State of Illinois
90th General Assembly
Legislation

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90_SB1048

      215 ILCS 5/356t new
      215 ILCS 5/370s new
      215 ILCS 5/511.114 new
      215 ILCS 125/5-3          from Ch. 111 1/2, par. 1411.2
      215 ILCS 130/3009         from Ch. 73, par. 1503-9
      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 Plans  Act.  Requires  coverage
      under those Acts to include diabetes self-management training
      and education. Effective immediately.
                                                   SDS/bill0039/bkp
                                             SDS/bill0039/bkp
 1        AN  ACT  concerning  health  coverage  for  treatment  of
 2    diabetes, 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 Sections 356t, 370s, and 511.114 as follows:
 7        (215 ILCS 5/356t new)
 8        Sec.   356t.  Diabetes   self-management   training   and
 9    education.
10        (a)  An individual or group policy of accident and health
11    insurance and a managed care plan, as defined in Section 356r
12    of  this Code, that is amended, delivered, issued, or renewed
13    after the effective date of this amendatory Act of 1997 shall
14    provide coverage for outpatient self-management training  and
15    education,  equipment,  and  supplies  for  the  treatment of
16    insulin-dependent    diabetes,    insulin-using     diabetes,
17    gestational diabetes, and non-insulin using diabetes.
18        (b)  As  used  in this Section, "diabetes self-management
19    training" means instruction in  an  inpatient  or  outpatient
20    setting  which  enables  diabetic  patients to understand the
21    diabetic management process and daily management of  diabetic
22    therapy  as a means of avoiding frequent hospitalizations and
23    complications.   Diabetic  self-management   training   shall
24    comply  with  the  standards  developed  by the Department of
25    Public  Health  in  consultation  with  a  national  diabetes
26    association affiliated with this State.
27        (c)  Diabetes self-management training shall be  provided
28    by   a   certified,   registered,  or  licensed  health  care
29    professional with expertise in diabetes management.   Medical
30    nutritional  therapy,  however,  may  be  provided  only by a
31    licensee under the Diatetic and Nutrition  Services  Practice
                            -2-              SDS/bill0039/bkp
 1    Act.  The Department of Public Health shall establish minimum
 2    requirements   for   demonstrating   expertise   in  diabetes
 3    management  in  consultation   with   a   national   diabetes
 4    association affiliated with this State.
 5        (d)  Coverage    under    this   Section   for   diabetes
 6    self-management   training,   including   medical   nutrition
 7    therapy, shall be limited to the following:
 8             (1)  visits medically necessary upon  the  diagnosis
 9        of diabetes by a physician;
10             (2)  a   physician   diagnosis   that  represents  a
11        significant change in the patient's symptoms or condition
12        requiring medically necessary changes  in  the  patient's
13        self-management; and
14             (3)  visits  when  reeducation or refresher training
15        is medically necessary.
16        Diabetes self-management training may be provided as part
17    of  an  office  visit,  group  setting,  or  in-home   visit.
18    Coverage  under  this  Section  shall  be subject to the same
19    deductible and coinsurance provisions  that  apply  to  other
20    coverage under the policy.
21        (e)  Other  coverage  under  a  policy or plan may not be
22    reduced or eliminated because of  the  requirements  of  this
23    Section.   The  Department  shall  issue  rules  necessary to
24    enforce the provisions of this Section.
25        (215 ILCS 5/370s new)
26        Sec. 370s.  Diabetes management training.   All  insurers
27    and administrators are subject to Section 356t of this Code.
28        (215 ILCS 5/511.114 new)
29        Sec.   511.114.  Diabetes   management   training.    All
30    administrators are subject to Section 356t of this Code.
31        Section  10.   The Health Maintenance Organization Act is
                            -3-              SDS/bill0039/bkp
 1    amended by changing Section 5-3 as follows:
 2        (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
 3        Sec. 5-3.  Insurance Code provisions.
 4        (a)  Health Maintenance Organizations shall be subject to
 5    the provisions of Sections 133, 134, 137, 140, 141.1,  141.2,
 6    141.3,  143,  143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
 7    154.6, 154.7, 154.8, 155.04, 355.2, 356m,  356t,  367i,  401,
 8    401.1,  402, 403, 403A, 408, 408.2, and 412, paragraph (c) of
 9    subsection (2) of Section 367, and Articles  VIII  1/2,  XII,
10    XII  1/2,  XIII, XIII 1/2, and XXVI of the Illinois Insurance
11    Code.
12        (b)  For purposes of the Illinois Insurance Code,  except
13    for   Articles   XIII   and   XIII  1/2,  Health  Maintenance
14    Organizations in the following categories are  deemed  to  be
15    "domestic companies":
16             (1)  a  corporation  authorized  under  the  Medical
17        Service Plan Act, the Dental Service Plan Act, the Vision
18        Service  Plan  Act,  the Pharmaceutical Service Plan Act,
19        the Voluntary Health Services Plan Act, or the  Nonprofit
20        Health Care Service Plan Act;
21             (2)  a  corporation organized under the laws of this
22        State; or
23             (3)  a  corporation  organized  under  the  laws  of
24        another state, 30% or more of the enrollees of which  are
25        residents  of this State, except a corporation subject to
26        substantially the  same  requirements  in  its  state  of
27        organization  as  is  a  "domestic company" under Article
28        VIII 1/2 of the Illinois Insurance Code.
29        (c)  In considering the merger, consolidation,  or  other
30    acquisition  of  control of a Health Maintenance Organization
31    pursuant to Article VIII 1/2 of the Illinois Insurance Code,
32             (1)  the Director shall give  primary  consideration
33        to  the  continuation  of  benefits  to enrollees and the
                            -4-              SDS/bill0039/bkp
 1        financial conditions of the acquired  Health  Maintenance
 2        Organization  after  the  merger, consolidation, or other
 3        acquisition of control takes effect;
 4             (2)(i)  the criteria specified in subsection  (1)(b)
 5        of Section 131.8 of the Illinois Insurance Code shall not
 6        apply  and (ii) the Director, in making his determination
 7        with respect  to  the  merger,  consolidation,  or  other
 8        acquisition  of  control,  need not take into account the
 9        effect on competition of the  merger,  consolidation,  or
10        other acquisition of control;
11             (3)  the  Director  shall  have the power to require
12        the following information:
13                  (A)  certification by an independent actuary of
14             the  adequacy  of  the  reserves   of   the   Health
15             Maintenance Organization sought to be acquired;
16                  (B)  pro  forma financial statements reflecting
17             the combined balance sheets of the acquiring company
18             and the Health Maintenance Organization sought to be
19             acquired as of the end of the preceding year and  as
20             of  a date 90 days prior to the acquisition, as well
21             as  pro  forma   financial   statements   reflecting
22             projected  combined  operation  for  a  period  of 2
23             years;
24                  (C)  a pro forma  business  plan  detailing  an
25             acquiring   party's   plans   with  respect  to  the
26             operation of  the  Health  Maintenance  Organization
27             sought  to be acquired for a period of not less than
28             3 years; and
29                  (D)  such other  information  as  the  Director
30             shall require.
31        (d)  The  provisions  of Article VIII 1/2 of the Illinois
32    Insurance Code and this Section 5-3 shall apply to  the  sale
33    by any health maintenance organization of greater than 10% of
34    its  enrollee  population  (including  without limitation the
                            -5-              SDS/bill0039/bkp
 1    health maintenance organization's right, title, and  interest
 2    in and to its health care certificates).
 3        (e)  In  considering  any  management contract or service
 4    agreement subject to Section 141.1 of the Illinois  Insurance
 5    Code,  the  Director  (i)  shall, in addition to the criteria
 6    specified in Section 141.2 of the  Illinois  Insurance  Code,
 7    take  into  account  the effect of the management contract or
 8    service  agreement  on  the  continuation  of   benefits   to
 9    enrollees   and   the   financial  condition  of  the  health
10    maintenance organization to be managed or serviced, and  (ii)
11    need  not  take  into  account  the  effect of the management
12    contract or service agreement on competition.
13        (f)  Except for small employer groups as defined  in  the
14    Small  Employer  Rating,  Renewability and Portability Health
15    Insurance Act and except for medicare supplement policies  as
16    defined  in  Section  363  of  the Illinois Insurance Code, a
17    Health Maintenance Organization may by contract agree with  a
18    group  or  other  enrollment unit to effect refunds or charge
19    additional premiums under the following terms and conditions:
20             (i)  the amount of, and other terms  and  conditions
21        with respect to, the refund or additional premium are set
22        forth  in the group or enrollment unit contract agreed in
23        advance of the period for which a refund is to be paid or
24        additional premium is to be charged (which  period  shall
25        not be less than one year); and
26             (ii)  the amount of the refund or additional premium
27        shall   not   exceed   20%   of  the  Health  Maintenance
28        Organization's profitable or unprofitable experience with
29        respect to the group or other  enrollment  unit  for  the
30        period  (and,  for  purposes  of  a  refund or additional
31        premium, the profitable or unprofitable experience  shall
32        be calculated taking into account a pro rata share of the
33        Health   Maintenance  Organization's  administrative  and
34        marketing expenses, but shall not include any  refund  to
                            -6-              SDS/bill0039/bkp
 1        be made or additional premium to be paid pursuant to this
 2        subsection (f)).  The Health Maintenance Organization and
 3        the   group   or  enrollment  unit  may  agree  that  the
 4        profitable or unprofitable experience may  be  calculated
 5        taking into account the refund period and the immediately
 6        preceding 2 plan years.
 7        The  Health  Maintenance  Organization  shall  include  a
 8    statement in the evidence of coverage issued to each enrollee
 9    describing the possibility of a refund or additional premium,
10    and  upon request of any group or enrollment unit, provide to
11    the group or enrollment unit a description of the method used
12    to  calculate  (1)  the  Health  Maintenance   Organization's
13    profitable experience with respect to the group or enrollment
14    unit and the resulting refund to the group or enrollment unit
15    or  (2)  the  Health  Maintenance Organization's unprofitable
16    experience with respect to the group or enrollment  unit  and
17    the  resulting  additional premium to be paid by the group or
18    enrollment unit.
19        In  no  event  shall  the  Illinois  Health   Maintenance
20    Organization  Guaranty  Association  be  liable  to  pay  any
21    contractual  obligation  of  an insolvent organization to pay
22    any refund authorized under this Section.
23    (Source: P.A. 88-313; 89-90, eff. 6-30-95.)
24        Section 15.  The Limited Health Service Organization  Act
25    is amended by changing Section 3009 as follows:
26        (215 ILCS 130/3009) (from Ch. 73, par. 1503-9)
27        Sec.   3009.  Point-of-service   limited  health  service
28    contracts.
29        (a)  An LHSO that offers a POS contract:
30             (1)  shall include as in-plan covered  services  all
31        services required by law to be provided by an LHSO;
32             (2)  shall  provide  incentives, which shall include
                            -7-              SDS/bill0039/bkp
 1        financial  incentives,  for  enrollees  to  use   in-plan
 2        covered services;
 3             (3)  shall  not  offer  services out-of-plan without
 4        providing those services on an in-plan basis;
 5             (4)  may limit or exclude specific types of services
 6        from coverage when obtained out-of-plan;
 7             (5)  may include  annual  out-of-pocket  limits  and
 8        lifetime  maximum  benefits  allowances  for  out-of-plan
 9        services  that are separate from any limits or allowances
10        applied to in-plan services;
11             (6)  shall  include  an   annual   maximum   benefit
12        allowance  not to exceed $2,500 per year that is separate
13        from  any  limits  or  allowances  applied   to   in-plan
14        services;
15             (7)  may  limit the groups to which a POS product is
16        offered, however, if a POS product is offered to a group,
17        then it must be offered to all eligible members  of  that
18        group, when an LHSO provider is available;
19             (8)  shall    not   consider   emergency   services,
20        authorized referral  services,  or  non-routine  services
21        obtained out of the service area to be POS services; and
22             (9)  may   treat   as   out-of-plan  services  those
23        services that an enrollee obtains  from  a  participating
24        provider,  but for which the proper authorization was not
25        given by the LHSO.
26        (b)  An LHSO offering a POS contract shall be subject  to
27    the following limitations:
28             (1)  The  LHSO  shall  not  expend  in  any calendar
29        quarter  more  than  20%  of  its  total  limited  health
30        services expenditures for all its members for out-of-plan
31        covered services.
32             (2)  If the amount specified  in  paragraph  (1)  is
33        exceeded  by  2%  in  a  quarter,  the  LHSO shall effect
34        compliance with paragraph (1) by the end of the following
                            -8-              SDS/bill0039/bkp
 1        quarter.
 2             (3)  If compliance  with  the  amount  specified  in
 3        paragraph  (1)  is  not  demonstrated  in the LHSO's next
 4        quarterly report, the LHSO may not offer the POS contract
 5        to new groups or include the POS option in the renewal of
 6        an  existing  group  until  compliance  with  the  amount
 7        specified in paragraph (1) is demonstrated  or  otherwise
 8        allowed by the Director.
 9             (4)  Any LHSO failing, without just cause, to comply
10        with the provisions of this subsection shall be required,
11        after  notice  and  hearing, to pay a penalty of $250 for
12        each day out  of  compliance,  to  be  recovered  by  the
13        Director  of  Insurance.   Any penalty recovered shall be
14        paid into the General Revenue  Fund.   The  Director  may
15        reduce  the  penalty  if  the  LHSO  demonstrates  to the
16        Director  that  the  imposition  of  the  penalty   would
17        constitute a financial hardship to the LHSO.
18        (c)  Any LHSO that offers a POS product shall:
19             (1)  File  a quarterly financial statement detailing
20        compliance with the requirements of subsection (b).
21             (2)  Track out-of-plan  POS  utilization  separately
22        from  in-plan  or  non-POS  out-of-plan  emergency  care,
23        referral  care,  and  urgent care out of the service area
24        utilization.
25             (3)  Record out-of-plan utilization in a manner that
26        will permit such utilization and cost  reporting  as  the
27        Director may, by regulation, require.
28             (4)  Demonstrate to the Director's satisfaction that
29        the  LHSO  has  the fiscal, administrative, and marketing
30        capacity to control its POS enrollment, utilization,  and
31        costs  so  as not to jeopardize the financial security of
32        the LHSO.
33             (5)  Maintain the deposit required by subsection (b)
34        of Section 2006 in addition to any other deposit required
                            -9-              SDS/bill0039/bkp
 1        under this Act.
 2        (d)  An LHSO shall not issue a POS contract until it  has
 3    filed  and had approved by the Director a plan to comply with
 4    the provisions of this Section.  The compliance plan shall at
 5    a minimum include provisions demonstrating that the LHSO will
 6    do all of the following:
 7             (1)  Design the benefit  levels  and  conditions  of
 8        coverage  for  in-plan  covered  services and out-of-plan
 9        covered services as required by this Article.
10             (2)  Provide  or  arrange  for  the   provision   of
11        adequate systems to:
12                  (A)  process and pay claims for all out-of-plan
13             covered services;
14                  (B)  meet  the  requirements for a POS contract
15             set  forth  in  this  Section  and  any   additional
16             requirements  that may be set forth by the Director;
17             and
18                  (C)  generate accurate data and  financial  and
19             regulatory  reports  on  a  timely basis so that the
20             Department can evaluate the LHSO's  experience  with
21             the  POS  contract  and  monitor compliance with POS
22             contract provisions.
23             (3)  Comply initially and on an ongoing  basis  with
24        the requirements of subsections (b) and (c).
25        (e)  A  limited health service organization that offers a
26    POS contract must comply with Section 356t  of  the  Illinois
27    Insurance Code.
28    (Source: P.A. 87-1079; 88-667, eff. 9-16-94.)
29        Section  20.   The Voluntary Health Services Plans Act is
30    amended by changing Section 10 as follows:
31        (215 ILCS 165/10) (from Ch. 32, par. 604)
32        Sec.  10.  Application  of  Insurance  Code   provisions.
                            -10-             SDS/bill0039/bkp
 1    Health  services plan corporations and all persons interested
 2    therein  or  dealing  therewith  shall  be  subject  to   the
 3    provisions  of  Article  XII  1/2 and Sections 3.1, 133, 140,
 4    143, 143c, 149, 354, 355.2, 356r, 356t,  367.2,  401,  401.1,
 5    402,  403,  403A, 408, 408.2, and 412, and paragraphs (7) and
 6    (15) of Section 367 of the Illinois Insurance Code.
 7    (Source: P.A. 89-514, eff. 7-17-96.)
 8        Section 99.  Effective date.  This Act takes effect  upon
 9    becoming law.

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