HB 5393

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Full Text of HB5393
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	HB5393 - 104th General Assembly
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			Senate Amendment 001
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		HB5393 Enrolled		LRB104 18114 BAB 31553 b
1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Limited Health Service Organization Act is
5amended by changing Sections 1002 and 3009 as follows:
6    (215 ILCS 130/1002)  (from Ch. 73, par. 1501-2)
7    Sec. 1002. Definitions. As used in this Act, unless the
8context otherwise requires, the following terms shall have the
9meanings ascribed to them:
10    "Advertisement" means any printed or published material,
11audiovisual material and descriptive literature of the limited
12health care plan used in direct mail, newspapers, magazines,
13radio scripts, television scripts, billboards and similar
14displays; and any descriptive literature or sales aids of all
15kinds disseminated by a representative of the limited health
16care plan for presentation to the public including, but not
17limited to, circulars, leaflets, booklets, depictions,
18illustrations, form letters and prepared sales presentations.
19    "Copayment" means the amount that an enrollee must pay in
20order to receive a specific service that is not fully prepaid.
21    "Director" means the Director of Insurance.
22    "Enrollee" means an individual, including a dependent, who 
23is entitled to limited health services pursuant to a contract 
		HB5393 Enrolled	- 2 -	LRB104 18114 BAB 31553 b
1with an entity authorized to provide or arrange for those 
2services under this Act [who has been enrolled in a limited ]
3[health care plan].
4    "Evidence of coverage" means any certificate, agreement or
5contract issued to an enrollee setting out the coverage to
6which that enrollee is entitled [in exchange for a per capita ]
7[prepaid sum].
8    "Group contract" means a contract for limited health
9services which by its terms limits eligibility to members of a
10specified group.
11    "In-plan covered services" means covered limited health
12services obtained from providers who are employed by, under
13contract with, referred by, or otherwise affiliated with the
14LHSO and emergency services.
15    "Limited health care plan" means any arrangement whereby
16an organization undertakes to provide or arrange for and, pay
17for or reimburse the cost of any limited health services from
18providers selected by the limited health service organization
19and such arrangement consists of arranging for or the
20provision of such limited health services on a per capita or 
21fixed prepaid basis, as distinguished from mere
22indemnification against the cost of such limited services on a
23per capita prepaid basis through insurance except as otherwise
24provided under Section 3009.
25    "Limited health service" means dental care services, 
26vision care services, pharmaceutical services, podiatric care 
		HB5393 Enrolled	- 3 -	LRB104 18114 BAB 31553 b
1services, and such other services as may be determined by the 
2Director to be limited health services. "Limited health 
3service" does not include hospital, medical, surgical, or 
4emergency services, except as these services are provided 
5incident to the limited health services set forth in this 
6definition [ambulance care services, dental care services, ]
7[vision care services, pharmaceutical services, clinical ]
8[laboratory services, and podiatric care services. Limited ]
9[health service shall not include hospital, medical, surgical ]
10[or emergency services except when those services are essential ]
11[to the delivery of the limited health service. Essential ]
12[hospital, medical, surgical, or emergency services shall be ]
13[covered unless specifically excluded].
14    "Limited health service organization" (LHSO) means any
15organization formed under the laws of this or another state to
16provide or arrange for one or more limited health care plans
17under a system which causes any part of the risk of limited
18health care delivery to be borne by the organization or its
19providers.
20    "Net worth" means admitted assets, as defined in Section
211003 of this Act, minus liabilities.
22    "Organization" means any insurance company or other
23corporation organized under the laws of this or another state
24for the purpose of operating one or more limited health care
25plans and doing no business other than that of a health
26maintenance organization or a limited health service
		HB5393 Enrolled	- 4 -	LRB104 18114 BAB 31553 b
1organization or an insurance company. Organization does not
2include (1) any entity otherwise authorized on the effective
3date of this Act pursuant to the laws of this State either to
4provide any limited health service on a prepayment basis or to
5indemnity for any limited health service; nor does it include
6(2) any provider or other entity when providing or arranging
7for the provision of limited health services pursuant to a
8contract with a limited health service organization or with
9any entity described in (1) of this definition.
10    "Out-of-plan covered services" means non-emergency,
11self-referred covered limited health services obtained from
12providers who are not otherwise employed by, under contract
13with, or otherwise affiliated with the LHSO or services
14obtained without a referral from providers who have contracted
15to provide limited health services to the enrollee on behalf
16of the limited health care plan.
17    "Point-of-service product" (POS) means a group contract
18that includes both in-plan covered services and out-of-plan
19covered services as well as a POS contract in which the risk
20for out-of-plan covered services is borne through reinsurance.
21This term does not apply to indemnity benefits offered through
22an LHSO that are underwritten in whole by a licensed insurance
23carrier and offered in conjunction with the LHSO benefit
24package.
25    "Provider" means any physician, dentist, health facility,
26or other person or institution which is duly licensed or
		HB5393 Enrolled	- 5 -	LRB104 18114 BAB 31553 b
1otherwise authorized to deliver or furnish limited health
2services and also includes any other entity that arranges for
3the delivery or furnishing of limited health service.
4    "Per capita prepaid" means a basis of payment by which a
5fixed amount of money is prepaid per individual or any other
6enrollment unit to the limited health service organization or
7for limited health services which are provided during a
8definite time period regardless of the frequency or extent of
9the services rendered, except for copayments of a fixed amount
10by the limited health service organization.
11    "Subscriber" means the person whose employment or other
12status, except for family dependency, is the basis for
13entitlement to limited health services pursuant to a contract
14with an organization authorized to provide or arrange for such
15services under this Act.
16    "Uncovered expense" means the cost of limited health
17services that are the obligation of a limited health service
18organization for which an enrollee may be liable in the event
19of the insolvency of the organization. Costs incurred by a
20provider who has agreed in writing not to bill enrollees,
21except for permissible supplemental charges, shall be
22considered covered expenses.
23(Source: P.A. 87-1079; 88-568, eff. 8-5-94; 88-667, eff.
249-16-94.)
25    (215 ILCS 130/3009)  (from Ch. 73, par. 1503-9)
		HB5393 Enrolled	- 6 -	LRB104 18114 BAB 31553 b
1    Sec. 3009. Point-of-service limited health service
2contracts.
3    (a) An LHSO that offers a POS contract:
4        (1) shall include as in-plan covered services all
5    services required by law to be provided by an LHSO;
6        (2) shall provide incentives, which shall include
7    financial incentives, for enrollees to use in-plan covered
8    services;
9        (3) shall not offer services out-of-plan without
10    providing those services on an in-plan basis;
11        (4) may limit or exclude specific types of services
12    from coverage when obtained out-of-plan;
13        (5) may include annual out-of-pocket limits and
14    lifetime maximum benefits allowances for out-of-plan
15    services that are separate from any limits or allowances
16    applied to in-plan services;
17        [(6) shall include an annual maximum benefit allowance ]
18    [not to exceed $2,500 per year that is separate from any ]
19    [limits or allowances applied to in-plan services;]
20        (6) [(7)] may limit the groups to which a POS product is
21    offered, however, if a POS product is offered to a group,
22    then it must be offered to all eligible members of that
23    group, when an LHSO provider is available;
24        (7) [(8)] shall not consider emergency services,
25    authorized referral services, or non-routine services
26    obtained out of the service area to be POS services; and
		HB5393 Enrolled	- 7 -	LRB104 18114 BAB 31553 b
1        (8) [(9)] may treat as out-of-plan services those
2    services that an enrollee obtains from a participating
3    provider, but for which the proper authorization was not
4    given by the LHSO.
5    (b) An LHSO offering a POS contract shall be subject to the
6following limitations:
7        (1) The LHSO shall not expend in any calendar quarter
8    more than 20% of its total limited health services
9    expenditures for all its members for out-of-plan covered
10    services, unless otherwise allowed under this subsection.
11        (2) If the amount specified in paragraph (1) is
12    exceeded by 2% in a quarter, the LHSO shall effect
13    compliance with paragraph (1) by the end of the following
14    quarter.
15        (3) If compliance with the amount specified in
16    paragraph (1) is not demonstrated in the LHSO's next
17    quarterly report, the LHSO may not offer the POS contract
18    to new groups or include the POS option in the renewal of
19    an existing group until compliance with the amount
20    specified in paragraph (1) is demonstrated [or otherwise ]
21    [allowed by the Director].
22        (4) Any LHSO failing, without just cause, to comply
23    with the provisions of this subsection shall be required,
24    after notice and hearing, to pay a penalty of $250 for each
25    day out of compliance, to be recovered by the Director of
26    Insurance. Any penalty recovered shall be paid into the
		HB5393 Enrolled	- 8 -	LRB104 18114 BAB 31553 b
1    General Revenue Fund. The Director may reduce the penalty
2    if the LHSO demonstrates to the Director that the
3    imposition of the penalty would constitute a financial
4    hardship to the LHSO.
5    This subsection does not apply in any calendar quarter in 
6which an LHSO satisfies the minimum capital and surplus 
7requirements applicable to a life, accident, and health 
8insurance company as outlined in Section 13 of the Illinois 
9Insurance Code.
10    (c) Any LHSO that offers a POS product shall:
11        (1) File a quarterly financial statement detailing
12    compliance with the requirements of subsection (b).
13        (2) Track out-of-plan POS utilization separately from
14    in-plan or non-POS out-of-plan emergency care, referral
15    care, and urgent care out of the service area utilization.
16        (3) Record out-of-plan utilization in a manner that
17    will permit such utilization and cost reporting as the
18    Director may, by regulation, require.
19        (4) Demonstrate to the Director's satisfaction that
20    the LHSO has the fiscal, administrative, and marketing
21    capacity to control its POS enrollment, utilization, and
22    costs so as not to jeopardize the financial security of
23    the LHSO.
24        (5) Maintain the deposit required by subsection (b) of
25    Section 2006 in addition to any other deposit required
26    under this Act.
		HB5393 Enrolled	- 9 -	LRB104 18114 BAB 31553 b
1    (d) An LHSO shall not issue a POS contract until it has
2filed and had approved by the Director a plan to comply with
3the provisions of this Section. The compliance plan shall at a
4minimum include provisions demonstrating that the LHSO will do
5all of the following:
6        (1) Design the benefit levels and conditions of
7    coverage for in-plan covered services and out-of-plan
8    covered services as required by this Article.
9        (2) Provide or arrange for the provision of adequate
10    systems to:
11            (A) process and pay claims for all out-of-plan
12        covered services;
13            (B) meet the requirements for a POS contract set
14        forth in this Section and any additional requirements
15        that may be set forth by the Director; and
16            (C) generate accurate data and financial and
17        regulatory reports on a timely basis so that the
18        Department can evaluate the LHSO's experience with the
19        POS contract and monitor compliance with POS contract
20        provisions.
21        (3) Comply initially and on an ongoing basis with the
22    requirements of subsections (b) and (c).
23    (e) A limited health service organization that offers a
24POS contract must comply with Sections 356w and 356x of the
25Illinois Insurance Code.
26(Source: P.A. 90-741, eff. 1-1-99.)