Managed care reform and patient rights act

Public Act 0761 99TH GENERAL ASSEMBLY

 Public Act 099-0761  
HB3549 EnrolledLRB099 09324 MLM 29529 b
  AN ACT concerning regulation.  Be it enacted by the People of the State of Illinois, represented in the General Assembly:  Section 5. The Health Maintenance Organization Act is amended by changing Section 5-3 as follows:  (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)  Sec. 5-3. Insurance Code provisions.  (a) Health Maintenance Organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8, 155.04, 155.22a, 355.2, 355.3, 355b, 356g.5-1, 356m, 356v, 356w, 356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, 356z.17, 356z.18, 356z.19, 356z.21, 356z.22, 364, 364.01, 367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e, 370c, 370c.1, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1, paragraph (c) of subsection (2) of Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.  (b) For purposes of the Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health Maintenance Organizations in the following categories are deemed to be "domestic companies":  
 (1) a corporation authorized under the Dental Service 
 Plan Act or the Voluntary Health Services Plans Act; 
 (2) a corporation organized under the laws of this 
 State; or 
 (3) a corporation organized under the laws of another 
 state, 30% or more of the enrollees of which are residents 
 of this State, except a corporation subject to 
 substantially the same requirements in its state of 
 organization as is a "domestic company" under Article VIII 
 1/2 of the Illinois Insurance Code. 
 (c) In considering the merger, consolidation, or other 
acquisition of control of a Health Maintenance Organization 
pursuant to Article VIII 1/2 of the Illinois Insurance Code, 
 (1) the Director shall give primary consideration to 
 the continuation of benefits to enrollees and the financial 
 conditions of the acquired Health Maintenance Organization 
 after the merger, consolidation, or other acquisition of 
 control takes effect; 
 (2)(i) the criteria specified in subsection (1)(b) of 
 Section 131.8 of the Illinois Insurance Code shall not 
 apply and (ii) the Director, in making his determination 
 with respect to the merger, consolidation, or other 
 acquisition of control, need not take into account the 
 effect on competition of the merger, consolidation, or 
 other acquisition of control; 
 (3) the Director shall have the power to require the 
 
 following information: 
 (A) certification by an independent actuary of the 
 adequacy of the reserves of the Health Maintenance 
 Organization sought to be acquired; 
 (B) pro forma financial statements reflecting the 
 combined balance sheets of the acquiring company and 
 the Health Maintenance Organization sought to be 
 acquired as of the end of the preceding year and as of 
 a date 90 days prior to the acquisition, as well as pro 
 forma financial statements reflecting projected 
 combined operation for a period of 2 years; 
 (C) a pro forma business plan detailing an 
 acquiring party's plans with respect to the operation 
 of the Health Maintenance Organization sought to be 
 acquired for a period of not less than 3 years; and 
 (D) such other information as the Director shall 
 require. 
 (d) The provisions of Article VIII 1/2 of the Illinois 
Insurance Code and this Section 5-3 shall apply to the sale by 
any health maintenance organization of greater than 10% of its 
enrollee population (including without limitation the health 
maintenance organization's right, title, and interest in and to 
its health care certificates). 
 (e) In considering any management contract or service 
agreement subject to Section 141.1 of the Illinois Insurance 
Code, the Director (i) shall, in addition to the criteria 
 
specified in Section 141.2 of the Illinois Insurance Code, take 
into account the effect of the management contract or service 
agreement on the continuation of benefits to enrollees and the 
financial condition of the health maintenance organization to 
be managed or serviced, and (ii) need not take into account the 
effect of the management contract or service agreement on 
competition. 
 (f) Except for small employer groups as defined in the 
Small Employer Rating, Renewability and Portability Health 
Insurance Act and except for medicare supplement policies as 
defined in Section 363 of the Illinois Insurance Code, a Health 
Maintenance Organization may by contract agree with a group or 
other enrollment unit to effect refunds or charge additional 
premiums under the following terms and conditions: 
 (i) the amount of, and other terms and conditions with 
 respect to, the refund or additional premium are set forth 
 in the group or enrollment unit contract agreed in advance 
 of the period for which a refund is to be paid or 
 additional premium is to be charged (which period shall not 
 be less than one year); and 
 (ii) the amount of the refund or additional premium 
 shall not exceed 20% of the Health Maintenance 
 Organization's profitable or unprofitable experience with 
 respect to the group or other enrollment unit for the 
 period (and, for purposes of a refund or additional 
 premium, the profitable or unprofitable experience shall 
 
 be calculated taking into account a pro rata share of the 
 Health Maintenance Organization's administrative and 
 marketing expenses, but shall not include any refund to be 
 made or additional premium to be paid pursuant to this 
 subsection (f)). The Health Maintenance Organization and 
 the group or enrollment unit may agree that the profitable 
 or unprofitable experience may be calculated taking into 
 account the refund period and the immediately preceding 2 
 plan years. 
 The Health Maintenance Organization shall include a 
statement in the evidence of coverage issued to each enrollee 
describing the possibility of a refund or additional premium, 
and upon request of any group or enrollment unit, provide to 
the group or enrollment unit a description of the method used 
to calculate (1) the Health Maintenance Organization's 
profitable experience with respect to the group or enrollment 
unit and the resulting refund to the group or enrollment unit 
or (2) the Health Maintenance Organization's unprofitable 
experience with respect to the group or enrollment unit and the 
resulting additional premium to be paid by the group or 
enrollment unit. 
 In no event shall the Illinois Health Maintenance 
Organization Guaranty Association be liable to pay any 
contractual obligation of an insolvent organization to pay any 
refund authorized under this Section. 
 (g) Rulemaking authority to implement Public Act 95-1045, 
 
if any, is conditioned on the rules being adopted in accordance 
with all provisions of the Illinois Administrative Procedure 
Act and all rules and procedures of the Joint Committee on 
Administrative Rules; any purported rule not so adopted, for 
whatever reason, is unauthorized. 
(Source: P.A. 97-282, eff. 8-9-11; 97-343, eff. 1-1-12; 97-437, 
eff. 8-18-11; 97-486, eff. 1-1-12; 97-592, eff. 1-1-12; 97-805, 
eff. 1-1-13; 97-813, eff. 7-13-12; 98-189, eff. 1-1-14; 
98-1091, eff. 1-1-15.) 
 Section 10. The Managed Care Reform and Patient Rights Act 
is amended by changing Section 45.1 as follows: 
 (215 ILCS 134/45.1)
 Sec. 45.1. Medical exceptions procedures required.
 (a) Notwithstanding any other provision of law, on or after 
the effective date of this amendatory Act of the 99th General 
Assembly, every insurer licensed in this State to sell a policy 
of group or individual accident and health insurance or a 
health benefits plan shall Every health carrier that offers a 
qualified health plan, as defined in the federal Patient 
Protection and Affordable Care Act of 2010 (Public Law 
111-148), as amended by the federal Health Care and Education 
Reconciliation Act of 2010 (Public Law 111-152), and any 
amendments thereto, or regulations or guidance issued under 
those Acts (collectively, "the Federal Act"), directly to 
 
consumers in this State shall establish and maintain a medical 
exceptions process that allows covered persons or their 
authorized representatives to request any clinically 
appropriate prescription drug when (1) the drug is not covered 
based on the health benefit plan's formulary; (2) the health 
benefit plan is discontinuing coverage of the drug on the 
plan's formulary for reasons other than safety or other than 
because the prescription drug has been withdrawn from the 
market by the drug's manufacturer; (3) the prescription drug 
alternatives required to be used in accordance with a step 
therapy requirement (A) has been ineffective in the treatment 
of the enrollee's disease or medical condition or, based on 
both sound clinical evidence and medical and scientific 
evidence, the known relevant physical or mental 
characteristics of the enrollee, and the known characteristics 
of the drug regimen, is likely to be ineffective or adversely 
affect the drug's effectiveness or patient compliance or (B) 
has caused or, based on sound medical evidence, is likely to 
cause an adverse reaction or harm to the enrollee; or (4) the 
number of doses available under a dose restriction for the 
prescription drug (A) has been ineffective in the treatment of 
the enrollee's disease or medical condition or (B) based on 
both sound clinical evidence and medical and scientific 
evidence, the known relevant physical and mental 
characteristics of the enrollee, and known characteristics of 
the drug regimen, is likely to be ineffective or adversely 
 
affect the drug's effective or patient compliance.
 (b) The health carrier's established medical exceptions 
procedures must require, at a minimum, the following:
 (1) Any request for approval of coverage made verbally 
 or in writing (regardless of whether made using a paper or 
 electronic form or some other writing) at any time shall be 
 reviewed by appropriate health care professionals.
 (2) The health carrier must, within 72 hours after 
 receipt of a request made under subsection (a) of this 
 Section, either approve or deny the request. In the case of 
 a denial, the health carrier shall provide the covered 
 person or the covered person's authorized representative 
 and the covered person's prescribing provider with the 
 reason for the denial, an alternative covered medication, 
 if applicable, and information regarding the procedure for 
 submitting an appeal to the denial.
 (3) In the case of an expedited coverage determination, 
 the health carrier must either approve or deny the request 
 within 24 hours after receipt of the request. In the case 
 of a denial, the health carrier shall provide the covered 
 person or the covered person's authorized representative 
 and the covered person's prescribing provider with the 
 reason for the denial, an alternative covered medication, 
 if applicable, and information regarding the procedure for 
 submitting an appeal to the denial.
 (c) A step therapy requirement exception request shall be 
 
approved if:
 (1) the required prescription drug is contraindicated;
 (2) the patient has tried the required prescription 
 drug while under the patient's current or previous health 
 insurance or health benefit plan and the prescribing 
 provider submits evidence of failure or intolerance; or
 (3) the patient is stable on a prescription drug 
 selected by his or her health care provider for the medical 
 condition under consideration while on a current or 
 previous health insurance or health benefit plan.
 (d) Upon the granting of an exception request, the insurer, 
health plan, utilization review organization, or other entity 
shall authorize the coverage for the drug prescribed by the 
enrollee's treating health care provider, to the extent the 
prescribed drug is a covered drug under the policy or contract 
up to the quantity covered.
 (e) Any approval of a medical exception request made 
pursuant to this Section shall be honored for 12 months 
following the date of the approval or until renewal of the 
plan. 
 (f) (c) Notwithstanding any other provision of this 
Section, nothing in this Section shall be interpreted or 
implemented in a manner not consistent with the federal Patient 
Protection and Affordable Care Act of 2010 (Public Law 
111-148), as amended by the federal Health Care and Education 
Reconciliation Act of 2010 (Public Law 111-152), and any 
 
amendments thereto, or regulations or guidance issued under 
those Acts Federal Act. 
 (g) Nothing in this Section shall require or authorize the 
State agency responsible for the administration of the medical 
assistance program established under the Illinois Public Aid 
Code to approve, supply, or cover prescription drugs pursuant 
to the procedure established in this Section. 
(Source: P.A. 98-1035, eff. 8-25-14.) 
 Section 99. Effective date. This Act takes effect January 
1, 2018.