State of Illinois
92nd General Assembly
Legislation

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92_HB5789

 
                                               LRB9215922JSpc

 1        AN ACT concerning insurance.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The Illinois Insurance  Code  is  amended  by
 5    changing Section 368a as follows:

 6        (215 ILCS 5/368a)
 7        Sec. 368a.  Timely payment for health care services.
 8        (a)  This Section applies to insurers, health maintenance
 9    organizations,   managed   care  plans,  health  care  plans,
10    preferred provider organizations, third party administrators,
11    independent  practice  associations,  and  physician-hospital
12    organizations (hereinafter  referred  to  as  "payors")  that
13    provide periodic payments, which are payments not requiring a
14    claim,   bill,   capitation  encounter  data,  or  capitation
15    reconciliation  reports,  such  as   prospective   capitation
16    payments,  to  health  care  professionals  and  health  care
17    facilities  to  provide  medical  or health care services for
18    insureds or enrollees.
19             (1)  A  payor  shall  make  periodic   payments   in
20        accordance  with  item  (3).   Failure  to  make periodic
21        payments  within the period of time specified in item (3)
22        shall entitle the health care professional or health care
23        facility to interest at the rate of 9% per year from  the
24        date  payment  was required to be made to the date of the
25        late payment, provided that interest  amounting  to  less
26        than $1 need not be paid.  Any required interest payments
27        shall be made within 30 days after the payment.
28             (2)  When  a  payor  requires  selection of a health
29        care professional or health care facility, the  selection
30        shall  be  completed  by the insured or enrollee no later
31        than 30 days after enrollment.  The payor  shall  provide
 
                            -2-                LRB9215922JSpc
 1        written  notice  of  this requirement to all insureds and
 2        enrollees. Nothing in this Section shall be construed  to
 3        require  a  payor to select a health care professional or
 4        health care facility for an insured or enrollee.
 5             (3)  A  payor  shall   provide   the   health   care
 6        professional  or  health care facility with notice of the
 7        selection as a health care professional  or  health  care
 8        facility by an insured or enrollee and the effective date
 9        of  the  selection  within  60  calendar  days  after the
10        selection.  No later than the 60th day following the date
11        an  insured  or  enrollee  has  selected  a  health  care
12        professional or health care facility  or  the  date  that
13        selection  becomes  effective,  whichever is later, or in
14        cases of retrospective enrollment  only,  30  days  after
15        notice  by  an  employer to the payor of the selection, a
16        payor  shall  begin  periodic  payment  of  the  required
17        amounts  to  the  insured's  or  enrollee's  health  care
18        professional or health care facility, or the designee  of
19        either, calculated from the date of selection or the date
20        the  selection becomes effective, whichever is later. All
21        subsequent payments shall be made in  accordance  with  a
22        monthly periodic cycle.
23        (b)  Notwithstanding any other provision of this Section,
24    independent   practice  associations  and  physician-hospital
25    organizations shall begin  making  periodic  payment  of  the
26    required  amounts within 60 days after an insured or enrollee
27    has selected  a  health  care  professional  or  health  care
28    facility  or  the  date  that  selection  becomes  effective,
29    whichever  is  later.  Before  January  1,  2001,  subsequent
30    periodic  payments  shall be made in accordance with a 60-day
31    periodic schedule, and after December  31,  2000,  subsequent
32    periodic  payments shall be made in accordance with a monthly
33    periodic schedule.
34        Notwithstanding any  other  provision  of  this  Section,
 
                            -3-                LRB9215922JSpc
 1    independent   practice  associations  and  physician-hospital
 2    organizations  shall  make  all  other  payments  for  health
 3    services within 60 days after receipt of due  proof  of  loss
 4    received  before  January  1,  2001  and within 30 days after
 5    receipt of due proof of  loss  received  after  December  31,
 6    2000.       Independent     practice     associations     and
 7    physician-hospital organizations shall  notify  the  insured,
 8    insured's  assignee, health care professional, or health care
 9    facility of any failure to provide  sufficient  documentation
10    for  a  due proof of loss within 30 days after receipt of the
11    claim for health services.
12        Failure to pay within  the  required  time  period  shall
13    entitle the payee to interest at the rate of 9% per year from
14    the  date the payment is due to the date of the late payment,
15    provided that interest amounting to less that $1 need not  be
16    paid.  Any required interest payments shall be made within 30
17    days after the payment.
18        (c)  All   insurers,  health  maintenance  organizations,
19    managed care plans, health  care  plans,  preferred  provider
20    organizations,  and  third  party administrators shall ensure
21    that  all  claims  and  indemnities  concerning  health  care
22    services other than for any periodic payment  shall  be  paid
23    within  30  days  after  receipt of due written proof of such
24    loss.   An   insured,   insured's   assignee,   health   care
25    professional, or health care facility shall  be  notified  of
26    any  known  failure to provide sufficient documentation for a
27    due proof of loss within 30 days after receipt of  the  claim
28    for  health care services.  Failure to pay within such period
29    shall entitle the payee to interest at the  rate  of  9%  per
30    year from the 30th day after receipt of such proof of loss to
31    the date of late payment, provided that interest amounting to
32    less than one dollar need not be paid.  Any required interest
33    payments shall be made within 30 days after the payment.
34        (d)  The  Department shall enforce the provisions of this
 
                            -4-                LRB9215922JSpc
 1    Section pursuant to the enforcement powers granted to  it  by
 2    law.
 3        (e)  The  Department is hereby granted specific authority
 4    to issue  a  cease  and  desist  order,  fine,  or  otherwise
 5    penalize     independent     practice     associations    and
 6    physician-hospital organizations that violate  this  Section.
 7    The  Department  shall  adopt  reasonable  rules  to  enforce
 8    compliance   with   this   Section  by  independent  practice
 9    associations and physician-hospital organizations.
10        (f)  Beginning 6  months  after  the  date  specified  in
11    Section  262  of the federal Health Insurance Portability and
12    Accountability Act of 1996,  pursuant  to  which  third-party
13    payors   are   required   to   comply   with  a  standard  or
14    implementation specification for the electronic  exchange  of
15    health  information  as  adopted or established by the United
16    States Secretary of Health and  Human  Services  pursuant  to
17    that Act, the provisions of this Section apply only to claims
18    submitted electronically to a third-party payor.
19        A  provider  and  a  third-party  payor  may enter into a
20    contractual arrangement under  which  the  third-party  payor
21    agrees   to   process   claims   that   are   not   submitted
22    electronically   because   of  the  financial  hardship  that
23    electronic submission of claims would create for the provider
24    or because of any other extenuating circumstance.
25    (Source: P.A. 91-605, eff. 12-14-99; 91-788, eff. 6-9-00.)

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