093_SB1777
LRB093 03736 JLS 03766 b
1 AN ACT in relation to 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 370i and changing and renumbering Section
6 356z.2 (as added by P.A. 92-579) as follows:
7 (215 ILCS 5/356z.3)
8 Sec. 356z.3 356z.2. Disclosure of limited benefit. An
9 insurer that issues, delivers, amends, or renews an
10 individual or group policy of accident and health insurance
11 in this State after the effective date of this amendatory Act
12 of the 92nd General Assembly and arranges, contracts with, or
13 administers contracts with a provider whereby beneficiaries
14 are provided an incentive to use the services of such
15 provider must include the following disclosure on its
16 contracts and evidences of coverage: "WARNING, LIMITED
17 BENEFITS WILL BE PAID WHEN NON-PARTICIPATING PROVIDERS ARE
18 USED. You should be aware that when you elect to utilize the
19 services of a non-participating provider for a covered
20 service in non-emergency situations, benefit payments to such
21 non-participating provider are not based upon the amount
22 billed. The basis of your benefit payment will be determined
23 according to your policy's fee schedule, usual and customary
24 charge (which is determined by comparing charges for similar
25 services adjusted to the geographical area where the services
26 are performed), or other method as defined by the policy. YOU
27 CAN EXPECT TO PAY MORE THAN THE COINSURANCE, COPAYMENT,
28 DEDUCTIBLE, AND OTHER OUT-OF-POCKET AMOUNTS AMOUNT DEFINED IN
29 THE POLICY AFTER THE PLAN HAS PAID ITS REQUIRED PORTION.
30 Non-participating providers may bill members for any amount
31 up to the billed charge after the plan has paid its portion
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1 of the bill. Participating providers have agreed to accept
2 discounted payments for services with no additional billing
3 to the member other than co-insurance, and deductible, and
4 other out-of-pocket amounts defined in your policy. BOTH
5 PARTICIPATING AND NON-PARTICIPATING PROVIDERS MAY BILL FOR
6 SERVICES NOT COVERED BY YOUR POLICY. You may obtain further
7 information about the participating status of professional
8 providers and information on out-of-pocket expenses by
9 calling the toll free telephone number on your identification
10 card.".
11 (Source: P.A. 92-579, eff. 1-1-03; revised 9-3-02.)
12 (215 ILCS 5/370i) (from Ch. 73, par. 982i)
13 Sec. 370i. Policies, agreements or arrangements with
14 incentives or limits on reimbursement authorized.
15 (a) Policies, agreements or arrangements issued under
16 this Article may not contain terms or conditions that would
17 operate unreasonably to restrict the access and availability
18 of health care services for the insured.
19 (b) An insurer or administrator may:
20 (1) enter into agreements with certain providers of
21 its choice relating to health care services which may be
22 rendered to insureds or beneficiaries of the insurer or
23 administrator, including agreements relating to the
24 amounts to be charged the insureds or beneficiaries for
25 services rendered;
26 (2) issue or administer programs, policies or
27 subscriber contracts in this State that include
28 incentives for the insured or beneficiary to utilize the
29 services of a provider which has entered into an
30 agreement with the insurer or administrator pursuant to
31 paragraph (1) above.
32 (c) After the effective date of this amendatory Act of
33 the 92nd General Assembly, any insurer that arranges,
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1 contracts with, or administers contracts with a provider
2 whereby beneficiaries are provided an incentive to use the
3 services of such provider must include the following
4 disclosure on its contracts and evidences of coverage:
5 "WARNING, LIMITED BENEFITS WILL BE PAID WHEN
6 NON-PARTICIPATING PROVIDERS ARE USED. You should be aware
7 that when you elect to utilize the services of a
8 non-participating provider for a covered service in
9 non-emergency situations, benefit payments to such
10 non-participating provider are not based upon the amount
11 billed. The basis of your benefit payment will be determined
12 according to your policy's fee schedule, usual and customary
13 charge (which is determined by comparing charges for similar
14 services adjusted to the geographical area where the services
15 are performed), or other method as defined by the policy. YOU
16 CAN EXPECT TO PAY MORE THAN THE COINSURANCE, CO-PAYMENT,
17 DEDUCTIBLE, AND OTHER OUT-OF-POCKET AMOUNTS AMOUNT DEFINED IN
18 THE POLICY AFTER THE PLAN HAS PAID ITS REQUIRED PORTION.
19 Non-participating providers may bill members for any amount
20 up to the billed charge after the plan has paid its portion
21 of the bill. Participating providers have agreed to accept
22 discounted payments for services with no additional billing
23 to the member other than co-insurance, and deductible, and
24 other out-of-pocket amounts defined in your policy. BOTH
25 PARTICIPATING AND NON-PARTICIPATING PROVIDERS MAY BILL FOR
26 SERVICES NOT COVERED BY YOUR POLICY. You may obtain further
27 information about the participating status of professional
28 providers and information on out-of-pocket expenses by
29 calling the toll free telephone number on your identification
30 card.".
31 (Source: P.A. 92-579, eff. 1-1-03.)
32 Section 10. The Health Maintenance Organization Act is
33 amended by changing Section 4.5-1 as follows:
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1 (215 ILCS 125/4.5-1)
2 Sec. 4.5-1. Point-of-service health service contracts.
3 (a) A health maintenance organization that offers a
4 point-of-service contract:
5 (1) must include as in-plan covered services all
6 services required by law to be provided by a health
7 maintenance organization;
8 (2) must provide incentives, which shall include
9 financial incentives, for enrollees to use in-plan
10 covered services;
11 (3) may not offer services out-of-plan without
12 providing those services on an in-plan basis;
13 (4) may include annual out-of-pocket limits and
14 lifetime maximum benefits allowances for out-of-plan
15 services that are separate from any limits or allowances
16 applied to in-plan services;
17 (5) may not consider emergency services, authorized
18 referral services, or non-routine services obtained out
19 of the service area to be point-of-service services;
20 (6) may treat as out-of-plan services those
21 services that an enrollee obtains from a participating
22 provider, but for which the proper authorization was not
23 given by the health maintenance organization; and
24 (7) after the effective date of this amendatory Act
25 of the 92nd General Assembly, must include the following
26 disclosure on its point-of-service contracts and
27 evidences of coverage: "WARNING, LIMITED BENEFITS WILL BE
28 PAID WHEN NON-PARTICIPATING PROVIDERS ARE USED. You
29 should be aware that when you elect to utilize the
30 services of a non-participating provider for a covered
31 service in non-emergency situations, benefit payments to
32 such non-participating provider are not based upon the
33 amount billed. The basis of your benefit payment will be
34 determined according to your policy's fee schedule, usual
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1 and customary charge (which is determined by comparing
2 charges for similar services adjusted to the geographical
3 area where the services are performed), or other method
4 as defined by the policy. YOU CAN EXPECT TO PAY MORE THAN
5 THE COINSURANCE, CO-PAYMENT, DEDUCTIBLE, AND OTHER
6 OUT-OF-POCKET AMOUNTS AMOUNT DEFINED IN THE POLICY AFTER
7 THE PLAN HAS PAID ITS REQUIRED PORTION. Non-participating
8 providers may bill members for any amount up to the
9 billed charge after the plan has paid its portion of the
10 bill. Participating providers have agreed to accept
11 discounted payments for services with no additional
12 billing to the member other than co-insurance, and
13 deductible, and other out-of-pocket amounts defined in
14 your policy. BOTH PARTICIPATING AND NON-PARTICIPATING
15 PROVIDERS MAY BILL FOR SERVICES NOT COVERED BY YOUR
16 POLICY. You may obtain further information about the
17 participating status of professional providers and
18 information on out-of-pocket expenses by calling the toll
19 free telephone number on your identification card.".
20 (b) A health maintenance organization offering a
21 point-of-service contract is subject to all of the following
22 limitations:
23 (1) The health maintenance organization may not
24 expend in any calendar quarter more than 20% of its total
25 expenditures for all its members for out-of-plan covered
26 services.
27 (2) If the amount specified in item (1) of this
28 subsection is exceeded by 2% in a quarter, the health
29 maintenance organization must effect compliance with item
30 (1) of this subsection by the end of the following
31 quarter.
32 (3) If compliance with the amount specified in item
33 (1) of this subsection is not demonstrated in the health
34 maintenance organization's next quarterly report, the
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1 health maintenance organization may not offer the
2 point-of-service contract to new groups or include the
3 point-of-service option in the renewal of an existing
4 group until compliance with the amount specified in item
5 (1) of this subsection is demonstrated or until otherwise
6 allowed by the Director.
7 (4) A health maintenance organization failing,
8 without just cause, to comply with the provisions of this
9 subsection shall be required, after notice and hearing,
10 to pay a penalty of $250 for each day out of compliance,
11 to be recovered by the Director. Any penalty recovered
12 shall be paid into the General Revenue Fund. The Director
13 may reduce the penalty if the health maintenance
14 organization demonstrates to the Director that the
15 imposition of the penalty would constitute a financial
16 hardship to the health maintenance organization.
17 (c) A health maintenance organization that offers a
18 point-of-service product must do all of the following:
19 (1) File a quarterly financial statement detailing
20 compliance with the requirements of subsection (b).
21 (2) Track out-of-plan, point-of-service utilization
22 separately from in-plan or non-point-of-service,
23 out-of-plan emergency care, referral care, and urgent
24 care out of the service area utilization.
25 (3) Record out-of-plan utilization in a manner that
26 will permit such utilization and cost reporting as the
27 Director may, by rule, require.
28 (4) Demonstrate to the Director's satisfaction that
29 the health maintenance organization has the fiscal,
30 administrative, and marketing capacity to control its
31 point-of-service enrollment, utilization, and costs so as
32 not to jeopardize the financial security of the health
33 maintenance organization.
34 (5) Maintain, in addition to any other deposit
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1 required under this Act, the deposit required by Section
2 2-6.
3 (6) Maintain cash and cash equivalents of
4 sufficient amount to fully liquidate 10 days' average
5 claim payments, subject to review by the Director.
6 (7) Maintain and file with the Director,
7 reinsurance coverage protecting against catastrophic
8 losses on out of network point-of-service services.
9 Deductibles may not exceed $100,000 per covered life per
10 year, and the portion of risk retained by the health
11 maintenance organization once deductibles have been
12 satisfied may not exceed 20%. Reinsurance must be placed
13 with licensed authorized reinsurers qualified to do
14 business in this State.
15 (d) A health maintenance organization may not issue a
16 point-of-service contract until it has filed and had approved
17 by the Director a plan to comply with the provisions of this
18 Section. The compliance plan must, at a minimum, include
19 provisions demonstrating that the health maintenance
20 organization will do all of the following:
21 (1) Design the benefit levels and conditions of
22 coverage for in-plan covered services and out-of-plan
23 covered services as required by this Article.
24 (2) Provide or arrange for the provision of
25 adequate systems to:
26 (A) process and pay claims for all out-of-plan
27 covered services;
28 (B) meet the requirements for point-of-service
29 contracts set forth in this Section and any
30 additional requirements that may be set forth by the
31 Director; and
32 (C) generate accurate data and financial and
33 regulatory reports on a timely basis so that the
34 Department of Insurance can evaluate the health
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1 maintenance organization's experience with the
2 point-of-service contract and monitor compliance
3 with point-of-service contract provisions.
4 (3) Comply with the requirements of subsections (b)
5 and (c).
6 (Source: P.A. 92-135, eff. 1-1-02; 92-579, eff. 1-1-03.)
7 Section 99. Effective date. This Act takes effect on
8 December 1, 2003.