SB2561sam001 94TH GENERAL ASSEMBLY

Sen. Debbie DeFrancesco Halvorson

Filed: 2/9/2006

09400SB2561sam001 LRB094 17366 LJB 55758 a

AMENDMENT TO SENATE BILL 2561

AMENDMENT NO. ______. Amend Senate Bill 2561 by replacing everything after the enacting clause with the following:

"ARTICLE 1. GENERAL PROVISIONS

Section 1-1. Short title. This Act may be cited as the Healthy Illinois Act.

Section 1-5. Purpose. Health care costs are rising rapidly and challenging Illinois' capacity to provide accessible, high-quality health care. Small businesses and individuals do not have adequate access to affordable health insurance in this State. This legislation creates Healthy Illinois, a 3-part program that will provide access to affordable coverage for small businesses and individuals through the Healthy Illinois Plan, initiate new strategies for health care quality improvement and cost containment through the Healthy Illinois Quality Forum, and gather and disseminate through the Health Resource Plan the information needed to ensure that all Illinoisans have access to quality, affordable health care.

Section 1-10. Definitions. As used in this Act:

"Authority" means the Healthy Illinois Authority established in Article 5 of this Act.

"Eligible business" means a business that employs at least 2 but not more than 50 employees, at least two-thirds of whom are employed in the State, including a not-for-profit corporation or a municipality or other public sector entity that has at least 2 but not more than 50 employees. Beginning one year after the Authority begins providing health insurance benefits, the Authority may, by rule, define "eligible business" to include larger public or private employers.

"Eligible employee" means an employee of an eligible business who works at least 20 hours per week for that eligible business. "Eligible employee" does not include an employee who works on a temporary or substitute basis or who does not work at least 26 weeks annually. New employees meet the 26-week requirement if they are expected to work at least 26 weeks in their first year of employment.

"Eligible individual" means any Illinois resident, including any dependents thereof.

"Health insurance carrier" means any entity that provides health insurance in this State. For the purposes of this Act, "health insurance carrier" includes a licensed insurance company, a prepaid hospital or medical service plan, a health maintenance organization, or any other entity providing a plan of health insurance or health benefits subject to State insurance regulation.

"Healthy Illinois Plan" means the health insurance plan established by the Healthy Illinois Authority.

"Quality improvement organization" means an organization whose mission includes the creation, endorsement, or implementation of healthcare quality performance measures. "Quality improvement organization" includes, but is not limited to, the National Quality Forum, the Illinois Foundation for Health Care Quality, the Agency for Healthcare Research and Quality, the Joint Commission on Accreditation of Healthcare Organizations, and the National Committee for Quality Assurance.

"Resident" means an individual (i) who is in the State for other than a temporary or transitory purpose during the taxable year or (ii) who is domiciled in this State but is absent from the State for a temporary or transitory purpose during the taxable year.

ARTICLE 5. THE HEALTHY ILLINOIS AUTHORITY

Section 5-5. Healthy Illinois Authority Established. The Healthy Illinois Authority is established as an agency in the executive branch of State government to arrange for the provision of comprehensive, affordable health care coverage to eligible businesses, including employees and their dependents, the self-employed and their dependents, and eligible individuals on a voluntary basis through the Healthy Illinois Plan. The Authority shall also monitor and improve the quality of health care in this State through administration of the Healthy Illinois Quality Forum. The Authority shall also develop the Health Resource Plan, focused on gathering and disseminating the information and plans needed to ensure the provision of quality, affordable health care in Illinois.

Section 5-10. Powers and duties of the Authority. Subject to any limitation contained in this Act or in any other law, the Authority shall have and exercise all powers necessary or convenient to effectuate the purposes for which the Authority is organized or to further the activities in which the Authority may lawfully be engaged, including the establishment of the Healthy Illinois Plan, the administration of the Healthy Illinois Quality Forum, and the development and promulgation of the Health Resource Plan.

Section 5-15. The Healthy Illinois Authority Fund. The Healthy Illinois Authority Fund is created as a special fund in the State treasury for the deposit of any funds advanced for initial operating expenses, payments made by participating businesses and individuals, any windfall profit assessments paid pursuant to Section 10-20 of this Act, and any funds received from any public or private source. The Fund is exempt from the provisions of subsection (c) of Section 5 of the State Finance Act and shall not lapse, but must be carried forward to carry out the purposes of this Act.

ARTICLE 10. HEALTHY ILLINOIS PLAN

Section 10-5. Healthy Illinois Plan. The Authority shall begin to provide health benefit coverage through the Healthy Illinois Plan not later than 12 months after entering into contracts with one or more qualified bidders to administer Healthy Illinois Plan benefits. The Healthy Illinois Plan must comply with all relevant requirements of this Article. The Authority shall select one or more entities to administer the Healthy Illinois Plan through a competitive request for proposal process to identify those that most fully meet qualifications set by the Authority.

Section 10-10. Healthy Illinois Plan administration.

(a) The Healthy Illinois Plan must provide a comprehensive package of benefits that is at least as comprehensive as the outline of benefits provided in the Comprehensive Health Insurance Plan Act. Preventive health care services, including, but not limited to, routine doctor visits, disease screenings, and contraception must be fully covered with no co-pays and no deductibles.

(b) The Healthy Illinois Plan must also provide any supplemental benefits the Authority makes available. The Healthy Illinois Plan may, at the discretion of the Authority, meet the requirements for mandated coverage for specific health services and specific diseases and for certain providers of health services under the Illinois Insurance Code.

(c) The Authority shall establish the minimum required contribution levels, not to exceed 60% of the cost of coverage for eligible employees, to be paid by eligible businesses toward the aggregate payment. The Authority may establish a separate minimum contribution level to be paid by eligible businesses toward coverage for dependents of the eligible business's enrolled employees. Aggregate payments owed under this subsection (c) shall be calculated in accordance with subsection (a) of Section 10-15 of this Act.

(d) The Authority shall require participating businesses to certify that at least 75% of their employees that work 20 hours or more per week are either enrolled in the Healthy Illinois Plan or have other creditable coverage.

(e) The Authority shall reduce the required payment amounts for Healthy Illinois Plan enrollees eligible for a subsidy under Section 10-15 of this Act in accordance with the enrollee's subsidy amount. The Authority shall notify both the Healthy Illinois Plan enrollee and the employer, if applicable, of both the subsidy and the new required payment amount so that the employer, where applicable, can reduce the amount deducted or otherwise set aside for the enrollee's premium share.

(f) A participating business shall make payments on behalf of both itself and its enrolled employees.

Section 10-15. Subsidies.

(a) The Authority shall pay 50% of a participating business's premium using funds generated by the windfall profit assessment established pursuant to Section 10-20. The participating business's aggregate payment will be calculated on the basis of the remaining 50%.

(b) The Authority shall establish sliding-scale subsidies for the purchase of the Healthy Illinois Plan by eligible employees and eligible individuals whose household income is under 300% of the federal poverty level and who are not eligible for Medicaid.

Section 10-20. Windfall profit assessment.

(a) For the purpose of providing the funds necessary to provide subsidies pursuant to Section 10-15 of this Act and to support the Healthy Illinois Quality Forum, health insurance carriers shall pay to the Authority 4% of annual health insurance premiums on policies issued pursuant to the laws of this State that insure residents of this State.

(b) A carrier may petition the Secretary of the Department of Financial and Professional Regulation for an abatement or deferment of all or part of an assessment imposed by the Authority. The Secretary may abate or defer, in whole or in part, the assessment if, in the opinion of the Secretary, payment of the assessment would endanger the ability of the carrier to fulfill its contractual obligations.

ARTICLE 15. HEALTH CARE QUALITY

Section 15-5. Healthy Illinois Quality Forum. The Healthy Illinois Quality Forum, referred to in this Article as the "Forum", is established within the Authority. The Forum shall be funded, at least in part, through the windfall profit assessments paid pursuant to Section 10-20 of this Act. Information obtained by the Forum is a public record within the meaning in Section 2 of the Freedom of Information Act. All data collection required by the Forum shall be done in a manner consistent with and not in duplication of the data collection requirements of federal and State law.

Section 15-10. Duties. The Forum shall perform the following duties:

(1) Gathering and disseminating information on health care quality and patient safety.

(2) Research on best practice in Illinois, including, but not limited to, the following:

(A) Collecting information from Illinois health care providers, insurers, third party administrators, and others to identify practices designed to increase health care quality and patient safety, focusing on those practices where a positive impact has been documented and where the information needed for others to replicate the practice is available. The Forum shall include examples of effective uses of electronic technology for such things as medical records and physical order entry.

(B) Dissemination of information on effective practices in Illinois through public reports, conferences, and other appropriate vehicles. The Authority, with guidance from the Forum, shall provide technical assistance to health care providers, insurers, and other entities that plan to implement proven practices that have been demonstrated to have a material positive impact on health care quality and patient safety in Illinois.

(3) Evaluation and comparison of health care quality and provider performance, including, but not limited to, the following:

(A) The Forum shall identify existing valid and reliable measures of health care quality and provider performance that have been adopted by existing quality improvement organizations.

(B) In coordination with existing quality improvement organizations, the Forum shall facilitate the dissemination of information on the measures identified in item (A) of this paragraph (3) to Illinois health care providers, insurers, and others.

(C) By the third year of operation, the Forum shall recommend an initial set of measures that all Illinois providers, insurers, and others, as appropriate, should adopt. The Forum shall develop incentives to encourage the adoption of those measures, such as the development of a pay-for-performance system whereby providers are financially rewarded for compliance with the established measures. The Forum shall provide guidance on data collection and submission protocols with the minimum possible burden for the providers of data.

ARTICLE 20. HEALTH RESOURCE PLAN

Section 20-5. Duties of the Authority related to the Health Resource Plan.

(a) The Authority shall do all of the following:

(1) develop and issue the biennial Health Resource Plan, referred to in this Article as the "plan". The first plan shall be issued by May 31 of the year following the effective date of this Act of the 94th General Assembly;

(2) make an annual report to the public assessing the progress toward meeting goals of the plan and provide any needed updates to the plan; and

(3) issue an annual statewide health expenditure budget report that shall serve as the basis for establishing priorities within the plan.

(b) The Authority shall provide the reports specified in paragraphs (2) and (3) of subsection (a) of this Section to the General Assembly.

Section 20-10. Health Resource Plan. The plan, issued pursuant to Section 20-5 of this Act, must set forth a comprehensive, coordinated approach to the development of health care facilities and resources in the State based on statewide cost, quality, and access goals and strategies to ensure access to affordable health care, maintain a rational system of health care, and promote the development of the health care workforce.

ARTICLE 25. COST CONTAINMENT

Section 25-5. Public reporting.

(a) Each health care practitioner licensed under the Medical Practice Act of 1987 shall, beginning on August 1, 2007, submit an annual report to the Authority listing the percentage by which its net revenue for the fiscal year exceeded its net revenue for the preceding fiscal year.

(b) Each hospital licensed under the Hospital Licensing Act shall, beginning August 1, 2007, submit an annual report to the Authority listing cost increases, as measured as expenses for case mix adjusted discharge, for the fiscal year as compared to cost increases for the preceding fiscal year. Each hospital licensed under the Hospital Licensing Act shall, beginning on August 1, 2007, submit an annual report to the Authority listing its operating margin for the fiscal year.

(c) Each health insurance carrier licensed in this State shall, beginning on August 1, 2007, submit an annual report to the Authority listing its overall underwriting gain, less federal taxes, on health insurance for the fiscal year.

(d) For the purposes of this Section, "fiscal year" means the fiscal year ending immediately prior to the deadline for the submission of a report required under this Section.

ARTICLE 95. AMENDATORY PROVISIONS

Section 95-5. The Illinois Health Facilities Planning Act is amended by changing Sections 3 and 12 as follows:

(20 ILCS 3960/3) (from Ch. 111 1/2, par. 1153)

(Section scheduled to be repealed on July 1, 2006)

Sec. 3. Definitions. As used in this Act:

"Health care facilities" means and includes the following facilities and organizations:

1. An ambulatory surgical treatment center required to be licensed pursuant to the Ambulatory Surgical Treatment Center Act;

2. An institution, place, building, or agency required to be licensed pursuant to the Hospital Licensing Act;

3. Skilled and intermediate long term care facilities licensed under the Nursing Home Care Act;

3. Skilled and intermediate long term care facilities licensed under the Nursing Home Care Act;

4. Hospitals, nursing homes, ambulatory surgical treatment centers, or kidney disease treatment centers maintained by the State or any department or agency thereof;

5. Kidney disease treatment centers, including a free-standing hemodialysis unit required to be licensed under the End Stage Renal Disease Facility Act; and

6. An institution, place, building, or room used for the performance of outpatient surgical procedures that is leased, owned, or operated by or on behalf of an out-of-state facility.

No federally owned facility shall be subject to the provisions of this Act, nor facilities used solely for healing by prayer or spiritual means.

No facility licensed under the Supportive Residences Licensing Act or the Assisted Living and Shared Housing Act shall be subject to the provisions of this Act.

A facility designated as a supportive living facility that is in good standing with the program established under Section 5-5.01a of the Illinois Public Aid Code shall not be subject to the provisions of this Act.

This Act does not apply to facilities granted waivers under Section 3-102.2 of the Nursing Home Care Act. However, if a demonstration project under that Act applies for a certificate of need to convert to a nursing facility, it shall meet the licensure and certificate of need requirements in effect as of the date of application.

This Act does not apply to a dialysis facility that provides only dialysis training, support, and related services to individuals with end stage renal disease who have elected to receive home dialysis. This Act does not apply to a dialysis unit located in a licensed nursing home that offers or provides dialysis-related services to residents with end stage renal disease who have elected to receive home dialysis within the nursing home. The Board, however, may require these dialysis facilities and licensed nursing homes to report statistical information on a quarterly basis to the Board to be used by the Board to conduct analyses on the need for proposed kidney disease treatment centers.

This Act shall not apply to the closure of an entity or a portion of an entity licensed under the Nursing Home Care Act that elects to convert, in whole or in part, to an assisted living or shared housing establishment licensed under the Assisted Living and Shared Housing Act.

With the exception of those health care facilities specifically included in this Section, nothing in this Act shall be intended to include facilities operated as a part of the practice of a physician or other licensed health care professional, whether practicing in his individual capacity or within the legal structure of any partnership, medical or professional corporation, or unincorporated medical or professional group. Further, this Act shall not apply to physicians or other licensed health care professional's practices where such practices are carried out in a portion of a health care facility under contract with such health care facility by a physician or by other licensed health care professionals, whether practicing in his individual capacity or within the legal structure of any partnership, medical or professional corporation, or unincorporated medical or professional groups. This Act shall apply to construction or modification and to establishment by such health care facility of such contracted portion which is subject to facility licensing requirements, irrespective of the party responsible for such action or attendant financial obligation.

"Person" means any one or more natural persons, legal entities, governmental bodies other than federal, or any combination thereof.

"Consumer" means any person other than a person (a) whose major occupation currently involves or whose official capacity within the last 12 months has involved the providing, administering or financing of any type of health care facility, (b) who is engaged in health research or the teaching of health, (c) who has a material financial interest in any activity which involves the providing, administering or financing of any type of health care facility, or (d) who is or ever has been a member of the immediate family of the person defined by (a), (b), or (c).

"State Board" means the Health Facilities Planning Board.

"Construction or modification" means the establishment, erection, building, alteration, reconstruction, modernization, improvement, extension, discontinuation, change of ownership, of or by a health care facility, or the purchase or acquisition by or through a health care facility of equipment or service for diagnostic or therapeutic purposes or for facility administration or operation, or any capital expenditure made by or on behalf of a health care facility which exceeds the capital expenditure minimum; however, any capital expenditure made by or on behalf of a health care facility for (i) the construction or modification of a facility licensed under the Assisted Living and Shared Housing Act or (ii) a conversion project undertaken in accordance with Section 30 of the Older Adult Services Act shall be excluded from any obligations under this Act.

"Establish" means the construction of a health care facility or the replacement of an existing facility on another site.

"Major medical equipment" means medical equipment which is used for the provision of medical and other health services and which costs in excess of the capital expenditure minimum, except that such term does not include medical equipment acquired by or on behalf of a clinical laboratory to provide clinical laboratory services if the clinical laboratory is independent of a physician's office and a hospital and it has been determined under Title XVIII of the Social Security Act to meet the requirements of paragraphs (10) and (11) of Section 1861(s) of such Act. In determining whether medical equipment has a value in excess of the capital expenditure minimum, the value of studies, surveys, designs, plans, working drawings, specifications, and other activities essential to the acquisition of such equipment shall be included.

"Capital Expenditure" means an expenditure: (A) made by or on behalf of a health care facility (as such a facility is defined in this Act); and (B) which under generally accepted accounting principles is not properly chargeable as an expense of operation and maintenance, or is made to obtain by lease or comparable arrangement any facility or part thereof or any equipment for a facility or part; and which exceeds the capital expenditure minimum.

For the purpose of this paragraph, the cost of any studies, surveys, designs, plans, working drawings, specifications, and other activities essential to the acquisition, improvement, expansion, or replacement of any plant or equipment with respect to which an expenditure is made shall be included in determining if such expenditure exceeds the capital expenditures minimum. Donations of equipment or facilities to a health care facility which if acquired directly by such facility would be subject to review under this Act shall be considered capital expenditures, and a transfer of equipment or facilities for less than fair market value shall be considered a capital expenditure for purposes of this Act if a transfer of the equipment or facilities at fair market value would be subject to review.

"Capital expenditure minimum" means $6,000,000, which shall be annually adjusted to reflect the increase in construction costs due to inflation, for major medical equipment and for all other capital expenditures; provided, however, that when a capital expenditure is for the construction or modification of a health and fitness center, "capital expenditure minimum" means the capital expenditure minimum for all other capital expenditures in effect on March 1, 2000, which shall be annually adjusted to reflect the increase in construction costs due to inflation.

"Non-clinical service area" means an area (i) for the benefit of the patients, visitors, staff, or employees of a health care facility and (ii) not directly related to the diagnosis, treatment, or rehabilitation of persons receiving services from the health care facility. "Non-clinical service areas" include, but are not limited to, chapels; gift shops; news stands; computer systems; tunnels, walkways, and elevators; telephone systems; projects to comply with life safety codes; educational facilities; student housing; patient, employee, staff, and visitor dining areas; administration and volunteer offices; modernization of structural components (such as roof replacement and masonry work); boiler repair or replacement; vehicle maintenance and storage facilities; parking facilities; mechanical systems for heating, ventilation, and air conditioning; loading docks; and repair or replacement of carpeting, tile, wall coverings, window coverings or treatments, or furniture. Solely for the purpose of this definition, "non-clinical service area" does not include health and fitness centers.

"Areawide" means a major area of the State delineated on a geographic, demographic, and functional basis for health planning and for health service and having within it one or more local areas for health planning and health service. The term "region", as contrasted with the term "subregion", and the word "area" may be used synonymously with the term "areawide".

"Local" means a subarea of a delineated major area that on a geographic, demographic, and functional basis may be considered to be part of such major area. The term "subregion" may be used synonymously with the term "local".

"Areawide health planning organization" or "Comprehensive health planning organization" means the health systems agency designated by the Secretary, Department of Health and Human Services or any successor agency.

"Local health planning organization" means those local health planning organizations that are designated as such by the areawide health planning organization of the appropriate area.

"Physician" means a person licensed to practice in accordance with the Medical Practice Act of 1987, as amended.

"Licensed health care professional" means a person licensed to practice a health profession under pertinent licensing statutes of the State of Illinois.

"Director" means the Director of the Illinois Department of Public Health.

"Agency" means the Illinois Department of Public Health.

"Comprehensive health planning" means health planning concerned with the total population and all health and associated problems that affect the well-being of people and that encompasses health services, health manpower, and health facilities; and the coordination among these and with those social, economic, and environmental factors that affect health.

"Alternative health care model" means a facility or program authorized under the Alternative Health Care Delivery Act.

"Out-of-state facility" means a person that is both (i) licensed as a hospital or as an ambulatory surgery center under the laws of another state or that qualifies as a hospital or an ambulatory surgery center under regulations adopted pursuant to the Social Security Act and (ii) not licensed under the Ambulatory Surgical Treatment Center Act, the Hospital Licensing Act, or the Nursing Home Care Act. Affiliates of out-of-state facilities shall be considered out-of-state facilities. Affiliates of Illinois licensed health care facilities 100% owned by an Illinois licensed health care facility, its parent, or Illinois physicians licensed to practice medicine in all its branches shall not be considered out-of-state facilities. Nothing in this definition shall be construed to include an office or any part of an office of a physician licensed to practice medicine in all its branches in Illinois that is not required to be licensed under the Ambulatory Surgical Treatment Center Act.

"Change of ownership of a health care facility" means a change in the person who has ownership or control of a health care facility's physical plant and capital assets. A change in ownership is indicated by the following transactions: sale, transfer, acquisition, lease, change of sponsorship, or other means of transferring control.

"Related person" means any person that: (i) is at least 50% owned, directly or indirectly, by either the health care facility or a person owning, directly or indirectly, at least 50% of the health care facility; or (ii) owns, directly or indirectly, at least 50% of the health care facility.

"Charity care" means care provided by a health care facility for which the provider does not expect to receive payment from the patient or a third-party payer.

"Health Resource Plan" means the biennial Health Resource Plan developed under Article 20 of the Healthy Illinois Act.

(Source: P.A. 93-41, eff. 6-27-03; 93-766, eff. 7-20-04; 93-935, eff. 1-1-05; 93-1031, eff. 8-27-04; 94-342, eff. 7-26-05; revised 10-19-05.)

(20 ILCS 3960/12) (from Ch. 111 1/2, par. 1162)

(Section scheduled to be repealed on July 1, 2006)

Sec. 12. Powers and duties of State Board. For purposes of this Act, the State Board shall exercise the following powers and duties:

(1) Prescribe rules, regulations, standards, criteria, procedures or reviews which may vary according to the purpose for which a particular review is being conducted or the type of project reviewed and which are required to carry out the provisions and purposes of this Act.

(2) Adopt procedures for public notice and hearing on all proposed rules, regulations, standards, criteria, and plans required to carry out the provisions of this Act.

(3) Prescribe criteria for recognition for areawide health planning organizations, including, but not limited to, standards for evaluating the scientific bases for judgments on need and procedure for making these determinations.

(4) Develop criteria and standards for health care facilities planning, conduct statewide inventories of health care facilities, maintain an updated inventory on the Department's web site reflecting the most recent bed and service changes and updated need determinations when new census data become available or new need formulae are adopted, and develop health care facility plans which shall be utilized in the review of applications for permit under this Act. Such health facility plans shall be coordinated by the Agency with the health care facility plans areawide health planning organizations and with other pertinent State Plans.

In developing health care facility plans, the State Board shall consider, but shall not be limited to, the following:

(a) The size, composition and growth of the population of the area to be served;

(b) The number of existing and planned facilities offering similar programs;

(c) The extent of utilization of existing facilities;

(d) The availability of facilities which may serve as alternatives or substitutes;

(e) The availability of personnel necessary to the operation of the facility;

(f) Multi-institutional planning and the establishment of multi-institutional systems where feasible;

(g) The financial and economic feasibility of proposed construction or modification; and

(h) In the case of health care facilities established by a religious body or denomination, the needs of the members of such religious body or denomination may be considered to be public need; and .

(i) The Health Resource Plan adopted by the Healthy Illinois Authority.

The health care facility plans which are developed and adopted in accordance with this Section shall form the basis for the plan of the State to deal most effectively with statewide health needs in regard to health care facilities.

(5) Coordinate with other state agencies having responsibilities affecting health care facilities, including those of licensure and cost reporting.

(6) Solicit, accept, hold and administer on behalf of the State any grants or bequests of money, securities or property for use by the State Board or recognized areawide health planning organizations in the administration of this Act; and enter into contracts consistent with the appropriations for purposes enumerated in this Act.

(7) The State Board shall prescribe, in consultation with the recognized areawide health planning organizations, procedures for review, standards, and criteria which shall be utilized to make periodic areawide reviews and determinations of the appropriateness of any existing health services being rendered by health care facilities subject to the Act. The State Board shall consider recommendations of the areawide health planning organization and the Agency in making its determinations.

(8) Prescribe, in consultation with the recognized areawide health planning organizations, rules, regulations, standards, and criteria for the conduct of an expeditious review of applications for permits for projects of construction or modification of a health care facility, which projects are non-substantive in nature. Such rules shall not abridge the right of areawide health planning organizations to make recommendations on the classification and approval of projects, nor shall such rules prevent the conduct of a public hearing upon the timely request of an interested party. Such reviews shall not exceed 60 days from the date the application is declared to be complete by the Agency.

(9) Prescribe rules, regulations, standards, and criteria pertaining to the granting of permits for construction and modifications which are emergent in nature and must be undertaken immediately to prevent or correct structural deficiencies or hazardous conditions that may harm or injure persons using the facility, as defined in the rules and regulations of the State Board. This procedure is exempt from public hearing requirements of this Act.

(10) Prescribe rules, regulations, standards and criteria for the conduct of an expeditious review, not exceeding 60 days, of applications for permits for projects to construct or modify health care facilities which are needed for the care and treatment of persons who have acquired immunodeficiency syndrome (AIDS) or related conditions.

(Source: P.A. 93-41, eff. 6-27-03.)

Section 95-10. The State Finance Act is amended by adding Section 5.663 as follows:

(30 ILCS 105/5.663 new)

Sec. 5.663. The Healthy Illinois Authority Fund.

Section 95-15. The Illinois Insurance Code is amended by adding Section 144.3 as follows:

(215 ILCS 5/144.3 new)

Sec. 144.3. Health insurance rates; filing; public hearing.

(a) The purpose of this Section is to help control the rate of growth of costs of health coverage and to make the State's oversight of health insurance carriers consistent with its oversight of medical liability insurance carriers, as provided in Section 155.18 of this Act.

(b) Except at preempted by federal law, this Section shall apply to any hospital or medical expense-incurred policy, hospital or medical service plan contract, or health maintenance organization subscriber contract, collectively referred to herein as health insurance. Health insurance, as used in this Section, does not include short-term, accident only, disability income, hospital confinement or fixed indemnity, dental only, vision only, limited benefit, or credit insurance, coverage issued as a supplement to liability insurance, insurance arising out of a workers' compensation or similar law, automobile medical-payment insurance, or insurance under which benefits are payable with or without regard to fault and which is statutorily required to be contained in any liability insurance policy or equivalent self-insurance.

(c) The following standards shall apply to the making and use of rates pertaining to all classes of health insurance:

(1) Rates shall not be excessive, inadequate, or unfairly discriminatory.

(2) Consideration shall be given, to the extent applicable, (i) to past and prospective loss experience within and outside this State, (ii) to a reasonable margin for underwriting profit and contingencies, (iii) to past and prospective expenses both countrywide and those especially applicable to this State, and (iv) to all other factors, including judgment factors, deemed relevant within and outside this State. Consideration may also be given in the making and use of rates to dividends, savings, or unabsorbed premium deposits allowed or returned by companies to their policyholders, members, or subscribers.

(3) The systems of expense provisions included in the rates for use by any company or group of companies may differ from those of other companies or groups of companies to reflect the operating methods of any company or group of companies with respect to any kind of insurance or with respect to any subdivision or combination thereof.

(4) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates in accordance with rating plans that establish standards for measuring variations in hazards or expense provisions, or both. The standards may measure any difference among risks that have a probable effect upon losses or expenses. The classifications or modifications of classifications of risks may be established based upon size, expense, management, experience, location, or dispersion of hazard or any other reasonable considerations and shall apply to all risks under the same or substantially the same circumstances or conditions. The rate for an established classification should be related generally to the anticipated loss and expense factors of the class.

(d) Every company writing health insurance shall file with the Secretary the rates and rating schedules it uses for health insurance. A rate shall go into effect upon filing, except as otherwise provided in this Section.

A rate filing shall occur upon a company's commencement of health insurance business in this State and thereafter as often as the rates are changed or amended. The Secretary shall notify the public of any application by an insurer for a rate increase to which this Section applies.

For the purposes of this Section, any change in premium to the company's insureds as a result of a change in the company's base rates or a change in its increased limits factors shall constitute a change in rates and shall require a filing with the Secretary.

It shall be certified in the filing by an officer of the company and a qualified actuary that the company's rates are based on sound actuarial principles and are not inconsistent with the company's experience. The Secretary may request any additional statistical data and other pertinent information necessary to determine how the company set the filed rates and the reasonableness of those rates. This data and information shall be made available, on a company by company basis, to the general public.

(e) The Secretary may convene a public hearing at his or her discretion for a violation of this Section or if a company files for a rate increase pursuant to this Section. The Secretary shall convene a public hearing if the percentage increase in a company's index rate for any classification is greater than 6%.

A public hearing under this Section must be concluded within 90 days after the decision or increase that gave rise to the hearing. The burden is on the company to justify the rate or proposed rate at the public hearing. The Secretary may, by order, adjust a rate or take any other appropriate action at the conclusion of the hearing.

(f) If, after a public hearing, the Secretary finds that any rate, rating plan, or rating system violates the provisions of this Section applicable to it, the Secretary shall issue an order to the company that was the subject of the hearing specifying the violation and may adjust the rate.

If, after a public hearing, the Secretary finds that the violation of any of the provisions of this Section by any company that was the subject of the hearing was willful or that any company has repeatedly violated any provision of this Section, the Secretary may take either or both of the following actions:

(1) Suspend or revoke, in whole or in part, the certificate of authority of the company with respect to the class of insurance that was the subject of the hearing.

(2) Impose a fine of up to $1,000 against the company for each violation. Each day during which a violation occurs constitutes a separate violation.

(g) A company writing policies of health insurance in Illinois must give 180 days' notice before the company discontinues the writing of policies of health insurance in Illinois.

(h) As used in this Section:

"Index rate" means, for each rate classification as to a rating period, the arithmetic mean of the applicable base premium rate and the corresponding highest premium rate.

"Base premium rate" means, for each rate classification as to a rating period, the lowest premium rate charged or that could be charged under a rating system for that classification.

ARTICLE 97. SEVERABILITY

Section 97-97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

ARTICLE 99. EFFECTIVE DATE

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