Illinois

SUMMARY

Illinois is a leader in transparency, and is currently implementing an All Payer Claims Database. The APCD is a result of Executive Order 14-01, signed by former Governor Pat Quinn in 2014, establishing the Governor’s Office of Health Innovation and Transformation in order to direct the state’s participation in the Center for Medicare and Medicaid Innovation’s State Innovation Model Program. Illinois was awarded up to $2,088,530 to develop its plan, dubbed the Illinois Alliance for Health Innovation Plan. The plan calls for building the APCD to ultimately collect data on commercial plans, Medicare, Medicaid, and the uninsured.

In the past, Illinois sought to decrease healthcare price transparency by amending the state’s Medical Assistance Article that currently requires the Illinois Department of Healthcare and Family Services to disclose certain benchmark, readmission, and hospital expenditure information. That legislation did not pass in the 2016 regular session. Illinois was also the site of two antitrust cases involving hospital mergers, one private antitrust action and one case brought by the FTC. In FTC v. Advocate Health Care Network, the district court granted an injunction on March 7, 2017, and the parties abandoned their merger plans.

 

LEGISLATION/REGULATION

Legislative Calendar

Illinois’ current regular legislative session runs between 1/10/2018 – 12/31/2018.

 

Legislative Updates

Healthcare Transparency

2018 HB4096 PREFERRED DRUG LIST: Provides that the Department of Healthcare and Family Services shall require each Medicaid Managed Care Organization to list as preferred on the Medicaid Managed Care Organization’s preferred drug list every pharmaceutical that is listed as preferred on the Department’s preferred drug list. Provides that the Department shall not prohibit, or adopt any rules or policies that prohibit, a Medicaid Managed Care Organization from: (i) covering additional pharmaceuticals that are not listed on the Department’s preferred drug list; or (ii) removing from the Medicaid Managed Care Organization’s preferred drug list any prior approval requirements applicable under the Department’s preferred drug list. Provides that the Department shall not require a Medicaid Managed Care Organization to utilize a single, statewide preferred drug list and shall not prohibit a plan from negotiating drug pricing concessions or rebates on any drug with pharmaceutical companies, unless otherwise required by federal law. Provides that no later than July 1, 2018, the Department shall develop a standardized format for all Medicaid Managed Care Organization preferred drug lists in cooperation with Medicaid Managed Care Organizations and stakeholders, including, but not limited to, community-based organizations, providers, and individuals or entities with expertise in drug formulary development. Requires each Medicaid Managed Care Organization to post its preferred drug list on its website without restricting access to enrolled members and to update the preferred drug list posted on its website within 2 business days of making any changes to the preferred drug list, including, but not limited to, any and all changes to requirements for prior approval. Effective immediately. Active – currently in committee
HB4679 ILLINOIS INSURANCE CODE (SURPRISE BILLING): Defines “surprise bill” to mean a bill for health care services received by certain out-of-network providers in which the enrollee did not knowingly elect to obtain those services from an out-of-network provider. Provides that a carrier shall require an enrollee to pay only certain expenses of a surprise bill that would be imposed for health care services if the services were rendered by a network provider. Provides for reimbursement to the out-of-network provider or enrollee at the average network rate, unless the carrier and out-of-network provider agree otherwise. Provides that if a carrier has an inadequate network, as determined by the Director of Insurance, the carrier shall ensure that the enrollee obtains covered service at no greater cost to the enrollee than if the service was obtained from a network provider or make other arrangements acceptable to the Director. Active – currently in committee
2017 HB239 DRUG MANUFACTURER DISCLOSURES: Requires manufacturers of brand name or generic prescription drugs to notify State purchasers, health insurers, health care service plan providers, pharmacy benefit managers, and the General Assembly of specified increases in drug prices at least 60 days before such increase and the cost of specified new prescription drugs within 3 days after approval by the U.S. Food and Drug Administration. Inactive – Died.
HB311 NETWORK ADEQUACY AND TRANSPARENCY ACT: Provides that administrators and insurers, prior to going to market, must file with the Department of Insurance for review and approval a description of the services to be offered through a network plan, with certain criteria included in the description. Provides that the network plan shall demonstrate to the Department, prior to approval, a minimum ratio of full-time equivalent providers to plan beneficiaries and maximum travel and distance standards for plan beneficiaries, which shall be established annually by the Department based upon specified sources. Provides that the Department shall conduct quarterly audits of network plans to verify compliance with network adequacy standards. Establishes certain notice requirements. Provides that a network plan shall provide for continuity of care for its beneficiaries under certain circumstances and according to certain requirements. Provides that a network plan shall post electronically a current and accurate provider directory and make available in print, upon request, a provider directory subject to certain specifications. Provides that the Department is granted specific authority to issue a cease and desist order against, fine, or otherwise penalize any insurer or administrator for violations of any provision of the Act. Makes other changes. Effective January 1, 2018. Passed – Signed by governor on 9/15/17.
SB73 PRESCRIPTION DRUG PRICE INCREASES: Adds provision concerning prescription drug price increases. Requires manufacturers of prescription drugs to notify State purchasers, health insurers, health care service plan providers, and pharmacy benefit managers of specified increases in drug prices at least 30 days before such increase and the cost of specified new prescription drugs 3 days before the commercial availability of a new drug approved by the U.S. Food and Drug Administration or within 3 days after approval by the U.S. Food and Drug Administration if the new drug will be made commercially available within 3 days of such approval. Provides that within 30 days after such notifications, prescription drug manufacturers shall report specified information to the Department of Public Health and requires the Department to publish such information on its website. Provides that failure to report such information to specified entities shall result in a specified administrative penalty. Provides that the Department may adopt rules and issue guidance to implement these provisions and shall be responsible for enforcing these provisions. Contains provisions concerning the confidentiality of pricing information. Repeals provisions concerning prescription drug price increases on January 1, 2022. Effective immediately. Inactive – Died.
SB1604 PHARMACY PRESCRIPTION DRUGS: Provides that if the substitute brand name drug product has a unit price greater than the unavailable generic drug product specified in the prescription, then the pharmacist shall dispense that substitute brand name at the lesser unit price of the generic specified in the prescription. Inactive – Died.

 

Healthcare Cost

2018 HB4900 ILLINOIS GENERIC DRUG PRICING FAIRNESS ACT: Provides that a manufacturer or wholesale drug distributor shall not engage in price gouging in the sale of an essential off-patent or generic drug. Provides that the Director of Healthcare and Family Services or Director of Central Management Services may notify the Attorney General of any increase in the price of any essential off-patent or generic drug under the Medical Assistance Program under the Illinois Public Aid Code or a State health plan, respectively, that amounts to price gouging. Provides that whenever the Attorney General has reason to believe that a manufacturer or wholesale drug distributor of an essential off-patent or generic drug has violated the Act, the Attorney General shall send a notice to the manufacturer or wholesale drug distributor requesting a specified statement. Provides that within 45 days after receipt of the request, the manufacturer or wholesale drug distributor shall submit the statement to the Attorney General. Provides that to accomplish the objectives and carry out the duties prescribed in the Act, the Attorney General may issue subpoenas or examine under oath any person to determine whether a manufacturer or wholesale drug distributor has violated the Act. Provides that upon petition of the Attorney General, a circuit court may issue specified orders against violations of the Act. Contains provisions concerning the disclosure of financial information provided by a manufacturer or wholesale drug distributor to the Attorney General. Would be effective January 1, 2019. Active – Currently up for debate
2017 SB1971 ILLINOIS INSURANCE CODE (COST LIST-PHARMACY BENEFITS MANAGER): Provides regulation for the creation of a list of drugs used to set the maximum allowable cost on which reimbursement to a pharmacy or pharmacist may be based. Provides that before a pharmacy benefits manager places or continues a particular drug on a maximum allowable cost list, the drug shall meet specified requirements. Provides for the duties of a pharmacy benefits manager in his or her use of a maximum allowable cost list. Provides for a reasonable administrative appeal procedure to allow pharmacies to challenge maximum allowable costs and reimbursements made under a maximum allowable cost for a specific drug. Provides that a pharmacy benefits manager shall not reimburse a pharmacy or pharmacist in this State in an amount less than the amount that the pharmacy benefits manager reimburses a pharmacy benefits manager affiliate for providing the same pharmacist services. Provides that a pharmacy or pharmacist may decline to provide pharmacist services to a patient or pharmacy benefits manager if, as a result of a maximum allowable cost list, a pharmacy or pharmacist is to be paid less than the pharmacy acquisition cost of the pharmacy providing pharmacist services. Provides that a violation of the provisions concerning maximum allowable cost lists and pharmacy benefits managers is a deceptive trade practice. Amends the Uniform Deceptive Trade Practices Act to make a conforming change. Defines terms. Inactive – Died.
HB2436 ILLINOIS MEDICARE FOR ALL HEALTH CARE ACT: Provides that all individuals residing in the State are covered under the Illinois Health Services Program for health insurance. Sets forth the health coverage benefits that participants are entitled to under the Program. Sets forth the qualification requirements for participating health providers. Sets forth standards for provider reimbursement. Provides that it is unlawful for private health insurers to sell health insurance coverage that duplicates the coverage of the Program. Provides that investor-ownership of health delivery facilities is unlawful. Provides that the State shall establish the Illinois Health Services Trust to provide financing for the Program. Sets forth the requirements for claims billing under the Program. Provides that the Program shall include funding for long-term care services and mental health services. Provides that the Program shall establish a single prescription drug formulary and list of approved durable medical goods and supplies. Creates the Pharmaceutical and Durable Medical Goods Committee to negotiate the prices of pharmaceuticals and durable medical goods with suppliers or manufacturers on an open bid competitive basis. Sets forth provisions concerning patients’ rights. Provides that the employees of the Program shall be compensated in accordance with the current pay scale for State employees and as deemed professionally appropriate by the General Assembly. Effective January 1, 2018. Inactive – Died.
HB2624 HEALTH INSURANCE RATE REVIEW ACT: Creates the independent quasi-judicial Health Insurance Rate Review Board to ensure insurance rates are reasonable and justified. Sets forth duties and prohibited activities concerning the Board. Creates the Health Insurance Rate Review Board Nomination Panel to provide a list of nominees to the Governor for appointment to the Health Insurance Rate Review Board. Sets forth the procedures for nomination. Provides requirements and procedures for health carriers to file current and proposed rates and rate schedules with the Health Insurance Rate Review Board. Provides that the Board shall review and approve or disapprove all rates and rate schedules filed or used by a health carrier. Sets forth provisions concerning rate standards, public notice, hearings, and the disapproval and approval of rates and rate schedules. Inactive – Died.

 

Healthcare Markets

  • None identified.

 

Key Statutes

Transparency in Healthcare

  • 20 Ill. Comp. Stat. § 2215/4-1 through 4-3, the “Illinois Health Finance Reform Act,” creates a uniform system for the collection, analysis, and distribution of health care cost and utilization data “to make valid comparisons among health care providers of prices and utilization of services provided and to support ongoing analysis of the health care delivery system.” To that end, the act requires that:
  1. Hospitals use and payers accept a uniform billing sheet;
  2. Hospitals must submit to the Department of Health inpatient and outpatient claims and encounter data;
  3. The Department of Public Health must publish a “Consumer Guide to Health Care” and a Hospital Record Card on its website. The Guide must contain information on at least 30 outpatient procedures identified to have the highest degree of variation in patient charges and quality of care, indicating the volume of cases and average charge for each procedure;
  4. “Publicly disclosed information must be provided in language that is easy to understand and accessible to consumers using an interactive query system;” and
  5. The Department must conduct outreach to educate the public regarding the availability of the foregoing.

 

  • 20 Ill. Comp. Stat. § 2215/4-4 requires that hospitals make price information on the normal charge incurred for any procedure available to a prospective patient. Further, the Department of Public Health shall require by regulation that hospitals post the established charges for specified services (including room charges and certain common procedures).

 

  • 20 Ill. Comp. Stat. § 2215/5-1 permits any third party payer to require a utilization review for hospital admissions and continued hospital stays for payment of hospital services. The third party payer may contract to withhold payment for hospital services to a beneficiary that is found to have been inappropriate and unwarranted.

 

  • 210 Ill. Comp. Stat. § 86/1 et seq., the “Hospital Report Card Act,” requires hospitals to issue periodic reports containing quality information respecting infection rates and nursing staff levels. The Department of Public Health shall compile the information acquired under the act and make comparative reports available to licensed hospitals. The Act affords whistleblower protection and prohibitions retaliation against an employee who discloses to an outside agency a practice that the employee reasonably believes poses a risk to health or safety of a patient or the public.

 

  • 215 Ill. Comp. Stat. 134/1 et seq., the “Managed Care Reform and Patient Rights Act,” states that, among other things, a patient has the right to a examine and receive an reasonable explanation of the total bill for health care services rendered, regardless of the payer source. The Act also requires the provision of certain information by insurers to enrollees such as coverage terms and timely notice of nonrenewal or termination.

 

  • 215 Ill. Comp. Stat. 134/90 establishes the Office of Consumer Health Insurance within the Department of Insurance to assist consumers in understanding health insurance materials and educate enrollees about their rights within individual plans.

 

Healthcare Contracting

  • 215 Ill. Comp. Stat. 134/30, 35 prevents a healthcare plan from contracting with providers to prohibit or discourage discussing “any health care services and health care providers, utilization review and quality assurance policies, terms and conditions of plans and plan policy with enrollees, prospective enrollees, providers, or the public.” A healthcare plan may not retaliate against a physician who advocates for medically appropriate health care services (i.e. protest against a decision to deny payment for a healthcare service).

 

  • 215 Ill. Comp. Stat. § 5/370h an insurer or administrator must establish terms and conditions to be met by non-institutional providers wishing to enter into an agreement with the insurer or administrator. The insurer may not discriminate unreasonably against non-institutional providers, and may not refuse to contract with a non-institutional provider who meets the established terms and conditions.

 

Healthcare Markets

  • 215 Ill. Comp. Stat. § 5/355 states that no health insurance policy may be issued for delivery in Ohio until a copy of the form and premium rates have been filed and approved by the Director of Insurance.

 

  • 20 Ill. Comp. Stat. § 3960 prohibits health care providers from acquiring, replacing, or adding to their facilities and equipment, except in specified circumstances, without the prior approval of the Department of Public Health through the state’s Certificate of Need process. A Certificate of Need regime aims to reduce healthcare overheard by reducing unnecessary or duplicative services, but can be anticompetitive by increasing regulatory barriers for new entrants.

 

Network Adequacy

  • 305 Ill. Comp. Stat. § 5/5-30.1, with respect to a managed care organization (an entity that contracts to provide healthcare services where payment is made on a capitated basis), the Department of Public Health must ensure that an adequate provider network is in place, “taking into consideration health professional shortage areas and medically underserved areas.”

 

FY 2018 BUDGET

Illinois’ fiscal year begins on July 1 and ends on June 30 the following year. Illinois enacted its FY 2018 Budget during a special legislative session. To view Illinois’ FY 2018 Budget, click here.

 

LITIGATION/ENFORCEMENT

  • FTC v. Advocate Healthcare et al.: The FTC successfully blocked the merger of Chicago-area Advocate Health Care and NorthShore University HealthSystems after winning its appeal to put the proposed merger on hold. On October 31, 2016, the Seventh Circuit granted a preliminary injunction, halting the merger of the Chicago area health systems, based on its conclusion that the district court’s geographic market finding in denying a preliminary injunction was “clearly erroneous.”  The Seventh Circuit sided with the FTC’s argument about proper geographic market definition, and found that the FTC demonstrated a likelihood of success on the merits of the case. The case was then remanded to the District Court for the Northern District of Illinois, which granted an injunction on March 7, 2017. The parties abandoned their merger plans soon thereafter. Read the FTC press release.

 

  • In re Evanston Northwestern:  currently pending in federal district court in the Northern District of Illinois, represents the first private class action antitrust lawsuit brought as a result of a (13-year-old) hospital merger.  At issue in Evanston is the 2000 acquisition of Highland Park Hospital by rival Evanston Northwestern HealthCare Corp.  Four years after the completion of the merger, the FTC announced that it had filed a retroactive administrative complaint, alleging that the merger had significantly lessened competition for general acute care hospital services in Chicago’s north shore area.  Find the FTC case summary and related documents here. The class action complaint was filed in 2007, and the class eventually certified in December 2013.

 

  • Illinois was recently one of 16 states to file an amicus brief in the Ninth Circuit case St. Luke’s Health Care Sys. v. FTC, No. 14-35173 (March 7, 2014), explaining that the acceleration of health care costs due to the growth of large health care provider systems has become a matter of grave concern for the States.

 

KEY RESOURCES

Illinois State General Assembly

Illinois Office of the Attorney General