State of Illinois
92nd General Assembly
Legislation

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92_SB1738

 
                                               LRB9211443JSpc

 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-                LRB9211443JSpc
 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-                LRB9211443JSpc
 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        (c-5)  Notwithstanding  any  other  provision   of   this
 
                            -4-                LRB9211443JSpc
 1    Section,  all  insurers,  health  maintenance  organizations,
 2    managed   care   plans,   preferred  provider  organizations,
 3    independent   practice    associations,    physician-hospital
 4    organizations,   and   third   party   administrators   shall
 5    acknowledge  receipt of each electronic claim received within
 6    24 hours after receipt.   Further,  these  electronic  claims
 7    must  be  accepted  and paid or rejected within 10 days after
 8    receipt.   The  insured,  insured's  assignee,  health   care
 9    professional,  or  health  care facility shall be notified of
10    all the reasons for any rejected claims.
11        (d)  The Department shall enforce the provisions of  this
12    Section  pursuant  to the enforcement powers granted to it by
13    law.
14        (e)  The Department is hereby granted specific  authority
15    to  issue  a  cease  and  desist  order,  fine,  or otherwise
16    penalize    independent     practice     associations     and
17    physician-hospital  organizations  that violate this Section.
18    The  Department  shall  adopt  reasonable  rules  to  enforce
19    compliance  with  this  Section   by   independent   practice
20    associations and physician-hospital organizations.
21        (f)  No  policy,  procedure,  contract,  or  plan  of any
22    insurer, health maintenance organization, managed care  plan,
23    preferred   provider   organization,   independent   practice
24    association,  physician-hospital organization, or third party
25    administrator shall limit, restrict,  or  waive  any  of  the
26    rights   set   forth  in  this  Section.   Any  such  policy,
27    procedure, contract, or plan shall be void and unenforceable.
28    (Source: P.A. 91-605, eff. 12-14-99; 91-788, eff. 6-9-00.)

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