Section 140.76  Hospital Managed Care Utilization Review Standardization and Transparency Practices

 

a)         Definitions. As used in this Section:

 

"Administrative days" means hospital long term care days as defined in 89 Ill. Adm. Code 148.50(c)(1).

 

"Adverse benefit determination" means the denial or limited authorization of a service authorization request for coverage of a health care service, including determinations based on the type or level of service, requirements for medical necessity, appropriateness, setting, or effectiveness of a covered benefit; the reduction, suspension, or termination of a previously authorized health care service; or the denial, in whole or in part, of payment for a service (unrelated to whether the claim is submitted timely or properly coded).

 

"Enrollee" means any person who is eligible for medical assistance under the Public Aid Code, is not eligible for or enrolled in Medicare, and is enrolled in a managed care organization.

 

"Generally accepted standards of care" for a health care service means standards of care and clinical practice that are generally recognized by health care clinicians practicing in relevant clinical specialties for the illness, injury, or condition or its symptoms and comorbidities. Valid, evidence-based sources reflecting generally accepted standards of care include peer-reviewed scientific studies and medical literature, recommendations of nonprofit health care provider professional associations and specialty societies, including, but not limited to, enrollee placement criteria and clinical practice guidelines, recommendations of federal government agencies, and drug labeling approved by the United States Food and Drug Administration.

 

"Health care service" means any medical or behavioral health service covered under the medical assistance program that is subject to review under a service authorization program, except for durable medical equipment as described in 89 Ill. Adm. Code 140.475 and pharmacy services as described in 89 Ill. Adm. Code 140.440. [305 ILCS 5/5-30.1(a)]

 

"Managed care organization" or "MCO" means any entity that contracts with the Department to provide health care services to enrollees where payment for services is made on a capitated basis. For purposes of this Section, MCOs shall also mean an MCO's utilization review department, a peer review organization, a quality improvement organization, or a utilization review organization (URO) that contracts with an MCO to administer a service authorization program and make service authorization determinations. For purposes of this Section, MCO does not mean an entity that contracts with the Department to provide health care services to Medicare-eligible enrollees where payment is made on a capitated basis.

 

"Medically necessary" or "medical necessity" means that a service addresses the specific needs of an enrollee for the purpose of:

 

screening, preventing, diagnosing, managing, or treating an illness, injury, or condition and disorder that results in health impairments and/or disability or its symptoms and comorbidities;

 

minimizing the progression of an illness, injury, or condition or its symptoms and comorbidities;

 

achieving age-appropriate growth and development;

 

attaining, maintaining, or regaining functional capacity; and

 

is provided in a manner that is:

 

in accordance with generally accepted standards of care;

 

clinically appropriate in terms of type, frequency, extent, site, and duration; and

 

not primarily for the economic benefit of the MCO or for the convenience of the enrollee or provider.

 

"Provider" means a facility or individual who is enrolled in the medical assistance program and licensed or otherwise authorized to order, prescribe, refer, or render health care services in this State.

 

"Service authorization determination" means a decision made by a service authorization program in advance of, concurrent to, or after the provision of a health care service to approve, change the level of care, partially deny, deny, or otherwise limit coverage and reimbursement for a health care service upon review of a service authorization request. [305 ILCS 5/5-30.1(a)]

 

"Service authorization program" means any utilization review, utilization management, peer review, quality review, or other medical management activity conducted by an MCO including but not limited to, prior authorization, prior approval, pre-certification, concurrent review, retrospective review, or certification of admission, of health care services provided in an inpatient or outpatient hospital setting. [305 ILCS 5/5-30.1(a)]  Unless otherwise specifically stated in this Section, "inpatient hospital setting" means as defined in 89 Ill. Adm. Code 148.25 (b)(1). "Outpatient hospital setting" means as defined in 89 Ill. Adm. Code 148.25 (b)(2).

 

"Service authorization request" means a request submitted by a provider to a service authorization program for a service authorization determination.

 

b)         This Section is effective for dates of service or admission on and after July 1, 2025, except for subsection (d) which shall be effective September 2, 2025.

 

c)         An MCO shall provide documents to the Department showing compliance with this Section as requested by the Department. The MCO shall provide all documents deemed necessary by the Department and within the timeframes requested by the Department. Nothing in this Section shall be construed to alleviate each MCO's obligations to notify providers of changes in policies and procedures as required by the Department in its contracts with the MCOs. Where the MCO contract language is inconsistent or in conflict with this Section, the MCO shall follow the requirements set forth in this Section.

 

d)         Publication Guidelines for Hospital Service Authorization Programs.

 

1)         Each MCO shall clearly publish on the home page of its public-facing website or provide a link on the home page to policies and procedures specific to Illinois for its service authorization programs. The website must be readily accessible to enrollees, in-network providers and out-of-network providers, and members of the public without requiring an individual to create any account or enter any credentials to access it. The policies and procedures shall be conspicuously posted on the website, detailed, written in easily understandable language, and readily available to the provider at the point of care.

 

2)         The website shall minimally include all the following:

 

A)        A complete list of health care services included in each service authorization program.

 

B)        For each health care service referenced in subsection (d)(2)(A), the MCO must:

 

i)          Categorize the health care service by in-network and out-of-network.

 

ii)         Categorize the health care service by type of service authorization program.

 

iii)        Include all MCO-specific payment and clinical review criteria, guidelines, and policies that are used instead of or to supplement nationally recognized decision support criteria.

 

iv)        Include any proprietary, nationally recognized decision support criteria on its secure provider portal. 

 

v)         Include a list of commonly used service authorization program terms and their definitions, as approved by the Department.

 

vi)        Identify the date the service authorization program requirement became effective in Illinois; the date the requirement was listed on the MCO's Illinois-specific website; the effective date of any removal, termination, or revision of service authorization program requirements; and a summary of and rationale for the terminations, removals, and revisions.

 

C)        Policies and procedures for requesting approval of administrative days.

 

D)        A clear outline of the process for a provider to request an appeal of an adverse benefit determination on behalf of an enrollee, including all timelines and required forms.

 

E)        A clear outline of the process for an enrollee, or provider on behalf of an enrollee, to request a review by an external independent entity of an adverse benefit determination, except for Home and Community-Based Services (HCBS) waiver service determinations.

 

F)         Access to standard electronic service authorization requests.

 

G)        If an MCO intends either to implement a new requirement or restrict or amend an existing requirement, the MCO shall update its website and provide contracted providers written notice no less than 60 days prior to implementation. The written notice may be provided in an electronic format, including email or facsimile, if the provider has agreed in advance to receive notices electronically.

 

e)         Procedures Covered in the Inpatient Hospital Setting.

 

1)         This subsection (e) shall not apply to behavioral health and substance use disorder health care services and health care services rendered in "psychiatric hospitals" defined in 89 Ill. Adm. Code 148.25 (d)(1); "rehabilitation hospitals" defined in 89 Ill. Adm. Code 148.25 (d)(2); and "long-term acute care hospitals" defined in 89 Ill. Adm. Code 148.25 (d)(4). (See 215 ILCS 5/532(e), 370c and 370c.1)

 

2)         For a health care service listed on the HFS Inpatient Only (IPO) list, as published by the Department on November 19, 2025, at https://hfs.illinois.gov/medicalproviders/cc/managedcareprogrampolicies.html, service authorization programs must approve the level of care as requested by the provider on the service authorization request and provide reimbursement under the applicable payment methodology as billed by the provider. In enrollee-specific cases where the provider determines that it is clinically appropriate and safe for such procedure to be performed in an outpatient hospital setting, and the provider bills the service as outpatient hospital level of care, the MCO must reimburse under the applicable outpatient hospital payment methodology.

 

f)          Hospital Administrative Forms Used in Enrollee Appeal Process.

 

1)         Each MCO must use the standard appointment of representative (AOR) form, both paper and electronic, as published by the Department. The MCOs shall allow the form to be signed prior to the rendering of the determination on the service authorization request for the health care service.

 

2)         MCOs shall allow alternatives to the standardized AOR form if the alternative is a separate and distinct document from the general consent to treatment form and contains all elements included in the standardized AOR form. Alternatives may include, but are not limited to, electronic medical record-generated forms.

 

g)         Limitations on Second or Subsequent Medical Necessity Reviews for Health Care Services in a Hospital Setting.

 

1)         Nothing in this Section supersedes or waives requirements regarding behavioral health and substance use disorder health care services necessary to comply with applicable federal or state law, federal regulation, federal grant requirements, any State or federal consent decrees or court orders, or applicable case law.

 

2)         Health care services authorized by a service authorization program that have been or are in the process of being rendered shall not be subject to a second or subsequent medical necessity review to revoke or further limit, condition, or restrict an approval received, or reduce or recover payment for a service which the service authorization program previously determined was medically necessary. Nothing in this subsection prevents a service authorization program from requiring authorization for health care services beyond the scope of the initial approval. Nothing in subsection (g)(2) supersedes subsection (g)(5).

 

3)         The MCO shall not deny a claim due to readmission policies for approved, planned readmissions. Each MCO shall update its payment systems to allow providers to indicate on the institutional claim that an admission was planned and allow a claim for a planned readmission to bypass any edits that would cause a denial of a claim due to readmission policies.

 

4)         Nothing in this subsection (g) shall prevent an MCO from requiring a provider to submit a timely, complete, and properly coded claim. The MCO shall not be liable for payments for individuals who are not enrollees of the MCO at the time the health care service is rendered.

 

5)         Nothing in this subsection (g) shall prevent an MCO from denying payments or recovering overpayments based on fraud, waste, or abuse. The MCO and the Department shall continue to implement and enforce any program integrity safeguards mandated by state or federal law, regulations, and policies including but not limited to 305 ILCS 5/12-13.1 and Title 42, Chapter IV, Subchapter C, Part 438, Subpart H of the Code of Federal Regulations and Title 42, Chapter IV, Subchapter F, Part 455 of the Code of Federal Regulations. The MCO or Department may require documentation, including documentation of medical necessity, in cases where the MCO or the Department is investigating fraud, waste, or abuse. When a service authorization program has approved an inpatient hospital level of care as medically necessary, and that service meets medical necessity based on nationally recognized decision support criteria, an MCO shall not subsequently classify that service as waste if it subsequently determines that the enrollee could have been treated in the hospital outpatient setting.

 

h)         Standardization of Peer-to-Peer Processes and Timelines in the Hospital Setting

 

1)         Each MCO shall adhere to the requirements of this subsection for peer-to-peer reviews for health care services that are subject to its service authorization programs.

 

2)         Providers may request a peer-to-peer review within 10 calendar days of receipt of the MCO's notice of intent to make an adverse determination, request for further documentation, or notice of adverse benefit determination. MCOs shall make exceptions to this timeframe on a case-by-case basis to accommodate unique, provider-specific circumstances. A peer-to-peer review request shall not alter the grievance and appeals rights of enrollees.

 

3)         MCOs may request peer-to-peer reviews but shall not automatically require peer-to-peer reviews as part of its service authorization program.

 

4)         Nothing in this subsection (h) alters the timeframes in subsection (j) for MCOs to make service authorization determinations. If compliance with these timeframes results in a determination being made after a peer-to-peer is scheduled but before the peer-to-peer occurs, the MCO shall not be out of compliance with subsection (h)(2).

 

5)         MCOs shall respond to a request for a peer-to-peer review within one business day of receipt of the request confirming the date and time of the peer-to-peer review and instructions for facilitating the review.

 

6)         Unless otherwise agreed to by the MCO and provider, the MCO shall hold a peer-to-peer review within three business days of the receipt of the request.

 

7)         In cases where an MCO fails to attend a scheduled peer-to-peer review or otherwise is unable to hold a peer-to-peer review within three business days of the receipt of the request, the MCO must treat all post-denial actions, including, but not limited to, appeals as when the provider submits the appeal or other post-denial action as urgent.

 

8)         MCOs shall allow both in-network and out-of-network providers to schedule and request a peer-to-peer review telephonically or in writing by electronic means, facsimile, and web-based secure functionality.  MCOs must also allow in-network providers to request and schedule a peer-to-peer review through the provider portal.

 

9)         When scheduling a peer-to-peer review, MCOs shall allow the providers to minimally offer three dates and times for the review from which the MCO will select a date and time.

 

10)       Peer-to-peer reviews shall be held in a manner most efficient to meet the needs of the enrollee and may be in-person, telephonic, or web based as agreed to by the provider and MCO. MCOs must use physicians who are in the same or similar specialty as a physician who typically manages the medical condition or disease.

 

11)       MCOs shall allow providers to submit additional clinical documentation which shall be considered during the peer-to-peer review. If requested by the provider, the MCO shall accept the documentation in lieu of the peer-to-peer review.

 

12)       If the MCO modifies its original intent to make an adverse determination or modifies an adverse benefit determination prior to the date of the peer-to-peer review, the MCO shall notify the provider of its decision before the date of the peer-to-peer review to allow the provider the option to cancel the review. The MCOs shall follow the notification provisions set forth in subsection (h)(13).

 

13)       MCO Notification of Peer-to-Peer Decisions.

 

A)        The MCO may verbally notify the provider of its decision during or after the peer-to-peer review. However, the MCO must issue a written decision to the provider submitting the service authorization request within 24 hours of the date and time of the peer-to-peer review.

 

B)        The written notice shall be issued by electronic means, facsimile, portal, or web-based secure functionality.

 

C)        The written notice shall minimally include the following:

 

i)          Date notice is issued.

 

ii)         Identification of the health care service.

 

iii)        The effective date of the decision.

 

iv)        Plain language instructions on a provider's right to appeal an adverse benefit determination on behalf of an enrollee in accordance with the procedures outlined in subsection (f); the right of the provider to submit a service authorization dispute of the medical necessity denial and the process, and the circumstances, under which an external independent review may be requested, consistent with Department policy.

 

v)         For service authorization determinations not wholly in favor of the enrollee, such as denials, limits, conditions, or restrictions of a health care service, a detailed basis for the determination with any data used to explain the decision, including:

 

•           The principal reason(s) for the determination, including, if applicable, a statement that the determination was based on a failure to submit specified medical records.

 

•           Additional documentation necessary for reconsideration or to support an appeal of an adverse benefit determination.

 

•           The clinical basis for the determination.

 

•           A description of the sources, including citations, that were used in making the determination.

 

•           The professional specialty of the individual who made the determination.

 

i)          Standard Criteria for Admission to a Long-Term Acute Care Hospital.

 

1)         Except for (i)(11), this subsection applies only to service authorization requests for initial admissions to a long-term acute care hospital (LTACH), as defined in 89 Ill. Adm. Code 148.25 (d)(4), from a discharging hospital.

 

2)         The service authorization program shall make medical necessity determinations in a manner that is no more restrictive than that used by the Department, including quantitative and non-quantitative treatment limits, as indicated in federal and State laws and regulations.

 

3)         Each service authorization program shall determine medical necessity for initial admission to an LTACH based on nationally recognized decision support criteria, except as outlined in subsection (i)(4) and (i)(5). If an MCO purchases or licenses service authorization program LTACH review criteria, the MCO shall, before using the criteria, verify and document that the criteria were developed in accordance with this subsection.

 

4)         In cases where the enrollee's condition does not specifically meet nationally recognized decision support criteria, service authorization programs must consider all clinical factors and make enrollee-specific determinations on a case-by-case basis, which may include approving service authorization requests for LTACH level of care when an enrollee's individual needs support approval.

 

5)         In cases where a multidisciplinary team at the discharging hospital determines and documents that the enrollee is appropriate for and will benefit from care in an LTACH and a lower level of care will not meet the enrollee's clinical needs, the service authorization program shall not deny a service authorization request for initial admission to an LTACH when the level of care is medically necessary, pursuant to subsection (i)(2), (i)(3), or (i)(4), and instead approve only skilled nursing facility level of care or alternate lower level of care. The MCO may request and conduct a peer-to-peer review with the provider prior to approval of the service authorization request to collaboratively discuss alternative settings of care, including any community-based alternatives that may be part of a quality program.

 

6)         Nothing in this subsection (i)prohibits an enrollee from choosing or electing an alternate level of care.

 

7)         Service authorization programs must have mechanisms in place to ensure consistent application of review criteria, allowing for enrollee-specific exceptions pursuant to (i)(4), and shall consult with the provider involved in the service authorization request when appropriate. Any decision to deny a service authorization request or to authorize a health care service in an amount, duration, or scope that is less than requested must be made by an individual who has appropriate expertise in addressing the enrollee's medical needs.

 

8)         The MCO shall continue to establish practice guidelines as mandated by federal regulations, including but not limited to 42 CFR 438.236. Practice guidelines must incorporate requirements set forth in this subsection.

 

9)         Nothing in this subsection alters a service authorization program's obligation to make medical necessity determinations on requests for continuing stays at LTACHs based on all contractual requirements and applicable federal and state laws and regulations, including but not limited to 42 CFR 438.210.

 

j)          Timelines for Standard and Urgent Service Authorization Requests for Long Term Acute Care Hospitals and Post-Acute Care Services.

 

1)         Nothing in this subsection (j) supersedes or waives requirements regarding behavioral health and substance use disorder health care services necessary to comply with applicable federal or state law, federal regulation, federal grant requirements, any State or federal consent decrees or court orders, or applicable case law.

 

2)         A service authorization program shall issue a service authorization determination as expeditiously as the enrollee's health condition requires and no later than the timelines outlined in this subsection (j).

 

3)         Except for subsection (j)(4), the MCO must render a service authorization determination and notify the enrollee and the provider of the determination within five calendar days of receipt of the service authorization request, with an extension of up to five additional calendar days if the enrollee requests the extension or the service authorization program informs the provider that there is a need for additional written justification demonstrating that the health care service is medically necessary and the enrollee will not be harmed by the extension.

 

4)         If the provider indicates or the MCO determines that following the timeframes listed in subsection (j)(3) could seriously jeopardize the enrollee's life or health, or could potentially result in a hospital stay beyond medical necessity, the service authorization program must render a service authorization determination and notify the enrollee and the provider no later than 48 hours after receipt of the service authorization request, unless the service authorization program has not received clinical information sufficient upon which to make a service authorization determination. Where the service authorization program has not received sufficient clinical information upon which to make a determination, the service authorization program shall notify the provider no later than 24 hours after receipt of the service authorization request that additional clinical information is needed and shall allow the provider 24 hours to submit the requested additional clinical documentation.  The MCO must then render an approval or adverse benefit determination no later than 72 hours after receipt of the original service authorization request.

 

5)         In cases where the provider indicates that the service authorization request must be decided within the urgent timeframe, the service authorization program cannot override the provider's determination and treat the request as a standard request.

 

(Source:  Amended at 49 Ill. Reg. 15705, effective November 26, 2025)