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90_SB0321eng
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
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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.
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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
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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
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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
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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
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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.
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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.
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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,
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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
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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.
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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,
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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
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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
SB321 Engrossed -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
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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.
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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
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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
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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
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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
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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
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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.
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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
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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
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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.
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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
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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
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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
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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
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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,
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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.