Illinois General Assembly - Full Text of SB3450
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Full Text of SB3450  98th General Assembly


Sen. James F. Clayborne, Jr.

Filed: 3/24/2014





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2    AMENDMENT NO. ______. Amend Senate Bill 3450 by replacing
3everything after the enacting clause with the following:
4    "Section 1. Short title. This Act may be cited as the
5Nursing Home Residents' Managed Care Rights Act.
6    Section 5. Findings. The General Assembly finds that
7elderly Illinoisans residing in a nursing home have the right
9    (1) quality health care regardless of the payer;
10    (2) receive medically necessary care prescribed by their
12    (3) a simple appeal process when care is denied;
13    (4) make decisions about their care; and
14    (5) continue to live in the nursing home they call home.
15    Section 10. Scope. This Act applies to policies and



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1contracts amended, delivered, issued, or renewed on or after
2the effective date of this Act. This Act does not diminish a
3managed care organization's duties and responsibilities under
4other federal or State laws or rules adopted under those laws.
5    Section 15. Definitions.
6    (a) As used in this Act:
7    "Advanced practice nurse" means an individual properly
8licensed as an advanced practice nurse under the Nurse Practice
10    "Appeal" means any of the procedures that deal with the
11review of adverse organization determinations on the health
12care services the enrollee believes he or she is entitled to
13receive, including delay in providing, arranging for, or
14approving the health care services, such that a delay would
15adversely affect the health of the enrollee or on any amounts
16the enrollee must pay for a service, as defined under 42 CFR
17422.566(b). These procedures include reconsiderations by the
18managed care organization and, if necessary, an independent
19review entity, hearings before administrative law judges
20(ALJs), review by the Medicare Appeals Council (MAC), and
21judicial review.
22    "Authorized medical professional" means a physician,
23physician assistant, or advanced practice nurse.
24    "Community" means a geographic area within a 15-mile or
2530-minute radius from the enrollee's zip code of residence



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1prior to becoming a nursing home resident or from the zip code
2of the enrollee's spouse's residence if the spouse relocated
3after the enrollee became a nursing home resident.
4    "Demonstration plan" means a 3-way contract entered into by
5a managed care organization with the United States Department
6of Health and Human Services' Centers for Medicare & Medicaid
7Services and the Department of Healthcare and Family Services
8to provide health care services, and any chosen flexible
9benefits, including long-term care and services.
10    "Department" means the Department of Healthcare and Family
12    "Emergency" or "medical emergency" means a medical
13condition manifesting itself by acute symptoms of sufficient
14severity, including, but not limited to, severe pain, such that
15a prudent layperson who possesses an average knowledge of
16health and medicine could reasonably expect the absence of
17immediate medical attention to result in (1) placing the health
18of the individual in serious jeopardy; (2) serious impairment
19to bodily functions; or (3) serious dysfunction of any bodily
20organ or part.
21    "Enhanced care" means a level of care in excess of
22traditional long-term care and includes, but is not limited to,
23ventilator care, traumatic brain injury services, pain
24management, wound care, bariatric services, and services
25provided to residents with diagnoses such as serious mental
26illness or Alzheimer's disease and other dementia-related



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2    "Enrollee" means any individual who resides in a nursing
3home or is qualified to be admitted to a nursing home and is
4enrolled with a managed care organization participating in one
5of the demonstration projects.
6    "Health care services" means the diagnosis, treatment, and
7prevention of disease and includes medication, primary care,
8nursing or medical care, mental health treatment, psychiatric
9rehabilitation, memory loss services, physical, occupational,
10and speech rehabilitation, enhanced care, and assistance with
11activities of daily living.
12    "Managed care organization" means an entity that meets the
13definition of health maintenance organization as defined in the
14Health Maintenance Organization Act and operates under a 3-way
15contract that administers a health plan under the Integrated
16Care Program or the Medicare-Medicaid Alignment Initiative.
17    "Marketing" means any written or oral communication from a
18managed care organization or its representative or a
19third-party broker under contract with the Department that can
20reasonably be interpreted as intended to influence a resident
21to enroll, not to enroll, or to disenroll from a health care
22delivery system.
23    "Medically necessary" means health care services that an
24authorized medical professional, exercising prudent clinical
25judgment, would provide to a patient for the purpose of
26preventing, evaluating, diagnosing, or treating an illness,



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1injury, or disease or its symptoms, and that are (i) in
2accordance with the generally accepted standards of medical
3practice; (ii) clinically appropriate, in terms of type,
4frequency, extent, site, and duration, and considered
5effective for the patient's illness, injury, or disease; and
6(iii) not primarily for the convenience of the patient, an
7authorized medical professional, or other health care
8provider. Health care services that are ordered by an
9authorized medical professional shall be presumed medically
10necessary absent clear and substantial evidence to the
11contrary. Managed care organizations are responsible for
12ensuring the delivery of a all medically necessary services.
13    "Nursing home" means all facilities licensed under the
14Nursing Home Care Act.
15    "Physician" means an individual licensed to practice in all
16branches of medicine under the Medical Practice Act of 1987.
17    "Physician assistant" means an individual properly
18licensed under the Physician Assistant Practice Act of 1987.
19    "Resident" means an enrollee who is receiving personal or
20medical care, including, but not limited to, mental health
21treatment, psychiatric rehabilitation, physical
22rehabilitation, and assistance with activities of daily living
23who is living in a nursing home.
24    "Resident's representative" means a person designated in
25writing by a resident to be the resident's representative or
26the resident's guardian, as described by the Nursing Home Care



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2    "Single-case resident choice agreement" means an agreement
3between an out-of-network nursing home and a managed care
4organization to provide for the provision of long-term care
5services to an individual enrollee.
6    "Transition care period" means a period of time within
7which the enrollee may remain in the nursing home where the
8enrollee currently resides whether or not the nursing home has
9a contract with a managed care organization participating in
10the demonstration project established under Section 20 of this
11Act or whether or not the nursing home has a contract with the
12managed care organization in which the resident is enrolled.
13    Section 20. Authorization.
14    (a) The Department of Healthcare and Family Services is
15authorized to establish a managed care demonstration project to
16test the delivery of long-term care and services to Medicaid
17beneficiaries using private managed care organizations under a
183-way contract with the Department and the Center for Medicare &
19 Medicaid. Two separate demonstration projects are
20authorized, with each focused on separate and distinct
21populations. The Integrated Care Program (ICP) is authorized to
22serve individuals who qualify for Medicaid-only assistance,
23and the Medicare-Medicaid Alignment Initiative (MMAI) is
24authorized to serve individuals who qualify for both Medicaid
25and Medicare assistance. The ICP program shall sunset on July



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11, 2016 and the MMAI program shall sunset on August 1, 2017.
2Either or both programs may be extended in whole or part, but
3only after an independent evaluation conducted by a university
4based in the State of Illinois determines that the plan has not
5adversely impacted the accessibility, availability, and
6quality of health care services and medications in nursing home
7settings in an arbitrary and capricious manner.
8    (b) Individual counties shall be identified to participate
9in one or both demonstration projects. Network Adequacy shall
10include the availability of 2 or more nursing homes in each
11affected community.
12    (c) Care coordination services offered by managed care
13organizations shall be resident-driven and person-centered.
14All Medicaid beneficiaries shall have the right to receive
15health care services in the care setting of their choice, to
16remain in the nursing home they reside in, and to live in their
17local community. Decision-making standards shall be based on
18the best interests of the Medicaid beneficiary. Managed care
19organizations are prohibited from using a cost-based or
20resource utilization model. Health care services ordered by an
21authorized medical professional shall be presumed to be
22medically necessary and subject to payment by the managed care
24    (d) Employees of the Department, the Department of
25Insurance, the managed care organizations, and third-party
26brokers having contact with enrollees shall be culturally



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1competent and trained in working with the elderly, individuals
2diagnosed with serious mental illness, and individuals with
3dementia. Translators shall be made available for individuals
4for whom English is a second language or individuals who are
5blind or deaf.
6    (e) The State of Illinois shall retain the responsibility
7for oversight and compliance issues, which shall be proactive
8and ongoing. The State shall establish uniform policy and
9procedures to increase the effectiveness of the State's
10compliance monitoring, reduce beneficiary and provider
11confusion, and increase the quality of health care services
13    (f) Managed care organizations are required to ensure
14seamless delivery and payment of health care services as
15enrollees migrate from managed care organization to managed
16care organization and from one care setting to another.
17    (g) Any and all providers willing to accept the terms and
18conditions offered by the managed care organization shall be
19offered a contract and shall be allowed to renew the contract
20at the end of the contract period. No managed care organization
21shall offer a contract to a provider or group of providers that
22includes terms and conditions designed to discourage the
23participation of one or more providers.
24    (h) All Medicaid beneficiaries receiving long-term care
25and services shall have available to them the same package of
26health care services and ancillary services, regardless of



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1whether they reside in a managed care demonstration county or a
2fee-for-service county. All providers shall be held to the same
3standards as set forth in federal and State statutes, rules,
4and regulations regardless of whether they are located in a
5managed care demonstration county or a fee-for-service county.
6    (i) No managed care organization shall penalize a nursing
7home for advocating on behalf of its residents, including the
8filing of appeals on behalf of the residents or on behalf of
10    (j) Managed care organizations shall be required to pay all
11providers within 30 days after receipt of a valid invoice for
12health care services or be subject to penalties. All payments
13for health care services rendered shall be backed by the full
14faith and credit of the State.
15    Section 25. Right to stay in their nursing home and
17    (a) To achieve network adequacy, managed care
18organizations shall solicit contracts with all nursing homes
19located in demonstration counties and shall enter into
20contracts with any nursing home willing to accept the terms and
21conditions of the managed care organization, provided that the
22nursing home meets all applicable State and federal
23requirements for participation in the Medicaid program. No
24managed care organization shall be determined to achieve
25adequacy if it does not offer each enrollee at least 2 nursing



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1homes within a 15-mile or 30-minute radius from an enrollee's
2zip code of residence within each county of the service area.
3    (b) Each resident shall be afforded a 180-day transition
4care period triggered by any one of the following qualifying
6        (1) A resident of a nursing home becomes enrolled with
7    a managed care organization either voluntarily or as
8    assigned by the Department.
9        (2) The nursing home in which the resident resides is
10    not renewed or terminated or terminates or does not renew
11    its contract with the managed care organization in which
12    the resident is enrolled.
13        (3) The managed care organization in which the resident
14    is enrolled is not renewed or terminated or terminates or
15    does not renew its contract with the Department.
16    A resident who in the course of a 180-day transition care
17period experiences a subsequent qualifying event shall have the
18transition care period extended by an additional 180 days.
19During the course of a 180-day transition care period triggered
20by paragraph (1) or (3) of subsection (b) of this Section, a
21resident may exercise the right to voluntarily select another
22managed care organization without effecting the length of the
23transition care period or the rights guaranteed a resident
24during or after a transition care period.
25     (c) A resident described in subsection (b) of this Section
26shall have 180 days to move to a nursing home under contract



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1with the managed care organization in which the resident is
2enrolled or select a managed care organization under contract
3with the nursing home in which the resident resides. If, by the
4end of the 180-day transition care period, the nursing home in
5which the resident resides chooses not to enter into a contract
6with the managed care organization and the resident does not
7elect to move to a network nursing home or enroll in managed
8care organization under contract with the nursing home in which
9the resident resides, the managed care organization in which
10the resident is enrolled shall enter into a single-case
11resident choice agreement with the nursing home in which the
12resident resides.
13    (d) An enrollee shall be guaranteed the right to receive
14health care services in the enrollee's community. A managed
15care organization unable to offer the enrollee 2 or more
16nursing home options shall offer the enrollee the opportunity
17to select an out-of-network nursing home within the enrollee's
18community. The managed care organization shall enter into a
19single-case resident choice agreement with the selected
20nursing home.
21    (e) An enrollee with an order signed by an authorized
22medical professional for enhanced care shall be entitled to
23receive such enhanced care within enrollee's community. If the
24managed care organization does not have a contract with a
25nursing home offering the type of enhanced care ordered in the
26enrollee's community, the enrollee shall be permitted to select



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1an out-of-network nursing home providing the enhanced care. The
2managed care organization shall enter into a single-case
3resident choice agreement with the selected nursing home.
4    (f) A single-case resident choice agreement shall be
5subject to the same terms, conditions, and reimbursement of an
6agreement offered by the managed care organization for
7participation in demonstration project network. Only those
8nursing homes meeting all applicable State and federal
9requirements for participation in the Medicaid and Medicare
10programs are eligible to enter into a single-case resident
11choice agreement. The single-case resident choice agreement
12shall remain in force until the end of the demonstration period
13or the resident is discharged, which ever is longer. A resident
14who leaves the facility for a family visit or to receive
15diagnostic tests or treatment with the intent of returning to
16the nursing home shall not be deemed to have been discharged.
17    Section 30. Continuity of care.
18    (a) Continuity of care provisions shall cover, but need not
19be limited to, the following circumstances:
20        (1) Events contained in subsection (b) of Section 25 of
21    this Act.
22        (2) The resident voluntarily changes managed care
23    organization enrollment.
24        (3) An enrollee is admitted into a nursing home,
25    regardless of whether the enrollee has been determined to



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1    qualify for Medicaid long-term care assistance prior to
2    admission.
3    (b) An interdisciplinary transition care team shall be
4assigned to each enrollee covered by this Section. The
5following provisions shall apply:
6        (1) The interdisciplinary transition care team shall
7    develop an individualized continuity of care plan, which
8    shall guide all aspects of the transition to ensure
9    continuity of care.
10        (2) The requirements of the individualized continuity
11    of care plan shall be established by rule, but shall at a
12    minimum include the following:
13            (A) All on-going course of treatments and an
14        evaluation of any proposed changes as the result of the
15        transition to another managed care organization or a
16        different care setting.
17            (B) All enhanced care needs.
18            (C) A medical evaluation.
19            (D) A comprehensive medical history completed
20        within 14 calendar days prior to the development of the
21        plan.
22            (E) A plan for the approval of all health care
23        services required during and immediately following a
24        transition from one care setting to another or from one
25        managed care organization to another.
26        (3) The interdisciplinary transition care team shall



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1    include the enrollee, the resident representative, if any,
2    a member of the enrollee's family at the enrollee's
3    discretion, at least one nursing home designee of the
4    nursing home's choosing, at least one authorized medical
5    professional with first-hand knowledge of the enrollees
6    physical and behavior medical needs and current course of
7    treatment, and at least one representatives of the managed
8    care organization.
9        (4) The individualized continuity of care plan shall be
10    signed by all members of the team and presented for
11    approval to the enrollee, the resident representative, if
12    any, and a member of the enrollee's family, at the
13    enrollee's discretion. The enrollee or, in lieu of the
14    enrollee, the resident representative or family member
15    designated by the enrollee to act on the enrollee's behalf,
16    may reject the plan or any portion of the plan. The
17    enrollee or, in lieu of enrollee, the resident
18    representative or a family member designated by the
19    enrollee to act on the enrollee's behalf may appeal the
20    plan in the name of the enrollee. If an appeal is
21    initiated, all provisions of Section 35 shall apply. A plan
22    shall not be agreed upon until the enrollee or, in lieu of
23    the enrollee, the resident representative or a family
24    member designated by the enrollee to act on their behalf
25    has signed off on the plan in its entirety.
26        (5) Both managed care organizations involved in an



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1    enrollee's transition from one managed care organization
2    to another managed care organization shall share equally in
3    the responsibility to ensure a seamless transition and the
4    continuity of the enrollee's care.
5    (c) Health care services provided pursuant to a medical
6order signed by an authorized medical professional during the
7first 7 days after an enrollee transitions from one managed
8care organization to another or one care setting to another
9shall be deemed approved.
10        (1) The nursing home shall, no later than the first
11    business day after the beginning of such a transition,
12    request post-approval of the health care services
13    specified in the medical order in a form and manner
14    established by rule.
15        (2) The period of deemed approval shall be extended if
16    at the end of the 7 days the nursing home has not received
17    from the managed care organization an individual
18    transition care plan signed by the enrollee or, in lieu of
19    the enrollee, the resident's representative or a family
20    member designated by the enrollee to act on enrollee's
21    behalf, accompanied by the corresponding medical orders
22    issued by the resident's physician after an in-person
23    examination. All orders for health care services
24    accompanying the individualized transition care plan shall
25    be approved by the managed care organization prior to being
26    conveyed to the nursing home.



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1        (3) The managed care organization shall be responsible
2    for the payment of all health care services provided
3    pursuant to this Section.
4    Section 35. Appeals and grievances.
5    (a) The Department of Insurance shall establish by rule an
6appeal and grievance process that permits an enrollee to
7simultaneously file an appeal or grievance under Medicare and
8Medicaid, except Medicare Part D. The process shall at a
9minimum provide for the following:
10        (1) submission of appeals orally, in writing, and on
11    the Internet;
12        (2) notices, timeframes, deadlines, and extensions;
13        (3) a multi-level appeal process, including recourse
14    to State or federal court, independent review entity
15    hearings before administrative law judges, and the
16    Medicare Appeals Council (MAC); and
17        (4) an expedited appeal.
18    (b) If an appeal to the managed care organization is
19incorporated into the appeal process, the managed care
20organization shall be limited to 24 hours, or one calendar day,
21to review and act on the appeal and shall provide access to an
22appeal process during non-business hours.
23    (c) Enrollees shall have the right to assign their appeal
24or grievance rights to nursing homes or other providers.
25    (d) At a minimum, enrollees and nursing homes shall have



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1the right to appeal or grieve the following:
2        (1) coverage determinations, including, but not
3    limited, to emergency care;
4        (2) determinations of medical necessity;
5        (3) denials of preauthorization or the appropriate
6    date of preauthorization;
7        (4) eligibility determinations;
8        (5) recoupments or offsets of payments; and
9        (6) timeliness of payments.
10    (e) The managed care organization shall have the burden of
11proof in all appeals and grievances and all decisions shall be
12made based on the best interest of the enrollee.
13    (f) For all appeals or grievances involving medical
14necessity, health care services that are ordered by an
15authorized medical professional shall be presumed medically
16necessary absent clear and substantial evidence to the
17contrary. The managed care organization shall be responsible
18for compensating the nursing home for all such health care
19services consistent with Section 60 of this Act.
20    (g) Nothing shall limit an enrollee's right to seek relief
21by appealing or grieving directly to the Director of Insurance
22or directly through a court of jurisdiction at any time during
23the appeal process.
24    (h) The managed care organization shall be liable for all
25costs associated with an appeal or grievance upon a finding in
26favor of the plaintiff.



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1    Section 40. Marketing.
2    (a) Managed care marketing practices shall comply with all
3State and federal laws. Any additional rights and
4responsibilities created pursuant to this Section are in
5addition to those created by other State and federal laws. In
6the event of a conflict with another State law, provisions of
7this Act shall govern.
8    (b) All marketing materials shall be approved in advance by
9the Director of Insurance, including, but not limited to, all
10written materials, promotional videos, websites, and scripts.
11    (c) All marketing to nursing home residents shall involve a
12third-party broker under contract with the Department, which
13shall be required to comply with standards established by rule.
14These standards shall, at a minimum, include the following:
15        (1) All solicitations shall be conducted based on the
16    best interests of the resident.
17        (2) All solicitations shall be face-to-face and shall
18    involve the resident, the resident's representative, where
19    applicable, and a member of the resident's family, at the
20    resident's discretion.
21        (3) Every nursing home resident residing in a
22    demonstration county shall receive at least one
23    face-to-face visit by the third-party broker at least 30
24    days prior to the Department selecting a plan on behalf of
25    the resident.



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1        (4) Brokers shall notify the nursing home in advance,
2    arrange a mutually acceptable date and time, and present
3    credentials to the nursing home administrator or the
4    administrator's designee upon entering the building.
5        (5) Brokers may not randomly approach residents and
6    shall immediately cease contact at the resident's request.
7        (6) Brokers shall provide the nursing home
8    administrator with contact information, which may be
9    provided to the resident, the resident's representative,
10    or a member of the resident's family upon request.
11    (d) Managed care organizations and third-party brokers
12under contract with the State are prohibited from the
14        (1) The use of games, promotional giveaways, and any
15    other monetary or non-monetary incentive to encourage a
16    resident, the resident's representatives, or the
17    resident's family to select one managed care organization
18    over another.
19        (2) Mailing promotional or informational materials
20    directly to a nursing home resident or from soliciting a
21    nursing home resident, the resident's representative, or a
22    member of the resident's family by telephone.
23        (3) Marketing directly to a resident for whom the court
24    has appointed a legal guardian. Managed care organizations
25    or brokers shall work with the nursing home administrator
26    or their designee to determine, which residents, if any,



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1    have court-appointed guardians. If a resident has a
2    court-appointed guardian, all marketing shall be directed
3    to the court-appointed guardian. The resident shall be held
4    harmless if the court-appointed guardian fails to respond.
5    Brokers and managed care organizations may contact the
6    court of jurisdiction for assistance.
7        (4) Marketing directly to a resident with an
8    Alzheimer's or other dementia-related disease diagnosis.
9    Managed care organizations or brokers shall work with the
10    nursing home administrator or their designee to identify
11    those residents with Alzheimer's or another
12    dementia-related disease. If a legal guardian has not been
13    appointed, the facility shall, upon request, provide the
14    managed care organization or the broker the contact
15    information for the resident's representative or family
16    member acting on the resident's behalf.
17    Section 45. Policies and procedures.
18    (a) The Department shall define by rule minimum standards
19governing the relationship between managed care organizations,
20enrollees, and nursing homes. The list in this subsection (a)
21is not intended to be all-inclusive, but serves as examples of
22terms and conditions that require uniformity across all managed
23care organizations. Rules shall be adopted for the following:
24        (1) best interest of the resident standard;
25        (2) presumption of approval;



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1        (3) medication prior approval;
2        (4) prior-approval procedures;
3        (5) post-approval procedures;
4        (6) post-emergency approval procedures;
5        (7) elective services;
6        (8) services that are not prior-approval services;
7        (9) clean claims;
8        (10) billing codes;
9        (11) look-back periods, which shall be at a minimum 10
10    days;
11        (12) prompt payment; and
12        (13) reporting requirements.
13    (b) All managed care organizations shall establish a
14process for authorization or denial of health care services
15available 365 days a year, 24 hours a day, 7 days a week. The
16call line must at a minimum have a 2 minute or less hold time,
17with at least 80% of the calls answered in 30 seconds and no
18more than 5% of the calls disconnected.
19    (c) Medication prior approval forms and procedures shall:
20        (1) permit the nursing home staff to seek an exception
21    to approval policies when making the initial request;
22        (2) prohibit denial based on:
23            (A) lack of a culture; or
24            (B) multiple drugs of a same class for the same
25        diagnosis; and
26        (3) acknowledge the presumption that all medications



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1    ordered by an authorized medical professional are
2    medically necessary.
3    Section 50. Contractual requirements
4    (a) Contracts between managed care organizations and
5nursing homes are prohibited from including terms and
6conditions that:
7        (1) limit or prohibit a nursing home from advocating on
8    behalf of its residents to include the filing of appeals
9    and grievances in the name of the resident at the
10    resident's request or on behalf of the nursing home;
11        (2) require prior approval of health care services if
12    the managed care organization does not have a prior
13    approval process available 365 days per year, 24 hours a
14    day, 7 days a week;
15        (3) offer incentives or disincentives that limit
16    access to specific types of health care services; or
17        (4) establish requirements in excess of federal and
18    State law.
19    (b) Managed care organizations shall offer contracts with
20at least a 36-month duration to any and all nursing homes in
21demonstration counties that meet all applicable State and
22federal requirements for participation in the Medicaid and
23Medicare Programs.
24    (c) Renewals shall be consistent with the provisions of
25subsection (b) of this Section. A nursing home denied a renewal



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1or whose contract is terminated may appeal the denial or
2termination to the Director of Insurance. The appeal shall stay
3the termination or nonrenewal of the contract and the
4notification of enrollees residing in the nursing home pending
5the outcome of the appeal. The decision rendered by the
6Director of Insurance pursuant to this subsection (c) shall be
7a final appealable decision under the Administrative Review
8Law. The burden of proof shall rest with the managed care
9organization. It is the responsibility of the managed care
10organization to notify all enrollees affected by the
11termination or nonrenewal within 15 days after notice provided
12to the nursing home or within 15 days after final action on the
13appeal, whichever is later. Notice shall include a proposed
14transition plan consistent with the provisions of Sections 25
15and 30 of this Act.
16    (d) A nursing home has the right to terminate its contract
17with a managed care organization with 90 days' written notice,
18with or without cause. The managed care organization shall
19immediately notify all residents of all rights and
20responsibilities during and after the resident's 90-day
21transition period.
22    (e) The managed care organization shall enter into a
23single-case resident choice agreement as required by Section 25
24of this Act.
25    Section 55. Prohibition. No managed care organization or



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1contract shall contain any provision, policy, or procedure that
2limits, restricts, or waives any rights set forth in this Act
3or is expressly prohibited by this Act. Any such policy or
4procedure shall be void and unenforceable.
5    Section 60. Reimbursement.
6    (a) Nursing homes shall be reimbursed no less than the
7Illinois fee-for-service Medicaid rate at the time the health
8care services were rendered. The fee-for-service Medicaid rate
9shall include the amounts established by the Department for the
10direct care, support, and capital components of the rate and
11any and all add-ons.
12    (b) The Department shall provide each managed care
13organization with the quarterly facility-specific RUG-IV
14nursing component per diem along with any add-ons for enhanced
15care services, support component per diem, and capital
16component per diem effective for each nursing home under
17contract with the managed care organization.
18    (c) A nursing home under a single-case resident choice
19agreement shall be reimbursed at the rate paid a nursing home
20under contract with the managed care organization to provide
21services to Medicaid beneficiaries in the Demonstration
23    (d) Prior approval and post approval shall be secured in
24the form and manner established by rule pursuant to Section 45
25of this Act.



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1    (e) The managed care organization shall be liable for all
2health care services rendered. Payment may be denied if and
3only if:
4        (1) health care services were provided outside the
5    window of a deemed approval period and prior approval was
6    not received;
7        (2) a medical emergency did not exist and prior
8    approval was not received;
9        (3) health care services claimed were not delivered;
10        (4) health care services were contrary to the
11    instructions of the managed care organization and the
12    nursing home was notified prior to the health care services
13    being delivered; or
14        (5) the resident was not an enrollee of the managed
15    care organization.
16    (f) A nursing home shall receive reimbursement for all
17health care services rendered no later than 30 days after a
18valid invoice is submitted to the managed care organization. If
19the managed care organization fails to reimburse the nursing
20home within 30 days, the managed care organization shall be
21liable for a past due penalty equal to the interest rate that
22lending institutions are charging for loans secured by State
24    (g) A managed care organization failing to pay a nursing
25home or group of nursing homes in excess of 60 days after the
26date that a valid invoice was submitted shall be considered in



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1default. Upon notification that a managed care organization is
2in default, the Department shall notify the Comptroller to
3place a hold on all payments to the managed care organization
4until such time that all outstanding payments and past due
5penalties have been paid. The Department shall immediately
6notify nursing homes under contract with the managed care
7organization that copies of all outstanding invoices and all
8future invoices shall be sent directly to the Department for
10    (h) A managed care organization that either terminates or
11is terminated from participation in a Medicaid long-term care
12demonstration program in one or more areas of the State shall
13be liable for payment for all health care services rendered
14during the period of time the contract with the Department was
15in force. The Department shall notify all nursing homes under
16contract with the managed care organization within 10 business
17days after the date that the managed care organization notified
18the Department of its intent to terminate or the date the
19Department notifies the managed care organization of their
20intent to terminate the contract. Notice to nursing homes shall
21include a plan for the reassignment of all residents under
22contract with the managed care organization and procedures for
23the submission of any outstanding invoices directly to the
24Department for payment. The reassignment plan shall ensure that
25all medical orders in place are honored, that the resident does
26not experience an interruption in health care services, and



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1that the provider does not experience an interruption in
3    (i) A managed care organization that authorizes the
4admission of an enrollee into a nursing home assumes
5responsibility for compensation owed the nursing home for the
6provision of all health care services as specified in
7subsection (d) of this Section, regardless of whether the
8enrollee has been found eligible for Medicaid long-term care
10    (j) The State of Illinois shall guarantee the payment of
11all valid invoices by managed care organizations subject to
12this Act.
13    Section 65. Compliance.
14    (a) The Department of Insurance shall be responsible for
15ensuring compliance with this Act.
16    (b) Within 30 days after the effective date of this Act,
17the Department of Insurance shall notify all nursing homes in
18all demonstration counties of the Department's compliance
19responsibility and the policy and procedures for notifying the
20Director of Insurance of any violations of the provisions this
21Act. The Department of Insurance shall accept both oral and
22written complaints. An Internet-based reporting option shall
23be offered.
24    (c) A managed care organization that is found to have used
25marketing materials or scripts that were not approved in



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1advance or provided such materials for use to a third-party or
2an employee, agent, or contractor of the State shall be subject
3to sanctions. An employee, agent, or contractor of the State
4using marketing materials or scripts that have not been
5approved in advance shall also be subject sanctions.
6    (d) All sanctioning guidelines shall be established by rule
7and shall include monetary sanctions, termination, loss of
8privileges to sell products or policies or otherwise enroll
9individuals in health plans in the State of Illinois, and
10criminal charges. Monetary sanctions for a first offense shall
11not be less than $1,000 per offense per resident per nursing
12home per day. Second offenses shall not be less than $5,000 per
13offense per resident per nursing home per day. Third and
14subsequence offenses shall be double the previous sanction.
15    (e) All monetary sanctions shall be paid into the Nursing
16Home Resident Managed Care Fund, which is hereby created in the
17State treasury. Disbursements from the Fund shall be subject to
18appropriations and shall be used to hire and train nursing home
19resident advocates in both the Senior Health Insurance Program
20and the Senior Health Assistance Program. Nursing home
21residents insurance advocates employed by the Senior Health
22Insurance Program shall assist nursing home residents,
23resident's representatives, and the resident's family to file
24appeals and grievance for the purpose of securing medically
25necessary health care services. Nursing home residents health
26assistance advocates employed by the Senior Health Assistance



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1Program shall assist residents, resident's representatives,
2and the resident's family to file applications and secure
3appropriate documentation to secure Medicaid long-term care
4coverage and to assist with the family in securing spousal
5impoverishment coverage. Moneys remaining in the fund at the
6end of each fiscal year shall be made available through
7competitive grants to nursing homes the following fiscal year
8for innovative programming to improve the quality of life of
9nursing home residents and the staff that serve them and
10transition assistance or modernization assistance. Grants
11shall be awarded by the Director of Public Health with the
12advice of the Department of Public Health's Long Term Care
13Advisory Committee. Moneys paid into the Fund may not be used
14for any purpose other than those specified in this subsection
16    Section 70. Solvency. The Department of Insurance shall
17ensure that all managed care organizations contracting with the
18State shall meet the solvency requirements enumerated in the
19Illinois Health Maintenance Organization Act and the rules
20adopted under that Act by the Department of Insurance. The
21Department of Insurance shall adopt such rules as are necessary
22to carry out the provisions of this Section.
23    Section 75. Applicability. This Act applies to all
24contracts in effect on or after the effective date of this Act



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1and all claims that accrue after the effective date of this
3    Section 900. The Health Maintenance Organization Act is
4amended by changing Section 1-2 as follows:
5    (215 ILCS 125/1-2)  (from Ch. 111 1/2, par. 1402)
6    Sec. 1-2. Definitions. As used in this Act, unless the
7context otherwise requires, the following terms shall have the
8meanings ascribed to them:
9    (1) "Advertisement" means any printed or published
10material, audiovisual material and descriptive literature of
11the health care plan used in direct mail, newspapers,
12magazines, radio scripts, television scripts, billboards and
13similar displays; and any descriptive literature or sales aids
14of all kinds disseminated by a representative of the health
15care plan for presentation to the public including, but not
16limited to, circulars, leaflets, booklets, depictions,
17illustrations, form letters and prepared sales presentations.
18    (2) "Director" means the Director of Insurance.
19    (3) "Basic health care services" means emergency care, and
20inpatient hospital and physician care, outpatient medical
21services, mental health services and care for alcohol and drug
22abuse, including any reasonable deductibles and co-payments,
23all of which are subject to the limitations described in
24Section 4-20 of this Act and as determined by the Director



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1pursuant to rule.
2    (4) "Enrollee" means an individual who has been enrolled in
3a health care plan.
4    (5) "Evidence of coverage" means any certificate,
5agreement, or contract issued to an enrollee setting out the
6coverage to which he is entitled in exchange for a per capita
7prepaid sum.
8    (6) "Group contract" means a contract for health care
9services which by its terms limits eligibility to members of a
10specified group.
11    (7) "Health care plan" means any arrangement whereby any
12organization undertakes to provide or arrange for and pay for
13or reimburse the cost of basic health care services, excluding
14any reasonable deductibles and copayments, from providers
15selected by the Health Maintenance Organization and such
16arrangement consists of arranging for or the provision of such
17health care services, as distinguished from mere
18indemnification against the cost of such services, except as
19otherwise authorized by Section 2-3 of this Act, on a per
20capita prepaid basis, through insurance or otherwise. A "health
21care plan" also includes any arrangement whereby an
22organization undertakes to provide or arrange for or pay for or
23reimburse the cost of any health care service for persons who
24are enrolled under Article V of the Illinois Public Aid Code or
25under the Children's Health Insurance Program Act through
26providers selected by the organization and the arrangement



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1consists of making provision for the delivery of health care
2services, as distinguished from mere indemnification. A
3"health care plan" also includes any arrangement pursuant to
4Section 4-17. Nothing in this definition, however, affects the
5total medical services available to persons eligible for
6medical assistance under the Illinois Public Aid Code.
7    (8) "Health care services" means any services included in
8the furnishing to any individual of medical or dental care, or
9the hospitalization or incident to the furnishing of such care
10or hospitalization as well as the furnishing to any person of
11any and all other services for the purpose of preventing,
12alleviating, curing or healing human illness or injury.
13    (9) "Health Maintenance Organization" means any
14organization formed under the laws of this or another state to
15provide or arrange for one or more health care plans under a
16system which causes any part of the risk of health care
17delivery to be borne by the organization or its providers.
18    (10) "Net worth" means admitted assets, as defined in
19Section 1-3 of this Act, minus liabilities.
20    (11) "Organization" means any insurance company, a
21nonprofit corporation authorized under the Dental Service Plan
22Act or the Voluntary Health Services Plans Act, or a
23corporation organized under the laws of this or another state
24for the purpose of operating one or more health care plans and
25doing no business other than that of a Health Maintenance
26Organization or an insurance company. "Organization" shall



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1also mean the University of Illinois Hospital as defined in the
2University of Illinois Hospital Act.
3    (12) "Provider" means any physician, hospital facility,
4facility licensed under the Nursing Home Care Act, or other
5person which is licensed or otherwise authorized to furnish
6health care services and also includes any other entity that
7arranges for the delivery or furnishing of health care service.
8    (13) "Producer" means a person directly or indirectly
9associated with a health care plan who engages in solicitation
10or enrollment.
11    (14) "Per capita prepaid" means a basis of prepayment by
12which a fixed amount of money is prepaid per individual or any
13other enrollment unit to the Health Maintenance Organization or
14for health care services which are provided during a definite
15time period regardless of the frequency or extent of the
16services rendered by the Health Maintenance Organization,
17except for copayments and deductibles and except as provided in
18subsection (f) of Section 5-3 of this Act.
19    (15) "Subscriber" means a person who has entered into a
20contractual relationship with the Health Maintenance
21Organization for the provision of or arrangement of at least
22basic health care services to the beneficiaries of such
24(Source: P.A. 97-1148, eff. 1-24-13.)
25    Section 905. The Managed Care Reform and Patient Rights Act



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1is amended by changing Section 10 as follows:
2    (215 ILCS 134/10)
3    Sec. 10. Definitions:
4    "Adverse determination" means a determination by a health
5care plan under Section 45 or by a utilization review program
6under Section 85 that a health care service is not medically
8    "Clinical peer" means a health care professional who is in
9the same profession and the same or similar specialty as the
10health care provider who typically manages the medical
11condition, procedures, or treatment under review.
12    "Department" means the Department of Insurance.
13    "Emergency medical condition" means a medical condition
14manifesting itself by acute symptoms of sufficient severity
15(including, but not limited to, severe pain) such that a
16prudent layperson, who possesses an average knowledge of health
17and medicine, could reasonably expect the absence of immediate
18medical attention to result in:
19        (1) placing the health of the individual (or, with
20    respect to a pregnant woman, the health of the woman or her
21    unborn child) in serious jeopardy;
22        (2) serious impairment to bodily functions; or
23        (3) serious dysfunction of any bodily organ or part.
24    "Emergency medical screening examination" means a medical
25screening examination and evaluation by a physician licensed to



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1practice medicine in all its branches, or to the extent
2permitted by applicable laws, by other appropriately licensed
3personnel under the supervision of or in collaboration with a
4physician licensed to practice medicine in all its branches to
5determine whether the need for emergency services exists.
6    "Emergency services" means, with respect to an enrollee of
7a health care plan, transportation services, including but not
8limited to ambulance services, and covered inpatient and
9outpatient hospital services furnished by a provider qualified
10to furnish those services that are needed to evaluate or
11stabilize an emergency medical condition. "Emergency services"
12does not refer to post-stabilization medical services.
13    "Enrollee" means any person and his or her dependents
14enrolled in or covered by a health care plan.
15    "Health care plan" means a plan that establishes, operates,
16or maintains a network of health care providers that has
17entered into an agreement with the plan to provide health care
18services to enrollees to whom the plan has the ultimate
19obligation to arrange for the provision of or payment for
20services through organizational arrangements for ongoing
21quality assurance, utilization review programs, or dispute
22resolution. Nothing in this definition shall be construed to
23mean that an independent practice association or a physician
24hospital organization that subcontracts with a health care plan
25is, for purposes of that subcontract, a health care plan.
26    For purposes of this definition, "health care plan" shall



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1not include the following:
2        (1) indemnity health insurance policies including
3    those using a contracted provider network;
4        (2) health care plans that offer only dental or only
5    vision coverage;
6        (3) preferred provider administrators, as defined in
7    Section 370g(g) of the Illinois Insurance Code;
8        (4) employee or employer self-insured health benefit
9    plans under the federal Employee Retirement Income
10    Security Act of 1974;
11        (5) health care provided pursuant to the Workers'
12    Compensation Act or the Workers' Occupational Diseases
13    Act; and
14        (6) not-for-profit voluntary health services plans
15    with health maintenance organization authority in
16    existence as of January 1, 1999 that are affiliated with a
17    union and that only extend coverage to union members and
18    their dependents.
19    "Health care professional" means a physician, a registered
20professional nurse, or other individual appropriately licensed
21or registered to provide health care services.
22    "Health care provider" means any physician, hospital
23facility, facility licensed under the Nursing Home Care Act, or
24other person that is licensed or otherwise authorized to
25deliver health care services. Nothing in this Act shall be
26construed to define Independent Practice Associations or



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1Physician-Hospital Organizations as health care providers.
2    "Health care services" means any services included in the
3furnishing to any individual of medical care, or the
4hospitalization incident to the furnishing of such care, as
5well as the furnishing to any person of any and all other
6services for the purpose of preventing, alleviating, curing, or
7healing human illness or injury including home health and
8pharmaceutical services and products.
9    "Medical director" means a physician licensed in any state
10to practice medicine in all its branches appointed by a health
11care plan.
12    "Person" means a corporation, association, partnership,
13limited liability company, sole proprietorship, or any other
14legal entity.
15    "Physician" means a person licensed under the Medical
16Practice Act of 1987.
17    "Post-stabilization medical services" means health care
18services provided to an enrollee that are furnished in a
19licensed hospital by a provider that is qualified to furnish
20such services, and determined to be medically necessary and
21directly related to the emergency medical condition following
23    "Stabilization" means, with respect to an emergency
24medical condition, to provide such medical treatment of the
25condition as may be necessary to assure, within reasonable
26medical probability, that no material deterioration of the



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1condition is likely to result.
2    "Utilization review" means the evaluation of the medical
3necessity, appropriateness, and efficiency of the use of health
4care services, procedures, and facilities.
5    "Utilization review program" means a program established
6by a person to perform utilization review.
7(Source: P.A. 91-617, eff. 1-1-00.)
8    Section 910. The Illinois Public Aid Code is amended by
9adding Section 5B-8.1 as follows:
10    (305 ILCS 5/5B-8.1 new)
11    Sec. 5B-8.1. Guarantee of payment.
12    (a) Any money owed to a nursing home by a managed care
13organization, as that term is defined in the Nursing Home
14Residents' Managed Care Rights Act, shall be guaranteed by this
15State. Upon a finding that a managed care organization is in
16default, as described in Section 60 of the Nursing Home
17Residents' Managed Care Rights Act, the Department shall
18immediately notify the Comptroller to place on hold all
19outstanding payments to the managed care organization until
20such time as the managed care organization has paid all past
21due invoices and interest penalties. From the moneys owed the
22managed care organization by this State, the Department shall
23pay directly to all nursing homes under contract with the
24managed care all past due invoices and all future invoices



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1until such time as the managed care organization is no longer
2in default.
3    (b) A managed care organization that terminates its managed
4care contract for long-term care services or is terminated by
5the Department from providing managed long-term care services
6during the life of the demonstration project and at the sunset
7of each demonstration plan shall submit to the Department a
8release from each nursing home under contract with the managed
9care organization stipulating that moneys due the nursing home
10now and in the future were paid in full prior to the Department
11sending to the Comptroller for payment an amount equivalent to
12the last 60 days of payment due the managed care organization.
13    (c) All payments owed providers for health care services
14rendered which are payable under this Code shall be considered
15guaranteed by this State, and shall carry with it the full
16faith and credit of this State. Outstanding payments shall be
17considered receivables owed by this State for the purposes of
18borrowing against future payments or otherwise collateralizing
19or capitalizing these guaranteed funds.
20    Section 915. The State Finance Act is amended by adding
21Section 5.855 as follows:
22    (30 ILCS 105/5.855 new)
23    Sec. 5.855. The Nursing Home Resident Managed Care Fund.



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1    Section 999. Effective date. This Act takes effect upon
2becoming law.".