Illinois General Assembly - Full Text of HB1544
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Full Text of HB1544  103rd General Assembly




State of Illinois
2023 and 2024


Introduced 1/31/2023, by Rep. Dan Ugaste


820 ILCS 305/8.2

    Amends the Workers' Compensation Act in relation to custom compound medications. Sets forth conditions for approval of payment. Provides that charges shall be based upon the specific amount of each component drug and its original manufacturer's National Drug Code number and also upon specified criteria. Provides that a provider may prescribe a one-time 7-day supply unless a prescription for more than 7 days is preauthorized by the employer. Effective immediately.

LRB103 05097 SPS 50111 b





HB1544LRB103 05097 SPS 50111 b

1    AN ACT concerning employment.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Workers' Compensation Act is amended by
5changing Section 8.2 as follows:
6    (820 ILCS 305/8.2)
7    Sec. 8.2. Fee schedule.
8    (a) Except as provided for in subsection (c), for
9procedures, treatments, or services covered under this Act and
10rendered or to be rendered on and after February 1, 2006, the
11maximum allowable payment shall be 90% of the 80th percentile
12of charges and fees as determined by the Commission utilizing
13information provided by employers' and insurers' national
14databases, with a minimum of 12,000,000 Illinois line item
15charges and fees comprised of health care provider and
16hospital charges and fees as of August 1, 2004 but not earlier
17than August 1, 2002. These charges and fees are provider
18billed amounts and shall not include discounted charges. The
1980th percentile is the point on an ordered data set from low to
20high such that 80% of the cases are below or equal to that
21point and at most 20% are above or equal to that point. The
22Commission shall adjust these historical charges and fees as
23of August 1, 2004 by the Consumer Price Index-U for the period



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1August 1, 2004 through September 30, 2005. The Commission
2shall establish fee schedules for procedures, treatments, or
3services for hospital inpatient, hospital outpatient,
4emergency room and trauma, ambulatory surgical treatment
5centers, and professional services. These charges and fees
6shall be designated by geozip or any smaller geographic unit.
7The data shall in no way identify or tend to identify any
8patient, employer, or health care provider. As used in this
9Section, "geozip" means a three-digit zip code based on data
10similarities, geographical similarities, and frequencies. A
11geozip does not cross state boundaries. As used in this
12Section, "three-digit zip code" means a geographic area in
13which all zip codes have the same first 3 digits. If a geozip
14does not have the necessary number of charges and fees to
15calculate a valid percentile for a specific procedure,
16treatment, or service, the Commission may combine data from
17the geozip with up to 4 other geozips that are demographically
18and economically similar and exhibit similarities in data and
19frequencies until the Commission reaches 9 charges or fees for
20that specific procedure, treatment, or service. In cases where
21the compiled data contains less than 9 charges or fees for a
22procedure, treatment, or service, reimbursement shall occur at
2376% of charges and fees as determined by the Commission in a
24manner consistent with the provisions of this paragraph.
25Providers of out-of-state procedures, treatments, services,
26products, or supplies shall be reimbursed at the lesser of



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1that state's fee schedule amount or the fee schedule amount
2for the region in which the employee resides. If no fee
3schedule exists in that state, the provider shall be
4reimbursed at the lesser of the actual charge or the fee
5schedule amount for the region in which the employee resides.
6Not later than September 30 in 2006 and each year thereafter,
7the Commission shall automatically increase or decrease the
8maximum allowable payment for a procedure, treatment, or
9service established and in effect on January 1 of that year by
10the percentage change in the Consumer Price Index-U for the 12
11month period ending August 31 of that year. The increase or
12decrease shall become effective on January 1 of the following
13year. As used in this Section, "Consumer Price Index-U" means
14the index published by the Bureau of Labor Statistics of the
15U.S. Department of Labor, that measures the average change in
16prices of all goods and services purchased by all urban
17consumers, U.S. city average, all items, 1982-84=100.
18    (a-1) Notwithstanding the provisions of subsection (a) and
19unless otherwise indicated, the following provisions shall
20apply to the medical fee schedule starting on September 1,
22        (1) The Commission shall establish and maintain fee
23    schedules for procedures, treatments, products, services,
24    or supplies for hospital inpatient, hospital outpatient,
25    emergency room, ambulatory surgical treatment centers,
26    accredited ambulatory surgical treatment facilities,



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1    prescriptions filled and dispensed outside of a licensed
2    pharmacy, dental services, and professional services. This
3    fee schedule shall be based on the fee schedule amounts
4    already established by the Commission pursuant to
5    subsection (a) of this Section. However, starting on
6    January 1, 2012, these fee schedule amounts shall be
7    grouped into geographic regions in the following manner:
8            (A) Four regions for non-hospital fee schedule
9        amounts shall be utilized:
10                (i) Cook County;
11                (ii) DuPage, Kane, Lake, and Will Counties;
12                (iii) Bond, Calhoun, Clinton, Jersey,
13            Macoupin, Madison, Monroe, Montgomery, Randolph,
14            St. Clair, and Washington Counties; and
15                (iv) All other counties of the State.
16            (B) Fourteen regions for hospital fee schedule
17        amounts shall be utilized:
18                (i) Cook, DuPage, Will, Kane, McHenry, DeKalb,
19            Kendall, and Grundy Counties;
20                (ii) Kankakee County;
21                (iii) Madison, St. Clair, Macoupin, Clinton,
22            Monroe, Jersey, Bond, and Calhoun Counties;
23                (iv) Winnebago and Boone Counties;
24                (v) Peoria, Tazewell, Woodford, Marshall, and
25            Stark Counties;
26                (vi) Champaign, Piatt, and Ford Counties;



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1                (vii) Rock Island, Henry, and Mercer Counties;
2                (viii) Sangamon and Menard Counties;
3                (ix) McLean County;
4                (x) Lake County;
5                (xi) Macon County;
6                (xii) Vermilion County;
7                (xiii) Alexander County; and
8                (xiv) All other counties of the State.
9        (2) If a geozip, as defined in subsection (a) of this
10    Section, overlaps into one or more of the regions set
11    forth in this Section, then the Commission shall average
12    or repeat the charges and fees in a geozip in order to
13    designate charges and fees for each region.
14        (3) In cases where the compiled data contains less
15    than 9 charges or fees for a procedure, treatment,
16    product, supply, or service or where the fee schedule
17    amount cannot be determined by the non-discounted charge
18    data, non-Medicare relative values and conversion factors
19    derived from established fee schedule amounts, coding
20    crosswalks, or other data as determined by the Commission,
21    reimbursement shall occur at 76% of charges and fees until
22    September 1, 2011 and 53.2% of charges and fees thereafter
23    as determined by the Commission in a manner consistent
24    with the provisions of this paragraph.
25        (4) To establish additional fee schedule amounts, the
26    Commission shall utilize provider non-discounted charge



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1    data, non-Medicare relative values and conversion factors
2    derived from established fee schedule amounts, and coding
3    crosswalks. The Commission may establish additional fee
4    schedule amounts based on either the charge or cost of the
5    procedure, treatment, product, supply, or service.
6        (5) Implants shall be reimbursed at 25% above the net
7    manufacturer's invoice price less rebates, plus actual
8    reasonable and customary shipping charges whether or not
9    the implant charge is submitted by a provider in
10    conjunction with a bill for all other services associated
11    with the implant, submitted by a provider on a separate
12    claim form, submitted by a distributor, or submitted by
13    the manufacturer of the implant. "Implants" include the
14    following codes or any substantially similar updated code
15    as determined by the Commission: 0274
16    (prosthetics/orthotics); 0275 (pacemaker); 0276 (lens
17    implant); 0278 (implants); 0540 and 0545 (ambulance); 0624
18    (investigational devices); and 0636 (drugs requiring
19    detailed coding). Non-implantable devices or supplies
20    within these codes shall be reimbursed at 65% of actual
21    charge, which is the provider's normal rates under its
22    standard chargemaster. A standard chargemaster is the
23    provider's list of charges for procedures, treatments,
24    products, supplies, or services used to bill payers in a
25    consistent manner.
26        (6) The Commission shall automatically update all



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1    codes and associated rules with the version of the codes
2    and rules valid on January 1 of that year.
3    (a-2) For procedures, treatments, services, or supplies
4covered under this Act and rendered or to be rendered on or
5after September 1, 2011, the maximum allowable payment shall
6be 70% of the fee schedule amounts, which shall be adjusted
7yearly by the Consumer Price Index-U, as described in
8subsection (a) of this Section.
9    (a-3) Prescriptions filled and dispensed outside of a
10licensed pharmacy shall be subject to a fee schedule that
11shall not exceed the Average Wholesale Price (AWP) plus a
12dispensing fee of $4.18. AWP or its equivalent as registered
13by the National Drug Code shall be set forth for that drug on
14that date as published in Medi-Span Medispan.
15    (a-4) As used in this Section:
16    "Custom compound medication" means a customized medication
17prescribed or ordered by a duly licensed prescriber for a
18specific patient that is prepared in a pharmacy by a licensed
19pharmacist in response to a licensed prescriber's prescription
20or order by combining, mixing, or altering of ingredients, but
21not reconstituting, to meet the unique needs of a specific
23    (a-5) A custom compound medication for longer than the
24one-time 7-day supply described in subsection (a-6) shall be
25approved for payment only if the compound meets all of the
26following standards:



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1        (1) there is no readily available commercially
2    manufactured equivalent product;
3        (2) no other Food and Drug Administration approved
4    alternative drug is appropriate for the patient;
5        (3) the active ingredients of the compound each have a
6    National Drug Code number, are components of drugs
7    approved by the Food and Drug Administration, and the
8    active ingredients in the custom compound medication are
9    being used for diagnosis or conditions approved use by the
10    Food and Drug Administration and not being used for
11    off-label use;
12        (4) the drug has not been withdrawn or removed from
13    the market for safety reasons; and
14        (5) the prescriber is able to demonstrate to the payer
15    that the compound medication is clinically appropriate for
16    the intended use.
17    (a-6) Custom compound medications shall be charged using
18the specific amount of each component drug and its original
19manufacturer's National Drug Code number included in the
20compound. Charges shall be based on a maximum charge of the
21average wholesale price based upon the original manufacturer's
22National Drug Code number, as published by Red Book or
23Medi-Span and prorated for each component amount used. If the
24National Drug Code for the compound ingredient is a repackaged
25drug, the maximum allowable fee for the repackaged drug shall
26be determined by the National Drug Code and the average



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1wholesale price of the underlying original manufacturer.
2Components without National Drug Code numbers shall not be
3charged. A single dispensing fee for a custom compound
4medication as determined by the Commission based on the actual
5costs of preparing and dispensing the custom compound
6medication shall be paid. The dispensing fee for a compound
7prescription shall be billed with code WC 700-C. The provider
8may prescribe a one-time 7-day supply. Any custom compound
9medication prescriptions for more than 7 days shall be
10preauthorized by the employer. Under all circumstances, if the
11compound medication meets the requirements in subsection
12(a-5), a 7-day supply shall be covered.
13    (a-7) This Section is subject to the other provisions of
14this Act, including, but not limited to, Section 8.7.
15    (b) Notwithstanding the provisions of subsection (a), if
16the Commission finds that there is a significant limitation on
17access to quality health care in either a specific field of
18health care services or a specific geographic limitation on
19access to health care, it may change the Consumer Price
20Index-U increase or decrease for that specific field or
21specific geographic limitation on access to health care to
22address that limitation.
23    (c) The Commission shall establish by rule a process to
24review those medical cases or outliers that involve
25extra-ordinary treatment to determine whether to make an
26additional adjustment to the maximum payment within a fee



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1schedule for a procedure, treatment, or service.
2    (d) When a patient notifies a provider that the treatment,
3procedure, or service being sought is for a work-related
4illness or injury and furnishes the provider the name and
5address of the responsible employer, the provider shall bill
6the employer or its designee directly. The employer or its
7designee shall make payment for treatment in accordance with
8the provisions of this Section directly to the provider,
9except that, if a provider has designated a third-party
10billing entity to bill on its behalf, payment shall be made
11directly to the billing entity. Providers shall submit bills
12and records in accordance with the provisions of this Section.
13        (1) All payments to providers for treatment provided
14    pursuant to this Act shall be made within 30 days of
15    receipt of the bills as long as the bill contains
16    substantially all the required data elements necessary to
17    adjudicate the bill.
18        (2) If the bill does not contain substantially all the
19    required data elements necessary to adjudicate the bill,
20    or the claim is denied for any other reason, in whole or in
21    part, the employer or insurer shall provide written
22    notification to the provider in the form of an explanation
23    of benefits explaining the basis for the denial and
24    describing any additional necessary data elements within
25    30 days of receipt of the bill. The Commission, with
26    assistance from the Medical Fee Advisory Board, shall



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1    adopt rules detailing the requirements for the explanation
2    of benefits required under this subsection.
3        (3) In the case (i) of nonpayment to a provider within
4    30 days of receipt of the bill which contained
5    substantially all of the required data elements necessary
6    to adjudicate the bill, (ii) of nonpayment to a provider
7    of a portion of such a bill, or (iii) where the provider
8    has not been issued an explanation of benefits for a bill,
9    the bill, or portion of the bill up to the lesser of the
10    actual charge or the payment level set by the Commission
11    in the fee schedule established in this Section, shall
12    incur interest at a rate of 1% per month payable by the
13    employer to the provider. Any required interest payments
14    shall be made by the employer or its insurer to the
15    provider within 30 days after payment of the bill.
16        (4) If the employer or its insurer fails to pay
17    interest within 30 days after payment of the bill as
18    required pursuant to paragraph (3), the provider may bring
19    an action in circuit court for the sole purpose of seeking
20    payment of interest pursuant to paragraph (3) against the
21    employer or its insurer responsible for insuring the
22    employer's liability pursuant to item (3) of subsection
23    (a) of Section 4. The circuit court's jurisdiction shall
24    be limited to enforcing payment of interest pursuant to
25    paragraph (3). Interest under paragraph (3) is only
26    payable to the provider. An employee is not responsible



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1    for the payment of interest under this Section. The right
2    to interest under paragraph (3) shall not delay, diminish,
3    restrict, or alter in any way the benefits to which the
4    employee or his or her dependents are entitled under this
5    Act.
6    The changes made to this subsection (d) by this amendatory
7Act of the 100th General Assembly apply to procedures,
8treatments, and services rendered on and after the effective
9date of this amendatory Act of the 100th General Assembly.
10    (e) Except as provided in subsections (e-5), (e-10), and
11(e-15), a provider shall not hold an employee liable for costs
12related to a non-disputed procedure, treatment, or service
13rendered in connection with a compensable injury. The
14provisions of subsections (e-5), (e-10), (e-15), and (e-20)
15shall not apply if an employee provides information to the
16provider regarding participation in a group health plan. If
17the employee participates in a group health plan, the provider
18may submit a claim for services to the group health plan. If
19the claim for service is covered by the group health plan, the
20employee's responsibility shall be limited to applicable
21deductibles, co-payments, or co-insurance. Except as provided
22under subsections (e-5), (e-10), (e-15), and (e-20), a
23provider shall not bill or otherwise attempt to recover from
24the employee the difference between the provider's charge and
25the amount paid by the employer or the insurer on a compensable
26injury, or for medical services or treatment determined by the



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1Commission to be excessive or unnecessary.
2    (e-5) If an employer notifies a provider that the employer
3does not consider the illness or injury to be compensable
4under this Act, the provider may seek payment of the
5provider's actual charges from the employee for any procedure,
6treatment, or service rendered. Once an employee informs the
7provider that there is an application filed with the
8Commission to resolve a dispute over payment of such charges,
9the provider shall cease any and all efforts to collect
10payment for the services that are the subject of the dispute.
11Any statute of limitations or statute of repose applicable to
12the provider's efforts to collect payment from the employee
13shall be tolled from the date that the employee files the
14application with the Commission until the date that the
15provider is permitted to resume collection efforts under the
16provisions of this Section.
17    (e-10) If an employer notifies a provider that the
18employer will pay only a portion of a bill for any procedure,
19treatment, or service rendered in connection with a
20compensable illness or disease, the provider may seek payment
21from the employee for the remainder of the amount of the bill
22up to the lesser of the actual charge, negotiated rate, if
23applicable, or the payment level set by the Commission in the
24fee schedule established in this Section. Once an employee
25informs the provider that there is an application filed with
26the Commission to resolve a dispute over payment of such



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1charges, the provider shall cease any and all efforts to
2collect payment for the services that are the subject of the
3dispute. Any statute of limitations or statute of repose
4applicable to the provider's efforts to collect payment from
5the employee shall be tolled from the date that the employee
6files the application with the Commission until the date that
7the provider is permitted to resume collection efforts under
8the provisions of this Section.
9    (e-15) When there is a dispute over the compensability of
10or amount of payment for a procedure, treatment, or service,
11and a case is pending or proceeding before an Arbitrator or the
12Commission, the provider may mail the employee reminders that
13the employee will be responsible for payment of any procedure,
14treatment or service rendered by the provider. The reminders
15must state that they are not bills, to the extent practicable
16include itemized information, and state that the employee need
17not pay until such time as the provider is permitted to resume
18collection efforts under this Section. The reminders shall not
19be provided to any credit rating agency. The reminders may
20request that the employee furnish the provider with
21information about the proceeding under this Act, such as the
22file number, names of parties, and status of the case. If an
23employee fails to respond to such request for information or
24fails to furnish the information requested within 90 days of
25the date of the reminder, the provider is entitled to resume
26any and all efforts to collect payment from the employee for



HB1544- 15 -LRB103 05097 SPS 50111 b

1the services rendered to the employee and the employee shall
2be responsible for payment of any outstanding bills for a
3procedure, treatment, or service rendered by a provider.
4    (e-20) Upon a final award or judgment by an Arbitrator or
5the Commission, or a settlement agreed to by the employer and
6the employee, a provider may resume any and all efforts to
7collect payment from the employee for the services rendered to
8the employee and the employee shall be responsible for payment
9of any outstanding bills for a procedure, treatment, or
10service rendered by a provider as well as the interest awarded
11under subsection (d) of this Section. In the case of a
12procedure, treatment, or service deemed compensable, the
13provider shall not require a payment rate, excluding the
14interest provisions under subsection (d), greater than the
15lesser of the actual charge or the payment level set by the
16Commission in the fee schedule established in this Section.
17Payment for services deemed not covered or not compensable
18under this Act is the responsibility of the employee unless a
19provider and employee have agreed otherwise in writing.
20Services not covered or not compensable under this Act are not
21subject to the fee schedule in this Section.
22    (f) Nothing in this Act shall prohibit an employer or
23insurer from contracting with a health care provider or group
24of health care providers for reimbursement levels for benefits
25under this Act different from those provided in this Section.
26    (g) On or before January 1, 2010 the Commission shall



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1provide to the Governor and General Assembly a report
2regarding the implementation of the medical fee schedule and
3the index used for annual adjustment to that schedule as
4described in this Section.
5(Source: P.A. 100-1117, eff. 11-27-18; 100-1175, eff.
7    Section 99. Effective date. This Act takes effect upon
8becoming law.