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91_HB1331
LRB9102355JSpc
1 AN ACT concerning external appeal procedures concerning
2 health care determinations, 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 State Employees Group Insurance Act of
6 1971 is amended by changing Section 6.11 as follows:
7 (5 ILCS 375/6.11)
8 Sec. 6.11. Required health benefits. The program of
9 health benefits shall provide the post-mastectomy care
10 benefits required to be covered by a policy of accident and
11 health insurance under Section 356t of the Illinois Insurance
12 Code. The program of health benefits shall provide the
13 coverage required under Sections 356u, 356w, and 356x of the
14 Illinois Insurance Code and comply with Article VII of the
15 Health Maintenance Organization Act.
16 (Source: P.A. 90-7, eff. 6-10-97; 90-655, eff. 7-30-98;
17 90-741, eff. 1-1-99.)
18 Section 10. The State Mandates Act is amended by adding
19 Section 8.23 as follows:
20 (30 ILCS 805/8.23 new)
21 Sec. 8.23. Exempt mandate. Notwithstanding Sections 6
22 and 8 of this Act, no reimbursement by the State is required
23 for the implementation of any mandate created by this
24 amendatory Act of the 91st General Assembly.
25 Section 15. The Counties Code is amended by changing
26 Section 5-1069.3 as follows:
27 (55 ILCS 5/5-1069.3)
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1 Sec. 5-1069.3. Required health benefits. If a county,
2 including a home rule county, is a self-insurer for purposes
3 of providing health insurance coverage for its employees, the
4 coverage shall include coverage for the post-mastectomy care
5 benefits required to be covered by a policy of accident and
6 health insurance under Section 356t and the coverage required
7 under Sections 356u, 356w, and 356x of the Illinois Insurance
8 Code and comply with Article VII of the Health Maintenance
9 Organization Act. The requirement that health benefits be
10 covered as provided in this Section is an exclusive power and
11 function of the State and is a denial and limitation under
12 Article VII, Section 6, subsection (h) of the Illinois
13 Constitution. A home rule county to which this Section
14 applies must comply with every provision of this Section.
15 (Source: P.A. 90-7, eff. 6-10-97; 90-741, eff. 1-1-99.)
16 Section 20. The Illinois Municipal Code is amended by
17 changing Section 10-4-2.3 as follows:
18 (65 ILCS 5/10-4-2.3)
19 Sec. 10-4-2.3. Required health benefits. If a
20 municipality, including a home rule municipality, is a
21 self-insurer for purposes of providing health insurance
22 coverage for its employees, the coverage shall include
23 coverage for the post-mastectomy care benefits required to be
24 covered by a policy of accident and health insurance under
25 Section 356t and the coverage required under Sections 356u,
26 356w, and 356x of the Illinois Insurance Code and comply with
27 Article VII of the Health Maintenance Organization Act. The
28 requirement that health benefits be covered as provided in
29 this is an exclusive power and function of the State and is a
30 denial and limitation under Article VII, Section 6,
31 subsection (h) of the Illinois Constitution. A home rule
32 municipality to which this Section applies must comply with
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1 every provision of this Section.
2 (Source: P.A. 90-7, eff. 6-10-97; 90-741, eff. 1-1-99.)
3 Section 25. The School Code is amended by changing
4 Section 10-22.3f as follows:
5 (105 ILCS 5/10-22.3f)
6 Sec. 10-22.3f. Required health benefits. Insurance
7 protection and benefits for employees shall provide the
8 post-mastectomy care benefits required to be covered by a
9 policy of accident and health insurance under Section 356t
10 and the coverage required under Sections 356u, 356w, and 356x
11 of the Illinois Insurance Code and comply with Article VII of
12 the Health Maintenance Organization Act.
13 (Source: P.A. 90-7, eff. 6-10-97; 90-741, eff. 1-1-99.)
14 Section 30. The Illinois Insurance Code is amended by
15 adding Sections 155.36, 370s, and 511.114 as follows:
16 (215 ILCS 5/155.36 new)
17 Sec. 155.36. Health care determination appeals.
18 Insurance companies that transact the kinds of insurance
19 authorized under Class 1(a) or Class 2(a) of Section 4 of
20 this Code shall comply with the requirements of Article VII
21 of the Health Maintenance Organization Act.
22 (215 ILCS 5/370s new)
23 Sec. 370s. Health care determination appeals.
24 Administrators shall comply with the requirements of Article
25 VII of the Health Maintenance Organization Act.
26 (215 ILCS 5/511.114 new)
27 Sec. 511.114. Health care determination appeals.
28 Administrators shall comply with the requirements of Article
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1 VII of the Health Maintenance Organization Act.
2 Section 35. The Health Maintenance Organization Act is
3 amended by adding Article VII as follows:
4 (215 ILCS 5/Art. VII heading new)
5 ARTICLE VII. EXTERNAL MEDICAL DETERMINATIONS APPEALS
6 (215 ILCS 125/7-105 new)
7 Sec. 7-105. Right to external appeal established.
8 (a) There is hereby established an enrollee's right to
9 an external appeal of a final adverse determination by a
10 health care plan.
11 (b) An enrollee, the enrollee's designee and, in
12 connection with retrospective adverse determinations, an
13 enrollee's health care provider, shall have the right to
14 request an external appeal when:
15 (1) the enrollee has had coverage of a health care
16 service that would otherwise be a covered benefit under a
17 subscriber contract denied on appeal, in whole or in
18 part, on the grounds that the health care service is not
19 medically necessary and the health care plan has rendered
20 a final adverse determination with respect to the health
21 care service or both the plan and the enrollee have
22 jointly agreed to waive any internal appeal; or
23 (2) the enrollee has had coverage of a health care
24 service denied on the basis that the service is
25 experimental or investigational; both the plan and the
26 enrollee have jointly agreed to waive any internal
27 appeal; the enrollee's attending physician has certified
28 that the enrollee has a life-threatening or disabling
29 condition or disease (a) for which standard health
30 services or procedures have been ineffective or would be
31 medically inappropriate, or (b) for which there does not
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1 exist a more beneficial standard health service or
2 procedure covered by the health care plan, or (c) for
3 which there exists a clinical trial; the enrollee's
4 attending physician, who must be a licensed,
5 board-certified or board-eligible physician qualified to
6 practice in the area of practice appropriate to treat the
7 enrollee's life threatening or disabling condition or
8 disease, has recommended either (A) a health service or
9 procedure (including a pharmaceutical product) that,
10 based on 2 documents from the available medical and
11 scientific evidence, is likely to be more beneficial to
12 the enrollee than any covered standard health service or
13 procedure or (B) a clinical trial for which the enrollee
14 is eligible; and the specific health service or procedure
15 recommended by the attending physician would otherwise be
16 covered under the policy except for the health care
17 plan's determination that the health service or procedure
18 is experimental or investigational.
19 Any physician certification provided under this
20 subsection shall include a statement of the evidence relied
21 upon by the physician in certifying his or her
22 recommendation.
23 (c) The health care plan may charge the enrollee a fee
24 of up to $50 per external appeal, provided that, in the event
25 the external appeal agent overturns the final adverse
26 determination of the plan, the fee shall be refunded to the
27 enrollee. Notwithstanding the foregoing, the health plan
28 shall not require the enrollee to pay a fee if the enrollee
29 is a recipient of medical assistance or if such fee shall
30 pose a hardship to the enrollee as determined by the plan.
31 (215 ILCS 125/7-110 new)
32 Sec. 7-110. Powers of the Director.
33 (a) The Director shall have the power to grant and
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1 revoke certifications of external appeal agents to conduct
2 external appeals requested pursuant to Section 7-105.
3 (b) If, after reviewing the application authorized by
4 Section 7-115, the Director is satisfied that the applicant
5 meets the requirements of this Section, the Director shall
6 issue a certificate to the applicant. A certificate issued
7 under this Section shall be valid for a period of not more
8 than 2 years.
9 (c) In order to be recertified, an external appeal agent
10 must demonstrate to the Director on forms prescribed by the
11 Director that it continues to meet all applicable standards
12 required by this Article. Recertification under this Section
13 shall be valid for a period of not more than 2 years.
14 (215 ILCS 125/7-115 new)
15 Sec. 7-115. Standards for certification.
16 (a) The Director shall develop an application for
17 certification. At a minimum, applicants shall provide:
18 (1) a description of the qualifications of the
19 clinical peer reviewers retained to conduct external
20 appeals of final adverse determinations, including the
21 reviewers' current and past employment history and
22 practice affiliations;
23 (2) a description of the procedures employed to
24 ensure that clinical peer reviewers conducting external
25 appeals are:
26 (A) appropriately licensed, registered, or
27 certified;
28 (B) trained in the principles, procedures, and
29 standards of the external appeal agent; and
30 (C) knowledgeable about the health care
31 service that is the subject of the final adverse
32 determination under appeal;
33 (3) a description of the methods of recruiting and
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1 selecting impartial clinical peer reviewers and matching
2 reviewers to specific cases;
3 (4) the number of clinical peer reviewers retained
4 by the external appeal agent, and a description of the
5 areas of expertise available from the reviewers and the
6 types of cases the reviewers are qualified to review;
7 (5) a description of the policies and procedures
8 employed to protect the confidentiality of individual
9 medical and treatment records in accordance with
10 applicable State and federal laws;
11 (6) a description of the quality assurance program
12 established by the external appeal agent pursuant to item
13 (3);
14 (7) the names of all corporations and organizations
15 owned or controlled by the external appeal agent or that
16 owns or controls such agent, and the nature and extent of
17 any such ownership or control;
18 (8) the names and biographies of all directors,
19 officers, and executives of the external appeal agent;
20 (9) an experimental and investigational treatment
21 review plan to conduct appeals pursuant to subsection (b)
22 of Section 7-125; and
23 (10) a description of the fees to be charged by
24 agents for external appeals.
25 (b) The Director shall, at a minimum, require an
26 external appeal agent to:
27 (1) appoint a medical director who is a physician
28 in possession of a current and valid non-restricted
29 license to practice medicine and who shall be responsible
30 for the supervision and oversight of the external appeal
31 process;
32 (2) develop written policies and procedures
33 governing all aspects of the appeal process, including,
34 at a minimum:
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1 (A) procedures to ensure that appeals are
2 conducted within the time frames specified in
3 Section 7-125 and any required notices are provided
4 in a timely manner;
5 (B) procedures to ensure the selection of
6 qualified and impartial clinical peer reviewers that
7 are qualified to render determinations relating to
8 the health care service that is the subject of the
9 final adverse determination under appeal;
10 (C) procedures to ensure the confidentiality
11 of medical and treatment records and review
12 materials; and
13 (D) procedures to ensure adherence to the
14 requirements of this Article by any contractor,
15 subcontractor, subvendor, agent, or employee
16 affiliated by contract or otherwise with the
17 external appeal agent;
18 (3) establish a quality assurance program that
19 includes written descriptions, to be provided to all
20 individuals involved in the program, of the
21 organizational arrangements and ongoing procedures for
22 the identification, evaluation, resolution, and follow-up
23 of potential and actual problems in external appeals
24 performed by the external appeal agent and to ensure the
25 maintenance of program standards pursuant to this
26 Section;
27 (4) establish a toll-free telephone service to
28 receive information relating to external appeals on a
29 24-hour-a-day, 7-day-a-week basis that is capable of
30 accepting, recording, or providing instruction to
31 incoming telephone calls during other than normal
32 business hours; and
33 (5) develop procedures to ensure that:
34 (A) appropriate personnel are reasonably
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1 accessible not less than 40 hours per week during
2 normal business hours to discuss patient care and to
3 allow response to telephone requests; and
4 (B) response to accepted or recorded messages
5 will be made not less than one business day after
6 the date on which the call was received.
7 (c) No entity shall be qualified to submit a request for
8 application if it owns or controls, is owned or controlled
9 by, or exercises common control with, any of the following:
10 (1) a national, state, or local illness, health
11 benefit, or public advocacy group;
12 (2) a national, state, or local society or
13 association of hospitals, physicians, or other providers
14 of health care services; or
15 (3) a national, state, or local association of
16 health care plans.
17 (d) A health care plan shall transmit, and an external
18 appeal agent shall be authorized to receive and review, an
19 enrollee's medical and treatment records in order to conduct
20 an external appeal pursuant to this Article.
21 (e) An external appeal agent shall provide ready access
22 to the Director to all data, records, and information
23 collected and maintained concerning the agent's external
24 appeal activities.
25 (f) An external appeal agent shall agree to provide the
26 Director such data, information, and reports as the Director
27 determines necessary to evaluate the external appeal process
28 established pursuant to this Article.
29 (g) The Director shall provide, upon the request of any
30 interested person, a copy of all nonproprietary information
31 filed with the Director by the external appeal agent. The
32 Director may charge a reasonable fee to the interested person
33 for reproducing the requested information.
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1 (215 ILCS 125/7-120 new)
2 Sec. 7-120. Conflict of interest.
3 (a) No external appeal agent or officer, director, or
4 management employee thereof and no clinical peer reviewer
5 employed or engaged thereby to conduct any external appeal
6 pursuant to this Article shall have any material professional
7 affiliation, material familial affiliation, material
8 financial affiliation, or other affiliation prescribed
9 pursuant to rule, with any of the following:
10 (1) the health care plan;
11 (2) an officer, director, or management employee of
12 the health care plan;
13 (3) a health care provider, physician's medical
14 group, independent practice association, or provider of
15 pharmaceutical products or services or durable medical
16 equipment, proposing to provide or supply the health
17 service;
18 (4) the facility at which the health service would
19 be provided;
20 (5) the developer or manufacturer of the principal
21 health service that is the subject of the appeal; or
22 (6) the enrollee whose health care service is the
23 subject of the appeal, or the enrollee's designee.
24 (b) Notwithstanding the provisions of subsection (a),
25 the Director shall promulgate rules to minimize any conflict
26 of interest when a conflict may be unavoidable.
27 (215 ILCS 125/7-125 new)
28 Sec. 7-125. Procedures for external appeals of adverse
29 determinations.
30 (a) The Director shall establish procedures by rule to
31 randomly assign an external appeal agent to conduct an
32 external appeal, provided that the Director may establish a
33 maximum fee that may be charged for any external appeal, but
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1 the Director may exclude from random assignment any external
2 appeal agent that charges a fee that he deems to be
3 unreasonable.
4 (b) The enrollee shall have 45 days to initiate an
5 external appeal after the enrollee receives notice from the
6 health care plan, or the plan's utilization review agent if
7 applicable, of a final adverse determination or denial or
8 after both the plan and the enrollee have jointly agreed to
9 waive any internal appeal. The request shall be in writing in
10 accordance with the instructions and in the form prescribed
11 by subsection (e) of this Section. The enrollee, and the
12 enrollee's health care provider when applicable, shall have
13 the opportunity to submit additional documentation with
14 respect to the appeal to the external appeal agent within the
15 45-day period, however, when the documentation represents a
16 material change from the documentation upon which the
17 utilization review agent based its adverse determination or
18 upon which the health plan based its denial, the health plan
19 shall have 3 business days to consider the documentation and
20 amend or confirm the adverse determination.
21 (c) The external appeal agent shall make a determination
22 with respect to the appeal within 30 days after the receipt
23 of the enrollee's request therefor, submitted in accordance
24 with the Director's instructions. The external appeal agent
25 shall have the opportunity to request additional information
26 from the enrollee, the enrollee's health care provider, and
27 the enrollee's health care plan within the 30-day period, in
28 which case the agent shall have up to 5 additional business
29 days if necessary to make a determination. The external
30 appeal agent shall notify the enrollee and the health care
31 plan, in writing, of the appeal determination within 2
32 business days after the rendering the determination.
33 (d) Notwithstanding the provisions of subsections (b)
34 and (c) of this Section, if the enrollee's attending
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1 physician states that a delay in providing the health care
2 service would pose an imminent or serious threat to the
3 health of the enrollee, the external appeal shall be
4 completed within 3 days of the request therefor, and the
5 external appeal agent shall make every reasonable attempt to
6 immediately notify the enrollee and the health plan of its
7 determination by telephone or facsimile, followed immediately
8 by written notification of the determination.
9 (e) For external appeals requested pursuant to paragraph
10 (1) of subsection (b) of Section 7-105, the external appeal
11 agent shall review the utilization review agent's final
12 adverse determination and, in accordance with the provisions
13 of this Article, shall make a determination as to whether the
14 health care plan acted reasonably and with sound medical
15 judgment and in the best interest of the patient. When the
16 external appeal agent makes its determination, it shall
17 consider the clinical standards of the plan, the information
18 provided concerning the patient, the attending physician's
19 recommendation, and applicable generally accepted practice
20 guidelines developed by the federal government and national
21 or professional medical societies, boards, and associations.
22 The determination shall be:
23 (1) conducted only by one or a greater odd number
24 of clinical peer reviewers;
25 (2) accompanied by a notice of appeal determination
26 that includes the reasons for the determination, however,
27 when the final adverse determination is upheld on appeal,
28 the notice shall include the clinical rationale, if any,
29 for the determination;
30 (3) subject to the terms and conditions generally
31 applicable to benefits under the evidence of coverage
32 under the health care plan;
33 (4) binding on the plan and the enrollee; and
34 (5) admissible in any court proceeding.
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1 (f) For external appeals requested pursuant to paragraph
2 (2) of subsection (b) of Section 7-105, the external appeal
3 agent shall review the proposed health service or procedure
4 for which coverage has been denied and, in accordance with
5 the provisions of this Article and the external agent's
6 experimental and investigational treatment review plan, make
7 a determination as to whether the patient costs of the health
8 service or procedure shall be covered by the health care
9 plan. The determination shall:
10 (1) be conducted by a panel of 3 or a greater odd
11 number of clinical peer reviewers;
12 (2) be accompanied by a written statement:
13 (A) that the patient costs of the proposed
14 health service or procedure shall be covered by the
15 health care plan either when a majority of the panel
16 of reviewers determines upon review of the
17 applicable medical and scientific evidence (or upon
18 confirmation that the recommended treatment is a
19 clinical trial), the enrollee's medical record, and
20 any other pertinent information that the proposed
21 health service or treatment (including a
22 pharmaceutical product) is likely to be more
23 beneficial than any standard treatment or treatments
24 for the enrollee's life-threatening or disabling
25 condition or disease (or, in the case of a clinical
26 trial, is likely to benefit the enrollee in the
27 treatment of the enrollee's condition or disease) or
28 when a reviewing panel is evenly divided as to a
29 determination concerning coverage of the health
30 service or procedure; or
31 (B) upholding the health plan's denial of
32 coverage;
33 (3) be subject to the terms and conditions
34 generally applicable to benefits under the evidence of
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1 coverage under the health care plan;
2 (4) be binding on the plan and the enrollee; and
3 (5) be admissible in any court proceeding.
4 As used in this subsection (f) with respect to a clinical
5 trial, patient costs shall include all costs of health
6 services required to provide treatment to the enrollee
7 according to the design of the trial. Such costs shall not
8 include the costs of any investigational drugs or devices
9 themselves, the cost of any nonhealth services that might be
10 required for the enrollee to receive the treatment, the costs
11 of managing the research, or costs that would not be covered
12 under the policy for noninvestigational treatments.
13 (g) No external appeal agent or clinical peer reviewer
14 conducting an external appeal shall be liable in damages to
15 any person for any opinions rendered by the external appeal
16 agent or clinical peer reviewer upon completion of an
17 external appeal conducted pursuant to this Section, unless
18 the opinion was rendered in bad faith or involved gross
19 negligence.
20 (h) Payment for an external appeal shall be the
21 responsibility of the health care plan. The health care plan
22 shall make payment to the external appeal agent within 45
23 days after the date the appeal determination is received by
24 the health care plan, and the health care plan shall be
25 obligated to pay the amount together with interest thereon
26 calculated at a rate 12% per annum, to be computed from the
27 date the bill was required to be paid, in the event that
28 payment is not made within such 45 days.
29 (i) The Director shall promulgate by rule a standard
30 description of the external appeal process established under
31 this Section, which shall provide a standard form and
32 instructions for the initiation of an external appeal by an
33 enrollee.
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1 (215 ILCS 125/7-130 new)
2 Sec. 7-130. Prohibited practices. An external appeal
3 agent shall not, with respect to external appeal activities,
4 permit or provide compensation or anything of value to its
5 employees, agents, or contractors based on:
6 (1) either a percentage of the amount by which a
7 claim is reduced for payment or the number of claims or
8 the cost of services for which the person has denied
9 authorization or payment; or
10 (2) any other method that encourages the upholding
11 of an adverse determination.
12 (215 ILCS 125/7-135 new)
13 Sec. 7-135. Oversight and surveillance of the external
14 appeal process.
15 (a) The Director shall have the power to:
16 (1) review the activities of the health care plans
17 and external appeal agents pursuant to this Article,
18 including the extent to which the plans and agents adhere
19 to the standards and time frames required pursuant to
20 this Article;
21 (2) investigate complaints by enrollees regarding
22 requests for and processing of external appeals; and
23 (3) conduct random audits of health care plans and
24 external appeal agents to determine compliance with the
25 provisions of this Article.
26 (b) A health care plan and external appeal agent shall
27 annually, in such form as the Director shall require, report
28 the number of external appeals requested by enrollees and the
29 outcomes of any external appeals.
30 (c) The Director shall annually report, by plan and
31 agent, such information to the Governor and the General
32 Assembly, provided that no information shall be included that
33 would otherwise be deemed confidential information within the
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1 meaning of this Act.
2 Section 40. The Voluntary Health Services Plans Act is
3 amended by adding Section 15.30 as follows:
4 (215 ILCS 165/15.30 new)
5 Sec. 15.30. Health care determination appeals. A health
6 services plan is subject to the provisions of Article VII of
7 the Health Maintenance Organization Act.