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92_HB5789 LRB9215922JSpc 1 AN ACT concerning insurance. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Insurance Code is amended by 5 changing Section 368a as follows: 6 (215 ILCS 5/368a) 7 Sec. 368a. Timely payment for health care services. 8 (a) This Section applies to insurers, health maintenance 9 organizations, managed care plans, health care plans, 10 preferred provider organizations, third party administrators, 11 independent practice associations, and physician-hospital 12 organizations (hereinafter referred to as "payors") that 13 provide periodic payments, which are payments not requiring a 14 claim, bill, capitation encounter data, or capitation 15 reconciliation reports, such as prospective capitation 16 payments, to health care professionals and health care 17 facilities to provide medical or health care services for 18 insureds or enrollees. 19 (1) A payor shall make periodic payments in 20 accordance with item (3). Failure to make periodic 21 payments within the period of time specified in item (3) 22 shall entitle the health care professional or health care 23 facility to interest at the rate of 9% per year from the 24 date payment was required to be made to the date of the 25 late payment, provided that interest amounting to less 26 than $1 need not be paid. Any required interest payments 27 shall be made within 30 days after the payment. 28 (2) When a payor requires selection of a health 29 care professional or health care facility, the selection 30 shall be completed by the insured or enrollee no later 31 than 30 days after enrollment. The payor shall provide -2- LRB9215922JSpc 1 written notice of this requirement to all insureds and 2 enrollees. Nothing in this Section shall be construed to 3 require a payor to select a health care professional or 4 health care facility for an insured or enrollee. 5 (3) A payor shall provide the health care 6 professional or health care facility with notice of the 7 selection as a health care professional or health care 8 facility by an insured or enrollee and the effective date 9 of the selection within 60 calendar days after the 10 selection. No later than the 60th day following the date 11 an insured or enrollee has selected a health care 12 professional or health care facility or the date that 13 selection becomes effective, whichever is later, or in 14 cases of retrospective enrollment only, 30 days after 15 notice by an employer to the payor of the selection, a 16 payor shall begin periodic payment of the required 17 amounts to the insured's or enrollee's health care 18 professional or health care facility, or the designee of 19 either, calculated from the date of selection or the date 20 the selection becomes effective, whichever is later. All 21 subsequent payments shall be made in accordance with a 22 monthly periodic cycle. 23 (b) Notwithstanding any other provision of this Section, 24 independent practice associations and physician-hospital 25 organizations shall begin making periodic payment of the 26 required amounts within 60 days after an insured or enrollee 27 has selected a health care professional or health care 28 facility or the date that selection becomes effective, 29 whichever is later. Before January 1, 2001, subsequent 30 periodic payments shall be made in accordance with a 60-day 31 periodic schedule, and after December 31, 2000, subsequent 32 periodic payments shall be made in accordance with a monthly 33 periodic schedule. 34 Notwithstanding any other provision of this Section, -3- LRB9215922JSpc 1 independent practice associations and physician-hospital 2 organizations shall make all other payments for health 3 services within 60 days after receipt of due proof of loss 4 received before January 1, 2001 and within 30 days after 5 receipt of due proof of loss received after December 31, 6 2000. Independent practice associations and 7 physician-hospital organizations shall notify the insured, 8 insured's assignee, health care professional, or health care 9 facility of any failure to provide sufficient documentation 10 for a due proof of loss within 30 days after receipt of the 11 claim for health services. 12 Failure to pay within the required time period shall 13 entitle the payee to interest at the rate of 9% per year from 14 the date the payment is due to the date of the late payment, 15 provided that interest amounting to less that $1 need not be 16 paid. Any required interest payments shall be made within 30 17 days after the payment. 18 (c) All insurers, health maintenance organizations, 19 managed care plans, health care plans, preferred provider 20 organizations, and third party administrators shall ensure 21 that all claims and indemnities concerning health care 22 services other than for any periodic payment shall be paid 23 within 30 days after receipt of due written proof of such 24 loss. An insured, insured's assignee, health care 25 professional, or health care facility shall be notified of 26 any known failure to provide sufficient documentation for a 27 due proof of loss within 30 days after receipt of the claim 28 for health care services. Failure to pay within such period 29 shall entitle the payee to interest at the rate of 9% per 30 year from the 30th day after receipt of such proof of loss to 31 the date of late payment, provided that interest amounting to 32 less than one dollar need not be paid. Any required interest 33 payments shall be made within 30 days after the payment. 34 (d) The Department shall enforce the provisions of this -4- LRB9215922JSpc 1 Section pursuant to the enforcement powers granted to it by 2 law. 3 (e) The Department is hereby granted specific authority 4 to issue a cease and desist order, fine, or otherwise 5 penalize independent practice associations and 6 physician-hospital organizations that violate this Section. 7 The Department shall adopt reasonable rules to enforce 8 compliance with this Section by independent practice 9 associations and physician-hospital organizations. 10 (f) Beginning 6 months after the date specified in 11 Section 262 of the federal Health Insurance Portability and 12 Accountability Act of 1996, pursuant to which third-party 13 payors are required to comply with a standard or 14 implementation specification for the electronic exchange of 15 health information as adopted or established by the United 16 States Secretary of Health and Human Services pursuant to 17 that Act, the provisions of this Section apply only to claims 18 submitted electronically to a third-party payor. 19 A provider and a third-party payor may enter into a 20 contractual arrangement under which the third-party payor 21 agrees to process claims that are not submitted 22 electronically because of the financial hardship that 23 electronic submission of claims would create for the provider 24 or because of any other extenuating circumstance. 25 (Source: P.A. 91-605, eff. 12-14-99; 91-788, eff. 6-9-00.)