Illinois General Assembly - Full Text of SB2367
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Full Text of SB2367  93rd General Assembly


Rep. Lee A. Daniels

Filed: 5/25/2004





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2     AMENDMENT NO. ______. Amend Senate Bill 2367, AS AMENDED,
3 by replacing everything after the enacting clause with the
4 following:
5     "Section 5. The Department of Human Services Act is amended
6 by adding Sections 1-35, 1-36, and 1-40 as follows:
7     (20 ILCS 1305/1-35 new)
8     Sec. 1-35. Community-based services contracting pilot
9 project.
10     (a) The Department of Human Services may initiate a 2-year
11 pilot project aimed at the improvement of delivery of
12 community-based services by contract, which will increase the
13 number of service contracts open to a competitive selection
14 process and utilize performance-based contracts in the
15 provision of such services. Only contracts for community-based
16 services executed under this project shall be subject to a
17 competitive selection process and performance measurement.
18 Nothing in this Section prohibits the Department from
19 continuing to issue requests for proposals or entering into
20 fee-for-service contracts that were subject to requests for
21 proposals before January 1, 2004.
22     If implemented, the pilot project authorized by this
23 Section shall be directed toward community-based services that
24 assist Illinois residents in achieving self-sufficiency,



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1 independence and health to the maximum extent possible by
2 providing integrated family-oriented services, promoting
3 prevention, and establishing measurable outcomes in
4 partnership with communities.
5     The 2-year pilot project must be implemented in a manner
6 that ensures the continuation of existing client and provider
7 relationships to the maximum extent possible in cases where
8 there is an ongoing plan of treatment. The pilot project shall
9 ensure that "critical access" providers of services, as defined
10 by rule, continue to provide essential services to the
11 communities serving persons who need such services.
12     (b) For the fiscal year beginning July 1, 2004, the
13 Department shall limit the total amount of the contracts issued
14 under this project to $64,000,000 with respect to no more than
15 the following services:
16         (1) Mental Health: Screening and Support Services.
17         (2) Mental Health: Preadmission Assessment and
18     Screening.
19         (3) Rehabilitation Services: Extended Services
20     Programs.
21         (4) Alcoholism and Substance Abuse: HIV Counseling and
22     Testing.
23         (5) Alcoholism and Substance Abuse: Technical
24     Assistance
25         (6) Developmental Disabilities: Self-Advocacy
26     Training.
27         (7) Developmental Disabilities: Enhanced Respite
28     Services in Underserved Areas.
29         (8) Community Health and Prevention: Abstinence Only
30     Education.
31         (9) Community Health and Prevention: Early
32     Intervention and Family Connections.
33         (10) Community Health and Prevention: Crossroads
34     Program.



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1         (11) Community Health and Prevention: Family Planning.
2         (12) Human Capital Development: Temporary Assistance
3     for Needy Families (TANF) - Work First.
4         (13) Human Capital Development: Temporary Assistance
5     for Needy Families (TANF) - Job Placement with Retention.
6         (14) Human Capital Development: Food Stamp Employment
7     and Training with retention.
8         (15) Human Capital Development: Emergency Food
9     Program.
10         (16) Human Capital Development: Emergency Food and
11     Shelter Program.
12         (17) Human Capital Development: Donated Funds
13     Initiative Employability Development Service (EDS).
14     The amount of the contracts to be issued and the programs
15 affected for the fiscal year beginning July 1, 2005 shall be
16 established by rule, which must be proposed by March 1, 2005.
17     (c) The Department must track real outcomes and
18 achievements that improve the quality of life for people.
19 Prospective bidders must provide affirmative statements in the
20 proposals submitted regarding the services to be provided and
21 the outcomes expected. Performance measurements must be
22 incorporated into the requests-for-proposals. Deliverables
23 must demonstrate performance and actual outcomes achieved.
24 Under the performance-based contracting system, providers must
25 be measured on the indicators set forth in the proposals
26 submitted and the contracts formally executed.
27 Requests-for-proposals shall be evaluated on the basis of a
28 tool to be referenced by the Department as Performance-based
29 Measures (PERMS), a web-based data collection system used by
30 the Department to collect data on service delivery, to assess
31 program progress, and to measure provider performance. The
32 system must be designed to support the quality of services, to
33 promote creativity and innovation, and to ensure that resources
34 are directed to areas of critical need. Under this pilot



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1 project, the Department shall not re-bid all of the community
2 service contracts under its jurisdiction. The Department may
3 only issue requests-for-proposals where an improved system is
4 expected to result. The Department may execute multi-year
5 agreements, when applicable, with annual renewals. In
6 designing the pilot project and in issuing and evaluating
7 requests-for-proposals, the Department must consult and
8 utilize experts in the field.
9     (d) Contracts under this Section shall include provisions
10 for (i) adequate and timely notice to a provider of any
11 determination by the Department that the provider is not in
12 compliance with the contract or any standards of performance
13 and (ii) an opportunity for the provider to take corrective
14 action. A contract may be terminated if the provider fails to
15 take corrective action. In the event of a contract termination,
16 the Department must ensure that eligible persons receiving
17 services under the contract will otherwise continue to receive
18 necessary services in the community.
19     (e) Additional procedures, supplementary payments, or
20 special rates may be adopted and implemented by the Department
21 to ensure that unique circumstances of local areas, as defined
22 by rule, can be met, including but not limited to circumstances
23 in which there are not sufficient services available to meet
24 basic needs or in which there is a need for specialty care.
25     (f) The Department must consult with stakeholders and
26 consumers in the design, development, and implementation of
27 this pilot project. The Department must conduct regional focus
28 group discussions with stakeholders (including consumers and
29 providers), legislators, foundations, trade associations,
30 consumers, and advocacy groups in the development and
31 evaluation of this system. The Department must implement a
32 system using internet technology under which concerned
33 individuals will be able to submit inquiries and receive
34 responses about the system. The Department must issue quarterly



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1 reports and post on its internet website information about this
2 project, information about roundtable discussions with
3 stakeholders, the content and postings regarding the
4 request-for-proposal process, the Department's work with
5 foundations and other experts in grant-making, the evaluation
6 of the request-for-proposal processes, and the Department's
7 work with stakeholders in establishing criteria that will
8 govern the determination of future additional program areas
9 that may be included in the request-for-proposal process.
10     (g) The Department must establish an "ombudsman" system
11 that will enable providers and consumers to resolve problems
12 and disputes.
13     (h) The pilot project must be evaluated by an independent
14 contractor with expertise in such matters, and a preliminary
15 report on the progress and results of the project must be
16 submitted to the Governor and General Assembly by March 1, 2005
17 and a final report March 1, 2006. The General Assembly may
18 authorize an extension of the period of this pilot project by
19 adoption of a joint resolution.
20     (20 ILCS 1305/1-36 new)
21     Sec. 1-36. Fee-for-service contracts.
22     (a) The Illinois Department of Human Services shall
23 implement policies and procedures for the procurement of
24 community services under its jurisdiction in a manner that will
25 ensure the maximum amount of federal financial participation in
26 the cost of such services. For the community services that may
27 be eligible for federal financial participation, the
28 Department of Human Services may issue and execute contracts
29 that include provisions for payment on a fee-for-service basis
30 after January 1, 2005 under the terms and conditions set forth
31 in this Section. The Department may immediately implement
32 demonstrations of a payment system based on fee-for-service
33 contracts that will include any provider of community services



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1 willing to execute a contract prior to January 1, 2005.
2     (b) Contracts must ensure that the transition to a
3 fee-for-service payment methodology will not cause any person
4 receiving services to become ineligible or the level or quality
5 of their service to be diminished, nor cause any person to be
6 denied necessary services if the person is eligible for
7 services.
8     (c) The Department of Human Services, in consultation with
9 the departments of Public Aid, Public Health, and Children and
10 Family Services and the Department on Aging, if applicable to
11 the services under contract, shall adopt rules establishing the
12 criteria, standards, and procedures for issuing the
13 fee-for-service contracts, including but not limited to the
14 fees to be paid for the service, the schedule for payment of
15 bills and reimbursement of claims, and the methodology for
16 reconciling advance payments.
17     (d) In developing rules establishing conditions of
18 participation and in developing performance standards, the
19 Department shall provide an opportunity for public review and
20 comment and for consultation with stakeholders before
21 publishing and adopting those rules and performance standards.
22 The Department shall develop and issue a separate memorandum of
23 understanding in cooperation with each category of community
24 provider, including providers of alcoholism and substance
25 abuse services, providers of developmental disabilities
26 services, and providers of community mental health services.
27 The memorandum shall delineate the criteria, standards, and
28 procedures agreed upon to be covered by the rules. The
29 Department may not issue any contracts under this Section until
30 it issues the memorandum.
31     (e) To ensure continuity of services for recipients of
32 community services administered by the Department, and to
33 ensure a smooth transition from any payment methodology not
34 based on fee-for-service contracts, the Department shall



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1 provide an aggregate amount of funding through a combination of
2 grants and contracts that will at least maintain the same level
3 of services in effect for the prior fiscal year beginning July
4 1, 2003. Individuals, organizations, or agencies who were
5 providers of community services in the fiscal year beginning
6 July 1, 2003, who are willing to comply with conditions of
7 participation, and who meet performance standards established
8 by the Department, shall be eligible as providers of services
9 after July 1, 2004 for grants and contracts under this Section
10 that include terms that will enable them to at least maintain
11 the same service capacity that they were providing in that
12 prior fiscal year.
13     (f) The Department shall implement policies and procedures
14 for recipients and providers of services to submit inquiries
15 and resolve disputes with regard to the community services
16 subject to contracts under this Section.
17     (g) The Department shall require cost reports from
18 providers of community services, as prescribed by rule, for the
19 community services for which the Department of Human Services
20 will contract under this Section to determine the cost of
21 services and other factors upon which the rates of payment
22 shall be based. Before adopting rules relating to rates to be
23 paid under fee-for-service contracts under this Section, the
24 Department shall obtain an evaluation and opinion by an
25 independent certified public accountant comparing reported
26 costs and any proposed rates.
27     (h) The Department, in cooperation with representatives of
28 the providers of services through the Department's divisions of
29 Developmental Disabilities, Alcohol and Substance Abuse, and
30 Mental Health, shall conduct a comprehensive review of the
31 methodology, used in determining rates to be paid for community
32 services after July 1, 2004, that is in effect on the effective
33 date of this amendatory Act of the 93rd General Assembly. The
34 Department shall complete this review by November 1, 2004.



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1     (20 ILCS 1305/1-40 new)
2     Sec. 1-40. Reserve of funding prohibited. Neither the
3 Governor nor the Governor's Office of Management and Budget,
4 nor anyone acting on behalf of either of those, shall direct or
5 require the reserve or impoundment, or otherwise prohibit the
6 expenditure, of moneys appropriated to the Department for the
7 purpose of funding services provided through the Department's
8 divisions of Developmental Disabilities, Alcohol and Substance
9 Abuse, and Mental Health, provided that any such expenditure is
10 made pursuant to the Department's powers and duties as provided
11 by law.
12     Section 10. The Mental Health and Developmental
13 Disabilities Administrative Act is amended by adding Section
14 18.5 as follows:
15     (20 ILCS 1705/18.5 new)
16     Sec. 18.5. Community Developmental Disability Services
17 Medicaid Trust Fund; reimbursement.
18     (a) Any funds paid to the State by the federal government
19 under Title XIX or Title XXI of the Social Security Act for
20 services delivered by community developmental disability
21 services providers, and any interest earned thereon, shall be
22 deposited directly into the Community Developmental Disability
23 Services Medicaid Trust Fund.
24     (b) Moneys in the Community Developmental Disability
25 Services Medicaid Trust Fund shall be used to pay for
26 Medicaid-reimbursed community developmental disability
27 services provided to eligible individuals and chosen by the
28 individual or his or her legal guardian from available
29 community services options. Once the individual or legal
30 guardian chooses the desired services, the services are
31 approved by the Department of Human Services, and the provision



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1 of services is initiated, the Department shall make payment to
2 the community developmental disability services provider.
3 Prior to choosing a service or services, an eligible individual
4 or his or her legal guardian shall be fully informed by the
5 independent service coordination agency and the provider of all
6 available community services options.
7     (c) Funds spent under this Section shall not supplant other
8 funds appropriated from the General Revenue Fund for
9 community-based developmental disability services.
10     (d) For the purposes of this Section:
11     "Medicaid-reimbursed developmental disability services"
12 means services provided by a community developmental
13 disability provider under an agreement with the Department that
14 is eligible for reimbursement under the federal Title XIX
15 program or Title XXI program.
16     "Provider" means a community agency that is funded by the
17 Department to provide a Medicaid-reimbursed service.
18     (20 ILCS 1705/18.1 rep.)
19     Section 11. The Mental Health and Developmental
20 Disabilities Administrative Act is amended by repealing
21 Section 18.1.
22     Section 15. The State Prompt Payment Act is amended by
23 changing Section 1 and adding Section 8 as follows:
24     (30 ILCS 540/1)  (from Ch. 127, par. 132.401)
25     Sec. 1. This Act applies to any State official or agency
26 authorized to provide for payment from State funds, by virtue
27 of any appropriation of the General Assembly, for goods or
28 services furnished to the State.
29     For purposes of this Act, "goods or services furnished to
30 the State" include but are not limited to covered health care
31 provided to eligible members and their covered dependents in



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1 accordance with the State Employees Group Insurance Act of
2 1971, including coverage through a physician-owned health
3 maintenance organization under Section 6.1 of that Act.
4     For the purposes of this Act, "appropriate State official
5 or agency" is defined as the Director or Chief Executive or his
6 designee of that State agency or department or facility of such
7 agency or department. With respect to covered health care
8 provided to eligible members and their dependents in accordance
9 with the State Employees Group Insurance Act of 1971,
10 "appropriate State official or agency" also includes an
11 administrator of a program of health benefits under that Act.
12     As used in this Act, "eligible member" means a member who
13 is eligible for health benefits under the State Employees Group
14 Insurance Act of 1971, and "member" and "dependent" have the
15 meanings ascribed to those terms in that Act.
16     As used in this Act, "a proper bill or invoice" means a
17 bill or invoice that includes the information necessary for
18 processing the payment as may be specified by a State agency
19 and in rules adopted in accordance with this Act.
20     As used in this Act, "payment" means a payment of a
21 vendor's bill or invoice or a payment of a grant award, whether
22 in whole or in part.
23 (Source: P.A. 91-266, eff. 7-23-99; 92-384, eff. 7-1-02.)
24     (30 ILCS 540/8 new)
25     Sec. 8. Priority of payment.
26     (a) Definition. As used in this Section, "qualified
27 provider" means a not-for-profit organization that provides
28 non-residential services for the mentally ill or
29 developmentally disabled and is reimbursed or otherwise paid
30 for providing those services by the Illinois Department of
31 Human Services. A "qualified provider" does not include a
32 hospital licensed under the Hospital Licensing Act, a long-term
33 care facility licensed under the Nursing Home Care Act only



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1 with respect to services provided in the licensed facility to
2 residents, or a local governmental unit or university. A
3 "qualified provider" also includes an entity licensed under the
4 Community-Integrated Living Arrangements Licensure and
5 Certification Act, but only with respect to the services
6 provided for a community-integrated living arrangement. The
7 Department of Human Services shall make the determination of
8 who is a "qualified provider".
9     (b) Processing by official or agency. Except as provided in
10 subsection (d), a bill or invoice for goods or services
11 furnished to the State submitted by a qualified provider and a
12 grant award payment to a qualified provider must be given
13 priority in processing. Any bill or invoice and any grant award
14 payment meeting these criteria that is submitted to an official
15 or agency must be processed and forwarded for payment before
16 any other bill, invoice, or grant award payment is processed or
17 forwarded for payment.
18     (c) Payment by Comptroller. Except as provided in
19 subsection (d), a voucher for payment for goods or services
20 furnished to the State by a qualified provider and a grant
21 award payment to a qualified provider submitted by an official
22 or agency to the Comptroller for payment must be given priority
23 in payment. Any voucher meeting these criteria that is
24 submitted to the Comptroller by an official or agency for
25 payment from a given fund must be paid before any other bill,
26 invoice, or grant award is paid from that fund. If 2 or more
27 vouchers eligible for priority payment are received by the
28 Comptroller in the same day for payment out of the same fund
29 and there is not enough money in the fund to pay them all, then
30 each bill, invoice, or grant award shall be paid in the order
31 in which it is received.
32     (d) The processing and payment of (i) debt service
33 obligations of the State and (ii) payroll obligations of the
34 State shall have priority over the processing and payment of



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1 items as required by this Section.
2     Section 20. The Community Services Act is amended by adding
3 Section 4.4 as follows:
4     (405 ILCS 30/4.4 new)
5     Sec. 4.4. Medicaid recipients; separate billing. The
6 Department of Human Services must bill the Department of Public
7 Aid separately for services provided to recipients of medical
8 assistance under Article V of the Illinois Public Aid Code
9 through the Division of Mental Health and for services provided
10 to such recipients through the Division of Developmental
11 Disabilities.
12     Section 99. Effective date. This Act takes effect upon
13 becoming law.".