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91_HB2713sam002
LRB9103967JSpcam07
1 AMENDMENT TO HOUSE BILL 2713
2 AMENDMENT NO. . Amend House Bill 2713, AS AMENDED,
3 by replacing the title with the following:
4 "AN ACT concerning payment for medical services, amending
5 named Acts."; and
6 by replacing everything after the enacting clause with the
7 following:
8 "Section 5. The State Employees Group Insurance Act of
9 1971 is amended by adding Section 6.12 as follows:
10 (5 ILCS 375/6-12 new)
11 Sec. 6.12. Payment for services. The program of health
12 benefits is subject to the provisions of Section 356y of the
13 Illinois Insurance Code.
14 Section 10. The Illinois Insurance Code is amended by
15 adding Section 356y and changing Sections 357.9 and 370a as
16 follows:
17 (215 ILCS 5/356y new)
18 Sec. 356y. Timely payment for health care services.
19 (a) This Section applies to insurers, health maintenance
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1 organizations, managed care plans, health care plans,
2 preferred provider organizations, third party administrators,
3 independent practice associations, and physician-hospital
4 organizations (hereinafter referred to as "payors") that
5 provide periodic payments, which are payments not requiring a
6 claim, bill, capitation encounter data, or capitation
7 reconciliation reports, such as prospective capitation
8 payments, to health care professionals and health care
9 facilities to provide medical or health care services for
10 insureds or enrollees.
11 (1) A payor shall make periodic payments in
12 accordance with item (3). Failure to make periodic
13 payments within the period of time specified in item (3)
14 shall entitle the health care professional or health care
15 facility to interest at the rate of 9% per year from the
16 date payment was required to be made to the date of the
17 late payment, provided that interest amounting to less
18 than $1 need not be paid. Any required interest payments
19 shall be made within 30 days after the payment.
20 (2) When a payor requires selection of a health
21 care professional or health care facility, the selection
22 shall be completed by the insured or enrollee no later
23 than 30 days after enrollment. The payor shall provide
24 written notice of this requirement to all insureds and
25 enrollees. Nothing in this Section shall be construed to
26 require a payor to select a health care professional or
27 health care facility for an insured or enrollee.
28 (3) A payor shall provide the health care
29 professional or health care facility with notice of the
30 selection as a health care professional or health care
31 facility by an insured or enrollee and the effective date
32 of the selection within 60 calendar days after the
33 selection. No later than the 60th day following the date
34 an insured or enrollee has selected a health care
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1 professional or health care facility or the date that
2 selection becomes effective, whichever is later, or in
3 cases of retrospective enrollment only, 30 days after
4 notice by an employer to the payor of the selection, a
5 payor shall begin periodic payment of the required
6 amounts to the insured's or enrollee's health care
7 professional or health care facility, or the designee of
8 either, calculated from the date of selection or the date
9 the selection becomes effective, whichever is later. All
10 subsequent payments shall be made in accordance with a
11 monthly periodic cycle.
12 (b) Notwithstanding any other provision of this Section,
13 independent practice associations and physician-hospital
14 organizations shall begin making periodic payment of the
15 required amounts within 60 days after an insured or enrollee
16 has selected a health care professional or health care
17 facility or the date that selection becomes effective,
18 whichever is later. Before January 1, 2001, subsequent
19 periodic payments shall be made in accordance with a 60-day
20 periodic schedule, and after December 31, 2000, subsequent
21 periodic payments shall be made in accordance with a monthly
22 periodic schedule.
23 Notwithstanding any other provision of this Section,
24 independent practice associations and physician-hospital
25 organizations shall make all other payments for health
26 services within 60 days after receipt of due proof of loss
27 received before January 1, 2001 and within 30 days after
28 receipt of due proof of loss received after December 31,
29 2000. Independent practice associations and
30 physician-hospital organizations shall notify the insured,
31 insured's assignee, health care professional, or health care
32 facility of any failure to provide sufficient documentation
33 for a due proof of loss within 30 days after receipt of the
34 claim for health services.
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1 Failure to pay within the required time period shall
2 entitle the payee to interest at the rate of 9% per year from
3 the date the payment is due to the date of the late payment,
4 provided that interest amounting to less that $1 need not be
5 paid. Any required interest payments shall be made within 30
6 days after the payment.
7 (c) All insurers, health maintenance organizations,
8 managed care plans, health care plans, preferred provider
9 organizations, and third party administrators shall ensure
10 that all claims and indemnities concerning health care
11 services other than for any periodic payment shall be paid
12 within 30 days after receipt of due written proof of such
13 loss. An insured, insured's assignee, health care
14 professional, or health care facility shall be notified of
15 any failure to provide sufficient documentation for a due
16 proof of loss within 30 days after receipt of the claim for
17 health care services. Failure to pay within such period
18 shall entitle the payee to interest at the rate of 9% per
19 year from the 30th day after receipt of such proof of loss to
20 the date of late payment, provided that interest amounting to
21 less than one dollar need not be paid. Any required interest
22 payments shall be made within 30 days after the payment.
23 (d) The Department shall enforce the provisions of this
24 Section pursuant to the enforcement powers granted to it by
25 law.
26 (e) The Department is hereby granted specific authority
27 to issue a cease and desist order, fine, or otherwise
28 penalize independent practice associations and
29 physician-hospital organizations that violate this Section.
30 The Department shall adopt reasonable rules to enforce
31 compliance with this Section by independent practice
32 associations and physician-hospital organizations.
33 (215 ILCS 5/357.9) (from Ch. 73, par. 969.9)
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1 Sec. 357.9. "TIME OF PAYMENT OF CLAIMS: Indemnities
2 payable under this policy for any loss other than loss for
3 which this policy provides any periodic payment will be paid
4 immediately upon receipt of due written proof of such loss.
5 Subject to due written proof of loss, all accrued indemnities
6 for loss for which this policy provides periodic payment will
7 be paid .... (insert period for payment which must not be
8 less frequently than monthly) and any balance remaining
9 unpaid upon the termination of liability, will be paid
10 immediately upon receipt of due written proof."
11 All claims and indemnities payable under the terms of a
12 policy of accident and health insurance shall be paid within
13 30 days following receipt by the insurer of due proof of
14 loss. Failure to pay within such period shall entitle the
15 insured to interest at the rate of 9 per cent per annum from
16 the 30th day after receipt of such proof of loss to the date
17 of late payment, provided that interest amounting to less
18 than one dollar need not be paid. An insured or an insured's
19 assignee shall be notified by the insurer, health maintenance
20 organization, managed care plan, health care plan, preferred
21 provider organization, or third party administrator of any
22 failure to provide sufficient documentation for a due proof
23 of loss within 30 days after receipt of the claim. Any
24 required interest payments shall be made within 30 days after
25 the payment.
26 The requirements of this Section shall apply to any
27 policy of accident and health insurance delivered, issued for
28 delivery, renewed or amended on or after 180 days following
29 the effective date of this amendatory Act of 1985. The
30 requirements of this Section also shall specifically apply to
31 any group policy of dental insurance only, delivered, issued
32 for delivery, renewed or amended on or after 180 days
33 following the effective date of this amendatory Act of 1987.
34 (Source: P.A. 85-395.)
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1 (215 ILCS 5/370a) (from Ch. 73, par. 982a)
2 Sec. 370a. Assignability of Accident and Health
3 Insurance.
4 No provision of the Illinois Insurance Code, or any other
5 law, prohibits an insured under any policy of accident and
6 health insurance or any other person who may be the owner of
7 any rights under such policy from making an assignment of all
8 or any part of his rights and privileges under the policy
9 including but not limited to the right to designate a
10 beneficiary and to have an individual policy issued in
11 accordance with its terms. Subject to the terms of the policy
12 or any contract relating thereto, an assignment by an insured
13 or by any other owner of rights under the policy, made before
14 or after the effective date of this amendatory Act of 1969 is
15 valid for the purpose of vesting in the assignee, in
16 accordance with any provisions included therein as to the
17 time at which it is effective, all rights and privileges so
18 assigned. However, such assignment is without prejudice to
19 the company on account of any payment it makes or individual
20 policy it issues before receipt of notice of the assignment.
21 This amendatory Act of 1969 acknowledges, declares and
22 codifies the existing right of assignment of interests under
23 accident and health insurance policies. If an enrollee or
24 insured of an insurer, health maintenance organization,
25 managed care plan, health care plan, preferred provider
26 organization, or third party administrator assigns a claim to
27 a health care professional or health care facility, then
28 payment shall be made directly to the health care
29 professional or health care facility including any interest
30 required under Section 356y of this Code for failure to pay
31 claims within 30 days after receipt by the insurer of due
32 proof of loss. Nothing in this Section shall be construed to
33 prevent any parties from reconciling duplicate payments.
34 (Source: P. A. 76-1709.)
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1 Section 15. The Health Maintenance Organization Act is
2 amended by changing Section 5-3 as follows:
3 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
4 Sec. 5-3. Insurance Code provisions.
5 (a) Health Maintenance Organizations shall be subject to
6 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
7 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
8 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
9 356y, 367i, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412,
10 444, and 444.1, paragraph (c) of subsection (2) of Section
11 367, and Articles VIII 1/2, XII, XII 1/2, XIII, XIII 1/2,
12 XXV, and XXVI of the Illinois Insurance Code.
13 (b) For purposes of the Illinois Insurance Code, except
14 for Sections 444 and 444.1 and Articles XIII and XIII 1/2,
15 Health Maintenance Organizations in the following categories
16 are deemed to be "domestic companies":
17 (1) a corporation authorized under the Dental
18 Service Plan Act or the Voluntary Health Services Plans
19 Act;
20 (2) a corporation organized under the laws of this
21 State; or
22 (3) a corporation organized under the laws of
23 another state, 30% or more of the enrollees of which are
24 residents of this State, except a corporation subject to
25 substantially the same requirements in its state of
26 organization as is a "domestic company" under Article
27 VIII 1/2 of the Illinois Insurance Code.
28 (c) In considering the merger, consolidation, or other
29 acquisition of control of a Health Maintenance Organization
30 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
31 (1) the Director shall give primary consideration
32 to the continuation of benefits to enrollees and the
33 financial conditions of the acquired Health Maintenance
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1 Organization after the merger, consolidation, or other
2 acquisition of control takes effect;
3 (2)(i) the criteria specified in subsection (1)(b)
4 of Section 131.8 of the Illinois Insurance Code shall not
5 apply and (ii) the Director, in making his determination
6 with respect to the merger, consolidation, or other
7 acquisition of control, need not take into account the
8 effect on competition of the merger, consolidation, or
9 other acquisition of control;
10 (3) the Director shall have the power to require
11 the following information:
12 (A) certification by an independent actuary of
13 the adequacy of the reserves of the Health
14 Maintenance Organization sought to be acquired;
15 (B) pro forma financial statements reflecting
16 the combined balance sheets of the acquiring company
17 and the Health Maintenance Organization sought to be
18 acquired as of the end of the preceding year and as
19 of a date 90 days prior to the acquisition, as well
20 as pro forma financial statements reflecting
21 projected combined operation for a period of 2
22 years;
23 (C) a pro forma business plan detailing an
24 acquiring party's plans with respect to the
25 operation of the Health Maintenance Organization
26 sought to be acquired for a period of not less than
27 3 years; and
28 (D) such other information as the Director
29 shall require.
30 (d) The provisions of Article VIII 1/2 of the Illinois
31 Insurance Code and this Section 5-3 shall apply to the sale
32 by any health maintenance organization of greater than 10% of
33 its enrollee population (including without limitation the
34 health maintenance organization's right, title, and interest
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1 in and to its health care certificates).
2 (e) In considering any management contract or service
3 agreement subject to Section 141.1 of the Illinois Insurance
4 Code, the Director (i) shall, in addition to the criteria
5 specified in Section 141.2 of the Illinois Insurance Code,
6 take into account the effect of the management contract or
7 service agreement on the continuation of benefits to
8 enrollees and the financial condition of the health
9 maintenance organization to be managed or serviced, and (ii)
10 need not take into account the effect of the management
11 contract or service agreement on competition.
12 (f) Except for small employer groups as defined in the
13 Small Employer Rating, Renewability and Portability Health
14 Insurance Act and except for medicare supplement policies as
15 defined in Section 363 of the Illinois Insurance Code, a
16 Health Maintenance Organization may by contract agree with a
17 group or other enrollment unit to effect refunds or charge
18 additional premiums under the following terms and conditions:
19 (i) the amount of, and other terms and conditions
20 with respect to, the refund or additional premium are set
21 forth in the group or enrollment unit contract agreed in
22 advance of the period for which a refund is to be paid or
23 additional premium is to be charged (which period shall
24 not be less than one year); and
25 (ii) the amount of the refund or additional premium
26 shall not exceed 20% of the Health Maintenance
27 Organization's profitable or unprofitable experience with
28 respect to the group or other enrollment unit for the
29 period (and, for purposes of a refund or additional
30 premium, the profitable or unprofitable experience shall
31 be calculated taking into account a pro rata share of the
32 Health Maintenance Organization's administrative and
33 marketing expenses, but shall not include any refund to
34 be made or additional premium to be paid pursuant to this
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1 subsection (f)). The Health Maintenance Organization and
2 the group or enrollment unit may agree that the
3 profitable or unprofitable experience may be calculated
4 taking into account the refund period and the immediately
5 preceding 2 plan years.
6 The Health Maintenance Organization shall include a
7 statement in the evidence of coverage issued to each enrollee
8 describing the possibility of a refund or additional premium,
9 and upon request of any group or enrollment unit, provide to
10 the group or enrollment unit a description of the method used
11 to calculate (1) the Health Maintenance Organization's
12 profitable experience with respect to the group or enrollment
13 unit and the resulting refund to the group or enrollment unit
14 or (2) the Health Maintenance Organization's unprofitable
15 experience with respect to the group or enrollment unit and
16 the resulting additional premium to be paid by the group or
17 enrollment unit.
18 In no event shall the Illinois Health Maintenance
19 Organization Guaranty Association be liable to pay any
20 contractual obligation of an insolvent organization to pay
21 any refund authorized under this Section.
22 (Source: P.A. 89-90, eff. 6-30-95; 90-25, eff. 1-1-98;
23 90-177, eff. 7-23-97; 90-372, eff. 7-1-98; 90-583, eff.
24 5-29-98; 90-655, eff. 7-30-98; 90-741, eff. 1-1-99; revised
25 9-8-98.)
26 Section 20. The Limited Health Service Organization Act
27 is amended by changing Section 4003 as follows:
28 (215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
29 Sec. 4003. Illinois Insurance Code provisions. Limited
30 health service organizations shall be subject to the
31 provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
32 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
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1 154.6, 154.7, 154.8, 155.04, 355.2, 356v, 356y, 401, 401.1,
2 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and
3 Articles VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and
4 XXVI of the Illinois Insurance Code. For purposes of the
5 Illinois Insurance Code, except for Sections 444 and 444.1
6 and Articles XIII and XIII 1/2, limited health service
7 organizations in the following categories are deemed to be
8 domestic companies:
9 (1) a corporation under the laws of this State; or
10 (2) a corporation organized under the laws of
11 another state, 30% of more of the enrollees of which are
12 residents of this State, except a corporation subject to
13 substantially the same requirements in its state of
14 organization as is a domestic company under Article VIII
15 1/2 of the Illinois Insurance Code.
16 (Source: P.A. 90-25, eff. 1-1-98; 90-583, eff. 5-29-98;
17 90-655, eff. 7-30-98.)
18 Section 25. The Voluntary Health Services Plans Act is
19 amended by changing Section 10 as follows:
20 (215 ILCS 165/10) (from Ch. 32, par. 604)
21 Sec. 10. Application of Insurance Code provisions.
22 Health services plan corporations and all persons interested
23 therein or dealing therewith shall be subject to the
24 provisions of Article XII 1/2 and Sections 3.1, 133, 140,
25 143, 143c, 149, 354, 355.2, 356r, 356t, 356u, 356v, 356w,
26 356x, 356y, 367.2, 401, 401.1, 402, 403, 403A, 408, 408.2,
27 and 412, and paragraphs (7) and (15) of Section 367 of the
28 Illinois Insurance Code.
29 (Source: P.A. 89-514, eff. 7-17-96; 90-7, eff. 6-10-97;
30 90-25, eff. 1-1-98; 90-655, eff. 7-30-98; 90-741, eff.
31 1-1-99.)
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1 Section 99. Effective date. This Act takes effect 120
2 days after becoming law.".