Bill Amendment: IL HB3549 | 2015-2016 | 99th General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

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Bill Title: MANAGED CARE ACT-STEP THERAPY

Status: 2016-08-12 - Public Act . . . . . . . . . 99-0761 [HB3549 Detail]

Download: Illinois-2015-HB3549-Senate_Amendment_003.html

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Sen. Julie A. Morrison

Filed: 5/6/2016

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AMENDMENT TO HOUSE BILL 3549
AMENDMENT NO. ______. Amend House Bill 3549, AS AMENDED, by
replacing everything after the enacting clause with the
following:
"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,

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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;

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(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

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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

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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

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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

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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

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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

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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

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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.".