Illinois Enforcement

Illinois:  State Levies $2 million in Fines against 5 Health Plans due to Parity Violations (July 2020)

On July 15, 2020, The Illinois Department of Insurance (IDOI) announced fines totaling over $2 million for five major health insurance companies found to be in violation of the Federal Parity Law.  The Market Conduct Examination Reports can be found online here.

Market conduct examinations performed by IDOI from 2015-2017 found that CIGNA, UnitedHealthcare, HCSC (parent company of Blue Cross Blue Shield) and Celtic had violations that resulted in the following fines:

• CIGNA Healthcare of IL was fined $582,000 for failing to:
  • Use the American Society of Addiction Medicine (ASAM) guidelines as required by Illinois law;
  • Allow providers to request a medical exception process that allows covered person or an authorized representative to request any clinically appropriate prescription drug;
  • Implement a step therapy exception request process;
  • Notify the party filing the appeal and all other necessary parties of all the information required to evaluate the appeal in a timely manner and then orally notify all of the parties in the appeal of the decision;
  • Implement reasonable standards for the prompt investigation and settlement of claims; and
  • Effectuate prompt, fair and equitable settlements when liability is reasonably clear.
• United Healthcare Companies was fined $550,000  for failing to:
  • Follow proper appeal timeframes and notification requirements (including notifying orally the person filing the appeal, the enrollee, their primary care physician and the ordering provider of the appeal decision);
  • Ensure the MH/SUD treatment limitations are not more restrictive than the predominant medical/surgical treatment limitations;
  • Use the  ASAM guidelines as required by Illinois law; and
  • Implement adjusted maximum benefits for Autism Spectrum Disorders.
• CIGNA Health and Life was fined $418,000  for failure to:
  • Notify the party filing the appeal and all other necessary parties of all the information required to evaluate the appeal within three (3) business days and then orally notify all of the parties in the appeal of the decision;
  • Acknowledge with reasonable promptness pertinent communications with respect to all claims;
  • Respond to the department of insurance of complaints received by the department in a timely manner;
  • Use ASAM patient placement criteria when making medical necessity determinations; and
  • Ensure the MH/SUD treatment limitations are not more restrictive than the predominant medical/surgical treatment limitations.
• Health Care Service Corporation (HCSC) was fined $325,000 for failure to:
  • Notify all parties involved with the appeal of health plan’s decision; and
  • Ensure the MH/SUD treatment limitations are not more restrictive than the predominant medical/surgical treatment limitations.
• Celtic was fined $208,000 for failing to:
  • Perform the substantially all/ predominant cost-sharing tests before insurance policies were issued;
  • Prevent policies from being issued that do not meet the cost-sharing requirements;
  • Acknowledge with reasonable promptness pertinent communications with respect to all claims; and
  • Pay interest on health claims beyond the thirty (30) days of receipt of written proof of the loss.

In summary, all five health plans were found to be in violation of the law have agreed to take corrective action based on the exam findings.  For each “stipulation and consent order” signed by the parties, the health plans have thirty (30) days to submit proof of compliance with each of the infractions referenced above.  The IDOI plans to conduct follow up exams to ensure the health plans remain in compliance