State of Illinois
90th General Assembly
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90_SB0321

      305 ILCS 5/5-16.3
          Amends the Medical Assistance  Article  of  the  Illinois
      Public  Aid  Code.   Provides that each proposed contract for
      services between the Department of Public Aid and  a  managed
      health care entity must first be approved by joint resolution
      of the General Assembly.  Effective immediately.
                                                     LRB9001502SMdv
                                               LRB9001502SMdv
 1        AN  ACT to amend the Illinois Public Aid Code by changing
 2    Section 5-16.3.
 3        Be it enacted by the People of  the  State  of  Illinois,
 4    represented in the General Assembly:
 5        Section  5.   The  Illinois Public Aid Code is amended by
 6    changing Section 5-16.3 as follows:
 7        (305 ILCS 5/5-16.3)
 8        (Text of Section before amendment by P.A. 89-507)
 9        Sec. 5-16.3.  System for integrated health care services.
10        (a)  It shall be the public policy of the State to adopt,
11    to  the  extent  practicable,  a  health  care  program  that
12    encourages  the  integration  of  health  care  services  and
13    manages the health care of program enrollees while preserving
14    reasonable choice within  a  competitive  and  cost-efficient
15    environment.   In  furtherance  of  this  public  policy, the
16    Illinois Department shall develop and implement an integrated
17    health care program consistent with the  provisions  of  this
18    Section.   The  provisions  of this Section apply only to the
19    integrated health care program created  under  this  Section.
20    Persons  enrolled  in  the integrated health care program, as
21    determined by the  Illinois  Department  by  rule,  shall  be
22    afforded  a  choice among health care delivery systems, which
23    shall include, but are not limited to, (i)  fee  for  service
24    care managed by a primary care physician licensed to practice
25    medicine  in  all  its  branches,  (ii)  managed  health care
26    entities,  and  (iii)  federally  qualified  health   centers
27    (reimbursed  according  to  a  prospective cost-reimbursement
28    methodology) and rural health clinics  (reimbursed  according
29    to  the  Medicare  methodology),  where  available.   Persons
30    enrolled  in  the  integrated health care program also may be
31    offered indemnity insurance plans, subject to availability.
                            -2-                LRB9001502SMdv
 1        For purposes of this  Section,  a  "managed  health  care
 2    entity"  means a health maintenance organization or a managed
 3    care community network as defined in this Section.  A "health
 4    maintenance  organization"   means   a   health   maintenance
 5    organization   as   defined   in   the   Health   Maintenance
 6    Organization  Act.   A "managed care community network" means
 7    an entity, other than a health maintenance organization, that
 8    is owned, operated, or governed by providers of  health  care
 9    services  within  this  State  and  that provides or arranges
10    primary, secondary, and tertiary managed health care services
11    under contract with the Illinois  Department  exclusively  to
12    enrollees  of  the  integrated health care program. A managed
13    care  community  network  may  contract  with  the   Illinois
14    Department  to provide only pediatric health care services. A
15    county provider as defined in Section 15-1 of this  Code  may
16    contract  with the Illinois Department to provide services to
17    enrollees of the integrated health care program as a  managed
18    care  community  network  without  the  need  to  establish a
19    separate  entity  that  provides  services   exclusively   to
20    enrollees  of the integrated health care program and shall be
21    deemed a managed care community network for purposes of  this
22    Code only to the extent of the provision of services to those
23    enrollees  in  conjunction  with  the  integrated health care
24    program.  A county provider shall  be  entitled  to  contract
25    with  the Illinois Department with respect to any contracting
26    region located in whole or in  part  within  the  county.   A
27    county provider shall not be required to accept enrollees who
28    do not reside within the county.
29        Each  managed care community network must demonstrate its
30    ability to bear the financial risk of serving enrollees under
31    this program.  The Illinois Department shall  by  rule  adopt
32    criteria  for  assessing  the  financial  soundness  of  each
33    managed  care  community  network. These rules shall consider
34    the extent to which  a  managed  care  community  network  is
                            -3-                LRB9001502SMdv
 1    comprised  of  providers  who directly render health care and
 2    are located within  the  community  in  which  they  seek  to
 3    contract  rather  than solely arrange or finance the delivery
 4    of health care.  These rules shall further consider a variety
 5    of risk-bearing  and  management  techniques,  including  the
 6    sufficiency  of  quality assurance and utilization management
 7    programs and whether a managed  care  community  network  has
 8    sufficiently  demonstrated  its  financial  solvency  and net
 9    worth. The Illinois Department's criteria must  be  based  on
10    sound  actuarial,  financial,  and accounting principles.  In
11    adopting these rules, the Illinois Department  shall  consult
12    with  the  Illinois  Department  of  Insurance.  The Illinois
13    Department is  responsible  for  monitoring  compliance  with
14    these rules.
15        This  Section may not be implemented before the effective
16    date of these rules, the approval of  any  necessary  federal
17    waivers,  and  the completion of the review of an application
18    submitted, at least 60 days  before  the  effective  date  of
19    rules  adopted under this Section, to the Illinois Department
20    by a managed care community network.
21        All health care delivery systems that contract  with  the
22    Illinois  Department under the integrated health care program
23    shall clearly recognize a health  care  provider's  right  of
24    conscience under the Right of Conscience Act.  In addition to
25    the  provisions  of  that Act, no health care delivery system
26    that  contracts  with  the  Illinois  Department  under   the
27    integrated  health care program shall be required to provide,
28    arrange for, or pay for any health care or  medical  service,
29    procedure,  or product if that health care delivery system is
30    owned, controlled, or  sponsored  by  or  affiliated  with  a
31    religious  institution  or  religious organization that finds
32    that health care or medical service, procedure, or product to
33    violate its religious and moral teachings and beliefs.
34        (b)  The Illinois Department may, by  rule,  provide  for
                            -4-                LRB9001502SMdv
 1    different   benefit  packages  for  different  categories  of
 2    persons enrolled in the  program.   Mental  health  services,
 3    alcohol  and  substance  abuse  services, services related to
 4    children  with  chronic   or   acute   conditions   requiring
 5    longer-term  treatment and follow-up, and rehabilitation care
 6    provided by a  free-standing  rehabilitation  hospital  or  a
 7    hospital  rehabilitation  unit may be excluded from a benefit
 8    package if the State ensures that  those  services  are  made
 9    available  through  a separate delivery system.  An exclusion
10    does not prohibit the Illinois Department from developing and
11    implementing demonstration projects for categories of persons
12    or services.   Benefit  packages  for  persons  eligible  for
13    medical  assistance  under  Articles  V, VI, and XII shall be
14    based on the requirements of  those  Articles  and  shall  be
15    consistent  with  the  Title  XIX of the Social Security Act.
16    Nothing in this Act shall be construed to apply  to  services
17    purchased  by  the Department of Children and Family Services
18    and  the  Department  of  Mental  Health  and   Developmental
19    Disabilities under the provisions of Title 59 of the Illinois
20    Administrative  Code,  Part  132  ("Medicaid Community Mental
21    Health Services Program").
22        (c)  The program  established  by  this  Section  may  be
23    implemented by the Illinois Department in various contracting
24    areas at various times.  The health care delivery systems and
25    providers available under the program may vary throughout the
26    State.   For purposes of contracting with managed health care
27    entities  and  providers,  the  Illinois   Department   shall
28    establish  contracting  areas similar to the geographic areas
29    designated  by  the  Illinois  Department   for   contracting
30    purposes   under   the   Illinois   Competitive   Access  and
31    Reimbursement Equity Program (ICARE) under the  authority  of
32    Section  3-4  of  the  Illinois  Health Finance Reform Act or
33    similarly-sized or smaller geographic  areas  established  by
34    the Illinois Department by rule. A managed health care entity
                            -5-                LRB9001502SMdv
 1    shall  be  permitted  to contract in any geographic areas for
 2    which it has a  sufficient  provider  network  and  otherwise
 3    meets  the  contracting  terms  of  the  State.  The Illinois
 4    Department is not prohibited from entering  into  a  contract
 5    with  a  managed  health care entity at any time, except that
 6    each proposed contract with a managed health care entity must
 7    first  be  approved  by  joint  resolution  of  the   General
 8    Assembly.
 9        (d)  A managed health care entity that contracts with the
10    Illinois  Department  for the provision of services under the
11    program shall do all of the following, solely for purposes of
12    the integrated health care program:
13             (1)  Provide that any individual physician  licensed
14        to  practice  medicine in all its branches, any pharmacy,
15        any  federally   qualified   health   center,   and   any
16        podiatrist,  that consistently meets the reasonable terms
17        and conditions established by  the  managed  health  care
18        entity,   including  but  not  limited  to  credentialing
19        standards,  quality   assurance   program   requirements,
20        utilization     management     requirements,    financial
21        responsibility     standards,     contracting     process
22        requirements, and provider network size and accessibility
23        requirements, must be accepted by the managed health care
24        entity for purposes of  the  Illinois  integrated  health
25        care  program.   Any  individual who is either terminated
26        from or denied inclusion in the panel  of  physicians  of
27        the  managed health care entity shall be given, within 10
28        business  days  after  that  determination,   a   written
29        explanation  of  the  reasons for his or her exclusion or
30        termination from the panel. This paragraph (1)  does  not
31        apply to the following:
32                  (A)  A   managed   health   care   entity  that
33             certifies to the Illinois Department that:
34                       (i)  it employs on a full-time  basis  125
                            -6-                LRB9001502SMdv
 1                  or   more   Illinois   physicians  licensed  to
 2                  practice medicine in all of its branches; and
 3                       (ii)  it  will  provide  medical  services
 4                  through its employees to more than 80%  of  the
 5                  recipients  enrolled  with  the  entity  in the
 6                  integrated health care program; or
 7                  (B)  A   domestic   stock   insurance   company
 8             licensed under clause (b) of class 1 of Section 4 of
 9             the Illinois Insurance Code if (i) at least  66%  of
10             the  stock  of  the  insurance company is owned by a
11             professional   corporation   organized   under   the
12             Professional Service Corporation Act that has 125 or
13             more  shareholders  who  are   Illinois   physicians
14             licensed to practice medicine in all of its branches
15             and  (ii)  the  insurance  company  certifies to the
16             Illinois Department  that  at  least  80%  of  those
17             physician  shareholders  will  provide  services  to
18             recipients   enrolled   with   the  company  in  the
19             integrated health care program.
20             (2)  Provide for  reimbursement  for  providers  for
21        emergency  care, as defined by the Illinois Department by
22        rule, that must be provided to its  enrollees,  including
23        an  emergency room screening fee, and urgent care that it
24        authorizes  for  its   enrollees,   regardless   of   the
25        provider's  affiliation  with  the  managed  health  care
26        entity.  Providers shall be reimbursed for emergency care
27        at  an  amount  equal  to   the   Illinois   Department's
28        fee-for-service rates for those medical services rendered
29        by  providers  not under contract with the managed health
30        care entity to enrollees of the entity.
31             (3)  Provide that any  provider  affiliated  with  a
32        managed health care entity may also provide services on a
33        fee-for-service  basis to Illinois Department clients not
34        enrolled in a managed health care entity.
                            -7-                LRB9001502SMdv
 1             (4)  Provide client education services as determined
 2        and approved by the Illinois  Department,  including  but
 3        not   limited  to  (i)  education  regarding  appropriate
 4        utilization of health care services  in  a  managed  care
 5        system, (ii) written disclosure of treatment policies and
 6        any  restrictions  or  limitations  on  health  services,
 7        including,   but   not  limited  to,  physical  services,
 8        clinical  laboratory   tests,   hospital   and   surgical
 9        procedures,   prescription   drugs   and  biologics,  and
10        radiological examinations, and (iii) written notice  that
11        the  enrollee  may  receive  from  another provider those
12        services covered under this program that are not provided
13        by the managed health care entity.
14             (5)  Provide that enrollees within  its  system  may
15        choose  the  site for provision of services and the panel
16        of health care providers.
17             (6)  Not   discriminate   in   its   enrollment   or
18        disenrollment  practices  among  recipients  of   medical
19        services or program enrollees based on health status.
20             (7)  Provide  a  quality  assurance  and utilization
21        review  program   that   (i)   for   health   maintenance
22        organizations   meets  the  requirements  of  the  Health
23        Maintenance Organization Act and (ii)  for  managed  care
24        community  networks meets the requirements established by
25        the Illinois Department in rules that  incorporate  those
26        standards   set   forth   in   the   Health   Maintenance
27        Organization Act.
28             (8)  Issue    a    managed    health   care   entity
29        identification card to  each  enrollee  upon  enrollment.
30        The card must contain all of the following:
31                  (A)  The enrollee's signature.
32                  (B)  The enrollee's health plan.
33                  (C)  The  name  and  telephone  number  of  the
34             enrollee's primary care physician.
                            -8-                LRB9001502SMdv
 1                  (D)  A   telephone   number   to  be  used  for
 2             emergency service 24 hours per day, 7 days per week.
 3             The  telephone  number  required  to  be  maintained
 4             pursuant to this subparagraph by each managed health
 5             care  entity  shall,  at  minimum,  be  staffed   by
 6             medically   trained   personnel   and   be  provided
 7             directly, or under  arrangement,  at  an  office  or
 8             offices  in   locations maintained solely within the
 9             State   of   Illinois.   For   purposes   of    this
10             subparagraph,  "medically  trained  personnel" means
11             licensed  practical  nurses  or  registered   nurses
12             located  in  the  State of Illinois who are licensed
13             pursuant to the Illinois Nursing Act of 1987.
14             (9)  Ensure that every primary  care  physician  and
15        pharmacy  in  the  managed  health  care entity meets the
16        standards established  by  the  Illinois  Department  for
17        accessibility   and   quality   of   care.  The  Illinois
18        Department shall arrange for and oversee an evaluation of
19        the standards established under this  paragraph  (9)  and
20        may  recommend  any necessary changes to these standards.
21        The Illinois Department shall submit an annual report  to
22        the  Governor and the General Assembly by April 1 of each
23        year regarding the effect of the  standards  on  ensuring
24        access and quality of care to enrollees.
25             (10)  Provide  a  procedure  for handling complaints
26        that (i) for health maintenance organizations  meets  the
27        requirements  of  the Health Maintenance Organization Act
28        and (ii) for managed care community  networks  meets  the
29        requirements  established  by  the Illinois Department in
30        rules that incorporate those standards set forth  in  the
31        Health Maintenance Organization Act.
32             (11)  Maintain,  retain,  and  make available to the
33        Illinois Department records, data, and information, in  a
34        uniform  manner  determined  by  the Illinois Department,
                            -9-                LRB9001502SMdv
 1        sufficient  for  the  Illinois  Department   to   monitor
 2        utilization, accessibility, and quality of care.
 3             (12)  Except  for providers who are prepaid, pay all
 4        approved claims for covered services that  are  completed
 5        and submitted to the managed health care entity within 30
 6        days  after  receipt  of  the  claim  or  receipt  of the
 7        appropriate capitation payment or payments by the managed
 8        health care entity from the State for the month in  which
 9        the   services  included  on  the  claim  were  rendered,
10        whichever is later. If payment is not made or  mailed  to
11        the provider by the managed health care entity by the due
12        date  under this subsection, an interest penalty of 1% of
13        any amount unpaid  shall  be  added  for  each  month  or
14        fraction  of  a  month  after  the  due date, until final
15        payment is made. Nothing in this Section  shall  prohibit
16        managed  health care entities and providers from mutually
17        agreeing to terms that require more timely payment.
18             (13)  Provide   integration   with   community-based
19        programs provided by certified local  health  departments
20        such  as  Women,  Infants, and Children Supplemental Food
21        Program (WIC), childhood  immunization  programs,  health
22        education  programs, case management programs, and health
23        screening programs.
24             (14)  Provide that the pharmacy formulary used by  a
25        managed  health care entity and its contract providers be
26        no  more  restrictive  than  the  Illinois   Department's
27        pharmaceutical  program  on  the  effective  date of this
28        amendatory Act of 1994 and as amended after that date.
29             (15)  Provide   integration   with   community-based
30        organizations,  including,  but  not  limited   to,   any
31        organization   that   has   operated  within  a  Medicaid
32        Partnership as defined by this Code or  by  rule  of  the
33        Illinois Department, that may continue to operate under a
34        contract with the Illinois Department or a managed health
                            -10-               LRB9001502SMdv
 1        care entity under this Section to provide case management
 2        services  to  Medicaid  clients  in  designated high-need
 3        areas.
 4        The  Illinois  Department   may,   by   rule,   determine
 5    methodologies to limit financial liability for managed health
 6    care   entities   resulting  from  payment  for  services  to
 7    enrollees provided under the Illinois Department's integrated
 8    health care program. Any methodology  so  determined  may  be
 9    considered  or implemented by the Illinois Department through
10    a contract with a  managed  health  care  entity  under  this
11    integrated health care program.
12        The  Illinois Department shall contract with an entity or
13    entities to provide  external  peer-based  quality  assurance
14    review  for  the  integrated  health care program. The entity
15    shall be representative of Illinois  physicians  licensed  to
16    practice  medicine  in  all  its  branches and have statewide
17    geographic representation in all specialties of medical  care
18    that  are provided within the integrated health care program.
19    The entity may not be a third party payer and shall  maintain
20    offices  in  locations  around  the State in order to provide
21    service  and  continuing  medical  education   to   physician
22    participants  within the integrated health care program.  The
23    review process shall be developed and conducted  by  Illinois
24    physicians licensed to practice medicine in all its branches.
25    In  consultation with the entity, the Illinois Department may
26    contract with  other  entities  for  professional  peer-based
27    quality assurance review of individual categories of services
28    other  than  services provided, supervised, or coordinated by
29    physicians licensed to practice medicine in all its branches.
30    The Illinois Department shall establish, by rule, criteria to
31    avoid  conflicts  of  interest  in  the  conduct  of  quality
32    assurance activities consistent with professional peer-review
33    standards.  All  quality  assurance   activities   shall   be
34    coordinated by the Illinois Department.
                            -11-               LRB9001502SMdv
 1        (e)  All   persons  enrolled  in  the  program  shall  be
 2    provided   with   a   full   written   explanation   of   all
 3    fee-for-service and managed health care plan  options  and  a
 4    reasonable   opportunity  to  choose  among  the  options  as
 5    provided by rule.  The Illinois Department shall  provide  to
 6    enrollees,  upon  enrollment  in  the  integrated health care
 7    program and at  least  annually  thereafter,  notice  of  the
 8    process   for   requesting   an  appeal  under  the  Illinois
 9    Department's      administrative      appeal      procedures.
10    Notwithstanding any other Section of this Code, the  Illinois
11    Department may provide by rule for the Illinois Department to
12    assign  a  person  enrolled  in  the  program  to  a specific
13    provider of medical services or to  a  specific  health  care
14    delivery  system if an enrollee has failed to exercise choice
15    in a timely manner. An  enrollee  assigned  by  the  Illinois
16    Department shall be afforded the opportunity to disenroll and
17    to  select  a  specific  provider  of  medical  services or a
18    specific health care delivery system within the first 30 days
19    after the assignment. An enrollee who has failed to  exercise
20    choice in a timely manner may be assigned only if there are 3
21    or  more  managed  health  care entities contracting with the
22    Illinois Department within the contracting area, except that,
23    outside the City of Chicago, this requirement may  be  waived
24    for an area by rules adopted by the Illinois Department after
25    consultation  with all hospitals within the contracting area.
26    The Illinois Department shall establish by rule the procedure
27    for random assignment  of  enrollees  who  fail  to  exercise
28    choice  in  a timely manner to a specific managed health care
29    entity in  proportion  to  the  available  capacity  of  that
30    managed health care entity. Assignment to a specific provider
31    of  medical  services  or  to  a specific managed health care
32    entity may not exceed that provider's or entity's capacity as
33    determined by the Illinois Department.  Any  person  who  has
34    chosen  a specific provider of medical services or a specific
                            -12-               LRB9001502SMdv
 1    managed health care  entity,  or  any  person  who  has  been
 2    assigned   under   this   subsection,   shall  be  given  the
 3    opportunity to change that choice or assignment at least once
 4    every 12 months, as determined by the Illinois Department  by
 5    rule.  The  Illinois  Department  shall  maintain a toll-free
 6    telephone number for  program  enrollees'  use  in  reporting
 7    problems with managed health care entities.
 8        (f)  If  a  person  becomes eligible for participation in
 9    the integrated  health  care  program  while  he  or  she  is
10    hospitalized,  the  Illinois  Department  may not enroll that
11    person in  the  program  until  after  he  or  she  has  been
12    discharged from the hospital.  This subsection does not apply
13    to   newborn  infants  whose  mothers  are  enrolled  in  the
14    integrated health care program.
15        (g)  The Illinois Department shall,  by  rule,  establish
16    for managed health care entities rates that (i) are certified
17    to  be  actuarially sound, as determined by an actuary who is
18    an associate or a fellow of the Society  of  Actuaries  or  a
19    member  of  the  American  Academy  of  Actuaries and who has
20    expertise and experience in  medical  insurance  and  benefit
21    programs,   in  accordance  with  the  Illinois  Department's
22    current fee-for-service payment system, and  (ii)  take  into
23    account  any  difference  of  cost  to provide health care to
24    different populations based on  gender,  age,  location,  and
25    eligibility  category.   The  rates  for  managed health care
26    entities shall be determined on a capitated basis.
27        The Illinois Department by rule shall establish a  method
28    to  adjust  its payments to managed health care entities in a
29    manner intended to avoid providing any financial incentive to
30    a managed health care entity to refer patients  to  a  county
31    provider,  in  an Illinois county having a population greater
32    than  3,000,000,  that  is  paid  directly  by  the  Illinois
33    Department.  The Illinois Department shall by April 1,  1997,
34    and   annually   thereafter,  review  the  method  to  adjust
                            -13-               LRB9001502SMdv
 1    payments. Payments by the Illinois Department to  the  county
 2    provider,   for  persons  not  enrolled  in  a  managed  care
 3    community network owned or operated  by  a  county  provider,
 4    shall  be paid on a fee-for-service basis under Article XV of
 5    this Code.
 6        The Illinois Department by rule shall establish a  method
 7    to  reduce  its  payments  to managed health care entities to
 8    take into consideration (i) any adjustment payments  paid  to
 9    hospitals  under subsection (h) of this Section to the extent
10    those payments, or any part  of  those  payments,  have  been
11    taken into account in establishing capitated rates under this
12    subsection  (g)  and (ii) the implementation of methodologies
13    to limit financial liability for managed health care entities
14    under subsection (d) of this Section.
15        (h)  For hospital services provided by  a  hospital  that
16    contracts  with  a  managed  health  care  entity, adjustment
17    payments shall be  paid  directly  to  the  hospital  by  the
18    Illinois  Department.   Adjustment  payments  may include but
19    need   not   be   limited   to   adjustment   payments    to:
20    disproportionate share hospitals under Section 5-5.02 of this
21    Code;  primary care access health care education payments (89
22    Ill. Adm. Code 149.140); payments for capital, direct medical
23    education, indirect medical education,  certified  registered
24    nurse anesthetist, and kidney acquisition costs (89 Ill. Adm.
25    Code  149.150(c));  uncompensated care payments (89 Ill. Adm.
26    Code 148.150(h)); trauma center payments (89 Ill.  Adm.  Code
27    148.290(c));  rehabilitation  hospital payments (89 Ill. Adm.
28    Code 148.290(d)); perinatal center  payments  (89  Ill.  Adm.
29    Code  148.290(e));  obstetrical  care  payments (89 Ill. Adm.
30    Code 148.290(f)); targeted access payments (89 Ill. Adm. Code
31    148.290(g)); Medicaid high volume payments (89 Ill. Adm. Code
32    148.290(h)); and outpatient indigent volume  adjustments  (89
33    Ill. Adm. Code 148.140(b)(5)).
34        (i)  For   any   hospital  eligible  for  the  adjustment
                            -14-               LRB9001502SMdv
 1    payments described in subsection (h), the Illinois Department
 2    shall maintain, through the  period  ending  June  30,  1995,
 3    reimbursement levels in accordance with statutes and rules in
 4    effect on April 1, 1994.
 5        (j)  Nothing  contained in this Code in any way limits or
 6    otherwise impairs the authority  or  power  of  the  Illinois
 7    Department  to  enter  into a negotiated contract pursuant to
 8    this Section with a managed health  care  entity,  including,
 9    but  not  limited to, a health maintenance organization, that
10    provides  for  termination  or  nonrenewal  of  the  contract
11    without cause upon notice as provided  in  the  contract  and
12    without a hearing.
13        (k)  Section   5-5.15  does  not  apply  to  the  program
14    developed and implemented pursuant to this Section.
15        (l)  The Illinois Department shall, by rule, define those
16    chronic or acute medical conditions of childhood that require
17    longer-term  treatment  and  follow-up  care.   The  Illinois
18    Department shall ensure that services required to treat these
19    conditions are available through a separate delivery system.
20        A managed health care  entity  that  contracts  with  the
21    Illinois Department may refer a child with medical conditions
22    described in the rules adopted under this subsection directly
23    to  a  children's  hospital  or  to  a hospital, other than a
24    children's hospital, that is qualified to  provide  inpatient
25    and  outpatient  services  to  treat  those  conditions.  The
26    Illinois    Department    shall    provide    fee-for-service
27    reimbursement directly to a  children's  hospital  for  those
28    services  pursuant to Title 89 of the Illinois Administrative
29    Code, Section 148.280(a), at a rate at  least  equal  to  the
30    rate  in  effect on March 31, 1994. For hospitals, other than
31    children's hospitals, that are qualified to provide inpatient
32    and  outpatient  services  to  treat  those  conditions,  the
33    Illinois Department shall  provide  reimbursement  for  those
34    services on a fee-for-service basis, at a rate at least equal
                            -15-               LRB9001502SMdv
 1    to  the rate in effect for those other hospitals on March 31,
 2    1994.
 3        A children's hospital shall be  directly  reimbursed  for
 4    all  services  provided  at  the  children's  hospital  on  a
 5    fee-for-service  basis  pursuant  to Title 89 of the Illinois
 6    Administrative Code, Section 148.280(a), at a rate  at  least
 7    equal  to  the  rate  in  effect on March 31, 1994, until the
 8    later of (i) implementation of  the  integrated  health  care
 9    program  under  this  Section  and development of actuarially
10    sound capitation rates for services other than those  chronic
11    or   acute  medical  conditions  of  childhood  that  require
12    longer-term treatment and follow-up care as  defined  by  the
13    Illinois   Department   in   the  rules  adopted  under  this
14    subsection or (ii) March 31, 1996.
15        Notwithstanding  anything  in  this  subsection  to   the
16    contrary,  a  managed  health  care entity shall not consider
17    sources or methods of payment in determining the referral  of
18    a  child.   The  Illinois  Department  shall  adopt  rules to
19    establish  criteria  for  those  referrals.    The   Illinois
20    Department  by  rule  shall  establish a method to adjust its
21    payments to managed health care entities in a manner intended
22    to avoid providing  any  financial  incentive  to  a  managed
23    health  care  entity  to  refer patients to a provider who is
24    paid directly by the Illinois Department.
25        (m)  Behavioral health services provided or funded by the
26    Department of Mental Health and  Developmental  Disabilities,
27    the   Department  of  Alcoholism  and  Substance  Abuse,  the
28    Department of Children and Family Services, and the  Illinois
29    Department   shall   be  excluded  from  a  benefit  package.
30    Conditions of  an  organic  or  physical  origin  or  nature,
31    including   medical   detoxification,  however,  may  not  be
32    excluded.  In this subsection, "behavioral  health  services"
33    means   mental  health  services  and  subacute  alcohol  and
34    substance  abuse  treatment  services,  as  defined  in   the
                            -16-               LRB9001502SMdv
 1    Illinois  Alcoholism  and Other Drug Dependency Act.  In this
 2    subsection, "mental health services" includes, at a  minimum,
 3    the following services funded by the Illinois Department, the
 4    Department  of  Mental Health and Developmental Disabilities,
 5    or the  Department  of  Children  and  Family  Services:  (i)
 6    inpatient  hospital  services,  including  related  physician
 7    services,     related    psychiatric    interventions,    and
 8    pharmaceutical services provided  to  an  eligible  recipient
 9    hospitalized   with   a   primary  diagnosis  of  psychiatric
10    disorder; (ii) outpatient mental health services  as  defined
11    and  specified  in  Title  59  of the Illinois Administrative
12    Code, Part 132; (iii)  any  other  outpatient  mental  health
13    services  funded  by  the Illinois Department pursuant to the
14    State   of   Illinois    Medicaid    Plan;    (iv)    partial
15    hospitalization;  and  (v) follow-up stabilization related to
16    any of those services.  Additional behavioral health services
17    may be excluded under this subsection as mutually  agreed  in
18    writing  by  the  Illinois  Department and the affected State
19    agency or agencies.  The exclusion of any  service  does  not
20    prohibit   the   Illinois   Department  from  developing  and
21    implementing demonstration projects for categories of persons
22    or  services.   The   Department   of   Mental   Health   and
23    Developmental  Disabilities,  the  Department of Children and
24    Family  Services,  and  the  Department  of  Alcoholism   and
25    Substance   Abuse   shall  each  adopt  rules  governing  the
26    integration of managed care in the  provision  of  behavioral
27    health  services.  The  State  shall  integrate  managed care
28    community networks and affiliated providers,  to  the  extent
29    practicable,  in  any  separate  delivery  system  for mental
30    health services.
31        (n)  The  Illinois  Department  shall  adopt   rules   to
32    establish  reserve  requirements  for  managed care community
33    networks,  as  required  by  subsection   (a),   and   health
34    maintenance  organizations  to protect against liabilities in
                            -17-               LRB9001502SMdv
 1    the event that a  managed  health  care  entity  is  declared
 2    insolvent or bankrupt.  If a managed health care entity other
 3    than  a  county  provider  is declared insolvent or bankrupt,
 4    after liquidation and application of  any  available  assets,
 5    resources,  and reserves, the Illinois Department shall pay a
 6    portion of the amounts owed by the managed health care entity
 7    to providers for services rendered  to  enrollees  under  the
 8    integrated  health  care  program under this Section based on
 9    the following schedule: (i) from April 1, 1995  through  June
10    30,  1998,  90%  of  the amounts owed; (ii) from July 1, 1998
11    through June 30, 2001, 80% of the  amounts  owed;  and  (iii)
12    from  July  1, 2001 through June 30, 2005, 75% of the amounts
13    owed.  The  amounts  paid  under  this  subsection  shall  be
14    calculated  based  on  the  total  amount owed by the managed
15    health care entity to providers  before  application  of  any
16    available  assets,  resources,  and reserves.  After June 30,
17    2005, the Illinois Department may not pay any amounts owed to
18    providers as a result of an insolvency  or  bankruptcy  of  a
19    managed  health  care entity occurring after that date.   The
20    Illinois Department is not obligated, however, to pay amounts
21    owed to a provider that has an ownership or  other  governing
22    interest  in the managed health care entity.  This subsection
23    applies only to managed health care entities and the services
24    they provide under the integrated health care  program  under
25    this Section.
26        (o)  Notwithstanding   any  other  provision  of  law  or
27    contractual agreement to the contrary, providers shall not be
28    required to accept from any other third party payer the rates
29    determined  or  paid  under  this  Code   by   the   Illinois
30    Department,  managed health care entity, or other health care
31    delivery system for services provided to recipients.
32        (p)  The Illinois Department  may  seek  and  obtain  any
33    necessary   authorization   provided  under  federal  law  to
34    implement the program, including the waiver  of  any  federal
                            -18-               LRB9001502SMdv
 1    statutes  or  regulations. The Illinois Department may seek a
 2    waiver  of  the  federal  requirement   that   the   combined
 3    membership  of  Medicare  and Medicaid enrollees in a managed
 4    care community network may not exceed 75% of the managed care
 5    community   network's   total   enrollment.    The   Illinois
 6    Department shall not seek a waiver of  this  requirement  for
 7    any  other  category  of  managed  health  care  entity.  The
 8    Illinois Department shall not seek a waiver of the  inpatient
 9    hospital  reimbursement methodology in Section 1902(a)(13)(A)
10    of Title XIX of the Social Security Act even if  the  federal
11    agency  responsible  for  administering  Title XIX determines
12    that Section 1902(a)(13)(A) applies to  managed  health  care
13    systems.
14        Notwithstanding  any other provisions of this Code to the
15    contrary, the Illinois Department  shall  seek  a  waiver  of
16    applicable federal law in order to impose a co-payment system
17    consistent  with  this  subsection  on  recipients of medical
18    services under Title XIX of the Social Security Act  who  are
19    not  enrolled  in  a  managed health care entity.  The waiver
20    request submitted by the Illinois  Department  shall  provide
21    for co-payments of up to $0.50 for prescribed drugs and up to
22    $0.50 for x-ray services and shall provide for co-payments of
23    up  to  $10 for non-emergency services provided in a hospital
24    emergency room and up  to  $10  for  non-emergency  ambulance
25    services.   The  purpose of the co-payments shall be to deter
26    those  recipients  from  seeking  unnecessary  medical  care.
27    Co-payments may not be used to deter recipients from  seeking
28    necessary  medical  care.   No recipient shall be required to
29    pay more than a total of $150 per year in  co-payments  under
30    the  waiver request required by this subsection.  A recipient
31    may not be required to pay more than $15 of  any  amount  due
32    under this subsection in any one month.
33        Co-payments  authorized  under this subsection may not be
34    imposed when the care was  necessitated  by  a  true  medical
                            -19-               LRB9001502SMdv
 1    emergency.   Co-payments  may  not  be imposed for any of the
 2    following classifications of services:
 3             (1)  Services furnished to person under 18 years  of
 4        age.
 5             (2)  Services furnished to pregnant women.
 6             (3)  Services  furnished to any individual who is an
 7        inpatient in a hospital, nursing  facility,  intermediate
 8        care  facility,  or  other  medical  institution, if that
 9        person is required to spend for costs of medical care all
10        but a minimal amount of his or her  income  required  for
11        personal needs.
12             (4)  Services furnished to a person who is receiving
13        hospice care.
14        Co-payments authorized under this subsection shall not be
15    deducted  from  or  reduce  in  any  way payments for medical
16    services from  the  Illinois  Department  to  providers.   No
17    provider  may  deny  those services to an individual eligible
18    for services based on the individual's inability to  pay  the
19    co-payment.
20        Recipients  who  are  subject  to  co-payments  shall  be
21    provided  notice,  in plain and clear language, of the amount
22    of the co-payments, the circumstances under which co-payments
23    are exempted, the circumstances under which  co-payments  may
24    be assessed, and their manner of collection.
25        The   Illinois  Department  shall  establish  a  Medicaid
26    Co-Payment Council to assist in the development of co-payment
27    policies for the medical assistance  program.   The  Medicaid
28    Co-Payment  Council shall also have jurisdiction to develop a
29    program to provide financial or non-financial  incentives  to
30    Medicaid  recipients in order to encourage recipients to seek
31    necessary health care.  The Council shall be chaired  by  the
32    Director  of  the  Illinois  Department,  and  shall  have  6
33    additional members.  Two of the 6 additional members shall be
34    appointed by the Governor, and one each shall be appointed by
                            -20-               LRB9001502SMdv
 1    the  President  of  the  Senate,  the  Minority Leader of the
 2    Senate, the Speaker of the House of Representatives, and  the
 3    Minority Leader of the House of Representatives.  The Council
 4    may be convened and make recommendations upon the appointment
 5    of a majority of its members.  The Council shall be appointed
 6    and convened no later than September 1, 1994 and shall report
 7    its   recommendations   to   the  Director  of  the  Illinois
 8    Department and the General Assembly no later than October  1,
 9    1994.   The  chairperson  of  the Council shall be allowed to
10    vote only in the case of  a  tie  vote  among  the  appointed
11    members of the Council.
12        The  Council  shall be guided by the following principles
13    as it considers recommendations to be developed to  implement
14    any  approved  waivers that the Illinois Department must seek
15    pursuant to this subsection:
16             (1)  Co-payments should not be used to deter  access
17        to adequate medical care.
18             (2)  Co-payments should be used to reduce fraud.
19             (3)  Co-payment   policies  should  be  examined  in
20        consideration  of  other  states'  experience,  and   the
21        ability   of   successful  co-payment  plans  to  control
22        unnecessary  or  inappropriate  utilization  of  services
23        should be promoted.
24             (4)  All   participants,   both    recipients    and
25        providers,   in   the  medical  assistance  program  have
26        responsibilities to both the State and the program.
27             (5)  Co-payments are primarily a tool to educate the
28        participants  in  the  responsible  use  of  health  care
29        resources.
30             (6)  Co-payments should  not  be  used  to  penalize
31        providers.
32             (7)  A   successful  medical  program  requires  the
33        elimination of improper utilization of medical resources.
34        The integrated health care program, or any part  of  that
                            -21-               LRB9001502SMdv
 1    program,   established   under   this   Section  may  not  be
 2    implemented if matching federal funds under Title XIX of  the
 3    Social  Security  Act are not available for administering the
 4    program.
 5        The Illinois Department shall submit for  publication  in
 6    the Illinois Register the name, address, and telephone number
 7    of  the  individual  to  whom a request may be directed for a
 8    copy of the request for a waiver of provisions of  Title  XIX
 9    of  the  Social  Security  Act  that  the Illinois Department
10    intends to submit to the Health Care Financing Administration
11    in order to implement this Section.  The Illinois  Department
12    shall  mail  a  copy  of  that  request  for  waiver  to  all
13    requestors  at  least  16 days before filing that request for
14    waiver with the Health Care Financing Administration.
15        (q)  After  the  effective  date  of  this  Section,  the
16    Illinois Department may take  all  planning  and  preparatory
17    action  necessary  to  implement this Section, including, but
18    not limited to, seeking requests for  proposals  relating  to
19    the   integrated  health  care  program  created  under  this
20    Section.
21        (r)  In  order  to  (i)  accelerate  and  facilitate  the
22    development of integrated health care  in  contracting  areas
23    outside  counties with populations in excess of 3,000,000 and
24    counties adjacent to those counties  and  (ii)  maintain  and
25    sustain  the high quality of education and residency programs
26    coordinated and associated with  local  area  hospitals,  the
27    Illinois Department may develop and implement a demonstration
28    program  for managed care community networks owned, operated,
29    or governed by State-funded medical  schools.   The  Illinois
30    Department  shall  prescribe by rule the criteria, standards,
31    and procedures for effecting this demonstration program.
32        (s)  (Blank).
33        (t)  On April 1, 1995 and every 6 months thereafter,  the
34    Illinois  Department shall report to the Governor and General
                            -22-               LRB9001502SMdv
 1    Assembly on  the  progress  of  the  integrated  health  care
 2    program   in  enrolling  clients  into  managed  health  care
 3    entities.  The report shall indicate the  capacities  of  the
 4    managed  health care entities with which the State contracts,
 5    the number of clients enrolled by each contractor, the  areas
 6    of  the State in which managed care options do not exist, and
 7    the progress toward  meeting  the  enrollment  goals  of  the
 8    integrated health care program.
 9        (u)  The  Illinois  Department may implement this Section
10    through the use of emergency rules in accordance with Section
11    5-45 of  the  Illinois  Administrative  Procedure  Act.   For
12    purposes of that Act, the adoption of rules to implement this
13    Section  is  deemed an emergency and necessary for the public
14    interest, safety, and welfare.
15    (Source: P.A.  88-554,  eff.  7-26-94;  89-21,  eff.  7-1-95;
16    89-673, eff. 8-14-96; revised 8-26-96.)
17        (Text of Section after amendment by P.A. 89-507)
18        Sec. 5-16.3.  System for integrated health care services.
19        (a)  It shall be the public policy of the State to adopt,
20    to  the  extent  practicable,  a  health  care  program  that
21    encourages  the  integration  of  health  care  services  and
22    manages the health care of program enrollees while preserving
23    reasonable  choice  within  a  competitive and cost-efficient
24    environment.  In  furtherance  of  this  public  policy,  the
25    Illinois Department shall develop and implement an integrated
26    health  care  program  consistent with the provisions of this
27    Section.  The provisions of this Section apply  only  to  the
28    integrated  health  care  program created under this Section.
29    Persons enrolled in the integrated health  care  program,  as
30    determined  by  the  Illinois  Department  by  rule, shall be
31    afforded a choice among health care delivery  systems,  which
32    shall  include,  but  are not limited to, (i) fee for service
33    care managed by a primary care physician licensed to practice
34    medicine in  all  its  branches,  (ii)  managed  health  care
                            -23-               LRB9001502SMdv
 1    entities,   and  (iii)  federally  qualified  health  centers
 2    (reimbursed according  to  a  prospective  cost-reimbursement
 3    methodology)  and  rural health clinics (reimbursed according
 4    to  the  Medicare  methodology),  where  available.   Persons
 5    enrolled in the integrated health care program  also  may  be
 6    offered indemnity insurance plans, subject to availability.
 7        For  purposes  of  this  Section,  a "managed health care
 8    entity" means a health maintenance organization or a  managed
 9    care community network as defined in this Section.  A "health
10    maintenance   organization"   means   a   health  maintenance
11    organization   as   defined   in   the   Health   Maintenance
12    Organization Act.  A "managed care community  network"  means
13    an entity, other than a health maintenance organization, that
14    is  owned,  operated, or governed by providers of health care
15    services within this State  and  that  provides  or  arranges
16    primary, secondary, and tertiary managed health care services
17    under  contract  with  the Illinois Department exclusively to
18    enrollees of the integrated health care  program.  A  managed
19    care   community  network  may  contract  with  the  Illinois
20    Department to provide only pediatric health care services.  A
21    county  provider  as defined in Section 15-1 of this Code may
22    contract with the Illinois Department to provide services  to
23    enrollees  of the integrated health care program as a managed
24    care community  network  without  the  need  to  establish  a
25    separate   entity   that  provides  services  exclusively  to
26    enrollees of the integrated health care program and shall  be
27    deemed  a managed care community network for purposes of this
28    Code only to the extent of the provision of services to those
29    enrollees in conjunction  with  the  integrated  health  care
30    program.   A  county  provider  shall be entitled to contract
31    with the Illinois Department with respect to any  contracting
32    region  located  in  whole  or  in part within the county.  A
33    county provider shall not be required to accept enrollees who
34    do not reside within the county.
                            -24-               LRB9001502SMdv
 1        Each managed care community network must demonstrate  its
 2    ability to bear the financial risk of serving enrollees under
 3    this  program.   The  Illinois Department shall by rule adopt
 4    criteria  for  assessing  the  financial  soundness  of  each
 5    managed care community network. These  rules  shall  consider
 6    the  extent  to  which  a  managed  care community network is
 7    comprised of providers who directly render  health  care  and
 8    are  located  within  the  community  in  which  they seek to
 9    contract rather than solely arrange or finance  the  delivery
10    of health care.  These rules shall further consider a variety
11    of  risk-bearing  and  management  techniques,  including the
12    sufficiency of quality assurance and  utilization  management
13    programs  and  whether  a  managed care community network has
14    sufficiently demonstrated  its  financial  solvency  and  net
15    worth.  The  Illinois  Department's criteria must be based on
16    sound actuarial, financial, and  accounting  principles.   In
17    adopting  these  rules, the Illinois Department shall consult
18    with the  Illinois  Department  of  Insurance.  The  Illinois
19    Department  is  responsible  for  monitoring  compliance with
20    these rules.
21        This Section may not be implemented before the  effective
22    date  of  these  rules, the approval of any necessary federal
23    waivers, and the completion of the review of  an  application
24    submitted,  at  least  60  days  before the effective date of
25    rules adopted under this Section, to the Illinois  Department
26    by a managed care community network.
27        All  health  care delivery systems that contract with the
28    Illinois Department under the integrated health care  program
29    shall  clearly  recognize  a  health care provider's right of
30    conscience under the Right of Conscience Act.  In addition to
31    the provisions of that Act, no health  care  delivery  system
32    that   contracts  with  the  Illinois  Department  under  the
33    integrated health care program shall be required to  provide,
34    arrange  for,  or pay for any health care or medical service,
                            -25-               LRB9001502SMdv
 1    procedure, or product if that health care delivery system  is
 2    owned,  controlled,  or  sponsored  by  or  affiliated with a
 3    religious institution or religious  organization  that  finds
 4    that health care or medical service, procedure, or product to
 5    violate its religious and moral teachings and beliefs.
 6        (b)  The  Illinois  Department  may, by rule, provide for
 7    different  benefit  packages  for  different  categories   of
 8    persons  enrolled  in  the  program.  Mental health services,
 9    alcohol and substance abuse  services,  services  related  to
10    children   with   chronic   or   acute  conditions  requiring
11    longer-term treatment and follow-up, and rehabilitation  care
12    provided  by  a  free-standing  rehabilitation  hospital or a
13    hospital rehabilitation unit may be excluded from  a  benefit
14    package  if  the  State  ensures that those services are made
15    available through a separate delivery system.   An  exclusion
16    does not prohibit the Illinois Department from developing and
17    implementing demonstration projects for categories of persons
18    or  services.   Benefit  packages  for  persons  eligible for
19    medical assistance under Articles V, VI,  and  XII  shall  be
20    based  on  the  requirements  of  those Articles and shall be
21    consistent with the Title XIX of  the  Social  Security  Act.
22    Nothing  in  this Act shall be construed to apply to services
23    purchased by the Department of Children and  Family  Services
24    and  the  Department  of  Human Services (as successor to the
25    Department of Mental Health and  Developmental  Disabilities)
26    under   the   provisions   of   Title   59  of  the  Illinois
27    Administrative Code, Part  132  ("Medicaid  Community  Mental
28    Health Services Program").
29        (c)  The  program  established  by  this  Section  may be
30    implemented by the Illinois Department in various contracting
31    areas at various times.  The health care delivery systems and
32    providers available under the program may vary throughout the
33    State.  For purposes of contracting with managed health  care
34    entities   and   providers,  the  Illinois  Department  shall
                            -26-               LRB9001502SMdv
 1    establish contracting areas similar to the  geographic  areas
 2    designated   by   the  Illinois  Department  for  contracting
 3    purposes  under   the   Illinois   Competitive   Access   and
 4    Reimbursement  Equity  Program (ICARE) under the authority of
 5    Section 3-4 of the Illinois  Health  Finance  Reform  Act  or
 6    similarly-sized  or  smaller  geographic areas established by
 7    the Illinois Department by rule. A managed health care entity
 8    shall be permitted to contract in any  geographic  areas  for
 9    which  it  has  a  sufficient  provider network and otherwise
10    meets the  contracting  terms  of  the  State.  The  Illinois
11    Department  is  not  prohibited from entering into a contract
12    with a managed health care entity at any  time,  except  that
13    each proposed contract with a managed health care entity must
14    first   be  approved  by  joint  resolution  of  the  General
15    Assembly.
16        (d)  A managed health care entity that contracts with the
17    Illinois Department for the provision of services  under  the
18    program shall do all of the following, solely for purposes of
19    the integrated health care program:
20             (1)  Provide  that any individual physician licensed
21        to practice medicine in all its branches,  any  pharmacy,
22        any   federally   qualified   health   center,   and  any
23        podiatrist, that consistently meets the reasonable  terms
24        and  conditions  established  by  the managed health care
25        entity,  including  but  not  limited  to   credentialing
26        standards,   quality   assurance   program  requirements,
27        utilization    management     requirements,     financial
28        responsibility     standards,     contracting     process
29        requirements, and provider network size and accessibility
30        requirements, must be accepted by the managed health care
31        entity  for  purposes  of  the Illinois integrated health
32        care program.  Any individual who  is  either  terminated
33        from  or  denied  inclusion in the panel of physicians of
34        the managed health care entity shall be given, within  10
                            -27-               LRB9001502SMdv
 1        business   days   after  that  determination,  a  written
 2        explanation of the reasons for his or  her  exclusion  or
 3        termination  from  the panel. This paragraph (1) does not
 4        apply to the following:
 5                  (A)  A  managed   health   care   entity   that
 6             certifies to the Illinois Department that:
 7                       (i)  it  employs  on a full-time basis 125
 8                  or  more  Illinois   physicians   licensed   to
 9                  practice medicine in all of its branches; and
10                       (ii)  it  will  provide  medical  services
11                  through  its  employees to more than 80% of the
12                  recipients enrolled  with  the  entity  in  the
13                  integrated health care program; or
14                  (B)  A   domestic   stock   insurance   company
15             licensed under clause (b) of class 1 of Section 4 of
16             the  Illinois  Insurance Code if (i) at least 66% of
17             the stock of the insurance company  is  owned  by  a
18             professional   corporation   organized   under   the
19             Professional Service Corporation Act that has 125 or
20             more   shareholders   who  are  Illinois  physicians
21             licensed to practice medicine in all of its branches
22             and (ii) the  insurance  company  certifies  to  the
23             Illinois  Department  that  at  least  80%  of those
24             physician  shareholders  will  provide  services  to
25             recipients  enrolled  with  the   company   in   the
26             integrated health care program.
27             (2)  Provide  for  reimbursement  for  providers for
28        emergency care, as defined by the Illinois Department  by
29        rule,  that  must be provided to its enrollees, including
30        an emergency room screening fee, and urgent care that  it
31        authorizes   for   its   enrollees,   regardless  of  the
32        provider's  affiliation  with  the  managed  health  care
33        entity. Providers shall be reimbursed for emergency  care
34        at   an   amount   equal  to  the  Illinois  Department's
                            -28-               LRB9001502SMdv
 1        fee-for-service rates for those medical services rendered
 2        by providers not under contract with the  managed  health
 3        care entity to enrollees of the entity.
 4             (3)  Provide  that  any  provider  affiliated with a
 5        managed health care entity may also provide services on a
 6        fee-for-service basis to Illinois Department clients  not
 7        enrolled in a managed health care entity.
 8             (4)  Provide client education services as determined
 9        and  approved  by  the Illinois Department, including but
10        not  limited  to  (i)  education  regarding   appropriate
11        utilization  of  health  care  services in a managed care
12        system, (ii) written disclosure of treatment policies and
13        any  restrictions  or  limitations  on  health  services,
14        including,  but  not  limited  to,   physical   services,
15        clinical   laboratory   tests,   hospital   and  surgical
16        procedures,  prescription  drugs   and   biologics,   and
17        radiological  examinations, and (iii) written notice that
18        the enrollee may  receive  from  another  provider  those
19        services covered under this program that are not provided
20        by the managed health care entity.
21             (5)  Provide  that  enrollees  within its system may
22        choose the site for provision of services and  the  panel
23        of health care providers.
24             (6)  Not   discriminate   in   its   enrollment   or
25        disenrollment   practices  among  recipients  of  medical
26        services or program enrollees based on health status.
27             (7)  Provide a  quality  assurance  and  utilization
28        review   program   that   (i)   for   health  maintenance
29        organizations  meets  the  requirements  of  the   Health
30        Maintenance  Organization  Act  and (ii) for managed care
31        community networks meets the requirements established  by
32        the  Illinois  Department in rules that incorporate those
33        standards   set   forth   in   the   Health   Maintenance
34        Organization Act.
                            -29-               LRB9001502SMdv
 1             (8)  Issue   a   managed    health    care    entity
 2        identification  card  to  each  enrollee upon enrollment.
 3        The card must contain all of the following:
 4                  (A)  The enrollee's signature.
 5                  (B)  The enrollee's health plan.
 6                  (C)  The  name  and  telephone  number  of  the
 7             enrollee's primary care physician.
 8                  (D)  A  telephone  number  to   be   used   for
 9             emergency service 24 hours per day, 7 days per week.
10             The  telephone  number  required  to  be  maintained
11             pursuant to this subparagraph by each managed health
12             care   entity  shall,  at  minimum,  be  staffed  by
13             medically  trained   personnel   and   be   provided
14             directly,  or  under  arrangement,  at  an office or
15             offices in  locations maintained solely  within  the
16             State    of   Illinois.   For   purposes   of   this
17             subparagraph, "medically  trained  personnel"  means
18             licensed   practical  nurses  or  registered  nurses
19             located in the State of Illinois  who  are  licensed
20             pursuant to the Illinois Nursing Act of 1987.
21             (9)  Ensure  that  every  primary care physician and
22        pharmacy in the managed  health  care  entity  meets  the
23        standards  established  by  the  Illinois  Department for
24        accessibility  and  quality   of   care.   The   Illinois
25        Department shall arrange for and oversee an evaluation of
26        the  standards  established  under this paragraph (9) and
27        may recommend any necessary changes to  these  standards.
28        The  Illinois Department shall submit an annual report to
29        the Governor and the General Assembly by April 1 of  each
30        year  regarding  the  effect of the standards on ensuring
31        access and quality of care to enrollees.
32             (10)  Provide a procedure  for  handling  complaints
33        that  (i)  for health maintenance organizations meets the
34        requirements of the Health Maintenance  Organization  Act
                            -30-               LRB9001502SMdv
 1        and  (ii)  for  managed care community networks meets the
 2        requirements established by the  Illinois  Department  in
 3        rules  that  incorporate those standards set forth in the
 4        Health Maintenance Organization Act.
 5             (11)  Maintain, retain, and make  available  to  the
 6        Illinois  Department records, data, and information, in a
 7        uniform manner determined  by  the  Illinois  Department,
 8        sufficient   for   the  Illinois  Department  to  monitor
 9        utilization, accessibility, and quality of care.
10             (12)  Except for providers who are prepaid, pay  all
11        approved  claims  for covered services that are completed
12        and submitted to the managed health care entity within 30
13        days after  receipt  of  the  claim  or  receipt  of  the
14        appropriate capitation payment or payments by the managed
15        health  care entity from the State for the month in which
16        the  services  included  on  the  claim  were   rendered,
17        whichever  is  later. If payment is not made or mailed to
18        the provider by the managed health care entity by the due
19        date under this subsection, an interest penalty of 1%  of
20        any  amount  unpaid  shall  be  added  for  each month or
21        fraction of a month  after  the  due  date,  until  final
22        payment  is  made. Nothing in this Section shall prohibit
23        managed health care entities and providers from  mutually
24        agreeing to terms that require more timely payment.
25             (13)  Provide   integration   with   community-based
26        programs  provided  by certified local health departments
27        such as Women, Infants, and  Children  Supplemental  Food
28        Program  (WIC),  childhood  immunization programs, health
29        education programs, case management programs, and  health
30        screening programs.
31             (14)  Provide  that the pharmacy formulary used by a
32        managed health care entity and its contract providers  be
33        no   more  restrictive  than  the  Illinois  Department's
34        pharmaceutical program on  the  effective  date  of  this
                            -31-               LRB9001502SMdv
 1        amendatory Act of 1994 and as amended after that date.
 2             (15)  Provide   integration   with   community-based
 3        organizations,   including,   but  not  limited  to,  any
 4        organization  that  has  operated   within   a   Medicaid
 5        Partnership  as  defined  by  this Code or by rule of the
 6        Illinois Department, that may continue to operate under a
 7        contract with the Illinois Department or a managed health
 8        care entity under this Section to provide case management
 9        services to  Medicaid  clients  in  designated  high-need
10        areas.
11        The   Illinois   Department   may,   by  rule,  determine
12    methodologies to limit financial liability for managed health
13    care  entities  resulting  from  payment  for   services   to
14    enrollees provided under the Illinois Department's integrated
15    health  care  program.  Any  methodology so determined may be
16    considered or implemented by the Illinois Department  through
17    a  contract  with  a  managed  health  care entity under this
18    integrated health care program.
19        The Illinois Department shall contract with an entity  or
20    entities  to  provide  external  peer-based quality assurance
21    review for the integrated health  care  program.  The  entity
22    shall  be  representative  of Illinois physicians licensed to
23    practice medicine in all  its  branches  and  have  statewide
24    geographic  representation in all specialties of medical care
25    that are provided within the integrated health care  program.
26    The  entity may not be a third party payer and shall maintain
27    offices in locations around the State  in  order  to  provide
28    service   and   continuing  medical  education  to  physician
29    participants within the integrated health care program.   The
30    review  process  shall be developed and conducted by Illinois
31    physicians licensed to practice medicine in all its branches.
32    In consultation with the entity, the Illinois Department  may
33    contract  with  other  entities  for  professional peer-based
34    quality assurance review of individual categories of services
                            -32-               LRB9001502SMdv
 1    other than services provided, supervised, or  coordinated  by
 2    physicians licensed to practice medicine in all its branches.
 3    The Illinois Department shall establish, by rule, criteria to
 4    avoid  conflicts  of  interest  in  the  conduct  of  quality
 5    assurance activities consistent with professional peer-review
 6    standards.   All   quality   assurance  activities  shall  be
 7    coordinated by the Illinois Department.
 8        (e)  All  persons  enrolled  in  the  program  shall   be
 9    provided   with   a   full   written   explanation   of   all
10    fee-for-service  and  managed  health care plan options and a
11    reasonable  opportunity  to  choose  among  the  options   as
12    provided  by  rule.  The Illinois Department shall provide to
13    enrollees, upon enrollment  in  the  integrated  health  care
14    program  and  at  least  annually  thereafter,  notice of the
15    process  for  requesting  an  appeal   under   the   Illinois
16    Department's      administrative      appeal      procedures.
17    Notwithstanding  any other Section of this Code, the Illinois
18    Department may provide by rule for the Illinois Department to
19    assign a  person  enrolled  in  the  program  to  a  specific
20    provider  of  medical  services  or to a specific health care
21    delivery system if an enrollee has failed to exercise  choice
22    in  a  timely  manner.  An  enrollee assigned by the Illinois
23    Department shall be afforded the opportunity to disenroll and
24    to select a  specific  provider  of  medical  services  or  a
25    specific health care delivery system within the first 30 days
26    after  the assignment. An enrollee who has failed to exercise
27    choice in a timely manner may be assigned only if there are 3
28    or more managed health care  entities  contracting  with  the
29    Illinois Department within the contracting area, except that,
30    outside  the  City of Chicago, this requirement may be waived
31    for an area by rules adopted by the Illinois Department after
32    consultation with all hospitals within the contracting  area.
33    The Illinois Department shall establish by rule the procedure
34    for  random  assignment  of  enrollees  who  fail to exercise
                            -33-               LRB9001502SMdv
 1    choice in a timely manner to a specific managed  health  care
 2    entity  in  proportion  to  the  available  capacity  of that
 3    managed health care entity. Assignment to a specific provider
 4    of medical services or to  a  specific  managed  health  care
 5    entity may not exceed that provider's or entity's capacity as
 6    determined  by  the  Illinois Department.  Any person who has
 7    chosen a specific provider of medical services or a  specific
 8    managed  health  care  entity,  or  any  person  who has been
 9    assigned  under  this  subsection,   shall   be   given   the
10    opportunity to change that choice or assignment at least once
11    every  12 months, as determined by the Illinois Department by
12    rule. The Illinois  Department  shall  maintain  a  toll-free
13    telephone  number  for  program  enrollees'  use in reporting
14    problems with managed health care entities.
15        (f)  If a person becomes eligible  for  participation  in
16    the  integrated  health  care  program  while  he  or  she is
17    hospitalized, the Illinois Department  may  not  enroll  that
18    person  in  the  program  until  after  he  or  she  has been
19    discharged from the hospital.  This subsection does not apply
20    to  newborn  infants  whose  mothers  are  enrolled  in   the
21    integrated health care program.
22        (g)  The  Illinois  Department  shall, by rule, establish
23    for managed health care entities rates that (i) are certified
24    to be actuarially sound, as determined by an actuary  who  is
25    an  associate  or  a  fellow of the Society of Actuaries or a
26    member of the American  Academy  of  Actuaries  and  who  has
27    expertise  and  experience  in  medical insurance and benefit
28    programs,  in  accordance  with  the  Illinois   Department's
29    current  fee-for-service  payment  system, and (ii) take into
30    account any difference of cost  to  provide  health  care  to
31    different  populations  based  on  gender, age, location, and
32    eligibility category.  The  rates  for  managed  health  care
33    entities shall be determined on a capitated basis.
34        The  Illinois Department by rule shall establish a method
                            -34-               LRB9001502SMdv
 1    to adjust its payments to managed health care entities  in  a
 2    manner intended to avoid providing any financial incentive to
 3    a  managed  health  care entity to refer patients to a county
 4    provider, in an Illinois county having a  population  greater
 5    than  3,000,000,  that  is  paid  directly  by  the  Illinois
 6    Department.   The Illinois Department shall by April 1, 1997,
 7    and  annually  thereafter,  review  the  method   to   adjust
 8    payments.  Payments  by the Illinois Department to the county
 9    provider,  for  persons  not  enrolled  in  a  managed   care
10    community  network  owned  or  operated by a county provider,
11    shall be paid on a fee-for-service basis under Article XV  of
12    this Code.
13        The  Illinois Department by rule shall establish a method
14    to reduce its payments to managed  health  care  entities  to
15    take  into  consideration (i) any adjustment payments paid to
16    hospitals under subsection (h) of this Section to the  extent
17    those  payments,  or  any  part  of those payments, have been
18    taken into account in establishing capitated rates under this
19    subsection (g) and (ii) the implementation  of  methodologies
20    to limit financial liability for managed health care entities
21    under subsection (d) of this Section.
22        (h)  For  hospital  services  provided by a hospital that
23    contracts with  a  managed  health  care  entity,  adjustment
24    payments  shall  be  paid  directly  to  the  hospital by the
25    Illinois Department.  Adjustment  payments  may  include  but
26    need    not   be   limited   to   adjustment   payments   to:
27    disproportionate share hospitals under Section 5-5.02 of this
28    Code; primary care access health care education payments  (89
29    Ill. Adm. Code 149.140); payments for capital, direct medical
30    education,  indirect  medical education, certified registered
31    nurse anesthetist, and kidney acquisition costs (89 Ill. Adm.
32    Code 149.150(c)); uncompensated care payments (89  Ill.  Adm.
33    Code  148.150(h));  trauma center payments (89 Ill. Adm. Code
34    148.290(c)); rehabilitation hospital payments (89  Ill.  Adm.
                            -35-               LRB9001502SMdv
 1    Code  148.290(d));  perinatal  center  payments (89 Ill. Adm.
 2    Code 148.290(e)); obstetrical care  payments  (89  Ill.  Adm.
 3    Code 148.290(f)); targeted access payments (89 Ill. Adm. Code
 4    148.290(g)); Medicaid high volume payments (89 Ill. Adm. Code
 5    148.290(h));  and  outpatient indigent volume adjustments (89
 6    Ill. Adm. Code 148.140(b)(5)).
 7        (i)  For  any  hospital  eligible  for   the   adjustment
 8    payments described in subsection (h), the Illinois Department
 9    shall  maintain,  through  the  period  ending June 30, 1995,
10    reimbursement levels in accordance with statutes and rules in
11    effect on April 1, 1994.
12        (j)  Nothing contained in this Code in any way limits  or
13    otherwise  impairs  the  authority  or  power of the Illinois
14    Department to enter into a negotiated  contract  pursuant  to
15    this  Section  with  a managed health care entity, including,
16    but not limited to, a health maintenance  organization,  that
17    provides  for  termination  or  nonrenewal  of  the  contract
18    without  cause  upon  notice  as provided in the contract and
19    without a hearing.
20        (k)  Section  5-5.15  does  not  apply  to  the   program
21    developed and implemented pursuant to this Section.
22        (l)  The Illinois Department shall, by rule, define those
23    chronic or acute medical conditions of childhood that require
24    longer-term  treatment  and  follow-up  care.   The  Illinois
25    Department shall ensure that services required to treat these
26    conditions are available through a separate delivery system.
27        A  managed  health  care  entity  that contracts with the
28    Illinois Department may refer a child with medical conditions
29    described in the rules adopted under this subsection directly
30    to a children's hospital or  to  a  hospital,  other  than  a
31    children's  hospital,  that is qualified to provide inpatient
32    and outpatient  services  to  treat  those  conditions.   The
33    Illinois    Department    shall    provide    fee-for-service
34    reimbursement  directly  to  a  children's hospital for those
                            -36-               LRB9001502SMdv
 1    services pursuant to Title 89 of the Illinois  Administrative
 2    Code,  Section  148.280(a),  at  a rate at least equal to the
 3    rate in effect on March 31, 1994. For hospitals,  other  than
 4    children's hospitals, that are qualified to provide inpatient
 5    and  outpatient  services  to  treat  those  conditions,  the
 6    Illinois  Department  shall  provide  reimbursement for those
 7    services on a fee-for-service basis, at a rate at least equal
 8    to the rate in effect for those other hospitals on March  31,
 9    1994.
10        A  children's  hospital  shall be directly reimbursed for
11    all  services  provided  at  the  children's  hospital  on  a
12    fee-for-service basis pursuant to Title 89  of  the  Illinois
13    Administrative  Code,  Section 148.280(a), at a rate at least
14    equal to the rate in effect on  March  31,  1994,  until  the
15    later  of  (i)  implementation  of the integrated health care
16    program under this Section  and  development  of  actuarially
17    sound  capitation rates for services other than those chronic
18    or  acute  medical  conditions  of  childhood  that   require
19    longer-term  treatment  and  follow-up care as defined by the
20    Illinois  Department  in  the  rules   adopted   under   this
21    subsection or (ii) March 31, 1996.
22        Notwithstanding   anything  in  this  subsection  to  the
23    contrary, a managed health care  entity  shall  not  consider
24    sources  or methods of payment in determining the referral of
25    a child.   The  Illinois  Department  shall  adopt  rules  to
26    establish   criteria   for  those  referrals.   The  Illinois
27    Department by rule shall establish a  method  to  adjust  its
28    payments to managed health care entities in a manner intended
29    to  avoid  providing  any  financial  incentive  to a managed
30    health care entity to refer patients to  a  provider  who  is
31    paid directly by the Illinois Department.
32        (m)  Behavioral health services provided or funded by the
33    Department  of Human Services, the Department of Children and
34    Family  Services,  and  the  Illinois  Department  shall   be
                            -37-               LRB9001502SMdv
 1    excluded from a benefit package.  Conditions of an organic or
 2    physical  origin or nature, including medical detoxification,
 3    however,  may  not  be   excluded.    In   this   subsection,
 4    "behavioral health services" means mental health services and
 5    subacute  alcohol  and substance abuse treatment services, as
 6    defined in the Illinois Alcoholism and Other Drug  Dependency
 7    Act.   In this subsection, "mental health services" includes,
 8    at a minimum, the following services funded by  the  Illinois
 9    Department, the Department of Human Services (as successor to
10    the   Department   of   Mental   Health   and   Developmental
11    Disabilities),  or  the  Department  of  Children  and Family
12    Services: (i) inpatient hospital services, including  related
13    physician  services,  related  psychiatric interventions, and
14    pharmaceutical services provided  to  an  eligible  recipient
15    hospitalized   with   a   primary  diagnosis  of  psychiatric
16    disorder; (ii) outpatient mental health services  as  defined
17    and  specified  in  Title  59  of the Illinois Administrative
18    Code, Part 132; (iii)  any  other  outpatient  mental  health
19    services  funded  by  the Illinois Department pursuant to the
20    State   of   Illinois    Medicaid    Plan;    (iv)    partial
21    hospitalization;  and  (v) follow-up stabilization related to
22    any of those services.  Additional behavioral health services
23    may be excluded under this subsection as mutually  agreed  in
24    writing  by  the  Illinois  Department and the affected State
25    agency or agencies.  The exclusion of any  service  does  not
26    prohibit   the   Illinois   Department  from  developing  and
27    implementing demonstration projects for categories of persons
28    or services.  The Department of Children and Family  Services
29    and  the  Department of Human Services shall each adopt rules
30    governing the integration of managed care in the provision of
31    behavioral health services. The State shall integrate managed
32    care community networks  and  affiliated  providers,  to  the
33    extent  practicable,  in  any  separate  delivery  system for
34    mental health services.
                            -38-               LRB9001502SMdv
 1        (n)  The  Illinois  Department  shall  adopt   rules   to
 2    establish  reserve  requirements  for  managed care community
 3    networks,  as  required  by  subsection   (a),   and   health
 4    maintenance  organizations  to protect against liabilities in
 5    the event that a  managed  health  care  entity  is  declared
 6    insolvent or bankrupt.  If a managed health care entity other
 7    than  a  county  provider  is declared insolvent or bankrupt,
 8    after liquidation and application of  any  available  assets,
 9    resources,  and reserves, the Illinois Department shall pay a
10    portion of the amounts owed by the managed health care entity
11    to providers for services rendered  to  enrollees  under  the
12    integrated  health  care  program under this Section based on
13    the following schedule: (i) from April 1, 1995  through  June
14    30,  1998,  90%  of  the amounts owed; (ii) from July 1, 1998
15    through June 30, 2001, 80% of the  amounts  owed;  and  (iii)
16    from  July  1, 2001 through June 30, 2005, 75% of the amounts
17    owed.  The  amounts  paid  under  this  subsection  shall  be
18    calculated  based  on  the  total  amount owed by the managed
19    health care entity to providers  before  application  of  any
20    available  assets,  resources,  and reserves.  After June 30,
21    2005, the Illinois Department may not pay any amounts owed to
22    providers as a result of an insolvency  or  bankruptcy  of  a
23    managed  health  care entity occurring after that date.   The
24    Illinois Department is not obligated, however, to pay amounts
25    owed to a provider that has an ownership or  other  governing
26    interest  in the managed health care entity.  This subsection
27    applies only to managed health care entities and the services
28    they provide under the integrated health care  program  under
29    this Section.
30        (o)  Notwithstanding   any  other  provision  of  law  or
31    contractual agreement to the contrary, providers shall not be
32    required to accept from any other third party payer the rates
33    determined  or  paid  under  this  Code   by   the   Illinois
34    Department,  managed health care entity, or other health care
                            -39-               LRB9001502SMdv
 1    delivery system for services provided to recipients.
 2        (p)  The Illinois Department  may  seek  and  obtain  any
 3    necessary   authorization   provided  under  federal  law  to
 4    implement the program, including the waiver  of  any  federal
 5    statutes  or  regulations. The Illinois Department may seek a
 6    waiver  of  the  federal  requirement   that   the   combined
 7    membership  of  Medicare  and Medicaid enrollees in a managed
 8    care community network may not exceed 75% of the managed care
 9    community   network's   total   enrollment.    The   Illinois
10    Department shall not seek a waiver of  this  requirement  for
11    any  other  category  of  managed  health  care  entity.  The
12    Illinois Department shall not seek a waiver of the  inpatient
13    hospital  reimbursement methodology in Section 1902(a)(13)(A)
14    of Title XIX of the Social Security Act even if  the  federal
15    agency  responsible  for  administering  Title XIX determines
16    that Section 1902(a)(13)(A) applies to  managed  health  care
17    systems.
18        Notwithstanding  any other provisions of this Code to the
19    contrary, the Illinois Department  shall  seek  a  waiver  of
20    applicable federal law in order to impose a co-payment system
21    consistent  with  this  subsection  on  recipients of medical
22    services under Title XIX of the Social Security Act  who  are
23    not  enrolled  in  a  managed health care entity.  The waiver
24    request submitted by the Illinois  Department  shall  provide
25    for co-payments of up to $0.50 for prescribed drugs and up to
26    $0.50 for x-ray services and shall provide for co-payments of
27    up  to  $10 for non-emergency services provided in a hospital
28    emergency room and up  to  $10  for  non-emergency  ambulance
29    services.   The  purpose of the co-payments shall be to deter
30    those  recipients  from  seeking  unnecessary  medical  care.
31    Co-payments may not be used to deter recipients from  seeking
32    necessary  medical  care.   No recipient shall be required to
33    pay more than a total of $150 per year in  co-payments  under
34    the  waiver request required by this subsection.  A recipient
                            -40-               LRB9001502SMdv
 1    may not be required to pay more than $15 of  any  amount  due
 2    under this subsection in any one month.
 3        Co-payments  authorized  under this subsection may not be
 4    imposed when the care was  necessitated  by  a  true  medical
 5    emergency.   Co-payments  may  not  be imposed for any of the
 6    following classifications of services:
 7             (1)  Services furnished to person under 18 years  of
 8        age.
 9             (2)  Services furnished to pregnant women.
10             (3)  Services  furnished to any individual who is an
11        inpatient in a hospital, nursing  facility,  intermediate
12        care  facility,  or  other  medical  institution, if that
13        person is required to spend for costs of medical care all
14        but a minimal amount of his or her  income  required  for
15        personal needs.
16             (4)  Services furnished to a person who is receiving
17        hospice care.
18        Co-payments authorized under this subsection shall not be
19    deducted  from  or  reduce  in  any  way payments for medical
20    services from  the  Illinois  Department  to  providers.   No
21    provider  may  deny  those services to an individual eligible
22    for services based on the individual's inability to  pay  the
23    co-payment.
24        Recipients  who  are  subject  to  co-payments  shall  be
25    provided  notice,  in plain and clear language, of the amount
26    of the co-payments, the circumstances under which co-payments
27    are exempted, the circumstances under which  co-payments  may
28    be assessed, and their manner of collection.
29        The   Illinois  Department  shall  establish  a  Medicaid
30    Co-Payment Council to assist in the development of co-payment
31    policies for the medical assistance  program.   The  Medicaid
32    Co-Payment  Council shall also have jurisdiction to develop a
33    program to provide financial or non-financial  incentives  to
34    Medicaid  recipients in order to encourage recipients to seek
                            -41-               LRB9001502SMdv
 1    necessary health care.  The Council shall be chaired  by  the
 2    Director  of  the  Illinois  Department,  and  shall  have  6
 3    additional members.  Two of the 6 additional members shall be
 4    appointed by the Governor, and one each shall be appointed by
 5    the  President  of  the  Senate,  the  Minority Leader of the
 6    Senate, the Speaker of the House of Representatives, and  the
 7    Minority Leader of the House of Representatives.  The Council
 8    may be convened and make recommendations upon the appointment
 9    of a majority of its members.  The Council shall be appointed
10    and convened no later than September 1, 1994 and shall report
11    its   recommendations   to   the  Director  of  the  Illinois
12    Department and the General Assembly no later than October  1,
13    1994.   The  chairperson  of  the Council shall be allowed to
14    vote only in the case of  a  tie  vote  among  the  appointed
15    members of the Council.
16        The  Council  shall be guided by the following principles
17    as it considers recommendations to be developed to  implement
18    any  approved  waivers that the Illinois Department must seek
19    pursuant to this subsection:
20             (1)  Co-payments should not be used to deter  access
21        to adequate medical care.
22             (2)  Co-payments should be used to reduce fraud.
23             (3)  Co-payment   policies  should  be  examined  in
24        consideration  of  other  states'  experience,  and   the
25        ability   of   successful  co-payment  plans  to  control
26        unnecessary  or  inappropriate  utilization  of  services
27        should be promoted.
28             (4)  All   participants,   both    recipients    and
29        providers,   in   the  medical  assistance  program  have
30        responsibilities to both the State and the program.
31             (5)  Co-payments are primarily a tool to educate the
32        participants  in  the  responsible  use  of  health  care
33        resources.
34             (6)  Co-payments should  not  be  used  to  penalize
                            -42-               LRB9001502SMdv
 1        providers.
 2             (7)  A   successful  medical  program  requires  the
 3        elimination of improper utilization of medical resources.
 4        The integrated health care program, or any part  of  that
 5    program,   established   under   this   Section  may  not  be
 6    implemented if matching federal funds under Title XIX of  the
 7    Social  Security  Act are not available for administering the
 8    program.
 9        The Illinois Department shall submit for  publication  in
10    the Illinois Register the name, address, and telephone number
11    of  the  individual  to  whom a request may be directed for a
12    copy of the request for a waiver of provisions of  Title  XIX
13    of  the  Social  Security  Act  that  the Illinois Department
14    intends to submit to the Health Care Financing Administration
15    in order to implement this Section.  The Illinois  Department
16    shall  mail  a  copy  of  that  request  for  waiver  to  all
17    requestors  at  least  16 days before filing that request for
18    waiver with the Health Care Financing Administration.
19        (q)  After  the  effective  date  of  this  Section,  the
20    Illinois Department may take  all  planning  and  preparatory
21    action  necessary  to  implement this Section, including, but
22    not limited to, seeking requests for  proposals  relating  to
23    the   integrated  health  care  program  created  under  this
24    Section.
25        (r)  In  order  to  (i)  accelerate  and  facilitate  the
26    development of integrated health care  in  contracting  areas
27    outside  counties with populations in excess of 3,000,000 and
28    counties adjacent to those counties  and  (ii)  maintain  and
29    sustain  the high quality of education and residency programs
30    coordinated and associated with  local  area  hospitals,  the
31    Illinois Department may develop and implement a demonstration
32    program  for managed care community networks owned, operated,
33    or governed by State-funded medical  schools.   The  Illinois
34    Department  shall  prescribe by rule the criteria, standards,
                            -43-               LRB9001502SMdv
 1    and procedures for effecting this demonstration program.
 2        (s)  (Blank).
 3        (t)  On April 1, 1995 and every 6 months thereafter,  the
 4    Illinois  Department shall report to the Governor and General
 5    Assembly on  the  progress  of  the  integrated  health  care
 6    program   in  enrolling  clients  into  managed  health  care
 7    entities.  The report shall indicate the  capacities  of  the
 8    managed  health care entities with which the State contracts,
 9    the number of clients enrolled by each contractor, the  areas
10    of  the State in which managed care options do not exist, and
11    the progress toward  meeting  the  enrollment  goals  of  the
12    integrated health care program.
13        (u)  The  Illinois  Department may implement this Section
14    through the use of emergency rules in accordance with Section
15    5-45 of  the  Illinois  Administrative  Procedure  Act.   For
16    purposes of that Act, the adoption of rules to implement this
17    Section  is  deemed an emergency and necessary for the public
18    interest, safety, and welfare.
19    (Source: P.A.  88-554,  eff.  7-26-94;  89-21,  eff.  7-1-95;
20    89-507, eff. 7-1-97; 89-673, eff. 8-14-96; revised 8-26-96.)
21        Section  95.   No  acceleration or delay.  Where this Act
22    makes changes in a statute that is represented in this Act by
23    text that is not yet or no longer in effect (for  example,  a
24    Section  represented  by  multiple versions), the use of that
25    text does not accelerate or delay the taking  effect  of  (i)
26    the  changes made by this Act or (ii) provisions derived from
27    any other Public Act.
28        Section 99.  Effective date.  This Act takes effect  upon
29    becoming law.

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