093_HB2358
LRB093 06064 JLS 06167 b
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
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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 make periodic payment of the required
26 amounts in accordance with a monthly periodic schedule after
27 an insured or enrollee has selected a health care
28 professional or health care facility or after that selection
29 becomes effective, whichever is later.
30 Notwithstanding any other provision of this Section,
31 independent practice associations and physician-hospital
32 organizations shall make all other payments for health
33 services within 30 days after receipt of due proof of loss.
34 Independent practice associations and physician-hospital
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1 organizations shall notify the insured, insured's assignee,
2 health care professional, or health care facility of any
3 failure to provide sufficient documentation for a due proof
4 of loss within 30 days after receipt of the claim for health
5 services.
6 Failure to pay within the required time period shall
7 entitle the payee to interest at the rate of 9% per year from
8 the date the payment is due to the date of the late payment,
9 provided that interest amounting to less that $1 need not be
10 paid. Any required interest payments shall be made within 30
11 days after the payment.
12 (c) All insurers, health maintenance organizations,
13 managed care plans, health care plans, preferred provider
14 organizations, and third party administrators shall ensure
15 that all claims and indemnities concerning health care
16 services other than for any periodic payment shall be paid
17 within 30 days after receipt of due written proof of such
18 loss. An insured, insured's assignee, health care
19 professional, or health care facility shall be notified of
20 any known failure to provide sufficient documentation for a
21 due proof of loss within 30 days after receipt of the claim
22 for health care services. Failure to pay within such period
23 shall entitle the payee to interest at the rate of 9% per
24 year from the 30th day after receipt of such proof of loss to
25 the date of late payment, provided that interest amounting to
26 less than one dollar need not be paid. Any required interest
27 payments shall be made within 30 days after the payment.
28 (d) The Department shall enforce the provisions of this
29 Section pursuant to the enforcement powers granted to it by
30 law.
31 (e) The Department is hereby granted specific authority
32 to issue a cease and desist order, fine, or otherwise
33 penalize independent practice associations and
34 physician-hospital organizations that violate this Section.
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1 The Department shall adopt reasonable rules to enforce
2 compliance with this Section by independent practice
3 associations and physician-hospital organizations.
4 (f) Beginning 6 months after the date specified in
5 Section 262 of the federal Health Insurance Portability and
6 Accountability Act of 1996, pursuant to which third-party
7 payors are required to comply with a standard or
8 implementation specification for the electronic exchange of
9 health information as adopted or established by the United
10 States Secretary of Health and Human Services pursuant to
11 that Act, the provisions of this Section apply only to claims
12 submitted electronically to a third-party payor.
13 A provider and a third-party payor may enter into a
14 contractual arrangement under which the third-party payor
15 agrees to process claims that are not submitted
16 electronically because of the financial hardship that
17 electronic submission of claims would create for the provider
18 or because of any other extenuating circumstance.
19 The provisions of this subsection do not apply to
20 long-term care facilities.
21 (Source: P.A. 91-605, eff. 12-14-99; 91-788, eff. 6-9-00;
22 92-745, eff. 1-1-03.)