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90_HB1490ham001
LRB9003498JSgcam01
1 AMENDMENT TO HOUSE BILL 1490
2 AMENDMENT NO. . Amend House Bill 1490 by replacing
3 the title with the following:
4 "AN ACT concerning the provision of health care services,
5 amending named Acts."; and
6 by replacing everything after the enacting clause with the
7 following:
8 "Section 5. The Health Maintenance Organization Act is
9 amended by changing Sections 1-2 and 5-5 and adding Section
10 2-10 as follows:
11 (215 ILCS 125/1-2) (from Ch. 111 1/2, par. 1402)
12 Sec. 1-2. Definitions. As used in this Act, unless the
13 context otherwise requires, the following terms shall have
14 the meanings ascribed to them:
15 (1) "Advertisement" means any printed or published
16 material, audiovisual material and descriptive literature of
17 the health care plan used in direct mail, newspapers,
18 magazines, radio scripts, television scripts, billboards and
19 similar displays; and any descriptive literature or sales
20 aids of all kinds disseminated by a representative of the
21 health care plan for presentation to the public including,
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1 but not limited to, circulars, leaflets, booklets,
2 depictions, illustrations, form letters and prepared sales
3 presentations.
4 (2) "Director" means the Director of Insurance.
5 (3) "Basic Health Care Services" means emergency care,
6 and inpatient hospital and physician care, outpatient medical
7 services, mental health services and care for alcohol and
8 drug abuse, including any reasonable deductibles and
9 co-payments, all of which are subject to such limitations as
10 are determined by the Director pursuant to rule.
11 (4) "Enrollee" means an individual who has been enrolled
12 in a health care plan.
13 (5) "Evidence of Coverage" means any certificate,
14 agreement, or contract issued to an enrollee setting out the
15 coverage to which he is entitled in exchange for a per capita
16 prepaid sum.
17 (6) "Group Contract" means a contract for health care
18 services which by its terms limits eligibility to members of
19 a specified group.
20 (7) "Health Care Plan" means any arrangement whereby any
21 organization undertakes to provide or arrange for and pay for
22 or reimburse the cost of basic health care services from
23 providers selected by the Health Maintenance Organization and
24 such arrangement consists of arranging for or the provision
25 of such health care services, as distinguished from mere
26 indemnification against the cost of such services, except as
27 otherwise authorized by Section 2-3 of this Act, on a per
28 capita prepaid basis, through insurance or otherwise. A
29 "health care plan" also includes any arrangement whereby an
30 organization undertakes to provide or arrange for or pay for
31 or reimburse the cost of any health care service for persons
32 who are enrolled in the integrated health care program
33 established under Section 5-16.3 of the Illinois Public Aid
34 Code through providers selected by the organization and the
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1 arrangement consists of making provision for the delivery of
2 health care services, as distinguished from mere
3 indemnification. Nothing in this definition, however,
4 affects the total medical services available to persons
5 eligible for medical assistance under the Illinois Public Aid
6 Code.
7 (8) "Health Care Services" means any services included
8 in the furnishing to any individual of medical or dental
9 care, or the hospitalization or incident to the furnishing of
10 such care or hospitalization as well as the furnishing to any
11 person of any and all other services for the purpose of
12 preventing, alleviating, curing or healing human illness or
13 injury.
14 (9) "Health Maintenance Organization" means any
15 organization formed under the laws of this or another state
16 to provide or arrange for one or more health care plans under
17 a system which causes any part of the risk of health care
18 delivery to be borne by the organization or its providers.
19 (10) "Net Worth" means admitted assets, as defined in
20 Section 1-3 of this Act, minus liabilities.
21 (11) "Organization" means any insurance company, or a
22 nonprofit corporation authorized under the Medical Service
23 Plan Act, the Dental Service Plan Act, the Vision Service
24 Plan Act, the Pharmaceutical Service Plan Act, the Voluntary
25 Health Services Plans Act or the Non-profit Health Care
26 Service Plan Act, or a corporation organized under the laws
27 of this or another state for the purpose of operating one or
28 more health care plans and doing no business other than that
29 of a Health Maintenance Organization or an insurance company.
30 Organization shall also mean the University of Illinois
31 Hospital as defined in the University of Illinois Hospital
32 Act.
33 (12) "Provider" means any physician, hospital facility,
34 or other person which is licensed or otherwise authorized to
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1 furnish health care services and also includes any other
2 entity that arranges for the delivery or furnishing of health
3 care service.
4 (13) "Producer" means a person directly or indirectly
5 associated with a health care plan who engages in
6 solicitation or enrollment.
7 (14) "Per capita prepaid" means a basis of prepayment by
8 which a fixed amount of money is prepaid per individual or
9 any other enrollment unit to the Health Maintenance
10 Organization or for health care services which are provided
11 during a definite time period regardless of the frequency or
12 extent of the services rendered by the Health Maintenance
13 Organization, except for copayments and deductibles and
14 except as provided in subsection (f) of Section 5-3 of this
15 Act.
16 (15) "Subscriber" means a person who has entered into a
17 contractual relationship with the Health Maintenance
18 Organization for the provision of or arrangement of at least
19 basic health care services to the beneficiaries of such
20 contract.
21 (16) "Accreditation organization" means all of the
22 following entities: the National Committee of Quality
23 Assurance, the Joint Commission on Accreditation of
24 Healthcare Organizations, the Accreditation Association for
25 Ambulatory Health Care, and such other nationally recognized
26 accreditation organizations as may be approved by rule by the
27 Department of Insurance.
28 (Source: P.A. 88-554, eff. 7-26-94; 89-90, eff. 6-30-95.)
29 (215 ILCS 125/2-10 new)
30 Sec. 2-10. Accreditation.
31 (a) As a condition of doing business in this State, a
32 health maintenance organization issued a certificate of
33 authority under this Act shall apply for accreditation by an
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1 accreditation organization within 6 months after its
2 licensure and shall be accredited within 18 months after the
3 health maintenance organization's receipt of its certificate
4 of authority. A health maintenance organization with an
5 existing certificate of authority must apply for
6 accreditation by an accreditation organization within 6
7 months after the effective date of this amendatory Act of
8 1997 and shall be accredited within 18 months after the
9 effective date of this amendatory Act of 1997. A health
10 maintenance organization shall be reaccredited by an
11 accreditation organization not less than once every 3 years.
12 (b) If a contract for the provision of health care
13 services between a provider and a health maintenance
14 organization issued a certificate of authority at any time
15 covers (i) at least 15% of the health maintenance
16 organization's current enrollment or (ii) at least 5,000
17 enrollees of the health maintenance organization's current
18 enrollment, the contracting provider shall apply for and
19 obtain accreditation by an accreditation organization within
20 (A) 6 months after the effective date of this amendatory Act
21 of 1997 and shall be accredited within 18 months after the
22 effective date of this amendatory Act of 1997 or (B) within 6
23 months after the first day of the month in which (i) or (ii)
24 applies. A health maintenance organization may contract for
25 the provision of health care services with an unaccredited
26 provider that would otherwise be required to be accredited
27 pursuant to this Section, but that has been licensed for less
28 than 6 months (or, in the case licensure of a provider entity
29 is not required, that has been in existence for less than 6
30 months) upon the condition that the provider will (i) apply
31 for accreditation from an accreditation organization within 6
32 months after the effective date of the contract between the
33 provider and the health maintenance organization and (ii)
34 obtain accreditation from an accreditation organization
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1 within 18 months after the effective date of the contract.
2 (c) The Director shall provide technical assistance,
3 upon request by a health maintenance organization, in order
4 to assist it in developing and maintaining quality assurance
5 systems and for the purpose of complying with the
6 accreditation requirement.
7 (d) The Director shall monitor and determine the
8 accreditation status of all existing health maintenance
9 organizations on an ongoing basis and group them into one of
10 the following categories:
11 (1) three year accreditation obtained;
12 (2) not applied and surveyed for accreditation
13 within the appropriate time frame;
14 (3) applied for accreditation, but not surveyed
15 within the appropriate time frame;
16 (4) surveyed, findings of the accreditation
17 organization not final; or
18 (5) failed accreditation survey.
19 (e) The Director shall verify the compliance of a health
20 maintenance organization with the accreditation requirement
21 with the appropriate accreditation organization and shall
22 initiate action for a health maintenance organization
23 classified under item (2), (3), or (5) of subsection (d).
24 (f) The Director shall file an administrative order to
25 show cause against a health maintenance organization
26 classified under item (2), (3), or (5) of subsection (d)
27 which is not in compliance with the accreditation
28 requirement.
29 (g) If a health maintenance organization fails to comply
30 with the requirements of this Section, the Director shall
31 sanction the noncompliant health maintenance organization as
32 follows:
33 (1) If a health maintenance organization is
34 classified under item (2) of subsection (d), the health
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1 maintenance organization shall suspend the offering of
2 health care plans pursuant to a new group contract and
3 suspend the enrollment of medical assistance recipients.
4 The suspension of enrollment of medical assistance
5 recipients shall preclude the enrollment by the health
6 maintenance organization of individuals currently
7 receiving medical assistance as well as the enrollment of
8 new medical assistance recipients, but shall not preclude
9 the enrollment of a dependent of a medical assistance
10 recipient currently enrolled with the noncompliance
11 health maintenance organization. The limitations on
12 enrollment contained in this subsection shall continue
13 until the noncompliant health maintenance organization
14 obtains accreditation as required under this Section; and
15 (2) in addition to the mandatory enrollment
16 restrictions, the Director, in his discretion, may take
17 action against the health maintenance organization
18 pursuant to Section 5-5 and may impose the following
19 monetary fines on a noncompliant health maintenance
20 organization:
21 (A) if a health maintenance organization has
22 not applied for accreditation within the required
23 time frames, a fine not to exceed $500 for each day
24 of noncompliance with this Section; and
25 (B) if a health maintenance organization has
26 applied for the accreditation required by this
27 Section, but has not been surveyed within the
28 required time frames, a fine not to exceed $250 for
29 each day of noncompliance with this Section.
30 (h) The enrollment of a health maintenance organization
31 that contracts with an unaccredited provider which is
32 required to be accredited by an accreditation organization
33 pursuant to this Section shall be suspended as described in
34 item (1) of subsection (g) during the period that it
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1 maintains the contract that causes it to be out of compliance
2 with this Section and may have imposed upon it a monetary
3 fine not to exceed $20,000 for each contract with an
4 unaccredited provider which is required to be accredited.
5 (i) For a health maintenance organization classified
6 under item (2) or (3) of subsection (d), the Director shall
7 assess the need to mitigate the monetary penalties specified
8 under subsection (g) based upon:
9 (1) the potential threat to enrollees' health,
10 safety, and welfare as determined by assessing compliance
11 with standards specified in this Section; the Director
12 shall also assess the findings of the accreditation
13 survey;
14 (2) the financial viability of the health
15 maintenance organization; and
16 (3) the extent of the health maintenance
17 organization's efforts in initiate corrective action.
18 (j) For those health maintenance organizations failing
19 the initial or renewal accreditation survey, the Department
20 of Human Services shall require the health maintenance
21 organization to enter into a corrective action process for
22 the purpose of achieving accreditation. The Department of
23 Human Services shall monitor the progress of those health
24 maintenance organizations not in compliance in cooperation
25 with the accreditation organization to ensure that health
26 maintenance organizations come into compliance with the
27 accreditation requirement.
28 (k) Those health maintenance organizations failing an
29 initial or renewal accreditation survey must receive
30 accreditation during a subsequent survey by the original
31 accrediting organization. Accreditation must be received
32 within one year of the final accreditation decision by the
33 accrediting agency or within a time frame mutually agreeable
34 to the Director, the accreditation organization, and the
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1 health maintenance organization. A health maintenance
2 organization may, at any time, seek accreditation from
3 another accreditation organization provided that the health
4 maintenance organization enters into a corrective action
5 process under subsection (j) to achieve accreditation with
6 the original accreditation organization.
7 (l) The Department of Human Services shall conduct
8 annual validation surveys on accredited health maintenance
9 organizations to ensure ongoing compliance with accreditation
10 standards. Selection of the health maintenance organizations
11 to be surveyed shall be based on the following information:
12 (1) reports received from the accreditation
13 organization, the Department of Insurance, or other State
14 or federal regulatory agency regarding the quality of
15 care provided by the organization;
16 (2) quality of care complaints received by the
17 Director from enrollees or providers; and
18 (3) such other information as the Director, in his
19 discretion, shall determine is relevant in the selection
20 process.
21 (215 ILCS 125/5-5) (from Ch. 111 1/2, par. 1413)
22 Sec. 5-5. Suspension, revocation or denial of
23 certification of authority. The Director may suspend or
24 revoke any certificate of authority issued to a health
25 maintenance organization under this Act or deny an
26 application for a certificate of authority if he finds any of
27 the following:
28 (a) The health maintenance organization is operating
29 significantly in contravention of its basic organizational
30 document, its health care plan, or in a manner contrary to
31 that described in any information submitted under Section 2-1
32 or 4-12.
33 (b) The health maintenance organization issues contracts
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1 or evidences of coverage or uses a schedule of charges for
2 health care services that do not comply with the requirement
3 of Section 2-1 or 4-12.
4 (c) The health care plan does not provide or arrange for
5 basic health care services, except as provided in Section
6 4-13 concerning mental health services for clients of the
7 Department of Children and Family Services.
8 (d) The Director of Public Health certifies to the
9 Director that (1) the health maintenance organization does
10 not meet the requirements of Section 2-2 or (2) the health
11 maintenance organization is unable to fulfill its obligations
12 to furnish health care services as required under its health
13 care plan. The Department of Public Health shall promulgate
14 by rule, pursuant to the Illinois Administrative Procedure
15 Act, the precise standards used for determining what
16 constitutes a material misrepresentation, what constitutes a
17 material violation of a contract or evidence of coverage, or
18 what constitutes good faith with regard to certification
19 under this paragraph.
20 (e) The health maintenance organization is no longer
21 financially responsible and may reasonably be expected to be
22 unable to meet its obligations to enrollees or prospective
23 enrollees.
24 (f) The health maintenance organization, or any person
25 on its behalf, has advertised or merchandised its services in
26 an untrue, misrepresentative, misleading, deceptive, or
27 unfair manner.
28 (g) The continued operation of the health maintenance
29 organization would be hazardous to its enrollees.
30 (h) The health maintenance organization has neglected to
31 correct, within the time prescribed by subsection (c) of
32 Section 2-4, any deficiency occurring due to the
33 organization's prescribed minimum net worth or special
34 contingent reserve being impaired.
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1 (i) The health maintenance organization has otherwise
2 failed to substantially comply with this Act.
3 (j) The health maintenance organization has failed to
4 meet the requirements for issuance of a certificate of
5 authority set forth in Section 2-2.
6 (k) The health maintenance organization has failed to
7 obtain and maintain accreditation by an accreditation
8 organization pursuant to Section 2-10.
9 When the certificate of authority of a health maintenance
10 organization is revoked, the organization shall proceed,
11 immediately following the effective date of the order of
12 revocation, to wind up its affairs and shall conduct no
13 further business except as may be essential to the orderly
14 conclusion of the affairs of the organization. The Director
15 may permit further operation of the organization that he
16 finds to be in the best interest of enrollees to the end that
17 the enrollees will be afforded the greatest practical
18 opportunity to obtain health care services.
19 (Source: P.A. 88-487.)
20 Section 10. The Illinois Aid Code is amended by adding
21 Sections 5-23 and 5-24 as follows:
22 (305 ILCS 5/5-23 new)
23 Sec. 5-23. Accreditation.
24 (a) A managed care community network or prepaid health
25 plan that contracts with the Illinois Department for the
26 provision of medical care to recipients entitled to aid under
27 this Article shall apply for accreditation by an
28 accreditation organization within 6 months after the
29 effective date of this amendatory Act of 1997 and obtain
30 accreditation within 18 months after the effective date of
31 this amendatory Act of 1997. The managed care community
32 network and prepaid health plan shall be reaccredited by an
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1 accreditation organization not less than once every 3 years.
2 For the purposes of this Section, "accreditation
3 organization" means all of the following entities: the
4 National Committee of Quality Assurance, the Joint Commission
5 on Accreditation of Healthcare Organizations, the
6 Accreditation Association for Ambulatory Health Care, and
7 such other nationally recognized accreditation organizations
8 as may be approved by rule by the Illinois Department.
9 (b) The Illinois Department shall monitor and determine
10 the accreditation status of all managed care community
11 networks and prepaid health plans that contract with the
12 Illinois Department for the provision of services to
13 recipients entitled to aid under this Article on an ongoing
14 basis and shall group them into one of the following
15 categories:
16 (1) three year accreditation obtained;
17 (2) not applied and surveyed for accreditation
18 within the appropriate time frame;
19 (3) applied for accreditation, but not surveyed
20 within the appropriate time frame;
21 (4) surveyed, findings of the accreditation agency
22 not final; or
23 (5) failed accreditation survey.
24 (c) The Illinois Department shall verify the compliance
25 of managed care community networks and prepaid health plans
26 with the accreditation requirement with the accreditation
27 organizations and shall initiate action for entities
28 classified under item (2), (3), or (5) of subsection (b).
29 (d) The Illinois Department shall file an administrative
30 order to show cause against those entities categorized under
31 item (2), (3), or (5), of subsection (b) which are not in
32 compliance with the accreditation requirement.
33 (e) If an entity required to do so fails to comply with
34 the requirements of this Section, the Illinois Department
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1 shall sanction the entity as follows:
2 (1) If the entity is categorized under item (2) or
3 (3) of subsection (b), the entity shall suspend the
4 enrollment of medical assistance recipients. The
5 suspension of enrollment of medical assistance recipients
6 shall preclude the enrollment of individuals currently
7 receiving medical assistance as well as the enrollment of
8 new medical assistance recipients, but shall not preclude
9 the enrollment of a dependent of a medical assistance
10 recipient currently enrolled with the noncompliant
11 entity. The limitation on enrollment shall continue
12 until the noncompliant entity obtains accreditation as
13 required under this Section; and
14 (2) in addition to the mandatory enrollment
15 restriction, the Director, in his discretion, may impose
16 the following monetary fines on a noncompliant
17 organization:
18 (A) if the entity has not applied for
19 accreditation within the required time frames, a
20 fine not to exceed $500 for each day of
21 noncompliance with this Section; and
22 (B) if the entity has applied for the
23 accreditation required by this Section, but has not
24 been surveyed within the required time frames, a
25 fine not to exceed $250 for each day of
26 noncompliance with this Section.
27 (3) If a prepaid health plan or managed care
28 community network fails a follow-up accreditation survey
29 conducted subsequent to a failed accreditation survey,
30 the contract for the provision of medical care to medical
31 assistance recipients of the noncompliant entity shall be
32 terminated.
33 (f) For an entity failing an accreditation survey, the
34 Director shall assess the need to mitigate the monetary
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1 penalties specified under item (2) of subsection (e) based
2 upon:
3 (1) the potential threat to recipients' health,
4 safety, and welfare as determined by assessing compliance
5 with standards specified in this Section; the Illinois
6 Department shall also assess the findings of the
7 accreditation survey;
8 (2) the financial viability of the entity; and
9 (3) the extent of the entity's efforts to initiate
10 corrective action.
11 (g) Those contracting entities classified under item
12 (2), (3), or (5) of subsection (b) shall be surveyed by the
13 Illinois Department to ensure compliance with their
14 contractual obligations under their contracts with the
15 Illinois Department.
16 (h) An entity failing the initial accreditation survey
17 shall enter into a corrective action process for the purpose
18 of achieving accreditation. The Illinois Department shall
19 monitor the progress of those contracting entities not in
20 compliance in cooperation with the accreditation organization
21 to ensure that the contracting entities gain compliance with
22 the accreditation requirement. Those contracting entities
23 failing an initial or renewal accreditation survey must
24 receive accreditation during a subsequent accreditation
25 survey by the original accreditation organization.
26 Accreditation must be received within one year of the final
27 accreditation decision by the accrediting organization or
28 within a time frame mutually agreeable to the Illinois
29 Department, the accreditation organization, and the
30 contracting entity. A contracting entity may, at any time
31 seeking accreditation from another accreditation organization
32 provided that the contracting entity enters into a corrective
33 action process under this subsection to achieve accreditation
34 with the original accreditation organization.
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1 (i) The Illinois Department shall conduct annual
2 validation surveys on accredited contracting entities to
3 ensure ongoing compliance with accreditation standards.
4 Selection of the contracting entities to be surveyed shall be
5 based on the following information:
6 (1) reports received from the accreditation
7 organization, the Illinois Department or other State or
8 federal regulatory agency regarding the quality of care
9 provided by the entity;
10 (2) quality of care complaints received by the
11 Illinois Department from recipients or providers; and
12 (3) such other information as the Director, in his
13 discretion, shall determine is relevant in the selection
14 process.
15 (305 ILCS 5/5-24 new)
16 Sec. 5-24. Telephone service. In any case that the
17 Illinois Department enters into a contract for the provision
18 of medical care from a health maintenance organization,
19 prepaid health plan, or managed care community network, the
20 contracting entity shall, at a minimum, staff any telephone
21 service maintained for the benefit of recipients with
22 medically trained personnel. The telephone service shall be
23 provided directly, or under arrangement, at an office or
24 offices in locations maintained solely within the State of
25 Illinois. For purposes of this Section, "medically trained
26 personnel" means licensed practical nurses or registered
27 nurses located in the State of Illinois who are licensed
28 pursuant to the Illinois Nursing Act of 1987.".