Bill Text: IL HB4429 | 2015-2016 | 99th General Assembly | Introduced

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Bill Title: Amends the State Prompt Payment Act. Provides that after the effective date of the amendatory Act, any bill approved for payment under the Act and pursuant to a health benefit plan under the State Employees Group Insurance Act of 1971 or submitted under Article V of the Illinois Public Aid Code, except a bill for pharmacy or nursing facility services or goods, if payment is not issued to the payee in a timely manner under the Section, the following interest penalty shall apply to any amount approved and unpaid until final payment is made: the sum of the prime commercial rate plus 4.0% per year, applied pro rata for the amount of time the bill remains unpaid. Defines "prime commercial rate". Amends the Illinois Insurance Code. In provisions concerning timely payment for health care services, provides that the interest to be charged on late payments of periodic payments, payments by independent practice associations and physician-hospital organizations, and payments by health insurers, health maintenance organizations, managed care plans, health care plans, preferred provider organizations, and third party administrators shall be the sum of the prime commercial rate plus 4.0% per year. Defines "prime commercial rate". Amends the State Employees Group Insurance Act of 1971. Provides that the program of health benefits offered under the Act is subject to certain provisions of the Illinois Insurance Code concerning late payments and assignability except as otherwise provided.

Spectrum: Slight Partisan Bill (Democrat 3-1)

Status: (Introduced - Dead) 2016-04-08 - Rule 19(a) / Re-referred to Rules Committee [HB4429 Detail]

Download: Illinois-2015-HB4429-Introduced.html

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99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 HB4429 Introduced , by Rep. Elaine Nekritz SYNOPSIS AS INTRODUCED:
5 ILCS 375/6.12
30 ILCS 540/3-2
215 ILCS 5/368a
Amends the State Prompt Payment Act. Provides that after the effective date of the amendatory Act, any bill approved for payment under the Act and pursuant to a health benefit plan under the State Employees Group Insurance Act of 1971 or submitted under Article V of the Illinois Public Aid Code, except a bill for pharmacy or nursing facility services or goods, if payment is not issued to the payee in a timely manner under the Section, the following interest penalty shall apply to any amount approved and unpaid until final payment is made: the sum of the prime commercial rate plus 4.0% per year, applied pro rata for the amount of time the bill remains unpaid. Defines "prime commercial rate". Amends the Illinois Insurance Code. In provisions concerning timely payment for health care services, provides that the interest to be charged on late payments of periodic payments, payments by independent practice associations and physician-hospital organizations, and payments by health insurers, health maintenance organizations, managed care plans, health care plans, preferred provider organizations, and third party administrators shall be the sum of the prime commercial rate plus 4.0% per year. Defines "prime commercial rate". Amends the State Employees Group Insurance Act of 1971. Provides that the program of health benefits offered under the Act is subject to certain provisions of the Illinois Insurance Code concerning late payments and assignability except as otherwise provided.
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A BILL FOR
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AN ACT concerning government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The State Employees Group Insurance Act of 1971
is amended by changing Section 6.12 as follows:
(5 ILCS 375/6.12)
Sec. 6.12. Payment for services. Except as otherwise
provided, the The program of health benefits is subject to the
provisions of Sections 368a and 370a of the Illinois Insurance
Code, provided that, if a covered member or covered dependent
assigns payments to a health care professional for covered
services, then the health care professional shall only collect
at point of service from that person the estimated amount not
expected to be paid by the plan.
(Source: P.A. 97-1086, eff. 8-24-12.)
Section 10. The State Prompt Payment Act is amended by
changing Section 3-2 as follows:
(30 ILCS 540/3-2)
Sec. 3-2. Beginning July 1, 1993, in any instance where a
State official or agency is late in payment of a vendor's bill
or invoice for goods or services furnished to the State, as

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defined in Section 1, properly approved in accordance with
rules promulgated under Section 3-3, the State official or
agency shall pay interest to the vendor in accordance with the
following:
(1) Any bill, except a bill submitted under Article V
of the Illinois Public Aid Code and except as provided
under paragraph (1.05) of this Section, approved for
payment under this Section must be paid or the payment
issued to the payee within 60 days of receipt of a proper
bill or invoice. If payment is not issued to the payee
within this 60-day period, an interest penalty of 1.0% of
any amount approved and unpaid shall be added for each
month or fraction thereof after the end of this 60-day
period, until final payment is made. Any bill, except a
bill for pharmacy or nursing facility services or goods,
and except as provided under paragraph (1.05) of this
Section, submitted under Article V of the Illinois Public
Aid Code approved for payment under this Section must be
paid or the payment issued to the payee within 60 days
after receipt of a proper bill or invoice, and, if payment
is not issued to the payee within this 60-day period, an
interest penalty of 2.0% of any amount approved and unpaid
shall be added for each month or fraction thereof after the
end of this 60-day period, until final payment is made. Any
bill for pharmacy or nursing facility services or goods
submitted under Article V of the Illinois Public Aid Code,

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except as provided under paragraph (1.05) of this Section,
and approved for payment under this Section must be paid or
the payment issued to the payee within 60 days of receipt
of a proper bill or invoice. If payment is not issued to
the payee within this 60-day period, an interest penalty of
1.0% of any amount approved and unpaid shall be added for
each month or fraction thereof after the end of this 60-day
period, until final payment is made.
(1.05) For State fiscal year 2012 and future fiscal
years, any bill approved for payment under this Section
must be paid or the payment issued to the payee within 90
days of receipt of a proper bill or invoice. If payment is
not issued to the payee within this 90-day period, an
interest penalty of 1.0% of any amount approved and unpaid
shall be added for each month, or 0.033% (one-thirtieth of
one percent) of any amount approved and unpaid for each
day, after the end of this 90-day period, until final
payment is made.
(1.06) After the effective date of this amendatory Act
of the 99th General Assembly, for any bill approved for
payment under this Section and pursuant to a health benefit
plan under the State Employees Group Insurance Act of 1971
or submitted under Article V of the Illinois Public Aid
Code, except a bill for pharmacy or nursing facility
services or goods, if payment is not issued to the payee in
a timely manner under this Section, the following interest

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penalty shall apply to any amount approved and unpaid until
final payment is made: the sum of the prime commercial rate
plus 4.0% per year, applied pro rata for the amount of time
the bill remains unpaid. As used in this paragraph, "prime
commercial rate" means the Wall Street Journal Prime Rate,
as published from time to time.
(1.1) A State agency shall review in a timely manner
each bill or invoice after its receipt. If the State agency
determines that the bill or invoice contains a defect
making it unable to process the payment request, the agency
shall notify the vendor requesting payment as soon as
possible after discovering the defect pursuant to rules
promulgated under Section 3-3; provided, however, that the
notice for construction related bills or invoices must be
given not later than 30 days after the bill or invoice was
first submitted. The notice shall identify the defect and
any additional information necessary to correct the
defect. If one or more items on a construction related bill
or invoice are disapproved, but not the entire bill or
invoice, then the portion that is not disapproved shall be
paid.
(2) Where a State official or agency is late in payment
of a vendor's bill or invoice properly approved in
accordance with this Act, and different late payment terms
are not reduced to writing as a contractual agreement, the
State official or agency shall automatically pay interest

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penalties required by this Section amounting to $50 or more
to the appropriate vendor. Each agency shall be responsible
for determining whether an interest penalty is owed and for
paying the interest to the vendor. Except as provided in
paragraph (4), an individual interest payment amounting to
$5 or less shall not be paid by the State. Interest due to
a vendor that amounts to greater than $5 and less than $50
shall not be paid but shall be accrued until all interest
due the vendor for all similar warrants exceeds $50, at
which time the accrued interest shall be payable and
interest will begin accruing again, except that interest
accrued as of the end of the fiscal year that does not
exceed $50 shall be payable at that time. In the event an
individual has paid a vendor for services in advance, the
provisions of this Section shall apply until payment is
made to that individual.
(3) The provisions of Public Act 96-1501 reducing the
interest rate on pharmacy claims under Article V of the
Illinois Public Aid Code to 1.0% per month shall apply to
any pharmacy bills for services and goods under Article V
of the Illinois Public Aid Code received on or after the
date 60 days before January 25, 2011 (the effective date of
Public Act 96-1501) except as provided under paragraph
(1.05) of this Section.
(4) Interest amounting to less than $5 shall not be
paid by the State, except for claims (i) to the Department

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of Healthcare and Family Services or the Department of
Human Services, (ii) pursuant to Article V of the Illinois
Public Aid Code, the Covering ALL KIDS Health Insurance
Act, or the Children's Health Insurance Program Act, and
(iii) made (A) by pharmacies for prescriptive services or
(B) by any federally qualified health center for
prescriptive services or any other services.
(Source: P.A. 96-555, eff. 8-18-09; 96-802, eff. 1-1-10;
96-959, eff. 7-1-10; 96-1000, eff. 7-2-10; 96-1501, eff.
1-25-11; 96-1530, eff. 2-16-11; 97-72, eff. 7-1-11; 97-74, eff.
6-30-11; 97-348, eff. 8-12-11; 97-813, eff. 7-13-12; 97-932,
eff. 8-10-12; 97-1142, eff. 12-28-12.)
Section 15. The Illinois Insurance Code is amended by
changing Section 368a as follows:
(215 ILCS 5/368a)
Sec. 368a. Timely payment for health care services.
(a) This Section applies to insurers, health maintenance
organizations, managed care plans, health care plans,
preferred provider organizations, third party administrators,
independent practice associations, and physician-hospital
organizations (hereinafter referred to as "payors") that
provide periodic payments, which are payments not requiring a
claim, bill, capitation encounter data, or capitation
reconciliation reports, such as prospective capitation

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payments, to health care professionals and health care
facilities to provide medical or health care services for
insureds or enrollees.
(1) A payor shall make periodic payments in accordance
with item (3). Failure to make periodic payments within the
period of time specified in item (3) shall entitle the
health care professional or health care facility to
interest at the rate of 9% per year from the date payment
was required to be made to the date of the late payment,
provided that interest amounting to less than $1 need not
be paid. For periodic payments due on or after the
effective date of this amendatory Act of the 99th General
Assembly, failure to make periodic payments within the
period of time specified in item (3) shall entitle the
health care professional or health care facility to
interest at the rate of the sum of the prime commercial
rate plus 4.0% per year from the date payment was required
to be made to the date of the late payment, provided that
interest amounting to less than $1 need not be paid. Any
required interest payments shall be made within 30 days
after the payment.
(2) When a payor requires selection of a health care
professional or health care facility, the selection shall
be completed by the insured or enrollee no later than 30
days after enrollment. The payor shall provide written
notice of this requirement to all insureds and enrollees.

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Nothing in this Section shall be construed to require a
payor to select a health care professional or health care
facility for an insured or enrollee.
(3) A payor shall provide the health care professional
or health care facility with notice of the selection as a
health care professional or health care facility by an
insured or enrollee and the effective date of the selection
within 60 calendar days after the selection. No later than
the 60th day following the date an insured or enrollee has
selected a health care professional or health care facility
or the date that selection becomes effective, whichever is
later, or in cases of retrospective enrollment only, 30
days after notice by an employer to the payor of the
selection, a payor shall begin periodic payment of the
required amounts to the insured's or enrollee's health care
professional or health care facility, or the designee of
either, calculated from the date of selection or the date
the selection becomes effective, whichever is later. All
subsequent payments shall be made in accordance with a
monthly periodic cycle.
(b) Notwithstanding any other provision of this Section,
independent practice associations and physician-hospital
organizations shall make periodic payment of the required
amounts in accordance with a monthly periodic schedule after an
insured or enrollee has selected a health care professional or
health care facility or after that selection becomes effective,

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whichever is later.
Notwithstanding any other provision of this Section,
independent practice associations and physician-hospital
organizations shall make all other payments for health services
within 30 days after receipt of due proof of loss. Independent
practice associations and physician-hospital organizations
shall notify the insured, insured's assignee, health care
professional, or health care facility of any failure to provide
sufficient documentation for a due proof of loss within 30 days
after receipt of the claim for health services.
Failure to pay within the required time period shall
entitle the payee to interest at the rate of 9% per year from
the date the payment is due to the date of the late payment,
provided that interest amounting to less than $1 need not be
paid. For any periodic payments or other payments due on or
after the effective date of this amendatory Act of the 99th
General Assembly, failure to pay within the required time
period shall entitle the payee to interest at the rate of the
sum of the prime commercial rate plus 4.0% per year from the
date the payment is due to the date of the late payment,
provided that interest amounting to less than $1 need not be
paid. Any required interest payments shall be made within 30
days after the payment.
(c) All insurers, health maintenance organizations,
managed care plans, health care plans, preferred provider
organizations, and third party administrators shall ensure

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that all claims and indemnities concerning health care services
other than for any periodic payment shall be paid within 30
days after receipt of due written proof of such loss. An
insured, insured's assignee, health care professional, or
health care facility shall be notified of any known failure to
provide sufficient documentation for a due proof of loss within
30 days after receipt of the claim for health care services.
Failure to pay within such period shall entitle the payee to
interest at the rate of 9% per year from the 30th day after
receipt of such proof of loss to the date of late payment,
provided that interest amounting to less than one dollar need
not be paid. For any claims and indemnities due on or after the
effective date of this amendatory Act of the 99th General
Assembly, failure to pay within such period shall entitle the
payee to interest at the rate of the sum of the prime
commercial rate plus 4.0% per year from the 30th day after
receipt of such proof of loss to the date of late payment,
provided that interest amounting to less than one dollar need
not be paid. Any required interest payments shall be made
within 30 days after the payment.
(d) The Department shall enforce the provisions of this
Section 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, fine, or otherwise penalize
independent practice associations and physician-hospital

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organizations that violate this Section. The Department shall
adopt reasonable rules to enforce compliance with this Section
by independent practice associations and physician-hospital
organizations.
(f) As used in this Section, "prime commercial rate" means
the Wall Street Journal Prime Rate, as published from time to
time.
(Source: P.A. 97-813, eff. 7-13-12.)