PREFERRED PROVIDER PROGRAMS Department of Insurance – Notice of Proposed Amendments Published April 27, 2012 (consisting of 153 pages) These rules were created due to the addition of preferred provider programs to the Illinois Worker’s Compensation Act so as to provide preferred provider programs to injured workers per Section 8.1a of the Worker’s Compensation Act. The registration and regulation of preferred provider programs falls under the jurisdiction of the Department of Insurance. These rules were published on April 27, 2012. Persons wishing to make comment on the proposed rulemaking are directed to submit written comments no later than 45 days after the publication of the notice to the Department of Insurance. The rules provide that the types of businesses and municipalities affected are: all employers offering workers compensation insurance. Section 2051.210 Purpose A. The purpose of these regulations is to provide for the regulation of preferred provider programs that provide insureds or beneficiaries access to discounted healthcare provider fees. The regulations establish requirements for any person, partnership, or corporation, including, but not limited to administrator’s discounted healthcare services plan, administrators, and insurers that enter into a preferred provider arrangements, or offer preferred provider program. This part does not apply to Employee Benefit Trust Funds, ERISA exempt organizations, self funded State of Illinois health benefit plans, Medicare approved prescription drug plans, or any State of Illinois discount approved drug program except as otherwise been designated within the regulations. B. This part also establishes requirements for any person, partnership, or corporation engaged in any conduct regulated by section 8.1a of the Worker’s Compensation Act including, but not limited to, workers compensation preferred provider program administrators, employers, including self-funded employers, and insurers that offer a preferred provider program. Any entity, in order to comply with this regulation, when requiring employees to make a choice of a healthcare services provider from a PPP, must comply with this regulation in order to satisfy the legislation found under section 8(a)(4) of the Worker’s Compensation Act. Section 2051.220 Definitions Economic Evaluation: means any evaluation as described in Section 8.1a(b) of the Workers Compensation Act of a particular physician, provider, medical group, or individual practice association based in whole or in part on the economic costs or utilization of services associated
with the medical care provided or authorized by the physician. Negotiated rates with a provider are not a form of economic evaluation. Emergency Medical Condition: means a medical condition manifesting itself by acute symptoms of sufficient severity that a prudent layperson with average knowledge of health and medicine could reasonably expect the absence of immediate medical care to result in placing the health of the individual in serious jeopardy, serious impairment, or serious dysfunction of any bodily organ. Payor: means an entity responsible for bearing the risk of healthcare services. An administrator, other than a self-insured employer implementing a workers compensation PPP, is prohibited from being a payor and may not bear or assume any underwriting risk. Preferred Provider: means any provider who has entered, either directly or indirectly, into an agreement with an administrator, employor, or risk-bearing entity, relating to healthcare services that may be rendered to beneficiaries under a preferred provider program, including providing discounts for healthcare services. A Preferred Provider Program, or PPP: means a system to make preferred provider arrangements available to beneficiaries. Preferred Provider Arrangements: means policies, agreements, or arrangements with providers relating to the amounts to be charged to beneficiaries for healthcare services that include incentives for the beneficiary to use those services, including discounted healthcare services. Primary Treating Physician: means a provider who has contracted with a workers compensation PPP administrator to provide healthcare services and who is a type of physician licensed to treat the injury experienced by the covered employee. This physician will be responsible for managing the care of the covered employee, including rendering and prescribing treatment. Risk Bearing Entity: means an insurer, health service corporation, limited health service organization holding a certificate of authority under the Limited Health Service Organization Act, or health maintenance organization holding a certificate of authority under the HMO Act. A Workers’ Compensation Preferred Provider Program or WC PPP: means a preferred provider program for the provision of workers compensation benefits that meets the requirements of section 8.1 a of the Worker’s Compensation Act. Section 2051.240 Registration, Renewals, and Appeals. This section provides that the Department of Insurance must find that the applicant for a PPP has a detailed plan of operation, is competent and trustworthy, has a good business reputation, and has incorporated under the laws of this or another state. The director of the Department of Insurance may suspend, revoke, or refuse to issue or renew and administrator’s registration for a variety of listed reasons.
This section provides that the information given to the director regarding the methods and or amounts of reimbursement between providers and the administrator under a preferred provider program, or between administrators, is deemed to be confidential. However, the director of the Department of Insurance shall make a Workers Compensation PPP administrator filing available to the public upon request, but may not publicly disclose any information submitted that is determined by the Director to be confidential, proprietary, or a trade secret. Section 2051.260 Administrator Requirements This section provides, among other things, that the administrator must provide a description of programs for utilization review, including procedures for timely investigation, resolution of questions concerning medical necessity and appropriateness of medical services and supplies, and appeals from beneficiaries and providers as provided by Section 370s of the act and Section 85 of the Managed Care Reform and Patient Rights Act, or, for the purposes of a WC PPP, section 8.7 of the Worker’s Compensation Act. WC PPP administrators that utilize economic evaluation of their providers shall file a description of any policies and procedures related to the economic evaluation utilized by the program. The filing shall describe how these policies and procedures are used in utilization review, peer review, incentive, and penalty programs, and in provider retention and termination decisions. WC PPP administrators shall provide those policies and procedures instituted to ensure the employer is providing proper notification to the covered employee in accordance with the form promulgated by the workers compensation commission. Section 2051.285 Workers Compensation Preferred Provider Program Payor Agreements Payor agreements between WC PPP administrators and payors shall contain the terms requiring and specifying all incentives provided to the insured to utilize the services of the provider. The agreements must provide terms stating that whenever an administrator or preferred provider finds it medically necessary to refer a beneficiary to a non-preferred provider, because the preferred provider program does not contain a provider who can provide the approved treatment, and if the beneficiary has complied with all with any reasonable preauthorization requirements, the payor shall ensure that the beneficiary so referred shall incur no greater liability than had the beneficiary received the services from a preferred provider, except as provided under section 8.1 a (c) (2) of the Worker’s Compensation Act. The agreements must provide terms, when referring to non-preferred providers, that the covered employee will be provided the covered services at no greater cost to the payor than if the service had been provided by a preferred provider. In these instances the administrator shall be responsible for the payment of any additional amounts otherwise due to the non-preferred provider, however, those amounts will be no greater than those established by the workers compensation fee schedule.
Section 2051.290 Provider Agreements WC PPP’s are exempt from the requirements of this section of filing a sample of copy of all provider agreements. Section 2051.295 WC PPP Agreements WC PPP agreements shall contain, at a minimum: - A provision identifying the specific covered healthcare services for which the preferred provider will be responsible including discounted amounts or a discounted fee schedule reflecting discounted rates; - A provision specifying credentialing or re-credentialing requirements, utilization review requirements, and referral procedures; - A provision requiring that when payments are due to the provider for services rendered the provider must maintain and make medical records available to the administrator and payor to determine, on a concurrent and retrospective basis, the compensability, medical necessity, or appropriateness of care; and to the appropriate state and federal authorities or their agents involved in assessing the accessibility of care; and to show compliance with the applicable state and federal laws related to privacy and confidentiality of medical records; - A provision requiring that all physician providers be licensed and have admitting privileges in at least one hospital with which the administrative has a written provider contract. However, exceptions can be made for physicians who, because of their specialty or location, do not normally have admitting privileges; - A provision describing notification procedures for contract termination; - A provision explaining the provider responsibilities for continuation of covered services in the event of contract termination; - A provision stating that the preferred provider has and will maintain adequate professional liability and malpractice coverage; - A provision stating that the provider will provide healthcare services without discrimination against any beneficiary; - A provision for notice to the beneficiary regarding the beneficiary’s personal financial obligation for non-covered services; - A provision that providers may charge covered employees for those services determined to be not compensable under the Workers' Compensation Act;
- A provision regarding any obligation to provide covered health services on a 24 hours per day, 7 days per week basis; - A provision clearly describing the administrators and the payors payment obligations to the provider, including the payment of interest under Section 8.2(d)(3) of the Workers' Compensation Act; - A provision identifying applicable internal appeal or arbitration procedures for settling contractual disputes or disagreements between the administrator and the preferred provider. Section 2051.315 Workers Compensation Network Availability and Adequacy Requirements This section requires that the WC PPP administrators and insurers must file a description of the services to be offered through a WC PPP, including: - A method of marketing the program, the geographic map of the area proposed to be served, the names and addresses and specialties of the providers; - The number of beneficiaries estimated to be covered by the providers; - An internet website and toll-free telephone number for the insureds, beneficiaries and prospective beneficiaries; - A description of how healthcare services are to be accessible and available to the beneficiaries, how the healthcare services are to be reasonably provided, including the type of healthcare services to be provided, the ratio of providers to beneficiaries by specialty, including primary treating physician’s, written policies regarding when the program will be closed to new providers, written policies for adding providers to meet patient need, and procedures for making referrals within and outside the network; The description must include a provision to address the needs of beneficiaries with limited English proficiency and literacy and/or diverse cultural and ethnic backgrounds, and to comply with the ADA of 1990; The description must include a statement that covered employees are not responsible for any costs associated with medical record transmission or duplication in order to have a claim adjudicated; The description must include a provision that when a covered employee has made a good-faith effort to utilize network providers for a covered service and it is determined that the administrators did not have the appropriate preferred providers due to insufficient number, type, or distance, the administrator shall ensure, directly or indirectly, by terms contained in the payor contract, that the covered employee will be provided a covered service at no greater cost to the payor and if the service had been provided by a preferred provider. In these instances the administrator shall be responsible for the payment of any additional amounts otherwise due to the non-preferred provider, however the amounts will be no greater than those established the
Fee Schedule. This section does not apply, however, to a covered employee who willfully chooses to access a non-preferred provider for healthcare services available through the administrator’s panel of participating providers. In those circumstances the requirements of section 8.2 of the Worker’s Compensation Act for non-preferred provider reimbursements will apply. This description must provide geographical maps indicating primary treating physician and hospital healthcare services for emergency healthcare services within 30 minutes or 15 miles of each covered employee’s residence. This description must further indicate providers of occupational health services and specialists within 60 minutes or 30 miles of a covered employee’s residence. If the administrator believes that, given the facts and circumstances with regard to a portion of its service area (specifically rural areas, including those where health facilities are located at least 30 miles apart) the accessibility standards set forth are unreasonably restrictive, the administrator shall include proposed alternative standards in writing in its application or in a notice of program modification. The alternative standard shall provide that all services shall be available and accessible at reasonable times to all covered employees. This description must provide a written policy for arranging and approving non-emergency medical care for covered employees authorized to temporarily work or travel outside of the PPP geographic service area; medical care for former employees who have ongoing needs and permanently reside outside the PPP geographic service area; and medical care for a covered employee decides to temporarily reside outside PPP geographic service area during recovery. This description must provide such employees described in this paragraph with a choice of at least three providers outside of the PPP geographic service area upon referral by the primary treating physician within the PPP, or selected by the PPP administrator. The referred providers must be located within the 60 minute/30 mile distance from the employee’s residence previously described above. The description must provide that, for non-emergency care, an appointment for initial treatment be available within 3 business days of the receipt for request for treatment. This description must provide for treatment of common injuries experienced by the covered employees based upon the type of occupation or industry in which the covered employees engage, and ensure that an appointment is available within 20 business days after a request for the referral to a specialist within the PPP. Appendix A: Health Care Preferred Provider Plans comments and summaries regarding fees, registration, organization, agreements, referrals, covered services, admitting privileges, continuation of services, payment obligations, arbitration, marketing, geographic coverage, website and telephonic access, ratio, travel distance, 24/7 access, referral procedures, inadequate networks, communications, medical record costs, bond. Appendix B: Comments regarding DHCS Plans. Appendix C: Comments regarding Insurers.
Appendix D: Workers' Compensation PPP comments and summaries regarding fees, registration, economic evaluations, organization, contracts, agreements, employee notification, incentives, referrals, compliance with Workers' Compensation Act, covered services, medical records, admitting privileges, continuation of services, malpractice, arbitration, 24/7 access, payment obligations, marketing, providers, website and telephonic access, ratios, medical record costs, emergency care, geographic coverage and travel distance, rural services, referral procedures, inadequate networks, communications, bond. Appendix E: Affidavit.
