2005 Illinois 215 ILCS 5/ Illinois Insurance Code. Article XXXI 1/2 - Third Party Prescription Programs
(215 ILCS 5/Art. XXXI.5 heading)ARTICLE XXXI 1/2.
THIRD PARTY PRESCRIPTION PROGRAMS
(215 ILCS 5/512‑1) (from Ch. 73, par. 1065.59‑1)
Sec. 512‑1.
Short Title.
This Article shall be known and may be cited
as the "Third Party Prescription Program Act".
(Source: P.A. 82‑1005.)
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(215 ILCS 5/512‑2) (from Ch. 73, par. 1065.59‑2)
Sec. 512‑2.
Purpose.
It is hereby determined and declared that the
purpose of this Article is to regulate certain practices engaged in by third‑party
prescription
program administrators.
(Source: P.A. 82‑1005.)
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(215 ILCS 5/512‑3) (from Ch. 73, par. 1065.59‑3)
Sec. 512‑3.
Definitions.
For the purposes of this Article, unless the
context otherwise requires, the terms defined in this Article have the meanings
ascribed
to them herein:
(a) "Third party prescription program" or "program" means any system of
providing for the reimbursement of pharmaceutical services and prescription
drug products offered or operated in this State under a contractual arrangement
or agreement between a provider of such services and another party who is
not the consumer of those services and products. Such programs may include, but need not be limited to, employee benefit
plans whereby a consumer receives prescription drugs or other pharmaceutical
services and those services are paid for by
an agent of the employer or others.
(b) "Third party program administrator" or "administrator" means any person,
partnership or corporation who issues or causes to be issued any payment
or reimbursement to a provider for services rendered pursuant to a third
party prescription program, but does not include the Director of Public
Aid or any agent authorized by
the Director to reimburse a provider of services rendered pursuant to a
program of which the Department of Public Aid is the third party.
(Source: P.A. 90‑372, eff. 7‑1‑98.)
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(215 ILCS 5/512‑4) (from Ch. 73, par. 1065.59‑4)
Sec. 512‑4.
Registration.
All third party prescription programs and
administrators doing business in the State shall register with the Director
of Insurance. The Director shall promulgate regulations establishing criteria
for registration in accordance with the terms of this Article. The Director
may by rule establish an annual registration fee for each third party administrator.
(Source: P.A. 82‑1005.)
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(215 ILCS 5/512‑5) (from Ch. 73, par. 1065.59‑5)
Sec. 512‑5.
Fiduciary and Bonding Requirements.
A third party prescription program administrator shall (1) establish and
maintain a fiduciary account, separate and apart from any and all other
accounts, for the receipt and disbursement of funds for reimbursement of
providers of services under the program, or (2) post,
or cause to be posted, a bond of indemnity in an amount equal to not less
than 10% of the total estimated annual reimbursements under the program.
The establishment of such fiduciary accounts and bonds shall be consistent
with applicable State law.
If a bond of indemnity is posted, it shall be held by the Director of Insurance
for the benefit and indemnification of the providers of services under the
third party prescription program.
An administrator who operates more than one third party prescription program
may establish and maintain a separate fiduciary account or bond of indemnity
for each such program, or may operate and maintain a consolidated fiduciary
account or bond of indemnity for all such programs.
The requirements of this Section do not apply to any third party prescription
program administered by or on behalf of any insurance company, Health Care
Service Plan Corporation or Pharmaceutical Service Plan Corporation authorized
to do business in the State of Illinois.
(Source: P.A. 82‑1005.)
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(215 ILCS 5/512‑6) (from Ch. 73, par. 1065.59‑6)
Sec. 512‑6.
Notice.
Notice of any change in the terms of a third party prescription program,
including but not limited to drugs covered, reimbursement rates, co‑payments,
and dosage quantity, shall be given to each enrolled pharmacy at least 30
days prior to the time it becomes effective.
(Source: P.A. 82‑1005.)
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(215 ILCS 5/512‑7) (from Ch. 73, par. 1065.59‑7)
Sec. 512‑7.
Contractual provisions.
(a) Any agreement or contract entered into in this State between the
administrator of a program and a pharmacy shall include a statement of the
method and amount of reimbursement to the pharmacy for services rendered to
persons enrolled in the program, the frequency of payment by the program
administrator to the pharmacy for those services, and a method for the
adjudication of complaints and the settlement of disputes between the
contracting parties.
(b)(1) A program shall provide an annual period of at |
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least 30 days during which any pharmacy licensed under the Pharmacy Practice Act of 1987 may elect to participate in the program under the program terms for at least one year.
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(2) If compliance with the requirements of this
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subsection (b) would impair any provision of a contract between a program and any other person, and if the contract provision was in existence before January 1, 1990, then immediately after the expiration of those contract provisions the program shall comply with the requirements of this subsection (b).
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(3) This subsection (b) does not apply if:
(A) the program administrator is a licensed
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health maintenance organization that owns or controls a pharmacy and that enters into an agreement or contract with that pharmacy in accordance with subsection (a); or
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(B) the program administrator is a licensed
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health maintenance organization that is owned or controlled by another entity that also owns or controls a pharmacy, and the administrator enters into an agreement or contract with that pharmacy in accordance with subsection (a).
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(4) This subsection (b) shall be inoperative
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(c) The program administrator shall cause to be issued an identification
card to each person enrolled in the program. The identification card
shall include:
(1) the name of the individual enrolled in the
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(2) an expiration date if required under the
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contractual arrangement or agreement between a provider of pharmaceutical services and prescription drug products and the third party prescription program administrator.
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(Source: P.A. 86‑473; 87‑254.)
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(215 ILCS 5/512‑8) (from Ch. 73, par. 1065.59‑8)
Sec. 512‑8.
Cancellation procedures.
(a) The administrator of a program
shall notify all pharmacies enrolled in the program of any cancellation
of the coverage of benefits of any group enrolled in the program at least
30 days prior to the effective date of such cancellation.
However, if the administrator of a program is not notified at least 45
days prior to the effective date of such cancellation, the administrator
shall notify all pharmacies enrolled in the program of the cancellation
as soon as practicable after having received notice.
(b) When a program is terminated, all persons enrolled therein shall be
so notified, and the employer shall make every reasonable effort to gain
possession of any plan identification cards in such persons' possession.
(c) Any person who intentionally uses a program identification card to
obtain services from a pharmacy after having received notice of the cancellation
of his benefits shall be guilty of a Class C misdemeanor. Persons shall
be liable to the program administrator for all monies paid by the program
administrator for any services received pursuant to any improper use of
the identification card.
(Source: P.A. 82‑1005.)
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(215 ILCS 5/512‑9) (from Ch. 73, par. 1065.59‑9)
Sec. 512‑9.
Denial of Payment.
(a) No administrator shall deny payment
to any pharmacy for covered pharmaceutical services or prescription drug
products rendered as a result of the misuse, fraudulent or illegal use of
an identification card unless such identification card had expired, been
noticeably altered, or the pharmacy was notified of the cancellation of
such card. In lieu of notifying pharmacies which have a common ownership,
the administrator may notify a party designated by the pharmacy to receive
such notice, in which case, notification shall not become effective until
5 calendar days after the designee receives notification.
(b) No program administrator may withhold any payment to any pharmacy
for covered pharmaceutical services or prescription drug products beyond
the time period specified in the payment schedule provisions of the agreement,
except for individual claims for payment which have been returned to the pharmacy
as incomplete or illegible. Such returned claims shall be paid if resubmitted
by the pharmacy to the program administrator with the appropriate corrections made.
(Source: P.A. 82‑1005.)
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(215 ILCS 5/512‑10) (from Ch. 73, par. 1065.59‑10)
Sec. 512‑10.
Failure to Register.
Any third party prescription program
or administrator which operates without a certificate of registration or
fails to register with the Director and pay the fee prescribed by this Article
shall be construed to be an unauthorized insurer as defined in Article VII
of this Code and shall be subject to all penalties contained therein.
The provisions of the Article shall apply to all new programs established
on or after January 1, 1983. Existing programs shall comply with the provisions
of this Article on the anniversary date of the programs that occurs on or
after January 1, 1983.
(Source: P.A. 82‑1005.)
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