Rep. Mary E. Flowers

Filed: 2/16/2006





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2     AMENDMENT NO. ______. Amend House Bill 4125 by replacing
3 everything after the enacting clause with the following:
4     "Section 5. The Illinois Insurance Code is amended by
5 changing Section 370c as follows:
6     (215 ILCS 5/370c)  (from Ch. 73, par. 982c)
7     Sec. 370c. Mental and emotional disorders.
8     (a) (1) On and after the effective date of this Section,
9 every insurer which delivers, issues for delivery or renews or
10 modifies group A&H policies providing coverage for hospital or
11 medical treatment or services for illness on an
12 expense-incurred basis shall offer to the applicant or group
13 policyholder subject to the insurers standards of
14 insurability, coverage for reasonable and necessary treatment
15 and services for mental, emotional or nervous disorders or
16 conditions, other than serious mental illnesses as defined in
17 item (2) of subsection (b), up to the limits provided in the
18 policy for other disorders or conditions, except (i) the
19 insured may be required to pay up to 50% of expenses incurred
20 as a result of the treatment or services, and (ii) the annual
21 benefit limit may be limited to the lesser of $10,000 or 25% of
22 the lifetime policy limit.
23     (2) Each insured that is covered for mental, emotional or
24 nervous disorders or conditions shall be free to select the



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1 physician licensed to practice medicine in all its branches,
2 licensed clinical psychologist, licensed clinical social
3 worker, or licensed clinical professional counselor of his
4 choice to treat such disorders, and the insurer shall pay the
5 covered charges of such physician licensed to practice medicine
6 in all its branches, licensed clinical psychologist, licensed
7 clinical social worker, or licensed clinical professional
8 counselor up to the limits of coverage, provided (i) the
9 disorder or condition treated is covered by the policy, and
10 (ii) the physician, licensed psychologist, licensed clinical
11 social worker, or licensed clinical professional counselor is
12 authorized to provide said services under the statutes of this
13 State and in accordance with accepted principles of his
14 profession.
15     (3) Insofar as this Section applies solely to licensed
16 clinical social workers and licensed clinical professional
17 counselors, those persons who may provide services to
18 individuals shall do so after the licensed clinical social
19 worker or licensed clinical professional counselor has
20 informed the patient of the desirability of the patient
21 conferring with the patient's primary care physician and the
22 licensed clinical social worker or licensed clinical
23 professional counselor has provided written notification to
24 the patient's primary care physician, if any, that services are
25 being provided to the patient. That notification may, however,
26 be waived by the patient on a written form. Those forms shall
27 be retained by the licensed clinical social worker or licensed
28 clinical professional counselor for a period of not less than 5
29 years.
30     (b) (1) An insurer that provides coverage for hospital or
31 medical expenses under a group policy of accident and health
32 insurance or health care plan amended, delivered, issued, or
33 renewed after the effective date of this amendatory Act of the
34 92nd General Assembly shall provide coverage under the policy



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1 for treatment of serious mental illness under the same terms
2 and conditions as coverage for hospital or medical expenses
3 related to other illnesses and diseases. The coverage required
4 under this Section must provide for same durational limits,
5 amount limits, deductibles, and co-insurance requirements for
6 serious mental illness as are provided for other illnesses and
7 diseases. This subsection does not apply to coverage provided
8 to employees by employers who have 50 or fewer employees.
9     (2) "Serious mental illness" means the following
10 psychiatric illnesses as defined in the most current edition of
11 the Diagnostic and Statistical Manual (DSM) published by the
12 American Psychiatric Association:
13         (A) schizophrenia;
14         (B) paranoid and other psychotic disorders;
15         (C) bipolar disorders (hypomanic, manic, depressive,
16     and mixed);
17         (D) major depressive disorders (single episode or
18     recurrent);
19         (E) schizoaffective disorders (bipolar or depressive);
20         (F) pervasive developmental disorders;
21         (G) obsessive-compulsive disorders;
22         (H) depression in childhood and adolescence;
23         (I) panic disorder; and
24         (J) post-traumatic stress disorders (acute, chronic,
25     or with delayed onset).
26     (3) Upon request of the reimbursing insurer, a provider of
27 treatment of serious mental illness shall furnish medical
28 records or other necessary data that substantiate that initial
29 or continued treatment is at all times medically necessary. An
30 insurer shall provide a mechanism for the timely review by a
31 provider holding the same license and practicing in the same
32 specialty as the patient's provider, who is unaffiliated with
33 the insurer, jointly selected by the patient (or the patient's
34 next of kin or legal representative if the patient is unable to



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1 act for himself or herself), the patient's provider, and the
2 insurer in the event of a dispute between the insurer and
3 patient's provider regarding the medical necessity of a
4 treatment proposed by a patient's provider. If the reviewing
5 provider determines the treatment to be medically necessary,
6 the insurer shall provide reimbursement for the treatment.
7 Future contractual or employment actions by the insurer
8 regarding the patient's provider may not be based on the
9 provider's participation in this procedure. Nothing prevents
10 the insured from agreeing in writing to continue treatment at
11 his or her expense. When making a determination of the medical
12 necessity for a treatment modality for serous mental illness,
13 an insurer must make the determination in a manner that is
14 consistent with the manner used to make that determination with
15 respect to other diseases or illnesses covered under the
16 policy, including an appeals process.
17     (4) A group health benefit plan:
18         (A) shall provide coverage based upon medical
19     necessity for the following treatment of mental illness in
20     each calendar year: ;
21             (i) 45 days of inpatient treatment; and
22             (ii) 35 visits for outpatient treatment including
23         group and individual outpatient treatment; and
24             (iii) for plans or policies delivered, issued for
25         delivery, renewed, or modified after the effective
26         date of this amendatory Act of the 94th General
27         Assembly, 20 additional outpatient visits for speech
28         therapy for treatment of pervasive developmental
29         disorders that will be in addition to speech therapy
30         provided pursuant to item (ii) of this subparagraph
31         (A);
32         (B) may not include a lifetime limit on the number of
33     days of inpatient treatment or the number of outpatient
34     visits covered under the plan; and



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1         (C) shall include the same amount limits, deductibles,
2     copayments, and coinsurance factors for serious mental
3     illness as for physical illness.
4     (5) An issuer of a group health benefit plan may not count
5 toward the number of outpatient visits required to be covered
6 under this Section an outpatient visit for the purpose of
7 medication management and shall cover the outpatient visits
8 under the same terms and conditions as it covers outpatient
9 visits for the treatment of physical illness.
10     (6) An issuer of a group health benefit plan may provide or
11 offer coverage required under this Section through a managed
12 care plan.
13     (7) This Section shall not be interpreted to require a
14 group health benefit plan to provide coverage for treatment of:
15         (A) an addiction to a controlled substance or cannabis
16     that is used in violation of law; or
17         (B) mental illness resulting from the use of a
18     controlled substance or cannabis in violation of law.
19     (8) (Blank).
20 (Source: P.A. 94-402, eff. 8-2-05; P.A. 94-584, eff. 8-15-05;
21 revised 8-19-05.)
22     Section 10. The Health Maintenance Organization Act is
23 amended by changing Section 5-3 as follows:
24     (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
25     Sec. 5-3. Insurance Code provisions.
26     (a) Health Maintenance Organizations shall be subject to
27 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
28 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
29 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
30 356y, 356z.2, 356z.4, 356z.5, 356z.6, 364.01, 367.2, 367.2-5,
31 367i, 368a, 368b, 368c, 368d, 368e, 370c, 401, 401.1, 402, 403,
32 403A, 408, 408.2, 409, 412, 444, and 444.1, paragraph (c) of



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1 subsection (2) of Section 367, and Articles IIA, VIII 1/2, XII,
2 XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois
3 Insurance Code.
4     (b) For purposes of the Illinois Insurance Code, except for
5 Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
6 Maintenance Organizations in the following categories are
7 deemed to be "domestic companies":
8         (1) a corporation authorized under the Dental Service
9     Plan Act or the Voluntary Health Services Plans Act;
10         (2) a corporation organized under the laws of this
11     State; or
12         (3) a corporation organized under the laws of another
13     state, 30% or more of the enrollees of which are residents
14     of this State, except a corporation subject to
15     substantially the same requirements in its state of
16     organization as is a "domestic company" under Article VIII
17     1/2 of the Illinois Insurance Code.
18     (c) In considering the merger, consolidation, or other
19 acquisition of control of a Health Maintenance Organization
20 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
21         (1) the Director shall give primary consideration to
22     the continuation of benefits to enrollees and the financial
23     conditions of the acquired Health Maintenance Organization
24     after the merger, consolidation, or other acquisition of
25     control takes effect;
26         (2)(i) the criteria specified in subsection (1)(b) of
27     Section 131.8 of the Illinois Insurance Code shall not
28     apply and (ii) the Director, in making his determination
29     with respect to the merger, consolidation, or other
30     acquisition of control, need not take into account the
31     effect on competition of the merger, consolidation, or
32     other acquisition of control;
33         (3) the Director shall have the power to require the
34     following information:



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1             (A) certification by an independent actuary of the
2         adequacy of the reserves of the Health Maintenance
3         Organization sought to be acquired;
4             (B) pro forma financial statements reflecting the
5         combined balance sheets of the acquiring company and
6         the Health Maintenance Organization sought to be
7         acquired as of the end of the preceding year and as of
8         a date 90 days prior to the acquisition, as well as pro
9         forma financial statements reflecting projected
10         combined operation for a period of 2 years;
11             (C) a pro forma business plan detailing an
12         acquiring party's plans with respect to the operation
13         of the Health Maintenance Organization sought to be
14         acquired for a period of not less than 3 years; and
15             (D) such other information as the Director shall
16         require.
17     (d) The provisions of Article VIII 1/2 of the Illinois
18 Insurance Code and this Section 5-3 shall apply to the sale by
19 any health maintenance organization of greater than 10% of its
20 enrollee population (including without limitation the health
21 maintenance organization's right, title, and interest in and to
22 its health care certificates).
23     (e) In considering any management contract or service
24 agreement subject to Section 141.1 of the Illinois Insurance
25 Code, the Director (i) shall, in addition to the criteria
26 specified in Section 141.2 of the Illinois Insurance Code, take
27 into account the effect of the management contract or service
28 agreement on the continuation of benefits to enrollees and the
29 financial condition of the health maintenance organization to
30 be managed or serviced, and (ii) need not take into account the
31 effect of the management contract or service agreement on
32 competition.
33     (f) Except for small employer groups as defined in the
34 Small Employer Rating, Renewability and Portability Health



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1 Insurance Act and except for medicare supplement policies as
2 defined in Section 363 of the Illinois Insurance Code, a Health
3 Maintenance Organization may by contract agree with a group or
4 other enrollment unit to effect refunds or charge additional
5 premiums under the following terms and conditions:
6         (i) the amount of, and other terms and conditions with
7     respect to, the refund or additional premium are set forth
8     in the group or enrollment unit contract agreed in advance
9     of the period for which a refund is to be paid or
10     additional premium is to be charged (which period shall not
11     be less than one year); and
12         (ii) the amount of the refund or additional premium
13     shall not exceed 20% of the Health Maintenance
14     Organization's profitable or unprofitable experience with
15     respect to the group or other enrollment unit for the
16     period (and, for purposes of a refund or additional
17     premium, the profitable or unprofitable experience shall
18     be calculated taking into account a pro rata share of the
19     Health Maintenance Organization's administrative and
20     marketing expenses, but shall not include any refund to be
21     made or additional premium to be paid pursuant to this
22     subsection (f)). The Health Maintenance Organization and
23     the group or enrollment unit may agree that the profitable
24     or unprofitable experience may be calculated taking into
25     account the refund period and the immediately preceding 2
26     plan years.
27     The Health Maintenance Organization shall include a
28 statement in the evidence of coverage issued to each enrollee
29 describing the possibility of a refund or additional premium,
30 and upon request of any group or enrollment unit, provide to
31 the group or enrollment unit a description of the method used
32 to calculate (1) the Health Maintenance Organization's
33 profitable experience with respect to the group or enrollment
34 unit and the resulting refund to the group or enrollment unit



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1 or (2) the Health Maintenance Organization's unprofitable
2 experience with respect to the group or enrollment unit and the
3 resulting additional premium to be paid by the group or
4 enrollment unit.
5     In no event shall the Illinois Health Maintenance
6 Organization Guaranty Association be liable to pay any
7 contractual obligation of an insolvent organization to pay any
8 refund authorized under this Section.
9 (Source: P.A. 92-764, eff. 1-1-03; 93-102, eff. 1-1-04; 93-261,
10 eff. 1-1-04; 93-477, eff. 8-8-03; 93-529, eff. 8-14-03; 93-853,
11 eff. 1-1-05; 93-1000, eff. 1-1-05; revised 10-14-04.)".