HB1525 94TH GENERAL ASSEMBLY

LRB094 07965 RXD 38146 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB1525

Introduced 2/10/2005, by Rep. Linda Chapa LaVia - Marlow H. Colvin - Michael P. McAuliffe - Jack McGuire - Elaine Nekritz

SYNOPSIS AS INTRODUCED:

815 ILCS 505/2B.3

Amends the Consumer Fraud and Deceptive Business Practices Act. Provides that it is an unlawful practice if an entity which sells health-related cash discount cards fails to register as an administrator of a preferred provider organization with the Illinois Division of Insurance. Prohibits a health-related discount card organization from engaging in specific activities. Provides that it is an unlawful practice if certain disclosures are not made in writing to a prospective member before purchase. Provides that it is an unlawful practice if the health-related cash discount card organization does not provide the customer a right to cancel, with full reimbursement of all membership and enrollment fees, within 30 days after the date of purchase. Provides that it is an unlawful practice if a health-related cash discount card does not safeguard protected health information.

A BILL FOR

AN ACT concerning health.

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

Section 5. The Consumer Fraud and Deceptive Business Practices Act is amended by changing Section 2B.3 as follows:

(815 ILCS 505/2B.3)

Sec. 2B.3. Health-related cash discount cards.

(a) Deceptive sale or promotion of health-related cash discount cards. It is an unlawful practice for any person to sell, market, promote, advertise, or otherwise distribute any card or other purchasing mechanism or device that purports to offer discounts or access to discounts from health care providers in health related purchases if:

(1) the card or other purchasing mechanism or device does not expressly provide in bold and prominent type that the discounts are not insurance;

(2) the discounts are not specifically authorized by a contract with each health care provider listed in conjunction with the card or other purchasing mechanism or device as outlined in subsection (e) of this Section; or

(3) the discounts or access to discounts offered or the range of discounts or access to the range of discounts offered are misleading, deceptive or fraudulent, regardless of the literal wording used.

(b) Registration. It is an unlawful practice if an entity which sells health-related cash discount cards fails to register as an administrator of a preferred provider organization with the Illinois Division of Insurance as required by Article XX 1/2 of the Illinois Insurance Code.

(c) Prohibited activities of a health-related cash discount card organization.

(1) It is unlawful practice for a health-related cash discount card organization to:

(A) Use in its advertisements, marketing material, brochures, and discount cards the term "insurance" except as otherwise provided in this Section;

(B) Use in its advertisements, marketing material, brochures, and discount cards the terms "health plan", "coverage", "copay", "copayments", "preexisting conditions", "guaranteed issue", "premium", "enrollment", "PPO", "preferred provider organization", or other terms that could reasonably mislead a person into believing the health-related cash discount card was health insurance;

(C) Have restrictions on free access to plan providers, including, but not limited to, waiting periods and notification periods; or

(D) Pay providers any fees for medical services.

(2) It is an unlawful practice for a health-related cash discount card organization to collect or accept money from a member for payment to a provider for specific medical services furnished or to be furnished to the member.

(3) It is an unlawful practice if a health-related cash discount card organization offers for sale a type of service without having a provider available within a prospective customer's service area (area defined by consumer's zip code, or within 50 miles thereof) that is contractually bound to honor the discount card.

(d) Prepayment disclosures.

(1) It is an unlawful practice if the following disclosures are not made in writing to any prospective member before purchase and are not on the first page of any advertisements, marketing materials, or brochures relating to a health-related cash discount card:

(A) That the plan provides discounts at certain health care providers for medical services.

(B) That the plan does not make payments directly to the providers of medical services.

(C) That the plan member is obligated to pay for all health care services but will receive a discount from those health care providers who have contracted with the discount plan organization.

(D) The corporate name, locations, and toll-free customer service number of the licensed health-related cash discount card organization.

The disclosures must be printed in not less than 12-point font or no smaller than the largest font on the page if larger than 12-point font.

(2) It is an unlawful practice if a health-related cash discount card organization does not provide each prospective customer before purchase:

(A) A written list for each type of service offered in conjunction with the health-related cash discount card containing the name, address, and phone number of the closest 25 health care providers in the prospective customer's service area (area defined by consumer's zip code, or within 50 miles thereof) that are contractually bound to honor the discount card. The written list of providers may be provided electronically if requested in that format by the prospective customer.

(B) For each provider disclosed in subparagraph (A) of paragraph (2) of this subsection, the health-related cash discount card organization must provide the prospective member with the negotiated fee schedule for the most common health care procedures, and other comparable rate information which supports the discount claims of the discount plan organization. The fee schedules may be provided electronically if requested in that format by the prospective customer.

(e) Right to cancel. It is an unlawful practice if the health-related cash discount card organization does not provide the customer a right to cancel, with full reimbursement of all membership and enrollment fees, within 30 days after the date of purchase.

(f) Provider agreements.

(1) The contract required in paragraph (2) of subsection (a) of this Section may be entered into directly by the provider or by a provider network to which the provider belongs.

(2) It is an unlawful practice if a provider agreement does not include the following:

(A) A list of the services and products to be provided at a discount.

(B) The amount or amounts of the discounts or, alternatively, a fee schedule which reflects the provider's discounted rates.

(C) That the provider will not charge members more than the discounted rates.

(3) It is an unlawful practice if a provider agreement between a health-related cash discount card organization and a provider network does not require that the provider network have written agreements with its providers which:

(A) Contain the terms described in paragraph (2) of this subsection.

(B) Authorize the provider network to contract with the health-related cash discount card organization on behalf of the provider.

(C) Require the network to maintain an up-to-date list of its contracted providers and to provide that list on a monthly basis to the health-related cash discount card organization.

(4) It is an unlawful practice if the health-related cash discount card organization does not maintain a copy of each active provider agreement.

(g) Provider name listing. It is an unlawful practice if each health-related cash discount card organization does not maintain an up-to-date list of the names and addresses of the providers with which it has contracted, available to consumers by a toll-free customer service number and on an Internet website page, and the web address and phone number shall be prominently displayed on all its advertisements, marketing materials, brochures, and discount cards. This subsection applies to those providers with whom the health-related cash discount card organization has contracted directly, as well as those who are members of a provider network with which the health-related cash discount card organization has contracted.

(h) Bundling health-related cash discount cards with other products. It is an unlawful practice if a marketer or health-related cash discount card organization sells a health-related cash discount card together with any other product and the fees for each individual product are not provided in writing to the member and itemized. If any of the additional products are insurance products, they must be itemized as such.

(i) Protection of personal health information. It is an unlawful practice if a health-related cash discount card does not safeguard protected health information as defined in the Health Insurance Portability and Accountability Act of 1996, in a manner consistent with the intent of the rule with regard to consent, authorization, notice, public policy, permissible uses and disclosures, and by limiting disclosure to the minimum necessary.

(j) Insurance products or services.

(1) It is an unlawful practice if a health-related cash discount card organization provides a product or service which would be classified as insurance under the Illinois Insurance Code to its members and does not comply with all applicable provisions under State law.

(2) It is an unlawful practice if a health-related cash discount card organization provides an insurance product or service as outlined in paragraph (1) of this subsection, and the company does not disclose in writing to a prospective member before purchase the name, address, and toll-free customer service number of the insurance company providing the insurance product or service.

(k) Discount claims. It is an unlawful practice if a health-related cash discount card organization does not adhere to all of the Retail Advertising provisions in Title 14, Part 470 of the Illinois Administrative Code. It is an unlawful practice for a health-related discount card organization to state or imply that any products or services are being offered for sale at a range of prices or at a range of percentage or fractional discounts unless the highest price or lowest discount in the range is clearly and conspicuously disclosed in the advertisement and a reasonable number of these products or services in the advertisement are offered with at least the largest advertised discount. If a discount card organization advertises a range of discounts, at least one provider within a prospective member's geographic area must provide services at the highest end of the range advertised.

(l) Fiduciary and bonding requirements. It is an unlawful practice for a licensed health-related cash discount card organization not to: (1) establish and maintain a fiduciary account, separate and apart from any and all other accounts, for use in protecting plan members; or (2) post or cause to be posted a bond of indemnity in an amount equal to not less that $50,000. If a bond of indemnity is posted, it shall be held by the Director of Insurance for the benefit of plan members under the programs subject to this Section. An administrator who operates more than one such program may establish and maintain a separate fiduciary account or bond of indemnity for each such program or may operate and maintain a consolidated fiduciary account or bond of indemnity for all such programs.

(Source: P.A. 92-296, eff. 1-1-02.)