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91_SB0251enr SB251 Enrolled LRB9102764EGfg 1 AN ACT concerning the delivery of health care services, 2 amending named Acts. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 1. Short title. This Act may be cited as the 6 Managed Care Reform and Patient Rights Act. 7 Section 5. Health care patient rights. 8 (a) The General Assembly finds that: 9 (1) A patient has the right to care consistent with 10 professional standards of practice to assure quality 11 nursing and medical practices, to choose the 12 participating physician responsible for coordinating his 13 or her care, to receive information concerning his or her 14 condition and proposed treatment, to refuse any treatment 15 to the extent permitted by law, and to privacy and 16 confidentiality of records except as otherwise provided 17 by law. 18 (2) A patient has the right, regardless of source 19 of payment, to examine and to receive a reasonable 20 explanation of his or her total bill for health care 21 services rendered by his or her physician or other health 22 care provider, including the itemized charges for 23 specific health care services received. A physician or 24 other health care provider has responsibility only for a 25 reasonable explanation of those specific health care 26 services provided by the health care provider. 27 (3) A patient has the right to timely prior notice 28 of the termination whenever a health care plan cancels or 29 refuses to renew an enrollee's participation in the plan. 30 (4) A patient has the right to privacy and 31 confidentiality in health care. This right may be SB251 Enrolled -2- LRB9102764EGfg 1 expressly waived in writing by the patient or the 2 patient's guardian. 3 (5) An individual has the right to purchase any 4 health care services with that individual's own funds. 5 (b) Nothing in this Section shall preclude the health 6 care plan from sharing information for plan quality 7 assessment and improvement purposes as required by Section 8 80. 9 Section 10. Definitions: 10 "Adverse determination" means a determination by a health 11 care plan under Section 45 or by a utilization review program 12 under Section 85 that a health care service is not medically 13 necessary. 14 "Clinical peer" means a health care professional who is 15 in the same profession and the same or similar specialty as 16 the health care provider who typically manages the medical 17 condition, procedures, or treatment under review. 18 "Department" means the Department of Insurance. 19 "Emergency medical condition" means a medical condition 20 manifesting itself by acute symptoms of sufficient severity 21 (including, but not limited to, severe pain) such that a 22 prudent layperson, who possesses an average knowledge of 23 health and medicine, could reasonably expect the absence of 24 immediate medical attention to result in: 25 (1) placing the health of the individual (or, with 26 respect to a pregnant woman, the health of the woman or 27 her unborn child) in serious jeopardy; 28 (2) serious impairment to bodily functions; or 29 (3) serious dysfunction of any bodily organ or 30 part. 31 "Emergency medical screening examination" means a medical 32 screening examination and evaluation by a physician licensed 33 to practice medicine in all its branches, or to the extent SB251 Enrolled -3- LRB9102764EGfg 1 permitted by applicable laws, by other appropriately licensed 2 personnel under the supervision of or in collaboration with a 3 physician licensed to practice medicine in all its branches 4 to determine whether the need for emergency services exists. 5 "Emergency services" means, with respect to an enrollee 6 of a health care plan, transportation services, including but 7 not limited to ambulance services, and covered inpatient and 8 outpatient hospital services furnished by a provider 9 qualified to furnish those services that are needed to 10 evaluate or stabilize an emergency medical condition. 11 "Emergency services" does not refer to post-stabilization 12 medical services. 13 "Enrollee" means any person and his or her dependents 14 enrolled in or covered by a health care plan. 15 "Health care plan" means a plan that establishes, 16 operates, or maintains a network of health care providers 17 that has entered into an agreement with the plan to provide 18 health care services to enrollees to whom the plan has the 19 ultimate obligation to arrange for the provision of or 20 payment for services through organizational arrangements for 21 ongoing quality assurance, utilization review programs, or 22 dispute resolution. Nothing in this definition shall be 23 construed to mean that an independent practice association or 24 a physician hospital organization that subcontracts with a 25 health care plan is, for purposes of that subcontract, a 26 health care plan. 27 For purposes of this definition, "health care plan" shall 28 not include the following: 29 (1) indemnity health insurance policies including 30 those using a contracted provider network; 31 (2) health care plans that offer only dental or 32 only vision coverage; 33 (3) preferred provider administrators, as defined 34 in Section 370g(g) of the Illinois Insurance Code; SB251 Enrolled -4- LRB9102764EGfg 1 (4) employee or employer self-insured health 2 benefit plans under the federal Employee Retirement 3 Income Security Act of 1974; 4 (5) health care provided pursuant to the Workers' 5 Compensation Act or the Workers' Occupational Diseases 6 Act; and 7 (6) not-for-profit voluntary health services plans 8 with health maintenance organization authority in 9 existence as of January 1, 1999 that are affiliated with 10 a union and that only extend coverage to union members 11 and their dependents. 12 "Health care professional" means a physician, a 13 registered professional nurse, or other individual 14 appropriately licensed or registered to provide health care 15 services. 16 "Health care provider" means any physician, hospital 17 facility, or other person that is licensed or otherwise 18 authorized to deliver health care services. Nothing in this 19 Act shall be construed to define Independent Practice 20 Associations or Physician-Hospital Organizations as health 21 care providers. 22 "Health care services" means any services included in the 23 furnishing to any individual of medical care, or the 24 hospitalization incident to the furnishing of such care, as 25 well as the furnishing to any person of any and all other 26 services for the purpose of preventing, alleviating, curing, 27 or healing human illness or injury including home health and 28 pharmaceutical services and products. 29 "Medical director" means a physician licensed in any 30 state to practice medicine in all its branches appointed by a 31 health care plan. 32 "Person" means a corporation, association, partnership, 33 limited liability company, sole proprietorship, or any other 34 legal entity. SB251 Enrolled -5- LRB9102764EGfg 1 "Physician" means a person licensed under the Medical 2 Practice Act of 1987. 3 "Post-stabilization medical services" means health care 4 services provided to an enrollee that are furnished in a 5 licensed hospital by a provider that is qualified to furnish 6 such services, and determined to be medically necessary and 7 directly related to the emergency medical condition following 8 stabilization. 9 "Stabilization" means, with respect to an emergency 10 medical condition, to provide such medical treatment of the 11 condition as may be necessary to assure, within reasonable 12 medical probability, that no material deterioration of the 13 condition is likely to result. 14 "Utilization review" means the evaluation of the medical 15 necessity, appropriateness, and efficiency of the use of 16 health care services, procedures, and facilities. 17 "Utilization review program" means a program established 18 by a person to perform utilization review. 19 Section 15. Provision of information. 20 (a) A health care plan shall provide annually to 21 enrollees and prospective enrollees, upon request, a complete 22 list of participating health care providers in the health 23 care plan's service area and a description of the following 24 terms of coverage: 25 (1) the service area; 26 (2) the covered benefits and services with all 27 exclusions, exceptions, and limitations; 28 (3) the pre-certification and other utilization 29 review procedures and requirements; 30 (4) a description of the process for the selection 31 of a primary care physician, any limitation on access to 32 specialists, and the plan's standing referral policy; 33 (5) the emergency coverage and benefits, including SB251 Enrolled -6- LRB9102764EGfg 1 any restrictions on emergency care services; 2 (6) the out-of-area coverage and benefits, if any; 3 (7) the enrollee's financial responsibility for 4 copayments, deductibles, premiums, and any other 5 out-of-pocket expenses; 6 (8) the provisions for continuity of treatment in 7 the event a health care provider's participation 8 terminates during the course of an enrollee's treatment 9 by that provider; 10 (9) the appeals process, forms, and time frames for 11 health care services appeals, complaints, and external 12 independent reviews, administrative complaints, and 13 utilization review complaints, including a phone number 14 to call to receive more information from the health care 15 plan concerning the appeals process; and 16 (10) a statement of all basic health care services 17 and all specific benefits and services mandated to be 18 provided to enrollees by any State law or administrative 19 rule. 20 In the event of an inconsistency between any separate 21 written disclosure statement and the enrollee contract or 22 certificate, the terms of the enrollee contract or 23 certificate shall control. 24 (b) Upon written request, a health care plan shall 25 provide to enrollees a description of the financial 26 relationships between the health care plan and any health 27 care provider and, if requested, the percentage of 28 copayments, deductibles, and total premiums spent on 29 healthcare related expenses and the percentage of copayments, 30 deductibles, and total premiums spent on other expenses, 31 including administrative expenses, except that no health care 32 plan shall be required to disclose specific provider 33 reimbursement. 34 (c) A participating health care provider shall provide SB251 Enrolled -7- LRB9102764EGfg 1 all of the following, where applicable, to enrollees upon 2 request: 3 (1) Information related to the health care 4 provider's educational background, experience, training, 5 specialty, and board certification, if applicable. 6 (2) The names of licensed facilities on the 7 provider panel where the health care provider presently 8 has privileges for the treatment, illness, or procedure 9 that is the subject of the request. 10 (3) Information regarding the health care 11 provider's participation in continuing education 12 programs and compliance with any licensure, 13 certification, or registration requirements, if 14 applicable. 15 (d) A health care plan shall provide the information 16 required to be disclosed under this Act upon enrollment and 17 annually thereafter in a legible and understandable format. 18 The Department shall promulgate rules to establish the format 19 based, to the extent practical, on the standards developed 20 for supplemental insurance coverage under Title XVIII of the 21 federal Social Security Act as a guide, so that a person can 22 compare the attributes of the various health care plans. 23 (e) The written disclosure requirements of this Section 24 may be met by disclosure to one enrollee in a household. 25 Section 20. Notice of nonrenewal or termination. A 26 health care plan must give at least 60 days notice of 27 nonrenewal or termination of a health care provider to the 28 health care provider and to the enrollees served by the 29 health care provider. The notice shall include a name and 30 address to which an enrollee or health care provider may 31 direct comments and concerns regarding the nonrenewal or 32 termination. Immediate written notice may be provided without 33 60 days notice when a health care provider's license has been SB251 Enrolled -8- LRB9102764EGfg 1 disciplined by a State licensing board. 2 Section 25. Transition of services. 3 (a) A health care plan shall provide for continuity of 4 care for its enrollees as follows: 5 (1) If an enrollee's physician leaves the health 6 care plan's network of health care providers for reasons 7 other than termination of a contract in situations 8 involving imminent harm to a patient or a final 9 disciplinary action by a State licensing board and the 10 physician remains within the health care plan's service 11 area, the health care plan shall permit the enrollee to 12 continue an ongoing course of treatment with that 13 physician during a transitional period: 14 (A) of 90 days from the date of the notice of 15 physician's termination from the health care plan to 16 the enrollee of the physician's disaffiliation from 17 the health care plan if the enrollee has an ongoing 18 course of treatment; or 19 (B) if the enrollee has entered the third 20 trimester of pregnancy at the time of the 21 physician's disaffiliation, that includes the 22 provision of post-partum care directly related to 23 the delivery. 24 (2) Notwithstanding the provisions in item (1) of 25 this subsection, such care shall be authorized by the 26 health care plan during the transitional period only if 27 the physician agrees: 28 (A) to continue to accept reimbursement from 29 the health care plan at the rates applicable prior 30 to the start of the transitional period; 31 (B) to adhere to the health care plan's 32 quality assurance requirements and to provide to the 33 health care plan necessary medical information SB251 Enrolled -9- LRB9102764EGfg 1 related to such care; and 2 (C) to otherwise adhere to the health care 3 plan's policies and procedures, including but not 4 limited to procedures regarding referrals and 5 obtaining preauthorizations for treatment. 6 (b) A health care plan shall provide for continuity of 7 care for new enrollees as follows: 8 (1) If a new enrollee whose physician is not a 9 member of the health care plan's provider network, but is 10 within the health care plan's service area, enrolls in 11 the health care plan, the health care plan shall permit 12 the enrollee to continue an ongoing course of treatment 13 with the enrollee's current physician during a 14 transitional period: 15 (A) of 90 days from the effective date of 16 enrollment if the enrollee has an ongoing course of 17 treatment; or 18 (B) if the enrollee has entered the third 19 trimester of pregnancy at the effective date of 20 enrollment, that includes the provision of 21 post-partum care directly related to the delivery. 22 (2) If an enrollee elects to continue to receive 23 care from such physician pursuant to item (1) of this 24 subsection, such care shall be authorized by the health 25 care plan for the transitional period only if the 26 physician agrees: 27 (A) to accept reimbursement from the health 28 care plan at rates established by the health care 29 plan; such rates shall be the level of reimbursement 30 applicable to similar physicians within the health 31 care plan for such services; 32 (B) to adhere to the health care plan's 33 quality assurance requirements and to provide to the 34 health care plan necessary medical information SB251 Enrolled -10- LRB9102764EGfg 1 related to such care; and 2 (C) to otherwise adhere to the health care 3 plan's policies and procedures including, but not 4 limited to procedures regarding referrals and 5 obtaining preauthorization for treatment. 6 (c) In no event shall this Section be construed to 7 require a health care plan to provide coverage for benefits 8 not otherwise covered or to diminish or impair preexisting 9 condition limitations contained in the enrollee's contract. 10 Section 30. Prohibitions. 11 (a) No health care plan or its subcontractors may 12 prohibit or discourage health care providers by contract or 13 policy from discussing any health care services and health 14 care providers, utilization review and quality assurance 15 policies, terms and conditions of plans and plan policy with 16 enrollees, prospective enrollees, providers, or the public. 17 (b) No health care plan by contract, written policy, or 18 procedure may permit or allow an individual or entity to 19 dispense a different drug in place of the drug or brand of 20 drug ordered or prescribed without the express permission of 21 the person ordering or prescribing the drug, except as 22 provided under Section 3.14 of the Illinois Food, Drug and 23 Cosmetic Act. 24 (c) Any violation of this Section shall be subject to 25 the penalties under this Act. 26 Section 35. Medically appropriate health care 27 protection. 28 (a) No health care plan or its subcontractors shall 29 retaliate against a physician or other health care provider 30 who advocates for appropriate health care services for 31 patients. 32 (b) It is the public policy of the State of Illinois SB251 Enrolled -11- LRB9102764EGfg 1 that a physician or any other health care provider be 2 encouraged to advocate for medically appropriate health care 3 services for his or her patients. For purposes of this 4 Section, "to advocate for medically appropriate health care 5 services" means to appeal a decision to deny payment for a 6 health care service pursuant to the reasonable grievance or 7 appeal procedure established by a health care plan or to 8 protest a decision, policy, or practice that the physician or 9 other health care provider, consistent with that degree of 10 learning and skill ordinarily possessed by physicians or 11 other health care providers practicing in the same or a 12 similar locality and under similar circumstances, reasonably 13 believes impairs the physician's or other health care 14 provider's ability to provide appropriate health care 15 services to his or her patients. 16 (c) This Section shall not be construed to prohibit a 17 health care plan or its subcontractors from making a 18 determination not to pay for a particular health care service 19 or to prohibit a medical group, independent practice 20 association, preferred provider organization, foundation, 21 hospital medical staff, hospital governing body or health 22 care plan from enforcing reasonable peer review or 23 utilization review protocols or determining whether a 24 physician or other health care provider has complied with 25 those protocols. 26 (d) Nothing in this Section shall be construed to 27 prohibit the governing body of a hospital or the hospital 28 medical staff from taking disciplinary actions against a 29 physician as authorized by law. 30 (e) Nothing in this Section shall be construed to 31 prohibit the Department of Professional Regulation from 32 taking disciplinary actions against a physician or other 33 health care provider under the appropriate licensing Act. 34 (f) Any violation of this Section shall be subject to SB251 Enrolled -12- LRB9102764EGfg 1 the penalties under this Act. 2 Section 40. Access to specialists. 3 (a) All health care plans that require each enrollee to 4 select a health care provider for any purpose including 5 coordination of care shall permit an enrollee to choose any 6 available primary care physician licensed to practice 7 medicine in all its branches participating in the health care 8 plan for that purpose. The health care plan shall provide the 9 enrollee with a choice of licensed health care providers who 10 are accessible and qualified. Nothing in this Act shall be 11 construed to prohibit a health care plan from requiring a 12 health care provider to meet the health care plan's criteria 13 in order to coordinate access to health care. 14 (b) A health care plan shall establish a procedure by 15 which an enrollee who has a condition that requires ongoing 16 care from a specialist physician or other health care 17 provider may apply for a standing referral to a specialist 18 physician or other health care provider if a referral to a 19 specialist physician or other health care provider is 20 required for coverage. The application shall be made to the 21 enrollee's primary care physician. This procedure for a 22 standing referral must specify the necessary criteria and 23 conditions that must be met in order for an enrollee to 24 obtain a standing referral. A standing referral shall be 25 effective for the period necessary to provide the referred 26 services or one year, except in the event of termination of a 27 contract or policy in which case Section 25 on transition of 28 services shall apply, if applicable. A primary care physician 29 may renew and re-renew a standing referral. 30 (c) The enrollee may be required by the health care plan 31 to select a specialist physician or other health care 32 provider who has a referral arrangement with the enrollee's 33 primary care physician or to select a new primary care SB251 Enrolled -13- LRB9102764EGfg 1 physician who has a referral arrangement with the specialist 2 physician or other health care provider chosen by the 3 enrollee. If a health care plan requires an enrollee to 4 select a new physician under this subsection, the health care 5 plan must provide the enrollee with both options provided in 6 this subsection. When a participating specialist with a 7 referral arrangement is not available, the primary care 8 physician, in consultation with the enrollee, shall arrange 9 for the enrollee to have access to a qualified participating 10 health care provider, and the enrollee shall be allowed to 11 stay with his or her primary care physician. If a secondary 12 referral is necessary, the specialist physician or other 13 health care provider shall advise the primary care physician. 14 The primary care physician shall be responsible for making 15 the secondary referral. In addition, the health care plan 16 shall require the specialist physician or other health care 17 provider to provide regular updates to the enrollee's primary 18 care physician. 19 (d) When the type of specialist physician or other 20 health care provider needed to provide ongoing care for a 21 specific condition is not represented in the health care 22 plan's provider network, the primary care physician shall 23 arrange for the enrollee to have access to a qualified 24 non-participating health care provider within a reasonable 25 distance and travel time at no additional cost beyond what 26 the enrollee would otherwise pay for services received within 27 the network. The referring physician shall notify the plan 28 when a referral is made outside the network. 29 (e) The enrollee's primary care physician shall remain 30 responsible for coordinating the care of an enrollee who has 31 received a standing referral to a specialist physician or 32 other health care provider. If a secondary referral is 33 necessary, the specialist physician or other health care 34 provider shall advise the primary care physician. The SB251 Enrolled -14- LRB9102764EGfg 1 primary care physician shall be responsible for making the 2 secondary referral. In addition, the health care plan shall 3 require the specialist physician or other health care 4 provider to provide regular updates to the enrollee's primary 5 care physician. 6 (f) If an enrollee's application for any referral is 7 denied, an enrollee may appeal the decision through the 8 health care plan's external independent review process in 9 accordance with subsection (f) of Section 45 of this Act. 10 (g) Nothing in this Act shall be construed to require an 11 enrollee to select a new primary care physician when no 12 referral arrangement exists between the enrollee's primary 13 care physician and the specialist selected by the enrollee 14 and when the enrollee has a long-standing relationship with 15 his or her primary care physician. 16 (h) In promulgating rules to implement this Act, the 17 Department shall define "standing referral" and "ongoing 18 course of treatment". 19 Section 45. Health care services appeals, complaints, 20 and external independent reviews. 21 (a) A health care plan shall establish and maintain an 22 appeals procedure as outlined in this Act. Compliance with 23 this Act's appeals procedures shall satisfy a health care 24 plan's obligation to provide appeal procedures under any 25 other State law or rules. All appeals of a health care plan's 26 administrative determinations and complaints regarding its 27 administrative decisions shall be handled as required under 28 Section 50. 29 (b) When an appeal concerns a decision or action by a 30 health care plan, its employees, or its subcontractors that 31 relates to (i) health care services, including, but not 32 limited to, procedures or treatments, for an enrollee with an 33 ongoing course of treatment ordered by a health care SB251 Enrolled -15- LRB9102764EGfg 1 provider, the denial of which could significantly increase 2 the risk to an enrollee's health, or (ii) a treatment 3 referral, service, procedure, or other health care service, 4 the denial of which could significantly increase the risk to 5 an enrollee's health, the health care plan must allow for the 6 filing of an appeal either orally or in writing. Upon 7 submission of the appeal, a health care plan must notify the 8 party filing the appeal, as soon as possible, but in no event 9 more than 24 hours after the submission of the appeal, of all 10 information that the plan requires to evaluate the appeal. 11 The health care plan shall render a decision on the appeal 12 within 24 hours after receipt of the required information. 13 The health care plan shall notify the party filing the appeal 14 and the enrollee, enrollee's primary care physician, and any 15 health care provider who recommended the health care service 16 involved in the appeal of its decision orally followed-up by 17 a written notice of the determination. 18 (c) For all appeals related to health care services 19 including, but not limited to, procedures or treatments for 20 an enrollee and not covered by subsection (b) above, the 21 health care plan shall establish a procedure for the filing 22 of such appeals. Upon submission of an appeal under this 23 subsection, a health care plan must notify the party filing 24 an appeal, within 3 business days, of all information that 25 the plan requires to evaluate the appeal. The health care 26 plan shall render a decision on the appeal within 15 business 27 days after receipt of the required information. The health 28 care plan shall notify the party filing the appeal, the 29 enrollee, the enrollee's primary care physician, and any 30 health care provider who recommended the health care service 31 involved in the appeal orally of its decision followed-up by 32 a written notice of the determination. 33 (d) An appeal under subsection (b) or (c) may be filed 34 by the enrollee, the enrollee's designee or guardian, the SB251 Enrolled -16- LRB9102764EGfg 1 enrollee's primary care physician, or the enrollee's health 2 care provider. A health care plan shall designate a clinical 3 peer to review appeals, because these appeals pertain to 4 medical or clinical matters and such an appeal must be 5 reviewed by an appropriate health care professional. No one 6 reviewing an appeal may have had any involvement in the 7 initial determination that is the subject of the appeal. The 8 written notice of determination required under subsections 9 (b) and (c) shall include (i) clear and detailed reasons for 10 the determination, (ii) the medical or clinical criteria for 11 the determination, which shall be based upon sound clinical 12 evidence and reviewed on a periodic basis, and (iii) in the 13 case of an adverse determination, the procedures for 14 requesting an external independent review under subsection 15 (f). 16 (e) If an appeal filed under subsection (b) or (c) is 17 denied for a reason including, but not limited to, the 18 service, procedure, or treatment is not viewed as medically 19 necessary, denial of specific tests or procedures, denial of 20 referral to specialist physicians or denial of 21 hospitalization requests or length of stay requests, any 22 involved party may request an external independent review 23 under subsection (f) of the adverse determination. 24 (f) External independent review. 25 (1) The party seeking an external independent 26 review shall so notify the health care plan. The health 27 care plan shall seek to resolve all external independent 28 reviews in the most expeditious manner and shall make a 29 determination and provide notice of the determination no 30 more than 24 hours after the receipt of all necessary 31 information when a delay would significantly increase the 32 risk to an enrollee's health or when extended health care 33 services for an enrollee undergoing a course of treatment 34 prescribed by a health care provider are at issue. SB251 Enrolled -17- LRB9102764EGfg 1 (2) Within 30 days after the enrollee receives 2 written notice of an adverse determination, if the 3 enrollee decides to initiate an external independent 4 review, the enrollee shall send to the health care plan a 5 written request for an external independent review, 6 including any information or documentation to support the 7 enrollee's request for the covered service or claim for a 8 covered service. 9 (3) Within 30 days after the health care plan 10 receives a request for an external independent review 11 from an enrollee, the health care plan shall: 12 (A) provide a mechanism for joint selection of 13 an external independent reviewer by the enrollee, 14 the enrollee's physician or other health care 15 provider, and the health care plan; and 16 (B) forward to the independent reviewer all 17 medical records and supporting documentation 18 pertaining to the case, a summary description of the 19 applicable issues including a statement of the 20 health care plan's decision, the criteria used, and 21 the medical and clinical reasons for that decision. 22 (4) Within 5 days after receipt of all necessary 23 information, the independent reviewer shall evaluate and 24 analyze the case and render a decision that is based on 25 whether or not the health care service or claim for the 26 health care service is medically appropriate. The 27 decision by the independent reviewer is final. If the 28 external independent reviewer determines the health care 29 service to be medically appropriate, the health care plan 30 shall pay for the health care service. 31 (5) The health care plan shall be solely 32 responsible for paying the fees of the external 33 independent reviewer who is selected to perform the 34 review. SB251 Enrolled -18- LRB9102764EGfg 1 (6) An external independent reviewer who acts in 2 good faith shall have immunity from any civil or criminal 3 liability or professional discipline as a result of acts 4 or omissions with respect to any external independent 5 review, unless the acts or omissions constitute wilful 6 and wanton misconduct. For purposes of any proceeding, 7 the good faith of the person participating shall be 8 presumed. 9 (7) Future contractual or employment action by the 10 health care plan regarding the patient's physician or 11 other health care provider shall not be based solely on 12 the physician's or other health care provider's 13 participation in this procedure. 14 (8) For the purposes of this Section, an external 15 independent reviewer shall: 16 (A) be a clinical peer; 17 (B) have no direct financial interest in 18 connection with the case; and 19 (C) have not been informed of the specific 20 identity of the enrollee. 21 (g) Nothing in this Section shall be construed to 22 require a health care plan to pay for a health care service 23 not covered under the enrollee's certificate of coverage or 24 policy. 25 Section 50. Administrative complaints and Departmental 26 review. 27 (a) Administrative complaint process. 28 (1) A health care plan shall accept and review 29 appeals of its determinations and complaints related to 30 administrative issues initiated by enrollees or their 31 health care providers (complainant). All appeals of a 32 health care plan's determinations and complaints related 33 to health care services shall be handled as required SB251 Enrolled -19- LRB9102764EGfg 1 under Section 45. Nothing in this Act shall be construed 2 to preclude an enrollee from filing a complaint with the 3 Department or as limiting the Department's ability to 4 investigate complaints. In addition, any enrollee not 5 satisfied with the plan's resolution of any complaint may 6 appeal that final plan decision to the Department. 7 (2) When a complaint against a health care plan 8 (respondent) is received by the Department, the 9 respondent shall be notified of the complaint. The 10 Department shall, in its notification, specify the date 11 when a report is to be received from the respondent, 12 which shall be no later than 21 days after notification 13 is sent to the respondent. A failure to reply by the date 14 specified may be followed by a collect telephone call or 15 collect telegram. Repeated instances of failing to reply 16 by the date specified may result in further regulatory 17 action. 18 (3) The respondent's report shall supply adequate 19 documentation that explains all actions taken or not 20 taken and that were the basis for the complaint. The 21 report shall include documents necessary to support the 22 respondent's position and any information requested by 23 the Department. The respondent's reply shall be in 24 duplicate, but duplicate copies of supporting documents 25 shall not be required. The respondent's reply shall 26 include the name, telephone number, and address of the 27 individual assigned to investigate or process the 28 complaint. The Department shall respect the 29 confidentiality of medical reports and other documents 30 that by law are confidential. Any other information 31 furnished by a respondent shall be marked "confidential" 32 if the respondent does not wish it to be released to the 33 complainant. 34 (b) Departmental review. The Department shall review SB251 Enrolled -20- LRB9102764EGfg 1 the plan decision to determine whether it is consistent with 2 the plan and Illinois law and rules. Upon receipt of the 3 respondent's report, the Department shall evaluate the 4 material submitted and: 5 (1) advise the complainant of the action taken and 6 disposition of the complaint; 7 (2) pursue further investigation with the 8 respondent or complainant; or 9 (3) refer the investigation report to the 10 appropriate branch within the Department for further 11 regulatory action. 12 (c) The Department of Insurance and the Department of 13 Public Health shall coordinate the complaint review and 14 investigation process. The Department of Insurance and the 15 Department of Public Health shall jointly establish rules 16 under the Illinois Administrative Procedure Act implementing 17 this complaint process. 18 Section 55. Record of complaints. 19 (a) The Department shall maintain records concerning the 20 complaints filed against health care plans. To that end, the 21 Department shall require health care plans to annually report 22 complaints made to and resolutions by health care plans in a 23 manner determined by rule. The Department shall make a 24 summary of all data collected available upon request and 25 publish the summary on the World Wide Web. 26 (b) The Department shall maintain records on the number 27 of complaints filed against each health care plan. 28 (c) The Department shall maintain records classifying 29 each complaint by whether the complaint was filed by: 30 (1) a consumer or enrollee; 31 (2) a provider; or 32 (3) any other individual. 33 (d) The Department shall maintain records classifying SB251 Enrolled -21- LRB9102764EGfg 1 each complaint according to the nature of the complaint as it 2 pertains to a specific function of the health care plan. The 3 complaints shall be classified under the following 4 categories: 5 (1) denial of care or treatment; 6 (2) denial of a diagnostic procedure; 7 (3) denial of a referral request; 8 (4) sufficient choice and accessibility of health 9 care providers; 10 (5) underwriting; 11 (6) marketing and sales; 12 (7) claims and utilization review; 13 (8) member services; 14 (9) provider relations; and 15 (10) miscellaneous. 16 (e) The Department shall maintain records classifying 17 the disposition of each complaint. The disposition of the 18 complaint shall be classified in one of the following 19 categories: 20 (1) complaint referred to the health care plan and 21 no further action necessary by the Department; 22 (2) no corrective action deemed necessary by the 23 Department; or 24 (3) corrective action taken by the Department. 25 (f) No Department publication or release of information 26 shall identify any enrollee, health care provider, or 27 individual complainant. 28 Section 60. Choosing a physician. 29 (a) A health care plan may also offer other arrangements 30 under which enrollees may access health care services from 31 contracted providers without a referral or authorization from 32 their primary care physician. 33 (b) The enrollee may be required by the health care plan SB251 Enrolled -22- LRB9102764EGfg 1 to select a specialist physician or other health care 2 provider who has a referral arrangement with the enrollee's 3 primary care physician or to select a new primary care 4 physician who has a referral arrangement with the specialist 5 physician or other health care provider chosen by the 6 enrollee. If a health care plan requires an enrollee to 7 select a new physician under this subsection, the health care 8 plan must provide the enrollee with both options provided in 9 this subsection. 10 (c) The Director of Insurance and the Department of 11 Public Health each may promulgate rules to ensure appropriate 12 access to and quality of care for enrollees in any plan that 13 allows enrollees to access health care services from 14 contractual providers without a referral or authorization 15 from the primary care physician. The rules may include, but 16 shall not be limited to, a system for the retrieval and 17 compilation of enrollees' medical records. 18 Section 65. Emergency services prior to stabilization. 19 (a) A health care plan that provides or that is required 20 by law to provide coverage for emergency services shall 21 provide coverage such that payment under this coverage is not 22 dependent upon whether the services are performed by a plan 23 or non-plan health care provider and without regard to prior 24 authorization. This coverage shall be at the same benefit 25 level as if the services or treatment had been rendered by 26 the health care plan physician licensed to practice medicine 27 in all its branches or health care provider. 28 (b) Prior authorization or approval by the plan shall 29 not be required for emergency services. 30 (c) Coverage and payment shall only be retrospectively 31 denied under the following circumstances: 32 (1) upon reasonable determination that the 33 emergency services claimed were never performed; SB251 Enrolled -23- LRB9102764EGfg 1 (2) upon timely determination that the emergency 2 evaluation and treatment were rendered to an enrollee who 3 sought emergency services and whose circumstance did not 4 meet the definition of emergency medical condition; 5 (3) upon determination that the patient receiving 6 such services was not an enrollee of the health care 7 plan; or 8 (4) upon material misrepresentation by the enrollee 9 or health care provider; "material" means a fact or 10 situation that is not merely technical in nature and 11 results or could result in a substantial change in the 12 situation. 13 (d) When an enrollee presents to a hospital seeking 14 emergency services, the determination as to whether the need 15 for those services exists shall be made for purposes of 16 treatment by a physician licensed to practice medicine in 17 all its branches or, to the extent permitted by applicable 18 law, by other appropriately licensed personnel under the 19 supervision of or in collaboration with a physician licensed 20 to practice medicine in all its branches. The physician or 21 other appropriate personnel shall indicate in the patient's 22 chart the results of the emergency medical screening 23 examination. 24 (e) The appropriate use of the 911 emergency telephone 25 system or its local equivalent shall not be discouraged or 26 penalized by the health care plan when an emergency medical 27 condition exists. This provision shall not imply that the use 28 of 911 or its local equivalent is a factor in determining the 29 existence of an emergency medical condition. 30 (f) The medical director's or his or her designee's 31 determination of whether the enrollee meets the standard of 32 an emergency medical condition shall be based solely upon the 33 presenting symptoms documented in the medical record at the 34 time care was sought. Only a clinical peer may make an SB251 Enrolled -24- LRB9102764EGfg 1 adverse determination. 2 (g) Nothing in this Section shall prohibit the 3 imposition of deductibles, copayments, and co-insurance. 4 Nothing in this Section alters the prohibition on billing 5 enrollees contained in the Health Maintenance Organization 6 Act. 7 Section 70. Post-stabilization medical services. 8 (a) If prior authorization for covered post-stabilization 9 services is required by the health care plan, the plan shall 10 provide access 24 hours a day, 7 days a week to persons 11 designated by the plan to make such determinations, provided 12 that any determination made under this Section must be made 13 by a health care professional. The review shall be resolved 14 in accordance with the provisions of Section 85 and the time 15 requirements of this Section. 16 (b) The treating physician licensed to practice medicine 17 in all its branches or health care provider shall contact 18 the health care plan or delegated health care provider as 19 designated on the enrollee's health insurance card to obtain 20 authorization, denial, or arrangements for an alternate plan 21 of treatment or transfer of the enrollee. 22 (c) The treating physician licensed to practice 23 medicine in all its branches or health care provider shall 24 document in the enrollee's medical record the enrollee's 25 presenting symptoms; emergency medical condition; and time, 26 phone number dialed, and result of the communication for 27 request for authorization of post-stabilization medical 28 services. The health care plan shall provide reimbursement 29 for covered post-stabilization medical services if: 30 (1) authorization to render them is received from 31 the health care plan or its delegated health care 32 provider, or 33 (2) after 2 documented good faith efforts, the SB251 Enrolled -25- LRB9102764EGfg 1 treating health care provider has attempted to contact 2 the enrollee's health care plan or its delegated health 3 care provider, as designated on the enrollee's health 4 insurance card, for prior authorization of 5 post-stabilization medical services and neither the plan 6 nor designated persons were accessible or the 7 authorization was not denied within 60 minutes of the 8 request. "Two documented good faith efforts" means the 9 health care provider has called the telephone number on 10 the enrollee's health insurance card or other available 11 number either 2 times or one time and an additional call 12 to any referral number provided. "Good faith" means 13 honesty of purpose, freedom from intention to defraud, 14 and being faithful to one's duty or obligation. For the 15 purpose of this Act, good faith shall be presumed. 16 (d) After rendering any post-stabilization medical 17 services, the treating physician licensed to practice 18 medicine in all its branches or health care provider shall 19 continue to make every reasonable effort to contact the 20 health care plan or its delegated health care provider 21 regarding authorization, denial, or arrangements for an 22 alternate plan of treatment or transfer of the enrollee until 23 the treating health care provider receives instructions from 24 the health care plan or delegated health care provider for 25 continued care or the care is transferred to another health 26 care provider or the patient is discharged. 27 (e) Payment for covered post-stabilization services may 28 be denied: 29 (1) if the treating health care provider does not 30 meet the conditions outlined in subsection (c); 31 (2) upon determination that the post-stabilization 32 services claimed were not performed; 33 (3) upon timely determination that the 34 post-stabilization services rendered were contrary to the SB251 Enrolled -26- LRB9102764EGfg 1 instructions of the health care plan or its delegated 2 health care provider if contact was made between those 3 parties prior to the service being rendered; 4 (4) upon determination that the patient receiving 5 such services was not an enrollee of the health care 6 plan; or 7 (5) upon material misrepresentation by the enrollee 8 or health care provider; "material" means a fact or 9 situation that is not merely technical in nature and 10 results or could result in a substantial change in the 11 situation. 12 (f) Nothing in this Section prohibits a health care plan 13 from delegating tasks associated with the responsibilities 14 enumerated in this Section to the health care plan's 15 contracted health care providers or another entity. Only a 16 clinical peer may make an adverse determination. However, 17 the ultimate responsibility for coverage and payment 18 decisions may not be delegated. 19 (g) Coverage and payment for post-stabilization medical 20 services for which prior authorization or deemed approval is 21 received shall not be retrospectively denied. 22 (h) Nothing in this Section shall prohibit the 23 imposition of deductibles, copayments, and co-insurance. 24 Nothing in this Section alters the prohibition on billing 25 enrollees contained in the Health Maintenance Organization 26 Act. 27 Section 72. Pharmacy providers. 28 (a) Before entering into an agreement with pharmacy 29 providers, a health care plan must establish terms and 30 conditions that must be met by pharmacy providers desiring to 31 contract with the health care plan. The terms and conditions 32 shall not discriminate against a pharmacy provider. A health 33 care plan may not refuse to contract with a pharmacy provider SB251 Enrolled -27- LRB9102764EGfg 1 that meets the terms and conditions established by the health 2 care plan. If a pharmacy provider rejects the terms and 3 conditions established, the health care plan may offer other 4 terms and conditions necessary to comply with network 5 adequacy requirements. 6 (b) A health care plan shall apply the same co-insurance, 7 copayment, and deductible factors to all drug prescriptions 8 filled by a pharmacy provider that participates in the health 9 care plan's network. Nothing in this subsection, however, 10 prohibits a health care plan from applying different 11 co-insurance, copayment, and deductible factors between brand 12 name drugs and generic drugs when a generic equivalent exists 13 for the brand name drug. 14 (c) A health care plan may not set a limit on the 15 quantity of drugs that an enrollee may obtain at one time 16 with a prescription unless the limit is applied uniformly to 17 all pharmacy providers in the health care plan's network. 18 Section 75. Consumer advisory committee. 19 (a) A health care plan shall establish a consumer 20 advisory committee. The consumer advisory committee shall 21 have the authority to identify and review consumer concerns 22 and make advisory recommendations to the health care plan. 23 The health care plan may also make requests of the consumer 24 advisory committee to provide feedback to proposed changes in 25 plan policies and procedures which will affect enrollees. 26 However, the consumer advisory committee shall not have the 27 authority to hear or resolve specific complaints or 28 grievances, but instead shall refer such complaints or 29 grievances to the health care plan's grievance committee. 30 (b) The health care plan shall randomly select 8 31 enrollees meeting the requirements of this Section to serve 32 on the consumer advisory committee. The health care plan must 33 continue to randomly select enrollees until 8 enrollees have SB251 Enrolled -28- LRB9102764EGfg 1 agreed to serve on the consumer advisory committee. Upon 2 initial formation of the consumer advisory committee, the 3 health care plan shall appoint 4 enrollees to a 2 year term 4 and 4 enrollees to a one year term. Thereafter, as an 5 enrollee's term expires, the health care plan shall 6 re-appoint or appoint an enrollee to serve on the consumer 7 advisory committee for a 2 year term. Members of the consumer 8 advisory committee shall by majority vote elect a member of 9 the committee to serve as chair of the committee. 10 (c) An enrollee may not serve on the consumer advisory 11 committee if during the 2 years preceding service the 12 enrollee: 13 (1) has been an employee, officer, or director of 14 the plan, an affiliate of the plan, or a provider or 15 affiliate of a provider that furnishes health care 16 services to the plan or affiliate of the plan; or 17 (2) is a relative of a person specified in item 18 (1). 19 (d) A health care plan's consumer advisory committee 20 shall meet not less than quarterly. 21 (e) All meetings shall be held within the State of 22 Illinois. The costs of the meetings shall be borne by the 23 health care plan. 24 Section 80. Quality assessment program. 25 (a) A health care plan shall develop and implement a 26 quality assessment and improvement strategy designed to 27 identify and evaluate accessibility, continuity, and quality 28 of care. The health care plan shall have: 29 (1) an ongoing, written, internal quality 30 assessment program; 31 (2) specific written guidelines for monitoring and 32 evaluating the quality and appropriateness of care and 33 services provided to enrollees requiring the health care SB251 Enrolled -29- LRB9102764EGfg 1 plan to assess: 2 (A) the accessibility to health care 3 providers; 4 (B) appropriateness of utilization; 5 (C) concerns identified by the health care 6 plan's medical or administrative staff and 7 enrollees; and 8 (D) other aspects of care and service directly 9 related to the improvement of quality of care; 10 (3) a procedure for remedial action to correct 11 quality problems that have been verified in accordance 12 with the written plan's methodology and criteria, 13 including written procedures for taking appropriate 14 corrective action; 15 (4) follow-up measures implemented to evaluate the 16 effectiveness of the action plan. 17 (b) The health care plan shall establish a committee 18 that oversees the quality assessment and improvement strategy 19 which includes physician and enrollee participation. 20 (c) Reports on quality assessment and improvement 21 activities shall be made to the governing body of the health 22 care plan not less than quarterly. 23 (d) The health care plan shall make available its 24 written description of the quality assessment program to the 25 Department of Public Health. 26 (e) With the exception of subsection (d), the Department 27 of Public Health shall accept evidence of accreditation with 28 regard to the health care network quality management and 29 performance improvement standards of: 30 (1) the National Commission on Quality Assurance 31 (NCQA); 32 (2) the American Accreditation Healthcare 33 Commission (URAC); 34 (3) the Joint Commission on Accreditation of SB251 Enrolled -30- LRB9102764EGfg 1 Healthcare Organizations (JCAHO); or 2 (4) any other entity that the Director of Public 3 Health deems has substantially similar or more stringent 4 standards than provided for in this Section. 5 (f) If the Department of Public Health determines that a 6 health care plan is not in compliance with the terms of this 7 Section, it shall certify the finding to the Department of 8 Insurance. The Department of Insurance shall subject a health 9 care plan to penalties, as provided in this Act, for such 10 non-compliance. 11 Section 85. Utilization review program registration. 12 (a) No person may conduct a utilization review program 13 in this State unless once every 2 years the person registers 14 the utilization review program with the Department and 15 certifies compliance with the Health Utilization Management 16 Standards of the American Accreditation Healthcare Commission 17 (URAC) sufficient to achieve American Accreditation 18 Healthcare Commission (URAC) accreditation or submits 19 evidence of accreditation by the American Accreditation 20 Healthcare Commission (URAC) for its Health Utilization 21 Management Standards. Nothing in this Act shall be construed 22 to require a health care plan or its subcontractors to become 23 American Accreditation Healthcare Commission (URAC) 24 accredited. 25 (b) In addition, the Director of the Department, in 26 consultation with the Director of the Department of Public 27 Health, may certify alternative utilization review standards 28 of national accreditation organizations or entities in order 29 for plans to comply with this Section. Any alternative 30 utilization review standards shall meet or exceed those 31 standards required under subsection (a). 32 (c) The provisions of this Section do not apply to: 33 (1) persons providing utilization review program SB251 Enrolled -31- LRB9102764EGfg 1 services only to the federal government; 2 (2) self-insured health plans under the federal 3 Employee Retirement Income Security Act of 1974, however, 4 this Section does apply to persons conducting a 5 utilization review program on behalf of these health 6 plans; 7 (3) hospitals and medical groups performing 8 utilization review activities for internal purposes 9 unless the utilization review program is conducted for 10 another person. 11 Nothing in this Act prohibits a health care plan or other 12 entity from contractually requiring an entity designated in 13 item (3) of this subsection to adhere to the utilization 14 review program requirements of this Act. 15 (d) This registration shall include submission of all of 16 the following information regarding utilization review 17 program activities: 18 (1) The name, address, and telephone number of the 19 utilization review programs. 20 (2) The organization and governing structure of the 21 utilization review programs. 22 (3) The number of lives for which utilization 23 review is conducted by each utilization review program. 24 (4) Hours of operation of each utilization review 25 program. 26 (5) Description of the grievance process for each 27 utilization review program. 28 (6) Number of covered lives for which utilization 29 review was conducted for the previous calendar year for 30 each utilization review program. 31 (7) Written policies and procedures for protecting 32 confidential information according to applicable State 33 and federal laws for each utilization review program. 34 (e) (1) A utilization review program shall have written SB251 Enrolled -32- LRB9102764EGfg 1 procedures for assuring that patient-specific information 2 obtained during the process of utilization review will be: 3 (A) kept confidential in accordance with applicable 4 State and federal laws; and 5 (B) shared only with the enrollee, the enrollee's 6 designee, the enrollee's health care provider, and those 7 who are authorized by law to receive the information. 8 Summary data shall not be considered confidential if it 9 does not provide information to allow identification of 10 individual patients or health care providers. 11 (2) Only a health care professional may make 12 determinations regarding the medical necessity of health 13 care services during the course of utilization review. 14 (3) When making retrospective reviews, utilization 15 review programs shall base reviews solely on the medical 16 information available to the attending physician or 17 ordering provider at the time the health care services 18 were provided. 19 (4) When making prospective, concurrent, and 20 retrospective determinations, utilization review programs 21 shall collect only information that is necessary to make 22 the determination and shall not routinely require health 23 care providers to numerically code diagnoses or 24 procedures to be considered for certification, unless 25 required under State or federal Medicare or Medicaid 26 rules or regulations, but may request such code if 27 available, or routinely request copies of medical records 28 of all enrollees reviewed. During prospective or 29 concurrent review, copies of medical records shall only 30 be required when necessary to verify that the health care 31 services subject to review are medically necessary. In 32 these cases, only the necessary or relevant sections of 33 the medical record shall be required. 34 (f) If the Department finds that a utilization review SB251 Enrolled -33- LRB9102764EGfg 1 program is not in compliance with this Section, the 2 Department shall issue a corrective action plan and allow a 3 reasonable amount of time for compliance with the plan. If 4 the utilization review program does not come into compliance, 5 the Department may issue a cease and desist order. Before 6 issuing a cease and desist order under this Section, the 7 Department shall provide the utilization review program with 8 a written notice of the reasons for the order and allow a 9 reasonable amount of time to supply additional information 10 demonstrating compliance with requirements of this Section 11 and to request a hearing. The hearing notice shall be sent 12 by certified mail, return receipt requested, and the hearing 13 shall be conducted in accordance with the Illinois 14 Administrative Procedure Act. 15 (g) A utilization review program subject to a corrective 16 action may continue to conduct business until a final 17 decision has been issued by the Department. 18 (h) Any adverse determination made by a health care plan 19 or its subcontractors may be appealed in accordance with 20 subsection (f) of Section 45. 21 (i) The Director may by rule establish a registration 22 fee for each person conducting a utilization review program. 23 All fees paid to and collected by the Director under this 24 Section shall be deposited into the Insurance Producer 25 Administration Fund. 26 Section 90. Office of Consumer Health Insurance. 27 (a) The Director of Insurance shall establish the Office 28 of Consumer Health Insurance within the Department of 29 Insurance to provide assistance and information to all health 30 care consumers within the State. Within the appropriation 31 allocated, the Office shall provide information and 32 assistance to all health care consumers by: 33 (1) assisting consumers in understanding health SB251 Enrolled -34- LRB9102764EGfg 1 insurance marketing materials and the coverage provisions 2 of individual plans; 3 (2) educating enrollees about their rights within 4 individual plans; 5 (3) assisting enrollees with the process of filing 6 formal grievances and appeals; 7 (4) establishing and operating a toll-free "800" 8 telephone number line to handle consumer inquiries; 9 (5) making related information available in 10 languages other than English that are spoken as a primary 11 language by a significant portion of the State's 12 population, as determined by the Department; 13 (6) analyzing, commenting on, monitoring, and 14 making publicly available reports on the development and 15 implementation of federal, State, and local laws, 16 regulations, and other governmental policies and actions 17 that pertain to the adequacy of health care plans, 18 facilities, and services in the State; 19 (7) filing an annual report with the Governor, the 20 Director, and the General Assembly, which shall contain 21 recommendations for improvement of the regulation of 22 health insurance plans, including recommendations on 23 improving health care consumer assistance and patterns, 24 abuses, and progress that it has identified from its 25 interaction with health care consumers; and 26 (8) performing all duties assigned to the Office by 27 the Director. 28 (b) The report required under subsection (a)(7) shall be 29 filed by January 31, 2001 and each January 31 thereafter. 30 (c) Nothing in this Section shall be interpreted to 31 authorize access to or disclosure of individual patient or 32 health care professional or provider records. 33 Section 95. Prohibited activity. No health care plan or SB251 Enrolled -35- LRB9102764EGfg 1 its subcontractors by contract, written policy, or procedure 2 shall contain any clause attempting to transfer or 3 transferring to a health care provider by indemnification, 4 hold harmless, or contribution requirements concerning any 5 liability relating to activities, actions, or omissions of 6 the health care plan or its officers, employees, or agents. 7 Nothing in this Section shall relieve any person or health 8 care provider from liability for his, her, or its own 9 negligence in the performance of his, her, or its duties 10 arising from treatment of a patient. The Illinois General 11 Assembly finds it to be against public policy for a person to 12 transfer liability in such a manner. 13 Section 100. Prohibition of waiver of rights. No health 14 care plan or contract shall contain any provision, policy, or 15 procedure that limits, restricts, or waives any of the rights 16 set forth in this Act. Any such policy or procedure shall be 17 void and unenforceable. 18 Section 105. Administration and enforcement. The 19 Director of Insurance may adopt rules necessary to implement 20 the Department's responsibilities under this Act. 21 To enforce the provisions of this Act, the Director may 22 issue a cease and desist order or require a health care plan 23 to submit a plan of correction for violations of this Act, or 24 both. Subject to the provisions of the Illinois 25 Administrative Procedure Act, the Director may, pursuant to 26 Section 403A of the Illinois Insurance Code, impose upon a 27 health care plan an administrative fine not to exceed 28 $250,000 for failure to submit a requested plan of 29 correction, failure to comply with its plan of correction, or 30 repeated violations of the Act. 31 Any person who believes that his or her health care plan 32 is in violation of the provisions of this Act may file a SB251 Enrolled -36- LRB9102764EGfg 1 complaint with the Department. The Department shall review 2 all complaints received and investigate all of those 3 complaints that it deems to state a potential violation. The 4 Department shall establish rules to fairly, efficiently, and 5 timely review and investigate complaints. Health care plans 6 found to be in violation of this Act shall be penalized in 7 accordance with this Section. 8 Section 110. Applicability and scope. This Act applies 9 to policies and contracts amended, delivered, issued, or 10 renewed on or after the effective date of this Act. This Act 11 does not diminish a health care plan's duties and 12 responsibilities under other federal or State law or rules 13 promulgated thereunder. 14 Section 115. Effect on benefits under Workers' 15 Compensation Act and Workers' Occupational Diseases Act. 16 Nothing in this Act shall be construed to expand, modify, or 17 restrict the health care benefits provided to employees under 18 the Workers' Compensation Act and Workers' Occupational 19 Diseases Act. 20 Section 120. Severability. The provisions of this Act 21 are severable under Section 1.31 of the Statute on Statutes. 22 Section 200. The State Employees Group Insurance Act of 23 1971 is amended by changing Sections 3 and 10 and adding 24 Section 6.12 as follows: 25 (5 ILCS 375/3) (from Ch. 127, par. 523) 26 Sec. 3. Definitions. Unless the context otherwise 27 requires, the following words and phrases as used in this Act 28 shall have the following meanings. The Department may define 29 these and other words and phrases separately for the purpose SB251 Enrolled -37- LRB9102764EGfg 1 of implementing specific programs providing benefits under 2 this Act. 3 (a) "Administrative service organization" means any 4 person, firm or corporation experienced in the handling of 5 claims which is fully qualified, financially sound and 6 capable of meeting the service requirements of a contract of 7 administration executed with the Department. 8 (b) "Annuitant" means (1) an employee who retires, or 9 has retired, on or after January 1, 1966 on an immediate 10 annuity under the provisions of Articles 2, 14, 15 (including 11 an employee who has retired under the optional retirement 12 program established under Section 15-158.2), paragraphs (2), 13 (3), or (5) of Section 16-106, or Article 18 of the Illinois 14 Pension Code; (2) any person who was receiving group 15 insurance coverage under this Act as of March 31, 1978 by 16 reason of his status as an annuitant, even though the annuity 17 in relation to which such coverage was provided is a 18 proportional annuity based on less than the minimum period of 19 service required for a retirement annuity in the system 20 involved; (3) any person not otherwise covered by this Act 21 who has retired as a participating member under Article 2 of 22 the Illinois Pension Code but is ineligible for the 23 retirement annuity under Section 2-119 of the Illinois 24 Pension Code; (4) the spouse of any person who is receiving a 25 retirement annuity under Article 18 of the Illinois Pension 26 Code and who is covered under a group health insurance 27 program sponsored by a governmental employer other than the 28 State of Illinois and who has irrevocably elected to waive 29 his or her coverage under this Act and to have his or her 30 spouse considered as the "annuitant" under this Act and not 31 as a "dependent"; or (5) an employee who retires, or has 32 retired, from a qualified position, as determined according 33 to rules promulgated by the Director, under a qualified local 34 government or a qualified rehabilitation facility or a SB251 Enrolled -38- LRB9102764EGfg 1 qualified domestic violence shelter or service. (For 2 definition of "retired employee", see (p) post). 3 (b-5) "New SERS annuitant" means a person who, on or 4 after January 1, 1998, becomes an annuitant, as defined in 5 subsection (b), by virtue of beginning to receive a 6 retirement annuity under Article 14 of the Illinois Pension 7 Code, and is eligible to participate in the basic program of 8 group health benefits provided for annuitants under this Act. 9 (b-6) "New SURS annuitant" means a person who, on or 10 after January 1, 1998, becomes an annuitant, as defined in 11 subsection (b), by virtue of beginning to receive a 12 retirement annuity under Article 15 of the Illinois Pension 13 Code, and is eligible to participate in the basic program of 14 group health benefits provided for annuitants under this Act. 15 (b-7) "New TRS State annuitant" means a person who, on 16 or after July 1, 1998, becomes an annuitant, as defined in 17 subsection (b), by virtue of beginning to receive a 18 retirement annuity under Article 16 of the Illinois Pension 19 Code based on service as a teacher as defined in paragraph 20 (2), (3), or (5) of Section 16-106 of that Code, and is 21 eligible to participate in the basic program of group health 22 benefits provided for annuitants under this Act. 23 (c) "Carrier" means (1) an insurance company, a 24 corporation organized under the Limited Health Service 25 Organization Act or the Voluntary Health Services Plan Act, a 26 partnership, or other nongovernmental organization, which is 27 authorized to do group life or group health insurance 28 business in Illinois, or (2) the State of Illinois as a 29 self-insurer. 30 (d) "Compensation" means salary or wages payable on a 31 regular payroll by the State Treasurer on a warrant of the 32 State Comptroller out of any State, trust or federal fund, or 33 by the Governor of the State through a disbursing officer of 34 the State out of a trust or out of federal funds, or by any SB251 Enrolled -39- LRB9102764EGfg 1 Department out of State, trust, federal or other funds held 2 by the State Treasurer or the Department, to any person for 3 personal services currently performed, and ordinary or 4 accidental disability benefits under Articles 2, 14, 15 5 (including ordinary or accidental disability benefits under 6 the optional retirement program established under Section 7 15-158.2), paragraphs (2), (3), or (5) of Section 16-106, or 8 Article 18 of the Illinois Pension Code, for disability 9 incurred after January 1, 1966, or benefits payable under the 10 Workers' Compensation or Occupational Diseases Act or 11 benefits payable under a sick pay plan established in 12 accordance with Section 36 of the State Finance Act. 13 "Compensation" also means salary or wages paid to an employee 14 of any qualified local government or qualified rehabilitation 15 facility or a qualified domestic violence shelter or service. 16 (e) "Commission" means the State Employees Group 17 Insurance Advisory Commission authorized by this Act. 18 Commencing July 1, 1984, "Commission" as used in this Act 19 means the Illinois Economic and Fiscal Commission as 20 established by the Legislative Commission Reorganization Act 21 of 1984. 22 (f) "Contributory", when referred to as contributory 23 coverage, shall mean optional coverages or benefits elected 24 by the member toward the cost of which such member makes 25 contribution, or which are funded in whole or in part through 26 the acceptance of a reduction in earnings or the foregoing of 27 an increase in earnings by an employee, as distinguished from 28 noncontributory coverage or benefits which are paid entirely 29 by the State of Illinois without reduction of the member's 30 salary. 31 (g) "Department" means any department, institution, 32 board, commission, officer, court or any agency of the State 33 government receiving appropriations and having power to 34 certify payrolls to the Comptroller authorizing payments of SB251 Enrolled -40- LRB9102764EGfg 1 salary and wages against such appropriations as are made by 2 the General Assembly from any State fund, or against trust 3 funds held by the State Treasurer and includes boards of 4 trustees of the retirement systems created by Articles 2, 14, 5 15, 16 and 18 of the Illinois Pension Code. "Department" 6 also includes the Illinois Comprehensive Health Insurance 7 Board, the Board of Examiners established under the Illinois 8 Public Accounting Act, and the Illinois Rural Bond Bank. 9 (h) "Dependent", when the term is used in the context of 10 the health and life plan, means a member's spouse and any 11 unmarried child (1) from birth to age 19 including an adopted 12 child, a child who lives with the member from the time of the 13 filing of a petition for adoption until entry of an order of 14 adoption, a stepchild or recognized child who lives with the 15 member in a parent-child relationship, or a child who lives 16 with the member if such member is a court appointed guardian 17 of the child, or (2) age 19 to 23 enrolled as a full-time 18 student in any accredited school, financially dependent upon 19 the member, and eligible as a dependent for Illinois State 20 income tax purposes, or (3) age 19 or over who is mentally or 21 physically handicapped as defined in the Illinois Insurance 22 Code. For the health plan only, the term "dependent" also 23 includes any person enrolled prior to the effective date of 24 this Section who is dependent upon the member to the extent 25 that the member may claim such person as a dependent for 26 Illinois State income tax deduction purposes; no other such 27 person may be enrolled. 28 (i) "Director" means the Director of the Illinois 29 Department of Central Management Services. 30 (j) "Eligibility period" means the period of time a 31 member has to elect enrollment in programs or to select 32 benefits without regard to age, sex or health. 33 (k) "Employee" means and includes each officer or 34 employee in the service of a department who (1) receives his SB251 Enrolled -41- LRB9102764EGfg 1 compensation for service rendered to the department on a 2 warrant issued pursuant to a payroll certified by a 3 department or on a warrant or check issued and drawn by a 4 department upon a trust, federal or other fund or on a 5 warrant issued pursuant to a payroll certified by an elected 6 or duly appointed officer of the State or who receives 7 payment of the performance of personal services on a warrant 8 issued pursuant to a payroll certified by a Department and 9 drawn by the Comptroller upon the State Treasurer against 10 appropriations made by the General Assembly from any fund or 11 against trust funds held by the State Treasurer, and (2) is 12 employed full-time or part-time in a position normally 13 requiring actual performance of duty during not less than 1/2 14 of a normal work period, as established by the Director in 15 cooperation with each department, except that persons elected 16 by popular vote will be considered employees during the 17 entire term for which they are elected regardless of hours 18 devoted to the service of the State, and (3) except that 19 "employee" does not include any person who is not eligible by 20 reason of such person's employment to participate in one of 21 the State retirement systems under Articles 2, 14, 15 (either 22 the regular Article 15 system or the optional retirement 23 program established under Section 15-158.2) or 18, or under 24 paragraph (2), (3), or (5) of Section 16-106, of the Illinois 25 Pension Code, but such term does include persons who are 26 employed during the 6 month qualifying period under Article 27 14 of the Illinois Pension Code. Such term also includes any 28 person who (1) after January 1, 1966, is receiving ordinary 29 or accidental disability benefits under Articles 2, 14, 15 30 (including ordinary or accidental disability benefits under 31 the optional retirement program established under Section 32 15-158.2), paragraphs (2), (3), or (5) of Section 16-106, or 33 Article 18 of the Illinois Pension Code, for disability 34 incurred after January 1, 1966, (2) receives total permanent SB251 Enrolled -42- LRB9102764EGfg 1 or total temporary disability under the Workers' Compensation 2 Act or Occupational Disease Act as a result of injuries 3 sustained or illness contracted in the course of employment 4 with the State of Illinois, or (3) is not otherwise covered 5 under this Act and has retired as a participating member 6 under Article 2 of the Illinois Pension Code but is 7 ineligible for the retirement annuity under Section 2-119 of 8 the Illinois Pension Code. However, a person who satisfies 9 the criteria of the foregoing definition of "employee" except 10 that such person is made ineligible to participate in the 11 State Universities Retirement System by clause (4) of 12 subsection (a) of Section 15-107 of the Illinois Pension Code 13 is also an "employee" for the purposes of this Act. 14 "Employee" also includes any person receiving or eligible for 15 benefits under a sick pay plan established in accordance with 16 Section 36 of the State Finance Act. "Employee" also includes 17 each officer or employee in the service of a qualified local 18 government, including persons appointed as trustees of 19 sanitary districts regardless of hours devoted to the service 20 of the sanitary district, and each employee in the service of 21 a qualified rehabilitation facility and each full-time 22 employee in the service of a qualified domestic violence 23 shelter or service, as determined according to rules 24 promulgated by the Director. 25 (l) "Member" means an employee, annuitant, retired 26 employee or survivor. 27 (m) "Optional coverages or benefits" means those 28 coverages or benefits available to the member on his or her 29 voluntary election, and at his or her own expense. 30 (n) "Program" means the group life insurance, health 31 benefits and other employee benefits designed and contracted 32 for by the Director under this Act. 33 (o) "Health plan" means a self-insured health insurance 34 program offered by the State of Illinois for the purposes of SB251 Enrolled -43- LRB9102764EGfg 1 benefiting employees by means of providing, among others, 2 wellness programs, utilization reviews, second opinions and 3 medical fee reviews, as well as for paying for hospital and 4 medical care up to the maximum coverage provided by the plan, 5 to its members and their dependents. 6 (p) "Retired employee" means any person who would be an 7 annuitant as that term is defined herein but for the fact 8 that such person retired prior to January 1, 1966. Such term 9 also includes any person formerly employed by the University 10 of Illinois in the Cooperative Extension Service who would be 11 an annuitant but for the fact that such person was made 12 ineligible to participate in the State Universities 13 Retirement System by clause (4) of subsection (a) of Section 14 15-107 of the Illinois Pension Code. 15 (p-6) "New SURS retired employee" means a person who, on 16 or after January 1, 1998, becomes a retired employee, as 17 defined in subsection (p), by virtue of being a person 18 formerly employed by the University of Illinois in the 19 Cooperative Extension Service who would be an annuitant but 20 for the fact that he or she was made ineligible to 21 participate in the State Universities Retirement System by 22 clause (4) of subsection (a) of Section 15-107 of the 23 Illinois Pension Code, and who is eligible to participate in 24 the basic program of group health benefits provided for 25 retired employees under this Act. 26 (q) "Survivor" means a person receiving an annuity as a 27 survivor of an employee or of an annuitant. "Survivor" also 28 includes: (1) the surviving dependent of a person who 29 satisfies the definition of "employee" except that such 30 person is made ineligible to participate in the State 31 Universities Retirement System by clause (4) of subsection 32 (a) of Section 15-107 of the Illinois Pension Code; and (2) 33 the surviving dependent of any person formerly employed by 34 the University of Illinois in the Cooperative Extension SB251 Enrolled -44- LRB9102764EGfg 1 Service who would be an annuitant except for the fact that 2 such person was made ineligible to participate in the State 3 Universities Retirement System by clause (4) of subsection 4 (a) of Section 15-107 of the Illinois Pension Code. 5 (q-5) "New SERS survivor" means a survivor, as defined 6 in subsection (q), whose annuity is paid under Article 14 of 7 the Illinois Pension Code and is based on the death of (i) an 8 employee whose death occurs on or after January 1, 1998, or 9 (ii) a new SERS annuitant as defined in subsection (b-5). 10 (q-6) "New SURS survivor" means a survivor, as defined 11 in subsection (q), whose annuity is paid under Article 15 of 12 the Illinois Pension Code and is based on the death of (i) an 13 employee whose death occurs on or after January 1, 1998, (ii) 14 a new SURS annuitant as defined in subsection (b-6), or (iii) 15 a new SURS retired employee as defined in subsection (p-6). 16 (q-7) "New TRS State survivor" means a survivor, as 17 defined in subsection (q), whose annuity is paid under 18 Article 16 of the Illinois Pension Code and is based on the 19 death of (i) an employee who is a teacher as defined in 20 paragraph (2), (3), or (5) of Section 16-106 of that Code and 21 whose death occurs on or after July 1, 1998, or (ii) a new 22 TRS State annuitant as defined in subsection (b-7). 23 (r) "Medical services" means the services provided 24 within the scope of their licenses by practitioners in all 25 categories licensed under the Medical Practice Act of 1987. 26 (s) "Unit of local government" means any county, 27 municipality, township, school district, special district or 28 other unit, designated as a unit of local government by law, 29 which exercises limited governmental powers or powers in 30 respect to limited governmental subjects, any not-for-profit 31 association with a membership that primarily includes 32 townships and township officials, that has duties that 33 include provision of research service, dissemination of 34 information, and other acts for the purpose of improving SB251 Enrolled -45- LRB9102764EGfg 1 township government, and that is funded wholly or partly in 2 accordance with Section 85-15 of the Township Code; any 3 not-for-profit corporation or association, with a membership 4 consisting primarily of municipalities, that operates its own 5 utility system, and provides research, training, 6 dissemination of information, or other acts to promote 7 cooperation between and among municipalities that provide 8 utility services and for the advancement of the goals and 9 purposes of its membership; the Southern Illinois Collegiate 10 Common Market, which is a consortium of higher education 11 institutions in Southern Illinois; and the Illinois 12 Association of Park Districts. "Qualified local government" 13 means a unit of local government approved by the Director and 14 participating in a program created under subsection (i) of 15 Section 10 of this Act. 16 (t) "Qualified rehabilitation facility" means any 17 not-for-profit organization that is accredited by the 18 Commission on Accreditation of Rehabilitation Facilities or 19 certified by the Department of Human Services (as successor 20 to the Department of Mental Health and Developmental 21 Disabilities) to provide services to persons with 22 disabilities and which receives funds from the State of 23 Illinois for providing those services, approved by the 24 Director and participating in a program created under 25 subsection (j) of Section 10 of this Act. 26 (u) "Qualified domestic violence shelter or service" 27 means any Illinois domestic violence shelter or service and 28 its administrative offices funded by the Department of Human 29 Services (as successor to the Illinois Department of Public 30 Aid), approved by the Director and participating in a program 31 created under subsection (k) of Section 10. 32 (v) "TRS benefit recipient" means a person who: 33 (1) is not a "member" as defined in this Section; 34 and SB251 Enrolled -46- LRB9102764EGfg 1 (2) is receiving a monthly benefit or retirement 2 annuity under Article 16 of the Illinois Pension Code; 3 and 4 (3) either (i) has at least 8 years of creditable 5 service under Article 16 of the Illinois Pension Code, or 6 (ii) was enrolled in the health insurance program offered 7 under that Article on January 1, 1996, or (iii) is the 8 survivor of a benefit recipient who had at least 8 years 9 of creditable service under Article 16 of the Illinois 10 Pension Code or was enrolled in the health insurance 11 program offered under that Article on the effective date 12 of this amendatory Act of 1995, or (iv) is a recipient or 13 survivor of a recipient of a disability benefit under 14 Article 16 of the Illinois Pension Code. 15 (w) "TRS dependent beneficiary" means a person who: 16 (1) is not a "member" or "dependent" as defined in 17 this Section; and 18 (2) is a TRS benefit recipient's: (A) spouse, (B) 19 dependent parent who is receiving at least half of his or 20 her support from the TRS benefit recipient, or (C) 21 unmarried natural or adopted child who is (i) under age 22 19, or (ii) enrolled as a full-time student in an 23 accredited school, financially dependent upon the TRS 24 benefit recipient, eligible as a dependent for Illinois 25 State income tax purposes, and either is under age 24 or 26 was, on January 1, 1996, participating as a dependent 27 beneficiary in the health insurance program offered under 28 Article 16 of the Illinois Pension Code, or (iii) age 19 29 or over who is mentally or physically handicapped as 30 defined in the Illinois Insurance Code. 31 (x) "Military leave with pay and benefits" refers to 32 individuals in basic training for reserves, special/advanced 33 training, annual training, emergency call up, or activation 34 by the President of the United States with approved pay and SB251 Enrolled -47- LRB9102764EGfg 1 benefits. 2 (y) "Military leave without pay and benefits" refers to 3 individuals who enlist for active duty in a regular component 4 of the U.S. Armed Forces or other duty not specified or 5 authorized under military leave with pay and benefits. 6 (z) "Community college benefit recipient" means a person 7 who: 8 (1) is not a "member" as defined in this Section; 9 and 10 (2) is receiving a monthly survivor's annuity or 11 retirement annuity under Article 15 of the Illinois 12 Pension Code; and 13 (3) either (i) was a full-time employee of a 14 community college district or an association of community 15 college boards created under the Public Community College 16 Act (other than an employee whose last employer under 17 Article 15 of the Illinois Pension Code was a community 18 college district subject to Article VII of the Public 19 Community College Act) and was eligible to participate in 20 a group health benefit plan as an employee during the 21 time of employment with a community college district 22 (other than a community college district subject to 23 Article VII of the Public Community College Act) or an 24 association of community college boards, or (ii) is the 25 survivor of a person described in item (i). 26 (aa) "Community college dependent beneficiary" means a 27 person who: 28 (1) is not a "member" or "dependent" as defined in 29 this Section; and 30 (2) is a community college benefit recipient's: (A) 31 spouse, (B) dependent parent who is receiving at least 32 half of his or her support from the community college 33 benefit recipient, or (C) unmarried natural or adopted 34 child who is (i) under age 19, or (ii) enrolled as a SB251 Enrolled -48- LRB9102764EGfg 1 full-time student in an accredited school, financially 2 dependent upon the community college benefit recipient, 3 eligible as a dependent for Illinois State income tax 4 purposes and under age 23, or (iii) age 19 or over and 5 mentally or physically handicapped as defined in the 6 Illinois Insurance Code. 7 (Source: P.A. 89-21, eff. 6-21-95; 89-25, eff. 6-21-95; 8 89-76, eff. 7-1-95; 89-324, eff. 8-13-95; 89-430, eff. 9 12-15-95; 89-502, eff. 7-1-96; 89-507, eff. 7-1-97; 89-628, 10 eff. 8-9-96; 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-448, 11 eff. 8-16-97; 90-497, eff. 8-18-97; 90-511, eff. 8-22-97; 12 90-582, eff. 5-27-98; 90-655, eff. 7-30-98.) 13 (5 ILCS 375/6.12 new) 14 Sec. 6.12. Managed Care Reform and Patient Rights Act. 15 The program of health benefits is subject to the provisions 16 of the Managed Care Reform and Patient Rights Act, except the 17 fee for service program shall only be required to comply with 18 Section 85 and the definition of "emergency medical 19 condition" in Section 10 of the Managed Care Reform and 20 Patient Rights Act. 21 (5 ILCS 375/10) (from Ch. 127, par. 530) 22 Sec. 10. Payments by State; premiums. 23 (a) The State shall pay the cost of basic 24 non-contributory group life insurance and, subject to member 25 paid contributions set by the Department or required by this 26 Section, the basic program of group health benefits on each 27 eligible member, except a member, not otherwise covered by 28 this Act, who has retired as a participating member under 29 Article 2 of the Illinois Pension Code but is ineligible for 30 the retirement annuity under Section 2-119 of the Illinois 31 Pension Code, and part of each eligible member's and retired 32 member's premiums for health insurance coverage for enrolled SB251 Enrolled -49- LRB9102764EGfg 1 dependents as provided by Section 9. The State shall pay the 2 cost of the basic program of group health benefits only after 3 benefits are reduced by the amount of benefits covered by 4 Medicare for all retired members and retired dependents aged 5 65 years or older who are entitled to benefits under Social 6 Security or the Railroad Retirement system or who had 7 sufficient Medicare-covered government employment except that 8 such reduction in benefits shall apply only to those retired 9 members or retired dependents who (1) first become eligible 10 for such Medicare coverage on or after July 1, 1992; or (2) 11 remain eligible for, but no longer receive Medicare coverage 12 which they had been receiving on or after July 1, 1992. The 13 Department may determine the aggregate level of the State's 14 contribution on the basis of actual cost of medical services 15 adjusted for age, sex or geographic or other demographic 16 characteristics which affect the costs of such programs. 17 The cost of participation in the basic program of group 18 health benefits for the dependent or survivor of a living or 19 deceased retired employee who was formerly employed by the 20 University of Illinois in the Cooperative Extension Service 21 and would be an annuitant but for the fact that he or she was 22 made ineligible to participate in the State Universities 23 Retirement System by clause (4) of subsection (a) of Section 24 15-107 of the Illinois Pension Code shall not be greater than 25 the cost of participation that would otherwise apply to that 26 dependent or survivor if he or she were the dependent or 27 survivor of an annuitant under the State Universities 28 Retirement System. 29 (a-1) Beginning January 1, 1998, for each person who 30 becomes a new SERS annuitant and participates in the basic 31 program of group health benefits, the State shall contribute 32 toward the cost of the annuitant's coverage under the basic 33 program of group health benefits an amount equal to 5% of 34 that cost for each full year of creditable service upon which SB251 Enrolled -50- LRB9102764EGfg 1 the annuitant's retirement annuity is based, up to a maximum 2 of 100% for an annuitant with 20 or more years of creditable 3 service. The remainder of the cost of a new SERS annuitant's 4 coverage under the basic program of group health benefits 5 shall be the responsibility of the annuitant. 6 (a-2) Beginning January 1, 1998, for each person who 7 becomes a new SERS survivor and participates in the basic 8 program of group health benefits, the State shall contribute 9 toward the cost of the survivor's coverage under the basic 10 program of group health benefits an amount equal to 5% of 11 that cost for each full year of the deceased employee's or 12 deceased annuitant's creditable service in the State 13 Employees' Retirement System of Illinois on the date of 14 death, up to a maximum of 100% for a survivor of an employee 15 or annuitant with 20 or more years of creditable service. 16 The remainder of the cost of the new SERS survivor's coverage 17 under the basic program of group health benefits shall be the 18 responsibility of the survivor. 19 (a-3) Beginning January 1, 1998, for each person who 20 becomes a new SURS annuitant and participates in the basic 21 program of group health benefits, the State shall contribute 22 toward the cost of the annuitant's coverage under the basic 23 program of group health benefits an amount equal to 5% of 24 that cost for each full year of creditable service upon which 25 the annuitant's retirement annuity is based, up to a maximum 26 of 100% for an annuitant with 20 or more years of creditable 27 service. The remainder of the cost of a new SURS annuitant's 28 coverage under the basic program of group health benefits 29 shall be the responsibility of the annuitant. 30 (a-4) Beginning January 1, 1998, for each person who 31 becomes a new SURS retired employee and participates in the 32 basic program of group health benefits, the State shall 33 contribute toward the cost of the retired employee's coverage 34 under the basic program of group health benefits an amount SB251 Enrolled -51- LRB9102764EGfg 1 equal to 5% of that cost for each full year that the retired 2 employee was an employee as defined in Section 3, up to a 3 maximum of 100% for a retired employee who was an employee 4 for 20 or more years. The remainder of the cost of a new 5 SURS retired employee's coverage under the basic program of 6 group health benefits shall be the responsibility of the 7 retired employee. 8 (a-5) Beginning January 1, 1998, for each person who 9 becomes a new SURS survivor and participates in the basic 10 program of group health benefits, the State shall contribute 11 toward the cost of the survivor's coverage under the basic 12 program of group health benefits an amount equal to 5% of 13 that cost for each full year of the deceased employee's or 14 deceased annuitant's creditable service in the State 15 Universities Retirement System on the date of death, up to a 16 maximum of 100% for a survivor of an employee or annuitant 17 with 20 or more years of creditable service. The remainder 18 of the cost of the new SURS survivor's coverage under the 19 basic program of group health benefits shall be the 20 responsibility of the survivor. 21 (a-6) Beginning July 1, 1998, for each person who 22 becomes a new TRS State annuitant and participates in the 23 basic program of group health benefits, the State shall 24 contribute toward the cost of the annuitant's coverage under 25 the basic program of group health benefits an amount equal to 26 5% of that cost for each full year of creditable service as a 27 teacher as defined in paragraph (2), (3), or (5) of Section 28 16-106 of the Illinois Pension Code upon which the 29 annuitant's retirement annuity is based, up to a maximum of 30 100% for an annuitant with 20 or more years of such 31 creditable service. The remainder of the cost of a new TRS 32 State annuitant's coverage under the basic program of group 33 health benefits shall be the responsibility of the annuitant. 34 (a-7) Beginning July 1, 1998, for each person who SB251 Enrolled -52- LRB9102764EGfg 1 becomes a new TRS State survivor and participates in the 2 basic program of group health benefits, the State shall 3 contribute toward the cost of the survivor's coverage under 4 the basic program of group health benefits an amount equal to 5 5% of that cost for each full year of the deceased employee's 6 or deceased annuitant's creditable service as a teacher as 7 defined in paragraph (2), (3), or (5) of Section 16-106 of 8 the Illinois Pension Code on the date of death, up to a 9 maximum of 100% for a survivor of an employee or annuitant 10 with 20 or more years of such creditable service. The 11 remainder of the cost of the new TRS State survivor's 12 coverage under the basic program of group health benefits 13 shall be the responsibility of the survivor. 14 (a-8) A new SERS annuitant, new SERS survivor, new SURS 15 annuitant, new SURS retired employee, new SURS survivor, new 16 TRS State annuitant, or new TRS State survivor may waive or 17 terminate coverage in the program of group health benefits. 18 Any such annuitant, survivor, or retired employee who has 19 waived or terminated coverage may enroll or re-enroll in the 20 program of group health benefits only during the annual 21 benefit choice period, as determined by the Director; except 22 that in the event of termination of coverage due to 23 nonpayment of premiums, the annuitant, survivor, or retired 24 employee may not re-enroll in the program. 25 (a-9) No later than May 1 of each calendar year, the 26 Director of Central Management Services shall certify in 27 writing to the Executive Secretary of the State Employees' 28 Retirement System of Illinois the amounts of the Medicare 29 supplement health care premiums and the amounts of the health 30 care premiums for all other retirees who are not Medicare 31 eligible. 32 A separate calculation of the premiums based upon the 33 actual cost of each health care plan shall be so certified. 34 The Director of Central Management Services shall provide SB251 Enrolled -53- LRB9102764EGfg 1 to the Executive Secretary of the State Employees' Retirement 2 System of Illinois such information, statistics, and other 3 data as he or she may require to review the premium amounts 4 certified by the Director of Central Management Services. 5 (b) State employees who become eligible for this program 6 on or after January 1, 1980 in positions normally requiring 7 actual performance of duty not less than 1/2 of a normal work 8 period but not equal to that of a normal work period, shall 9 be given the option of participating in the available 10 program. If the employee elects coverage, the State shall 11 contribute on behalf of such employee to the cost of the 12 employee's benefit and any applicable dependent supplement, 13 that sum which bears the same percentage as that percentage 14 of time the employee regularly works when compared to normal 15 work period. 16 (c) The basic non-contributory coverage from the basic 17 program of group health benefits shall be continued for each 18 employee not in pay status or on active service by reason of 19 (1) leave of absence due to illness or injury, (2) authorized 20 educational leave of absence or sabbatical leave, or (3) 21 military leave with pay and benefits. This coverage shall 22 continue until expiration of authorized leave and return to 23 active service, but not to exceed 24 months for leaves under 24 item (1) or (2). This 24-month limitation and the requirement 25 of returning to active service shall not apply to persons 26 receiving ordinary or accidental disability benefits or 27 retirement benefits through the appropriate State retirement 28 system or benefits under the Workers' Compensation or 29 Occupational Disease Act. 30 (d) The basic group life insurance coverage shall 31 continue, with full State contribution, where such person is 32 (1) absent from active service by reason of disability 33 arising from any cause other than self-inflicted, (2) on 34 authorized educational leave of absence or sabbatical leave, SB251 Enrolled -54- LRB9102764EGfg 1 or (3) on military leave with pay and benefits. 2 (e) Where the person is in non-pay status for a period 3 in excess of 30 days or on leave of absence, other than by 4 reason of disability, educational or sabbatical leave, or 5 military leave with pay and benefits, such person may 6 continue coverage only by making personal payment equal to 7 the amount normally contributed by the State on such person's 8 behalf. Such payments and coverage may be continued: (1) 9 until such time as the person returns to a status eligible 10 for coverage at State expense, but not to exceed 24 months, 11 (2) until such person's employment or annuitant status with 12 the State is terminated, or (3) for a maximum period of 4 13 years for members on military leave with pay and benefits and 14 military leave without pay and benefits (exclusive of any 15 additional service imposed pursuant to law). 16 (f) The Department shall establish by rule the extent 17 to which other employee benefits will continue for persons in 18 non-pay status or who are not in active service. 19 (g) The State shall not pay the cost of the basic 20 non-contributory group life insurance, program of health 21 benefits and other employee benefits for members who are 22 survivors as defined by paragraphs (1) and (2) of subsection 23 (q) of Section 3 of this Act. The costs of benefits for 24 these survivors shall be paid by the survivors or by the 25 University of Illinois Cooperative Extension Service, or any 26 combination thereof. However, the State shall pay the amount 27 of the reduction in the cost of participation, if any, 28 resulting from the amendment to subsection (a) made by this 29 amendatory Act of the 91st General Assembly. 30 (h) Those persons occupying positions with any 31 department as a result of emergency appointments pursuant to 32 Section 8b.8 of the Personnel Code who are not considered 33 employees under this Act shall be given the option of 34 participating in the programs of group life insurance, health SB251 Enrolled -55- LRB9102764EGfg 1 benefits and other employee benefits. Such persons electing 2 coverage may participate only by making payment equal to the 3 amount normally contributed by the State for similarly 4 situated employees. Such amounts shall be determined by the 5 Director. Such payments and coverage may be continued until 6 such time as the person becomes an employee pursuant to this 7 Act or such person's appointment is terminated. 8 (i) Any unit of local government within the State of 9 Illinois may apply to the Director to have its employees, 10 annuitants, and their dependents provided group health 11 coverage under this Act on a non-insured basis. To 12 participate, a unit of local government must agree to enroll 13 all of its employees, who may select coverage under either 14 the State group health insurance plan or a health maintenance 15 organization that has contracted with the State to be 16 available as a health care provider for employees as defined 17 in this Act. A unit of local government must remit the 18 entire cost of providing coverage under the State group 19 health insurance plan or, for coverage under a health 20 maintenance organization, an amount determined by the 21 Director based on an analysis of the sex, age, geographic 22 location, or other relevant demographic variables for its 23 employees, except that the unit of local government shall not 24 be required to enroll those of its employees who are covered 25 spouses or dependents under this plan or another group policy 26 or plan providing health benefits as long as (1) an 27 appropriate official from the unit of local government 28 attests that each employee not enrolled is a covered spouse 29 or dependent under this plan or another group policy or plan, 30 and (2) at least 85% of the employees are enrolled and the 31 unit of local government remits the entire cost of providing 32 coverage to those employees. Employees of a participating 33 unit of local government who are not enrolled due to coverage 34 under another group health policy or plan may enroll at a SB251 Enrolled -56- LRB9102764EGfg 1 later date subject to submission of satisfactory evidence of 2 insurability and provided that no benefits shall be payable 3 for services incurred during the first 6 months of coverage 4 to the extent the services are in connection with any 5 pre-existing condition. A participating unit of local 6 government may also elect to cover its annuitants. Dependent 7 coverage shall be offered on an optional basis, with the 8 costs paid by the unit of local government, its employees, or 9 some combination of the two as determined by the unit of 10 local government. The unit of local government shall be 11 responsible for timely collection and transmission of 12 dependent premiums. 13 The Director shall annually determine monthly rates of 14 payment, subject to the following constraints: 15 (1) In the first year of coverage, the rates shall 16 be equal to the amount normally charged to State 17 employees for elected optional coverages or for enrolled 18 dependents coverages or other contributory coverages, or 19 contributed by the State for basic insurance coverages on 20 behalf of its employees, adjusted for differences between 21 State employees and employees of the local government in 22 age, sex, geographic location or other relevant 23 demographic variables, plus an amount sufficient to pay 24 for the additional administrative costs of providing 25 coverage to employees of the unit of local government and 26 their dependents. 27 (2) In subsequent years, a further adjustment shall 28 be made to reflect the actual prior years' claims 29 experience of the employees of the unit of local 30 government. 31 In the case of coverage of local government employees 32 under a health maintenance organization, the Director shall 33 annually determine for each participating unit of local 34 government the maximum monthly amount the unit may contribute SB251 Enrolled -57- LRB9102764EGfg 1 toward that coverage, based on an analysis of (i) the age, 2 sex, geographic location, and other relevant demographic 3 variables of the unit's employees and (ii) the cost to cover 4 those employees under the State group health insurance plan. 5 The Director may similarly determine the maximum monthly 6 amount each unit of local government may contribute toward 7 coverage of its employees' dependents under a health 8 maintenance organization. 9 Monthly payments by the unit of local government or its 10 employees for group health insurance or health maintenance 11 organization coverage shall be deposited in the Local 12 Government Health Insurance Reserve Fund. The Local 13 Government Health Insurance Reserve Fund shall be a 14 continuing fund not subject to fiscal year limitations. All 15 expenditures from this fund shall be used for payments for 16 health care benefits for local government and rehabilitation 17 facility employees, annuitants, and dependents, and to 18 reimburse the Department or its administrative service 19 organization for all expenses incurred in the administration 20 of benefits. No other State funds may be used for these 21 purposes. 22 A local government employer's participation or desire to 23 participate in a program created under this subsection shall 24 not limit that employer's duty to bargain with the 25 representative of any collective bargaining unit of its 26 employees. 27 (j) Any rehabilitation facility within the State of 28 Illinois may apply to the Director to have its employees, 29 annuitants, and their dependents provided group health 30 coverage under this Act on a non-insured basis. To 31 participate, a rehabilitation facility must agree to enroll 32 all of its employees and remit the entire cost of providing 33 such coverage for its employees, except that the 34 rehabilitation facility shall not be required to enroll those SB251 Enrolled -58- LRB9102764EGfg 1 of its employees who are covered spouses or dependents under 2 this plan or another group policy or plan providing health 3 benefits as long as (1) an appropriate official from the 4 rehabilitation facility attests that each employee not 5 enrolled is a covered spouse or dependent under this plan or 6 another group policy or plan, and (2) at least 85% of the 7 employees are enrolled and the rehabilitation facility remits 8 the entire cost of providing coverage to those employees. 9 Employees of a participating rehabilitation facility who are 10 not enrolled due to coverage under another group health 11 policy or plan may enroll at a later date subject to 12 submission of satisfactory evidence of insurability and 13 provided that no benefits shall be payable for services 14 incurred during the first 6 months of coverage to the extent 15 the services are in connection with any pre-existing 16 condition. A participating rehabilitation facility may also 17 elect to cover its annuitants. Dependent coverage shall be 18 offered on an optional basis, with the costs paid by the 19 rehabilitation facility, its employees, or some combination 20 of the 2 as determined by the rehabilitation facility. The 21 rehabilitation facility shall be responsible for timely 22 collection and transmission of dependent premiums. 23 The Director shall annually determine quarterly rates of 24 payment, subject to the following constraints: 25 (1) In the first year of coverage, the rates shall 26 be equal to the amount normally charged to State 27 employees for elected optional coverages or for enrolled 28 dependents coverages or other contributory coverages on 29 behalf of its employees, adjusted for differences between 30 State employees and employees of the rehabilitation 31 facility in age, sex, geographic location or other 32 relevant demographic variables, plus an amount sufficient 33 to pay for the additional administrative costs of 34 providing coverage to employees of the rehabilitation SB251 Enrolled -59- LRB9102764EGfg 1 facility and their dependents. 2 (2) In subsequent years, a further adjustment shall 3 be made to reflect the actual prior years' claims 4 experience of the employees of the rehabilitation 5 facility. 6 Monthly payments by the rehabilitation facility or its 7 employees for group health insurance shall be deposited in 8 the Local Government Health Insurance Reserve Fund. 9 (k) Any domestic violence shelter or service within the 10 State of Illinois may apply to the Director to have its 11 employees, annuitants, and their dependents provided group 12 health coverage under this Act on a non-insured basis. To 13 participate, a domestic violence shelter or service must 14 agree to enroll all of its employees and pay the entire cost 15 of providing such coverage for its employees. A 16 participating domestic violence shelter may also elect to 17 cover its annuitants. Dependent coverage shall be offered on 18 an optional basis, with employees, or some combination of the 19 2 as determined by the domestic violence shelter or service. 20 The domestic violence shelter or service shall be responsible 21 for timely collection and transmission of dependent premiums. 22 The Director shall annually determine quarterly rates of 23 payment, subject to the following constraints: 24 (1) In the first year of coverage, the rates shall 25 be equal to the amount normally charged to State 26 employees for elected optional coverages or for enrolled 27 dependents coverages or other contributory coverages on 28 behalf of its employees, adjusted for differences between 29 State employees and employees of the domestic violence 30 shelter or service in age, sex, geographic location or 31 other relevant demographic variables, plus an amount 32 sufficient to pay for the additional administrative costs 33 of providing coverage to employees of the domestic 34 violence shelter or service and their dependents. SB251 Enrolled -60- LRB9102764EGfg 1 (2) In subsequent years, a further adjustment shall 2 be made to reflect the actual prior years' claims 3 experience of the employees of the domestic violence 4 shelter or service. 5 (3) In no case shall the rate be less than the 6 amount normally charged to State employees or contributed 7 by the State on behalf of its employees. 8 Monthly payments by the domestic violence shelter or 9 service or its employees for group health insurance shall be 10 deposited in the Local Government Health Insurance Reserve 11 Fund. 12 (l) A public community college or entity organized 13 pursuant to the Public Community College Act may apply to the 14 Director initially to have only annuitants not covered prior 15 to July 1, 1992 by the district's health plan provided health 16 coverage under this Act on a non-insured basis. The 17 community college must execute a 2-year contract to 18 participate in the Local Government Health Plan. Those 19 annuitants enrolled initially under this contract shall have 20 no benefits payable for services incurred during the first 6 21 months of coverage to the extent the services are in 22 connection with any pre-existing condition. Any annuitant 23 who may enroll after this initial enrollment period shall be 24 subject to submission of satisfactory evidence of 25 insurability and to the pre-existing conditions limitation. 26 The Director shall annually determine monthly rates of 27 payment subject to the following constraints: for those 28 community colleges with annuitants only enrolled, first year 29 rates shall be equal to the average cost to cover claims for 30 a State member adjusted for demographics, Medicare 31 participation, and other factors; and in the second year, a 32 further adjustment of rates shall be made to reflect the 33 actual first year's claims experience of the covered 34 annuitants. SB251 Enrolled -61- LRB9102764EGfg 1 (m) The Director shall adopt any rules deemed necessary 2 for implementation of this amendatory Act of 1989 (Public Act 3 86-978). 4 (Source: P.A. 89-53, eff. 7-1-95; 89-236, eff. 8-4-95; 5 89-324, eff. 8-13-95; 89-626, eff. 8-9-96; 90-65, eff. 6 7-7-97; 90-582, eff. 5-27-98; 90-655, eff. 7-30-98; revised 7 8-3-98.) 8 Section 205. The State Mandates Act is amended by adding 9 Section 8.23 as follows: 10 (30 ILCS 805/8.23 new) 11 Sec. 8.23. Exempt mandate. Notwithstanding Sections 6 12 and 8 of this Act, no reimbursement by the State is required 13 for the implementation of any mandate created by this 14 amendatory Act of the 91st General Assembly. 15 Section 210. The Counties Code is amended by adding 16 Section 5-1069.8 as follows: 17 (55 ILCS 5/5-1069.8 new) 18 Sec. 5-1069.8. Managed Care Reform and Patient Rights 19 Act. All counties, including home rule counties, are subject 20 to the provisions of the Managed Care Reform and Patient 21 Rights Act. The requirement under this Section that health 22 care benefits provided by counties comply with the Managed 23 Care Reform and Patient Rights Act is an exclusive power and 24 function of the State and is a denial and limitation of home 25 rule county powers under Article VII, Section 6, subsection 26 (h) of the Illinois Constitution. 27 Section 215. The Illinois Municipal Code is amended by 28 adding Section 10-4-2.8 as follows: SB251 Enrolled -62- LRB9102764EGfg 1 (65 ILCS 5/10-4-2.8 new) 2 Sec. 10-4-2.8. Managed Care Reform and Patient Rights 3 Act. The corporate authorities of all municipalities are 4 subject to the provisions of the Managed Care Reform and 5 Patient Rights Act. The requirement under this Section that 6 health care benefits provided by municipalities comply with 7 the Managed Care Reform and Patient Rights Act is an 8 exclusive power and function of the State and is a denial and 9 limitation of home rule municipality powers under Article 10 VII, Section 6, subsection (h) of the Illinois Constitution. 11 Section 220. The Illinois Insurance Code is amended by 12 changing Section 370g and adding Sections 155.36, 370s, and 13 511.118 as follows: 14 (215 ILCS 5/155.36 new) 15 Sec. 155.36. Managed Care Reform and Patient Rights Act. 16 Insurance companies that transact the kinds of insurance 17 authorized under Class 1(b) or Class 2(a) of Section 4 of 18 this Code shall comply with Section 85 and the definition of 19 the term "emergency medical condition" in Section 10 of the 20 Managed Care Reform and Patient Rights Act. 21 (215 ILCS 5/370g) (from Ch. 73, par. 982g) 22 Sec. 370g. Definitions. As used in this Article, the 23 following definitions apply: 24 (a) "Health care services" means health care services or 25 products rendered or sold by a provider within the scope of 26 the provider's license or legal authorization. The term 27 includes, but is not limited to, hospital, medical, surgical, 28 dental, vision and pharmaceutical services or products. 29 (b) "Insurer" means an insurance company or a health 30 service corporation authorized in this State to issue 31 policies or subscriber contracts which reimburse for expenses SB251 Enrolled -63- LRB9102764EGfg 1 of health care services. 2 (c) "Insured" means an individual entitled to 3 reimbursement for expenses of health care services under a 4 policy or subscriber contract issued or administered by an 5 insurer. 6 (d) "Provider" means an individual or entity duly 7 licensed or legally authorized to provide health care 8 services. 9 (e) "Noninstitutional provider" means any person 10 licensed under the Medical Practice Act of 1987, as now or 11 hereafter amended. 12 (f) "Beneficiary" means an individual entitled to 13 reimbursement for expenses of or the discount of provider 14 fees for health care services under a program where the 15 beneficiary has an incentive to utilize the services of a 16 provider which has entered into an agreement or arrangement 17 with an administrator. 18 (g) "Administrator" means any person, partnership or 19 corporation, other than an insurer or health maintenance 20 organization holding a certificate of authority under the 21 "Health Maintenance Organization Act", as now or hereafter 22 amended, that arranges, contracts with, or administers 23 contracts with a provider whereby beneficiaries are provided 24 an incentive to use the services of such provider. 25 (h) "Emergency medical condition" means a medical 26 condition manifesting itself by acute symptoms of sufficient 27 severity (including severe pain) such that a prudent 28 layperson, who possesses an average knowledge of health and 29 medicine, could reasonably expect the absence of immediate 30 medical attention to result in: 31 (1) placing the health of the individual (or, with 32 respect to a pregnant woman, the health of the woman or 33 her unborn child) in serious jeopardy; 34 (2) serious impairment to bodily functions; or SB251 Enrolled -64- LRB9102764EGfg 1 (3) serious dysfunction of any bodily organ or 2 part."Emergency" means an accidental bodily injury or3emergency medical condition which reasonably requires the4beneficiary or insured to seek immediate medical care5under circumstances or at locations which reasonably6preclude the beneficiary or insured from obtaining needed7medical care from a preferred provider.8 (Source: P.A. 88-400.) 9 (215 ILCS 5/370s new) 10 Sec. 370s. Managed Care Reform and Patient Rights Act. 11 All administrators shall comply with Sections 55 and 85 of 12 the Managed Care Reform and Patient Rights Act. 13 (215 ILCS 5/511.118 new) 14 Sec. 511.118. Managed Care Reform and Patient Rights 15 Act. All administrators are subject to the provisions of 16 Sections 55 and 85 of the Managed Care Reform and Patient 17 Rights Act. 18 Section 225. The Comprehensive Health Insurance Plan Act 19 is amended by adding Section 8.6 as follows: 20 (215 ILCS 105/8.6 new) 21 Sec. 8.6. Managed Care Reform and Patient Rights Act. 22 The plan is subject to the provisions of the Managed Care 23 Reform and Patient Rights Act. 24 Section 230. The Health Care Purchasing Group Act is 25 amended by changing Sections 15 and 20 as follows: 26 (215 ILCS 123/15) 27 Sec. 15. Health care purchasing groups; membership; 28 formation. SB251 Enrolled -65- LRB9102764EGfg 1 (a) An HPG may be an organization formed by 2 or more 2 employers with no more than 500 covered employees each2,5003covered individuals, an HPG sponsor or a risk-bearer for 4 purposes of contracting for health insurance under this Act 5 to cover employees and dependents of HPG members. An HPG 6 shall not be prevented from supplementing health insurance 7 coverage purchased under this Act by contracting for services 8 from entities licensed and authorized in Illinois to provide 9 those services under the Dental Service Plan Act, the Limited 10 Health Service Organization Act, or Voluntary Health Services 11 Plans Act. An HPG may be a separate legal entity or simply a 12 group of 2 or more employers with no more than 500 covered 13 employees each2,500 covered individualsaggregated under 14 this Act by an HPG sponsor or risk-bearer for insurance 15 purposes. There shall be no limit as to the number of HPGs 16 that may operate in any geographic area of the State. No 17 insurance risk may be borne or retained by the HPG. All 18 health insurance contracts issued to the HPG must be 19 delivered or issued for delivery in Illinois. 20 (b) Members of an HPG must be Illinois domiciled 21 employers, except that an employer domiciled elsewhere may 22 become a member of an Illinois HPG for the sole purpose of 23 insuring its employees whose place of employment is located 24 within this State. HPG membership may include employers 25 having no more than 500 covered employees each2,500 covered26individuals. 27 (c) If an HPG is formed by any 2 or more employers with 28 no more than 500 covered employees each2,500 covered29individuals, it is authorized to negotiate, solicit, market, 30 obtain proposals for, and enter into group or master health 31 insurance contracts on behalf of its members and their 32 employees and employee dependents so long as it meets all of 33 the following requirements: 34 (1) The HPG must be an organization having the SB251 Enrolled -66- LRB9102764EGfg 1 legal capacity to contract and having its legal situs in 2 Illinois. 3 (2) The principal persons responsible for the 4 conduct of the HPG must perform their HPG related 5 functions in Illinois. 6 (3) No HPG may collect premium in its name or hold 7 or manage premium or claim fund accounts unless duly 8 licensed and qualified as a managing general agent 9 pursuant to Section 141a of the Illinois Insurance Code 10 or a third party administrator pursuant to Section 11 511.105 of the Illinois Insurance Code. 12 (4) If the HPG gives an offer, application, notice, 13 or proposal of insurance to an employer, it must disclose 14 to that employer the total cost of the insurance. Dues, 15 fees, or charges to be paid to the HPG, HPG sponsor, or 16 any other entity as a condition to purchasing the 17 insurance must be itemized. The HPG shall also disclose 18 to its members the amount of any dividends, experience 19 refunds, or other such payments it receives from the 20 risk-bearer. 21 (5) An HPG must register with the Director before 22 entering into a group or master health insurance contract 23 on behalf of its members and must renew the registration 24 annually on forms and at times prescribed by the Director 25 in rules specifying, at minimum, (i) the identity of the 26 officers and directors, trustees, or attorney-in-fact of 27 the HPG; (ii) a certification that those persons have not 28 been convicted of any felony offense involving a breach 29 of fiduciary duty or improper manipulation of accounts; 30 and (iii) the number of employer members then enrolled in 31 the HPG, together with any other information that may be 32 needed to carry out the purposes of this Act. 33 (6) At the time of initial registration and each 34 renewal thereof an HPG shall pay a fee of $100 to the SB251 Enrolled -67- LRB9102764EGfg 1 Director. 2 (d) If an HPG is formed by an HPG sponsor or risk-bearer 3 and the HPG performs no marketing, negotiation, solicitation, 4 or proposing of insurance to HPG members, exclusive of 5 ministerial acts performed by individual employers to service 6 their own employees, then a group or master health insurance 7 contract may be issued in the name of the HPG and held by an 8 HPG sponsor, risk-bearer, or designated employer member 9 within the State. In these cases the HPG requirements 10 specified in subsection (c) shall not be applicable, however: 11 (1) the group or master health insurance contract 12 must contain a provision permitting the contract to be 13 enforced through legal action initiated by any employer 14 member or by an employee of an HPG member who has paid 15 premium for the coverage provided; 16 (2) the group or master health insurance contract 17 must be available for inspection and copying by any HPG 18 member, employee, or insured dependent at a designated 19 location within the State at all normal business hours; 20 and 21 (3) any information concerning HPG membership 22 required by rule under item (5) of subsection (c) must be 23 provided by the HPG sponsor in its registration and 24 renewal forms or by the risk-bearer in its annual 25 reports. 26 (Source: P.A. 90-337, eff. 1-1-98; 90-655, eff. 7-30-98.) 27 (215 ILCS 123/20) 28 Sec. 20. HPG sponsors. Except as provided by Sections 15 29 and 25 of this Act, only a corporation authorized by the 30 Secretary of State to transact business in Illinois may 31 sponsor one or more HPGs with no more than 100,00010,00032 covered individuals by negotiating, soliciting, or servicing 33 health insurance contracts for HPGs and their members. Such a SB251 Enrolled -68- LRB9102764EGfg 1 corporation may assert and maintain authority to act as an 2 HPG sponsor by complying with all of the following 3 requirements: 4 (1) The principal officers and directors 5 responsible for the conduct of the HPG sponsor must 6 perform their HPG sponsor related functions in Illinois. 7 (2) No insurance risk may be borne or retained by 8 the HPG sponsor; all health insurance contracts issued to 9 HPGs through the HPG sponsor must be delivered in 10 Illinois. 11 (3) No HPG sponsor may collect premium in its name 12 or hold or manage premium or claim fund accounts unless 13 duly qualified and licensed as a managing general agent 14 pursuant to Section 141a of the Illinois Insurance Code 15 or as a third party administrator pursuant to Section 16 511.105 of the Illinois Insurance Code. 17 (4) If the HPG gives an offer, application, notice, 18 or proposal of insurance to an employer, it must disclose 19 the total cost of the insurance. Dues, fees, or charges 20 to be paid to the HPG, HPG sponsor, or any other entity 21 as a condition to purchasing the insurance must be 22 itemized. The HPG shall also disclose to its members the 23 amount of any dividends, experience refunds, or other 24 such payments it receives from the risk-bearer. 25 (5) An HPG sponsor must register with the Director 26 before negotiating or soliciting any group or master 27 health insurance contract for any HPG and must renew the 28 registration annually on forms and at times prescribed by 29 the Director in rules specifying, at minimum, (i) the 30 identity of the officers and directors of the HPG sponsor 31 corporation; (ii) a certification that those persons have 32 not been convicted of any felony offense involving a 33 breach of fiduciary duty or improper manipulation of 34 accounts; (iii) the number of employer members then SB251 Enrolled -69- LRB9102764EGfg 1 enrolled in each HPG sponsored; (iv) the date on which 2 each HPG was issued a group or master health insurance 3 contract, if any; and (v) the date on which each such 4 contract, if any, was terminated. 5 (6) At the time of initial registration and each 6 renewal thereof an HPG sponsor shall pay a fee of $100 to 7 the Director. 8 (Source: P.A. 90-337, eff. 1-1-98.) 9 Section 235. The Health Maintenance Organization Act is 10 amended by changing Sections 2-2 and 6-7 and adding Section 11 5-3.6 as follows: 12 (215 ILCS 125/2-2) (from Ch. 111 1/2, par. 1404) 13 Sec. 2-2. Determination by Director; Health Maintenance 14 Advisory Board. 15 (a) Upon receipt of an application for issuance of a 16 certificate of authority, the Director shall transmit copies 17 of such application and accompanying documents to the 18 Director of the Illinois Department of Public Health. The 19 Director of the Department of Public Health shall then 20 determine whether the applicant for certificate of authority, 21 with respect to health care services to be furnished: (1) has 22 demonstrated the willingness and potential ability to assure 23 that such health care service will be provided in a manner to 24 insure both availability and accessibility of adequate 25 personnel and facilities and in a manner enhancing 26 availability, accessibility, and continuity of service; and 27 (2) has arrangements, established in accordance with 28 regulations promulgated by the Department of Public Health 29 for an ongoing quality of health care assurance program 30 concerning health care processes and outcomes. Upon 31 investigation, the Director of the Department of Public 32 Health shall certify to the Director whether the proposed SB251 Enrolled -70- LRB9102764EGfg 1 Health Maintenance Organization meets the requirements of 2 this subsection (a). If the Director of the Department of 3 Public Health certifies that the Health Maintenance 4 Organization does not meet such requirements, he shall 5 specify in what respect it is deficient. 6 There is created in the Department of Public Health a 7 Health Maintenance Advisory Board composed of 11 members. 8 Nine9members shallwhohave practiced in the health field, 9 4 of which shall have been or are currently affiliated with a 10 Health Maintenance Organization. Two of the members shall be 11 members of the general public, one of whom is over 50 years 12 of age. Each member shall be appointed by the Director of 13 the Department of Public Health and serve at the pleasure of 14 that Director and shall receive no compensation for services 15 rendered other than reimbursement for expenses. SixFive16 members of the Board shall constitute a quorum. A vacancy in 17 the membership of the Advisory Board shall not impair the 18 right of a quorum to exercise all rights and perform all 19 duties of the Board. The Health Maintenance Advisory Board 20 has the power to review and comment on proposed rules and 21 regulations to be promulgated by the Director of the 22 Department of Public Health within 30 days after those 23 proposed rules and regulations have been submitted to the 24 Advisory Board. 25 (b) Issuance of a certificate of authority shall be 26 granted if the following conditions are met: 27 (1) the requirements of subsection (c) of Section 28 2-1 have been fulfilled; 29 (2) the persons responsible for the conduct of the 30 affairs of the applicant are competent, trustworthy, and 31 possess good reputations, and have had appropriate 32 experience, training or education; 33 (3) the Director of the Department of Public Health 34 certifies that the Health Maintenance Organization's SB251 Enrolled -71- LRB9102764EGfg 1 proposed plan of operation meets the requirements of this 2 Act; 3 (4) the Health Care Plan furnishes basic health 4 care services on a prepaid basis, through insurance or 5 otherwise, except to the extent of reasonable 6 requirements for co-payments or deductibles as authorized 7 by this Act; 8 (5) the Health Maintenance Organization is 9 financially responsible and may reasonably be expected to 10 meet its obligations to enrollees and prospective 11 enrollees; in making this determination, the Director 12 shall consider: 13 (A) the financial soundness of the applicant's 14 arrangements for health services and the minimum 15 standard rates, co-payments and other patient 16 charges used in connection therewith; 17 (B) the adequacy of working capital, other 18 sources of funding, and provisions for 19 contingencies; and 20 (C) that no certificate of authority shall be 21 issued if the initial minimum net worth of the 22 applicant is less than $2,000,000. The initial net 23 worth shall be provided in cash and securities in 24 combination and form acceptable to the Director; 25 (6) the agreements with providers for the provision 26 of health services contain the provisions required by 27 Section 2-8 of this Act; and 28 (7) any deficiencies identified by the Director 29 have been corrected. 30 (Source: P.A. 86-620; 86-1475.) 31 (215 ILCS 125/5-3.6 new) 32 Sec. 5-3.6. Managed Care Reform and Patient Rights Act. 33 Health maintenance organizations are subject to the SB251 Enrolled -72- LRB9102764EGfg 1 provisions of the Managed Care Reform and Patient Rights Act. 2 3 (215 ILCS 125/6-7) (from Ch. 111 1/2, par. 1418.7) 4 Sec. 6-7. Board of Directors. The board of directors of 5 the Association consists of not less than 75nor more than 6 119members serving terms as established in the plan of 7 operation. The members of the board are to be selected by 8 member organizations subject to the approval of the Director, 9 except the Director shall name 2 members who are current 10 enrollees, one of whom is over 50 years of age. Vacancies on 11 the board must be filled for the remaining period of the term 12 in the manner described in the plan of operation. To select 13 the initial board of directors, and initially organize the 14 Association, the Director must give notice to all member 15 organizations of the time and place of the organizational 16 meeting. In determining voting rights at the organizational 17 meeting each member organization is entitled to one vote in 18 person or by proxy. If the board of directors is not 19 selected at the organizational meeting, the Director may 20 appoint the initial members. 21 In approving selections or in appointing members to the 22 board, the Director must consider, whether all member 23 organizations are fairly represented. 24 Members of the board may be reimbursed from the assets of 25 the Association for expenses incurred by them as members of 26 the board of directors but members of the board may not 27 otherwise be compensated by the Association for their 28 services. 29 (Source: P.A. 85-20.) 30 Section 240. The Limited Health Service Organization Act 31 is amended by adding Section 4002.6 as follows: SB251 Enrolled -73- LRB9102764EGfg 1 (215 ILCS 130/4002.6 new) 2 Sec. 4002.6. Managed Care Reform and Patient Rights Act. 3 Except for health care plans offering only dental services or 4 only vision services, limited health service organizations 5 are subject to the provisions of the Managed Care Reform and 6 Patient Rights Act. 7 Section 245. The Voluntary Health Services Plans Act is 8 amended by adding Section 15.30 as follows: 9 (215 ILCS 165/15.30 new) 10 Sec. 15.30. Managed Care Reform and Patient Rights Act. 11 A health service plan corporation is subject to the 12 provisions of the Managed Care Reform and Patient Rights Act. 13 14 Section 250. The Illinois Public Aid Code is amended by 15 adding Section 5-16.12 as follows: 16 (305 ILCS 5/5-16.12 new) 17 Sec. 5-16.12. Managed Care Reform and Patient Rights 18 Act. The medical assistance program and other programs 19 administered by the Department are subject to the provisions 20 of the Managed Care Reform and Patient Rights Act. The 21 Department may adopt rules to implement those provisions. 22 These rules shall require compliance with that Act in the 23 medical assistance managed care programs and other programs 24 administered by the Department. The medical assistance 25 fee-for-service program is not subject to the provisions of 26 the Managed Care Reform and Patient Rights Act. 27 Nothing in the Managed Care Reform and Patient Rights Act 28 shall be construed to mean that the Department is a health 29 care plan as defined in that Act simply because the 30 Department enters into contractual relationships with health SB251 Enrolled -74- LRB9102764EGfg 1 care plans. 2 Section 299. Effective date. This Section and Section 3 200 of this Act take effect upon becoming law; Sections 25 4 and 85 take effect July 1, 2000; and the remaining Sections 5 of this Act take effect January 1, 2000.