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| [ Engrossed ] | [ Senate Amendment 001 ] |
91_SB0436
LRB9102556JSpcB
1 AN ACT to amend the Illinois Insurance Code by adding
2 Sections 143.32, 143.33, and 143.34 and changing Section
3 357.9.
4 Be it enacted by the People of the State of Illinois,
5 represented in the General Assembly:
6 Section 5. The Illinois Insurance Code is amended by
7 adding Sections 143.32, 143.33, and 143.34 and changing
8 Section 357.9 as follows:
9 (215 ILCS 5/143.32 new)
10 Sec. 143.32. Timely payment of health care services
11 claims.
12 (a) An insurer, health maintenance organization, managed
13 care plan, preferred provider organization, third party
14 administrator, and any entity responsible for payment under a
15 contract shall provide payment for all claims or indemnities
16 payable under the terms of the policy within 30 days
17 following receipt of due proof of loss. Payment shall be made
18 directly to the insured or enrollee who submits the claim or
19 to the health care professional or health care provider who
20 submits a claim on behalf of an insured or enrollee.
21 (b) Failure to pay within such period shall entitle the
22 insured or health care professional or health care provider
23 who submitted the claim to interest at the rate of 9% per
24 year from the 30th day after receipt of proof of loss to the
25 date of late payment, provided that interest amounting to
26 less than $1 need not be paid.
27 (215 ILCS 5/143.33 new)
28 Sec. 143.33. Timely payment of periodic payments for
29 health care services.
30 (a) This Section applies to insurers, health maintenance
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1 organizations, managed care plans, preferred provider
2 organizations, third party administrators, and any other
3 entity responsible for payment under a contract (hereinafter
4 referred to as "payors") that provide periodic payments, such
5 as capitation payments, to physicians licensed to practice
6 medicine in all its branches to provide medical or health
7 care services for insureds or enrollees.
8 (b) A payor shall make periodic payments in accordance
9 with subsection (c). Failure to make periodic payments
10 within the period of time specified in subsection (c) shall
11 entitle the physician licensed to practice medicine in all
12 its branches to interest at the rate of 9% per year from the
13 date payment was due to the date of the late payment,
14 provided that interest amounting to less than $1 need not be
15 paid.
16 (c) A payor shall provide the physician licensed to
17 practice medicine in all its branches with written notice of
18 the assignment or selection as a physician by an insured or
19 enrollee within 30 working days after the selection or
20 assignment. No later than the 45th day following the date an
21 insured or enrollee has selected or has been assigned a
22 physician, a payor shall begin periodic payment of the
23 required amounts to the insured's or enrollee's physician or
24 physician's designee calculated from the time of enrollment.
25 If selection or assignment does not occur at the time of
26 enrollment, periodic payments that would otherwise have been
27 paid to a physician had selection been made shall be reserved
28 as a payable periodic payments until the time as an insured
29 or enrollee makes a selection.
30 (215 ILCS 5/143.34 new)
31 Sec. 143.34. Resolution of health care services payment
32 disputes. The Department shall establish by rule a process to
33 resolve payment disputes between insurers, health maintenance
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1 organizations, managed care plans, preferred provider
2 organizations, third party administrators, and any other
3 entity responsible for payment under a contract and health
4 care professionals and health care providers.
5 (215 ILCS 5/357.9) (from Ch. 73, par. 969.9)
6 Sec. 357.9. "TIME OF PAYMENT OF CLAIMS: Indemnities
7 payable under this policy for any loss other than loss for
8 which this policy provides any periodic payment will be paid
9 immediately upon receipt of due written proof of such loss.
10 Subject to due written proof of loss, all accrued indemnities
11 for loss for which this policy provides periodic payment will
12 be paid . (insert period for payment which must not be less
13 frequently than monthly) and any balance remaining unpaid
14 upon the termination of liability, will be paid immediately
15 upon receipt of due written proof." All claims and
16 indemnities payable under the terms of a policy of accident
17 and health insurance shall be paid within 30 days following
18 receipt by the insurer of due proof of loss. Payment shall be
19 made directly to the insured or enrollee who submits the
20 claim or to the health care professional or health care
21 provider who submits a claim on behalf of an insured or
22 enrollee. Failure to pay within such period shall entitle the
23 insured or health care professional or health care provider
24 to interest at the rate of 9 per cent per annum from the 30th
25 day after receipt of such proof of loss to the date of late
26 payment, provided that interest amounting to less than one
27 dollar need not be paid.
28 The requirements of this Section shall apply to any
29 policy of accident and health insurance delivered, issued for
30 delivery, renewed or amended on or after 180 days following
31 the effective date of this amendatory Act of 1985. The
32 requirements of this Section also shall specifically apply to
33 any group policy of dental insurance only, delivered, issued
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1 for delivery, renewed or amended on or after 180 days
2 following the effective date of this amendatory Act of 1987.
3 (Source: P.A. 85-395.)
4 Section 10. The Health Maintenance Organization Act is
5 amended by changing Section 5-3 as follows:
6 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
7 Sec. 5-3. Insurance Code provisions.
8 (a) Health Maintenance Organizations shall be subject to
9 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
10 141.3, 143, 143.32, 143.33, 143.34, 143c, 147, 148, 149, 151,
11 152, 153, 154, 154.5, 154.6, 154.7, 154.8, 155.04, 355.2,
12 356m, 356v, 356w, 356x, 367i, 401, 401.1, 402, 403, 403A,
13 408, 408.2, 409, 412, 444, and 444.1, paragraph (c) of
14 subsection (2) of Section 367, and Articles VIII 1/2, XII,
15 XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois
16 Insurance Code.
17 (b) For purposes of the Illinois Insurance Code, except
18 for Sections 444 and 444.1 and Articles XIII and XIII 1/2,
19 Health Maintenance Organizations in the following categories
20 are deemed to be "domestic companies":
21 (1) a corporation authorized under the Dental
22 Service Plan Act or the Voluntary Health Services Plans
23 Act;
24 (2) a corporation organized under the laws of this
25 State; or
26 (3) a corporation organized under the laws of
27 another state, 30% or more of the enrollees of which are
28 residents of this State, except a corporation subject to
29 substantially the same requirements in its state of
30 organization as is a "domestic company" under Article
31 VIII 1/2 of the Illinois Insurance Code.
32 (c) In considering the merger, consolidation, or other
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1 acquisition of control of a Health Maintenance Organization
2 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
3 (1) the Director shall give primary consideration
4 to the continuation of benefits to enrollees and the
5 financial conditions of the acquired Health Maintenance
6 Organization after the merger, consolidation, or other
7 acquisition of control takes effect;
8 (2)(i) the criteria specified in subsection (1)(b)
9 of Section 131.8 of the Illinois Insurance Code shall not
10 apply and (ii) the Director, in making his determination
11 with respect to the merger, consolidation, or other
12 acquisition of control, need not take into account the
13 effect on competition of the merger, consolidation, or
14 other acquisition of control;
15 (3) the Director shall have the power to require
16 the following information:
17 (A) certification by an independent actuary of
18 the adequacy of the reserves of the Health
19 Maintenance Organization sought to be acquired;
20 (B) pro forma financial statements reflecting
21 the combined balance sheets of the acquiring company
22 and the Health Maintenance Organization sought to be
23 acquired as of the end of the preceding year and as
24 of a date 90 days prior to the acquisition, as well
25 as pro forma financial statements reflecting
26 projected combined operation for a period of 2
27 years;
28 (C) a pro forma business plan detailing an
29 acquiring party's plans with respect to the
30 operation of the Health Maintenance Organization
31 sought to be acquired for a period of not less than
32 3 years; and
33 (D) such other information as the Director
34 shall require.
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1 (d) The provisions of Article VIII 1/2 of the Illinois
2 Insurance Code and this Section 5-3 shall apply to the sale
3 by any health maintenance organization of greater than 10% of
4 its enrollee population (including without limitation the
5 health maintenance organization's right, title, and interest
6 in and to its health care certificates).
7 (e) In considering any management contract or service
8 agreement subject to Section 141.1 of the Illinois Insurance
9 Code, the Director (i) shall, in addition to the criteria
10 specified in Section 141.2 of the Illinois Insurance Code,
11 take into account the effect of the management contract or
12 service agreement on the continuation of benefits to
13 enrollees and the financial condition of the health
14 maintenance organization to be managed or serviced, and (ii)
15 need not take into account the effect of the management
16 contract or service agreement on competition.
17 (f) Except for small employer groups as defined in the
18 Small Employer Rating, Renewability and Portability Health
19 Insurance Act and except for medicare supplement policies as
20 defined in Section 363 of the Illinois Insurance Code, a
21 Health Maintenance Organization may by contract agree with a
22 group or other enrollment unit to effect refunds or charge
23 additional premiums under the following terms and conditions:
24 (i) the amount of, and other terms and conditions
25 with respect to, the refund or additional premium are set
26 forth in the group or enrollment unit contract agreed in
27 advance of the period for which a refund is to be paid or
28 additional premium is to be charged (which period shall
29 not be less than one year); and
30 (ii) the amount of the refund or additional premium
31 shall not exceed 20% of the Health Maintenance
32 Organization's profitable or unprofitable experience with
33 respect to the group or other enrollment unit for the
34 period (and, for purposes of a refund or additional
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1 premium, the profitable or unprofitable experience shall
2 be calculated taking into account a pro rata share of the
3 Health Maintenance Organization's administrative and
4 marketing expenses, but shall not include any refund to
5 be made or additional premium to be paid pursuant to this
6 subsection (f)). The Health Maintenance Organization and
7 the group or enrollment unit may agree that the
8 profitable or unprofitable experience may be calculated
9 taking into account the refund period and the immediately
10 preceding 2 plan years.
11 The Health Maintenance Organization shall include a
12 statement in the evidence of coverage issued to each enrollee
13 describing the possibility of a refund or additional premium,
14 and upon request of any group or enrollment unit, provide to
15 the group or enrollment unit a description of the method used
16 to calculate (1) the Health Maintenance Organization's
17 profitable experience with respect to the group or enrollment
18 unit and the resulting refund to the group or enrollment unit
19 or (2) the Health Maintenance Organization's unprofitable
20 experience with respect to the group or enrollment unit and
21 the resulting additional premium to be paid by the group or
22 enrollment unit.
23 In no event shall the Illinois Health Maintenance
24 Organization Guaranty Association be liable to pay any
25 contractual obligation of an insolvent organization to pay
26 any refund authorized under this Section.
27 (Source: P.A. 89-90, eff. 6-30-95; 90-25, eff. 1-1-98;
28 90-177, eff. 7-23-97; 90-372, eff. 7-1-98; 90-583, eff.
29 5-29-98; 90-655, eff. 7-30-98; 90-741, eff. 1-1-99; revised
30 9-8-98.)
31 Section 15. The Limited Health Service Organization Act
32 is amended by changing Section 4003 as follows:
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1 (215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
2 Sec. 4003. Illinois Insurance Code provisions. Limited
3 health service organizations shall be subject to the
4 provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
5 141.3, 143, 143.32, 143.33, 143.34, 143c, 147, 148, 149, 151,
6 152, 153, 154, 154.5, 154.6, 154.7, 154.8, 155.04, 355.2,
7 356v, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444,
8 and 444.1 and Articles VIII 1/2, XII, XII 1/2, XIII, XIII
9 1/2, XXV, and XXVI of the Illinois Insurance Code. For
10 purposes of the Illinois Insurance Code, except for Sections
11 444 and 444.1 and Articles XIII and XIII 1/2, limited health
12 service organizations in the following categories are deemed
13 to be domestic companies:
14 (1) a corporation under the laws of this State; or
15 (2) a corporation organized under the laws of
16 another state, 30% of more of the enrollees of which are
17 residents of this State, except a corporation subject to
18 substantially the same requirements in its state of
19 organization as is a domestic company under Article VIII
20 1/2 of the Illinois Insurance Code.
21 (Source: P.A. 90-25, eff. 1-1-98; 90-583, eff. 5-29-98;
22 90-655, eff. 7-30-98.)
23 Section 20. The Voluntary Health Services Plans Act is
24 amended by changing Section 10 as follows:
25 (215 ILCS 165/10) (from Ch. 32, par. 604)
26 Sec. 10. Application of Insurance Code provisions.
27 Health services plan corporations and all persons interested
28 therein or dealing therewith shall be subject to the
29 provisions of Article XII 1/2 and Sections 3.1, 133, 140,
30 143, 143.32, 143.33, 143.34, 143c, 149, 354, 355.2, 356r,
31 356t, 356u, 356v, 356w, 356x, 367.2, 401, 401.1, 402, 403,
32 403A, 408, 408.2, and 412, and paragraphs (7) and (15) of
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1 Section 367 of the Illinois Insurance Code.
2 (Source: P.A. 89-514, eff. 7-17-96; 90-7, eff. 6-10-97;
3 90-25, eff. 1-1-98; 90-655, eff. 7-30-98; 90-741, eff.
4 1-1-99.)