HB4475 Engrossed LRB103 36234 RPS 66329 b
1		AN ACT concerning regulation.
2		Be it enacted by the People of the State of Illinois,
3		represented in the General Assembly:
4		Section 1. This Act may be referred to as the
5		Strengthening Mental Health and Substance Use Parity Act.
6		Section 2. Purpose. The purpose of this Act is to improve
7		mental health and substance use parity, specifically
8		addressing network adequacy and nonquantitative treatment
9		limitations that restrict access to care.
10		Section 3. Findings. The General Assembly finds that:
11		(1) A 2021 U.S. Surgeon General Advisory, Protecting Youth
12		Mental Health, reported the COVID-19 pandemic's devastating
13		impact on youth and family mental health:
14		(A) One in 3 high school students reported persistent
15		feelings of hopelessness and sadness in 2019.
16		(B) Rates of depression and anxiety for youth doubled
17		during the pandemic.
18		(C) Black children under 13 are nearly twice as likely
19		to die by suicide than white children.
20		(2) According to a bipartisan U.S. Senate Finance
21		Committee report on Mental Health Care in the United States,
22		symptoms for depression and anxiety in adults increased nearly

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1		four-fold during the pandemic.
2		(3) In 2020, 2,944 Illinoisans lost their lives to an
3		opioid overdose according to the Illinois Department of Public
4		Health.
5		(4) Discriminatory commercial insurance practices that do
6		not live up to the federal Mental Health Parity and Addiction
7		Equity Act (MHPAEA) and Illinois' parity laws, specifically
8		regarding insurance network adequacy, severely limit access to
9		care.
10		(5) Commercial insurance practices disincentivize mental
11		health and substance use treatment providers from
12		participating in insurance networks by erecting significant
13		administrative barriers and by reimbursing providers far below
14		the reimbursement of other health care providers despite a
15		behavioral health workforce crisis.
16		(A) Such practices lead to restrictive, narrow
17		insurance networks that restrict access care.
18		(B) 26% of psychiatrists do not participate in
19		insurance networks, according to a report in JAMA
20		Psychiatry.
21		(C) 21% of psychologists do not participate in
22		insurance networks, according to a 2015 American
23		Psychological Association Survey.
24		(D) A significant percentage of behavioral health
25		providers do not contract with insurers, leaving patients
26		to see out-of-network providers.

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1		(E) Out-of-network treatment is far more expensive for
2		the patient than in-network care.
3		(F) Mental health and substance use treatment is
4		inaccessible and unaffordable for millions of Illinoisans
5		for these reasons.
6		(6) A recent Milliman report analyzing insurance claims
7		for 37,000,000 Americans, including Illinois residents, found
8		major disparities in out-of-network utilization for behavioral
9		health compared to other health care. The report's findings
10		include:
11		(A) Illinois out-of-network behavioral health
12		utilization was 18.2% for outpatient services in 2017
13		compared to just 3.9% for medical/surgical services.
14		(B) Illinois out-of-network behavioral health
15		utilization was 12.1% in 2017 for inpatient care compared
16		to just 2.8% for medical/surgical.
17		(C) The disparity between out-of-network usage for
18		behavioral health compared to medical/surgical services
19		grew significantly between 2013 and 2017: Out-of-network
20		behavioral health utilization for outpatient visits grew
21		by 44%, while out-of-network utilization for
22		medical/surgical services decreased by 42% over the same
23		period in Illinois.
24		(D) Nearly 14% of behavioral health office visits for
25		individuals with a preferred provider organization plan
26		were out-of-network in Illinois.

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1		(7) Mental health and substance use care, which represents
2		just 5.2% of all health care spending, does not drive up
3		premiums.
4		(8) Improved access to behavioral health care is expected
5		to reduce overall health care spending because:
6		(A) spending on physical health care is 2 to 3 times
7		higher for patients with ongoing mental health and
8		substance use diagnoses, according to a 2018 Milliman
9		research report; and
10		(B) improved utilization of mental health services has
11		been demonstrated empirically to reduce overall health
12		care spending (Biu, Yoon, & Hines, 2021).
13		(9) Illinois must strengthen its parity laws to prevent
14		insurance practices that restrict access to mental health and
15		substance use care.
16		Section 10. The Illinois Insurance Code is amended by
17		adding Section 370c.3 as follows:
18		(215 ILCS 5/370c.3 new)
19		Sec. 370c.3. Mental health and substance use parity.
20		(a) In this Section:
21		"Application" means a person's or facility's application
22		to become a participating provider with an insurer in at least
23		one of the insurer's provider networks.
24		"Applying provider" means a provider or facility that has

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1		submitted a completed application to become a participating
2		provider or facility with an insurer.
3		"Behavioral health trainee" means any person: (1) engaged
4		in the provision of mental health or substance use disorder
5		clinical services as part of that person's supervised course
6		of study while enrolled in a master's or doctoral psychology,
7		social work, counseling, or marriage or family therapy program
8		or as a postdoctoral graduate working toward licensure; and
9		(2) who is working toward clinical State licensure under the
10		clinical supervision of a fully licensed mental health or
11		substance use disorder treatment provider.
12		"Completed application" means a person's or facility's
13		application to become a participating provider that has been
14		submitted to the insurer and includes all the required
15		information for the application to be considered by the
16		insurer according to the insurer's policies and procedures for
17		verifying a provider's or facility's credentials.
18		"Contracting process" means the process by which a mental
19		health or substance use disorder treatment provider or
20		facility makes a completed application with an insurer to
21		become a participating provider with the insurer until the
22		effective date of a final contract between the provider or
23		facility and the insurer. "Contracting process" includes the
24		process of verifying a provider's credentials.
25		"Participating provider" means any mental health or
26		substance use disorder treatment provider that has a contract

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1		to provide mental health or substance use disorder services
2		with an insurer.
3		(b) For all group or individual policies of accident and
4		health insurance or managed care plans that are amended,
5		delivered, issued, or renewed on or after January 1, 2026, or
6		any contracted third party administering the behavioral health
7		benefits for the insurer, reimbursement for in-network mental
8		health and substance use disorder treatment services delivered
9		by Illinois providers and facilities must be equal to or
10		greater than 141% of the Medicare rate for the mental health or
11		substance use disorder service delivered. For services not
12		covered by Medicare, the reimbursement rates must be, on
13		average, equal to or greater than 144% of the insurer's
14		in-network reimbursement rate for such service on the
15		effective date of this amendatory Act of the 103rd General
16		Assembly. This Section applies to all covered office,
17		outpatient, inpatient, and residential mental health and
18		substance use disorder services.
19		(c) A group or individual policy of accident and health
20		insurance or managed care plan that is amended, delivered,
21		issued, or renewed on or after January 1, 2025, or contracted
22		third party administering the behavioral health benefits for
23		the insurer, shall cover all medically necessary mental health
24		or substance use disorder services received by the same
25		insured on the same day from the same or different mental
26		health or substance use provider or facility for both

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1		outpatient and inpatient care.
2		(d) A group or individual policy of accident and health
3		insurance or managed care plan that is amended, delivered,
4		issued, or renewed on or after January 1, 2025, or any
5		contracted third party administering the behavioral health
6		benefits for the insurer, shall cover any medically necessary
7		mental health or substance use disorder service provided by a
8		behavioral health trainee when the trainee is working toward
9		clinical State licensure and is under the supervision of a
10		fully licensed mental health or substance use disorder
11		treatment provider, which is a physician licensed to practice
12		medicine in all its branches, licensed clinical psychologist,
13		licensed clinical social worker, licensed clinical
14		professional counselor, licensed marriage and family
15		therapist, licensed speech-language pathologist, or other
16		licensed or certified professional at a program licensed
17		pursuant to the Substance Use Disorder Act who is engaged in
18		treating mental, emotional, nervous, or substance use
19		disorders or conditions. Services provided by the trainee must
20		be billed under the supervising clinician's rendering National
21		Provider Identifier.
22		(e) A group or individual policy of accident and health
23		insurance or managed care plan that is amended, delivered,
24		issued, or renewed on or after January 1, 2025, or any
25		contracted third party administering the behavioral health
26		benefits for the insurer, shall:

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1		(1) cover medically necessary 60-minute psychotherapy
2		billed using the CPT Code 90837 for Individual Therapy;
3		(2) not impose more onerous documentation requirements
4		on the provider than is required for other psychotherapy
5		CPT Codes; and
6		(3) not audit the use of CPT Code 90837 any more
7		frequently than audits for the use of other psychotherapy
8		CPT Codes.
9		(f)(1) Any group or individual policy of accident and
10		health insurance or managed care plan that is amended,
11		delivered, issued, or renewed on or after January 1, 2026, or
12		any contracted third party administering the behavioral health
13		benefits for the insurer, shall complete the contracting
14		process with a mental health or substance use disorder
15		treatment provider or facility for becoming a participating
16		provider in the insurer's network, including the verification
17		of the provider's credentials, within 60 days from the date of
18		a completed application to the insurer to become a
19		participating provider. Nothing in this paragraph (1),
20		however, presumes or establishes a contract between an insurer
21		and a provider.
22		(2) Any group or individual policy of accident and health
23		insurance or managed care plan that is amended, delivered,
24		issued, or renewed on or after January 1, 2025, or any
25		contracted third party administering the behavioral health
26		benefits for the insurer, shall reimburse a participating

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1		mental health or substance use disorder treatment provider or
2		facility at the contracted reimbursement rate for any
3		medically necessary services provided to an insured from the
4		date of submission of the provider's or facility's completed
5		application to become a participating provider with the
6		insurer up to the effective date of the provider's contract.
7		The provider's claims for such services shall be reimbursed
8		only when submitted after the effective date of the provider's
9		contract with the insurer. This paragraph (2) does not apply
10		to a provider that does not have a completed contract with an
11		insurer. If a provider opts to submit claims for medically
12		necessary mental health or substance use disorder services
13		pursuant to this paragraph (2), the provider must notify the
14		insured following submission of the claims to the insurer that
15		the services provided to the insured may be treated as
16		in-network services.
17		(3) Any group or individual policy of accident and health
18		insurance or managed care plan that is amended, delivered,
19		issued, or renewed on or after January 1, 2025, or any
20		contracted third party administering the behavioral health
21		benefits for the insurer, shall cover any medically necessary
22		mental health or substance use disorder service provided by a
23		fully licensed mental health or substance use disorder
24		treatment provider affiliated with a mental health or
25		substance use disorder treatment group practice who has
26		submitted a completed application to become a participating

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1		provider with an insurer who is delivering services under the
2		supervision of another fully licensed participating mental
3		health or substance use disorder treatment provider within the
4		same group practice up to the effective date of the applying
5		provider's contract with the insurer as a participating
6		provider. Services provided by the applying provider must be
7		billed under the supervising licensed provider's rendering
8		National Provider Identifier.
9		(4) Upon request, an insurer, or any contracted third
10		party administering the behavioral health benefits for the
11		insurer, shall provide an applying provider with the insurer's
12		credentialing policies and procedures. An insurer, or any
13		contracted third party administering the behavioral health
14		benefits for the insurer, shall post the following
15		nonproprietary information on its website and make that
16		information available to all applicants:
17		(A) a list of the information required to be included
18		in an application;
19		(B) a checklist of the materials that must be
20		submitted in the credentialing process; and
21		(C) designated contact information of a network
22		representative, including a designated point of contact,
23		an email address, and a telephone number, to which an
24		applicant may address any credentialing inquiries.
25		(g) The Department has the same authority to enforce this
26		Section as it has to enforce compliance with Sections 370c and

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1		370c.1. Additionally, if the Department determines that an
2		insurer or a contracted third party administering the
3		behavioral health benefits for the insurer has violated this
4		Section, the Department shall, after appropriate notice and
5		opportunity for hearing in accordance with Section 402, by
6		order assess a civil penalty of $1,000 for each violation. The
7		Department shall establish any processes or procedures
8		necessary to monitor compliance with this Section.
9		(h) The Department shall adopt any rules necessary to
10		implement this Section by no later than May 1, 2025.
11		(i) This Section does not apply to a health care plan
12		serving Medicaid populations that provides, arranges for, pays
13		for, or reimburses the cost of any health care service for
14		persons who are enrolled under the Illinois Public Aid Code or
15		under the Children's Health Insurance Program Act.
16		Section 15. The Health Maintenance Organization Act is
17		amended by changing Section 5-3 as follows:
18		(215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
19		Sec. 5-3. Insurance Code provisions.
20		(a) Health Maintenance Organizations shall be subject to
21		the provisions of Sections 133, 134, 136, 137, 139, 140,
22		141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153,
23		154, 154.5, 154.6, 154.7, 154.8, 155.04, 155.22a, 155.49,
24		355.2, 355.3, 355b, 355c, 356f, 356g.5-1, 356m, 356q, 356v,

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1		356w, 356x, 356z.2, 356z.3a, 356z.4, 356z.4a, 356z.5, 356z.6,
2		356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 356z.13, 356z.14,
3		356z.15, 356z.17, 356z.18, 356z.19, 356z.20, 356z.21, 356z.22,
4		356z.23, 356z.24, 356z.25, 356z.26, 356z.28, 356z.29, 356z.30,
5		356z.30a, 356z.31, 356z.32, 356z.33, 356z.34, 356z.35,
6		356z.36, 356z.37, 356z.38, 356z.39, 356z.40, 356z.41, 356z.44,
7		356z.45, 356z.46, 356z.47, 356z.48, 356z.49, 356z.50, 356z.51,
8		356z.53, 356z.54, 356z.55, 356z.56, 356z.57, 356z.58, 356z.59,
9		356z.60, 356z.61, 356z.62, 356z.64, 356z.65, 356z.67, 356z.68,
10		364, 364.01, 364.3, 367.2, 367.2-5, 367i, 368a, 368b, 368c,
11		368d, 368e, 370c, 370c.3, 370c.1, 401, 401.1, 402, 403, 403A,
12		408, 408.2, 409, 412, 444, and 444.1, paragraph (c) of
13		subsection (2) of Section 367, and Articles IIA, VIII 1/2,
14		XII, XII 1/2, XIII, XIII 1/2, XXV, XXVI, and XXXIIB of the
15		Illinois Insurance Code.
16		(b) For purposes of the Illinois Insurance Code, except
17		for Sections 444 and 444.1 and Articles XIII and XIII 1/2,
18		Health Maintenance Organizations in the following categories
19		are deemed to be "domestic companies":
20		(1) a corporation authorized under the Dental Service
21		Plan Act or the Voluntary Health Services Plans Act;
22		(2) a corporation organized under the laws of this
23		State; or
24		(3) a corporation organized under the laws of another
25		state, 30% or more of the enrollees of which are residents
26		of this State, except a corporation subject to

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1		substantially the same requirements in its state of
2		organization as is a "domestic company" under Article VIII
3		1/2 of the Illinois Insurance Code.
4		(c) In considering the merger, consolidation, or other
5		acquisition of control of a Health Maintenance Organization
6		pursuant to Article VIII 1/2 of the Illinois Insurance Code,
7		(1) the Director shall give primary consideration to
8		the continuation of benefits to enrollees and the
9		financial conditions of the acquired Health Maintenance
10		Organization after the merger, consolidation, or other
11		acquisition of control takes effect;
12		(2)(i) the criteria specified in subsection (1)(b) of
13		Section 131.8 of the Illinois Insurance Code shall not
14		apply and (ii) the Director, in making his determination
15		with respect to the merger, consolidation, or other
16		acquisition of control, need not take into account the
17		effect on competition of the merger, consolidation, or
18		other acquisition of control;
19		(3) the Director shall have the power to require the
20		following information:
21		(A) certification by an independent actuary of the
22		adequacy of the reserves of the Health Maintenance
23		Organization sought to be acquired;
24		(B) pro forma financial statements reflecting the
25		combined balance sheets of the acquiring company and
26		the Health Maintenance Organization sought to be

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1		acquired as of the end of the preceding year and as of
2		a date 90 days prior to the acquisition, as well as pro
3		forma financial statements reflecting projected
4		combined operation for a period of 2 years;
5		(C) a pro forma business plan detailing an
6		acquiring party's plans with respect to the operation
7		of the Health Maintenance Organization sought to be
8		acquired for a period of not less than 3 years; and
9		(D) such other information as the Director shall
10		require.
11		(d) The provisions of Article VIII 1/2 of the Illinois
12		Insurance Code and this Section 5-3 shall apply to the sale by
13		any health maintenance organization of greater than 10% of its
14		enrollee population (including, without limitation, the health
15		maintenance organization's right, title, and interest in and
16		to its health care certificates).
17		(e) In considering any management contract or service
18		agreement subject to Section 141.1 of the Illinois Insurance
19		Code, the Director (i) shall, in addition to the criteria
20		specified in Section 141.2 of the Illinois Insurance Code,
21		take into account the effect of the management contract or
22		service agreement on the continuation of benefits to enrollees
23		and the financial condition of the health maintenance
24		organization to be managed or serviced, and (ii) need not take
25		into account the effect of the management contract or service
26		agreement on competition.

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1		(f) Except for small employer groups as defined in the
2		Small Employer Rating, Renewability and Portability Health
3		Insurance Act and except for medicare supplement policies as
4		defined in Section 363 of the Illinois Insurance Code, a
5		Health Maintenance Organization may by contract agree with a
6		group or other enrollment unit to effect refunds or charge
7		additional premiums under the following terms and conditions:
8		(i) the amount of, and other terms and conditions with
9		respect to, the refund or additional premium are set forth
10		in the group or enrollment unit contract agreed in advance
11		of the period for which a refund is to be paid or
12		additional premium is to be charged (which period shall
13		not be less than one year); and
14		(ii) the amount of the refund or additional premium
15		shall not exceed 20% of the Health Maintenance
16		Organization's profitable or unprofitable experience with
17		respect to the group or other enrollment unit for the
18		period (and, for purposes of a refund or additional
19		premium, the profitable or unprofitable experience shall
20		be calculated taking into account a pro rata share of the
21		Health Maintenance Organization's administrative and
22		marketing expenses, but shall not include any refund to be
23		made or additional premium to be paid pursuant to this
24		subsection (f)). The Health Maintenance Organization and
25		the group or enrollment unit may agree that the profitable
26		or unprofitable experience may be calculated taking into

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1		account the refund period and the immediately preceding 2
2		plan years.
3		The Health Maintenance Organization shall include a
4		statement in the evidence of coverage issued to each enrollee
5		describing the possibility of a refund or additional premium,
6		and upon request of any group or enrollment unit, provide to
7		the group or enrollment unit a description of the method used
8		to calculate (1) the Health Maintenance Organization's
9		profitable experience with respect to the group or enrollment
10		unit and the resulting refund to the group or enrollment unit
11		or (2) the Health Maintenance Organization's unprofitable
12		experience with respect to the group or enrollment unit and
13		the resulting additional premium to be paid by the group or
14		enrollment unit.
15		In no event shall the Illinois Health Maintenance
16		Organization Guaranty Association be liable to pay any
17		contractual obligation of an insolvent organization to pay any
18		refund authorized under this Section.
19		(g) Rulemaking authority to implement Public Act 95-1045,
20		if any, is conditioned on the rules being adopted in
21		accordance with all provisions of the Illinois Administrative
22		Procedure Act and all rules and procedures of the Joint
23		Committee on Administrative Rules; any purported rule not so
24		adopted, for whatever reason, is unauthorized.
25		(Source: P.A. 102-30, eff. 1-1-22; 102-34, eff. 6-25-21;
26		102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-443, eff.

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1		1-1-22; 102-589, eff. 1-1-22; 102-642, eff. 1-1-22; 102-665,
2		eff. 10-8-21; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22;
3		102-804, eff. 1-1-23; 102-813, eff. 5-13-22; 102-816, eff.
4		1-1-23; 102-860, eff. 1-1-23; 102-901, eff. 7-1-22; 102-1093,
5		eff. 1-1-23; 102-1117, eff. 1-13-23; 103-84, eff. 1-1-24;
6		103-91, eff. 1-1-24; 103-123, eff. 1-1-24; 103-154, eff.
7		6-30-23; 103-420, eff. 1-1-24; 103-426, eff. 8-4-23; 103-445,
8		eff. 1-1-24; 103-551, eff. 8-11-23; revised 8-29-23.)