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90_HB2629
New Act
Creates the Patient Protection in Utilization Review Act.
Requires persons who are health care utilization review
agents to be certificated by the Department of Insurance.
Preempts home rule. Effective January 1, 1999.
LRB9009144JSdv
LRB9009144JSdv
1 AN ACT concerning utilization review of health care
2 services.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 1. Short Title. This Act may be cited as the
6 Patient Protection in Utilization Review Act.
7 Section 5. Legislative intent. The General Assembly
8 finds and declares that:
9 (a) Utilization review by insurers and other third party
10 payers of the medical necessity and costs of health care
11 services is a widespread practice, affecting the delivery of
12 health care services throughout the State of Illinois. The
13 procedures and criteria used to conduct private utilization
14 review directly affect the ability of patients to access
15 health care services, the rights of patients who are
16 receiving needed health care services, and the quality of
17 health care services provided in the State. Patients and
18 providers have a right to know the procedures and criteria
19 used in utilization review.
20 (b) Private utilization review is conducted largely by
21 and for persons or entities licensed to engage in the
22 business of insurance, and it is proper for the State of
23 Illinois to oversee that activity as a part of the State's
24 regulation and supervision of the insurance industry.
25 Section 10. Purposes. The purposes of this Act are to:
26 (a) promote the delivery of quality health care services
27 in a cost effective manner;
28 (b) protect the rights of patients, businesses, and
29 providers of health care services by making information
30 about the practices of private review agents available;
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1 (c) ensure that private review agents maintain the
2 confidentiality of patient medical information in accordance
3 with applicable State and federal law; and
4 (d) improve coordination among patients, health care
5 providers, and third party payors.
6 Section 15. Definitions. As used in this Act:
7 "Certificate" means a certificate of registration granted
8 by the Director to a private review agent.
9 "Department" means the Department of Insurance.
10 "Director" means the Director of Insurance.
11 "Private review agent" means (1) any person or entity
12 performing utilization review in the State of Illinois or
13 (2) any person or entity performing utilization review in
14 the State of Illinois that is either affiliated with, under
15 contract with, or acting on behalf of:
16 (i) an Illinois business entity; or
17 (ii) a third party that is licensed to and does
18 provide or administer hospital or medical benefits to
19 citizens of this State including but not limited to any
20 insurance company authorized to transact health
21 insurance business in this State and any entity that is
22 organized under Article XXXI 1/4 of the Illinois
23 Insurance Code, the Voluntary Health Services Plans Act,
24 the Health Care Reimbursement Reform Act of 1985, or the
25 Limited Health Service Organization Act.
26 "Provider" means any licensed physician, dentist,
27 podiatrist, health facility, or other person or institution
28 that is duly licensed or otherwise authorized to deliver or
29 furnish health services.
30 "Utilization review" means a system for reviewing the
31 appropriate or effective allocation of health care services
32 given or proposed to be given to a patient or a group of
33 patients for determining whether those services should be
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1 covered or paid for by an insurer, health benefits plan, or
2 other entity. Utilization review includes but is not limited
3 to preadmission review, second surgical opinions, medical
4 necessity review, length-of-stay review, review relating to
5 the appropriateness of the site at which services were or
6 are to be delivered, and review of discharge planning.
7 "Utilization review plan" means a written description of
8 the procedures and other elements required by this Act under
9 which utilization review will be performed by a private
10 review agent.
11 Section 20. Certificate required.
12 (a) Except as specified in subsection (b) of this
13 Section, after January 1, 1999, no private review agent who
14 approves or denies payment, who recommends approval or
15 denial of payment, or whose review results in the approval
16 or denial of payment for hospital or medical services on a
17 case by case basis may conduct utilization review in this
18 State unless the Director has issued a certificate to the
19 private review agent.
20 (b) A certificate is not required for private review
21 agents:
22 (1) who are employees of or affiliated with a
23 hospital or other health care facility licensed in the
24 State of Illinois and who are conducting utilization
25 review for the patients of that hospital or health care
26 facility either for purposes of:
27 (A) the hospital or health care facility's
28 in-house utilization review activities,
29 (B) conducting review on a delegated basis for
30 an insurer, plan, or other entity provided that the
31 insurer, plan, or other entity has obtained a
32 certificate, or
33 (C) compliance with the conditions of
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1 participation for Medicare and Medicaid (Title XVIII
2 and Title XIX of the Social Security Act); or
3 (2) who operate solely under contract with the
4 State or Federal government for utilization review of
5 patients eligible for services under Title XVIII or
6 Title XIX of the Social Security Act; or
7 (3) who are employees of or affiliated with a
8 health maintenance organization licensed in the State of
9 Illinois and who are conducting utilization review with
10 respect to the enrollees of that health maintenance
11 organization or who are conducting utilization review
12 with respect to enrollees that use an organization
13 operating in the State of Illinois that is an affiliate,
14 as defined in Section 131.1 of the Illinois Insurance
15 Code, of the health maintenance organization, provided
16 that the utilization review is substantially the same as
17 the utilization review performed for enrollees of the
18 health maintenance organization, including but not
19 limited to the clinical review criteria used, the
20 personnel performing the reviews, the quality assurance
21 standards used, the appeals processes, and the
22 confidentiality protections. The Department may request
23 information to verify that the conditions for exemption
24 under this paragraph are being satisfied.
25 Section 25. Procedure for certification.
26 (a) An applicant for a certificate shall:
27 (1) submit an application to the Department; and
28 (2) pay to the Department the application fee
29 established by the Director.
30 (b) The application shall:
31 (1) be on a form prescribed by the Department and
32 accompanied by any supporting documentation required by
33 the Department; and
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1 (2) be signed by the applicant.
2 (c) The private review agent shall submit with the
3 application the following information:
4 (1) The name and address of the applicant and the
5 name of the chief executive officer or person
6 responsible for managing the affairs of the private
7 review agent. When the private review agent is a
8 corporation, the date of incorporation and the names of
9 the officers and directors of the corporation shall also
10 be provided.
11 (2) Written policies and procedures to ensure that
12 the private review agent maintains a written utilization
13 review plan that includes, for each service that is to
14 be reviewed by the private review agent the specific
15 review standards, criteria, and procedures to be used in
16 evaluating the medical necessity, appropriateness, or
17 effectiveness of proposed or delivered health care
18 services. However, the specific review standards,
19 criteria, and procedures need not be submitted as part of
20 the application.
21 (3) The specific written policies and procedures
22 for implementation of the following elements of the
23 utilization review plan:
24 (A) a provision that no final determination or
25 recommendation adverse to a patient or to any
26 affected provider concerning the medical necessity
27 or appropriateness for any form of hospital,
28 medical, or other health care services shall be
29 made by the private review agent without prior
30 evaluation and concurrence by a provider who is
31 licensed to practice medicine in the same or similar
32 clinical specialty as the provider under review,
33 except for mental health services other than those
34 provided by a psychiatrist, this determination or
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1 recommendation shall be made by a provider who has
2 the same or similar professional education,
3 training, and qualifications as the mental health
4 provider under review;
5 (B) a description of the process for providing
6 timely written notification and explanation to the
7 patient and to all providers involved in the
8 patient's care of a recommendation of or a final
9 adverse decision by the private review agent, which
10 shall include requirements that (i) written
11 notification include references to the specific
12 review criteria, standards, and procedures upon
13 which any denial or reduction in services is based
14 and (ii) the written review criteria, standards,
15 and procedures relevant to the notification of
16 denial or reduction in services shall be provided
17 to the patient and all providers within one
18 business day of a request for the information;
19 (C) the manner in which patients or providers
20 may seek reconsideration, appeal, or expedited
21 review of adverse decisions by the private review
22 agent including a provision that (i) determinations
23 of all reviews of adverse decisions shall be made
24 in a timely fashion; (ii) when the private review
25 agent conducts review on a concurrent basis,
26 expedited review must be completed within 24 hours
27 of a request for review; (iii) all specific review
28 standards, criteria, and procedures relevant to a
29 particular case under review be disclosed in
30 writing to a provider or patient within 24 hours of
31 the receipt of a request for the information; and
32 (iv) any appeal or review of an adverse decision
33 shall include a review by a person other than the
34 initial reviewer who recommended the adverse
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1 action; and
2 (D) those circumstances, if any, under which
3 utilization review may be delegated to a hospital
4 or health care facility.
5 (4) A summary of the number, type, and
6 qualifications of the personnel either employed or under
7 contract to perform the utilization review.
8 (5) A summary of the average annual number of lives
9 for which the private review agent shall be responsible
10 for conducting utilization review.
11 (6) An annual summary of the number and types of
12 reviews undertaken; the number and types of denials or
13 recommendations for denials issued; the number, types,
14 and outcomes of appeals processed; and the number and
15 types of complaints received and the disposition of those
16 complaints.
17 (7) The written policies and procedures to ensure
18 that a representative of the private review agent is
19 reasonably accessible to patients and providers 5 days a
20 week during normal business hours in the State of
21 Illinois.
22 (8) The written policies and procedures to ensure
23 that all applicable State and federal laws to protect
24 the confidentiality of medical records or any other
25 patient information are followed including but not
26 limited to the Mental Health and Developmental
27 Disabilities Confidentiality Act and 42 CFR Part 2 -
28 Confidentiality of Alcohol and Drug Abuse Patient
29 Records.
30 (9) A copy of the materials used by the private
31 review agent to inform patients and providers of the
32 requirements of the utilization review plan affecting
33 those patients and providers.
34 (10) A list of the insurers, plans, and other
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1 entities for which the private review agent is
2 performing utilization review in this State.
3 (11) Any ownership interest by or in any insurer,
4 plan, or other entity for which the private review agent
5 performs utilization review.
6 (12) Any other information the Director may
7 require.
8 (d) The Director shall issue a certificate to an
9 applicant that has met all the requirements of this Section
10 and all applicable regulations of the Department.
11 (e) A certificate is not transferable.
12 Section 30. Private review agent certified in other
13 state.
14 (a) Upon payment of the required fee, the Director may
15 grant a certificate to conduct utilization review in
16 Illinois, without submission of an application, to a private
17 review agent that is certified, licensed, or otherwise
18 authorized to conduct utilization review under the laws of
19 another state. Certification without application shall be
20 granted only if the requirements for certification,
21 licensure, or other authorization of the other state are
22 substantially equal to those in force in this State and
23 require, at a minimum, that the private review agent
24 maintain the policies and procedures related to a
25 utilization review plan described in paragraphs (2) and (3)
26 of subsection (c) of Section 25.
27 (b) A private review agent that receives certification
28 under this Section 30 shall be subject to any laws of this
29 State or rules or regulations promulgated by the Department
30 that govern the practice of private utilization review.
31 Section 35. Expiration and renewal of certificate.
32 (a) A certificate expires on the second anniversary of
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1 its effective date unless the certificate is renewed for a 2
2 year term as provided in this Section.
3 (b) Before it expires, a certificate may be renewed for
4 an additional 2 year term if the applicant pays the renewal
5 fee set by the Director and submits to the Department:
6 (1) a renewal application on a form supplied by the
7 Department;
8 (2) satisfactory evidence of compliance with the
9 requirements of this Act for certification; and
10 (3) an update of the information required for an
11 application for certification under Section 25.
12 Before renewing a certificate the Department shall consider
13 complaints filed under Section 45 against a certificate
14 holder.
15 Section 40. Availability of information.
16 (a) On request of any provider or any patient whose care
17 is subject to review, the Department shall provide copies of
18 the application required under Section 25 of any private
19 review agent who has been issued a certificate to conduct
20 review in this State.
21 (b) Every 3 months the Department shall compile a list
22 of certified private review agents along with the renewal
23 dates of their certifications. This information shall be
24 made available upon request.
25 Section 45. Complaints and investigations.
26 (a) Any provider or any patient whose care is subject to
27 review may submit to the Director a written complaint
28 concerning the activities of a private review agent. When
29 the patient or provider receives an adverse decision
30 concerning the health care services provided to a particular
31 patient, that decision must be appealed through the policies
32 and procedures described in paragraph (3) of subsection (c)
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1 of Section 25 before a complaint may be submitted to the
2 Department.
3 (b) The Department shall establish a process for
4 reviewing written complaints. The process shall include at
5 a minimum the following:
6 (1) sending a copy of the complaint, within 10 days
7 of receipt, to the private review agent and requiring
8 that any written reply be sent to the Director within 10
9 days after receipt of the complaint by the private
10 review agent; and
11 (2) establishing a method to resolve disputes
12 between private review agents and providers and
13 patients.
14 (c) The Department may establish reporting requirements
15 to:
16 (1) evaluate the effectiveness of private review
17 agents; or
18 (2) determine if the utilization review conducted
19 by the private review agents is in compliance with the
20 provisions of this Act and any applicable regulations.
21 Section 50. Denial or revocation of certification.
22 (a) The Director shall deny a certificate to any
23 applicant if, upon review of the application, the Director
24 finds that the applicant proposing to conduct utilization
25 review does not:
26 (1) Have available the services of a sufficient
27 number of physicians, registered nurses, medical records
28 technicians, or similarly qualified medical professionals
29 supported and supervised by appropriate physicians to
30 carry out its utilization review.
31 (2) Provide assurances satisfactory to the
32 Department that the procedures and policies of the
33 private review agent will:
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1 (A) protect the confidentiality of patient
2 information in compliance with state and federal
3 law;
4 (B) ensure that the private review agent will
5 be reasonably accessible to patients and providers
6 for 5 working days a week during normal business
7 hours in this State; and
8 (C) provide for timely notification of adverse
9 decisions and timely processing of appeals or
10 reviews of adverse decisions to ensure that a
11 patient's care is not interrupted.
12 (3) Meet any applicable regulations the Department
13 may adopt under this Act relating to the qualifications
14 of private review agents or the performance of
15 utilization review.
16 (b) The Director may revoke or refuse to issue or renew
17 a certificate if the holder or applicant:
18 (1) violates any provision of this Act or its
19 rules;
20 (2) fraudulently or deceptively obtains, attempts
21 to obtain, or uses a certificate; or
22 (3) fails to substantially meet the standards and
23 qualifications set forth in this Act or any rules
24 promulgated by the Department.
25 (c) Before refusing to issue or renew or revoking a
26 certificate under this Section, the Director shall provide
27 the applicant or certificate holder with written notice of
28 the reasons for the refusal to issue or renew or revocation,
29 reasonable time to supply additional information
30 demonstrating compliance with the requirements of this Act,
31 and the opportunity to request a hearing. If an applicant or
32 certificate holder requests a hearing, the Director shall
33 send a hearing notice by certified mail, return receipt
34 requested, and conduct a hearing in accordance with the
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1 Illinois Administrative Procedure Act.
2 Section 55. Prohibited acts. Any private review agent
3 certified in Illinois is prohibited from:
4 (a) Disclosing any patient information obtained in
5 conducting utilization review, except that the private
6 review agent may disclose that information to the provider,
7 third party insurer, plan, or other entity responsible for
8 the coverage of the beneficiary. The provider shall be held
9 harmless for any abrogation of this obligation of the
10 private review agent, insurer, plan, or other entity.
11 (b) Offering or undertaking to offer:
12 (1) a contingent fee contract to conduct
13 utilization review under which compensation to the
14 private review entity is based in whole or in part upon
15 amounts or expenditures saved or reduced by the private
16 review agent;
17 (2) bonuses or commissions to be paid to the
18 private review agent based upon dollar reductions of
19 provider bills; or
20 (3) promises to reduce health care expenditures by
21 certain amounts or percentages.
22 (c) Refusing to identify the name of the agent or the
23 identity of a person employed or otherwise engaged by a
24 private review agent who is conducting utilization review
25 when requested to do so by a provider or patient.
26 (d) Releasing data obtained in the review process that
27 identifies individual patients, hospitals, or physicians
28 without prior consent of the patient, physician, or
29 hospital, as the case may be.
30 Section 60. Penalties.
31 (a) Any person or entity that acts as a private review
32 agent in the State of Illinois without obtaining a
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1 certificate or any certified private review agent who fails
2 to comply with the provisions of this Act or its rules is:
3 (1) guilty of a Class A misdemeanor, and upon
4 conviction is subject to a penalty not exceeding $1,000
5 with each day the violation continues after the first
6 violation constituting a separate offense; and
7 (2) prohibited from denying payment to any provider
8 or patient for services that the provider has rendered
9 to any patient whose care was reviewed by the person or
10 entity.
11 (b) Notwithstanding the existence or pursuit of any
12 other remedy, whenever the Attorney General has reason to
13 believe that any person or entity has engaged in or is about
14 to engage in any act or practice in violation of this Act
15 and that proceedings would be in the public interest, he or
16 she may bring an action in the name of the People of the
17 State against that person or entity to restrain, by
18 preliminary or permanent injunction, the prohibited act or
19 practice. The court, in its discretion, may exercise all
20 powers necessary, including but not limited to, injunction,
21 revocation of the certificate to engage in utilization
22 review, dissolution of a domestic corporation, suspension or
23 termination of the right of a foreign corporation to do
24 business in this State, and restitution. In addition to the
25 other remedies provided in this Section, the Attorney
26 General may request and the court may impose a civil penalty
27 in a sum not to exceed $50,000 against any person or entity
28 found by the court to have engaged in any act or practice
29 declared unlawful under this Act.
30 Section 65. Department rules. The Department shall
31 adopt rules necessary for the administration and enforcement
32 of this Act within 6 months of its effective date.
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1 Section 70. Judicial review. All final administrative
2 decisions of the Department are subject to judicial review
3 under the Administrative Review Law and its rules. The term
4 "administrative decision" is defined as in Section 3-101 of
5 the Code of Civil Procedure.
6 Section 75. Administrative Procedure Act. The Illinois
7 Administrative Procedure Act is expressly adopted and
8 incorporated as if all the provisions of that Act were
9 included in this Act. For the purposes of this Act, the
10 notice required under Section 10-25 of the Illinois
11 Administrative Procedure Act is considered sufficient when
12 mailed to the last known address of a party.
13 Section 80. Home rule. The regulation and certification
14 of private review agents are exclusive powers and functions
15 of the State. A home rule unit may not regulate or license
16 private review agents. This Section is a denial of home
17 rule powers and functions under subsection (h) of Section 6
18 of Article VII of the Illinois Constitution.
19 Section 99. Effective date. This Act takes effect on
20 January 1, 1999.