SB2367ham002 93RD GENERAL ASSEMBLY

Rep. Lee A. Daniels

Filed: 5/25/2004

09300SB2367ham002 LRB093 19989 DRJ 51539 a

AMENDMENT TO SENATE BILL 2367

AMENDMENT NO. ______. Amend Senate Bill 2367, AS AMENDED, by replacing everything after the enacting clause with the following:

"Section 5. The Department of Human Services Act is amended by adding Sections 1-35, 1-36, and 1-40 as follows:

(20 ILCS 1305/1-35 new)

Sec. 1-35. Community-based services contracting pilot project.

(a) The Department of Human Services may initiate a 2-year pilot project aimed at the improvement of delivery of community-based services by contract, which will increase the number of service contracts open to a competitive selection process and utilize performance-based contracts in the provision of such services. Only contracts for community-based services executed under this project shall be subject to a competitive selection process and performance measurement. Nothing in this Section prohibits the Department from continuing to issue requests for proposals or entering into fee-for-service contracts that were subject to requests for proposals before January 1, 2004.

If implemented, the pilot project authorized by this Section shall be directed toward community-based services that assist Illinois residents in achieving self-sufficiency, independence and health to the maximum extent possible by providing integrated family-oriented services, promoting prevention, and establishing measurable outcomes in partnership with communities.

The 2-year pilot project must be implemented in a manner that ensures the continuation of existing client and provider relationships to the maximum extent possible in cases where there is an ongoing plan of treatment. The pilot project shall ensure that "critical access" providers of services, as defined by rule, continue to provide essential services to the communities serving persons who need such services.

(b) For the fiscal year beginning July 1, 2004, the Department shall limit the total amount of the contracts issued under this project to $64,000,000 with respect to no more than the following services:

(1) Mental Health: Screening and Support Services.

(2) Mental Health: Preadmission Assessment and Screening.

(3) Rehabilitation Services: Extended Services Programs.

(4) Alcoholism and Substance Abuse: HIV Counseling and Testing.

(5) Alcoholism and Substance Abuse: Technical Assistance

(6) Developmental Disabilities: Self-Advocacy Training.

(7) Developmental Disabilities: Enhanced Respite Services in Underserved Areas.

(8) Community Health and Prevention: Abstinence Only Education.

(9) Community Health and Prevention: Early Intervention and Family Connections.

(10) Community Health and Prevention: Crossroads Program.

(11) Community Health and Prevention: Family Planning.

(12) Human Capital Development: Temporary Assistance for Needy Families (TANF) - Work First.

(13) Human Capital Development: Temporary Assistance for Needy Families (TANF) - Job Placement with Retention.

(14) Human Capital Development: Food Stamp Employment and Training with retention.

(15) Human Capital Development: Emergency Food Program.

(16) Human Capital Development: Emergency Food and Shelter Program.

(17) Human Capital Development: Donated Funds Initiative Employability Development Service (EDS).

The amount of the contracts to be issued and the programs affected for the fiscal year beginning July 1, 2005 shall be established by rule, which must be proposed by March 1, 2005.

(c) The Department must track real outcomes and achievements that improve the quality of life for people. Prospective bidders must provide affirmative statements in the proposals submitted regarding the services to be provided and the outcomes expected. Performance measurements must be incorporated into the requests-for-proposals. Deliverables must demonstrate performance and actual outcomes achieved. Under the performance-based contracting system, providers must be measured on the indicators set forth in the proposals submitted and the contracts formally executed. Requests-for-proposals shall be evaluated on the basis of a tool to be referenced by the Department as Performance-based Measures (PERMS), a web-based data collection system used by the Department to collect data on service delivery, to assess program progress, and to measure provider performance. The system must be designed to support the quality of services, to promote creativity and innovation, and to ensure that resources are directed to areas of critical need. Under this pilot project, the Department shall not re-bid all of the community service contracts under its jurisdiction. The Department may only issue requests-for-proposals where an improved system is expected to result. The Department may execute multi-year agreements, when applicable, with annual renewals. In designing the pilot project and in issuing and evaluating requests-for-proposals, the Department must consult and utilize experts in the field.

(d) Contracts under this Section shall include provisions for (i) adequate and timely notice to a provider of any determination by the Department that the provider is not in compliance with the contract or any standards of performance and (ii) an opportunity for the provider to take corrective action. A contract may be terminated if the provider fails to take corrective action. In the event of a contract termination, the Department must ensure that eligible persons receiving services under the contract will otherwise continue to receive necessary services in the community.

(e) Additional procedures, supplementary payments, or special rates may be adopted and implemented by the Department to ensure that unique circumstances of local areas, as defined by rule, can be met, including but not limited to circumstances in which there are not sufficient services available to meet basic needs or in which there is a need for specialty care.

(f) The Department must consult with stakeholders and consumers in the design, development, and implementation of this pilot project. The Department must conduct regional focus group discussions with stakeholders (including consumers and providers), legislators, foundations, trade associations, consumers, and advocacy groups in the development and evaluation of this system. The Department must implement a system using internet technology under which concerned individuals will be able to submit inquiries and receive responses about the system. The Department must issue quarterly reports and post on its internet website information about this project, information about roundtable discussions with stakeholders, the content and postings regarding the request-for-proposal process, the Department's work with foundations and other experts in grant-making, the evaluation of the request-for-proposal processes, and the Department's work with stakeholders in establishing criteria that will govern the determination of future additional program areas that may be included in the request-for-proposal process.

(g) The Department must establish an "ombudsman" system that will enable providers and consumers to resolve problems and disputes.

(h) The pilot project must be evaluated by an independent contractor with expertise in such matters, and a preliminary report on the progress and results of the project must be submitted to the Governor and General Assembly by March 1, 2005 and a final report March 1, 2006. The General Assembly may authorize an extension of the period of this pilot project by adoption of a joint resolution.

(20 ILCS 1305/1-36 new)

Sec. 1-36. Fee-for-service contracts.

(a) The Illinois Department of Human Services shall implement policies and procedures for the procurement of community services under its jurisdiction in a manner that will ensure the maximum amount of federal financial participation in the cost of such services. For the community services that may be eligible for federal financial participation, the Department of Human Services may issue and execute contracts that include provisions for payment on a fee-for-service basis after January 1, 2005 under the terms and conditions set forth in this Section. The Department may immediately implement demonstrations of a payment system based on fee-for-service contracts that will include any provider of community services willing to execute a contract prior to January 1, 2005.

(b) Contracts must ensure that the transition to a fee-for-service payment methodology will not cause any person receiving services to become ineligible or the level or quality of their service to be diminished, nor cause any person to be denied necessary services if the person is eligible for services.

(c) The Department of Human Services, in consultation with the departments of Public Aid, Public Health, and Children and Family Services and the Department on Aging, if applicable to the services under contract, shall adopt rules establishing the criteria, standards, and procedures for issuing the fee-for-service contracts, including but not limited to the fees to be paid for the service, the schedule for payment of bills and reimbursement of claims, and the methodology for reconciling advance payments.

(d) In developing rules establishing conditions of participation and in developing performance standards, the Department shall provide an opportunity for public review and comment and for consultation with stakeholders before publishing and adopting those rules and performance standards. The Department shall develop and issue a separate memorandum of understanding in cooperation with each category of community provider, including providers of alcoholism and substance abuse services, providers of developmental disabilities services, and providers of community mental health services. The memorandum shall delineate the criteria, standards, and procedures agreed upon to be covered by the rules. The Department may not issue any contracts under this Section until it issues the memorandum.

(e) To ensure continuity of services for recipients of community services administered by the Department, and to ensure a smooth transition from any payment methodology not based on fee-for-service contracts, the Department shall provide an aggregate amount of funding through a combination of grants and contracts that will at least maintain the same level of services in effect for the prior fiscal year beginning July 1, 2003. Individuals, organizations, or agencies who were providers of community services in the fiscal year beginning July 1, 2003, who are willing to comply with conditions of participation, and who meet performance standards established by the Department, shall be eligible as providers of services after July 1, 2004 for grants and contracts under this Section that include terms that will enable them to at least maintain the same service capacity that they were providing in that prior fiscal year.

(f) The Department shall implement policies and procedures for recipients and providers of services to submit inquiries and resolve disputes with regard to the community services subject to contracts under this Section.

(g) The Department shall require cost reports from providers of community services, as prescribed by rule, for the community services for which the Department of Human Services will contract under this Section to determine the cost of services and other factors upon which the rates of payment shall be based. Before adopting rules relating to rates to be paid under fee-for-service contracts under this Section, the Department shall obtain an evaluation and opinion by an independent certified public accountant comparing reported costs and any proposed rates.

(h) The Department, in cooperation with representatives of the providers of services through the Department's divisions of Developmental Disabilities, Alcohol and Substance Abuse, and Mental Health, shall conduct a comprehensive review of the methodology, used in determining rates to be paid for community services after July 1, 2004, that is in effect on the effective date of this amendatory Act of the 93rd General Assembly. The Department shall complete this review by November 1, 2004.

(20 ILCS 1305/1-40 new)

Sec. 1-40. Reserve of funding prohibited. Neither the Governor nor the Governor's Office of Management and Budget, nor anyone acting on behalf of either of those, shall direct or require the reserve or impoundment, or otherwise prohibit the expenditure, of moneys appropriated to the Department for the purpose of funding services provided through the Department's divisions of Developmental Disabilities, Alcohol and Substance Abuse, and Mental Health, provided that any such expenditure is made pursuant to the Department's powers and duties as provided by law.

Section 10. The Mental Health and Developmental Disabilities Administrative Act is amended by adding Section 18.5 as follows:

(20 ILCS 1705/18.5 new)

Sec. 18.5. Community Developmental Disability Services Medicaid Trust Fund; reimbursement.

(a) Any funds paid to the State by the federal government under Title XIX or Title XXI of the Social Security Act for services delivered by community developmental disability services providers, and any interest earned thereon, shall be deposited directly into the Community Developmental Disability Services Medicaid Trust Fund.

(b) Moneys in the Community Developmental Disability Services Medicaid Trust Fund shall be used to pay for Medicaid-reimbursed community developmental disability services provided to eligible individuals and chosen by the individual or his or her legal guardian from available community services options. Once the individual or legal guardian chooses the desired services, the services are approved by the Department of Human Services, and the provision of services is initiated, the Department shall make payment to the community developmental disability services provider. Prior to choosing a service or services, an eligible individual or his or her legal guardian shall be fully informed by the independent service coordination agency and the provider of all available community services options.

(c) Funds spent under this Section shall not supplant other funds appropriated from the General Revenue Fund for community-based developmental disability services.

(d) For the purposes of this Section:

"Medicaid-reimbursed developmental disability services" means services provided by a community developmental disability provider under an agreement with the Department that is eligible for reimbursement under the federal Title XIX program or Title XXI program.

"Provider" means a community agency that is funded by the Department to provide a Medicaid-reimbursed service.

(20 ILCS 1705/18.1 rep.)

Section 11. The Mental Health and Developmental Disabilities Administrative Act is amended by repealing Section 18.1.

Section 15. The State Prompt Payment Act is amended by changing Section 1 and adding Section 8 as follows:

(30 ILCS 540/1) (from Ch. 127, par. 132.401)

Sec. 1. This Act applies to any State official or agency authorized to provide for payment from State funds, by virtue of any appropriation of the General Assembly, for goods or services furnished to the State.

For purposes of this Act, "goods or services furnished to the State" include but are not limited to covered health care provided to eligible members and their covered dependents in accordance with the State Employees Group Insurance Act of 1971, including coverage through a physician-owned health maintenance organization under Section 6.1 of that Act.

For the purposes of this Act, "appropriate State official or agency" is defined as the Director or Chief Executive or his designee of that State agency or department or facility of such agency or department. With respect to covered health care provided to eligible members and their dependents in accordance with the State Employees Group Insurance Act of 1971, "appropriate State official or agency" also includes an administrator of a program of health benefits under that Act.

As used in this Act, "eligible member" means a member who is eligible for health benefits under the State Employees Group Insurance Act of 1971, and "member" and "dependent" have the meanings ascribed to those terms in that Act.

As used in this Act, "a proper bill or invoice" means a bill or invoice that includes the information necessary for processing the payment as may be specified by a State agency and in rules adopted in accordance with this Act.

As used in this Act, "payment" means a payment of a vendor's bill or invoice or a payment of a grant award, whether in whole or in part.

(Source: P.A. 91-266, eff. 7-23-99; 92-384, eff. 7-1-02.)

(30 ILCS 540/8 new)

Sec. 8. Priority of payment.

(a) Definition. As used in this Section, "qualified provider" means a not-for-profit organization that provides non-residential services for the mentally ill or developmentally disabled and is reimbursed or otherwise paid for providing those services by the Illinois Department of Human Services. A "qualified provider" does not include a hospital licensed under the Hospital Licensing Act, a long-term care facility licensed under the Nursing Home Care Act only with respect to services provided in the licensed facility to residents, or a local governmental unit or university. A "qualified provider" also includes an entity licensed under the Community-Integrated Living Arrangements Licensure and Certification Act, but only with respect to the services provided for a community-integrated living arrangement. The Department of Human Services shall make the determination of who is a "qualified provider".

(b) Processing by official or agency. Except as provided in subsection (d), a bill or invoice for goods or services furnished to the State submitted by a qualified provider and a grant award payment to a qualified provider must be given priority in processing. Any bill or invoice and any grant award payment meeting these criteria that is submitted to an official or agency must be processed and forwarded for payment before any other bill, invoice, or grant award payment is processed or forwarded for payment.

(c) Payment by Comptroller. Except as provided in subsection (d), a voucher for payment for goods or services furnished to the State by a qualified provider and a grant award payment to a qualified provider submitted by an official or agency to the Comptroller for payment must be given priority in payment. Any voucher meeting these criteria that is submitted to the Comptroller by an official or agency for payment from a given fund must be paid before any other bill, invoice, or grant award is paid from that fund. If 2 or more vouchers eligible for priority payment are received by the Comptroller in the same day for payment out of the same fund and there is not enough money in the fund to pay them all, then each bill, invoice, or grant award shall be paid in the order in which it is received.

(d) The processing and payment of (i) debt service obligations of the State and (ii) payroll obligations of the State shall have priority over the processing and payment of items as required by this Section.

Section 20. The Community Services Act is amended by adding Section 4.4 as follows:

(405 ILCS 30/4.4 new)

Sec. 4.4. Medicaid recipients; separate billing. The Department of Human Services must bill the Department of Public Aid separately for services provided to recipients of medical assistance under Article V of the Illinois Public Aid Code through the Division of Mental Health and for services provided to such recipients through the Division of Developmental Disabilities.

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