Bill Text: IL HB3748 | 2009-2010 | 96th General Assembly | Introduced

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Bill Title: Amends the Illinois Insurance Code. In the provisions concerning remittance advice and procedures and recoupment, provides that no recoupment or offset may be requested or withheld from future payments 60 or more days after the original payment was made. Provides that the provisions concerning administration and enforcement are deemed incorporated into health care professional and health care provider service contracts entered into on or before the effective date of the amendatory Act. Provides that the Director may require an insurance company that issues a policy in wilful violation of the Act to pay a penalty in a sum not exceeding $5,000 (instead of $1,000). Makes other changes.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2009-03-13 - Rule 19(a) / Re-referred to Rules Committee [HB3748 Detail]

Download: Illinois-2009-HB3748-Introduced.html

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96TH GENERAL ASSEMBLY State of Illinois 2009 and 2010 HB3748 Introduced 2/25/2009, by Rep. Mary E. Flowers SYNOPSIS AS INTRODUCED:
215 ILCS 5/368b
215 ILCS 5/368c
215 ILCS 5/368d
215 ILCS 5/368e
215 ILCS 5/370 from Ch. 73, par. 982
215 ILCS 5/370a from Ch. 73, par. 982a
215 ILCS 5/370b from Ch. 73, par. 982b
Amends the Illinois Insurance Code. In the provisions concerning remittance advice and procedures and recoupment, provides that no recoupment or offset may be requested or withheld from future payments 60 or more days after the original payment was made. Provides that the provisions concerning administration and enforcement are deemed incorporated into health care professional and health care provider service contracts entered into on or before the effective date of the amendatory Act. Provides that the Director may require an insurance company that issues a policy in wilful violation of the Act to pay a penalty in a sum not exceeding $5,000 (instead of $1,000). Makes other changes.
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A BILL FOR
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AN ACT concerning insurance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Insurance Code is amended by
changing Sections 368b, 368c, 368d, 368e, 370, 370a, and 370b
as follows:
(215 ILCS 5/368b)
Sec. 368b. Contracting procedures.
(a) A health care professional or health care provider
offered a contract by an insurer, health maintenance
organization, independent practice association, or physician
hospital organization for signature after the effective date of
this amendatory Act of the 93rd General Assembly shall be
provided with a proposed health care professional or health
care provider services contract including, if any, exhibits and
attachments that the contract indicates are to be attached.
Within 35 days after a written request, the health care
professional or health care provider offered a contract shall
be given the opportunity to review and obtain a copy of the
following: a specialty-specific fee schedule sample based on a
minimum of the 50 highest volume fee schedule codes with the
rates applicable to the health care professional or health care
provider to whom the contract is offered, the network provider

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administration manual, and a summary capitation schedule, if
payment is made on a capitation basis. If 50 codes do not exist
for a particular specialty, the health care professional or
health care provider offered a contract shall be given the
opportunity to review or obtain a copy of a fee schedule sample
with the codes applicable to that particular specialty. This
information may be provided electronically. An insurer, health
maintenance organization, independent practice association, or
physician hospital organization may substitute the fee
schedule sample with a document providing reference to the
information needed to calculate the fee schedule that is
available to the public at no charge and the percentage or
conversion factor at which the insurer, health maintenance
organization, preferred provider organization, independent
practice association, or physician hospital organization sets
its rates.
(b) The fee schedule, the capitation schedule, and the
network provider administration manual constitute
confidential, proprietary, and trade secret information and
are subject to the provisions of the Illinois Trade Secrets
Act. The health care professional or health care provider
receiving such protected information may disclose the
information on a need to know basis and only to individuals and
entities that provide services directly related to the health
care professional's or health care provider's decision to enter
into the contract or keep the contract in force. Any person or

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entity receiving or reviewing such protected information
pursuant to this Section shall not disclose the information to
any other person, organization, or entity, unless the
disclosure is requested pursuant to a valid court order or
required by a state or federal government agency. Individuals
or entities receiving such information from a health care
professional or health care provider as delineated in this
subsection are subject to the provisions of the Illinois Trade
Secrets Act.
(c) The health care professional or health care provider
shall be allowed at least 30 days to review the health care
professional or health care provider services contract,
including exhibits and attachments, if any, before signing. The
30-day review period begins upon receipt of the health care
professional or health care provider services contract, unless
the information available upon request in subsection (a) is not
included. If information is not included in the professional
services contract and is requested pursuant to subsection (a),
the 30-day review period begins on the date of receipt of the
information. Nothing in this subsection shall prohibit a health
care professional or health care provider from signing a
contract prior to the expiration of the 30-day review period.
(d) The insurer, health maintenance organization,
independent practice association, or physician hospital
organization shall provide all contracted health care
professionals or health care providers with any changes to the

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fee schedule provided under subsection (a) not later than 35
days after the effective date of the changes, unless such
changes are specified in the contract and the health care
professional or health care provider is able to calculate the
changed rates based on information in the contract and
information available to the public at no charge. For the
purposes of this subsection, "changes" means an increase or
decrease in the fee schedule referred to in subsection (a).
This information may be made available by mail, e-mail,
newsletter, website listing, or other reasonable method. Upon
request, a health care professional or health care provider may
request an updated copy of the fee schedule referred to in
subsection (a) every calendar quarter.
(e) Upon termination of a contract with an insurer, health
maintenance organization, independent practice association, or
physician hospital organization and at the request of the
patient, a health care professional or health care provider
shall provide transfer copies of the patient's medical records.
Any other provision of law notwithstanding, the costs for
copying and transferring copies of medical records shall be
assigned per the arrangements agreed upon, if any, in the
health care professional or health care provider services
contract.
(Source: P.A. 93-261, eff. 1-1-04.)
(215 ILCS 5/368c)

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Sec. 368c. Remittance advice and procedures.
(a) A remittance advice shall be furnished to a health care
professional or health care provider that identifies the
disposition of each claim. The remittance advice shall identify
the services billed; the patient responsibility, if any; the
actual payment, if any, for the services billed; and the reason
for any reduction to the amount for which the claim was
submitted. For any reductions to the amount for which the claim
was submitted, the remittance shall identify any withholds and
the reason for any denial or reduction.
A remittance advice for capitation or prospective payment
arrangements shall be furnished to a health care professional
or health care provider pursuant to a contract with an insurer,
health maintenance organization, independent practice
association, or physician hospital organization in accordance
with the terms of the contract.
(b) When health care services are provided by a
non-participating health care professional or health care
provider, an insurer, health maintenance organization,
independent practice association, or physician hospital
organization shall may pay for covered services either to a
patient directly or to the non-participating health care
professional or health care provider, if the benefits have been
assigned by the patient.
(c) When a person presents a benefits information card, a
health care professional or health care provider shall make a

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good faith effort to inform the person if the health care
professional or health care provider has a participation
contract with the insurer, health maintenance organization, or
other entity identified on the card.
(d) No recoupment or offset may be requested or withheld
from future payments 60 or more days after the original payment
was made.
(Source: P.A. 93-261, eff. 1-1-04.)
(215 ILCS 5/368d)
Sec. 368d. Recoupments.
(a) A health care professional or health care provider
shall be provided a remittance advice, which must include an
explanation of a recoupment or offset taken by an insurer,
health maintenance organization, independent practice
association, or physician hospital organization, if any. The
recoupment explanation shall, at a minimum, include the name of
the patient; the date of service; the service code or if no
service code is available a service description; the recoupment
amount; and the reason for the recoupment or offset. In
addition, an insurer, health maintenance organization,
independent practice association, or physician hospital
organization shall provide with the remittance advice a
telephone number or mailing address to initiate an appeal of
the recoupment or offset.
(b) It is not a recoupment when a health care professional

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or health care provider is paid an amount prospectively or
concurrently under a contract with an insurer, health
maintenance organization, independent practice association, or
physician hospital organization that requires a retrospective
reconciliation based upon specific conditions outlined in the
contract.
(c) No recoupment or offset may be requested or withheld
from future payments 60 or more days after the original payment
was made.
(Source: P.A. 93-261, eff. 1-1-04.)
(215 ILCS 5/368e)
Sec. 368e. Administration and enforcement.
(a) Other than the duties specifically created in Sections
368b, 368c, and 368d, nothing in those Sections is intended to
preclude, prevent, or require the adoption, modification, or
termination of any utilization management, quality management,
or claims processing methodologies or other provisions of a
contract applicable to services provided under a contract
between an insurer, health maintenance organization,
independent practice association, or physician hospital
organization and a health care professional or health care
provider.
(b) Nothing in Sections 368b, 368c, and 368d precludes,
prevents, or requires the adoption, modification, or
termination of any health plan term, benefit, coverage or

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eligibility provision, or payment methodology.
(c) The provisions of Sections 368b, 368c, and 368d are
deemed incorporated into health care professional and health
care provider service contracts entered into on or before
January 1, 2004 (the effective date of Public Act 93-261) this
amendatory Act of the 93rd General Assembly and do not require
an insurer, health maintenance organization, independent
practice association, or physician hospital organization to
renew or renegotiate the contracts with a health care
professional or health care provider.
(c-5) The amendatory provisions of Sections 368b, 368c,
368d, 370a, and 370b are deemed incorporated into health care
professional and health care provider service contracts
entered into on or before the effective date of this amendatory
Act of the 96th General Assembly and do not require an insurer,
health maintenance organization, independent practice
association, or physician hospital organization to renew or
renegotiate the contracts with a health care professional or
health care provider.
(d) The Department shall enforce the provisions of this
Section and Sections 368b, 368c, and 368d pursuant to the
enforcement powers granted to it by law.
(e) The Department is hereby granted specific authority to
issue a cease and desist order against, fine, or otherwise
penalize independent practice associations and
physician-hospital organizations for violations.

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(f) The Department shall adopt reasonable rules to enforce
compliance with this Section and Sections 368b, 368c, and 368d.
(Source: P.A. 93-261, eff. 1-1-04.)
(215 ILCS 5/370) (from Ch. 73, par. 982)
Sec. 370. Policies issued in violation of article-Penalty.
(1) Any company, or any officer or agent thereof, issuing
or delivering to any person in this State any policy in wilful
violation of the provision of this article shall be guilty of a
petty offense.
(2) The Director may revoke the license of any foreign or
alien company, or of the agent thereof wilfully violating any
provision of this article or suspend such license for any
period of time up to, but not to exceed, two years; or may by
order require such insurance company or agent to pay to the
people of the State of Illinois a penalty in a sum not
exceeding $5,000 $1,000, and upon the failure of such insurance
company or agent to pay such penalty within twenty days after
the mailing of such order, postage prepaid, registered, and
addressed to the last known place of business of such insurance
company or agent, unless such order is stayed by an order of a
court of competent jurisdiction, the Director of Insurance may
revoke or suspend the license of such insurance company or
agent for any period of time up to, but not exceeding a period
of, two years.
(Source: P.A. 93-32, eff. 7-1-03.)

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(215 ILCS 5/370a) (from Ch. 73, par. 982a)
Sec. 370a. Assignability of Accident and Health Insurance.
(a) No provision of the Illinois Insurance Code, or any
other law, prohibits an insured under any policy of accident
and health insurance or any other person who may be the owner
of any rights under such policy from making an assignment of
all or any part of his rights and privileges under the policy
including but not limited to the right to designate a
beneficiary and to have an individual policy issued in
accordance with its terms. Subject to the terms of the policy
or any contract relating thereto, an assignment by an insured
or by any other owner of rights under the policy, made before
or after the effective date of this amendatory Act of 1969 is
valid for the purpose of vesting in the assignee, in accordance
with any provisions included therein as to the time at which it
is effective, all rights and privileges so assigned. However,
such assignment is without prejudice to the company on account
of any payment it makes or individual policy it issues before
receipt of notice of the assignment. This amendatory Act of
1969 acknowledges, declares and codifies the existing right of
assignment of interests under accident and health insurance
policies.
(b) For the purposes of payment for covered services, if If
an enrollee or insured of an insurer, health maintenance
organization, managed care plan, health care plan, preferred

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provider organization, or third party administrator assigns a
claim to a health care professional or health care facility,
then payment shall be made directly to the health care
professional or health care facility regardless of whether the
professional is a participating or non-participating provider,
including any interest required under Section 368a, of this
Code for failure to pay claims within 30 days after receipt by
the insurer of due proof of loss. Nothing in this Section shall
be construed to prevent any parties from reconciling duplicate
payments.
(Source: P.A. 91-605, eff. 12-14-99; 91-788, eff. 6-9-00.)
(215 ILCS 5/370b) (from Ch. 73, par. 982b)
Sec. 370b. Reimbursement on equal basis. Notwithstanding
any provision of any individual or group policy of accident and
health insurance, or any provision of a policy, contract, plan
or agreement for hospital or medical service or indemnity,
wherever such policy, contract, plan or agreement provides for
reimbursement for any service provided by persons licensed
under the Medical Practice Act of 1987 or the Podiatric Medical
Practice Act of 1987, the person entitled to benefits or person
performing services under such policy, contract, plan or
agreement is entitled to reimbursement on an equal basis for
such service, when the service is performed by a person
licensed under the Medical Practice Act of 1987 or the
Podiatric Medical Practice Act of 1987 whether the person is a

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participating or non-participating provider. The provisions of
this Section do not apply to any policy, contract, plan or
agreement in effect prior to September 19, 1969 or to preferred
provider arrangements or benefit agreements.
(Source: P.A. 90-14, eff. 7-1-97.)