§ 3009 — Point-of-service limited health service contracts

(a) An LHSO that offers a POS contract: (1) shall include as in-plan covered services all services required by law to be provided by an LHSO; (2) shall provide incentives, which shall include financial incentives, for enrollees to use in-plan covered services; (3) shall not offer services out-of-plan without providing those services on an in-plan basis; (4) may limit or exclude specific types of services from coverage when obtained out-of-plan; (5) may include annual out-of-pocket limits and lifetime maximum benefits allowances for out-of-plan services that are separate from any limits or allowances applied to in-plan services; (6) shall include an annual maximum benefit allowance not to exceed $2,500 per year that is separate from any limits or allowances applied to in-plan services; (7) may limit the groups to which a POS product is offered, however, if a POS product is offered to a group, then it must be offered to all eligible members of that group, when an LHSO provider is available; (8) shall not consider emergency services, authorized referral services, or non-routine services obtained out of the service area to be POS services; and (9) may treat as out-of-plan services those services that an enrollee obtains from a participating provider, but for which the proper authorization was not given by the LHSO. (b) An LHSO offering a POS contract shall be subject to the following limitations: (1) The LHSO shall not expend in any calendar quarter more than 20% of its total limited health services expenditures for all its members for out-of-plan covered services. (2) If the amount specified in paragraph (1) is exceeded by 2% in a quarter, the LHSO shall effect compliance with paragraph (1) by the end of the following quarter. (3) If compliance with the amount specified in paragraph (1) is not demonstrated in the LHSO's next quarterly report, the LHSO may not offer the POS contract to new groups or include the POS option in the renewal of an existing group until compliance with the amount specified in paragraph (1) is demonstrated or otherwise allowed by the Director. (4) Any LHSO failing, without just cause, to comply with the provisions of this subsection shall be required, after notice and hearing, to pay a penalty of $250 for each day out of compliance, to be recovered by the Director of Insurance. Any penalty recovered shall be paid into the General Revenue Fund. The Director may reduce the penalty if the LHSO demonstrates to the Director that the imposition of the penalty would constitute a financial hardship to the LHSO. (c) Any LHSO that offers a POS product shall: (1) File a quarterly financial statement detailing compliance with the requirements of subsection (b). (2) Track out-of-plan POS utilization separately from in-plan or non-POS out-of-plan emergency care, referral care, and urgent care out of the service area utilization. (3) Record out-of-plan utilization in a manner that will permit such utilization and cost reporting as the Director may, by regulation, require. (4) Demonstrate to the Director's satisfaction that the LHSO has the fiscal, administrative, and marketing capacity to control its POS enrollment, utilization, and costs so as not to jeopardize the financial security of the LHSO. (5) Maintain the deposit required by subsection (b) of Section 2006 in addition to any other deposit required under this Act. (d) An LHSO shall not issue a POS contract until it has filed and had approved by the Director a plan to comply with the provisions of this Section. The compliance plan shall at a minimum include provisions demonstrating that the LHSO will do all of the following: (1) Design the benefit levels and conditions of coverage for in-plan covered services and out-of-plan covered services as required by this Article. (2) Provide or arrange for the provision of adequate systems to: (A) process and pay claims for all out-of-plan covered services; (B) meet the requirements for a POS contract set forth in this Section and any additional requirements that may be set forth by the Director; and (C) generate accurate data and financial and regulatory reports on a timely basis so that the Department can evaluate the LHSO's experience with the POS contract and monitor compliance with POS contract provisions. (3) Comply initially and on an ongoing basis with the requirements of subsections (b) and (c). (e) A limited health service organization that offers a POS contract must comply with Sections 356w and 356x of the Illinois Insurance Code.

Legislative History

(Source: P.A. 90-741, eff. 1-1-99.)