Bill Text: IL HB1186 | 2023-2024 | 103rd General Assembly | Chaptered

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Bill Title: Amends the Health Maintenance Organization Act. Provides that the powers of a health maintenance organization include the voluntary use of a referral system for enrollees to access providers under contract with or employed by the health maintenance organization. Provides that the provisions shall not be construed as requiring the use of a referral system to obtain a certificate of authority. Changes the definition of "health care plan". Defines "referral system". Effective January 1, 2024.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Passed) 2023-06-27 - Public Act . . . . . . . . . 103-0104 [HB1186 Detail]

Download: Illinois-2023-HB1186-Chaptered.html

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Public Act 103-0104
HB1186 Enrolled LRB103 05082 BMS 50096 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 Sections 1-2 and 2-3 as follows:
(215 ILCS 125/1-2) (from Ch. 111 1/2, par. 1402)
Sec. 1-2. Definitions. As used in this Act, unless the
context otherwise requires, the following terms shall have the
meanings ascribed to them:
(1) "Advertisement" means any printed or published
material, audiovisual material and descriptive literature of
the health care plan used in direct mail, newspapers,
magazines, radio scripts, television scripts, billboards and
similar displays; and any descriptive literature or sales aids
of all kinds disseminated by a representative of the health
care plan for presentation to the public including, but not
limited to, circulars, leaflets, booklets, depictions,
illustrations, form letters and prepared sales presentations.
(2) "Director" means the Director of Insurance.
(3) "Basic health care services" means emergency care, and
inpatient hospital and physician care, outpatient medical
services, mental health services and care for alcohol and drug
abuse, including any reasonable deductibles and co-payments,

all of which are subject to the limitations described in
Section 4-20 of this Act and as determined by the Director
pursuant to rule.
(4) "Enrollee" means an individual who has been enrolled
in a health care plan.
(5) "Evidence of coverage" means any certificate,
agreement, or contract issued to an enrollee setting out the
coverage to which he is entitled in exchange for a per capita
prepaid sum.
(6) "Group contract" means a contract for health care
services which by its terms limits eligibility to members of a
specified group.
(7) "Health care plan" means any arrangement in which an
whereby any organization provides, arranges undertakes to
provide or arrange for, pays and pay for, or reimburses
reimburse the cost of basic health care services, excluding
any reasonable deductibles and copayments, from providers
selected by the Health Maintenance Organization; and the such
arrangement consists of providing for the arranging for or the
provision of basic such health care services that is , as
distinguished from mere indemnification against the cost of
such services, on a per capita prepaid basis, through
insurance or otherwise, except as otherwise authorized by
Section 2-3 of this Act, on a per capita prepaid basis, through
insurance or otherwise. A "health care plan" also includes any
arrangement in which whereby an organization provides,

arranges undertakes to provide or arrange for, pays or pay
for, or reimburses reimburse the cost of any health care
service for persons who are enrolled under Article V of the
Illinois Public Aid Code or under the Children's Health
Insurance Program Act through providers selected by the
organization; and the arrangement consists of making a
provision for the delivery of health care services that is , as
distinguished from mere indemnification. A "health care plan"
also includes any arrangement pursuant to Section 4-17.
Nothing in this definition, however, affects the total medical
services available to persons eligible for medical assistance
under the Illinois Public Aid Code. Nothing in this definition
shall be construed as requiring a health care plan or health
maintenance organization to utilize a referral system that
enrollees must use to access basic health care services and
other health care services from providers that are under
contract with or employed by the health maintenance
organization. The Director may prescribe by rule the language
that must be included in the plan name, marketing,
advertising, or other consumer disclosure requirements to
differentiate a health care plan that does not use a referral
system for such providers from a health care plan that does use
a referral system for such providers.
(8) "Health care services" means any services included in
the furnishing to any individual of medical or dental care, or
the hospitalization or incident to the furnishing of such care

or hospitalization as well as the furnishing to any person of
any and all other services for the purpose of preventing,
alleviating, curing or healing human illness or injury.
(9) "Health Maintenance Organization" means any
organization formed under the laws of this or another state to
provide or arrange for one or more health care plans under a
system which causes any part of the risk of health care
delivery to be borne by the organization or its providers.
(10) "Net worth" means admitted assets, as defined in
Section 1-3 of this Act, minus liabilities.
(11) "Organization" means any insurance company, a
nonprofit corporation authorized under the Dental Service Plan
Act or the Voluntary Health Services Plans Act, or a
corporation organized under the laws of this or another state
for the purpose of operating one or more health care plans and
doing no business other than that of a Health Maintenance
Organization or an insurance company. "Organization" shall
also mean the University of Illinois Hospital as defined in
the University of Illinois Hospital Act or a unit of local
government health system operating within a county with a
population of 3,000,000 or more.
(12) "Provider" means any physician, hospital facility,
facility licensed under the Nursing Home Care Act, or facility
or long-term care facility as those terms are defined in the
Nursing Home Care Act or other person which is licensed or
otherwise authorized to furnish health care services and also

includes any other entity that arranges for the delivery or
furnishing of health care service.
(13) "Producer" means a person directly or indirectly
associated with a health care plan who engages in solicitation
or enrollment.
(14) "Per capita prepaid" means a basis of prepayment by
which a fixed amount of money is prepaid per individual or any
other enrollment unit to the Health Maintenance Organization
or for health care services which are provided during a
definite time period regardless of the frequency or extent of
the services rendered by the Health Maintenance Organization,
except for copayments and deductibles and except as provided
in subsection (f) of Section 5-3 of this Act.
(15) "Referral system" means any arrangement in a health
care plan in which a primary care provider coordinates or
manages the care of a health maintenance organization's
enrollee by referring the enrollee to other providers or
specialists.
(16) (15) "Subscriber" means a person who has entered into
a contractual relationship with the Health Maintenance
Organization for the provision of or arrangement of at least
basic health care services to the beneficiaries of such
contract.
(Source: P.A. 98-651, eff. 6-16-14; 98-841, eff. 8-1-14;
99-78, eff. 7-20-15.)

(215 ILCS 125/2-3) (from Ch. 111 1/2, par. 1405)
Sec. 2-3. Powers of health maintenance organizations. The
powers of a health maintenance organization include, but are
not limited to the following:
(a) The purchase, lease, construction, renovation,
operation, or maintenance of hospitals, medical facilities or
both, and their ancillary equipment, and such property as may
reasonably be required for its principal office or for such
other purposes as may be necessary in the transaction of the
business of the organization.
(b) The making of loans to a medical group under contract
with it and in furtherance of its program or the making of
loans to a corporation or corporations under its control for
the purpose of acquiring or constructing medical facilities at
hospitals or in furtherance of a program providing health care
services for enrollees.
(c) The furnishing of health care services through
providers which are under contract with or employed by the
health maintenance organization.
(d) The contracting with any person for the performance on
its behalf of certain functions such as marketing, enrollment
and administration.
(d-5) The voluntary use of a referral system for enrollees
to access providers under contract with or employed by the
health maintenance organization. Nothing in this subsection
(d-5) shall be construed as requiring the use of a referral

system with the health maintenance organization's contracted
or employed providers to obtain a certificate of authority as
set forth in Section 2-1.
(e) The contracting with an insurance company licensed in
this State, or with a hospital, medical, dental, vision or
pharmaceutical service corporation authorized to do business
in this State, for the provision of insurance, indemnity, or
reimbursement against the cost of health care service provided
by the health maintenance organization.
(f) The offering, in addition to basic health care
services, of (1) health care services, (2) indemnity benefits
covering out of area or emergency services, (3) indemnity
benefits provided through insurers or hospital, medical,
dental, vision, or pharmaceutical service corporations, and
(4) health maintenance organization point-of-service benefits
as authorized under Article 4.5.
(g) Rendering services related to the functions involved
in the operating of its health maintenance organization
business including but not limited to providing health
services, data processing, accounting, or claims.
(g-5) Indemnification for services provided to a child as
required under subdivision (e)(3) of Section 4-2.
(h) Any other business activity reasonably complementary
or supplementary to its health maintenance organization
business to the extent approved by the Director.
(Source: P.A. 92-135, eff. 1-1-02.)

Section 99. Effective date. This Act takes effect January
1, 2024.