INS CD-MENTAL HEALTH-REVIEW

Illinois General Assembly - Full Text of HB4650

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB4650

Introduced 2/3/2026, by Rep. Lindsey LaPointe

SYNOPSIS AS INTRODUCED:

215 ILCS 5/370c

from Ch. 73, par. 982c

Amends the Illinois Insurance Code. Provides that, in conducting
utilization review of all covered health care services for the diagnosis,
prevention, and treatment of mental, emotional, and nervous disorders or
conditions, an insurer shall apply the criteria and guidelines set forth
in the most recent version of the treatment criteria developed by an
unaffiliated professional organization (instead of an unaffiliated
nonprofit professional association) for the relevant clinical specialty
or, for Medicaid managed care organizations, criteria and guidelines
determined by the Department of Healthcare and Family Services that are
consistent with generally accepted standards of mental, emotional, nervous
or substance use disorder or condition care. Provides that insurers may
not apply utilization review criteria developed by any entity that has a
financial stake in the outcome of the utilization review decisions. Makes
changes to provisions concerning utilization review relating to level of
care placement, continued stay, transfer, discharge, or any other patient
care decisions that are within the scope of the specified sources.
LRB104 18397 BAB 31839 b

A BILL FOR

HB4650
LRB104 18397 BAB 31839 b
1

AN ACT concerning regulation.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Illinois Insurance Code is amended by
5
changing Section 370c as follows:

6

(215 ILCS 5/370c)

(from Ch. 73, par. 982c)
7

Sec. 370c.
Mental and emotional disorders.
8

(a)(1) On and after January 1, 2022 (the effective date of
9
Public Act 102-579), every insurer that amends, delivers,
10
issues, or renews group accident and health policies providing
11
coverage for hospital or medical treatment or services for
12
illness shall provide coverage for the medically necessary
13
treatment of mental, emotional, nervous, or substance use
14
disorders or conditions consistent with the parity
15
requirements of Section 370c.1 of this Code.
16

(2) Each insured that is covered for mental, emotional,
17
nervous, or substance use disorders or conditions shall be
18
free to select the physician licensed to practice medicine in
19
all its branches, licensed clinical psychologist, licensed
20
clinical social worker, licensed clinical professional
21
counselor, licensed marriage and family therapist, licensed
22
speech-language pathologist, or other licensed or certified
23
professional at a program licensed pursuant to the Substance

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1
Use Disorder Act of his or her choice to treat such disorders,
2
and the insurer shall pay the covered charges of such
3
physician licensed to practice medicine in all its branches,
4
licensed clinical psychologist, licensed clinical social
5
worker, licensed clinical professional counselor, licensed
6
marriage and family therapist, licensed speech-language
7
pathologist, or other licensed or certified professional at a
8
program licensed pursuant to the Substance Use Disorder Act up
9
to the limits of coverage, provided (i) the disorder or
10
condition treated is covered by the policy, and (ii) the
11
physician, licensed psychologist, licensed clinical social
12
worker, licensed clinical professional counselor, licensed
13
marriage and family therapist, licensed speech-language
14
pathologist, or other licensed or certified professional at a
15
program licensed pursuant to the Substance Use Disorder Act is
16
authorized to provide said services under the statutes of this
17
State and in accordance with accepted principles of his or her
18
profession.
19

(3) Insofar as this Section applies solely to licensed
20
clinical social workers, licensed clinical professional
21
counselors, licensed marriage and family therapists, licensed
22
speech-language pathologists, and other licensed or certified
23
professionals at programs licensed pursuant to the Substance
24
Use Disorder Act, those persons who may provide services to
25
individuals shall do so after the licensed clinical social
26
worker, licensed clinical professional counselor, licensed

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marriage and family therapist, licensed speech-language
2
pathologist, or other licensed or certified professional at a
3
program licensed pursuant to the Substance Use Disorder Act
4
has informed the patient of the desirability of the patient
5
conferring with the patient's primary care physician.
6

(4) "Mental, emotional, nervous, or substance use disorder
7
or condition" means a condition or disorder that involves a
8
mental health condition or substance use disorder that falls
9
under any of the diagnostic categories listed in the mental
10
and behavioral disorders chapter of the current edition of the
11
World Health Organization's International Classification of
12
Disease or that is listed in the most recent version of the
13
American Psychiatric Association's Diagnostic and Statistical
14
Manual of Mental Disorders. "Mental, emotional, nervous, or
15
substance use disorder or condition" includes any mental
16
health condition that occurs during pregnancy or during the
17
postpartum period and includes, but is not limited to,
18
postpartum depression.
19

(5) Medically necessary treatment and medical necessity
20
determinations shall be interpreted and made in a manner that
21
is consistent with and pursuant to subsections (h) through
22
(y).
23

(b)(1) (Blank).
24

(2) (Blank).
25

(2.5) (Blank).
26

(3) Unless otherwise prohibited by federal law and

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consistent with the parity requirements of Section 370c.1 of
2
this Code, the insurer that amends, delivers, issues, or
3
renews a group or individual policy of accident and health
4
insurance, a qualified health plan offered through the health
5
insurance marketplace, or a provider of treatment of mental,
6
emotional, nervous, or substance use disorders or conditions
7
shall furnish medical records or other necessary data that
8
substantiate that initial or continued treatment is at all
9
times medically necessary. Nothing in this paragraph (3)
10
supersedes the prohibition on prior authorization requirements
11
to the extent provided under subsections (g) and (w) and
12
subparagraph (A) of paragraph (6.5) of this subsection.
13
Nothing prevents the insured from agreeing in writing to
14
continue treatment at his or her expense. When making a
15
determination of the medical necessity for a treatment
16
modality for mental, emotional, nervous, or substance use
17
disorders or conditions, an insurer must make the
18
determination in a manner that is consistent with the manner
19
used to make that determination with respect to other diseases
20
or illnesses covered under the policy, including an appeals
21
process. Medical necessity determinations for substance use
22
disorders shall be made in accordance with appropriate patient
23
placement criteria established by the American Society of
24
Addiction Medicine. No additional criteria may be used to make
25
medical necessity determinations for substance use disorders.
26

(4) A group health benefit plan amended, delivered,

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1
issued, or renewed on or after January 1, 2019 (the effective
2
date of Public Act 100-1024) or an individual policy of
3
accident and health insurance or a qualified health plan
4
offered through the health insurance marketplace amended,
5
delivered, issued, or renewed on or after January 1, 2019 (the
6
effective date of Public Act 100-1024):
7

(A) shall provide coverage based upon medical
8

necessity for the treatment of a mental, emotional,
9

nervous, or substance use disorder or condition consistent
10

with the parity requirements of Section 370c.1 of this
11

Code; provided, however, that in each calendar year
12

coverage shall not be less than the following:
13

(i) 45 days of inpatient treatment; and
14

(ii) beginning on June 26, 2006 (the effective
15

date of Public Act 94-921), 60 visits for outpatient
16

treatment including group and individual outpatient
17

treatment; and
18

(iii) for plans or policies delivered, issued for
19

delivery, renewed, or modified after January 1, 2007
20

(the effective date of Public Act 94-906), 20
21

additional outpatient visits for speech therapy for
22

treatment of pervasive developmental disorders that
23

will be in addition to speech therapy provided
24

pursuant to item (ii) of this subparagraph (A); and
25

(B) may not include a lifetime limit on the number of
26

days of inpatient treatment or the number of outpatient

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LRB104 18397 BAB 31839 b
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visits covered under the plan.
2

(C) (Blank).
3

(5) An issuer of a group health benefit plan or an
4
individual policy of accident and health insurance or a
5
qualified health plan offered through the health insurance
6
marketplace may not count toward the number of outpatient
7
visits required to be covered under this Section an outpatient
8
visit for the purpose of medication management and shall cover
9
the outpatient visits under the same terms and conditions as
10
it covers outpatient visits for the treatment of physical
11
illness.
12

(5.5) An individual or group health benefit plan amended,
13
delivered, issued, or renewed on or after September 9, 2015
14
(the effective date of Public Act 99-480) shall offer coverage
15
for medically necessary acute treatment services and medically
16
necessary clinical stabilization services. The treating
17
provider shall base all treatment recommendations and the
18
health benefit plan shall base all medical necessity
19
determinations for substance use disorders in accordance with
20
the most current edition of the Treatment Criteria for
21
Addictive, Substance-Related, and Co-Occurring Conditions
22
established by the American Society of Addiction Medicine. The
23
treating provider shall base all treatment recommendations and
24
the health benefit plan shall base all medical necessity
25
determinations for medication-assisted treatment in accordance
26
with the most current Treatment Criteria for Addictive,

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Substance-Related, and Co-Occurring Conditions established by
2
the American Society of Addiction Medicine.
3

As used in this subsection:
4

"Acute treatment services" means 24-hour medically
5
supervised addiction treatment that provides evaluation and
6
withdrawal management and may include biopsychosocial
7
assessment, individual and group counseling, psychoeducational
8
groups, and discharge planning.
9

"Clinical stabilization services" means 24-hour treatment,
10
usually following acute treatment services for substance
11
abuse, which may include intensive education and counseling
12
regarding the nature of addiction and its consequences,
13
relapse prevention, outreach to families and significant
14
others, and aftercare planning for individuals beginning to
15
engage in recovery from addiction.
16

"Prior authorization" has the meaning given to that term
17
in Section 15 of the Prior Authorization Reform Act.
18

(6) An issuer of a group health benefit plan may provide or
19
offer coverage required under this Section through a managed
20
care plan.
21

(6.5) An individual or group health benefit plan amended,
22
delivered, issued, or renewed on or after January 1, 2019 (the
23
effective date of Public Act 100-1024):
24

(A) shall not impose prior authorization requirements,
25

including limitations on dosage, other than those
26

established under the Treatment Criteria for Addictive,

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LRB104 18397 BAB 31839 b
1

Substance-Related, and Co-Occurring Conditions
2

established by the American Society of Addiction Medicine,
3

on a prescription medication approved by the United States
4

Food and Drug Administration that is prescribed or
5

administered for the treatment of substance use disorders;
6

(B) shall not impose any step therapy requirements;
7

(C) shall place all prescription medications approved
8

by the United States Food and Drug Administration
9

prescribed or administered for the treatment of substance
10

use disorders on, for brand medications, the lowest tier
11

of the drug formulary developed and maintained by the
12

individual or group health benefit plan that covers brand
13

medications and, for generic medications, the lowest tier
14

of the drug formulary developed and maintained by the
15

individual or group health benefit plan that covers
16

generic medications; and
17

(D) shall not exclude coverage for a prescription
18

medication approved by the United States Food and Drug
19

Administration for the treatment of substance use
20

disorders and any associated counseling or wraparound
21

services on the grounds that such medications and services
22

were court ordered.
23

(7) (Blank).
24

(8) (Blank).
25

(9) With respect to all mental, emotional, nervous, or
26
substance use disorders or conditions, coverage for inpatient

HB4650
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LRB104 18397 BAB 31839 b
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treatment shall include coverage for treatment in a
2
residential treatment center certified or licensed by the
3
Department of Public Health or the Department of Human
4
Services.
5

(c) This Section shall not be interpreted to require
6
coverage for speech therapy or other habilitative services for
7
those individuals covered under Section 356z.15 of this Code.
8

(d) With respect to a group or individual policy of
9
accident and health insurance or a qualified health plan
10
offered through the health insurance marketplace, the
11
Department and, with respect to medical assistance, the
12
Department of Healthcare and Family Services shall each
13
enforce the requirements of this Section and Sections 356z.23
14
and 370c.1 of this Code, the Paul Wellstone and Pete Domenici
15
Mental Health Parity and Addiction Equity Act of 2008, 42
16
U.S.C. 18031(j), and any amendments to, and federal guidance
17
or regulations issued under, those Acts, including, but not
18
limited to, final regulations issued under the Paul Wellstone
19
and Pete Domenici Mental Health Parity and Addiction Equity
20
Act of 2008 and final regulations applying the Paul Wellstone
21
and Pete Domenici Mental Health Parity and Addiction Equity
22
Act of 2008 to Medicaid managed care organizations, the
23
Children's Health Insurance Program, and alternative benefit
24
plans. Specifically, the Department and the Department of
25
Healthcare and Family Services shall take action:
26

(1) proactively ensuring compliance by individual and

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LRB104 18397 BAB 31839 b
1

group policies, including by requiring that insurers
2

submit comparative analyses, as set forth in paragraph (6)
3

of subsection (k) of Section 370c.1, demonstrating how
4

they design and apply nonquantitative treatment
5

limitations, both as written and in operation, for mental,
6

emotional, nervous, or substance use disorder or condition
7

benefits as compared to how they design and apply
8

nonquantitative treatment limitations, as written and in
9

operation, for medical and surgical benefits;
10

(2) evaluating all consumer or provider complaints
11

regarding mental, emotional, nervous, or substance use
12

disorder or condition coverage for possible parity
13

violations;
14

(3) performing parity compliance market conduct
15

examinations or, in the case of the Department of
16

Healthcare and Family Services, parity compliance audits
17

of individual and group plans and policies, including, but
18

not limited to, reviews of:
19

(A) nonquantitative treatment limitations,
20

including, but not limited to, prior authorization
21

requirements, concurrent review, retrospective review,
22

step therapy, network admission standards,
23

reimbursement rates, and geographic restrictions;
24

(B) denials of authorization, payment, and
25

coverage; and
26

(C) other specific criteria as may be determined

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LRB104 18397 BAB 31839 b
1

by the Department.
2

The findings and the conclusions of the parity compliance
3
market conduct examinations and audits shall be made public.
4

The Director may adopt rules to effectuate any provisions
5
of the Paul Wellstone and Pete Domenici Mental Health Parity
6
and Addiction Equity Act of 2008 that relate to the business of
7
insurance.
8

(e) Availability of plan information.
9

(1) The criteria for medical necessity determinations
10

made under a group health plan, an individual policy of
11

accident and health insurance, or a qualified health plan
12

offered through the health insurance marketplace with
13

respect to mental health or substance use disorder
14

benefits (or health insurance coverage offered in
15

connection with the plan with respect to such benefits)
16

must be made available by the plan administrator (or the
17

health insurance issuer offering such coverage) to any
18

current or potential participant, beneficiary, or
19

contracting provider upon request.
20

(2) The reason for any denial under a group health
21

benefit plan, an individual policy of accident and health
22

insurance, or a qualified health plan offered through the
23

health insurance marketplace (or health insurance coverage
24

offered in connection with such plan or policy) of
25

reimbursement or payment for services with respect to
26

mental, emotional, nervous, or substance use disorders or

HB4650
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LRB104 18397 BAB 31839 b
1

conditions benefits in the case of any participant or
2

beneficiary must be made available within a reasonable
3

time and in a reasonable manner and in readily
4

understandable language by the plan administrator (or the
5

health insurance issuer offering such coverage) to the
6

participant or beneficiary upon request.
7

(f) As used in this Section, "group policy of accident and
8
health insurance" and "group health benefit plan" includes (1)
9
State-regulated employer-sponsored group health insurance
10
plans written in Illinois or which purport to provide coverage
11
for a resident of this State; and (2) State, county,
12
municipal, or school district employee health plans.
13
References to an insurer include all plans described in this
14
subsection.
15

(g) (1) As used in this subsection:
16

"Benefits", with respect to insurers that are not Medicaid
17
managed care organizations, means the benefits provided for
18
treatment services for inpatient and outpatient treatment of
19
substance use disorders or conditions at American Society of
20
Addiction Medicine levels of treatment 2.1 (Intensive
21
Outpatient), 2.5 (High-Intensity Outpatient), 3.1 (Clinically
22
Managed Low-Intensity Residential), 3.5 (Clinically Managed
23
High-Intensity Residential), and 3.7 (Medically Managed
24
Residential) and OMT (Opioid Maintenance Therapy) services.
25

"Benefits", with respect to Medicaid managed care
26
organizations, means the benefits provided for treatment

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LRB104 18397 BAB 31839 b
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services for inpatient and outpatient treatment of substance
2
use disorders or conditions at American Society of Addiction
3
Medicine levels of treatment 2.1 (Intensive Outpatient), 2.5
4
(High-Intensity Outpatient), 3.5 (Clinically Managed
5
High-Intensity Residential), and 3.7 (Medically Managed
6
Residential) and OMT (Opioid Maintenance Therapy) services.
7

"Substance use disorder treatment provider or facility"
8
means a licensed physician, licensed psychologist, licensed
9
psychiatrist, licensed advanced practice registered nurse, or
10
licensed, certified, or otherwise State-approved facility or
11
provider of substance use disorder treatment.
12

(2) A group health insurance policy, an individual health
13
benefit plan, or qualified health plan that is offered through
14
the health insurance marketplace, small employer group health
15
plan, and large employer group health plan that is amended,
16
delivered, issued, executed, or renewed in this State, or
17
approved for issuance or renewal in this State, on or after
18
January 1, 2019 (the effective date of Public Act 100-1023)
19
shall comply with the requirements of this Section and Section
20
370c.1. The services for the treatment and the ongoing
21
assessment of the patient's progress in treatment shall follow
22
the requirements of 77 Ill. Adm. Code 2060.
23

(3) Prior authorization shall not be utilized for the
24
benefits under this subsection. Except to the extent
25
prohibited by Section 370c.1 with respect to treatment
26
limitations in a benefit classification or subclassification,

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LRB104 18397 BAB 31839 b
1
the insurer may require the substance use disorder treatment
2
provider or facility to notify the insurer of the initiation
3
of treatment. For an insurer that is not a Medicaid managed
4
care organization, the substance use disorder treatment
5
provider or facility may be required to give notification for
6
the initiation of treatment of the covered person within 2
7
business days. For Medicaid managed care organizations, the
8
substance use disorder treatment provider or facility may be
9
required to give notification in accordance with the protocol
10
set forth in the provider agreement for initiation of
11
treatment within 24 hours. If the Medicaid managed care
12
organization is not capable of accepting the notification in
13
accordance with the contractual protocol during the 24-hour
14
period following admission, the substance use disorder
15
treatment provider or facility shall have one additional
16
business day to provide the notification to the appropriate
17
managed care organization. Treatment plans shall be developed
18
in accordance with the requirements and timeframes established
19
in 77 Ill. Adm. Code 2060. No such coverage shall be subject to
20
concurrent review prior to the applicable notification
21
deadline. If coverage is denied retrospectively, neither the
22
provider or facility nor the insurer shall bill, and the
23
covered individual shall not be liable, for any treatment
24
under this subsection through the date the adverse
25
determination is issued, other than any copayment,
26
coinsurance, or deductible for the treatment or stay through

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LRB104 18397 BAB 31839 b
1
that date as applicable under the policy. Coverage shall not
2
be retrospectively denied for benefits that were furnished at
3
a participating substance use disorder facility prior to the
4
applicable notification deadline except for the following:
5

(A) upon reasonable determination that the benefits
6

were not provided;
7

(B) upon determination that the patient receiving the
8

treatment was not an insured, enrollee, or beneficiary
9

under the policy;
10

(C) upon material misrepresentation by the patient or
11

provider. As used in this subparagraph (C), "material"
12

means a fact or situation that is not merely technical in
13

nature and results or could result in a substantial change
14

in the situation;
15

(D) upon determination that a service was excluded
16

under the terms of coverage. For situations that qualify
17

under this subparagraph (D), the limitation to billing for
18

a copayment, coinsurance, or deductible shall not apply;
19

(E) upon determination that a service was not
20

medically necessary consistent with subsections (h)
21

through (n); or
22

(F) upon determination that the patient did not
23

consent to the treatment and that there was no court order
24

mandating the treatment.
25

(4) For an insurer that is not a Medicaid managed care
26
organization, if an insurer determines that benefits are no

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LRB104 18397 BAB 31839 b
1
longer medically necessary, the insurer shall notify the
2
covered person, the covered person's authorized
3
representative, if any, and the covered person's health care
4
provider in writing of the covered person's right to request
5
an external review pursuant to the Health Carrier External
6
Review Act. The notification shall occur within 24 hours
7
following the adverse determination.
8

Pursuant to the requirements of the Health Carrier
9
External Review Act, the covered person or the covered
10
person's authorized representative may request an expedited
11
external review. An expedited external review may not occur if
12
the substance use disorder treatment provider or facility
13
determines that continued treatment is no longer medically
14
necessary.
15

If an expedited external review request meets the criteria
16
of the Health Carrier External Review Act, an independent
17
review organization shall make a final determination of
18
medical necessity within 72 hours. If an independent review
19
organization upholds an adverse determination, an insurer
20
shall remain responsible to provide coverage of benefits
21
through the day following the determination of the independent
22
review organization. A decision to reverse an adverse
23
determination shall comply with the Health Carrier External
24
Review Act.
25

(5) The substance use disorder treatment provider or
26
facility shall provide the insurer with 7 business days'

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LRB104 18397 BAB 31839 b
1
advance notice of the planned discharge of the patient from
2
the substance use disorder treatment provider or facility and
3
notice on the day that the patient is discharged from the
4
substance use disorder treatment provider or facility.
5

(6) The benefits required by this subsection shall be
6
provided to all covered persons with a diagnosis of substance
7
use disorder or conditions. The presence of additional related
8
or unrelated diagnoses shall not be a basis to reduce or deny
9
the benefits required by this subsection.
10

(7) Nothing in this subsection shall be construed to
11
require an insurer to provide coverage for any of the benefits
12
in this subsection.
13

(8) Any concurrent or retrospective review permitted by
14
this subsection must be consistent with the utilization review
15
provisions in subsections (h) through (n).
16

(h) As used in this Section:
17

"Generally accepted standards of mental, emotional,
18
nervous, or substance use disorder or condition care" means
19
standards of care and clinical practice that are generally
20
recognized by health care providers practicing in relevant
21
clinical specialties such as psychiatry, psychology, clinical
22
sociology, social work, addiction medicine and counseling, and
23
behavioral health treatment. Valid, evidence-based sources
24
reflecting generally accepted standards of mental, emotional,
25
nervous, or substance use disorder or condition care include
26
peer-reviewed scientific studies and medical literature,

HB4650
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LRB104 18397 BAB 31839 b
1
recommendations of nonprofit health care provider professional
2
associations and specialty societies, including, but not
3
limited to, patient placement criteria and clinical practice
4
guidelines, recommendations of federal government agencies,
5
and drug labeling approved by the United States Food and Drug
6
Administration.
7

"Medically necessary treatment of mental, emotional,
8
nervous, or substance use disorders or conditions" means a
9
service or product addressing the specific needs of that
10
patient, for the purpose of screening, preventing, diagnosing,
11
managing, or treating an illness, injury, or condition or its
12
symptoms and comorbidities, including minimizing the
13
progression of an illness, injury, or condition or its
14
symptoms and comorbidities in a manner that is all of the
15
following:
16

(1) in accordance with the generally accepted
17

standards of mental, emotional, nervous, or substance use
18

disorder or condition care;
19

(2) clinically appropriate in terms of type,
20

frequency, extent, site, and duration; and
21

(3) not primarily for the economic benefit of the
22

insurer, purchaser, or for the convenience of the patient,
23

treating physician, or other health care provider.
24

"Utilization review" means either of the following:
25

(1) prospectively, retrospectively, or concurrently
26

reviewing and approving, modifying, delaying, or denying,

HB4650
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LRB104 18397 BAB 31839 b
1

based in whole or in part on medical necessity, requests
2

by health care providers, insureds, or their authorized
3

representatives for coverage of health care services
4

before, retrospectively, or concurrently with the
5

provision of health care services to insureds.
6

(2) evaluating the medical necessity, appropriateness,
7

level of care, service intensity, efficacy, or efficiency
8

of health care services, benefits, procedures, or
9

settings, under any circumstances, to determine whether a
10

health care service or benefit subject to a medical
11

necessity coverage requirement in an insurance policy is
12

covered as medically necessary for an insured.
13

"Utilization review criteria" means patient placement
14
criteria or any criteria, standards, protocols, or guidelines
15
used by an insurer to conduct utilization review.
16

(i)(1) Every insurer that amends, delivers, issues, or
17
renews a group or individual policy of accident and health
18
insurance or a qualified health plan offered through the
19
health insurance marketplace in this State and Medicaid
20
managed care organizations providing coverage for hospital or
21
medical treatment on or after January 1, 2023 shall, pursuant
22
to subsections (h) through (s), provide coverage for medically
23
necessary treatment of mental, emotional, nervous, or
24
substance use disorders or conditions.
25

(2) An insurer shall not set a specific limit on the
26
duration of benefits or coverage of medically necessary

HB4650
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LRB104 18397 BAB 31839 b
1
treatment of mental, emotional, nervous, or substance use
2
disorders or conditions or limit coverage only to alleviation
3
of the insured's current symptoms.
4

(3) All utilization review conducted by the insurer
5
concerning diagnosis, prevention, and treatment of insureds
6
diagnosed with mental, emotional, nervous, or substance use
7
disorders or conditions shall be conducted in accordance with
8
the requirements of subsections (k) through (w).
9

(4) An insurer that authorizes a specific type of
10
treatment by a provider pursuant to this Section shall not
11
rescind or modify the authorization after that provider
12
renders the health care service in good faith and pursuant to
13
this authorization for any reason, including, but not limited
14
to, the insurer's subsequent cancellation or modification of
15
the insured's or policyholder's contract, or the insured's or
16
policyholder's eligibility. Nothing in this Section shall
17
require the insurer to cover a treatment when the
18
authorization was granted based on a material
19
misrepresentation by the insured, the policyholder, or the
20
provider. Nothing in this Section shall require Medicaid
21
managed care organizations to pay for services if the
22
individual was not eligible for Medicaid at the time the
23
service was rendered. Nothing in this Section shall require an
24
insurer to pay for services if the individual was not the
25
insurer's enrollee at the time services were rendered. As used
26
in this paragraph, "material" means a fact or situation that

HB4650
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LRB104 18397 BAB 31839 b
1
is not merely technical in nature and results in or could
2
result in a substantial change in the situation.
3

(j) An insurer shall not limit benefits or coverage for
4
medically necessary services on the basis that those services
5
should be or could be covered by a public entitlement program,
6
including, but not limited to, special education or an
7
individualized education program, Medicaid, Medicare,
8
Supplemental Security Income, or Social Security Disability
9
Insurance, and shall not include or enforce a contract term
10
that excludes otherwise covered benefits on the basis that
11
those services should be or could be covered by a public
12
entitlement program. Nothing in this subsection shall be
13
construed to require an insurer to cover benefits that have
14
been authorized and provided for a covered person by a public
15
entitlement program. Medicaid managed care organizations are
16
not subject to this subsection.
17

(k) An insurer shall base any medical necessity
18
determination or the utilization review criteria that the
19
insurer, and any entity acting on the insurer's behalf,
20
applies to determine the medical necessity of health care
21
services and benefits for the diagnosis, prevention, and
22
treatment of mental, emotional, nervous, or substance use
23
disorders or conditions on current generally accepted
24
standards of mental, emotional, nervous, or substance use
25
disorder or condition care. All denials and appeals shall be
26
reviewed by a professional with experience or expertise

HB4650
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LRB104 18397 BAB 31839 b
1
comparable to the provider requesting the authorization.
2

(l) In conducting utilization review of all covered health
3
care services for the diagnosis, prevention, and treatment of
4
mental, emotional, and nervous disorders or conditions, an
5
insurer shall apply the criteria and guidelines set forth in
6
the most recent version of the treatment criteria developed by
7
an unaffiliated
nonprofit
professional
organization

8
association
for the relevant clinical specialty or, for
9
Medicaid managed care organizations, criteria and guidelines
10
determined by the Department of Healthcare and Family Services
11
that are consistent with generally accepted standards of
12
mental, emotional, nervous or substance use disorder or
13
condition care.
Insurers may not apply utilization review
14
criteria developed by any entity that has a financial stake in
15
the outcome of the utilization review decisions.
Pursuant to
16
subsection (b), in conducting utilization review of all
17
covered services and benefits for the diagnosis, prevention,
18
and treatment of substance use disorders an insurer shall use
19
the most recent edition of the patient placement criteria
20
established by the American Society of Addiction Medicine.
21

(m) In conducting utilization review relating to level of
22
care placement, continued stay, transfer, discharge, or any
23
other patient care decisions that are within the scope of the
24
sources specified in subsection (l), an insurer shall not
25
apply
different, additional,
conflicting
,
or more restrictive
26
utilization review criteria than the criteria set forth in

HB4650
- 23 -
LRB104 18397 BAB 31839 b
1
those sources
, and shall not apply utilization review criteria
2
created by any entity that has a financial stake in the outcome
3
of the utilization review decisions
. For all level of care
4
placement decisions, the insurer shall authorize placement at
5
the level of care consistent with the assessment of the
6
insured using the relevant patient placement criteria as
7
specified in subsection (l). If that level of placement is not
8
available, the insurer shall authorize the next higher level
9
of care. In the event of disagreement, the insurer shall
10
provide full detail of its assessment using the relevant
11
criteria as specified in subsection (l) to the provider of the
12
service and the patient.
13

If an insurer purchases or licenses utilization review
14
criteria pursuant to this subsection, the insurer shall verify
15
and document before use that the criteria were developed in
16
accordance with subsection (k).
17

(n) In conducting utilization review that is outside the
18
scope of the criteria as specified in subsection (l) or
19
relates to the advancements in technology or in the types or
20
levels of care that are not addressed in the most recent
21
versions of the sources specified in subsection (l), an
22
insurer shall conduct utilization review in accordance with
23
subsection (k).
24

(o) This Section does not in any way limit the rights of a
25
patient under the Medical Patient Rights Act.
26

(p) This Section does not in any way limit early and

HB4650
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LRB104 18397 BAB 31839 b
1
periodic screening, diagnostic, and treatment benefits as
2
defined under 42 U.S.C. 1396d(r).
3

(q) To ensure the proper use of the criteria described in
4
subsection (l), every insurer shall do all of the following:
5

(1) Educate the insurer's staff, including any third
6

parties contracted with the insurer to review claims,
7

conduct utilization reviews, or make medical necessity
8

determinations about the utilization review criteria.
9

(2) Make the educational program available to other
10

stakeholders, including the insurer's participating or
11

contracted providers and potential participants,
12

beneficiaries, or covered lives. The education program
13

must be provided at least once a year, in-person or
14

digitally, or recordings of the education program must be
15

made available to the aforementioned stakeholders.
16

(3) Provide, at no cost, the utilization review
17

criteria and any training material or resources to
18

providers and insured patients upon request. For
19

utilization review criteria not concerning level of care
20

placement, continued stay, transfer, discharge, or other
21

patient care decisions used by the insurer pursuant to
22

subsection (m), the insurer may place the criteria on a
23

secure, password-protected website so long as the access
24

requirements of the website do not unreasonably restrict
25

access to insureds or their providers. No restrictions
26

shall be placed upon the insured's or treating provider's

HB4650
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LRB104 18397 BAB 31839 b
1

access right to utilization review criteria obtained under
2

this paragraph at any point in time, including before an
3

initial request for authorization.
4

(4) Track, identify, and analyze how the utilization
5

review criteria are used to certify care, deny care, and
6

support the appeals process.
7

(5) Conduct interrater reliability testing to ensure
8

consistency in utilization review decision making that
9

covers how medical necessity decisions are made; this
10

assessment shall cover all aspects of utilization review
11

as defined in subsection (h).
12

(6) Run interrater reliability reports about how the
13

clinical guidelines are used in conjunction with the
14

utilization review process and parity compliance
15

activities.
16

(7) Achieve interrater reliability pass rates of at
17

least 90% and, if this threshold is not met, immediately
18

provide for the remediation of poor interrater reliability
19

and interrater reliability testing for all new staff
20

before they can conduct utilization review without
21

supervision.
22

(8) Maintain documentation of interrater reliability
23

testing and the remediation actions taken for those with
24

pass rates lower than 90% and submit to the Department of
25

Insurance or, in the case of Medicaid managed care
26

organizations, the Department of Healthcare and Family

HB4650
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LRB104 18397 BAB 31839 b
1

Services the testing results and a summary of remedial
2

actions as part of parity compliance reporting set forth
3

in subsection (k) of Section 370c.1.
4

(r) This Section applies to all health care services and
5
benefits for the diagnosis, prevention, and treatment of
6
mental, emotional, nervous, or substance use disorders or
7
conditions covered by an insurance policy, including
8
prescription drugs.
9

(s) This Section applies to an insurer that amends,
10
delivers, issues, or renews a group or individual policy of
11
accident and health insurance or a qualified health plan
12
offered through the health insurance marketplace in this State
13
providing coverage for hospital or medical treatment and
14
conducts utilization review as defined in this Section,
15
including Medicaid managed care organizations, and any entity
16
or contracting provider that performs utilization review or
17
utilization management functions on an insurer's behalf.
18

(t) If the Director determines that an insurer has
19
violated this Section, the Director may, after appropriate
20
notice and opportunity for hearing, by order, assess a civil
21
penalty between $1,000 and $5,000 for each violation. Moneys
22
collected from penalties shall be deposited into the Parity
23
Advancement Fund established in subsection (i) of Section
24
370c.1.
25

(u) An insurer shall not adopt, impose, or enforce terms
26
in its policies or provider agreements, in writing or in

HB4650
- 27 -
LRB104 18397 BAB 31839 b
1
operation, that undermine, alter, or conflict with the
2
requirements of this Section.
3

(v) The provisions of this Section are severable. If any
4
provision of this Section or its application is held invalid,
5
that invalidity shall not affect other provisions or
6
applications that can be given effect without the invalid
7
provision or application.
8

(w) Beginning January 1, 2026, coverage for medically
9
necessary treatment of mental, emotional, or nervous disorders
10
or conditions shall comply with the following requirements:
11

(1) No policy shall require prior authorization for
12

outpatient or partial hospitalization services for
13

treatment of mental, emotional, or nervous disorders or
14

conditions provided by a physician licensed to practice
15

medicine in all branches, a licensed clinical
16

psychologist, a licensed clinical social worker, a
17

licensed clinical professional counselor, a licensed
18

marriage and family therapist, a licensed speech-language
19

pathologist, or any other type of licensed, certified, or
20

legally authorized provider, including trainees working
21

under the supervision of a licensed health care
22

professional listed under this subsection, or facility
23

whose outpatient or partial hospitalization services the
24

policy covers for treatment of mental, emotional, or
25

nervous disorders or conditions. Such coverage may be
26

subject to concurrent and retrospective review consistent

HB4650
- 28 -
LRB104 18397 BAB 31839 b
1

with the utilization review provisions in subsections (h)
2

through (n) and Section 370c.1. Nothing in this paragraph
3

(1) supersedes a health maintenance organization's
4

referral requirement for services from nonparticipating
5

providers. An insurer may require providers or facilities
6

to notify the insurer of the initiation of treatment as
7

specified in this subsection, except to the extent
8

prohibited by Section 370c.1 with respect to treatment
9

limitations in a benefit classification or
10

subclassification. No such coverage shall be subject to
11

concurrent review for any services furnished before an
12

applicable notification deadline, subject to the
13

following:
14

(A) In the case of outpatient treatment, for an
15

insurer that is not a Medicaid managed care
16

organization, the insurer may set a notification
17

deadline of 2 business days after the initiation of
18

the covered person's treatment. A Medicaid managed
19

care organization may set a deadline of 24 hours after
20

the initiation of treatment. If the Medicaid managed
21

care organization is not capable of accepting the
22

notification in accordance with the contractual
23

protocol within the 24-hour period following
24

initiation, the treatment provider or facility shall
25

have one additional business day to provide the
26

notification to the Medicaid managed care

HB4650
- 29 -
LRB104 18397 BAB 31839 b
1

organization.
2

(B) In the case of a partial hospitalization
3

program, for an insurer that is not a Medicaid managed
4

care organization, the insurer may set a notification
5

deadline of 48 hours after the initiation of the
6

covered person's treatment. A Medicaid managed care
7

organization may set a deadline of 24 hours after the
8

initiation of treatment. If the Medicaid managed care
9

organization is not capable of accepting the
10

notification in accordance with the contractual
11

protocol during the 24-hour period following
12

initiation, the treatment provider or facility shall
13

have one additional business day to provide the
14

notification to the Medicaid managed care
15

organization.
16

(2) No policy shall require prior authorization for
17

inpatient treatment at a hospital for mental, emotional,
18

or nervous disorders or conditions at a participating
19

provider. Additionally, no such coverage shall be subject
20

to concurrent review for the first 72 hours after
21

admission, provided that the provider must notify the
22

insurer of both the admission and the initial treatment
23

plan within 48 hours of admission. A discharge plan must
24

be fully developed and continuity services prepared to
25

meet the patient's needs and the patient's community
26

preference upon release. Recommended level of care

HB4650
- 30 -
LRB104 18397 BAB 31839 b
1

placements identified in the discharge plan shall comply
2

with generally accepted standards of care, as defined in
3

subsection (h).
4

(A) If the provider satisfies the conditions of
5

paragraph (2), then the insurer shall approve coverage
6

of the recommended level of care, if applicable, upon
7

discharge subject to concurrent review.
8

(B) Nothing in this paragraph supersedes a health
9

maintenance organization's referral requirement for
10

services from nonparticipating providers upon a
11

patient's discharge from a hospital or facility.
12

(C) Concurrent review for such coverage must be
13

consistent with the utilization review provisions in
14

subsections (h) through (n).
15

(D) In this subsection, residential treatment that
16

is not otherwise identified in the discharge plan is
17

not inpatient hospitalization.
18

(3) Treatment provided under this subsection may be
19

reviewed retrospectively. If coverage is denied
20

retrospectively, neither the insurer nor the participating
21

provider shall bill, and the insured shall not be liable,
22

for any treatment under this subsection through the date
23

the adverse determination is issued, other than any
24

copayment, coinsurance, or deductible for the stay through
25

that date as applicable under the policy. Coverage shall
26

not be retrospectively denied for the first 72 hours of

HB4650
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LRB104 18397 BAB 31839 b
1

admission to inpatient hospitalization for treatment of
2

mental, emotional, or nervous disorders or conditions, or
3

before the applicable deadline under paragraph (1) of this
4

subsection for outpatient treatment or partial
5

hospitalization programs, at a participating provider
6

except:
7

(A) upon reasonable determination that the
8

inpatient mental health treatment was not provided;
9

(B) upon determination that the patient receiving
10

the treatment was not an insured, enrollee, or
11

beneficiary under the policy;
12

(C) upon material misrepresentation by the patient
13

or health care provider. In this item (C), "material"
14

means a fact or situation that is not merely technical
15

in nature and results or could result in a substantial
16

change in the situation;
17

(D) upon determination that a service was excluded
18

under the terms of coverage. In that case, the
19

limitation to billing for a copayment, coinsurance, or
20

deductible shall not apply;
21

(E) for outpatient treatment or partial
22

hospitalization programs only, upon determination that
23

a service was not medically necessary consistent with
24

subsections (h) through (n); or
25

(F) upon determination that the patient did not
26

consent to the treatment and that there was no court

HB4650
- 32 -
LRB104 18397 BAB 31839 b
1

order mandating the treatment.
2

Nothing in this subsection shall be construed to
3

require a policy to cover any health care service excluded
4

under the terms of coverage.
5

This subsection does not apply to coverage for any
6

prescription or over-the-counter drug.
7

Nothing in this subsection shall be construed to
8

require the medical assistance program to reimburse for
9

services not covered by the medical assistance program as
10

authorized by the Illinois Public Aid Code or the
11

Children's Health Insurance Program Act.
12

(x) Notwithstanding any provision of this Section, nothing
13
shall require the medical assistance program under Article V
14
of the Illinois Public Aid Code or the Children's Health
15
Insurance Program Act to violate any applicable federal laws,
16
regulations, or grant requirements, including requirements for
17
utilization management, or any State or federal consent
18
decrees. Nothing in subsection (g) or (w) shall prevent the
19
Department of Healthcare and Family Services from requiring a
20
health care provider to use specified level of care,
21
admission, continued stay, or discharge criteria, including,
22
but not limited to, those under Section 5-5.23 of the Illinois
23
Public Aid Code, as long as the Department of Healthcare and
24
Family Services, subject to applicable federal laws,
25
regulations, or grant requirements, including requirements for
26
utilization management, does not require a health care

HB4650
- 33 -
LRB104 18397 BAB 31839 b
1
provider to seek prior authorization or concurrent review from
2
the Department of Healthcare and Family Services, a Medicaid
3
managed care organization, or a utilization review
4
organization under the circumstances expressly prohibited by
5
subsections (g) and (w). Nothing in this Section prohibits a
6
health plan, including a Medicaid managed care organization,
7
from conducting reviews for medical necessity, clinical
8
appropriateness, safety, fraud, waste, or abuse and reporting
9
suspected fraud, waste, or abuse according to State and
10
federal requirements. Nothing in this Section limits the
11
authority of the Department of Healthcare and Family Services
12
or another State agency, or a Medicaid managed care
13
organization on the State agency's behalf, to (i) implement or
14
require programs, services, screenings, assessments, tools, or
15
reviews to comply with applicable federal law, federal
16
regulation, federal grant requirements, any State or federal
17
consent decrees or court orders, or any applicable case law,
18
such as Olmstead v. L.C., 527 U.S. 581 (1999), or (ii)
19
administer or require programs, services, screenings,
20
assessments, tools, or reviews established under State or
21
federal laws, rules, or regulations in compliance with State
22
or federal laws, rules, or regulations, including, but not
23
limited to, the Children's Mental Health Act and the Mental
24
Health and Developmental Disabilities Administrative Act.
25

(y) (Blank).
26
(Source: P.A. 103-426, eff. 8-4-23; 103-650, eff. 1-1-25;

HB4650
- 34 -
LRB104 18397 BAB 31839 b
1
103-1040, eff. 8-9-24; 104-28, eff. 1-1-26; 104-417, eff.
2
8-15-25
.)

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