Gov. JB Pritzker signed a legislative package into law Wednesday to transform the insurance sector in Illinois.
Part of the two new laws bans insurers from asking patients to try less costly treatments before authorizing more expensive alternatives, a practice known as step therapy. The ban would go into effect in 2026.
The package also requires insurers to cover the first 72 hours of inpatient mental health treatment at a hospital, provided the facility notifies the insurer of the admission and the initial treatment plan within 48 hours. Officials said Wednesday that Illinois is the first state in the nation to require such coverage for behavioral health services.
The new laws raise network adequacy and transparency standards, including a mandate that insurers perform 90-day internal audits and post treatments that require prior authorization. They also set standards for appointment time availability and number of in-network doctors.
And the laws task the Department of Insurance with creating a uniform electronic provider directory information notification form to streamline communication when a provider’s information changes. The agency will have the authority to approve, modify or reject premiums it deems unreasonable or inadequate, specifically related to base rates and not the final rates.
Another major provision bans short-term, limited duration plans starting next year.
Pritzker, who made insurance reform a major legislative initiative this spring, said during the signing at the Rush University System for Health in Chicago that the laws will empower providers and patients, the “two most important stakeholders” in making medical decisions.
“For too long, insurance companies have used predatory tactics to make an extra dime at the expense of Illinois consumers,” Pritzker said.
The estimated total cost of the two laws is between $50 to $60 million.
Legislative colleagues and those in the provider community joined Pritzker. They said the laws resulted from feedback on what barriers to care they and their patients face regularly.
“This action is a critical step to expand continuity of care by prohibiting prior authorization for inpatient mental health services and addressing limitations on step therapy requirements, putting medical decisions back in the hands of patients and their doctors,” said A.J. Wilhelmi, CEO of the Illinois Health and Hospital Association.
“The health insurance reforms passed by Illinois lawmakers will ensure that administrative delays caused by insurance companies, as well as their inadequate provider networks, should be a thing of the past,” said Dr. Piyush Vyas, president of the Illinois State Medical Society.