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.



LRB099 13077 MLM 36964 b


 
 
A BILL FOR
 


HB4429LRB099 13077 MLM 36964 b



1 AN ACT concerning government.


2 Be it enacted by the People of the State of Illinois,

3represented in the General Assembly:



4 Section 5. The State Employees Group Insurance Act of 1971 
5is amended by changing Section 6.12 as follows:




6 (5 ILCS 375/6.12)



7 Sec. 6.12. Payment for services. Except as otherwise 
8provided, the The program of health benefits
is subject to the 
9provisions of Sections 368a and 370a of the Illinois
Insurance 
10Code, provided that, if a covered member or covered dependent 
11assigns payments to a health care professional for covered 
12services, then the health care professional shall only collect 
13at point of service from that person the estimated amount not 
14expected to be paid by the plan.

15(Source: P.A. 97-1086, eff. 8-24-12.)


16 Section 10. The State Prompt Payment Act is amended by 
17changing Section 3-2 as follows:



18 (30 ILCS 540/3-2)


19 Sec. 3-2. Beginning July 1, 1993, in any instance where a 
20State official or
agency is late in payment of a vendor's bill 
21or invoice for goods or services
furnished to the State, as 
 
 
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1defined in Section 1, properly approved in
accordance with 
2rules promulgated under Section 3-3, the State official or

3agency shall pay interest to the vendor in accordance with the 
4following:


5  (1) Any bill, except a bill submitted under Article V 
6 of the Illinois Public Aid Code and except as provided 
7 under paragraph (1.05) of this Section, approved for 
8 payment under this Section must be paid
or the payment 
9 issued to the payee within 60 days of receipt
of a proper 
10 bill or invoice.
If payment is not issued to the payee 
11 within this 60-day
period, an
interest penalty of 1.0% of 
12 any amount approved and unpaid shall be added
for each 
13 month or fraction thereof after the end of this 60-day 
14 period,
until final payment is made. Any bill, except a 
15 bill for pharmacy
or nursing facility services or goods, 
16 and except as provided under paragraph (1.05) of this 
17 Section, submitted under Article V of the Illinois Public 
18 Aid Code approved for payment under this Section must be 
19 paid
or the payment issued to the payee within 60 days 
20 after receipt
of a proper bill or invoice, and,
if payment 
21 is not issued to the payee within this 60-day
period, an

22 interest penalty of 2.0% of any amount approved and unpaid 
23 shall be added
for each month or fraction thereof after the 
24 end of this 60-day period,
until final payment is made. Any 
25 bill for pharmacy or nursing facility services or
goods 
26 submitted under Article V of the Illinois Public Aid
Code, 
 
 
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1 except as provided under paragraph (1.05) of this Section, 
2 and approved for payment under this Section must be paid
or 
3 the payment issued to the payee within 60 days of
receipt 
4 of a proper bill or invoice. If payment is not
issued to 
5 the payee within this 60-day period, an interest
penalty of 
6 1.0% of any amount approved and unpaid shall be
added for 
7 each month or fraction thereof after the end of this 60-day 
8 period, until final payment is made. 

9  (1.05) For State fiscal year 2012 and future fiscal 
10 years, any bill approved for payment under this Section 
11 must be paid
or the payment issued to the payee within 90 
12 days of receipt
of a proper bill or invoice.
If payment is 
13 not issued to the payee within this 90-day
period, an

14 interest penalty of 1.0% of any amount approved and unpaid 
15 shall be added
for each month, or 0.033% (one-thirtieth of 
16 one percent) of any amount approved and unpaid for each 
17 day, after the end of this 90-day period,
until final 
18 payment is made. 
19  (1.06) After the effective date of this amendatory Act 
20 of the 99th General Assembly, for any bill approved for 
21 payment under this Section and pursuant to a health benefit 
22 plan under the State Employees Group Insurance Act of 1971 
23 or submitted under Article V of the Illinois Public Aid 
24 Code, except a bill for pharmacy or nursing facility 
25 services or goods, if payment is not issued to the payee in 
26 a timely manner under this Section, the following interest 
 
 
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1 penalty shall apply to any amount approved and unpaid until 
2 final payment is made: the sum of the prime commercial rate 
3 plus 4.0% per year, applied pro rata for the amount of time 
4 the bill remains unpaid. As used in this paragraph, "prime 
5 commercial rate" means the Wall Street Journal Prime Rate, 
6 as published from time to time. 

7  (1.1) A State agency shall review in a timely manner 
8 each bill or
invoice after its receipt. If the
State agency 
9 determines that the bill or invoice contains a defect 
10 making it
unable to process the payment request, the agency

11 shall notify the vendor requesting payment as soon as 
12 possible after
discovering the
defect pursuant to rules 
13 promulgated under Section 3-3; provided, however, that the 
14 notice for construction related bills or invoices must be 
15 given not later than 30 days after the bill or invoice was 
16 first submitted. The notice shall
identify the defect and 
17 any additional information
necessary to correct the 
18 defect. If one or more items on a construction related bill 
19 or invoice are disapproved, but not the entire bill or 
20 invoice, then the portion that is not disapproved shall be 
21 paid.



22  (2) Where a State official or agency is late in payment 
23 of a
vendor's bill or invoice properly approved in 
24 accordance with this Act, and
different late payment terms 
25 are not reduced to writing as a contractual
agreement, the 
26 State official or agency shall automatically pay interest

 
 
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1 penalties required by this Section amounting to $50 or more 
2 to the appropriate
vendor. Each agency shall be responsible 
3 for determining whether an interest
penalty
is
owed and
for 
4 paying the interest to the vendor. Except as provided in 
5 paragraph (4), an individual interest payment amounting to 
6 $5 or less shall not be paid by the State.
Interest due to 
7 a vendor that amounts to greater than $5 and less than $50 
8 shall not be paid but shall be accrued until all interest 
9 due the vendor for all similar warrants exceeds $50, at 
10 which time the accrued interest shall be payable and 
11 interest will begin accruing again, except that interest 
12 accrued as of the end of the fiscal year that does not 
13 exceed $50 shall be payable at that time. In the event an

14 individual has paid a vendor for services in advance, the 
15 provisions of this
Section shall apply until payment is 
16 made to that individual.

17  (3) The provisions of Public Act 96-1501 reducing the 
18 interest rate on pharmacy claims under Article V of the 
19 Illinois Public Aid Code to 1.0% per month shall apply to 
20 any pharmacy bills for services and goods under Article V 
21 of the Illinois Public Aid Code received on or after the 
22 date 60 days before January 25, 2011 (the effective date of 
23 Public Act 96-1501) except as provided under paragraph 
24 (1.05) of this Section. 
25  (4) Interest amounting to less than $5 shall not be 
26 paid by the State, except for claims (i) to the Department 
 
 
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1 of Healthcare and Family Services or the Department of 
2 Human Services, (ii) pursuant to Article V of the Illinois 
3 Public Aid Code, the Covering ALL KIDS Health Insurance 
4 Act, or the Children's Health Insurance Program Act, and 
5 (iii) made (A) by pharmacies for prescriptive services or 
6 (B) by any federally qualified health center for 
7 prescriptive services or any other services.
8(Source: P.A. 96-555, eff. 8-18-09; 96-802, eff. 1-1-10; 
996-959, eff. 7-1-10; 96-1000, eff. 7-2-10; 96-1501, eff. 
101-25-11; 96-1530, eff. 2-16-11; 97-72, eff. 7-1-11; 97-74, eff. 
116-30-11; 97-348, eff. 8-12-11; 97-813, eff. 7-13-12; 97-932, 
12eff. 8-10-12; 97-1142, eff. 12-28-12.)



13 Section 15. The Illinois Insurance Code is amended by 
14changing Section 368a as follows:




15 (215 ILCS 5/368a)



16 Sec. 368a. Timely payment for health care services. 

17 (a) This Section applies to insurers, health maintenance 
18organizations,
managed care plans, health care plans, 
19preferred provider organizations, third
party
administrators, 
20independent practice associations, and physician-hospital

21organizations (hereinafter referred to as "payors") that

22provide
periodic payments, which are payments not requiring a 
23claim, bill, capitation
encounter
data, or capitation 
24reconciliation reports, such as
prospective capitation 
 
 
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1payments, to
health care professionals and health care 
2facilities
to provide medical or health care services for 
3insureds or enrollees.


4  (1) A payor
shall
make
periodic payments in accordance 
5 with item (3). Failure to make
periodic
payments
within the 
6 period of time specified in item (3) shall
entitle the

7 health care professional or health care facility to 
8 interest at the
rate of 9%
per year from
the date payment 
9 was required to be made to the date of the late payment,

10 provided that
interest amounting
to less than $1 need not 
11 be paid. For periodic payments due on or after the 
12 effective date of this amendatory Act of the 99th General 
13 Assembly, failure to make periodic payments within the 
14 period of time specified in item (3) shall entitle the 
15 health care professional or health care facility to 
16 interest at the rate of the sum of the prime commercial 
17 rate plus 4.0% per year from the date payment was required 
18 to be made to the date of the late payment, provided that 
19 interest amounting to less than $1 need not be paid. Any 
20 required interest payments shall be made
within 30 days 
21 after the payment.


22  (2) When a payor requires selection of a health care

23 professional or
health care facility, the selection shall 
24 be completed by the insured or
enrollee no later
than
30 
25 days after enrollment. The payor shall provide written 
26 notice of this
requirement to all insureds and enrollees.

 
 
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1 Nothing in this Section shall be construed to require a 
2 payor to select a
health care professional or health care 
3 facility for an insured or enrollee.


4  (3) A payor
shall provide the
health care professional 
5 or health care facility with
notice of the selection as a 
6 health care professional or
health care facility by
an

7 insured or
enrollee and the effective date of the selection 
8 within
60 calendar days after the selection. No later than 
9 the 60th day
following the
date an insured or enrollee has 
10 selected a health care
professional or health care facility 
11 or the date that selection becomes
effective, whichever is 
12 later, or in cases of retrospective enrollment only, 30

13 days after notice by an employer to the payor of the 
14 selection, a payor
shall begin periodic payment of
the 
15 required
amounts to the insured's or enrollee's health care 
16 professional or health care
facility, or the designee of 
17 either,
calculated from the date of
selection or the date 
18 the selection becomes effective, whichever is later.
All 
19 subsequent payments shall be made
in accordance with
a 
20 monthly periodic cycle.

21 (b) Notwithstanding any other provision of this Section,

22independent practice associations and physician-hospital 
23organizations shall
make periodic payment of the required 
24amounts in
accordance with a monthly periodic schedule after
an 
25insured or enrollee has selected a health care professional or 
26health care
facility or after that selection becomes effective, 
 
 
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1whichever
is later.

2 Notwithstanding any other provision of this Section, 
3independent
practice associations and physician-hospital 
4organizations shall make all
other payments for health services 
5within 30 days after receipt of
due proof
of loss. Independent

6practice associations and physician-hospital organizations 
7shall notify the
insured, insured's assignee, health care 
8professional, or health care facility
of any failure to provide 
9sufficient documentation for a due proof of
loss within 30 days 
10after receipt of the claim for health services.

11 Failure to pay within the required time period shall 
12entitle the payee to
interest at the rate of 9% per year from 
13the date the payment is due to the
date of the late payment, 
14provided that interest amounting to less than $1
need not be 
15paid. For any periodic payments or other payments due on or 
16after the effective date of this amendatory Act of the 99th 
17General Assembly, failure to pay within the required time 
18period shall entitle the payee to interest at the rate of the 
19sum of the prime commercial rate plus 4.0% per year from the 
20date the payment is due to the date of the late payment, 
21provided that interest amounting to less than $1 need not be 
22paid. Any required interest payments shall be made within 30

23days after the payment.

24 (c) All insurers, health maintenance
organizations, 
25managed care plans, health care plans, preferred provider

26organizations, and third party administrators
shall ensure 
 
 
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1that all claims and indemnities
concerning health care services

2other than for
any periodic payment shall be paid within 30 
3days after receipt of due
written proof of such loss. An 
4insured, insured's assignee, health care
professional, or 
5health care facility shall be
notified of any known failure to 
6provide sufficient documentation for a
due proof of
loss within 
730 days after receipt of the claim for health care
services.

8Failure to pay
within such period shall entitle the payee
to 
9interest at the rate of 9% per year from the 30th day after

10receipt of such proof of loss to
the date of late payment, 
11provided that interest amounting to less than one
dollar need 
12not be paid. For any claims and indemnities due on or after the 
13effective date of this amendatory Act of the 99th General 
14Assembly, failure to pay within such period shall entitle the 
15payee to interest at the rate of the sum of the prime 
16commercial rate plus 4.0% per year from the 30th day after 
17receipt of such proof of loss to the date of late payment, 
18provided that interest amounting to less than one dollar need 
19not be paid. Any
required interest payments shall be made 
20within 30 days after the payment.

21 (d) The Department shall enforce the provisions of this 
22Section pursuant to
the enforcement powers granted to it by 
23law.

24 (e) The Department is hereby granted specific authority to 
25issue a
cease and desist order, fine, or otherwise penalize 
26independent practice
associations and physician-hospital 
 
 
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1organizations that violate this Section.
The Department shall 
2adopt reasonable rules to enforce compliance with this
Section 
3by
independent practice associations and physician-hospital 
4organizations.

5 (f) As used in this Section, "prime commercial rate" means 
6the Wall Street Journal Prime Rate, as published from time to 
7time. 
8(Source: P.A. 97-813, eff. 7-13-12.)