SB3587 104TH GENERAL ASSEMBLY

LRB104 18302 KTG 31742 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3587

Introduced 2/5/2026, by Sen. Emil Jones, III

SYNOPSIS AS INTRODUCED:

305 ILCS 5/14-12.5

Amends the Hospital Services Trust Fund Article of the Illinois Public Aid Code. In provisions requiring the Department of Healthcare and Family Services to pay safety-net hospitals a low volume add-on payment of $200 for each inpatient General Acute and Psychiatric day of care, removes the December 31, 2026 sunset date for such add-on payments. Effective immediately.

A BILL FOR

AN ACT concerning public aid.

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

Section 5. The Illinois Public Aid Code is amended by changing Section 14-12.5 as follows:

(305 ILCS 5/14-12.5)

Sec. 14-12.5. Hospital rate updates.

(a) Notwithstanding any other provision of this Code, the hospital rates of reimbursement authorized under Sections 5-5.05, 14-12, and 14-13 of this Code shall be adjusted in accordance with the provisions of this Section.

(b) Notwithstanding any other provision of this Code, effective for dates of service on and after January 1, 2024, subject to federal approval, hospital reimbursement rates shall be revised as follows:

(1) For inpatient general acute care services, the statewide-standardized amount and the per diem rates for hospitals exempt from the APR-DRG reimbursement system, in effect January 1, 2023, shall be increased by 10%.

(2) For inpatient psychiatric services:

(A) For safety-net hospitals, the hospital specific per diem rate in effect January 1, 2023 and the minimum per diem rate of $630, authorized in subsection (b-5) of Section 5-5.05 of this Code, shall be increased by 10%.

(B) For all general acute care hospitals that are not safety-net hospitals, the inpatient psychiatric care per diem rates in effect January 1, 2023 shall be increased by 10%, except that all rates shall be at least 90% of the minimum inpatient psychiatric care per diem rate for safety-net hospitals as authorized in subsection (b-5) of Section 5-5.05 of this Code including the adjustments authorized in this Section. The statewide default per diem rate for a hospital opening a new psychiatric distinct part unit, shall be set at 90% of the minimum inpatient psychiatric care per diem rate for safety-net hospitals as authorized in subsection (b-5) of Section 5-5.05 of this Code, including the adjustment authorized in this Section.

(C) For all psychiatric specialty hospitals, the per diem rates in effect January 1, 2023, shall be increased by 10%, except that all rates shall be at least 90% of the minimum inpatient per diem rate for safety-net hospitals as authorized in subsection (b-5) of Section 5-5.05 of this Code, including the adjustments authorized in this Section. The statewide default per diem rate for a new psychiatric specialty hospital shall be set at 90% of the minimum inpatient psychiatric care per diem rate for safety-net hospitals as authorized in subsection (b-5) of Section 5-5.05 of this Code, including the adjustment authorized in this Section.

(3) For inpatient rehabilitative services, all hospital specific per diem rates in effect January 1, 2023, shall be increased by 10%. The statewide default inpatient rehabilitative services per diem rates, for general acute care hospitals and for rehabilitation specialty hospitals respectively, shall be increased by 10%.

(4) The statewide-standardized amount for outpatient general acute care services in effect January 1, 2023, shall be increased by 10%.

(5) The statewide-standardized amount for outpatient psychiatric care services in effect January 1, 2023, shall be increased by 10%.

(6) The statewide-standardized amount for outpatient rehabilitative care services in effect January 1, 2023, shall be increased by 10%.

(7) The per diem rate in effect January 1, 2023, as authorized in subsection (a) of Section 14-13 of this Article shall be increased by 10%.

(8) For services provided on and after January 1, 2024 through June 30, 2024, and on and after January 1, 2027, subject to federal approval, in addition to the statewide standardized amount, an add-on payment of at least $210 shall be paid for each inpatient General Acute and Psychiatric day of care, excluding Medicare-Medicaid dual eligible crossover days, for all safety-net hospitals defined in Section 5-5e.1 of this Code.

(A) For Psychiatric days of care, the Department may implement payment of this add-on by increasing the hospital specific psychiatric per diem rate, adjusted in accordance with subparagraph (A) of paragraph (2) of subsection (b) by $210, or by a separate add-on payment.

(B) If the add-on adjustment is added to the hospital specific psychiatric per diem rate to operationalize payment, the Department shall provide a rate sheet to each safety-net hospital, which identifies the hospital psychiatric per diem rate before and after the adjustment.

(C) The add-on adjustment shall not be considered when setting the 90% minimum rate identified in paragraph (2) of subsection (b).

(9) For services provided on and after July 1, 2024, and on or before December 31, 2026, subject to federal approval, in addition to the statewide standardized amount and any other payments authorized under this Code, a safety-net hospital health care equity add-on payment shall be paid for each inpatient General Acute and Psychiatric day of care, excluding Medicare-Medicaid dual eligible crossover days, for safety-net hospitals defined in Section 5-5e.1 of this Code, as follows:

(A) if the safety-net hospital's Medicaid inpatient utilization rate, as calculated under Section 5-5e.1 of this Code, is equal to or greater than 70%, the add-on payment shall be $425;

(B) if the safety-net hospital's Medicaid inpatient utilization rate, as calculated under Section 5-5e.1 of this Code, is equal to or greater than 50% and less than 70%, the add-on payment shall be $300;

(C) if the safety-net hospital's Medicaid inpatient utilization rate, as calculated under Section 5-5e.1 of this Code, is equal to or greater than 40% and less than 50%, the add-on payment shall be $225; and

(D) if the safety-net hospital's Medicaid inpatient utilization rate, as calculated under Section 5-5e.1 of this Code, is less than 40%, the add-on payment shall be $210.

Qualification for the safety-net hospital health care equity add-on payment shall be updated January 1, 2026, based on the MIUR determination effective 3 months prior to the start of the January 1, 2026 calendar year.

Rates described in subparagraphs (A) through (C) shall be adjusted annually beginning January 1, 2026 by applying a uniform factor to each rate to spend an approximate amount of $50,000,000 annually per year using State fiscal year 2024 days as a basis for calendar year 2026 rates.

The add-on adjustment under this paragraph shall not be considered when setting the 90% minimum rate identified in subparagraph (B) of paragraph (2).

(10) For services provided on and after July 1, 2024, and on or before December 31, 2026, subject to federal approval, in addition to the statewide standardized amount and any other payments authorized under this Code, a safety-net hospital low volume add-on payment of $200 shall be paid for each inpatient General Acute and Psychiatric day of care, excluding Medicare-Medicaid dual eligible crossover days, for any safety-net hospital as defined in Section 5-5e.1 that provided less than 11,000 Medicaid inpatient days of care, excluding Medicare-Medicaid dual eligible crossover days, in the base period. As used in this paragraph, "base period" means State fiscal year 2022 admissions received by the Department prior to October 1, 2023 for the payment period July 1, 2024 through December 31, 2025, and beginning in calendar year 2026, the State fiscal year that ends 30 months before the applicable calendar year, such as State fiscal year 2023 admissions received by the Department prior to October 1, 2024, for calendar year 2026.

(c) The Department shall take all actions necessary to ensure the changes authorized in Public Act 103-102 and this amendatory Act of the 103rd General Assembly are in effect for dates of service on and after the effective date of the changes made to this Section by this amendatory Act of the 103rd General Assembly, including publishing all appropriate public notices, applying for federal approval of amendments to the Illinois Title XIX State Plan, and adopting administrative rules if necessary.

(d) The Department of Healthcare and Family Services may adopt rules necessary to implement the changes made by Public Act 103-102 and this amendatory Act of the 103rd General Assembly through the use of emergency rulemaking in accordance with Section 5-45 of the Illinois Administrative Procedure Act. The 24-month limitation on the adoption of emergency rules does not apply to rules adopted under this Section. The General Assembly finds that the adoption of rules to implement the changes made by Public Act 103-102 and this amendatory Act of the 103rd General Assembly is deemed an emergency and necessary for the public interest, safety, and welfare.

(e) The Department shall ensure that all necessary adjustments to the managed care organization capitation base rates necessitated by the adjustments in this Section are completed, published, and applied in accordance with Section 5-30.8 of this Code 90 days prior to the implementation date of the changes required under Public Act 103-102 and this amendatory Act of the 103rd General Assembly.

(f) The Department shall publish updated rate sheets or add-on payment amounts, as applicable, for all hospitals 30 days prior to the effective date of the rate increase, or within 30 days after federal approval by the Centers for Medicare and Medicaid Services, whichever is later.

(Source: P.A. 103-102, eff. 6-16-23; 103-593, eff. 6-7-24.)

Section 99. Effective date. This Act takes effect upon becoming law.