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Public Act 92-0579
HB5842 Enrolled LRB9214435JSpc
AN ACT in relation to insurance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Insurance Code is amended by
changing Section 370i and adding Section 356z.2 as follows:
(215 ILCS 5/356z.2 new)
Sec. 356z.2. Disclosure of limited benefit. An insurer
that issues, delivers, amends, or renews an individual or
group policy of accident and health insurance in this State
after the effective date of this amendatory Act of the 92nd
General Assembly and arranges, contracts with, or administers
contracts with a provider whereby beneficiaries are provided
an incentive to use the services of such provider must
include the following disclosure on its contracts and
evidences of coverage: "WARNING, LIMITED BENEFITS WILL BE
PAID WHEN NON-PARTICIPATING PROVIDERS ARE USED. You should be
aware that when you elect to utilize the services of a
non-participating provider for a covered service in
non-emergency situations, benefit payments to such
non-participating provider are not based upon the amount
billed. The basis of your benefit payment will be determined
according to your policy's fee schedule, usual and customary
charge (which is determined by comparing charges for similar
services adjusted to the geographical area where the services
are performed), or other method as defined by the policy. YOU
CAN EXPECT TO PAY MORE THAN THE COINSURANCE AMOUNT DEFINED IN
THE POLICY AFTER THE PLAN HAS PAID ITS REQUIRED PORTION.
Non-participating providers may bill members for any amount
up to the billed charge after the plan has paid its portion
of the bill. Participating providers have agreed to accept
discounted payments for services with no additional billing
to the member other than co-insurance and deductible amounts.
You may obtain further information about the participating
status of professional providers and information on
out-of-pocket expenses by calling the toll free telephone
number on your identification card.".
(215 ILCS 5/370i) (from Ch. 73, par. 982i)
Sec. 370i. Policies, agreements or arrangements with
incentives or limits on reimbursement authorized.
(a) Policies, agreements or arrangements issued under
this Article may not contain terms or conditions that would
operate unreasonably to restrict the access and availability
of health care services for the insured.
(b) An insurer or administrator may:
(1) enter into agreements with certain providers of its
choice relating to health care services which may be rendered
to insureds or beneficiaries of the insurer or administrator,
including agreements relating to the amounts to be charged
the insureds or beneficiaries for services rendered;
(2) issue or administer programs, policies or subscriber
contracts in this State that include incentives for the
insured or beneficiary to utilize the services of a provider
which has entered into an agreement with the insurer or
administrator pursuant to paragraph (1) above.
(c) After the effective date of this amendatory Act of
the 92nd General Assembly, any insurer that arranges,
contracts with, or administers contracts with a provider
whereby beneficiaries are provided an incentive to use the
services of such provider must include the following
disclosure on its contracts and evidences of coverage:
"WARNING, LIMITED BENEFITS WILL BE PAID WHEN
NON-PARTICIPATING PROVIDERS ARE USED. You should be aware
that when you elect to utilize the services of a
non-participating provider for a covered service in
non-emergency situations, benefit payments to such
non-participating provider are not based upon the amount
billed. The basis of your benefit payment will be determined
according to your policy's fee schedule, usual and customary
charge (which is determined by comparing charges for similar
services adjusted to the geographical area where the services
are performed), or other method as defined by the policy. YOU
CAN EXPECT TO PAY MORE THAN THE COINSURANCE AMOUNT DEFINED IN
THE POLICY AFTER THE PLAN HAS PAID ITS REQUIRED PORTION.
Non-participating providers may bill members for any amount
up to the billed charge after the plan has paid its portion
of the bill. Participating providers have agreed to accept
discounted payments for services with no additional billing
to the member other than co-insurance and deductible amounts.
You may obtain further information about the participating
status of professional providers and information on
out-of-pocket expenses by calling the toll free telephone
number on your identification card.".
(Source: P.A. 84-618.)
Section 10. The Health Maintenance Organization Act is
amended by changing Section 4.5-1 as follows:
(215 ILCS 125/4.5-1)
Sec. 4.5-1. Point-of-service health service contracts.
(a) A health maintenance organization that offers a
point-of-service contract:
(1) must include as in-plan covered services all
services required by law to be provided by a health
maintenance organization;
(2) must provide incentives, which shall include
financial incentives, for enrollees to use in-plan
covered services;
(3) may not offer services out-of-plan without
providing those services on an in-plan basis;
(4) may include annual out-of-pocket limits and
lifetime maximum benefits allowances for out-of-plan
services that are separate from any limits or allowances
applied to in-plan services;
(5) may not consider emergency services, authorized
referral services, or non-routine services obtained out
of the service area to be point-of-service services; and
(6) may treat as out-of-plan services those
services that an enrollee obtains from a participating
provider, but for which the proper authorization was not
given by the health maintenance organization; and.
(7) after the effective date of this amendatory Act
of the 92nd General Assembly, must include the following
disclosure on its point-of-service contracts and
evidences of coverage: "WARNING, LIMITED BENEFITS WILL BE
PAID WHEN NON-PARTICIPATING PROVIDERS ARE USED. You
should be aware that when you elect to utilize the
services of a non-participating provider for a covered
service in non-emergency situations, benefit payments to
such non-participating provider are not based upon the
amount billed. The basis of your benefit payment will be
determined according to your policy's fee schedule, usual
and customary charge (which is determined by comparing
charges for similar services adjusted to the geographical
area where the services are performed), or other method
as defined by the policy. YOU CAN EXPECT TO PAY MORE THAN
THE COINSURANCE AMOUNT DEFINED IN THE POLICY AFTER THE
PLAN HAS PAID ITS REQUIRED PORTION. Non-participating
providers may bill members for any amount up to the
billed charge after the plan has paid its portion of the
bill. Participating providers have agreed to accept
discounted payments for services with no additional
billing to the member other than co-insurance and
deductible amounts. You may obtain further information
about the participating status of professional providers
and information on out-of-pocket expenses by calling the
toll free telephone number on your identification card.".
(b) A health maintenance organization offering a
point-of-service contract is subject to all of the following
limitations:
(1) The health maintenance organization may not
expend in any calendar quarter more than 20% of its total
expenditures for all its members for out-of-plan covered
services.
(2) If the amount specified in item (1) of this
subsection is exceeded by 2% in a quarter, the health
maintenance organization must effect compliance with item
(1) of this subsection by the end of the following
quarter.
(3) If compliance with the amount specified in item
(1) of this subsection is not demonstrated in the health
maintenance organization's next quarterly report, the
health maintenance organization may not offer the
point-of-service contract to new groups or include the
point-of-service option in the renewal of an existing
group until compliance with the amount specified in item
(1) of this subsection is demonstrated or until otherwise
allowed by the Director.
(4) A health maintenance organization failing,
without just cause, to comply with the provisions of this
subsection shall be required, after notice and hearing,
to pay a penalty of $250 for each day out of compliance,
to be recovered by the Director. Any penalty recovered
shall be paid into the General Revenue Fund. The Director
may reduce the penalty if the health maintenance
organization demonstrates to the Director that the
imposition of the penalty would constitute a financial
hardship to the health maintenance organization.
(c) A health maintenance organization that offers a
point-of-service product must do all of the following:
(1) File a quarterly financial statement detailing
compliance with the requirements of subsection (b).
(2) Track out-of-plan, point-of-service utilization
separately from in-plan or non-point-of-service,
out-of-plan emergency care, referral care, and urgent
care out of the service area utilization.
(3) Record out-of-plan utilization in a manner that
will permit such utilization and cost reporting as the
Director may, by rule, require.
(4) Demonstrate to the Director's satisfaction that
the health maintenance organization has the fiscal,
administrative, and marketing capacity to control its
point-of-service enrollment, utilization, and costs so as
not to jeopardize the financial security of the health
maintenance organization.
(5) Maintain, in addition to any other deposit
required under this Act, the deposit required by Section
2-6.
(6) Maintain cash and cash equivalents of
sufficient amount to fully liquidate 10 days' average
claim payments, subject to review by the Director.
(7) Maintain and file with the Director,
reinsurance coverage protecting against catastrophic
losses on out of network point-of-service services.
Deductibles may not exceed $100,000 per covered life per
year, and the portion of risk retained by the health
maintenance organization once deductibles have been
satisfied may not exceed 20%. Reinsurance must be placed
with licensed authorized reinsurers qualified to do
business in this State.
(d) A health maintenance organization may not issue a
point-of-service contract until it has filed and had approved
by the Director a plan to comply with the provisions of this
Section. The compliance plan must, at a minimum, include
provisions demonstrating that the health maintenance
organization will do all of the following:
(1) Design the benefit levels and conditions of
coverage for in-plan covered services and out-of-plan
covered services as required by this Article.
(2) Provide or arrange for the provision of
adequate systems to:
(A) process and pay claims for all out-of-plan
covered services;
(B) meet the requirements for point-of-service
contracts set forth in this Section and any
additional requirements that may be set forth by the
Director; and
(C) generate accurate data and financial and
regulatory reports on a timely basis so that the
Department of Insurance can evaluate the health
maintenance organization's experience with the
point-of-service contract and monitor compliance
with point-of-service contract provisions.
(3) Comply with the requirements of subsections (b)
and (c).
(Source: P.A. 92-135, eff. 1-1-02.)
Section 99. Effective date. This Act takes effect on
January 1, 2003.
Passed in the General Assembly April 25, 2002.
Approved June 26, 2002.
Effective January 01, 2003.
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