Public Act 099-0761
 
HB3549 EnrolledLRB099 09324 MLM 29529 b


  
    AN ACT concerning regulation.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  


 
    Section 5. 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, 136, 137, 139, 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, 155.22a, 355.2, 355.3, 
355b, 356g.5-1, 356m, 356v, 356w, 356x, 356y,
356z.2, 356z.4, 
356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 
356z.13, 356z.14, 356z.15, 356z.17, 356z.18, 356z.19, 356z.21, 
356z.22, 364, 364.01, 367.2, 367.2-5, 367i, 368a, 368b, 368c, 
368d, 368e, 370c,
370c.1, 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.

    (g) Rulemaking authority to implement Public Act 95-1045, 
if any, is conditioned on the rules being adopted in accordance 
with all provisions of the Illinois Administrative Procedure 
Act and all rules and procedures of the Joint Committee on 
Administrative Rules; any purported rule not so adopted, for 
whatever reason, is unauthorized. 
(Source: P.A. 97-282, eff. 8-9-11; 97-343, eff. 1-1-12; 97-437, 
eff. 8-18-11; 97-486, eff. 1-1-12; 97-592, eff. 1-1-12; 97-805, 
eff. 1-1-13; 97-813, eff. 7-13-12; 98-189, eff. 1-1-14; 
98-1091, eff. 1-1-15.)
 
    Section 10. The Managed Care Reform and Patient Rights Act 
is amended  by changing Section 45.1 as follows:
 
    (215 ILCS 134/45.1)
    Sec. 45.1. Medical exceptions procedures required.
    (a) Notwithstanding any other provision of law, on or after

the effective date of this amendatory Act of the 99th General

Assembly, every insurer licensed in this State to sell a policy

of group or individual accident and health insurance or a

health benefits plan shall Every health carrier that offers a 
qualified health plan, as defined in the federal Patient 
Protection and Affordable Care Act of 2010 (Public Law 
111-148), as amended by the federal Health Care and Education 
Reconciliation Act of 2010 (Public Law 111-152), and any 
amendments thereto, or regulations or guidance issued under 
those Acts (collectively, "the Federal Act"), directly to 
consumers in this State shall establish and maintain a medical 
exceptions process that allows covered persons or their 
authorized representatives to request any clinically 
appropriate prescription drug when (1) the drug is not covered 
based on the health benefit plan's formulary; (2) the health 
benefit plan is discontinuing coverage of the drug on the 
plan's formulary for reasons other than safety or other than 
because the prescription drug has been withdrawn from the 
market by the drug's manufacturer; (3) the prescription drug 
alternatives required to be used in accordance with a step 
therapy requirement (A) has been ineffective in the treatment 
of the enrollee's disease or medical condition or, based on 
both sound clinical evidence and medical and scientific 
evidence, the known relevant physical or mental 
characteristics of the enrollee, and the known characteristics 
of the drug regimen, is likely to be ineffective or adversely 
affect the drug's effectiveness or patient compliance or (B) 
has caused or, based on sound medical evidence, is likely to 
cause an adverse reaction or harm to the enrollee; or (4) the 
number of doses available under a dose restriction for the 
prescription drug (A) has been ineffective in the treatment of 
the enrollee's disease or medical condition or (B) based on 
both sound clinical evidence and medical and scientific 
evidence, the known relevant physical and mental 
characteristics of the enrollee, and known characteristics of 
the drug regimen, is likely to be ineffective or adversely 
affect the drug's effective or patient compliance.
    (b) The health carrier's established medical exceptions 
procedures must require, at a minimum, the following:
        (1) Any request for approval of coverage made verbally 
    or in writing (regardless of whether made using a paper or 
    electronic form or some other writing) at any time shall be 
    reviewed by appropriate health care professionals.
        (2) The health carrier must, within 72 hours after 
    receipt of a request made under subsection (a) of this 
    Section, either approve or deny the request.  In the case of 
    a denial, the health carrier shall provide the covered 
    person or the covered person's authorized representative 
    and the covered person's prescribing provider with the 
    reason for the denial, an alternative covered medication, 
    if applicable, and information regarding the procedure for 
    submitting an appeal to the denial.
        (3) In the case of an expedited coverage determination, 
    the health carrier must either approve or deny the request 
    within 24 hours after receipt of the request.  In the case 
    of a denial, the health carrier shall provide the covered 
    person or the covered person's authorized representative 
    and the covered person's prescribing provider with the 
    reason for the denial, an alternative covered medication, 
    if applicable, and information regarding the procedure for 
    submitting an appeal to the denial.
    (c) A step therapy requirement exception request shall be

approved if:
        (1) the required prescription drug is contraindicated;
        (2) the patient has tried the required prescription

    drug while under the patient's current or previous health

    insurance or health benefit plan and the prescribing

    provider submits evidence of failure or intolerance; or
        (3) the patient is stable on a prescription
drug 
    selected by his or her health care provider for the
medical 
    condition under consideration while on a
current or 
    previous health insurance or health benefit plan.
    (d) Upon the granting of an exception request, the insurer,

health plan, utilization review organization, or other entity

shall authorize the coverage for the drug
prescribed by the 
enrollee's treating health care provider,
to the extent the 
prescribed drug is a covered drug under the policy or contract 
up to the quantity covered.
    (e) Any approval of a medical exception request made 
pursuant to this Section shall be honored for 12 months 
following the date of the approval or until renewal of the 
plan. 
    (f) (c) Notwithstanding any other provision of this 
Section, nothing in this Section shall be interpreted or 
implemented in a manner not consistent with the federal Patient 
Protection and Affordable Care Act of 2010 (Public Law 
111-148), as amended by the federal Health Care and Education 
Reconciliation Act of 2010 (Public Law 111-152), and any 
amendments thereto, or regulations or guidance issued under 
those Acts Federal Act.

    (g) Nothing in this Section shall require or authorize the 
State agency responsible for the administration of the medical 
assistance program established under the Illinois Public Aid 
Code to approve, supply, or cover prescription drugs pursuant 
to the procedure established in this Section. 
(Source: P.A. 98-1035, eff. 8-25-14.)
 

    Section 99. Effective date. This Act takes effect January 
1, 2018.