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92_HB1365 LRB9203614LBgc 1 AN ACT professional regulation. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Health Care Worker Self-Referral Act is 5 amended by changing Section 20 as follows: 6 (225 ILCS 47/20) 7 Sec. 20. Prohibited referrals and claims for payment. 8 (a) A health care worker mustshallnot refer a patient 9 for health services to an entity outside the health care 10 worker's office or group practice in which the health care 11 worker is an investor, unless the health care worker directly 12 provides health services within the entity and will be 13 personally involved with the provision of care to the 14 referred patient. 15 (b) Pursuant to Board determination that the following 16 exception is applicable, a health care worker may invest in 17 and refer to an entity, whether or not the health care worker 18 provides direct services within said entity, if there is a 19 demonstrated need in the community for the entity and 20 alternative financing is not available. For purposes of this 21 subsection (b), "demonstrated need" in the community for the 22 entity may exist if (1) there is no facility of reasonable 23 quality that provides medically appropriate service, (2) use 24 of existing facilities is onerous or creates too great a 25 hardship for patients, (3) the entity is formed to own or 26 lease medical equipment which replaces obsolete or otherwise 27 inadequate equipment in or under the control of a hospital 28 located in a federally designated health manpower shortage 29 area, or (4) anysuchother standards as established, by 30 rule, by the Board. "Community" isshall bedefined as a 31 metropolitan area for a city, and a county for a rural area. -2- LRB9203614LBgc 1 In addition, the following provisions must be met to be 2 exempt under this Section: 3 (1) Individuals who are not in a position to refer 4 patients to an entity are given a bona fide opportunity 5 to also invest in the entity on the same terms as those 6 offered a referring health care worker; and 7 (2) No health care worker who invests shall be 8 required or encouraged to make referrals to the entity or 9 otherwise generate business as a condition of becoming or 10 remaining an investor; and 11 (3) The entity shall market or furnish its services 12 to referring health care worker investors and other 13 investors on equal terms; and 14 (4) The entity shall not loan funds or guarantee 15 any loans for health care workers who are in a position 16 to refer to an entity; and 17 (5) The income on the health care worker's 18 investment shall be tied to the health care worker's 19 equity in the facility rather than to the volume of 20 referrals made; and 21 (6) Any investment contract between the entity and 22 the health care worker shall not include any covenant or 23 non-competition clause that prevents a health care worker 24 from investing in other entities; and 25 (7) When making a referral, a health care worker 26 must disclose his investment interest in an entity to the 27 patient being referred to such entity. If alternative 28 facilities are reasonably available, the health care 29 worker must provide the patient with a list of 30 alternative facilities. The health care worker shall 31 inform the patient that they have the option to use an 32 alternative facility other than one in which the health 33 care worker has an investment interest and the patient 34 will not be treated differently by the health care worker -3- LRB9203614LBgc 1 if the patient chooses to use another entity. This shall 2 be applicable to all health care worker investors, 3 including those who provide direct care or services for 4 their patients in entities outside their office 5 practices; and 6 (8) If a third party payor requests information 7 with regard to a health care worker's investment 8 interest, the same shall be disclosed; and 9 (9) The entity shall establish an internal 10 utilization review program to ensure that investing 11 health care workers provided appropriate or necessary 12 utilization; and 13 (10) If a health care worker's financial interest 14 in an entity is incompatible with a referred patient's 15 interest, the health care worker shall make alternative 16 arrangements for the patient's care. 17 The Board shall make such a determination for a health 18 care worker within 90 days of a completed written request. 19 Failure to make such a determination within the 90 day time 20 frame shall mean that no alternative is practical based upon 21 the facts set forth in the completed written request. 22 (c) It shall not be a violation of this Act for a health 23 care worker to refer a patient for health services to a 24 publicly traded entity in which he or she has an investment 25 interest provided that: 26 (1) the entity is listed for trading on the New 27 York Stock Exchange or on the American Stock Exchange, or 28 is a national market system security traded under an 29 automated inter-dealer quotation system operated by the 30 National Association of Securities Dealers; and 31 (2) the entity had, at the end of the corporation's 32 most recent fiscal year, total net assets of at least 33 $30,000,000 related to the furnishing of health services; 34 and -4- LRB9203614LBgc 1 (3) any investment interest obtained after the 2 effective date of this Act is traded on the exchanges 3 listed in paragraph 1 of subsection (c) of this Section 4 after the entity became a publicly traded corporation; 5 and 6 (4) the entity markets or furnishes its services to 7 referring health care worker investors and other health 8 care workers on equal terms; and 9 (5) all stock held in such publicly traded 10 companies, including stock held in the predecessor 11 privately held company, shall be of one class without 12 preferential treatment as to status or remuneration; and 13 (6) the entity does not loan funds or guarantee any 14 loans for health care workers who are in a position to be 15 referred to an entity; and 16 (7) the income on the health care worker's 17 investment is tied to the health care worker's equity in 18 the entity rather than to the volume of referrals made; 19 and 20 (8) the investment interest does not exceed 1/2 of 21 1% of the entity's total equity. 22 (d) Any hospital licensed under the Hospital Licensing 23 Act shall not discriminate against or otherwise penalize a 24 health care worker for compliance with this Act. 25 (e) Any health care worker or other entity shall not 26 enter into an arrangement or scheme seeking to make referrals 27 to another health care worker or entity based upon the 28 condition that the health care worker or entity will make 29 referrals with an intent to evade the prohibitions of this 30 Act by inducing patient referrals which would be prohibited 31 by this Section if the health care worker or entity made the 32 referral directly. 33 (f) If compliance with the need and alternative investor 34 criteria is not practical, the health care worker shall -5- LRB9203614LBgc 1 identify to the patient reasonably available alternative 2 facilities. The Board shall, by rule, designate when 3 compliance is "not practical". 4 (g) Health care workers may request from the Board that 5 it render an advisory opinion that a referral to an existing 6 or proposed entity under specified circumstances does or does 7 not violate the provisions of this Act. The Board's opinion 8 shall be presumptively correct. Failure to render such an 9 advisory opinion within 90 days of a completed written 10 request pursuant to this Section shall create a rebuttable 11 presumption that a referral described in the completed 12 written request is not or will not be a violation of this 13 Act. 14 (h) Notwithstanding any provision of this Act to the 15 contrary, a health care worker may refer a patient, who is a 16 member of a health maintenance organization "HMO" licensed in 17 this State, for health services to an entity, outside the 18 health care worker's office or group practice, in which the 19 health care worker is an investor, provided that any such 20 referral is made pursuant to a contract with the HMO. 21 Furthermore, notwithstanding any provision of this Act to the 22 contrary, a health care worker may refer an enrollee of a 23 "managed care community network", as defined in Section 24 5-16.3 of the Illinois Public Aid Code, for health services 25 to an entity, outside the health care worker's office or 26 group practice, in which the health care worker is an 27 investor, provided that any such referral is made pursuant to 28 a contract with the managed care community network. 29 (Source: P.A. 87-1207; 88-554, eff. 7-26-94.)