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90_SB0438
215 ILCS 5/356t new
215 ILCS 125/5-3 from Ch. 111 1/2, par. 1411.2
215 ILCS 130/3009 from Ch. 73, par. 1503-9
215 ILCS 165/10 from Ch. 32, par. 604
Amends the Illinois Insurance Code, Health Maintenance
Organization Act, Limited Health Service Organization Act,
and Voluntary Health Services Plans Act. Provides that
health benefit coverage under those Acts must include
coverage for patient care provided pursuant to
investigational cancer treatments. Defines terms. Effective
January 1, 1998.
LRB9002217JScbA
LRB9002217JScbA
1 AN ACT concerning benefits for certain health treatments.
2 WHEREAS, It is the intent of the General Assembly to
3 recognize that cancer clinical trials are designed to compare
4 the effectiveness of the standard medical treatment with a
5 new therapy that researchers believe will prove more
6 effective, based on scientific evidence and that such
7 research provides the foundation for improved patient care
8 and decreased health care costs; and
9 WHEREAS, It is the intent of the General Assembly to
10 recognize that cancer clinical trials involve a rigorously
11 developed clinical protocol that includes goals, rationale
12 and background, criteria for patient selection, specific
13 directions for administering therapy and monitoring patients,
14 definition of quantitative measures for determining treatment
15 response, and methods for documenting and treating adverse
16 reactions; and
17 WHEREAS, It is the intent of the General Assembly to
18 recognize that virtually every major breakthrough for current
19 standard medical treatment has been developed through the
20 clinical trial system; and
21 WHEREAS, It is the intent of the General Assembly to
22 acknowledge that cancer clinical trials can be cost neutral
23 in comparison to the standard therapy; therefore
24 Be it enacted by the People of the State of Illinois,
25 represented in the General Assembly:
26 Section 5. The Illinois Insurance Code is amended by
27 adding Section 356t as follows:
28 (215 ILCS 5/356t new)
29 Sec. 356t. Coverage for investigational cancer
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1 treatments.
2 (a) An individual or group policy of accident and health
3 insurance issued, delivered, amended, or renewed in this
4 State after the effective date of this amendatory Act of 1997
5 must provide coverage for patient care of insureds, when
6 medically appropriate, to participate in an approved research
7 trial and shall provide coverage for the patient care
8 provided pursuant to investigational cancer treatments as
9 provided in subsection (b).
10 (b) Coverage must be included for an item or service
11 that would otherwise be covered, subject to the limitations
12 and cost sharing requirements applicable to the item or
13 service, when that item or service is provided to an insured
14 in the course of an investigational cancer treatment if:
15 (1) the treatment is a qualifying cancer
16 investigational treatment; and
17 (2) the cancer treatment is administered as part of
18 the medical management of a life-threatening disease,
19 disorder, or health condition.
20 Coverage must be included for an item or service when
21 that item or service is required to provide patient care
22 pursuant to the design of a research trial, except those
23 items or services normally paid for by other funding sources,
24 such as the costs of certain investigational agents, the
25 costs of any nonhealth services that might be required for a
26 person to receive cancer treatment, and the costs of managing
27 the research; items or services subject to this exception may
28 be covered in addition to patient care at the discretion of
29 the health plan.
30 (c) For purposes of this Section, (A) "qualifying
31 investigational cancer treatment" means a treatment (i) the
32 effectiveness of which has not been determined and (ii) that
33 is under clinical investigation as part of an approved cancer
34 research trial and (B) "approved cancer research trial" means
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1 (i) a cancer research trial approved by the U.S. Secretary of
2 Health and Human Services, the Director of the National
3 Institutes of Health, the Commissioner of the Food and Drug
4 Administration (through an investigational new drug exemption
5 under Section 505(1) of the federal Food, Drug and Cosmetic
6 Act or an investigational device exemption under Section
7 520(g) of that Act), the Secretary of Veterans Affairs, the
8 Secretary of Defense, or a qualified nongovernmental cancer
9 research entity as defined in guidelines of the National
10 Institutes of Health or (ii) a peer-reviewed and approved
11 cancer research program, as defined by the U.S. Secretary of
12 Health and Human Services, conducted for the primary purpose
13 of determining whether or not a cancer treatment is safe or
14 efficacious or has any other characteristic of a cancer
15 treatment that must be demonstrated in order for the cancer
16 treatment to be medically necessary or appropriate.
17 Section 10. The Health Maintenance Organization Act is
18 amended by changing Section 5-3 as follows:
19 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
20 Sec. 5-3. Insurance Code provisions.
21 (a) Health Maintenance Organizations shall be subject to
22 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
23 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
24 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356t, 367i, 401,
25 401.1, 402, 403, 403A, 408, 408.2, and 412, paragraph (c) of
26 subsection (2) of Section 367, and Articles VIII 1/2, XII,
27 XII 1/2, XIII, XIII 1/2, and XXVI of the Illinois Insurance
28 Code.
29 (b) For purposes of the Illinois Insurance Code, except
30 for Articles XIII and XIII 1/2, Health Maintenance
31 Organizations in the following categories are deemed to be
32 "domestic companies":
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1 (1) a corporation authorized under the Medical
2 Service Plan Act, the Dental Service Plan Act, the Vision
3 Service Plan Act, the Pharmaceutical Service Plan Act,
4 the Voluntary Health Services Plan Act, or the Nonprofit
5 Health Care Service Plan Act;
6 (2) a corporation organized under the laws of this
7 State; or
8 (3) a corporation organized under the laws of
9 another state, 30% or more of the enrollees of which are
10 residents of this State, except a corporation subject to
11 substantially the same requirements in its state of
12 organization as is a "domestic company" under Article
13 VIII 1/2 of the Illinois Insurance Code.
14 (c) In considering the merger, consolidation, or other
15 acquisition of control of a Health Maintenance Organization
16 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
17 (1) the Director shall give primary consideration
18 to the continuation of benefits to enrollees and the
19 financial conditions of the acquired Health Maintenance
20 Organization after the merger, consolidation, or other
21 acquisition of control takes effect;
22 (2)(i) the criteria specified in subsection (1)(b)
23 of Section 131.8 of the Illinois Insurance Code shall not
24 apply and (ii) the Director, in making his determination
25 with respect to the merger, consolidation, or other
26 acquisition of control, need not take into account the
27 effect on competition of the merger, consolidation, or
28 other acquisition of control;
29 (3) the Director shall have the power to require
30 the following information:
31 (A) certification by an independent actuary of
32 the adequacy of the reserves of the Health
33 Maintenance Organization sought to be acquired;
34 (B) pro forma financial statements reflecting
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1 the combined balance sheets of the acquiring company
2 and the Health Maintenance Organization sought to be
3 acquired as of the end of the preceding year and as
4 of a date 90 days prior to the acquisition, as well
5 as pro forma financial statements reflecting
6 projected combined operation for a period of 2
7 years;
8 (C) a pro forma business plan detailing an
9 acquiring party's plans with respect to the
10 operation of the Health Maintenance Organization
11 sought to be acquired for a period of not less than
12 3 years; and
13 (D) such other information as the Director
14 shall require.
15 (d) The provisions of Article VIII 1/2 of the Illinois
16 Insurance Code and this Section 5-3 shall apply to the sale
17 by any health maintenance organization of greater than 10% of
18 its enrollee population (including without limitation the
19 health maintenance organization's right, title, and interest
20 in and to its health care certificates).
21 (e) In considering any management contract or service
22 agreement subject to Section 141.1 of the Illinois Insurance
23 Code, the Director (i) shall, in addition to the criteria
24 specified in Section 141.2 of the Illinois Insurance Code,
25 take into account the effect of the management contract or
26 service agreement on the continuation of benefits to
27 enrollees and the financial condition of the health
28 maintenance organization to be managed or serviced, and (ii)
29 need not take into account the effect of the management
30 contract or service agreement on competition.
31 (f) Except for small employer groups as defined in the
32 Small Employer Rating, Renewability and Portability Health
33 Insurance Act and except for medicare supplement policies as
34 defined in Section 363 of the Illinois Insurance Code, a
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1 Health Maintenance Organization may by contract agree with a
2 group or other enrollment unit to effect refunds or charge
3 additional premiums under the following terms and conditions:
4 (i) the amount of, and other terms and conditions
5 with respect to, the refund or additional premium are set
6 forth in the group or enrollment unit contract agreed in
7 advance of the period for which a refund is to be paid or
8 additional premium is to be charged (which period shall
9 not be less than one year); and
10 (ii) the amount of the refund or additional premium
11 shall not exceed 20% of the Health Maintenance
12 Organization's profitable or unprofitable experience with
13 respect to the group or other enrollment unit for the
14 period (and, for purposes of a refund or additional
15 premium, the profitable or unprofitable experience shall
16 be calculated taking into account a pro rata share of the
17 Health Maintenance Organization's administrative and
18 marketing expenses, but shall not include any refund to
19 be made or additional premium to be paid pursuant to this
20 subsection (f)). The Health Maintenance Organization and
21 the group or enrollment unit may agree that the
22 profitable or unprofitable experience may be calculated
23 taking into account the refund period and the immediately
24 preceding 2 plan years.
25 The Health Maintenance Organization shall include a
26 statement in the evidence of coverage issued to each enrollee
27 describing the possibility of a refund or additional premium,
28 and upon request of any group or enrollment unit, provide to
29 the group or enrollment unit a description of the method used
30 to calculate (1) the Health Maintenance Organization's
31 profitable experience with respect to the group or enrollment
32 unit and the resulting refund to the group or enrollment unit
33 or (2) the Health Maintenance Organization's unprofitable
34 experience with respect to the group or enrollment unit and
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1 the resulting additional premium to be paid by the group or
2 enrollment unit.
3 In no event shall the Illinois Health Maintenance
4 Organization Guaranty Association be liable to pay any
5 contractual obligation of an insolvent organization to pay
6 any refund authorized under this Section.
7 (Source: P.A. 88-313; 89-90, eff. 6-30-95.)
8 Section 15. The Limited Health Service Organization Act
9 is amended by changing Section 3009 as follows:
10 (215 ILCS 130/3009) (from Ch. 73, par. 1503-9)
11 Sec. 3009. Point-of-service limited health service
12 contracts.
13 (a) An LHSO that offers a POS contract:
14 (1) shall include as in-plan covered services all
15 services required by law to be provided by an LHSO;
16 (2) shall provide incentives, which shall include
17 financial incentives, for enrollees to use in-plan
18 covered services;
19 (3) shall not offer services out-of-plan without
20 providing those services on an in-plan basis;
21 (4) may limit or exclude specific types of services
22 from coverage when obtained out-of-plan;
23 (5) may include annual out-of-pocket limits and
24 lifetime maximum benefits allowances for out-of-plan
25 services that are separate from any limits or allowances
26 applied to in-plan services;
27 (6) shall include an annual maximum benefit
28 allowance not to exceed $2,500 per year that is separate
29 from any limits or allowances applied to in-plan
30 services;
31 (7) may limit the groups to which a POS product is
32 offered, however, if a POS product is offered to a group,
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1 then it must be offered to all eligible members of that
2 group, when an LHSO provider is available;
3 (8) shall not consider emergency services,
4 authorized referral services, or non-routine services
5 obtained out of the service area to be POS services; and
6 (9) may treat as out-of-plan services those
7 services that an enrollee obtains from a participating
8 provider, but for which the proper authorization was not
9 given by the LHSO.
10 (b) An LHSO offering a POS contract shall be subject to
11 the following limitations:
12 (1) The LHSO shall not expend in any calendar
13 quarter more than 20% of its total limited health
14 services expenditures for all its members for out-of-plan
15 covered services.
16 (2) If the amount specified in paragraph (1) is
17 exceeded by 2% in a quarter, the LHSO shall effect
18 compliance with paragraph (1) by the end of the following
19 quarter.
20 (3) If compliance with the amount specified in
21 paragraph (1) is not demonstrated in the LHSO's next
22 quarterly report, the LHSO may not offer the POS contract
23 to new groups or include the POS option in the renewal of
24 an existing group until compliance with the amount
25 specified in paragraph (1) is demonstrated or otherwise
26 allowed by the Director.
27 (4) Any LHSO failing, without just cause, to comply
28 with the provisions of this subsection shall be required,
29 after notice and hearing, to pay a penalty of $250 for
30 each day out of compliance, to be recovered by the
31 Director of Insurance. Any penalty recovered shall be
32 paid into the General Revenue Fund. The Director may
33 reduce the penalty if the LHSO demonstrates to the
34 Director that the imposition of the penalty would
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1 constitute a financial hardship to the LHSO.
2 (c) Any LHSO that offers a POS product shall:
3 (1) File a quarterly financial statement detailing
4 compliance with the requirements of subsection (b).
5 (2) Track out-of-plan POS utilization separately
6 from in-plan or non-POS out-of-plan emergency care,
7 referral care, and urgent care out of the service area
8 utilization.
9 (3) Record out-of-plan utilization in a manner that
10 will permit such utilization and cost reporting as the
11 Director may, by regulation, require.
12 (4) Demonstrate to the Director's satisfaction that
13 the LHSO has the fiscal, administrative, and marketing
14 capacity to control its POS enrollment, utilization, and
15 costs so as not to jeopardize the financial security of
16 the LHSO.
17 (5) Maintain the deposit required by subsection (b)
18 of Section 2006 in addition to any other deposit required
19 under this Act.
20 (d) An LHSO shall not issue a POS contract until it has
21 filed and had approved by the Director a plan to comply with
22 the provisions of this Section. The compliance plan shall at
23 a minimum include provisions demonstrating that the LHSO will
24 do all of the following:
25 (1) Design the benefit levels and conditions of
26 coverage for in-plan covered services and out-of-plan
27 covered services as required by this Article.
28 (2) Provide or arrange for the provision of
29 adequate systems to:
30 (A) process and pay claims for all out-of-plan
31 covered services;
32 (B) meet the requirements for a POS contract
33 set forth in this Section and any additional
34 requirements that may be set forth by the Director;
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1 and
2 (C) generate accurate data and financial and
3 regulatory reports on a timely basis so that the
4 Department can evaluate the LHSO's experience with
5 the POS contract and monitor compliance with POS
6 contract provisions.
7 (3) Comply initially and on an ongoing basis with
8 the requirements of subsections (b) and (c).
9 (e) A POS contract must comply with the requirements of
10 Section 356t of the Illinois Insurance Code.
11 (Source: P.A. 87-1079; 88-667, eff. 9-16-94.)
12 Section 20. The Voluntary Health Services Plans Act is
13 amended by changing Section 10 as follows:
14 (215 ILCS 165/10) (from Ch. 32, par. 604)
15 Sec. 10. Application of Insurance Code provisions.
16 Health services plan corporations and all persons interested
17 therein or dealing therewith shall be subject to the
18 provisions of Article XII 1/2 and Sections 3.1, 133, 140,
19 143, 143c, 149, 354, 355.2, 356r, 356t, 367.2, 401, 401.1,
20 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7) and
21 (15) of Section 367 of the Illinois Insurance Code.
22 (Source: P.A. 89-514, eff. 7-17-96.)
23 Section 99. Effective date. This Act takes effect on
24 January 1, 1998.