100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB2600

 

Introduced , by Rep. David Harris

 

SYNOPSIS AS INTRODUCED:
 
5 ILCS 375/6.12
30 ILCS 540/3-2
215 ILCS 5/368a

    Amends the State Prompt Payment Act. Provides that after the effective date of the amendatory Act, if for any bill approved for payment under the Act and pursuant to a health benefit plan under the State Employees Group Insurance Act of 1971 or submitted under Article V of the Illinois Public Aid Code, except a bill for pharmacy or nursing facility services or goods, payment is not issued to the payee in a timely manner under the Section, an interest penalty of 8% per year of any amount approved and unpaid shall apply, applied pro rata for the amount of time the bill remains unpaid. Amends the Illinois Insurance Code. In provisions concerning timely payment for health care services, provides that the interest to be charged on late payments of periodic payments, payments by independent practice associations and physician-hospital organizations, and payments by health insurers, health maintenance organizations, managed care plans, health care plans, preferred provider organizations, and third party administrators shall be 8% per year. Amends the State Employees Group Insurance Act of 1971. Provides that the program of health benefits offered under the Act is subject to certain provisions of the Illinois Insurance Code concerning late payments and assignability except as otherwise provided. Effective January 1, 2018.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2600LRB100 09784 MLM 19954 b

1    AN ACT concerning government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Employees Group Insurance Act of 1971
5is amended by changing Section 6.12 as follows:
 
6    (5 ILCS 375/6.12)
7    Sec. 6.12. Payment for services. Except as otherwise
8provided, the The program of health benefits is subject to the
9provisions of Sections 368a and 370a of the Illinois Insurance
10Code, provided that, if a covered member or covered dependent
11assigns payments to a health care professional for covered
12services, then the health care professional shall only collect
13at point of service from that person the estimated amount not
14expected to be paid by the plan.
15(Source: P.A. 97-1086, eff. 8-24-12.)
 
16    Section 10. The State Prompt Payment Act is amended by
17changing Section 3-2 as follows:
 
18    (30 ILCS 540/3-2)
19    Sec. 3-2. Beginning July 1, 1993, in any instance where a
20State official or agency is late in payment of a vendor's bill
21or invoice for goods or services furnished to the State, as

 

 

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1defined in Section 1, properly approved in accordance with
2rules promulgated under Section 3-3, the State official or
3agency shall pay interest to the vendor in accordance with the
4following:
5        (1) Any bill, except a bill submitted under Article V
6    of the Illinois Public Aid Code and except as provided
7    under paragraph (1.05) of this Section, approved for
8    payment under this Section must be paid or the payment
9    issued to the payee within 60 days of receipt of a proper
10    bill or invoice. If payment is not issued to the payee
11    within this 60-day period, an interest penalty of 1.0% of
12    any amount approved and unpaid shall be added for each
13    month or fraction thereof after the end of this 60-day
14    period, until final payment is made. Any bill, except a
15    bill for pharmacy or nursing facility services or goods,
16    and except as provided under paragraph (1.05) of this
17    Section, submitted under Article V of the Illinois Public
18    Aid Code approved for payment under this Section must be
19    paid or the payment issued to the payee within 60 days
20    after receipt of a proper bill or invoice, and, if payment
21    is not issued to the payee within this 60-day period, an
22    interest penalty of 2.0% of any amount approved and unpaid
23    shall be added for each month or fraction thereof after the
24    end of this 60-day period, until final payment is made. Any
25    bill for pharmacy or nursing facility services or goods
26    submitted under Article V of the Illinois Public Aid Code,

 

 

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1    except as provided under paragraph (1.05) of this Section,
2    and approved for payment under this Section must be paid or
3    the payment issued to the payee within 60 days of receipt
4    of a proper bill or invoice. If payment is not issued to
5    the payee within this 60-day period, an interest penalty of
6    1.0% of any amount approved and unpaid shall be added for
7    each month or fraction thereof after the end of this 60-day
8    period, until final payment is made.
9        (1.05) For State fiscal year 2012 and future fiscal
10    years, any bill approved for payment under this Section
11    must be paid or the payment issued to the payee within 90
12    days of receipt of a proper bill or invoice. If payment is
13    not issued to the payee within this 90-day period, an
14    interest penalty of 1.0% of any amount approved and unpaid
15    shall be added for each month, or 0.033% (one-thirtieth of
16    one percent) of any amount approved and unpaid for each
17    day, after the end of this 90-day period, until final
18    payment is made.
19        (1.06) After the effective date of this amendatory Act
20    of the 100th General Assembly, for any bill approved for
21    payment under this Section and pursuant to a health benefit
22    plan under the State Employees Group Insurance Act of 1971
23    or submitted under Article V of the Illinois Public Aid
24    Code, except a bill for pharmacy or nursing facility
25    services or goods, if payment is not issued to the payee in
26    a timely manner under this Section, an interest penalty of

 

 

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1    8% per year of any amount approved and unpaid shall apply,
2    applied pro rata for the amount of time the bill remains
3    unpaid.
4        (1.1) A State agency shall review in a timely manner
5    each bill or invoice after its receipt. If the State agency
6    determines that the bill or invoice contains a defect
7    making it unable to process the payment request, the agency
8    shall notify the vendor requesting payment as soon as
9    possible after discovering the defect pursuant to rules
10    promulgated under Section 3-3; provided, however, that the
11    notice for construction related bills or invoices must be
12    given not later than 30 days after the bill or invoice was
13    first submitted. The notice shall identify the defect and
14    any additional information necessary to correct the
15    defect. If one or more items on a construction related bill
16    or invoice are disapproved, but not the entire bill or
17    invoice, then the portion that is not disapproved shall be
18    paid.
19        (2) Where a State official or agency is late in payment
20    of a vendor's bill or invoice properly approved in
21    accordance with this Act, and different late payment terms
22    are not reduced to writing as a contractual agreement, the
23    State official or agency shall automatically pay interest
24    penalties required by this Section amounting to $50 or more
25    to the appropriate vendor. Each agency shall be responsible
26    for determining whether an interest penalty is owed and for

 

 

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1    paying the interest to the vendor. Except as provided in
2    paragraph (4), an individual interest payment amounting to
3    $5 or less shall not be paid by the State. Interest due to
4    a vendor that amounts to greater than $5 and less than $50
5    shall not be paid but shall be accrued until all interest
6    due the vendor for all similar warrants exceeds $50, at
7    which time the accrued interest shall be payable and
8    interest will begin accruing again, except that interest
9    accrued as of the end of the fiscal year that does not
10    exceed $50 shall be payable at that time. In the event an
11    individual has paid a vendor for services in advance, the
12    provisions of this Section shall apply until payment is
13    made to that individual.
14        (3) The provisions of Public Act 96-1501 reducing the
15    interest rate on pharmacy claims under Article V of the
16    Illinois Public Aid Code to 1.0% per month shall apply to
17    any pharmacy bills for services and goods under Article V
18    of the Illinois Public Aid Code received on or after the
19    date 60 days before January 25, 2011 (the effective date of
20    Public Act 96-1501) except as provided under paragraph
21    (1.05) of this Section.
22        (4) Interest amounting to less than $5 shall not be
23    paid by the State, except for claims (i) to the Department
24    of Healthcare and Family Services or the Department of
25    Human Services, (ii) pursuant to Article V of the Illinois
26    Public Aid Code, the Covering ALL KIDS Health Insurance

 

 

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1    Act, or the Children's Health Insurance Program Act, and
2    (iii) made (A) by pharmacies for prescriptive services or
3    (B) by any federally qualified health center for
4    prescriptive services or any other services.
5(Source: P.A. 96-555, eff. 8-18-09; 96-802, eff. 1-1-10;
696-959, eff. 7-1-10; 96-1000, eff. 7-2-10; 96-1501, eff.
71-25-11; 96-1530, eff. 2-16-11; 97-72, eff. 7-1-11; 97-74, eff.
86-30-11; 97-348, eff. 8-12-11; 97-813, eff. 7-13-12; 97-932,
9eff. 8-10-12; 97-1142, eff. 12-28-12.)
 
10    Section 15. The Illinois Insurance Code is amended by
11changing Section 368a as follows:
 
12    (215 ILCS 5/368a)
13    Sec. 368a. Timely payment for health care services.
14    (a) This Section applies to insurers, health maintenance
15organizations, managed care plans, health care plans,
16preferred provider organizations, third party administrators,
17independent practice associations, and physician-hospital
18organizations (hereinafter referred to as "payors") that
19provide periodic payments, which are payments not requiring a
20claim, bill, capitation encounter data, or capitation
21reconciliation reports, such as prospective capitation
22payments, to health care professionals and health care
23facilities to provide medical or health care services for
24insureds or enrollees.

 

 

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1        (1) A payor shall make periodic payments in accordance
2    with item (3). Failure to make periodic payments within the
3    period of time specified in item (3) shall entitle the
4    health care professional or health care facility to
5    interest at the rate of 9% per year from the date payment
6    was required to be made to the date of the late payment,
7    provided that interest amounting to less than $1 need not
8    be paid. For periodic payments due on or after the
9    effective date of this amendatory Act of the 100th General
10    Assembly, failure to make periodic payments within the
11    period of time specified in item (3) shall entitle the
12    health care professional or health care facility to an
13    interest penalty of 8.0% per year of any amount approved
14    and unpaid, applied pro rata for the amount of time the
15    bill remains unpaid. Any required interest payments shall
16    be made within 30 days after the payment.
17        (2) When a payor requires selection of a health care
18    professional or health care facility, the selection shall
19    be completed by the insured or enrollee no later than 30
20    days after enrollment. The payor shall provide written
21    notice of this requirement to all insureds and enrollees.
22    Nothing in this Section shall be construed to require a
23    payor to select a health care professional or health care
24    facility for an insured or enrollee.
25        (3) A payor shall provide the health care professional
26    or health care facility with notice of the selection as a

 

 

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1    health care professional or health care facility by an
2    insured or enrollee and the effective date of the selection
3    within 60 calendar days after the selection. No later than
4    the 60th day following the date an insured or enrollee has
5    selected a health care professional or health care facility
6    or the date that selection becomes effective, whichever is
7    later, or in cases of retrospective enrollment only, 30
8    days after notice by an employer to the payor of the
9    selection, a payor shall begin periodic payment of the
10    required amounts to the insured's or enrollee's health care
11    professional or health care facility, or the designee of
12    either, calculated from the date of selection or the date
13    the selection becomes effective, whichever is later. All
14    subsequent payments shall be made in accordance with a
15    monthly periodic cycle.
16    (b) Notwithstanding any other provision of this Section,
17independent practice associations and physician-hospital
18organizations shall make periodic payment of the required
19amounts in accordance with a monthly periodic schedule after an
20insured or enrollee has selected a health care professional or
21health care facility or after that selection becomes effective,
22whichever is later.
23    Notwithstanding any other provision of this Section,
24independent practice associations and physician-hospital
25organizations shall make all other payments for health services
26within 30 days after receipt of due proof of loss. Independent

 

 

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1practice associations and physician-hospital organizations
2shall notify the insured, insured's assignee, health care
3professional, or health care facility of any failure to provide
4sufficient documentation for a due proof of loss within 30 days
5after receipt of the claim for health services.
6    Failure to pay within the required time period shall
7entitle the payee to interest at the rate of 9% per year from
8the date the payment is due to the date of the late payment,
9provided that interest amounting to less than $1 need not be
10paid. For any periodic payments or other payments due on or
11after the effective date of this amendatory Act of the 100th
12General Assembly, failure to pay within the required time
13period shall entitle the payee to interest at the rate of 8.0%
14per year from the date the payment is due to the date of the
15late payment, provided that interest amounting to less than $1
16need not be paid. Any required interest payments shall be made
17within 30 days after the payment.
18    (c) All insurers, health maintenance organizations,
19managed care plans, health care plans, preferred provider
20organizations, and third party administrators shall ensure
21that all claims and indemnities concerning health care services
22other than for any periodic payment shall be paid within 30
23days after receipt of due written proof of such loss. An
24insured, insured's assignee, health care professional, or
25health care facility shall be notified of any known failure to
26provide sufficient documentation for a due proof of loss within

 

 

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130 days after receipt of the claim for health care services.
2Failure to pay within such period shall entitle the payee to
3interest at the rate of 9% per year from the 30th day after
4receipt of such proof of loss to the date of late payment,
5provided that interest amounting to less than one dollar need
6not be paid. For any claims and indemnities due on or after the
7effective date of this amendatory Act of the 100th General
8Assembly, failure to pay within such period shall entitle the
9payee to interest at the rate of 8.0% per year from the 30th
10day after receipt of such proof of loss to the date of late
11payment, provided that interest amounting to less than one
12dollar need not be paid. Any required interest payments shall
13be made within 30 days after the payment.
14    (d) The Department shall enforce the provisions of this
15Section pursuant to the enforcement powers granted to it by
16law.
17    (e) The Department is hereby granted specific authority to
18issue a cease and desist order, fine, or otherwise penalize
19independent practice associations and physician-hospital
20organizations that violate this Section. The Department shall
21adopt reasonable rules to enforce compliance with this Section
22by independent practice associations and physician-hospital
23organizations.
24(Source: P.A. 97-813, eff. 7-13-12.)
 
25    Section 99. Effective date. This Act takes effect January
261, 2018.