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    AN ACT concerning regulation.

 
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    Be it enacted by the People of the State of Illinois, 
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represented in the General Assembly: 


 
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    Section 5. The State Employees Group Insurance Act of 1971 
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is amended  by changing Section 6.11 as follows:
 


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    (5 ILCS 375/6.11)



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    Sec. 6.11. Required health benefits; Illinois Insurance 
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Code
requirements.  The program of health
benefits shall provide 
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the post-mastectomy care benefits required to be covered
by a 
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policy of accident and health insurance under Section 356t of 
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the Illinois
Insurance Code.  The program of health benefits 
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shall provide the coverage
required under Sections 356f.1, 
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356g.5,
356u, 356w, 356x, 356z.2, 356z.4, 356z.6, and 356z.9, 
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and 356z.10 356z.9 of the
Illinois Insurance Code.
The program 
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of health benefits must comply with Section 155.37 of the

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Illinois Insurance Code.

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(Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07; 
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95-520, eff. 8-28-07; revised 12-4-07.)

 
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    Section 10. The Counties Code is amended  by changing 
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Section 5-1069.3 as follows:
 
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    (55 ILCS 5/5-1069.3)

 


 






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    Sec. 5-1069.3. Required health benefits.   If a county, 
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including a home
rule
county, is a self-insurer for purposes of 
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providing health insurance coverage
for its employees, the 
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coverage shall include coverage for the post-mastectomy
care 
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benefits required to be covered by a policy of accident and 
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health
insurance under Section 356t and the coverage required 
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under Sections 356f.1, 356g.5, 356u,
356w, 356x, 356z.6, and 
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356z.9, and 356z.10  356z.9 of
the Illinois Insurance Code.  The 
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requirement that health benefits be covered
as provided in this 
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Section is an
exclusive power and function of the State and is 
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a denial and limitation under
Article VII, Section 6, 
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subsection (h) of the Illinois Constitution.  A home
rule county 
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to which this Section applies must comply with every provision 
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of
this Section.


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(Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07; 
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95-520, eff. 8-28-07; revised 12-4-07.)

 
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    Section 15. The Illinois Municipal Code is amended  by 
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changing Section 10-4-2.3 as follows:
 
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    (65 ILCS 5/10-4-2.3)

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    Sec. 10-4-2.3. Required health benefits.   If a 
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municipality, including a
home rule municipality, is a 
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self-insurer for purposes of providing health
insurance 
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coverage for its employees, the coverage shall include coverage 
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for
the post-mastectomy care benefits required to be covered by 
 


 






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a policy of
accident and health insurance under Section 356t 
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and the coverage required
under Sections 356f.1, 356g.5, 356u, 
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356w, 356x, 356z.6, and 356z.9, and  356z.10 356z.9 of the 
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Illinois
Insurance
Code.  The requirement that health
benefits 
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be covered as provided in this is an exclusive power and 
6
function of
the State and is a denial and limitation under 
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Article VII, Section 6,
subsection (h) of the Illinois 
8
Constitution.  A home rule municipality to which
this Section 
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applies must comply with every provision of this Section.


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(Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07; 
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95-520, eff. 8-28-07; revised 12-4-07.)

 
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    Section 20. The School Code is amended  by changing Section 
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10-22.3f as follows:
 
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    (105 ILCS 5/10-22.3f)

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    Sec. 10-22.3f. Required health benefits.   Insurance 
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protection and
benefits
for employees shall provide the 
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post-mastectomy care benefits required to be
covered by a 
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policy of accident and health insurance under Section 356t and 
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the
coverage required under Sections 356f.1, 356g.5, 356u, 
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356w, 356x,

356z.6, and 356z.9 of
the
Illinois Insurance Code.


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(Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07; 
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revised 12-4-07.)

 
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    Section 25. The Illinois Insurance Code is amended  by 
 


 






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adding Section 356f.1 as follows:
 
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    (215 ILCS 5/356f.1  new)
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    Sec. 356f.1. External review appeals process.
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    (a) A policy of accident or health insurance or managed 
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care plan shall maintain an external review appeals process for 
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member or member representative requests to reverse or modify 
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adverse determinations made by the insurer or managed care 
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plan. For the purposes of this Section, "adverse determination" 
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means a determination by a health insurer, managed care plan, 
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or its designee utilization review organization that an 
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admission, course of treatment, continued stay, or other health 
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care service that is not excluded explicitly by applicable 
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benefit language, including determinations that a health 
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service is experimental or investigational, does not meet the 
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insurer's or managed care plan's requirements for medical 
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necessity, appropriateness, health care setting, level of 
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care, or effectiveness and the requested payment for the 
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service is therefore denied, reduced, or terminated.
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    (b) An insurer or managed care plan shall comply with 
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subsection (a) of this Section by providing an external review 
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appeals program that meets or exceeds the Health Utilization 
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Management independent review process standards established by 
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URAC, whether or not the appeal relates to adverse 
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determinations related to utilization management review.
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    (c) An insurer or managed care plan may comply with this 
 


 






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Section by:
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        (1) registering its utilization review program, 
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    including appeals, with the Division of Insurance, as 
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    provided in Section 85 of the Managed Care and Patients 
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    Rights Act, and certifying compliance with the external 
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    review standards of the Health Utilization Management 
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    Standards of URAC sufficient to achieve accreditation from 
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    URAC, doing business as the American Accreditation 
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    Healthcare Commission, Inc.; or
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        (2) submitting evidence of accreditation by the 
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    American Accreditation Healthcare Commission (URAC) for 
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    its Health Utilization Management Standards.
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    Nothing in this Act shall be construed to require an 
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insurer or managed care plan or its subcontractors to become 
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American Accreditation Healthcare Commission (URAC) 
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accredited.
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    (d) The Director of the Division of Insurance, in 
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consultation with the Director of the Department of Public 
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Health, may certify alternative external review standards of 
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national accreditation organizations or entities in order for 
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insurers or managed care plans to comply with this Section. Any 
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alternative external review standards shall meet or exceed 
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those standards required under subsection (b) of this Section.
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    (e) This Section does not apply to:
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        (1) persons providing utilization review program 
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    services only to the federal government;
 


 






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        (2) self-insured health plans under the





federal 
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    Employee Retirement Income Security Act of 1974; however, 
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    this Section does apply to persons


 conducting a utilization 
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    review program on behalf of these health plans;
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        (3) hospitals and medical groups performing


 
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    utilization review activities for internal purposes unless 
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    the utilization review program is conducted for another 
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    person; or
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        (4) workers' compensation, short-term travel, 
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    accident-only, limited, or specific disease policies.
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    Nothing in this Act prohibits an insurer or managed care 
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plan or other entity from contractually requiring an entity 
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designated in item (3) of this subsection (e) to adhere to the 
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utilization review program requirements of this Act.
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    (f) If the Division of Insurance finds that an external 
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review program is not in compliance with this Section, the 
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Director shall issue a corrective action plan and allow a 
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reasonable amount of time for compliance with the insurer or 
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managed care plan. Before issuing a cease and desist order 
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under this Section, the Director shall provide the insurer or 
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managed  care plan with a written notice of the reasons for the 
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order and allow a reasonable amount of time to supply 
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additional information demonstrating compliance with 
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requirements of this Section and to request a hearing. The 
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hearing notice shall be sent by certified mail, return receipt 
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requested and the hearing shall be conducted in accordance with 
 


 






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the Illinois Administrative Procedure Act.
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    If the insurer's or managed care plan's external review 
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program does not come into compliance with this Section, the 
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Director may issue a cease and desist order.
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    (g) A utilization review program subject to a corrective 
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action may continue to conduct business until a final decision 
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has been issued by the Director.
 
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    Section 30. The Limited Health Service Organization Act is 
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amended  by changing Section 4003 as follows:
 



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    (215 ILCS 130/4003)  (from Ch. 73, par. 1504-3)



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    Sec. 4003. Illinois Insurance Code provisions. Limited 
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health service
organizations shall be subject to the provisions 
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of Sections 133, 134, 137,
140, 141.1, 141.2, 141.3, 143, 143c, 
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147, 148, 149, 151, 152, 153, 154, 154.5,
154.6, 154.7, 154.8, 
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155.04, 155.37, 355.2, 356f.1, 356v, 356z.10 356z.9, 368a, 401, 
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401.1,
402,
403, 403A, 408,
408.2, 409, 412, 444, and 444.1 and 
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Articles IIA, VIII 1/2, XII, XII 1/2,
XIII,
XIII 1/2, XXV, and 
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XXVI of the Illinois Insurance Code.  For purposes of the

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Illinois Insurance Code, except for Sections 444 and 444.1 and 
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Articles XIII
and XIII 1/2, limited health service 
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organizations in the following categories
are deemed to be 
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domestic companies:


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        (1) a corporation under the laws of this State; or


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        (2) a corporation organized under the laws of another 
 


 






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    state, 30% of more
of the enrollees of which are residents 
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    of this State, except a corporation
subject to 
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    substantially the same requirements in its state of 
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    organization as
is a domestic company under Article VIII 
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    1/2 of the Illinois Insurance Code.

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(Source: P.A. 95-520, eff. 8-28-07; revised 12-5-07.)

 
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    Section 35. The Voluntary Health Services Plans Act is 
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amended  by changing Section 10 as follows:
 



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    (215 ILCS 165/10)  (from Ch. 32, par. 604)


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    Sec. 10. Application of Insurance Code provisions. Health 
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services
plan corporations and all persons interested therein 
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or dealing therewith
shall be subject to the provisions of 
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Articles IIA and XII 1/2 and Sections
3.1, 133, 140, 143, 143c, 
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149, 155.37, 354, 355.2, 356f.1, 356g.5, 356r, 356t, 356u, 
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356v,
356w, 356x, 356y, 356z.1, 356z.2, 356z.4, 356z.5, 356z.6, 
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356z.8, 356z.9,
356z.10 356z.9, 364.01, 367.2, 368a, 401, 
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401.1,
402,
403, 403A, 408,
408.2, and 412, and paragraphs (7) 
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and (15) of Section 367 of the Illinois
Insurance Code.

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(Source: P.A. 94-1076, eff. 12-29-06; 95-189, eff. 8-16-07; 
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95-331, eff. 8-21-07; 95-422, eff. 8-24-07; 95-520, eff. 
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8-28-07; revised 12-5-07.)