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90_HB1490eng
215 ILCS 125/2-3.1 from Ch. 111 1/2, par. 1405.1
Amends the Health Maintenance Organization Act. Adds a
caption and makes technical changes to a Section concerning
the dispensing of drugs.
LRB9003498JSgc
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1 AN ACT concerning the provision of health care services,
2 amending named Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Health Maintenance Organization Act is
6 amended by changing Sections 1-2 and 5-5 and adding Section
7 2-10 as follows:
8 (215 ILCS 125/1-2) (from Ch. 111 1/2, par. 1402)
9 Sec. 1-2. Definitions. As used in this Act, unless the
10 context otherwise requires, the following terms shall have
11 the meanings ascribed to them:
12 (1) "Advertisement" means any printed or published
13 material, audiovisual material and descriptive literature of
14 the health care plan used in direct mail, newspapers,
15 magazines, radio scripts, television scripts, billboards and
16 similar displays; and any descriptive literature or sales
17 aids of all kinds disseminated by a representative of the
18 health care plan for presentation to the public including,
19 but not limited to, circulars, leaflets, booklets,
20 depictions, illustrations, form letters and prepared sales
21 presentations.
22 (2) "Director" means the Director of Insurance.
23 (3) "Basic Health Care Services" means emergency care,
24 and inpatient hospital and physician care, outpatient medical
25 services, mental health services and care for alcohol and
26 drug abuse, including any reasonable deductibles and
27 co-payments, all of which are subject to such limitations as
28 are determined by the Director pursuant to rule.
29 (4) "Enrollee" means an individual who has been enrolled
30 in a health care plan.
31 (5) "Evidence of Coverage" means any certificate,
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1 agreement, or contract issued to an enrollee setting out the
2 coverage to which he is entitled in exchange for a per capita
3 prepaid sum.
4 (6) "Group Contract" means a contract for health care
5 services which by its terms limits eligibility to members of
6 a specified group.
7 (7) "Health Care Plan" means any arrangement whereby any
8 organization undertakes to provide or arrange for and pay for
9 or reimburse the cost of basic health care services from
10 providers selected by the Health Maintenance Organization and
11 such arrangement consists of arranging for or the provision
12 of such health care services, as distinguished from mere
13 indemnification against the cost of such services, except as
14 otherwise authorized by Section 2-3 of this Act, on a per
15 capita prepaid basis, through insurance or otherwise. A
16 "health care plan" also includes any arrangement whereby an
17 organization undertakes to provide or arrange for or pay for
18 or reimburse the cost of any health care service for persons
19 who are enrolled in the integrated health care program
20 established under Section 5-16.3 of the Illinois Public Aid
21 Code through providers selected by the organization and the
22 arrangement consists of making provision for the delivery of
23 health care services, as distinguished from mere
24 indemnification. Nothing in this definition, however,
25 affects the total medical services available to persons
26 eligible for medical assistance under the Illinois Public Aid
27 Code.
28 (8) "Health Care Services" means any services included
29 in the furnishing to any individual of medical or dental
30 care, or the hospitalization or incident to the furnishing of
31 such care or hospitalization as well as the furnishing to any
32 person of any and all other services for the purpose of
33 preventing, alleviating, curing or healing human illness or
34 injury.
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1 (9) "Health Maintenance Organization" means any
2 organization formed under the laws of this or another state
3 to provide or arrange for one or more health care plans under
4 a system which causes any part of the risk of health care
5 delivery to be borne by the organization or its providers.
6 (10) "Net Worth" means admitted assets, as defined in
7 Section 1-3 of this Act, minus liabilities.
8 (11) "Organization" means any insurance company, or a
9 nonprofit corporation authorized under the Medical Service
10 Plan Act, the Dental Service Plan Act, the Vision Service
11 Plan Act, the Pharmaceutical Service Plan Act, the Voluntary
12 Health Services Plans Act or the Non-profit Health Care
13 Service Plan Act, or a corporation organized under the laws
14 of this or another state for the purpose of operating one or
15 more health care plans and doing no business other than that
16 of a Health Maintenance Organization or an insurance company.
17 Organization shall also mean the University of Illinois
18 Hospital as defined in the University of Illinois Hospital
19 Act.
20 (12) "Provider" means any physician, hospital facility,
21 or other person which is licensed or otherwise authorized to
22 furnish health care services and also includes any other
23 entity that arranges for the delivery or furnishing of health
24 care service.
25 (13) "Producer" means a person directly or indirectly
26 associated with a health care plan who engages in
27 solicitation or enrollment.
28 (14) "Per capita prepaid" means a basis of prepayment by
29 which a fixed amount of money is prepaid per individual or
30 any other enrollment unit to the Health Maintenance
31 Organization or for health care services which are provided
32 during a definite time period regardless of the frequency or
33 extent of the services rendered by the Health Maintenance
34 Organization, except for copayments and deductibles and
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1 except as provided in subsection (f) of Section 5-3 of this
2 Act.
3 (15) "Subscriber" means a person who has entered into a
4 contractual relationship with the Health Maintenance
5 Organization for the provision of or arrangement of at least
6 basic health care services to the beneficiaries of such
7 contract.
8 (16) "Accreditation organization" means all of the
9 following entities: the National Committee of Quality
10 Assurance, the Joint Commission on Accreditation of
11 Healthcare Organizations, the Accreditation Association for
12 Ambulatory Health Care, and such other nationally recognized
13 accreditation organizations as may be approved by rule by the
14 Department of Insurance.
15 (Source: P.A. 88-554, eff. 7-26-94; 89-90, eff. 6-30-95.)
16 (215 ILCS 125/2-10 new)
17 Sec. 2-10. Accreditation.
18 (a) As a condition of doing business in this State, a
19 health maintenance organization issued a certificate of
20 authority under this Act shall apply for accreditation by an
21 accreditation organization within 24 months after its
22 licensure and shall be accredited within 36 months after the
23 health maintenance organization's receipt of its certificate
24 of authority. A health maintenance organization with an
25 existing certificate of authority must apply for
26 accreditation by an accreditation organization within 24
27 months after the effective date of this amendatory Act of
28 1997 and shall be accredited within 36 months after the
29 effective date of this amendatory Act of 1997. A health
30 maintenance organization shall be reaccredited by an
31 accreditation organization not less than once every 3 years.
32 (b) If a contract for the provision of health care
33 services between a provider and a health maintenance
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1 organization issued a certificate of authority at any time
2 covers (i) at least 15% of the health maintenance
3 organization's current enrollment or (ii) at least 5,000
4 enrollees of the health maintenance organization's current
5 enrollment, the contracting provider shall apply for and
6 obtain accreditation by an accreditation organization within
7 (A) 24 months after the effective date of this amendatory Act
8 of 1997 and shall be accredited within 36 months after the
9 effective date of this amendatory Act of 1997 or (B) within
10 24 months after the first day of the month in which (i) or
11 (ii) applies. This subsection does not apply to any licensed
12 physician or physician group including, but not limited to,
13 physicians organized as a partnership, limited liability
14 partnership, limited liability company, medical corporation,
15 professional service corporation, professional association,
16 or a joint venture of partnerships or corporations. A
17 health maintenance organization may contract for the
18 provision of health care services with an unaccredited
19 provider that would otherwise be required to be accredited
20 pursuant to this Section, but that has been licensed for less
21 than 24 months (or, in the case licensure of a provider
22 entity is not required, that has been in existence for less
23 than 24 months) upon the condition that the provider will (i)
24 apply for accreditation from an accreditation organization
25 within 24 months after the effective date of the contract
26 between the provider and the health maintenance organization
27 and (ii) obtain accreditation from an accreditation
28 organization within 36 months after the effective date of the
29 contract.
30 (c) The Director shall provide technical assistance,
31 upon request by a health maintenance organization, in order
32 to assist it in developing and maintaining quality assurance
33 systems and for the purpose of complying with the
34 accreditation requirement.
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1 (d) The Director shall monitor and determine the
2 accreditation status of all existing health maintenance
3 organizations on an ongoing basis and group them into one of
4 the following categories:
5 (1) three year accreditation obtained;
6 (2) not applied and surveyed for accreditation
7 within the appropriate time frame;
8 (3) applied for accreditation, but not surveyed
9 within the appropriate time frame;
10 (4) surveyed, findings of the accreditation
11 organization not final; or
12 (5) failed accreditation survey.
13 (e) The Director shall verify the compliance of a health
14 maintenance organization with the accreditation requirement
15 with the appropriate accreditation organization and shall
16 initiate action for a health maintenance organization
17 classified under item (2), (3), or (5) of subsection (d).
18 (f) The Director shall file an administrative order to
19 show cause against a health maintenance organization
20 classified under item (2), (3), or (5) of subsection (d)
21 which is not in compliance with the accreditation
22 requirement.
23 (g) If a health maintenance organization fails to comply
24 with the requirements of this Section, the Director shall
25 sanction the noncompliant health maintenance organization as
26 follows:
27 (1) If a health maintenance organization is
28 classified under item (2) of subsection (d), the health
29 maintenance organization shall suspend the offering of
30 health care plans pursuant to a new group contract and
31 suspend the enrollment of medical assistance recipients.
32 The suspension of enrollment of medical assistance
33 recipients shall preclude the enrollment by the health
34 maintenance organization of individuals currently
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1 receiving medical assistance as well as the enrollment of
2 new medical assistance recipients, but shall not preclude
3 the enrollment of a dependent of a medical assistance
4 recipient currently enrolled with the noncompliance
5 health maintenance organization. The limitations on
6 enrollment contained in this subsection shall continue
7 until the noncompliant health maintenance organization
8 obtains accreditation as required under this Section; and
9 (2) in addition to the mandatory enrollment
10 restrictions, the Director, in his discretion, may take
11 action against the health maintenance organization
12 pursuant to Section 5-5 and may impose the following
13 monetary fines on a noncompliant health maintenance
14 organization:
15 (A) if a health maintenance organization has
16 not applied for accreditation within the required
17 time frames, a fine not to exceed $500 for each day
18 of noncompliance with this Section; and
19 (B) if a health maintenance organization has
20 applied for the accreditation required by this
21 Section, but has not been surveyed within the
22 required time frames, a fine not to exceed $250 for
23 each day of noncompliance with this Section.
24 (h) The enrollment of a health maintenance organization
25 that contracts with an unaccredited provider which is
26 required to be accredited by an accreditation organization
27 pursuant to this Section shall be suspended as described in
28 item (1) of subsection (g) during the period that it
29 maintains the contract that causes it to be out of compliance
30 with this Section and may have imposed upon it a monetary
31 fine not to exceed $20,000 for each contract with an
32 unaccredited provider which is required to be accredited.
33 (i) For a health maintenance organization classified
34 under item (2) or (3) of subsection (d), the Director shall
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1 assess the need to mitigate the monetary penalties specified
2 under subsection (g) based upon:
3 (1) the potential threat to enrollees' health,
4 safety, and welfare as determined by assessing compliance
5 with standards specified in this Section; the Director
6 shall also assess the findings of the accreditation
7 survey;
8 (2) the financial viability of the health
9 maintenance organization; and
10 (3) the extent of the health maintenance
11 organization's efforts to initiate corrective action.
12 (j) For those health maintenance organizations failing
13 the initial or renewal accreditation survey, the Department
14 of Human Services shall require the health maintenance
15 organization to enter into a corrective action process for
16 the purpose of achieving accreditation. The Department of
17 Human Services shall monitor the progress of those health
18 maintenance organizations not in compliance in cooperation
19 with the accreditation organization to ensure that health
20 maintenance organizations come into compliance with the
21 accreditation requirement.
22 (k) Those health maintenance organizations failing an
23 initial or renewal accreditation survey must receive
24 accreditation during a subsequent survey by the original
25 accrediting organization. Accreditation must be received
26 within one year of the final accreditation decision by the
27 accrediting agency or within a time frame mutually agreeable
28 to the Director, the accreditation organization, and the
29 health maintenance organization. A health maintenance
30 organization may, at any time, seek accreditation from
31 another accreditation organization provided that the health
32 maintenance organization enters into a corrective action
33 process under subsection (j) to achieve accreditation with
34 the original accreditation organization.
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1 (l) The Department of Human Services shall conduct
2 annual validation surveys on accredited health maintenance
3 organizations to ensure ongoing compliance with accreditation
4 standards. Selection of the health maintenance organizations
5 to be surveyed shall be based on the following information:
6 (1) reports received from the accreditation
7 organization, the Department of Insurance, or other State
8 or federal regulatory agency regarding the quality of
9 care provided by the organization;
10 (2) quality of care complaints received by the
11 Director from enrollees or providers; and
12 (3) such other information as the Director, in his
13 discretion, shall determine is relevant in the selection
14 process.
15 (215 ILCS 125/5-5) (from Ch. 111 1/2, par. 1413)
16 Sec. 5-5. Suspension, revocation or denial of
17 certification of authority. The Director may suspend or
18 revoke any certificate of authority issued to a health
19 maintenance organization under this Act or deny an
20 application for a certificate of authority if he finds any of
21 the following:
22 (a) The health maintenance organization is operating
23 significantly in contravention of its basic organizational
24 document, its health care plan, or in a manner contrary to
25 that described in any information submitted under Section 2-1
26 or 4-12.
27 (b) The health maintenance organization issues contracts
28 or evidences of coverage or uses a schedule of charges for
29 health care services that do not comply with the requirement
30 of Section 2-1 or 4-12.
31 (c) The health care plan does not provide or arrange for
32 basic health care services, except as provided in Section
33 4-13 concerning mental health services for clients of the
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1 Department of Children and Family Services.
2 (d) The Director of Public Health certifies to the
3 Director that (1) the health maintenance organization does
4 not meet the requirements of Section 2-2 or (2) the health
5 maintenance organization is unable to fulfill its obligations
6 to furnish health care services as required under its health
7 care plan. The Department of Public Health shall promulgate
8 by rule, pursuant to the Illinois Administrative Procedure
9 Act, the precise standards used for determining what
10 constitutes a material misrepresentation, what constitutes a
11 material violation of a contract or evidence of coverage, or
12 what constitutes good faith with regard to certification
13 under this paragraph.
14 (e) The health maintenance organization is no longer
15 financially responsible and may reasonably be expected to be
16 unable to meet its obligations to enrollees or prospective
17 enrollees.
18 (f) The health maintenance organization, or any person
19 on its behalf, has advertised or merchandised its services in
20 an untrue, misrepresentative, misleading, deceptive, or
21 unfair manner.
22 (g) The continued operation of the health maintenance
23 organization would be hazardous to its enrollees.
24 (h) The health maintenance organization has neglected to
25 correct, within the time prescribed by subsection (c) of
26 Section 2-4, any deficiency occurring due to the
27 organization's prescribed minimum net worth or special
28 contingent reserve being impaired.
29 (i) The health maintenance organization has otherwise
30 failed to substantially comply with this Act.
31 (j) The health maintenance organization has failed to
32 meet the requirements for issuance of a certificate of
33 authority set forth in Section 2-2.
34 (k) The health maintenance organization has failed to
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1 obtain and maintain accreditation by an accreditation
2 organization pursuant to Section 2-10.
3 When the certificate of authority of a health maintenance
4 organization is revoked, the organization shall proceed,
5 immediately following the effective date of the order of
6 revocation, to wind up its affairs and shall conduct no
7 further business except as may be essential to the orderly
8 conclusion of the affairs of the organization. The Director
9 may permit further operation of the organization that he
10 finds to be in the best interest of enrollees to the end that
11 the enrollees will be afforded the greatest practical
12 opportunity to obtain health care services.
13 (Source: P.A. 88-487.)
14 Section 10. The Illinois Public Aid Code is amended by
15 adding Section 5-23:
16 (305 ILCS 5/5-23 new)
17 Sec. 5-23. Accreditation.
18 (a) A managed care community network or prepaid health
19 plan that contracts with the Illinois Department for the
20 provision of medical care to recipients entitled to aid under
21 this Article shall apply for accreditation by an
22 accreditation organization within 24 months after the
23 effective date of this amendatory Act of 1997 and obtain
24 accreditation within 36 months after the effective date of
25 this amendatory Act of 1997. The managed care community
26 network and prepaid health plan shall be reaccredited by an
27 accreditation organization not less than once every 3 years.
28 For the purposes of this Section, "accreditation
29 organization" means all of the following entities: the
30 National Committee of Quality Assurance, the Joint Commission
31 on Accreditation of Healthcare Organizations, the
32 Accreditation Association for Ambulatory Health Care, and
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1 such other nationally recognized accreditation organizations
2 as may be approved by rule by the Illinois Department.
3 (b) The Illinois Department shall monitor and determine
4 the accreditation status of all managed care community
5 networks and prepaid health plans that contract with the
6 Illinois Department for the provision of services to
7 recipients entitled to aid under this Article on an ongoing
8 basis and shall group them into one of the following
9 categories:
10 (1) three year accreditation obtained;
11 (2) not applied and surveyed for accreditation
12 within the appropriate time frame;
13 (3) applied for accreditation, but not surveyed
14 within the appropriate time frame;
15 (4) surveyed, findings of the accreditation agency
16 not final; or
17 (5) failed accreditation survey.
18 (c) The Illinois Department shall verify the compliance
19 of managed care community networks and prepaid health plans
20 with the accreditation requirement with the accreditation
21 organizations and shall initiate action for entities
22 classified under item (2), (3), or (5) of subsection (b).
23 (d) The Illinois Department shall file an administrative
24 order to show cause against those entities categorized under
25 item (2), (3), or (5), of subsection (b) which are not in
26 compliance with the accreditation requirement.
27 (e) If an entity required to do so fails to comply with
28 the requirements of this Section, the Illinois Department
29 shall sanction the entity as follows:
30 (1) If the entity is categorized under item (2) or
31 (3) of subsection (b), the entity shall suspend the
32 enrollment of medical assistance recipients. The
33 suspension of enrollment of medical assistance recipients
34 shall preclude the enrollment of individuals currently
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1 receiving medical assistance as well as the enrollment of
2 new medical assistance recipients, but shall not preclude
3 the enrollment of a dependent of a medical assistance
4 recipient currently enrolled with the noncompliant
5 entity. The limitation on enrollment shall continue
6 until the noncompliant entity obtains accreditation as
7 required under this Section; and
8 (2) in addition to the mandatory enrollment
9 restriction, the Director, in his discretion, may impose
10 the following monetary fines on a noncompliant
11 organization:
12 (A) if the entity has not applied for
13 accreditation within the required time frames, a
14 fine not to exceed $500 for each day of
15 noncompliance with this Section; and
16 (B) if the entity has applied for the
17 accreditation required by this Section, but has not
18 been surveyed within the required time frames, a
19 fine not to exceed $250 for each day of
20 noncompliance with this Section.
21 (3) If a prepaid health plan or managed care
22 community network fails a follow-up accreditation survey
23 conducted subsequent to a failed accreditation survey,
24 the contract for the provision of medical care to medical
25 assistance recipients of the noncompliant entity shall be
26 terminated.
27 (f) For an entity failing an accreditation survey, the
28 Director shall assess the need to mitigate the monetary
29 penalties specified under item (2) of subsection (e) based
30 upon:
31 (1) the potential threat to recipients' health,
32 safety, and welfare as determined by assessing compliance
33 with standards specified in this Section; the Illinois
34 Department shall also assess the findings of the
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1 accreditation survey;
2 (2) the financial viability of the entity; and
3 (3) the extent of the entity's efforts to initiate
4 corrective action.
5 (g) Those contracting entities classified under item
6 (2), (3), or (5) of subsection (b) shall be surveyed by the
7 Illinois Department to ensure compliance with their
8 contractual obligations under their contracts with the
9 Illinois Department.
10 (h) An entity failing the initial accreditation survey
11 shall enter into a corrective action process for the purpose
12 of achieving accreditation. The Illinois Department shall
13 monitor the progress of those contracting entities not in
14 compliance in cooperation with the accreditation organization
15 to ensure that the contracting entities gain compliance with
16 the accreditation requirement. Those contracting entities
17 failing an initial or renewal accreditation survey must
18 receive accreditation during a subsequent accreditation
19 survey by the original accreditation organization.
20 Accreditation must be received within one year of the final
21 accreditation decision by the accrediting organization or
22 within a time frame mutually agreeable to the Illinois
23 Department, the accreditation organization, and the
24 contracting entity. A contracting entity may, at any time
25 seek accreditation from another accreditation organization
26 provided that the contracting entity enters into a corrective
27 action process under this subsection to achieve accreditation
28 with the original accreditation organization.
29 (i) The Illinois Department shall conduct annual
30 validation surveys on accredited contracting entities to
31 ensure ongoing compliance with accreditation standards.
32 Selection of the contracting entities to be surveyed shall be
33 based on the following information:
34 (1) reports received from the accreditation
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1 organization, the Illinois Department or other State or
2 federal regulatory agency regarding the quality of care
3 provided by the entity;
4 (2) quality of care complaints received by the
5 Illinois Department from recipients or providers; and
6 (3) such other information as the Director, in his
7 discretion, shall determine is relevant in the selection
8 process.