with all provisions of the Illinois Administrative Procedure
13Act and all rules and procedures of the Joint Committee on
14Administrative Rules; any purported rule not so adopted, for
15whatever reason, is unauthorized.
16(Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07;
1795-520, eff. 8-28-07; 95-876, eff. 8-21-08; 95-958, eff.
186-1-09; 95-978, eff. 1-1-09; 95-1005, eff. 12-12-08; 95-1045,
19eff. 3-27-09; 95-1049, eff. 1-1-10; 96-139, eff. 1-1-10;
2096-328, eff. 8-11-09; 96-1000, eff. 7-2-10.)
 
21    Section 20. If and only if House Bill 5085 of the 96th
22General Assembly becomes law, then the School Code is amended
23by changing Section 10-22.3f as follows:
 
24    (105 ILCS 5/10-22.3f)

 

 

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1    Sec. 10-22.3f. Required health benefits. Insurance
2protection and benefits for employees shall provide the
3post-mastectomy care benefits required to be covered by a
4policy of accident and health insurance under Section 356t and
5the coverage required under Sections 356g, 356g.5, 356g.5-1,
6356u, 356w, 356x, 356z.3a, 356z.6, 356z.8, 356z.9, 356z.11,
7356z.12, 356z.13, 356z.14, and 356z.15 of the Illinois
8Insurance Code.
9    Rulemaking authority to implement Public Act 95-1045, if
10any, is conditioned on the rules being adopted in accordance
11with all provisions of the Illinois Administrative Procedure
12Act and all rules and procedures of the Joint Committee on
13Administrative Rules; any purported rule not so adopted, for
14whatever reason, is unauthorized.
15(Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07;
1695-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;
1795-1005, 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
181-1-10; 96-139, eff. 1-1-10; 96-328, eff. 8-11-09; 96-1000,
19eff. 7-2-10.)
 
20    Section 25. If and only if House Bill 5085 of the 96th
21General Assembly becomes law, then the Illinois Insurance Code
22is amended by changing Section 356z.3a as follows:
 
23    (215 ILCS 5/356z.3a)
24    Sec. 356z.3a. Nonparticipating facility-based physicians

 

 

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1and providers.
2    (a) For purposes of this Section, "facility-based
3provider" means a physician or other provider who provides
4provide radiology, anesthesiology, pathology, neonatology, or
5emergency department services to insureds, beneficiaries, or
6enrollees in a participating hospital or participating
7ambulatory surgical treatment center.
8    (b) When a beneficiary, insured, or enrollee utilizes a
9participating network hospital or a participating network
10ambulatory surgery center and, due to any reason, in network
11services for radiology, anesthesiology, pathology, emergency
12physician, or neonatology are unavailable and are provided by a
13nonparticipating facility-based physician or provider, the
14insurer or health plan shall ensure that the beneficiary,
15insured, or enrollee shall incur no greater out-of-pocket costs
16than the beneficiary, insured, or enrollee would have incurred
17with a participating physician or provider for covered
18services.
19    (c) If a beneficiary, insured, or enrollee agrees in
20writing, notwithstanding any other provision of this Code, any
21benefits a beneficiary, insured, or enrollee receives for
22services under the situation in subsection (b) are assigned to
23the nonparticipating facility-based providers. The insurer or
24health plan shall provide the nonparticipating provider with a
25written explanation of benefits that specifies the proposed
26reimbursement and the applicable deductible, copayment or

 

 

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1coinsurance amounts owed by the insured, beneficiary or
2enrollee. The insurer or health plan shall pay any
3reimbursement directly to the nonparticipating facility-based
4provider. The nonparticipating facility-based physician or
5provider shall not bill the beneficiary, insured, or enrollee,
6except for applicable deductible, copayment, or coinsurance
7amounts that would apply if the beneficiary, insured, or
8enrollee utilized a participating physician or provider for
9covered services in accordance with the explanation of benefits
10submitted by the insurer or health plan. A nonparticipating
11facility-based physician or provider may bill the beneficiary,
12insured, or enrollee for services determined by the insurer or
13health plan to be a noncovered service as set forth in the
14contract or the certificate of insurance.
15    If a beneficiary, insured, or enrollee specifically
16rejects assignment under this Section in writing to the
17nonparticipating facility-based provider, then the
18nonparticipating facility-based provider may bill the
19beneficiary, insured, or enrollee for the services rendered.
20    (d) For bills assigned under subsection (c), the
21nonparticipating facility-based provider may bill the insurer
22or health plan for the services rendered, and the insurer or
23health plan may pay the billed amount or attempt to negotiate
24reimbursement with the nonparticipating facility-based
25provider. If attempts to negotiate reimbursement for services
26provided by a nonparticipating facility-based provider do not

 

 

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1result in a resolution of the payment dispute within 30 days
2after receipt of written explanation of benefits from by the
3insurer or health plan, then an insurer or health plan or
4nonparticipating facility-based physician or provider may
5initiate binding arbitration to determine payment for services
6provided on a per bill basis.
7    The party requesting arbitration shall notify the other
8party arbitration has been initiated and state its final offer
9before arbitration. In response to this notice, the
10nonrequesting party shall inform the requesting party of its
11final offer before the arbitration occurs. Arbitration shall be
12initiated by filing a request with the Department of Insurance.
13    (e) The Department of Insurance shall publish a list of
14approved arbitrators or entities that shall provide binding
15arbitration. These arbitrators shall be American Arbitration
16Association or American Health Lawyers Association trained
17arbitrators. Both parties must agree on an arbitrator from the
18Department of Insurance's list of arbitrators. If no agreement
19can be reached, then a list of 5 arbitrators shall be provided
20by the Department of Insurance. From the list of 5 arbitrators,
21the insurer can veto 2 arbitrators and the provider can veto 2
22arbitrators. The remaining arbitrator shall be the chosen
23arbitrator. This arbitration shall consist of a review of the
24written submissions by both parties. Binding arbitration shall
25provide for a written decision within 45 days after the request
26is filed with the Department of Insurance. Both parties shall

 

 

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1be bound by the arbitrator's decision. The arbitrator's
2expenses and fees, together with other expenses, not including
3attorney's fees, incurred in the conduct of the arbitration,
4shall be paid as provided in the decision.
5    (f) This Section 356z.3a does not apply to a beneficiary,
6insured, or enrollee who willfully chooses to access a
7nonparticipating facility-based physician or provider for
8health care services available through the insurer's or plan's
9network of participating physicians and providers. In these
10circumstances, the contractual requirements for
11nonparticipating facility-based provider reimbursements will
12apply.
13    (g) Section 368a of this Act shall not apply during the
14pendency of a decision under subsection (d) any interest
15required to be paid a provider under Section 368a shall not
16accrue until after 30 days of an arbitrator's decision as
17provided in subsection (d), but in no circumstances longer than
18150 days from date the nonparticipating facility-based
19provider billed for services rendered.
20    (h) Nothing in this Section shall be interpreted to change
21the prudent layperson provisions with respect to emergency
22services under the Managed Care Reform and Patient Rights Act.
23    (i) The Department of Insurance shall require the
24arbitrator to file all arbitration decisions upon being
25awarded, with any references to any patients redacted. The
26Department shall monitor the implementation of this Section and

 

 

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1shall report its findings to the General Assembly by July 1,
22012.
3(Source: 09600HB5085enr.)
 
4    Section 30. If and only if House Bill 5085 of the 96th
5General Assembly becomes law, then the Health Maintenance
6Organization Act is amended by changing Section 5-3 as follows:
 
7    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
8    Sec. 5-3. Insurance Code provisions.
9    (a) Health Maintenance Organizations shall be subject to
10the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
11141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
12154.6, 154.7, 154.8, 155.04, 355.2, 356g.5-1, 356m, 356v, 356w,
13356x, 356y, 356z.2, 356z.3a, 356z.4, 356z.5, 356z.6, 356z.8,
14356z.9, 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15,
15356z.17, 356z.18, 364.01, 367.2, 367.2-5, 367i, 368a, 368b,
16368c, 368d, 368e, 370c, 401, 401.1, 402, 403, 403A, 408, 408.2,
17409, 412, 444, and 444.1, paragraph (c) of subsection (2) of
18Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII,
19XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
20    (b) For purposes of the Illinois Insurance Code, except for
21Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
22Maintenance Organizations in the following categories are
23deemed to be "domestic companies":
24        (1) a corporation authorized under the Dental Service

 

 

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1    Plan Act or the Voluntary Health Services Plans Act;
2        (2) a corporation organized under the laws of this
3    State; or
4        (3) a corporation organized under the laws of another
5    state, 30% or more of the enrollees of which are residents
6    of this State, except a corporation subject to
7    substantially the same requirements in its state of
8    organization as is a "domestic company" under Article VIII
9    1/2 of the Illinois Insurance Code.
10    (c) In considering the merger, consolidation, or other
11acquisition of control of a Health Maintenance Organization
12pursuant to Article VIII 1/2 of the Illinois Insurance Code,
13        (1) the Director shall give primary consideration to
14    the continuation of benefits to enrollees and the financial
15    conditions of the acquired Health Maintenance Organization
16    after the merger, consolidation, or other acquisition of
17    control takes effect;
18        (2)(i) the criteria specified in subsection (1)(b) of
19    Section 131.8 of the Illinois Insurance Code shall not
20    apply and (ii) the Director, in making his determination
21    with respect to the merger, consolidation, or other
22    acquisition of control, need not take into account the
23    effect on competition of the merger, consolidation, or
24    other acquisition of control;
25        (3) the Director shall have the power to require the
26    following information:

 

 

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1            (A) certification by an independent actuary of the
2        adequacy of the reserves of the Health Maintenance
3        Organization sought to be acquired;
4            (B) pro forma financial statements reflecting the
5        combined balance sheets of the acquiring company and
6        the Health Maintenance Organization sought to be
7        acquired as of the end of the preceding year and as of
8        a date 90 days prior to the acquisition, as well as pro
9        forma financial statements reflecting projected
10        combined operation for a period of 2 years;
11            (C) a pro forma business plan detailing an
12        acquiring party's plans with respect to the operation
13        of the Health Maintenance Organization sought to be
14        acquired for a period of not less than 3 years; and
15            (D) such other information as the Director shall
16        require.
17    (d) The provisions of Article VIII 1/2 of the Illinois
18Insurance Code and this Section 5-3 shall apply to the sale by
19any health maintenance organization of greater than 10% of its
20enrollee population (including without limitation the health
21maintenance organization's right, title, and interest in and to
22its health care certificates).
23    (e) In considering any management contract or service
24agreement subject to Section 141.1 of the Illinois Insurance
25Code, the Director (i) shall, in addition to the criteria
26specified in Section 141.2 of the Illinois Insurance Code, take

 

 

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1into account the effect of the management contract or service
2agreement on the continuation of benefits to enrollees and the
3financial condition of the health maintenance organization to
4be managed or serviced, and (ii) need not take into account the
5effect of the management contract or service agreement on
6competition.
7    (f) Except for small employer groups as defined in the
8Small Employer Rating, Renewability and Portability Health
9Insurance Act and except for medicare supplement policies as
10defined in Section 363 of the Illinois Insurance Code, a Health
11Maintenance Organization may by contract agree with a group or
12other enrollment unit to effect refunds or charge additional
13premiums under the following terms and conditions:
14        (i) the amount of, and other terms and conditions with
15    respect to, the refund or additional premium are set forth
16    in the group or enrollment unit contract agreed in advance
17    of the period for which a refund is to be paid or
18    additional premium is to be charged (which period shall not
19    be less than one year); and
20        (ii) the amount of the refund or additional premium
21    shall not exceed 20% of the Health Maintenance
22    Organization's profitable or unprofitable experience with
23    respect to the group or other enrollment unit for the
24    period (and, for purposes of a refund or additional
25    premium, the profitable or unprofitable experience shall
26    be calculated taking into account a pro rata share of the

 

 

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1    Health Maintenance Organization's administrative and
2    marketing expenses, but shall not include any refund to be
3    made or additional premium to be paid pursuant to this
4    subsection (f)). The Health Maintenance Organization and
5    the group or enrollment unit may agree that the profitable
6    or unprofitable experience may be calculated taking into
7    account the refund period and the immediately preceding 2
8    plan years.
9    The Health Maintenance Organization shall include a
10statement in the evidence of coverage issued to each enrollee
11describing the possibility of a refund or additional premium,
12and upon request of any group or enrollment unit, provide to
13the group or enrollment unit a description of the method used
14to calculate (1) the Health Maintenance Organization's
15profitable experience with respect to the group or enrollment
16unit and the resulting refund to the group or enrollment unit
17or (2) the Health Maintenance Organization's unprofitable
18experience with respect to the group or enrollment unit and the
19resulting additional premium to be paid by the group or
20enrollment unit.
21    In no event shall the Illinois Health Maintenance
22Organization Guaranty Association be liable to pay any
23contractual obligation of an insolvent organization to pay any
24refund authorized under this Section.
25    (g) Rulemaking authority to implement Public Act 95-1045,
26if any, is conditioned on the rules being adopted in accordance

 

 

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1with all provisions of the Illinois Administrative Procedure
2Act and all rules and procedures of the Joint Committee on
3Administrative Rules; any purported rule not so adopted, for
4whatever reason, is unauthorized.
5(Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07;
695-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;
795-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
81-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff.
96-1-10; 96-1000, eff. 7-2-10.)
 
10    Section 35. If and only if House Bill 5085 of the 96th
11General Assembly becomes law, then the Voluntary Health
12Services Plans Act is amended by changing Section 10 as
13follows:
 
14    (215 ILCS 165/10)  (from Ch. 32, par. 604)
15    Sec. 10. Application of Insurance Code provisions. Health
16services plan corporations and all persons interested therein
17or dealing therewith shall be subject to the provisions of
18Articles IIA and XII 1/2 and Sections 3.1, 133, 140, 143, 143c,
19149, 155.37, 354, 355.2, 356g, 356g.5, 356g.5-1, 356r, 356t,
20356u, 356v, 356w, 356x, 356y, 356z.1, 356z.2, 356z.3a, 356z.4,
21356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12,
22356z.13, 356z.14, 356z.15, 356z.18, 364.01, 367.2, 368a, 401,
23401.1, 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7)
24and (15) of Section 367 of the Illinois Insurance Code.

 

 

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1    Rulemaking authority to implement Public Act 95-1045, if
2any, is conditioned on the rules being adopted in accordance
3with all provisions of the Illinois Administrative Procedure
4Act and all rules and procedures of the Joint Committee on
5Administrative Rules; any purported rule not so adopted, for
6whatever reason, is unauthorized.
7(Source: P.A. 95-189, eff. 8-16-07; 95-331, eff. 8-21-07;
895-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.
98-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005,
10eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff. 1-1-10;
1196-328, eff. 8-11-09; 96-833, eff. 6-1-10; 96-1000, eff.
127-2-10.)
 
13    Section 99. Effective date. This Act takes effect upon
14becoming law or on the effective date of House Bill 5085 of the
1596th General Assembly, whichever is later.