Public Act 93-0261
HB1074 Enrolled LRB093 05507 JLS 05598 b
AN ACT in relation to insurance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Insurance Code is amended by
changing Section 370k and adding Sections 368b, 368c, 368d,
and 368e as follows:
(215 ILCS 5/368b new)
Sec. 368b. Contracting procedures.
(a) A health care professional or health care provider
offered a contract by an insurer, health maintenance
organization, independent practice association, or physician
hospital organization for signature after the effective date
of this amendatory Act of the 93rd General Assembly shall be
provided with a proposed health care professional or health
care provider services contract including, if any, exhibits
and attachments that the contract indicates are to be
attached. Within 35 days after a written request, the health
care professional or health care provider offered a contract
shall be given the opportunity to review and obtain a copy of
the following: a specialty-specific fee schedule sample based
on a minimum of the 50 highest volume fee schedule codes with
the rates applicable to the health care professional or
health care provider to whom the contract is offered, the
network provider administration manual, and a summary
capitation schedule, if payment is made on a capitation
basis. If 50 codes do not exist for a particular specialty,
the health care professional or health care provider offered
a contract shall be given the opportunity to review or obtain
a copy of a fee schedule sample with the codes applicable to
that particular specialty. This information may be provided
electronically. An insurer, health maintenance organization,
independent practice association, or physician hospital
organization may substitute the fee schedule sample with a
document providing reference to the information needed to
calculate the fee schedule that is available to the public at
no charge and the percentage or conversion factor at which
the insurer, health maintenance organization, preferred
provider organization, independent practice association, or
physician hospital organization sets its rates.
(b) The fee schedule, the capitation schedule, and the
network provider administration manual constitute
confidential, proprietary, and trade secret information and
are subject to the provisions of the Illinois Trade Secrets
Act. The health care professional or health care provider
receiving such protected information may disclose the
information on a need to know basis and only to individuals
and entities that provide services directly related to the
health care professional's or health care provider's decision
to enter into the contract or keep the contract in force. Any
person or entity receiving or reviewing such protected
information pursuant to this Section shall not disclose the
information to any other person, organization, or entity,
unless the disclosure is requested pursuant to a valid court
order or required by a state or federal government agency.
Individuals or entities receiving such information from a
health care professional or health care provider as
delineated in this subsection are subject to the provisions
of the Illinois Trade Secrets Act.
(c) The health care professional or health care provider
shall be allowed at least 30 days to review the health care
professional or health care provider services contract,
including exhibits and attachments, if any, before signing.
The 30-day review period begins upon receipt of the health
care professional or health care provider services contract,
unless the information available upon request in subsection
(a) is not included. If information is not included in the
professional services contract and is requested pursuant to
subsection (a), the 30-day review period begins on the date
of receipt of the information. Nothing in this subsection
shall prohibit a health care professional or health care
provider from signing a contract prior to the expiration of
the 30-day review period.
(d) The insurer, health maintenance organization,
independent practice association, or physician hospital
organization shall provide all contracted health care
professionals or health care providers with any changes to
the fee schedule provided under subsection (a) not later than
35 days after the effective date of the changes, unless such
changes are specified in the contract and the health care
professional or health care provider is able to calculate the
changed rates based on information in the contract and
information available to the public at no charge. For the
purposes of this subsection, "changes" means an increase or
decrease in the fee schedule referred to in subsection (a).
This information may be made available by mail, e-mail,
newsletter, website listing, or other reasonable method. Upon
request, a health care professional or health care provider
may request an updated copy of the fee schedule referred to
in subsection (a) every calendar quarter.
(e) Upon termination of a contract with an insurer,
health maintenance organization, independent practice
association, or physician hospital organization and at the
request of the patient, a health care professional or health
care provider shall transfer copies of the patient's medical
records. Any other provision of law notwithstanding, the
costs for copying and transferring copies of medical records
shall be assigned per the arrangements agreed upon, if any,
in the health care professional or health care provider
services contract.
(215 ILCS 5/368c new)
Sec. 368c. Remittance advice and procedures.
(a) A remittance advice shall be furnished to a health
care professional or health care provider that identifies the
disposition of each claim. The remittance advice shall
identify the services billed; the patient responsibility, if
any; the actual payment, if any, for the services billed; and
the reason for any reduction to the amount for which the
claim was submitted. For any reductions to the amount for
which the claim was submitted, the remittance shall identify
any withholds and the reason for any denial or reduction.
A remittance advice for capitation or prospective payment
arrangements shall be furnished to a health care professional
or health care provider pursuant to a contract with an
insurer, health maintenance organization, independent
practice association, or physician hospital organization in
accordance with the terms of the contract.
(b) When health care services are provided by a
non-participating health care professional or health care
provider, an insurer, health maintenance organization,
independent practice association, or physician hospital
organization may pay for covered services either to a patient
directly or to the non-participating health care professional
or health care provider.
(c) When a person presents a benefits information card,
a health care professional or health care provider shall make
a good faith effort to inform the person if the health care
professional or health care provider has a participation
contract with the insurer, health maintenance organization,
or other entity identified on the card.
(215 ILCS 5/368d new)
Sec. 368d. Recoupments.
(a) A health care professional or health care provider
shall be provided a remittance advice, which must include an
explanation of a recoupment or offset taken by an insurer,
health maintenance organization, independent practice
association, or physician hospital organization, if any. The
recoupment explanation shall, at a minimum, include the name
of the patient; the date of service; the service code or if
no service code is available a service description; the
recoupment amount; and the reason for the recoupment or
offset. In addition, an insurer, health maintenance
organization, independent practice association, or physician
hospital organization shall provide with the remittance
advice a telephone number or mailing address to initiate an
appeal of the recoupment or offset.
(b) It is not a recoupment when a health care
professional or health care provider is paid an amount
prospectively or concurrently under a contract with an
insurer, health maintenance organization, independent
practice association, or physician hospital organization that
requires a retrospective reconciliation based upon specific
conditions outlined in the contract.
(215 ILCS 5/368e new)
Sec. 368e. Administration and enforcement.
(a) Other than the duties specifically created in
Sections 368b, 368c, and 368d, nothing in those Sections is
intended to preclude, prevent, or require the adoption,
modification, or termination of any utilization management,
quality management, or claims processing methodologies or
other provisions of a contract applicable to services
provided under a contract between an insurer, health
maintenance organization, independent practice association,
or physician hospital organization and a health care
professional or health care provider.
(b) Nothing in Sections 368b, 368c, and 368d precludes,
prevents, or requires the adoption, modification, or
termination of any health plan term, benefit, coverage or
eligibility provision, or payment methodology.
(c) The provisions of Sections 368b, 368c, and 368d are
deemed incorporated into health care professional and health
care provider service contracts entered into on or before the
effective date of this amendatory Act of the 93rd General
Assembly and do not require an insurer, health maintenance
organization, independent practice association, or physician
hospital organization to renew or renegotiate the contracts
with a health care professional or health care provider.
(d) The Department shall enforce the provisions of this
Section and Sections 368b, 368c, and 368d pursuant to the
enforcement powers granted to it by law.
(e) The Department is hereby granted specific authority
to issue a cease and desist order against, fine, or otherwise
penalize independent practice associations and
physician-hospital organizations for violations.
(f) The Department shall adopt reasonable rules to
enforce compliance with this Section and Sections 368b, 368c,
and 368d.
(215 ILCS 5/370k) (from Ch. 73, par. 982k)
Sec. 370k. Registration.
(a) All administrators of a preferred provider program
subject to this Article shall register with the Department of
Insurance, which shall by rule establish criteria for such
registration including minimum solvency requirements and an
annual registration fee for each administrator.
(b) The Department of Insurance shall compile and
maintain a listing updated at least annually of
administrators and insurers offering agreements authorized
under this Article.
(c) Preferred provider administrators are subject to the
provisions of Sections 368b, 368c, 368d, and 368e of this
Code.
(Source: P.A. 84-618.)
Section 10. The Health Maintenance Organization Act is
amended by changing Section 5-3 as follows:
(215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
Sec. 5-3. Insurance Code provisions.
(a) Health Maintenance Organizations shall be subject to
the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
356y, 356z.2, 367i, 368a, 368b, 368c, 368d, 368e, 401, 401.1,
402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1,
paragraph (c) of subsection (2) of Section 367, and Articles
IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of
the Illinois Insurance Code.
(b) For purposes of the Illinois Insurance Code, except
for Sections 444 and 444.1 and Articles XIII and XIII 1/2,
Health Maintenance Organizations in the following categories
are deemed to be "domestic companies":
(1) a corporation authorized under the Dental
Service Plan Act or the Voluntary Health Services Plans
Act;
(2) a corporation organized under the laws of this
State; or
(3) a corporation organized under the laws of
another state, 30% or more of the enrollees of which are
residents of this State, except a corporation subject to
substantially the same requirements in its state of
organization as is a "domestic company" under Article
VIII 1/2 of the Illinois Insurance Code.
(c) In considering the merger, consolidation, or other
acquisition of control of a Health Maintenance Organization
pursuant to Article VIII 1/2 of the Illinois Insurance Code,
(1) the Director shall give primary consideration
to the continuation of benefits to enrollees and the
financial conditions of the acquired Health Maintenance
Organization after the merger, consolidation, or other
acquisition of control takes effect;
(2)(i) the criteria specified in subsection (1)(b)
of Section 131.8 of the Illinois Insurance Code shall not
apply and (ii) the Director, in making his determination
with respect to the merger, consolidation, or other
acquisition of control, need not take into account the
effect on competition of the merger, consolidation, or
other acquisition of control;
(3) the Director shall have the power to require
the following information:
(A) certification by an independent actuary of
the adequacy of the reserves of the Health
Maintenance Organization sought to be acquired;
(B) pro forma financial statements reflecting
the combined balance sheets of the acquiring company
and the Health Maintenance Organization sought to be
acquired as of the end of the preceding year and as
of a date 90 days prior to the acquisition, as well
as pro forma financial statements reflecting
projected combined operation for a period of 2
years;
(C) a pro forma business plan detailing an
acquiring party's plans with respect to the
operation of the Health Maintenance Organization
sought to be acquired for a period of not less than
3 years; and
(D) such other information as the Director
shall require.
(d) The provisions of Article VIII 1/2 of the Illinois
Insurance Code and this Section 5-3 shall apply to the sale
by any health maintenance organization of greater than 10% of
its enrollee population (including without limitation the
health maintenance organization's right, title, and interest
in and to its health care certificates).
(e) In considering any management contract or service
agreement subject to Section 141.1 of the Illinois Insurance
Code, the Director (i) shall, in addition to the criteria
specified in Section 141.2 of the Illinois Insurance Code,
take into account the effect of the management contract or
service agreement on the continuation of benefits to
enrollees and the financial condition of the health
maintenance organization to be managed or serviced, and (ii)
need not take into account the effect of the management
contract or service agreement on competition.
(f) Except for small employer groups as defined in the
Small Employer Rating, Renewability and Portability Health
Insurance Act and except for medicare supplement policies as
defined in Section 363 of the Illinois Insurance Code, a
Health Maintenance Organization may by contract agree with a
group or other enrollment unit to effect refunds or charge
additional premiums under the following terms and conditions:
(i) the amount of, and other terms and conditions
with respect to, the refund or additional premium are set
forth in the group or enrollment unit contract agreed in
advance of the period for which a refund is to be paid or
additional premium is to be charged (which period shall
not be less than one year); and
(ii) the amount of the refund or additional premium
shall not exceed 20% of the Health Maintenance
Organization's profitable or unprofitable experience with
respect to the group or other enrollment unit for the
period (and, for purposes of a refund or additional
premium, the profitable or unprofitable experience shall
be calculated taking into account a pro rata share of the
Health Maintenance Organization's administrative and
marketing expenses, but shall not include any refund to
be made or additional premium to be paid pursuant to this
subsection (f)). The Health Maintenance Organization and
the group or enrollment unit may agree that the
profitable or unprofitable experience may be calculated
taking into account the refund period and the immediately
preceding 2 plan years.
The Health Maintenance Organization shall include a
statement in the evidence of coverage issued to each enrollee
describing the possibility of a refund or additional premium,
and upon request of any group or enrollment unit, provide to
the group or enrollment unit a description of the method used
to calculate (1) the Health Maintenance Organization's
profitable experience with respect to the group or enrollment
unit and the resulting refund to the group or enrollment unit
or (2) the Health Maintenance Organization's unprofitable
experience with respect to the group or enrollment unit and
the resulting additional premium to be paid by the group or
enrollment unit.
In no event shall the Illinois Health Maintenance
Organization Guaranty Association be liable to pay any
contractual obligation of an insolvent organization to pay
any refund authorized under this Section.
(Source: P.A. 91-357, eff. 7-29-99; 91-406, eff. 1-1-00;
91-549, eff. 8-14-99; 91-605, eff. 12-14-99; 91-788, eff.
6-9-00; 92-764, eff. 1-1-03.)
Section 99. Effective date. This Act takes effect January
1, 2004.