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91_HB2713enr
HB2713 Enrolled LRB9103967SMpr
1 AN ACT concerning payment for medical services, amending
2 named Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The State Employees Group Insurance Act of
6 1971 is amended by adding Section 6.12 as follows:
7 (5 ILCS 375/6-12 new)
8 Sec. 6.12. Payment for services. The program of health
9 benefits is subject to the provisions of Section 356y of the
10 Illinois Insurance Code.
11 Section 10. The Illinois Insurance Code is amended by
12 adding Section 356y and changing Sections 357.9 and 370a as
13 follows:
14 (215 ILCS 5/356y new)
15 Sec. 356y. Timely payment for health care services.
16 (a) This Section applies to insurers, health maintenance
17 organizations, managed care plans, health care plans,
18 preferred provider organizations, third party administrators,
19 independent practice associations, and physician-hospital
20 organizations (hereinafter referred to as "payors") that
21 provide periodic payments, which are payments not requiring a
22 claim, bill, capitation encounter data, or capitation
23 reconciliation reports, such as prospective capitation
24 payments, to health care professionals and health care
25 facilities to provide medical or health care services for
26 insureds or enrollees.
27 (1) A payor shall make periodic payments in
28 accordance with item (3). Failure to make periodic
29 payments within the period of time specified in item (3)
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1 shall entitle the health care professional or health care
2 facility to interest at the rate of 9% per year from the
3 date payment was required to be made to the date of the
4 late payment, provided that interest amounting to less
5 than $1 need not be paid. Any required interest payments
6 shall be made within 30 days after the payment.
7 (2) When a payor requires selection of a health
8 care professional or health care facility, the selection
9 shall be completed by the insured or enrollee no later
10 than 30 days after enrollment. The payor shall provide
11 written notice of this requirement to all insureds and
12 enrollees. Nothing in this Section shall be construed to
13 require a payor to select a health care professional or
14 health care facility for an insured or enrollee.
15 (3) A payor shall provide the health care
16 professional or health care facility with notice of the
17 selection as a health care professional or health care
18 facility by an insured or enrollee and the effective date
19 of the selection within 60 calendar days after the
20 selection. No later than the 60th day following the date
21 an insured or enrollee has selected a health care
22 professional or health care facility or the date that
23 selection becomes effective, whichever is later, or in
24 cases of retrospective enrollment only, 30 days after
25 notice by an employer to the payor of the selection, a
26 payor shall begin periodic payment of the required
27 amounts to the insured's or enrollee's health care
28 professional or health care facility, or the designee of
29 either, calculated from the date of selection or the date
30 the selection becomes effective, whichever is later. All
31 subsequent payments shall be made in accordance with a
32 monthly periodic cycle.
33 (b) Notwithstanding any other provision of this Section,
34 independent practice associations and physician-hospital
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1 organizations shall begin making periodic payment of the
2 required amounts within 60 days after an insured or enrollee
3 has selected a health care professional or health care
4 facility or the date that selection becomes effective,
5 whichever is later. Before January 1, 2001, subsequent
6 periodic payments shall be made in accordance with a 60-day
7 periodic schedule, and after December 31, 2000, subsequent
8 periodic payments shall be made in accordance with a monthly
9 periodic schedule.
10 Notwithstanding any other provision of this Section,
11 independent practice associations and physician-hospital
12 organizations shall make all other payments for health
13 services within 60 days after receipt of due proof of loss
14 received before January 1, 2001 and within 30 days after
15 receipt of due proof of loss received after December 31,
16 2000. Independent practice associations and
17 physician-hospital organizations shall notify the insured,
18 insured's assignee, health care professional, or health care
19 facility of any failure to provide sufficient documentation
20 for a due proof of loss within 30 days after receipt of the
21 claim for health services.
22 Failure to pay within the required time period shall
23 entitle the payee to interest at the rate of 9% per year from
24 the date the payment is due to the date of the late payment,
25 provided that interest amounting to less that $1 need not be
26 paid. Any required interest payments shall be made within 30
27 days after the payment.
28 (c) All insurers, health maintenance organizations,
29 managed care plans, health care plans, preferred provider
30 organizations, and third party administrators shall ensure
31 that all claims and indemnities concerning health care
32 services other than for any periodic payment shall be paid
33 within 30 days after receipt of due written proof of such
34 loss. An insured, insured's assignee, health care
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1 professional, or health care facility shall be notified of
2 any known failure to provide sufficient documentation for a
3 due proof of loss within 30 days after receipt of the claim
4 for health care services. Failure to pay within such period
5 shall entitle the payee to interest at the rate of 9% per
6 year from the 30th day after receipt of such proof of loss to
7 the date of late payment, provided that interest amounting to
8 less than one dollar need not be paid. Any required interest
9 payments shall be made within 30 days after the payment.
10 (d) The Department shall enforce the provisions of this
11 Section pursuant to the enforcement powers granted to it by
12 law.
13 (e) The Department is hereby granted specific authority
14 to issue a cease and desist order, fine, or otherwise
15 penalize independent practice associations and
16 physician-hospital organizations that violate this Section.
17 The Department shall adopt reasonable rules to enforce
18 compliance with this Section by independent practice
19 associations and physician-hospital organizations.
20 (215 ILCS 5/357.9) (from Ch. 73, par. 969.9)
21 Sec. 357.9. "TIME OF PAYMENT OF CLAIMS: Indemnities
22 payable under this policy for any loss other than loss for
23 which this policy provides any periodic payment will be paid
24 immediately upon receipt of due written proof of such loss.
25 Subject to due written proof of loss, all accrued indemnities
26 for loss for which this policy provides periodic payment will
27 be paid .... (insert period for payment which must not be
28 less frequently than monthly) and any balance remaining
29 unpaid upon the termination of liability, will be paid
30 immediately upon receipt of due written proof."
31 All claims and indemnities payable under the terms of a
32 policy of accident and health insurance shall be paid within
33 30 days following receipt by the insurer of due proof of
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1 loss. Failure to pay within such period shall entitle the
2 insured to interest at the rate of 9 per cent per annum from
3 the 30th day after receipt of such proof of loss to the date
4 of late payment, provided that interest amounting to less
5 than one dollar need not be paid. An insured or an insured's
6 assignee shall be notified by the insurer, health maintenance
7 organization, managed care plan, health care plan, preferred
8 provider organization, or third party administrator of any
9 known failure to provide sufficient documentation for a due
10 proof of loss within 30 days after receipt of the claim. Any
11 required interest payments shall be made within 30 days after
12 the payment.
13 The requirements of this Section shall apply to any
14 policy of accident and health insurance delivered, issued for
15 delivery, renewed or amended on or after 180 days following
16 the effective date of this amendatory Act of 1985. The
17 requirements of this Section also shall specifically apply to
18 any group policy of dental insurance only, delivered, issued
19 for delivery, renewed or amended on or after 180 days
20 following the effective date of this amendatory Act of 1987.
21 (Source: P.A. 85-395.)
22 (215 ILCS 5/370a) (from Ch. 73, par. 982a)
23 Sec. 370a. Assignability of Accident and Health
24 Insurance.
25 No provision of the Illinois Insurance Code, or any other
26 law, prohibits an insured under any policy of accident and
27 health insurance or any other person who may be the owner of
28 any rights under such policy from making an assignment of all
29 or any part of his rights and privileges under the policy
30 including but not limited to the right to designate a
31 beneficiary and to have an individual policy issued in
32 accordance with its terms. Subject to the terms of the policy
33 or any contract relating thereto, an assignment by an insured
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1 or by any other owner of rights under the policy, made before
2 or after the effective date of this amendatory Act of 1969 is
3 valid for the purpose of vesting in the assignee, in
4 accordance with any provisions included therein as to the
5 time at which it is effective, all rights and privileges so
6 assigned. However, such assignment is without prejudice to
7 the company on account of any payment it makes or individual
8 policy it issues before receipt of notice of the assignment.
9 This amendatory Act of 1969 acknowledges, declares and
10 codifies the existing right of assignment of interests under
11 accident and health insurance policies. If an enrollee or
12 insured of an insurer, health maintenance organization,
13 managed care plan, health care plan, preferred provider
14 organization, or third party administrator assigns a claim to
15 a health care professional or health care facility, then
16 payment shall be made directly to the health care
17 professional or health care facility including any interest
18 required under Section 356y of this Code for failure to pay
19 claims within 30 days after receipt by the insurer of due
20 proof of loss. Nothing in this Section shall be construed to
21 prevent any parties from reconciling duplicate payments.
22 (Source: P. A. 76-1709.)
23 Section 15. The Health Maintenance Organization Act is
24 amended by changing Section 5-3 as follows:
25 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
26 Sec. 5-3. Insurance Code provisions.
27 (a) Health Maintenance Organizations shall be subject to
28 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
29 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
30 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
31 356y, 367i, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412,
32 444, and 444.1, paragraph (c) of subsection (2) of Section
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1 367, and Articles VIII 1/2, XII, XII 1/2, XIII, XIII 1/2,
2 XXV, and XXVI of the Illinois Insurance Code.
3 (b) For purposes of the Illinois Insurance Code, except
4 for Sections 444 and 444.1 and Articles XIII and XIII 1/2,
5 Health Maintenance Organizations in the following categories
6 are deemed to be "domestic companies":
7 (1) a corporation authorized under the Dental
8 Service Plan Act or the Voluntary Health Services Plans
9 Act;
10 (2) a corporation organized under the laws of this
11 State; or
12 (3) a corporation organized under the laws of
13 another state, 30% or more of the enrollees of which are
14 residents of this State, except a corporation subject to
15 substantially the same requirements in its state of
16 organization as is a "domestic company" under Article
17 VIII 1/2 of the Illinois Insurance Code.
18 (c) In considering the merger, consolidation, or other
19 acquisition of control of a Health Maintenance Organization
20 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
21 (1) the Director shall give primary consideration
22 to the continuation of benefits to enrollees and the
23 financial conditions of the acquired Health Maintenance
24 Organization after the merger, consolidation, or other
25 acquisition of control takes effect;
26 (2)(i) the criteria specified in subsection (1)(b)
27 of Section 131.8 of the Illinois Insurance Code shall not
28 apply and (ii) the Director, in making his determination
29 with respect to the merger, consolidation, or other
30 acquisition of control, need not take into account the
31 effect on competition of the merger, consolidation, or
32 other acquisition of control;
33 (3) the Director shall have the power to require
34 the following information:
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1 (A) certification by an independent actuary of
2 the adequacy of the reserves of the Health
3 Maintenance Organization sought to be acquired;
4 (B) pro forma financial statements reflecting
5 the combined balance sheets of the acquiring company
6 and the Health Maintenance Organization sought to be
7 acquired as of the end of the preceding year and as
8 of a date 90 days prior to the acquisition, as well
9 as pro forma financial statements reflecting
10 projected combined operation for a period of 2
11 years;
12 (C) a pro forma business plan detailing an
13 acquiring party's plans with respect to the
14 operation of the Health Maintenance Organization
15 sought to be acquired for a period of not less than
16 3 years; and
17 (D) such other information as the Director
18 shall require.
19 (d) The provisions of Article VIII 1/2 of the Illinois
20 Insurance Code and this Section 5-3 shall apply to the sale
21 by any health maintenance organization of greater than 10% of
22 its enrollee population (including without limitation the
23 health maintenance organization's right, title, and interest
24 in and to its health care certificates).
25 (e) In considering any management contract or service
26 agreement subject to Section 141.1 of the Illinois Insurance
27 Code, the Director (i) shall, in addition to the criteria
28 specified in Section 141.2 of the Illinois Insurance Code,
29 take into account the effect of the management contract or
30 service agreement on the continuation of benefits to
31 enrollees and the financial condition of the health
32 maintenance organization to be managed or serviced, and (ii)
33 need not take into account the effect of the management
34 contract or service agreement on competition.
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1 (f) Except for small employer groups as defined in the
2 Small Employer Rating, Renewability and Portability Health
3 Insurance Act and except for medicare supplement policies as
4 defined in Section 363 of the Illinois Insurance Code, a
5 Health Maintenance Organization may by contract agree with a
6 group or other enrollment unit to effect refunds or charge
7 additional premiums under the following terms and conditions:
8 (i) the amount of, and other terms and conditions
9 with respect to, the refund or additional premium are set
10 forth in the group or enrollment unit contract agreed in
11 advance of the period for which a refund is to be paid or
12 additional premium is to be charged (which period shall
13 not be less than one year); and
14 (ii) the amount of the refund or additional premium
15 shall not exceed 20% of the Health Maintenance
16 Organization's profitable or unprofitable experience with
17 respect to the group or other enrollment unit for the
18 period (and, for purposes of a refund or additional
19 premium, the profitable or unprofitable experience shall
20 be calculated taking into account a pro rata share of the
21 Health Maintenance Organization's administrative and
22 marketing expenses, but shall not include any refund to
23 be made or additional premium to be paid pursuant to this
24 subsection (f)). The Health Maintenance Organization and
25 the group or enrollment unit may agree that the
26 profitable or unprofitable experience may be calculated
27 taking into account the refund period and the immediately
28 preceding 2 plan years.
29 The Health Maintenance Organization shall include a
30 statement in the evidence of coverage issued to each enrollee
31 describing the possibility of a refund or additional premium,
32 and upon request of any group or enrollment unit, provide to
33 the group or enrollment unit a description of the method used
34 to calculate (1) the Health Maintenance Organization's
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1 profitable experience with respect to the group or enrollment
2 unit and the resulting refund to the group or enrollment unit
3 or (2) the Health Maintenance Organization's unprofitable
4 experience with respect to the group or enrollment unit and
5 the resulting additional premium to be paid by the group or
6 enrollment unit.
7 In no event shall the Illinois Health Maintenance
8 Organization Guaranty Association be liable to pay any
9 contractual obligation of an insolvent organization to pay
10 any refund authorized under this Section.
11 (Source: P.A. 89-90, eff. 6-30-95; 90-25, eff. 1-1-98;
12 90-177, eff. 7-23-97; 90-372, eff. 7-1-98; 90-583, eff.
13 5-29-98; 90-655, eff. 7-30-98; 90-741, eff. 1-1-99; revised
14 9-8-98.)
15 Section 20. The Limited Health Service Organization Act
16 is amended by changing Section 4003 as follows:
17 (215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
18 Sec. 4003. Illinois Insurance Code provisions. Limited
19 health service organizations shall be subject to the
20 provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
21 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
22 154.6, 154.7, 154.8, 155.04, 355.2, 356v, 356y, 401, 401.1,
23 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and
24 Articles VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and
25 XXVI of the Illinois Insurance Code. For purposes of the
26 Illinois Insurance Code, except for Sections 444 and 444.1
27 and Articles XIII and XIII 1/2, limited health service
28 organizations in the following categories are deemed to be
29 domestic companies:
30 (1) a corporation under the laws of this State; or
31 (2) a corporation organized under the laws of
32 another state, 30% of more of the enrollees of which are
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1 residents of this State, except a corporation subject to
2 substantially the same requirements in its state of
3 organization as is a domestic company under Article VIII
4 1/2 of the Illinois Insurance Code.
5 (Source: P.A. 90-25, eff. 1-1-98; 90-583, eff. 5-29-98;
6 90-655, eff. 7-30-98.)
7 Section 25. The Voluntary Health Services Plans Act is
8 amended by changing Section 10 as follows:
9 (215 ILCS 165/10) (from Ch. 32, par. 604)
10 Sec. 10. Application of Insurance Code provisions.
11 Health services plan corporations and all persons interested
12 therein or dealing therewith shall be subject to the
13 provisions of Article XII 1/2 and Sections 3.1, 133, 140,
14 143, 143c, 149, 354, 355.2, 356r, 356t, 356u, 356v, 356w,
15 356x, 356y, 367.2, 401, 401.1, 402, 403, 403A, 408, 408.2,
16 and 412, and paragraphs (7) and (15) of Section 367 of the
17 Illinois Insurance Code.
18 (Source: P.A. 89-514, eff. 7-17-96; 90-7, eff. 6-10-97;
19 90-25, eff. 1-1-98; 90-655, eff. 7-30-98; 90-741, eff.
20 1-1-99.)
21 Section 99. Effective date. This Act takes effect 120
22 days after becoming law.
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