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90_SB0447
215 ILCS 5/356t new
215 ILCS 125/5-3 from Ch. 111 1/2, par. 1411.2
215 ILCS 130/4003 from Ch. 73, par. 1504-3
215 ILCS 165/10 from Ch. 32, par. 604
Amends the Illinois Insurance Code, Health Maintenance
Organization Act, Limited Health Service Organization Act,
and Voluntary Health Services Plan Act. Provides that
coverage under those Acts shall include coverage for drugs
when prescribed for a use that is not approved by the Food
and Drug Administration if the medical literature supports
the use. Requires the Director of Insurance to create a
panel of experts to advise on off-label uses.
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1 AN ACT concerning insurance coverage for drug therapy,
2 amending named Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Insurance Code is amended by
6 adding Section 356t as follows:
7 (215 ILCS 5/356t new)
8 Sec. 356t. Drugs; alternative indications.
9 (a) An individual or group policy of accident and health
10 insurance amended, delivered, issued, or renewed after the
11 effective date of this amendatory Act of 1997 may not exclude
12 coverage for a drug for a particular indication on the ground
13 that the drug has not been approved by the federal Food and
14 Drug Administration for that indication if the drug is
15 recognized for treatment of that indication in one of the
16 standard reference compendia, in the medical literature, or
17 by the Director. Coverage required under this Section for a
18 drug shall also include medically necessary services
19 associated with the administration of the drug. This Section
20 does not require coverage for drugs that:
21 (1) have not been approved by the federal Food and
22 Drug Administration;
23 (2) the federal Food and Drug Administration has
24 determined the use of is contra-indicated; or
25 (3) are experimental drugs not otherwise approved
26 for any indication by the federal Food and Drug
27 Administration.
28 (b) As used in this Section, "medical literature" means
29 published studies in any peer-reviewed national professional
30 journal and "standard reference compendia" means the United
31 States Pharmacopeia Drug Information, the American Medical
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1 Association Drug Evaluations, or the American Hospital
2 Formulary Service Drug Information.
3 (c) The Director shall create a panel of 7 medical
4 experts to review off-label uses not included in any of the
5 standard reference compendia or in the medical literature and
6 to advise the Director in those instances whether a
7 particular off-label use is medically appropriate. The panel
8 shall make its recommendations periodically and whenever a
9 particular dispute about payment for off-label use is brought
10 to the Director. The panel shall include 3 medical
11 oncologists, 2 specialists in the management of AIDS
12 patients, one specialist in heart disease, and one general
13 practitioner. The Department shall enforce the provisions of
14 this Section.
15 Section 10. The Health Maintenance Organization Act is
16 amended by changing Section 5-3 as follows:
17 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
18 Sec. 5-3. Insurance Code provisions.
19 (a) Health Maintenance Organizations shall be subject to
20 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
21 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
22 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356t, 367i, 401,
23 401.1, 402, 403, 403A, 408, 408.2, and 412, paragraph (c) of
24 subsection (2) of Section 367, and Articles VIII 1/2, XII,
25 XII 1/2, XIII, XIII 1/2, and XXVI of the Illinois Insurance
26 Code.
27 (b) For purposes of the Illinois Insurance Code, except
28 for Articles XIII and XIII 1/2, Health Maintenance
29 Organizations in the following categories are deemed to be
30 "domestic companies":
31 (1) a corporation authorized under the Medical
32 Service Plan Act, the Dental Service Plan Act, the Vision
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1 Service Plan Act, the Pharmaceutical Service Plan Act,
2 the Voluntary Health Services Plan Act, or the Nonprofit
3 Health Care Service Plan Act;
4 (2) a corporation organized under the laws of this
5 State; or
6 (3) a corporation organized under the laws of
7 another state, 30% or more of the enrollees of which are
8 residents of this State, except a corporation subject to
9 substantially the same requirements in its state of
10 organization as is a "domestic company" under Article
11 VIII 1/2 of the Illinois Insurance Code.
12 (c) In considering the merger, consolidation, or other
13 acquisition of control of a Health Maintenance Organization
14 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
15 (1) the Director shall give primary consideration
16 to the continuation of benefits to enrollees and the
17 financial conditions of the acquired Health Maintenance
18 Organization after the merger, consolidation, or other
19 acquisition of control takes effect;
20 (2)(i) the criteria specified in subsection (1)(b)
21 of Section 131.8 of the Illinois Insurance Code shall not
22 apply and (ii) the Director, in making his determination
23 with respect to the merger, consolidation, or other
24 acquisition of control, need not take into account the
25 effect on competition of the merger, consolidation, or
26 other acquisition of control;
27 (3) the Director shall have the power to require
28 the following information:
29 (A) certification by an independent actuary of
30 the adequacy of the reserves of the Health
31 Maintenance Organization sought to be acquired;
32 (B) pro forma financial statements reflecting
33 the combined balance sheets of the acquiring company
34 and the Health Maintenance Organization sought to be
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1 acquired as of the end of the preceding year and as
2 of a date 90 days prior to the acquisition, as well
3 as pro forma financial statements reflecting
4 projected combined operation for a period of 2
5 years;
6 (C) a pro forma business plan detailing an
7 acquiring party's plans with respect to the
8 operation of the Health Maintenance Organization
9 sought to be acquired for a period of not less than
10 3 years; and
11 (D) such other information as the Director
12 shall require.
13 (d) The provisions of Article VIII 1/2 of the Illinois
14 Insurance Code and this Section 5-3 shall apply to the sale
15 by any health maintenance organization of greater than 10% of
16 its enrollee population (including without limitation the
17 health maintenance organization's right, title, and interest
18 in and to its health care certificates).
19 (e) In considering any management contract or service
20 agreement subject to Section 141.1 of the Illinois Insurance
21 Code, the Director (i) shall, in addition to the criteria
22 specified in Section 141.2 of the Illinois Insurance Code,
23 take into account the effect of the management contract or
24 service agreement on the continuation of benefits to
25 enrollees and the financial condition of the health
26 maintenance organization to be managed or serviced, and (ii)
27 need not take into account the effect of the management
28 contract or service agreement on competition.
29 (f) Except for small employer groups as defined in the
30 Small Employer Rating, Renewability and Portability Health
31 Insurance Act and except for medicare supplement policies as
32 defined in Section 363 of the Illinois Insurance Code, a
33 Health Maintenance Organization may by contract agree with a
34 group or other enrollment unit to effect refunds or charge
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1 additional premiums under the following terms and conditions:
2 (i) the amount of, and other terms and conditions
3 with respect to, the refund or additional premium are set
4 forth in the group or enrollment unit contract agreed in
5 advance of the period for which a refund is to be paid or
6 additional premium is to be charged (which period shall
7 not be less than one year); and
8 (ii) the amount of the refund or additional premium
9 shall not exceed 20% of the Health Maintenance
10 Organization's profitable or unprofitable experience with
11 respect to the group or other enrollment unit for the
12 period (and, for purposes of a refund or additional
13 premium, the profitable or unprofitable experience shall
14 be calculated taking into account a pro rata share of the
15 Health Maintenance Organization's administrative and
16 marketing expenses, but shall not include any refund to
17 be made or additional premium to be paid pursuant to this
18 subsection (f)). The Health Maintenance Organization and
19 the group or enrollment unit may agree that the
20 profitable or unprofitable experience may be calculated
21 taking into account the refund period and the immediately
22 preceding 2 plan years.
23 The Health Maintenance Organization shall include a
24 statement in the evidence of coverage issued to each enrollee
25 describing the possibility of a refund or additional premium,
26 and upon request of any group or enrollment unit, provide to
27 the group or enrollment unit a description of the method used
28 to calculate (1) the Health Maintenance Organization's
29 profitable experience with respect to the group or enrollment
30 unit and the resulting refund to the group or enrollment unit
31 or (2) the Health Maintenance Organization's unprofitable
32 experience with respect to the group or enrollment unit and
33 the resulting additional premium to be paid by the group or
34 enrollment unit.
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1 In no event shall the Illinois Health Maintenance
2 Organization Guaranty Association be liable to pay any
3 contractual obligation of an insolvent organization to pay
4 any refund authorized under this Section.
5 (Source: P.A. 88-313; 89-90, eff. 6-30-95.)
6 Section 15. The Limited Health Service Organization Act
7 is amended by changing Section 4003 as follows:
8 (215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
9 Sec. 4003. Illinois Insurance Code provisions. Limited
10 health service organizations shall be subject to the
11 provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
12 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
13 154.6, 154.7, 154.8, 155.04, 355.2, 356t, 401, 401.1, 402,
14 403, 403A, 408, 408.2, and 412, and Articles VIII 1/2, XII,
15 XII 1/2, XIII, XIII 1/2, and XXVI of the Illinois Insurance
16 Code. For purposes of the Illinois Insurance Code, except
17 for Articles XIII and XIII 1/2, limited health service
18 organizations in the following categories are deemed to be
19 domestic companies:
20 (1) a corporation under the laws of this State; or
21 (2) a corporation organized under the laws of
22 another state, 30% of more of the enrollees of which are
23 residents of this State, except a corporation subject to
24 substantially the same requirements in its state of
25 organization as is a domestic company under Article VIII
26 1/2 of the Illinois Insurance Code.
27 (Source: P.A. 86-600; 87-587; 87-1090.)
28 Section 20. The Voluntary Health Services Plans Act is
29 amended by changing Section 10 as follows:
30 (215 ILCS 165/10) (from Ch. 32, par. 604)
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1 Sec. 10. Application of Insurance Code provisions.
2 Health services plan corporations and all persons interested
3 therein or dealing therewith shall be subject to the
4 provisions of Article XII 1/2 and Sections 3.1, 133, 140,
5 143, 143c, 149, 354, 355.2, 356r, 356t, 367.2, 401, 401.1,
6 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7) and
7 (15) of Section 367 of the Illinois Insurance Code.
8 (Source: P.A. 89-514, eff. 7-17-96.)