103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB2581

 

Introduced 2/15/2023, by Rep. William E Hauter

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/356z.3a

    Amends the Illinois Insurance Code. Provides that for any bill submitted to arbitration, the health insurance issuer shall pay the provider or facility at least the current Medicare reimbursement rate pending the resolution of the arbitration.


LRB103 06011 BMS 51564 b

 

 

A BILL FOR

 

HB2581LRB103 06011 BMS 51564 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Section 356z.3a as follows:
 
6    (215 ILCS 5/356z.3a)
7    Sec. 356z.3a. Billing; emergency services;
8nonparticipating providers.
9    (a) As used in this Section:
10    "Ancillary services" means:
11        (1) items and services related to emergency medicine,
12    anesthesiology, pathology, radiology, and neonatology that
13    are provided by any health care provider;
14        (2) items and services provided by assistant surgeons,
15    hospitalists, and intensivists;
16        (3) diagnostic services, including radiology and
17    laboratory services, except for advanced diagnostic
18    laboratory tests identified on the most current list
19    published by the United States Secretary of Health and
20    Human Services under 42 U.S.C. 300gg-132(b)(3);
21        (4) items and services provided by other specialty
22    practitioners as the United States Secretary of Health and
23    Human Services specifies through rulemaking under 42

 

 

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1    U.S.C. 300gg-132(b)(3); and
2        (5) items and services provided by a nonparticipating
3    provider if there is no participating provider who can
4    furnish the item or service at the facility.
5    "Cost sharing" means the amount an insured, beneficiary,
6or enrollee is responsible for paying for a covered item or
7service under the terms of the policy or certificate. "Cost
8sharing" includes copayments, coinsurance, and amounts paid
9toward deductibles, but does not include amounts paid towards
10premiums, balance billing by out-of-network providers, or the
11cost of items or services that are not covered under the policy
12or certificate.
13    "Emergency department of a hospital" means any hospital
14department that provides emergency services, including a
15hospital outpatient department.
16    "Emergency medical condition" has the meaning ascribed to
17that term in Section 10 of the Managed Care Reform and Patient
18Rights Act.
19    "Emergency medical screening examination" has the meaning
20ascribed to that term in Section 10 of the Managed Care Reform
21and Patient Rights Act.
22    "Emergency services" means, with respect to an emergency
23medical condition:
24        (1) in general, an emergency medical screening
25    examination, including ancillary services routinely
26    available to the emergency department to evaluate such

 

 

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1    emergency medical condition, and such further medical
2    examination and treatment as would be required to
3    stabilize the patient regardless of the department of the
4    hospital or other facility in which such further
5    examination or treatment is furnished; or
6        (2) additional items and services for which benefits
7    are provided or covered under the coverage and that are
8    furnished by a nonparticipating provider or
9    nonparticipating emergency facility regardless of the
10    department of the hospital or other facility in which such
11    items are furnished after the insured, beneficiary, or
12    enrollee is stabilized and as part of outpatient
13    observation or an inpatient or outpatient stay with
14    respect to the visit in which the services described in
15    paragraph (1) are furnished. Services after stabilization
16    cease to be emergency services only when all the
17    conditions of 42 U.S.C. 300gg-111(a)(3)(C)(ii)(II) and
18    regulations thereunder are met.
19    "Freestanding Emergency Center" means a facility licensed
20under Section 32.5 of the Emergency Medical Services (EMS)
21Systems Act.
22    "Health care facility" means, in the context of
23non-emergency services, any of the following:
24        (1) a hospital as defined in 42 U.S.C. 1395x(e);
25        (2) a hospital outpatient department;
26        (3) a critical access hospital certified under 42

 

 

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1    U.S.C. 1395i-4(e);
2        (4) an ambulatory surgical treatment center as defined
3    in the Ambulatory Surgical Treatment Center Act; or
4        (5) any recipient of a license under the Hospital
5    Licensing Act that is not otherwise described in this
6    definition.
7    "Health care provider" means a provider as defined in
8subsection (d) of Section 370g. "Health care provider" does
9not include a provider of air ambulance or ground ambulance
10services.
11    "Health care services" has the meaning ascribed to that
12term in subsection (a) of Section 370g.
13    "Health insurance issuer" has the meaning ascribed to that
14term in Section 5 of the Illinois Health Insurance Portability
15and Accountability Act.
16    "Nonparticipating emergency facility" means, with respect
17to the furnishing of an item or service under a policy of group
18or individual health insurance coverage, any of the following
19facilities that does not have a contractual relationship
20directly or indirectly with a health insurance issuer in
21relation to the coverage:
22        (1) an emergency department of a hospital;
23        (2) a Freestanding Emergency Center;
24        (3) an ambulatory surgical treatment center as defined
25    in the Ambulatory Surgical Treatment Center Act; or
26        (4) with respect to emergency services described in

 

 

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1    paragraph (2) of the definition of "emergency services", a
2    hospital.
3    "Nonparticipating provider" means, with respect to the
4furnishing of an item or service under a policy of group or
5individual health insurance coverage, any health care provider
6who does not have a contractual relationship directly or
7indirectly with a health insurance issuer in relation to the
8coverage.
9    "Participating emergency facility" means any of the
10following facilities that has a contractual relationship
11directly or indirectly with a health insurance issuer offering
12group or individual health insurance coverage setting forth
13the terms and conditions on which a relevant health care
14service is provided to an insured, beneficiary, or enrollee
15under the coverage:
16        (1) an emergency department of a hospital;
17        (2) a Freestanding Emergency Center;
18        (3) an ambulatory surgical treatment center as defined
19    in the Ambulatory Surgical Treatment Center Act; or
20        (4) with respect to emergency services described in
21    paragraph (2) of the definition of "emergency services", a
22    hospital.
23    For purposes of this definition, a single case agreement
24between an emergency facility and an issuer that is used to
25address unique situations in which an insured, beneficiary, or
26enrollee requires services that typically occur out-of-network

 

 

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1constitutes a contractual relationship and is limited to the
2parties to the agreement.
3    "Participating health care facility" means any health care
4facility that has a contractual relationship directly or
5indirectly with a health insurance issuer offering group or
6individual health insurance coverage setting forth the terms
7and conditions on which a relevant health care service is
8provided to an insured, beneficiary, or enrollee under the
9coverage. A single case agreement between an emergency
10facility and an issuer that is used to address unique
11situations in which an insured, beneficiary, or enrollee
12requires services that typically occur out-of-network
13constitutes a contractual relationship for purposes of this
14definition and is limited to the parties to the agreement.
15    "Participating provider" means any health care provider
16that has a contractual relationship directly or indirectly
17with a health insurance issuer offering group or individual
18health insurance coverage setting forth the terms and
19conditions on which a relevant health care service is provided
20to an insured, beneficiary, or enrollee under the coverage.
21    "Qualifying payment amount" has the meaning given to that
22term in 42 U.S.C. 300gg-111(a)(3)(E) and the regulations
23promulgated thereunder.
24    "Recognized amount" means the lesser of the amount
25initially billed by the provider or the qualifying payment
26amount.

 

 

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1    "Stabilize" means "stabilization" as defined in Section 10
2of the Managed Care Reform and Patient Rights Act.
3    "Treating provider" means a health care provider who has
4evaluated the individual.
5    "Visit" means, with respect to health care services
6furnished to an individual at a health care facility, health
7care services furnished by a provider at the facility, as well
8as equipment, devices, telehealth services, imaging services,
9laboratory services, and preoperative and postoperative
10services regardless of whether the provider furnishing such
11services is at the facility.
12    (b) Emergency services. When a beneficiary, insured, or
13enrollee receives emergency services from a nonparticipating
14provider or a nonparticipating emergency facility, the health
15insurance issuer shall ensure that the beneficiary, insured,
16or enrollee shall incur no greater out-of-pocket costs than
17the beneficiary, insured, or enrollee would have incurred with
18a participating provider or a participating emergency
19facility. Any cost-sharing requirements shall be applied as
20though the emergency services had been received from a
21participating provider or a participating facility. Cost
22sharing shall be calculated based on the recognized amount for
23the emergency services. If the cost sharing for the same item
24or service furnished by a participating provider would have
25been a flat-dollar copayment, that amount shall be the
26cost-sharing amount unless the provider has billed a lesser

 

 

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1total amount. In no event shall the beneficiary, insured,
2enrollee, or any group policyholder or plan sponsor be liable
3to or billed by the health insurance issuer, the
4nonparticipating provider, or the nonparticipating emergency
5facility for any amount beyond the cost sharing calculated in
6accordance with this subsection with respect to the emergency
7services delivered. Administrative requirements or limitations
8shall be no greater than those applicable to emergency
9services received from a participating provider or a
10participating emergency facility.
11    (b-5) Non-emergency services at participating health care
12facilities.
13        (1) When a beneficiary, insured, or enrollee utilizes
14    a participating health care facility and, due to any
15    reason, covered ancillary services are provided by a
16    nonparticipating provider during or resulting from the
17    visit, the health insurance issuer shall ensure that the
18    beneficiary, insured, or enrollee shall incur no greater
19    out-of-pocket costs than the beneficiary, insured, or
20    enrollee would have incurred with a participating provider
21    for the ancillary services. Any cost-sharing requirements
22    shall be applied as though the ancillary services had been
23    received from a participating provider. Cost sharing shall
24    be calculated based on the recognized amount for the
25    ancillary services. If the cost sharing for the same item
26    or service furnished by a participating provider would

 

 

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1    have been a flat-dollar copayment, that amount shall be
2    the cost-sharing amount unless the provider has billed a
3    lesser total amount. In no event shall the beneficiary,
4    insured, enrollee, or any group policyholder or plan
5    sponsor be liable to or billed by the health insurance
6    issuer, the nonparticipating provider, or the
7    participating health care facility for any amount beyond
8    the cost sharing calculated in accordance with this
9    subsection with respect to the ancillary services
10    delivered. In addition to ancillary services, the
11    requirements of this paragraph shall also apply with
12    respect to covered items or services furnished as a result
13    of unforeseen, urgent medical needs that arise at the time
14    an item or service is furnished, regardless of whether the
15    nonparticipating provider satisfied the notice and consent
16    criteria under paragraph (2) of this subsection.
17        (2) When a beneficiary, insured, or enrollee utilizes
18    a participating health care facility and receives
19    non-emergency covered health care services other than
20    those described in paragraph (1) of this subsection from a
21    nonparticipating provider during or resulting from the
22    visit, the health insurance issuer shall ensure that the
23    beneficiary, insured, or enrollee incurs no greater
24    out-of-pocket costs than the beneficiary, insured, or
25    enrollee would have incurred with a participating provider
26    unless the nonparticipating provider, or the participating

 

 

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1    health care facility on behalf of the nonparticipating
2    provider, satisfies the notice and consent criteria
3    provided in 42 U.S.C. 300gg-132 and regulations
4    promulgated thereunder. If the notice and consent criteria
5    are not satisfied, then:
6            (A) any cost-sharing requirements shall be applied
7        as though the health care services had been received
8        from a participating provider;
9            (B) cost sharing shall be calculated based on the
10        recognized amount for the health care services; and
11            (C) in no event shall the beneficiary, insured,
12        enrollee, or any group policyholder or plan sponsor be
13        liable to or billed by the health insurance issuer,
14        the nonparticipating provider, or the participating
15        health care facility for any amount beyond the cost
16        sharing calculated in accordance with this subsection
17        with respect to the health care services delivered.
18    (c) Notwithstanding any other provision of this Code,
19except when the notice and consent criteria are satisfied for
20the situation in paragraph (2) of subsection (b-5), any
21benefits a beneficiary, insured, or enrollee receives for
22services under the situations in subsection subsections (b) or
23(b-5) are assigned to the nonparticipating providers or the
24facility acting on their behalf. Upon receipt of the
25provider's bill or facility's bill, the health insurance
26issuer shall provide the nonparticipating provider or the

 

 

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1facility with a written explanation of benefits that specifies
2the proposed reimbursement and the applicable deductible,
3copayment, or coinsurance amounts owed by the insured,
4beneficiary, or enrollee. The health insurance issuer shall
5pay any reimbursement subject to this Section directly to the
6nonparticipating provider or the facility.
7    (d) For bills assigned under subsection (c), the
8nonparticipating provider or the facility may bill the health
9insurance issuer for the services rendered, and the health
10insurance issuer may pay the billed amount or attempt to
11negotiate reimbursement with the nonparticipating provider or
12the facility. Within 30 calendar days after the provider or
13facility transmits the bill to the health insurance issuer,
14the issuer shall send an initial payment or notice of denial of
15payment with the written explanation of benefits to the
16provider or facility. If attempts to negotiate reimbursement
17for services provided by a nonparticipating provider do not
18result in a resolution of the payment dispute within 30 days
19after receipt of written explanation of benefits by the health
20insurance issuer, then the health insurance issuer or
21nonparticipating provider or the facility may initiate binding
22arbitration to determine payment for services provided on a
23per-bill per bill basis. The party requesting arbitration
24shall notify the other party arbitration has been initiated
25and state its final offer before arbitration. In response to
26this notice, the nonrequesting party shall inform the

 

 

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1requesting party of its final offer before the arbitration
2occurs. Arbitration shall be initiated by filing a request
3with the Department of Insurance. For any bill submitted to
4arbitration, the health insurance issuer shall pay the
5provider or facility at least the current Medicare
6reimbursement rate pending the resolution of the arbitration.
7    (e) The Department of Insurance shall publish a list of
8approved arbitrators or entities that shall provide binding
9arbitration. These arbitrators shall be American Arbitration
10Association or American Health Lawyers Association trained
11arbitrators. Both parties must agree on an arbitrator from the
12Department of Insurance's or its approved entity's list of
13arbitrators. If no agreement can be reached, then a list of 5
14arbitrators shall be provided by the Department of Insurance
15or the approved entity. From the list of 5 arbitrators, the
16health insurance issuer can veto 2 arbitrators and the
17provider or facility can veto 2 arbitrators. The remaining
18arbitrator shall be the chosen arbitrator. This arbitration
19shall consist of a review of the written submissions by both
20parties. The arbitrator shall not establish a rebuttable
21presumption that the qualifying payment amount should be the
22total amount owed to the provider or facility by the
23combination of the issuer and the insured, beneficiary, or
24enrollee. Binding arbitration shall provide for a written
25decision within 45 days after the request is filed with the
26Department of Insurance. Both parties shall be bound by the

 

 

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1arbitrator's decision. The arbitrator's expenses and fees,
2together with other expenses, not including attorney's fees,
3incurred in the conduct of the arbitration, shall be paid as
4provided in the decision.
5    (f) (Blank).
6    (g) Section 368a of this Act shall not apply during the
7pendency of a decision under subsection (d). Upon the issuance
8of the arbitrator's decision, Section 368a applies with
9respect to the amount, if any, by which the arbitrator's
10determination exceeds the issuer's initial payment under
11subsection (c), or the entire amount of the arbitrator's
12determination if initial payment was denied. Any interest
13required to be paid to a provider under Section 368a shall not
14accrue until after 30 days of an arbitrator's decision as
15provided in subsection (d), but in no circumstances longer
16than 150 days from the date the nonparticipating
17facility-based provider billed for services rendered.
18    (h) Nothing in this Section shall be interpreted to change
19the prudent layperson provisions with respect to emergency
20services under the Managed Care Reform and Patient Rights Act.
21    (i) Nothing in this Section shall preclude a health care
22provider from billing a beneficiary, insured, or enrollee for
23reasonable administrative fees, such as service fees for
24checks returned for nonsufficient funds and missed
25appointments.
26    (j) Nothing in this Section shall preclude a beneficiary,

 

 

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1insured, or enrollee from assigning benefits to a
2nonparticipating provider when the notice and consent criteria
3are satisfied under paragraph (2) of subsection (b-5) or in
4any other situation not described in subsection subsections
5(b) or (b-5).
6    (k) Except when the notice and consent criteria are
7satisfied under paragraph (2) of subsection (b-5), if an
8individual receives health care services under the situations
9described in subsection subsections (b) or (b-5), no referral
10requirement or any other provision contained in the policy or
11certificate of coverage shall deny coverage, reduce benefits,
12or otherwise defeat the requirements of this Section for
13services that would have been covered with a participating
14provider. However, this subsection shall not be construed to
15preclude a provider contract with a health insurance issuer,
16or with an administrator or similar entity acting on the
17issuer's behalf, from imposing requirements on the
18participating provider, participating emergency facility, or
19participating health care facility relating to the referral of
20covered individuals to nonparticipating providers.
21    (l) Except if the notice and consent criteria are
22satisfied under paragraph (2) of subsection (b-5),
23cost-sharing amounts calculated in conformity with this
24Section shall count toward any deductible or out-of-pocket
25maximum applicable to in-network coverage.
26    (m) The Department has the authority to enforce the

 

 

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1requirements of this Section in the situations described in
2subsections (b) and (b-5), and in any other situation for
3which 42 U.S.C. Chapter 6A, Subchapter XXV, Parts D or E and
4regulations promulgated thereunder would prohibit an
5individual from being billed or liable for emergency services
6furnished by a nonparticipating provider or nonparticipating
7emergency facility or for non-emergency health care services
8furnished by a nonparticipating provider at a participating
9health care facility.
10    (n) This Section does not apply with respect to air
11ambulance or ground ambulance services. This Section does not
12apply to any policy of excepted benefits or to short-term,
13limited-duration health insurance coverage.
14(Source: P.A. 102-901, eff. 7-1-22; revised 8-19-22.)