State of Illinois
92nd General Assembly
Legislation

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[ Introduced ][ Engrossed ][ House Amendment 001 ]


92_SB0873enr

 
SB873 Enrolled                                 LRB9201523DJgc

 1        AN ACT in relation to public aid.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.  The University of Illinois Act is amended by
 5    changing Section 7 as follows:

 6        (110 ILCS 305/7) (from Ch. 144, par. 28)
 7        Sec. 7.  Powers of trustees.
 8        (a)  The trustees shall have power  to  provide  for  the
 9    requisite  buildings, apparatus, and conveniences; to fix the
10    rates  for  tuition;   to   appoint   such   professors   and
11    instructors,  and to establish and provide for the management
12    of such model farms, model art,  and  other  departments  and
13    professorships,  as  may  be  required  to teach, in the most
14    thorough manner, such branches of learning as are related  to
15    agriculture  and  the  mechanic  arts,  and military tactics,
16    without excluding other scientific and classical studies. The
17    trustees shall, upon  the  written  request  of  an  employee
18    withhold  from  the  compensation  of that employee any dues,
19    payments or contributions payable by  such  employee  to  any
20    labor  organization  as  defined  in the Illinois Educational
21    Labor Relations Act.  Under such arrangement, an amount shall
22    be withheld from each regular payroll period which  is  equal
23    to the pro rata share of the annual dues plus any payments or
24    contributions,   and   the   trustees   shall  transmit  such
25    withholdings to the specified labor  organization  within  10
26    working  days  from  the  time  of the withholding.  They may
27    accept  the  endowments  and  voluntary   professorships   or
28    departments  in the University, from any person or persons or
29    corporations who may offer the  same,  and,  at  any  regular
30    meeting  of the board, may prescribe rules and regulations in
31    relation to such  endowments  and  declare  on  what  general
 
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 1    principles  they may be admitted: Provided, that such special
 2    voluntary  endowments  or   professorships   shall   not   be
 3    incompatible  with  the  true  design and scope of the act of
 4    congress, or of this Act: Provided, that no student shall  at
 5    any  time  be allowed to remain in or about the University in
 6    idleness, or without full mental  or  industrial  occupation:
 7    And  provided  further, that the trustees, in the exercise of
 8    any of the powers conferred by this Act, shall not create any
 9    liability or indebtedness in excess of the funds in the hands
10    of the treasurer of the University at the  time  of  creating
11    such  liability  or  indebtedness, and which may be specially
12    and properly applied to the payment of the same. Any lease to
13    the trustees of lands, buildings  or  facilities  which  will
14    support  scientific research and development in such areas as
15    high   technology,   super    computing,    microelectronics,
16    biotechnology, robotics, physics and engineering shall be for
17    a  term not to exceed 18 years, and may grant to the trustees
18    the option to purchase the lands,  buildings  or  facilities.
19    The  lease shall recite that it is subject to termination and
20    cancellation in any year for which the General Assembly fails
21    to make an appropriation to pay the rent  payable  under  the
22    terms of the lease.
23        Leases  for  the  purposes  described  herein exceeding 5
24    years shall have the approval of the Illinois Board of Higher
25    Education.
26        The Board of Trustees may,  directly  or  in  cooperation
27    with  other  institutions  of  higher  education,  acquire by
28    purchase or  lease  or  otherwise,  and  construct,  enlarge,
29    improve, equip, complete, operate, control and manage medical
30    research   and  high  technology  parks,  together  with  the
31    necessary  lands,  buildings,   facilities,   equipment   and
32    personal  property  therefor, to encourage and facilitate (a)
33    the location and development of business and industry in  the
34    State  of  Illinois,  and  (b)  the increased application and
 
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 1    development  of  technology  and  (c)  the  improvement   and
 2    development of the State's economy. The Board of Trustees may
 3    lease  to nonprofit corporations all or any part of the land,
 4    buildings, facilities, equipment or other  property  included
 5    in  a  medical  research  and  high technology park upon such
 6    terms and conditions as the University of Illinois  may  deem
 7    advisable  and enter into any contract or agreement with such
 8    nonprofit corporations as may be necessary  or  suitable  for
 9    the  construction,  financing,  operation and maintenance and
10    management of any such park; and may  lease  to  any  person,
11    firm,  partnership  or corporation, either public or private,
12    any part or all of the land, building, facilities,  equipment
13    or  other  property  of  such park for such purposes and upon
14    such rentals, terms and conditions as the University may deem
15    advisable; and may finance all or part of  the  cost  of  any
16    such  park,  including  the  purchase,  lease,  construction,
17    reconstruction,  improvement,  remodeling,  addition  to, and
18    extension and  maintenance  of  all  or  part  of  such  high
19    technology  park,  and  all  equipment  and  furnishings,  by
20    legislative  appropriations,  government  grants,  contracts,
21    private  gifts,  loans,  receipts  from the operation of such
22    high technology park, rentals and similar receipts;  and  may
23    make  its  other facilities and services available to tenants
24    or other occupants of  any  such  park  at  rates  which  are
25    reasonable and appropriate.
26        The  Trustees  shall  have  power  (a)  to  purchase real
27    property and easements, and (b) to acquire real property  and
28    easements  in  the manner provided by law for the exercise of
29    the right of eminent domain, and in  the  event  negotiations
30    for  the acquisition of real property or easements for making
31    any improvement which the Trustees  are  authorized  to  make
32    shall have proven unsuccessful and the Trustees shall have by
33    resolution  adopted  a  schedule or plan of operation for the
34    execution of the project and therein made a finding  that  it
 
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 1    is  necessary  to take such property or easements immediately
 2    or at some specified later date in order to comply  with  the
 3    schedule, the Trustees may acquire such property or easements
 4    in  the  same manner provided in Sections 7-103 through 7-112
 5    of the Code of Civil Procedure.
 6        The Board of Trustees also shall have power to agree with
 7    the State's Attorney of the county in which any properties of
 8    the Board are located to pay for  services  rendered  by  the
 9    various  taxing districts for the years 1944 through 1949 and
10    to pay annually for  services  rendered  thereafter  by  such
11    district  such  sums  as  may be determined by the Board upon
12    properties used solely for income producing  purposes,  title
13    to  which  is held by said Board of Trustees, upon properties
14    leased to members of the staff of the University of Illinois,
15    title to which is held in trust for said  Board  of  Trustees
16    and  upon  properties leased to for-profit entities the title
17    to which properties is held  by  the  Board  of  Trustees.  A
18    certified  copy  of  any such agreement made with the State's
19    Attorney shall be filed with the County Clerk and  such  sums
20    shall  be  distributed  to the respective taxing districts by
21    the County Collector in such  proportions  that  each  taxing
22    district  will  receive  therefrom such proportion as the tax
23    rate of such taxing district bears to the total tax rate that
24    would be levied against such  properties  if  they  were  not
25    exempt from taxation under the Property Tax Code.
26        The  Board  of  Trustees  of  the University of Illinois,
27    subject to the applicable  civil  service  law,  may  appoint
28    persons  to  be  members of the University of Illinois Police
29    Department. Members of the Police Department shall  be  peace
30    officers  and  as such have all powers possessed by policemen
31    in cities, and sheriffs, including the power to make  arrests
32    on  view or warrants of violations of state statutes and city
33    or county ordinances, except  that  they  may  exercise  such
34    powers only in counties wherein the University and any of its
 
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 1    branches  or properties are located when such is required for
 2    the protection of university properties  and  interests,  and
 3    its  students  and  personnel,  and  otherwise,  within  such
 4    counties,  when  requested  by appropriate state or local law
 5    enforcement officials; provided, however, that  such  officer
 6    shall have no power to serve and execute civil processes.
 7        The  Board  of  Trustees must authorize to each member of
 8    the University of Illinois Police Department and to any other
 9    employee of the University of Illinois exercising the  powers
10    of  a  peace  officer a distinct badge that, on its face, (i)
11    clearly states that the badge is authorized by the University
12    of Illinois and (ii) contains a unique identifying number. No
13    other  badge  shall  be  authorized  by  the  University   of
14    Illinois.
15        The  Board of Trustees may own, operate, or govern, by or
16    through the College of Medicine at  Peoria,  a  managed  care
17    community  network  established  under  subsection (b) (r) of
18    Section 5-11 5-16.3 of the Illinois Public Aid Code.
19        The powers of  the  trustees  as  herein  designated  are
20    subject  to  the  provisions  of  "An Act creating a Board of
21    Higher Education, defining its powers and duties,  making  an
22    appropriation  therefor,  and repealing an Act herein named",
23    approved August 22, 1961, as amended.
24        The Board of Trustees shall have the authority  to  adopt
25    all  administrative  rules  which  may  be  necessary for the
26    effective administration, enforcement and regulation  of  all
27    matters   for   which   the   Board   has   jurisdiction   or
28    responsibility.
29        (b)  To   assist   in  the  provision  of  buildings  and
30    facilities  beneficial  to,  useful  for,  or  supportive  of
31    University purposes, the Board of Trustees of the  University
32    of  Illinois may exercise the following powers with regard to
33    the area located on or adjacent to the University of Illinois
34    at Chicago campus and bounded as  follows:  on  the  West  by
 
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 1    Morgan Street; on the North by Roosevelt Road; on the East by
 2    Union Street; and on the South by 16th Street, in the City of
 3    Chicago:
 4             (1)  Acquire  any  interests  in land, buildings, or
 5        facilities by purchase,  including  installments  payable
 6        over  a  period  allowed  by law, by lease over a term of
 7        such duration as the Board of Trustees  shall  determine,
 8        or by exercise of the power of eminent domain;
 9             (2)  Sub-lease   or  contract  to  purchase  through
10        installments  all  or  any  portion   of   buildings   or
11        facilities  for  such  duration  and on such terms as the
12        Board of Trustees shall determine, including a term  that
13        exceeds  5  years,  provided  that  each  such  lease  or
14        purchase  contract  shall  be and shall recite that it is
15        subject to termination and cancellation in any  year  for
16        which the General Assembly fails to make an appropriation
17        to  pay  the  rent or purchase installments payable under
18        the terms of such lease or purchase contract; and
19             (3)  Sell property without compliance with the State
20        Property  Control  Act  and  retain   proceeds   in   the
21        University  Treasury  in  a special, separate development
22        fund account which the Auditor General shall  examine  to
23        assure compliance with this Act.
24    Any buildings or facilities to be developed on the land shall
25    be  buildings or facilities that, in the determination of the
26    Board of Trustees, in whole or in part: (i) are  for  use  by
27    the  University;  or  (ii) otherwise advance the interests of
28    the University, including, by  way  of  example,  residential
29    facilities  for  University staff and students and commercial
30    facilities which provide services needed  by  the  University
31    community.  Revenues from the development fund account may be
32    withdrawn by the University for the purpose of demolition and
33    the  processes  associated  with demolition; routine land and
34    property acquisition;  extension  of  utilities;  streetscape
 
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 1    work;   landscape   work;   surface  and  structure  parking;
 2    sidewalks, recreational paths, and street  construction;  and
 3    lease  and  lease  purchase arrangements and the professional
 4    services associated with the planning and development of  the
 5    area.   Moneys from the development fund account used for any
 6    other purpose must be deposited into  and  appropriated  from
 7    the  General Revenue Fund.  Buildings or facilities leased to
 8    an entity or person other than the University  shall  not  be
 9    subject  to  any  limitations applicable to a State supported
10    college or university under any law.  All development on  the
11    land  and  all  use  of  any buildings or facilities shall be
12    subject to the control and approval of the Board of Trustees.
13    (Source: P.A. 90-730, eff. 8-10-98; 91-883, eff. 1-1-01.)

14        Section 10.  The Southern Illinois University  Management
15    Act is amended by changing Section 8 as follows:

16        (110 ILCS 520/8) (from Ch. 144, par. 658)
17        Sec. 8.  Powers and Duties of the Board.  The Board shall
18    have power and it shall be its duty:
19             1.  To  make  rules,  regulations  and  by-laws, not
20        inconsistent with law, for the government and  management
21        of Southern Illinois University and its branches;
22             2.  To  employ,  and,  for  good  cause, to remove a
23        president  of  Southern  Illinois  University,  and   all
24        necessary   deans,   professors,   associate  professors,
25        assistant professors, instructors, and other  educational
26        and  administrative  assistants,  and all other necessary
27        employees, and contract with them upon  matters  relating
28        to tenure, salaries and retirement benefits in accordance
29        with  the State Universities Civil Service Act; the Board
30        shall,  upon  the  written  request  of  an  employee  of
31        Southern   Illinois   University,   withhold   from   the
32        compensation of  that  employee  any  dues,  payments  or
 
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 1        contributions  payable  by  such  employee  to  any labor
 2        organization as defined in the Illinois Educational Labor
 3        Relations Act. Under such arrangement, an amount shall be
 4        withheld from each regular payroll period which is  equal
 5        to  the  pro  rata  share  of  the  annual  dues plus any
 6        payments or contributions, and the Board  shall  transmit
 7        such  withholdings  to  the  specified labor organization
 8        within 10 working days from the time of the  withholding.
 9        Whenever the Board establishes a search committee to fill
10        the   position   of   president   of   Southern  Illinois
11        University,  there  shall  be  minority   representation,
12        including women, on that search committee;
13             3.  To prescribe the course of study to be followed,
14        and  textbooks  and  apparatus  to  be  used  at Southern
15        Illinois University;
16             4.  To issue upon the recommendation of the faculty,
17        diplomas to such persons as have satisfactorily completed
18        the required studies of Southern Illinois University, and
19        confer such professional  and  literary  degrees  as  are
20        usually conferred by other institutions of like character
21        for  similar  or  equivalent courses of study, or such as
22        the Board may deem appropriate;
23             5.  To examine into the conditions, management,  and
24        administration   of   Southern  Illinois  University,  to
25        provide the requisite buildings, apparatus, equipment and
26        auxiliary   enterprises,   and   to   fix   and   collect
27        matriculation  fees;  tuition  fees;  fees  for   student
28        activities;  fees  for student facilities such as student
29        union buildings or  field  houses  or  stadium  or  other
30        recreational facilities; student welfare fees; laboratory
31        fees and similar fees for supplies and material;
32             6.  To  succeed  to  and  to  administer all trusts,
33        trust property, and gifts now or hereafter  belonging  or
34        pertaining to Southern Illinois University;
 
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 1             7.  To   accept   endowments  of  professorships  or
 2        departments in the University from  any  person  who  may
 3        proffer them and, at regular meetings, to prescribe rules
 4        and  regulations in relation to endowments and declare on
 5        what general principles they may be accepted;
 6             8.  To  enter  into  contracts  with   the   Federal
 7        government for providing courses of instruction and other
 8        services  at  Southern  Illinois  University  for persons
 9        serving in or with the military or naval  forces  of  the
10        United States, and to provide such courses of instruction
11        and other services;
12             9.  To  provide  for the receipt and expenditures of
13        Federal funds, paid to the Southern  Illinois  University
14        by  the  Federal  government  for  instruction  and other
15        services for persons serving in or with the  military  or
16        naval  forces  of  the  United  States and to provide for
17        audits of such funds;
18             10.  To appoint, subject  to  the  applicable  civil
19        service  law,  persons  to  be  members  of  the Southern
20        Illinois University Police  Department.  Members  of  the
21        Police  Department shall be conservators of the peace and
22        as such have all powers possessed by policemen in cities,
23        and sheriffs, including the power to make arrests on view
24        or warrants of violations of state  statutes,  university
25        rules  and  regulations  and  city  or county ordinances,
26        except that they may exercise  such  powers  only  within
27        counties  wherein  the university and any of its branches
28        or properties are located when such is required  for  the
29        protection  of  university  properties and interests, and
30        its students and personnel, and  otherwise,  within  such
31        counties,  when  requested  by appropriate State or local
32        law enforcement officials. However, such  officers  shall
33        have no power to serve and execute civil processes.
34             The  Board  must  authorize  to  each  member of the
 
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 1        Southern Illinois University Police Department and to any
 2        other employee of Southern Illinois University exercising
 3        the powers of a peace officer a distinct badge  that,  on
 4        its face, (i) clearly states that the badge is authorized
 5        by  Southern  Illinois  University  and  (ii)  contains a
 6        unique identifying  number.   No  other  badge  shall  be
 7        authorized by Southern Illinois University.
 8             11.  To  administer  a  plan or plans established by
 9        the clinical faculty of the School of  Medicine  for  the
10        billing,  collection  and disbursement of charges made by
11        individual  faculty  members  for  professional  services
12        performed by them in the course of or in support of their
13        academic responsibilities, provided that  such  plan  has
14        been first approved by Board action. All such collections
15        shall   be   deposited  into  a  special  fund  or  funds
16        administered by the Board from which disbursements may be
17        made according  to  the  provisions  of  said  plan.  The
18        reasonable    costs    incurred,   by   the   University,
19        administering the billing,  collection  and  disbursement
20        provisions  of  a  plan  shall  have  first  priority for
21        payment before distribution or disbursement for any other
22        purpose. Charges established pursuant to this  plan  must
23        be  itemized  in  any  billing  and any amounts collected
24        which are not used to off-set the cost  of  operating  or
25        maintaining   the  activity  which  generated  the  funds
26        collected,  must  be  accounted  for   separately.   This
27        accounting must clearly show the use and application made
28        of  the funds and the Board shall report such accountings
29        for the previous fiscal year  to  the  Legislative  Audit
30        Commission annually by December 31 of each fiscal year.
31             The  Board  of Trustees may own, operate, or govern,
32        by or through the School  of  Medicine,  a  managed  care
33        community network established under subsection (b) (r) of
34        Section 5-11 5-16.3 of the Illinois Public Aid Code.
 
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 1             12.  The  Board  of  Trustees  may,  directly  or in
 2        cooperation with other institutions of higher  education,
 3        acquire by purchase or lease or otherwise, and construct,
 4        enlarge,  improve,  equip, complete, operate, control and
 5        manage  medical  research  and  high  technology   parks,
 6        together with the necessary lands, buildings, facilities,
 7        equipment,  and  personal property therefor, to encourage
 8        and  facilitate  (a)  the  location  and  development  of
 9        business and industry in the State of Illinois,  and  (b)
10        the  increased  application and development of technology
11        and (c) the improvement and development  of  the  State's
12        economy.   The  Board  of Trustees may lease to nonprofit
13        corporations all or any  part  of  the  land,  buildings,
14        facilities,  equipment  or  other  property included in a
15        medical research and high technology park upon such terms
16        and  conditions  as  the  Board  of  Trustees  may   deem
17        advisable  and  enter into any contract or agreement with
18        such  nonprofit  corporations  as  may  be  necessary  or
19        suitable for the construction, financing,  operation  and
20        maintenance  and  management  of  any  such park; and may
21        lease to any person, firm,  partnership  or  corporation,
22        either  public  or  private, any part or all of the land,
23        building, facilities, equipment or other property of such
24        park for such purposes and upon such rentals,  terms  and
25        conditions  as  the Board of Trustees may deem advisable;
26        and may finance all or part of the cost of any such park,
27        including    the    purchase,    lease,     construction,
28        reconstruction, improvement, remodeling, addition to, and
29        extension  and  maintenance  of  all or part of such high
30        technology park, and all equipment  and  furnishings,  by
31        legislative appropriations, government grants, contracts,
32        private gifts, loans, receipts from the operation of such
33        high  technology  park, rentals and similar receipts; and
34        may make its other facilities and services  available  to
 
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 1        tenants  or  other  occupants  of  any such park at rates
 2        which are reasonable and appropriate.
 3        The powers of the Board as herein designated are  subject
 4    to the  Board of Higher Education Act.
 5    (Source: P.A. 91-883, eff. 1-1-01.)

 6        Section  15.  The  Illinois  Insurance Code is amended by
 7    changing Section 352 as follows:

 8        (215 ILCS 5/352) (from Ch. 73, par. 964)
 9        Sec. 352.  Scope of Article.
10        (a)  Except as provided in subsections (b), (c), (d), and
11    (e), this Article shall apply to all companies transacting in
12    this State the kinds of business enumerated in clause (b)  of
13    Class  1  and  clause (a) of Class 2 of section 4. Nothing in
14    this Article shall apply to, or in any way affect policies or
15    contracts described in clause (a) of Class 1  of  Section  4;
16    however,  this  Article shall apply to policies and contracts
17    which  contain  benefits  providing  reimbursement  for   the
18    expenses  of  long  term  health  care which are certified or
19    ordered  by  a  physician  including  but  not   limited   to
20    professional   nursing  care,  custodial  nursing  care,  and
21    non-nursing custodial care provided in a nursing home or at a
22    residence of the insured.
23        (b)  This Article does not apply to policies of  accident
24    and  health  insurance issued in compliance with Article XIXB
25    of this Code.
26        (c)  A policy issued and delivered  in  this  State  that
27    provides  coverage  under that policy for certificate holders
28    who are neither residents of nor employed in this State  does
29    not  need to provide to those nonresident certificate holders
30    who  are not employed in this State the coverages or services
31    mandated by this Article.
32        (d)  Stop-loss insurance is exempt from all  Sections  of
 
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 1    this  Article,  except  this  Section and Sections 353a, 354,
 2    357.30, and 370.  For purposes of this  exemption,  stop-loss
 3    insurance is further defined as follows:
 4             (1)  The  policy  must  be  issued  to and insure an
 5        employer, trustee, or other sponsor of the plan,  or  the
 6        plan itself, but not employees, members, or participants.
 7             (2)  Payments  by  the  insurer  must be made to the
 8        employer, trustee, or other sponsors of the plan, or  the
 9        plan   itself,   but   not  to  the  employees,  members,
10        participants, or health care providers.
11        (e)  A policy issued or delivered in this  State  to  the
12    Illinois  Department  of  Public  Aid and providing coverage,
13    under clause (b) of Class 1 or  clause  (a)  of  Class  2  as
14    described  in  Section  4, to persons who are enrolled in the
15    integrated health care program established  under  Article  V
16    Section  5-16.3  of the Illinois Public Aid Code or under the
17    Children's Health Insurance Program Act is  exempt  from  all
18    restrictions,  limitations,  standards, rules, or regulations
19    respecting benefits imposed by or  under  authority  of  this
20    Code,  except  those  specified  by subsection (1) of Section
21    143.  Nothing in this subsection, however, affects the  total
22    medical  services  available  to persons eligible for medical
23    assistance under the Illinois Public Aid Code.
24    (Source: P.A. 87-435; 87-757; 87-938; 87-956; 88-364; 88-554,
25    eff. 7-26-94.)

26        Section 20.  The Health Maintenance Organization  Act  is
27    amended by changing Sections 1-2, 2-1, and 6-3 as follows:

28        (215 ILCS 125/1-2) (from Ch. 111 1/2, par. 1402)
29        Sec.  1-2.  Definitions.  As used in this Act, unless the
30    context otherwise requires, the following  terms  shall  have
31    the meanings ascribed to them:
32        (1)  "Advertisement"   means  any  printed  or  published
 
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 1    material, audiovisual material and descriptive literature  of
 2    the  health  care  plan  used  in  direct  mail,  newspapers,
 3    magazines,  radio scripts, television scripts, billboards and
 4    similar displays; and any  descriptive  literature  or  sales
 5    aids  of  all  kinds  disseminated by a representative of the
 6    health care plan for presentation to  the  public  including,
 7    but   not   limited   to,   circulars,   leaflets,  booklets,
 8    depictions, illustrations, form letters  and  prepared  sales
 9    presentations.
10        (2)  "Director" means the Director of Insurance.
11        (3)  "Basic  health  care services" means emergency care,
12    and inpatient hospital and physician care, outpatient medical
13    services, mental health services and  care  for  alcohol  and
14    drug   abuse,   including   any  reasonable  deductibles  and
15    co-payments, all of which are subject to such limitations  as
16    are determined by the Director pursuant to rule.
17        (4)  "Enrollee" means an individual who has been enrolled
18    in a health care plan.
19        (5)  "Evidence   of   coverage"  means  any  certificate,
20    agreement, or contract issued to an enrollee setting out  the
21    coverage to which he is entitled in exchange for a per capita
22    prepaid sum.
23        (6)  "Group  contract"  means  a contract for health care
24    services which by its terms limits eligibility to members  of
25    a specified group.
26        (7)  "Health care plan" means any arrangement whereby any
27    organization undertakes to provide or arrange for and pay for
28    or  reimburse  the  cost  of  basic health care services from
29    providers selected by the Health Maintenance Organization and
30    such arrangement consists of arranging for or  the  provision
31    of  such  health  care  services,  as distinguished from mere
32    indemnification against the cost of such services, except  as
33    otherwise  authorized  by  Section  2-3 of this Act, on a per
34    capita prepaid basis,  through  insurance  or  otherwise.   A
 
SB873 Enrolled             -15-                LRB9201523DJgc
 1    "health  care  plan" also includes any arrangement whereby an
 2    organization undertakes to provide or arrange for or pay  for
 3    or  reimburse the cost of any health care service for persons
 4    who are  enrolled  in  the  integrated  health  care  program
 5    established  under  Article  V Section 5-16.3 of the Illinois
 6    Public Aid Code or  under  the  Children's  Health  Insurance
 7    Program  Act  through  providers selected by the organization
 8    and the arrangement consists  of  making  provision  for  the
 9    delivery  of health care services, as distinguished from mere
10    indemnification.  A "health  care  plan"  also  includes  any
11    arrangement  pursuant  to  Section  4-17.   Nothing  in  this
12    definition,  however,  affects  the  total  medical  services
13    available  to  persons  eligible for medical assistance under
14    the Illinois Public Aid Code.
15        (8)  "Health care services" means any  services  included
16    in  the  furnishing  to  any  individual of medical or dental
17    care, or the hospitalization or incident to the furnishing of
18    such care or hospitalization as well as the furnishing to any
19    person of any and all  other  services  for  the  purpose  of
20    preventing,  alleviating,  curing or healing human illness or
21    injury.
22        (9)  "Health   Maintenance   Organization"   means    any
23    organization  formed  under the laws of this or another state
24    to provide or arrange for one or more health care plans under
25    a system which causes any part of the  risk  of  health  care
26    delivery to be borne by the organization or its providers.
27        (10)  "Net  worth"  means  admitted assets, as defined in
28    Section 1-3 of this Act, minus liabilities.
29        (11)  "Organization"  means  any  insurance  company,   a
30    nonprofit  corporation  authorized  under  the Dental Service
31    Plan Act or the Voluntary Health Services  Plans  Act,  or  a
32    corporation organized under the laws of this or another state
33    for  the  purpose  of operating one or more health care plans
34    and doing no business other than that of a Health Maintenance
 
SB873 Enrolled             -16-                LRB9201523DJgc
 1    Organization or an insurance company.   "Organization"  shall
 2    also  mean  the University of Illinois Hospital as defined in
 3    the University of Illinois Hospital Act.
 4        (12)  "Provider" means any physician, hospital  facility,
 5    or  other person which is licensed or otherwise authorized to
 6    furnish health care services  and  also  includes  any  other
 7    entity that arranges for the delivery or furnishing of health
 8    care service.
 9        (13)  "Producer"  means  a  person directly or indirectly
10    associated  with  a  health  care   plan   who   engages   in
11    solicitation or enrollment.
12        (14)  "Per capita prepaid" means a basis of prepayment by
13    which  a  fixed  amount of money is prepaid per individual or
14    any  other  enrollment  unit  to   the   Health   Maintenance
15    Organization  or  for health care services which are provided
16    during a definite time period regardless of the frequency  or
17    extent  of  the  services  rendered by the Health Maintenance
18    Organization,  except  for  copayments  and  deductibles  and
19    except as provided in subsection (f) of Section 5-3  of  this
20    Act.
21        (15)  "Subscriber"  means a person who has entered into a
22    contractual  relationship   with   the   Health   Maintenance
23    Organization  for the provision of or arrangement of at least
24    basic health care  services  to  the  beneficiaries  of  such
25    contract.
26    (Source:  P.A.  89-90,  eff.  6-30-95;  90-177, eff. 7-23-97;
27    90-372, eff.  7-1-98;  90-376,  eff.  8-14-97;  90-655,  eff.
28    7-30-98.)

29        (215 ILCS 125/2-1) (from Ch. 111 1/2, par. 1403)
30        Sec.  2-1.   Certificate  of  authority  -  Exception for
31    corporate  employee  programs  -  Applications   -   Material
32    modification of operation.
33        (a)  No  organization shall establish or operate a Health
 
SB873 Enrolled             -17-                LRB9201523DJgc
 1    Maintenance Organization in this State  without  obtaining  a
 2    certificate  of  authority  under  this Act.  No person other
 3    than an organization may  lawfully  establish  or  operate  a
 4    Health  Maintenance  Organization  in  this  State.  This Act
 5    shall not apply to  the  establishment  and  operation  of  a
 6    Health  Maintenance  Organization  exclusively  providing  or
 7    arranging   for  health  care  services  to  employees  of  a
 8    corporate affiliate of such Health Maintenance  Organization.
 9    This  exclusion  shall  be  available  only  to  those Health
10    Maintenance    Organizations    which    require     employee
11    contributions  which equal less than 50% of the total cost of
12    the health care plan, with the remainder of  the  cost  being
13    paid  by the corporate affiliate which is the employer of the
14    participants in the  plan. This Act shall not  apply  to  the
15    establishment   and   operation   of   a  Health  Maintenance
16    Organization exclusively providing or arranging  health  care
17    services  under  contract with the State to persons committed
18    to the custody of the  Illinois  Department  of  Corrections.
19    This Act does not apply to the establishment and operation of
20    (i)  a  managed care community network providing or arranging
21    health  care  services  under   contract   with   the   State
22    exclusively  to  persons  who  are enrolled in the integrated
23    health care program established under Section 5-16.3  of  the
24    Illinois  Public  Aid  Code  or (ii) a managed care community
25    network owned, operated, or governed by a county provider  as
26    defined in Section 15-1 of that Code.
27        This   Act  does  not  apply  to  the  establishment  and
28    operation  of  managed  care  community  networks  that   are
29    certified  as risk-bearing entities under Section 5-11 of the
30    Illinois Public Aid Code and that contract with the  Illinois
31    Department of Public Aid pursuant to that Section.
32        (b)  Any  organization  may apply to the Director for and
33    obtain a certificate of authority to establish and operate  a
34    Health  Maintenance Organization in compliance with this Act.
 
SB873 Enrolled             -18-                LRB9201523DJgc
 1    A foreign corporation may qualify under this Act, subject  to
 2    its  registration  to  do business in this State as a foreign
 3    corporation.
 4        (c)  Each application  for  a  certificate  of  authority
 5    shall  be  filed  in triplicate and verified by an officer or
 6    authorized representative of the applicant,  shall  be  in  a
 7    form prescribed by the Director, and shall set forth, without
 8    limiting what may be required by the Director, the following:
 9             (1)  A copy of the organizational document;
10             (2)  A copy of the bylaws, rules and regulations, or
11        similar  document  regulating the conduct of the internal
12        affairs of the applicant, which shall include a mechanism
13        to afford the enrollees an opportunity to participate  in
14        an advisory capacity in matters of policy and operations;
15             (3)  A  list  of  the names, addresses, and official
16        positions of the persons who are to  be  responsible  for
17        the  conduct  of the affairs of the applicant; including,
18        but  not  limited  to,  all  members  of  the  board   of
19        directors,  executive  committee, the principal officers,
20        and any person or entity owning or having  the  right  to
21        acquire   10%   or  more  of  the  voting  securities  or
22        subordinated debt of the applicant;
23             (4)  A statement generally describing the applicant,
24        geographic area to be served, its  facilities,  personnel
25        and the health care services to be offered;
26             (5)  A  copy  of the form of any contract made or to
27        be made between the applicant and any providers regarding
28        the provision of health care services to enrollees;
29             (6)  A copy of the form of any contract made  or  to
30        be  made  between  the applicant and any person listed in
31        paragraph (3) of this subsection;
32             (7)  A copy of the form of any contract made  or  to
33        be   made   between   the   applicant   and  any  person,
34        corporation,  partnership  or  other   entity   for   the
 
SB873 Enrolled             -19-                LRB9201523DJgc
 1        performance  on  the  applicant's behalf of any functions
 2        including, but not limited to, marketing, administration,
 3        enrollment, investment management and subcontracting  for
 4        the provision of health services to enrollees;
 5             (8)  A  copy of the form of any group contract which
 6        is to be issued to employers, unions, trustees, or  other
 7        organizations  and  a  copy  of  any  form of evidence of
 8        coverage to be issued to any enrollee or  subscriber  and
 9        any advertising material;
10             (9)  Descriptions  of the applicant's procedures for
11        resolving  enrollee   grievances   which   must   include
12        procedures  providing  for enrollees participation in the
13        resolution of grievances;
14             (10)  A  copy  of  the   applicant's   most   recent
15        financial  statements audited by an independent certified
16        public accountant.   If  the  financial  affairs  of  the
17        applicant's  parent company are audited by an independent
18        certified public accountant but those  of  the  applicant
19        are not, then a copy of the most recent audited financial
20        statement  of  the  applicant's parent, attached to which
21        shall be consolidating financial statements of the parent
22        including separate unaudited financial statements of  the
23        applicant, unless the Director determines that additional
24        or  more recent financial information is required for the
25        proper administration of this Act;
26             (11)  A copy  of  the  applicant's  financial  plan,
27        including   a   three-year   projection   of  anticipated
28        operating results, a statement of the sources of  working
29        capital,  and any other sources of funding and provisions
30        for contingencies;
31             (12)  A description of rate methodology;
32             (13)  A  description  of  the  proposed  method   of
33        marketing;
34             (14)  A  copy of every filing made with the Illinois
 
SB873 Enrolled             -20-                LRB9201523DJgc
 1        Secretary of  State  which  relates  to  the  applicant's
 2        registered agent or registered office;
 3             (15)  A  description  of the complaint procedures to
 4        be established and maintained as required  under  Section
 5        4-6 of this Act;
 6             (16)  A  description, in accordance with regulations
 7        promulgated by the Illinois Department of Public  Health,
 8        of   the   quality   assessment  and  utilization  review
 9        procedures to be utilized by the applicant;
10             (17)  The fee for filing an application for issuance
11        of a certificate of authority provided in Section 408  of
12        the Illinois Insurance Code, as now or hereafter amended;
13        and
14             (18)  Such  other  information  as  the Director may
15        reasonably require to make the determinations required by
16        this Act.
17    (Source: P.A. 90-618, eff. 7-10-98.)

18        (215 ILCS 125/6-3) (from Ch. 111 1/2, par. 1418.3)
19        Sec.  6-3.   Scope.   This  Article  applies  to   direct
20    individual contracts, group contracts and certificates issued
21    thereunder,  or any other evidence of coverage, each of which
22    provides for coverage under a health care plan, and has  been
23    issued   by   organizations   licensed   to  transact  health
24    maintenance organization business in  this  State  under  the
25    Health  Maintenance Organization Act, but not to any business
26    of  such  organization  not  transacted  under   its   health
27    maintenance  organization  certificate  of  authority.   This
28    Article  does  not  apply  to  (i)  a  managed care community
29    network providing or arranging  health  care  services  under
30    contract  with  the  State  exclusively  to  persons  who are
31    enrolled in the integrated health  care  program  established
32    under  Section 5-16.3 of the Illinois Public Aid Code or (ii)
33    a managed care community network owned, operated, or governed
 
SB873 Enrolled             -21-                LRB9201523DJgc
 1    by a county provider as defined in Section 15-1 of that Code.
 2    (Source: P.A. 88-554, eff. 7-26-94.)

 3        Section 25.  The Health Care Worker Self-Referral Act  is
 4    amended by changing Section 20 as follows:

 5        (225 ILCS 47/20)
 6        Sec. 20.  Prohibited referrals and claims for payment.
 7        (a)  A  health  care worker shall not refer a patient for
 8    health services to an entity outside the health care worker's
 9    office or group practice in which the health care  worker  is
10    an  investor, unless the health care worker directly provides
11    health services within the  entity  and  will  be  personally
12    involved with the provision of care to the referred patient.
13        (b)  Pursuant  to  Board determination that the following
14    exception is applicable, a health care worker may  invest  in
15    and refer to an entity, whether or not the health care worker
16    provides  direct  services  within said entity, if there is a
17    demonstrated  need  in  the  community  for  the  entity  and
18    alternative financing is not available.  For purposes of this
19    subsection (b), "demonstrated need" in the community for  the
20    entity  may  exist  if (1) there is no facility of reasonable
21    quality that provides medically appropriate service, (2)  use
22    of  existing  facilities  is  onerous  or creates too great a
23    hardship for patients, (3) the entity is  formed  to  own  or
24    lease  medical equipment which replaces obsolete or otherwise
25    inadequate equipment in or under the control  of  a  hospital
26    located  in  a  federally designated health manpower shortage
27    area, or (4) such other standards as established, by rule, by
28    the Board.  "Community" shall be defined  as  a  metropolitan
29    area for a city, and a county for a rural area.  In addition,
30    the  following provisions must be met to be exempt under this
31    Section:
32             (1)  Individuals who are not in a position to  refer
 
SB873 Enrolled             -22-                LRB9201523DJgc
 1        patients  to  an entity are given a bona fide opportunity
 2        to also invest in the entity on the same terms  as  those
 3        offered a referring health care worker; and
 4             (2)  No  health  care  worker  who  invests shall be
 5        required or encouraged to make referrals to the entity or
 6        otherwise generate business as a condition of becoming or
 7        remaining an investor; and
 8             (3)  The entity shall market or furnish its services
 9        to referring  health  care  worker  investors  and  other
10        investors on equal terms; and
11             (4)  The  entity  shall  not loan funds or guarantee
12        any loans for health care workers who are in  a  position
13        to refer to an entity; and
14             (5)  The   income   on   the  health  care  worker's
15        investment shall be tied  to  the  health  care  worker's
16        equity  in  the  facility  rather  than  to the volume of
17        referrals made; and
18             (6)  Any investment contract between the entity  and
19        the  health care worker shall not include any covenant or
20        non-competition clause that prevents a health care worker
21        from investing in other entities; and
22             (7)  When making a referral, a  health  care  worker
23        must disclose his investment interest in an entity to the
24        patient  being  referred  to  such entity. If alternative
25        facilities are  reasonably  available,  the  health  care
26        worker   must   provide   the  patient  with  a  list  of
27        alternative facilities.  The  health  care  worker  shall
28        inform  the  patient  that they have the option to use an
29        alternative facility other than one in which  the  health
30        care  worker  has  an investment interest and the patient
31        will not be treated differently by the health care worker
32        if the patient chooses to use another entity. This  shall
33        be  applicable  to  all  health  care  worker  investors,
34        including  those  who provide direct care or services for
 
SB873 Enrolled             -23-                LRB9201523DJgc
 1        their  patients  in   entities   outside   their   office
 2        practices; and
 3             (8)  If  a  third  party  payor requests information
 4        with  regard  to  a  health  care   worker's   investment
 5        interest, the same shall be disclosed; and
 6             (9)  The   entity   shall   establish   an  internal
 7        utilization  review  program  to  ensure  that  investing
 8        health care workers  provided  appropriate  or  necessary
 9        utilization; and
10             (10)  If  a  health care worker's financial interest
11        in an entity is incompatible with  a  referred  patient's
12        interest,  the  health care worker shall make alternative
13        arrangements for the patient's care.
14        The Board shall make such a determination  for  a  health
15    care  worker  within  90 days of a completed written request.
16    Failure to make such a determination within the 90  day  time
17    frame  shall mean that no alternative is practical based upon
18    the facts set forth in the completed written request.
19        (c)  It shall not be a violation of this Act for a health
20    care worker to refer a  patient  for  health  services  to  a
21    publicly  traded  entity in which he or she has an investment
22    interest provided that:
23             (1)  the entity is listed for  trading  on  the  New
24        York Stock Exchange or on the American Stock Exchange, or
25        is  a  national  market  system  security traded under an
26        automated inter-dealer quotation system operated  by  the
27        National Association of Securities Dealers; and
28             (2)  the entity had, at the end of the corporation's
29        most  recent  fiscal  year,  total net assets of at least
30        $30,000,000 related to the furnishing of health services;
31        and
32             (3)  any  investment  interest  obtained  after  the
33        effective date of this Act is  traded  on  the  exchanges
34        listed  in  paragraph 1 of subsection (c) of this Section
 
SB873 Enrolled             -24-                LRB9201523DJgc
 1        after the entity became a  publicly  traded  corporation;
 2        and
 3             (4)  the entity markets or furnishes its services to
 4        referring  health  care worker investors and other health
 5        care workers on equal terms; and
 6             (5)  all  stock  held  in   such   publicly   traded
 7        companies,   including  stock  held  in  the  predecessor
 8        privately held company, shall be  of  one  class  without
 9        preferential treatment as to status or remuneration; and
10             (6)  the entity does not loan funds or guarantee any
11        loans for health care workers who are in a position to be
12        referred to an entity; and
13             (7)  the   income   on   the  health  care  worker's
14        investment is tied to the health care worker's equity  in
15        the  entity  rather than to the volume of referrals made;
16        and
17             (8)  the investment interest does not exceed 1/2  of
18        1% of the entity's total equity.
19        (d)  Any  hospital  licensed under the Hospital Licensing
20    Act shall not discriminate against or  otherwise  penalize  a
21    health care worker for compliance with this Act.
22        (e)  Any  health  care  worker  or other entity shall not
23    enter into an arrangement or scheme seeking to make referrals
24    to another health  care  worker  or  entity  based  upon  the
25    condition  that  the  health  care worker or entity will make
26    referrals with an intent to evade the  prohibitions  of  this
27    Act  by  inducing patient referrals which would be prohibited
28    by this Section if the health care worker or entity made  the
29    referral directly.
30        (f)  If compliance with the need and alternative investor
31    criteria  is  not  practical,  the  health  care worker shall
32    identify to  the  patient  reasonably  available  alternative
33    facilities.   The   Board  shall,  by  rule,  designate  when
34    compliance is "not practical".
 
SB873 Enrolled             -25-                LRB9201523DJgc
 1        (g)  Health care workers may request from the Board  that
 2    it  render an advisory opinion that a referral to an existing
 3    or proposed entity under specified circumstances does or does
 4    not violate the provisions of this Act.  The Board's  opinion
 5    shall  be  presumptively  correct.  Failure to render such an
 6    advisory opinion  within  90  days  of  a  completed  written
 7    request  pursuant  to  this Section shall create a rebuttable
 8    presumption  that  a  referral  described  in  the  completed
 9    written request is not or will not be  a  violation  of  this
10    Act.
11        (h)  Notwithstanding  any  provision  of  this Act to the
12    contrary, a health care worker may refer  a patient, who is a
13    member of a health maintenance organization "HMO" licensed in
14    this State, for health services to  an  entity,  outside  the
15    health  care  worker's office or group practice, in which the
16    health care worker is an investor,  provided  that  any  such
17    referral  is  made  pursuant  to  a  contract  with  the HMO.
18    Furthermore, notwithstanding any provision of this Act to the
19    contrary, a health care worker may refer  an  enrollee  of  a
20    "managed  care  community  network", as defined in subsection
21    (b) of Section 5-11 5-16.3 of the Illinois Public  Aid  Code,
22    for  health  services  to  an entity, outside the health care
23    worker's office or group practice, in which the  health  care
24    worker  is  an  investor,  provided that any such referral is
25    made pursuant to a contract with the managed  care  community
26    network.
27    (Source: P.A. 87-1207; 88-554, eff. 7-26-94.)

28        Section  30.  The  Illinois Public Aid Code is amended by
29    changing Sections 5-11, 5-16.9, 5-16.11,  15-2,  15-3,  15-4,
30    and 15-5 as follows:

31        (305 ILCS 5/5-11) (from Ch. 23, par. 5-11)
32        Sec.  5-11.  Co-operative  arrangements;  contracts  with
 
SB873 Enrolled             -26-                LRB9201523DJgc
 1    other   State   agencies,   health  care  and  rehabilitation
 2    organizations, and fiscal intermediaries.
 3        (a)  The Illinois Department may enter into  co-operative
 4    arrangements    with    State    agencies   responsible   for
 5    administering or supervising  the  administration  of  health
 6    services  and  vocational  rehabilitation services to the end
 7    that there may be maximum utilization of such services in the
 8    provision of medical assistance.
 9        The Illinois Department shall, not later  than  June  30,
10    1993,  enter  into one or more co-operative arrangements with
11    the   Department   of   Mental   Health   and   Developmental
12    Disabilities providing that the Department of  Mental  Health
13    and   Developmental  Disabilities  will  be  responsible  for
14    administering or supervising all  programs  for  services  to
15    persons   in  community  care  facilities  for  persons  with
16    developmental disabilities,  including  but  not  limited  to
17    intermediate  care  facilities,  that  are supported by State
18    funds or by funding under Title XIX  of  the  federal  Social
19    Security  Act.   The  responsibilities  of  the Department of
20    Mental Health  and  Developmental  Disabilities  under  these
21    agreements   are  transferred  to  the  Department  of  Human
22    Services as provided in the Department of Human Services Act.
23        The Department may also contract with such  State  health
24    and  rehabilitation  agencies  and  other  public  or private
25    health care and rehabilitation organizations to act for it in
26    supplying designated medical  services  to  persons  eligible
27    therefor  under  this  Article.  Any  contracts  with  health
28    services   or   health  maintenance  organizations  shall  be
29    restricted to organizations  which  have  been  certified  as
30    being  in  compliance  with standards promulgated pursuant to
31    the laws  of  this  State  governing  the  establishment  and
32    operation   of   health   services   or   health  maintenance
33    organizations.  The  Department  may   also   contract   with
34    insurance  companies  or  other corporate entities serving as
 
SB873 Enrolled             -27-                LRB9201523DJgc
 1    fiscal  intermediaries  in  this  State   for   the   Federal
 2    Government  in respect to Medicare payments under Title XVIII
 3    of the Federal Social Security Act to act for the  Department
 4    in  paying medical care suppliers.  The provisions of Section
 5    9 of "An Act in relation to State finance", approved June 10,
 6    1919, as amended, notwithstanding, such contracts with  State
 7    agencies, other health care and rehabilitation organizations,
 8    or fiscal intermediaries may provide for advance payments.
 9        (b)  For  purposes  of this subsection (b), "managed care
10    community network" means  an  entity,  other  than  a  health
11    maintenance   organization,   that  is  owned,  operated,  or
12    governed by providers of health  care  services  within  this
13    State  and  that provides or arranges primary, secondary, and
14    tertiary managed health care services under contract with the
15    Illinois Department exclusively to persons  participating  in
16    programs administered by the Illinois Department.
17        The   Illinois   Department   may  certify  managed  care
18    community networks, including managed care community networks
19    owned, operated, managed, or governed by State-funded medical
20    schools, as risk-bearing entities eligible to  contract  with
21    the    Illinois   Department   as   Medicaid   managed   care
22    organizations.  The Illinois  Department  may  contract  with
23    those  managed care community networks to furnish health care
24    services  to  or  arrange  those  services  for   individuals
25    participating   in  programs  administered  by  the  Illinois
26    Department.    The   rates   for   those   provider-sponsored
27    organizations may  be  determined  on  a  prepaid,  capitated
28    basis.   A  managed  care  community  network  may  choose to
29    contract  with  the  Illinois  Department  to  provide   only
30    pediatric health care services. The Illinois Department shall
31    by  rule  adopt  the  criteria,  standards, and procedures by
32    which a managed care community network may  be  permitted  to
33    contract  with the Illinois Department and shall consult with
34    the Department of Insurance in adopting these rules.
 
SB873 Enrolled             -28-                LRB9201523DJgc
 1        A county provider as defined in Section 15-1 of this Code
 2    may contract with the Illinois Department to provide primary,
 3    secondary, or tertiary managed  health  care  services  as  a
 4    managed  care community network without the need to establish
 5    a  separate  entity  and  shall  be  deemed  a  managed  care
 6    community network for purposes  of  this  Code  only  to  the
 7    extent  it provides services to participating individuals.  A
 8    county provider is entitled to  contract  with  the  Illinois
 9    Department  with respect to any contracting region located in
10    whole or in part within the county.  A county provider is not
11    required to accept enrollees who do  not  reside  within  the
12    county.
13        In order to (i) accelerate and facilitate the development
14    of  integrated  health  care  in  contracting  areas  outside
15    counties with populations in excess of 3,000,000 and counties
16    adjacent  to those counties and (ii) maintain and sustain the
17    high quality of education and residency programs  coordinated
18    and  associated  with  local  area  hospitals,  the  Illinois
19    Department  may develop and implement a demonstration program
20    from  managed  care  community  networks   owned,   operated,
21    managed,  or  governed  by State-funded medical schools.  The
22    Illinois Department shall prescribe  by  rule  the  criteria,
23    standards,  and  procedures  for effecting this demonstration
24    program.
25        A managed care community network that contracts with  the
26    Illinois  Department  to  furnish  health care services to or
27    arrange  those  services  for  enrollees   participating   in
28    programs administered by the Illinois Department shall do all
29    of the following:
30             (1)  Provide  that  any provider affiliated with the
31        managed care community network may also provide  services
32        on a fee-for-service basis to Illinois Department clients
33        not enrolled in such managed care entities.
34             (2)  Provide client education services as determined
 
SB873 Enrolled             -29-                LRB9201523DJgc
 1        and  approved  by  the Illinois Department, including but
 2        not  limited  to  (i)  education  regarding   appropriate
 3        utilization  of  health  care  services in a managed care
 4        system, (ii) written disclosure of treatment policies and
 5        restrictions   or   limitations   on   health   services,
 6        including,  but  not  limited  to,   physical   services,
 7        clinical   laboratory   tests,   hospital   and  surgical
 8        procedures,  prescription  drugs   and   biologics,   and
 9        radiological  examinations, and (iii) written notice that
10        the enrollee may  receive  from  another  provider  those
11        covered  services  that  are  not provided by the managed
12        care community network.
13             (3)  Provide that enrollees within  the  system  may
14        choose  the  site for provision of services and the panel
15        of health care providers.
16             (4)  Not discriminate in enrollment or disenrollment
17        practices  among  recipients  of  medical   services   or
18        enrollees based on health status.
19             (5)  Provide  a  quality  assurance  and utilization
20        review program that meets the requirements established by
21        the Illinois Department in rules that  incorporate  those
22        standards   set   forth   in   the   Health   Maintenance
23        Organization Act.
24             (6)  Issue   a   managed   care   community  network
25        identification card to  each  enrollee  upon  enrollment.
26        The card must contain all of the following:
27                  (A)  The enrollee's health plan.
28                  (B)  The  name  and  telephone  number  of  the
29             enrollee's  primary  care  physician or the site for
30             receiving primary care services.
31                  (C)  A telephone number to be used  to  confirm
32             eligibility   for  benefits  and  authorization  for
33             services that is available 24 hours per day, 7  days
34             per week.
 
SB873 Enrolled             -30-                LRB9201523DJgc
 1             (7)  Ensure  that  every  primary care physician and
 2        pharmacy in the managed care community network meets  the
 3        standards  established  by  the  Illinois  Department for
 4        accessibility  and  quality  of  care.     The   Illinois
 5        Department shall arrange for and oversee an evaluation of
 6        the  standards  established  under this paragraph (7) and
 7        may recommend any necessary changes to these standards.
 8             (8)  Provide a  procedure  for  handling  complaints
 9        that  meets  the requirements established by the Illinois
10        Department in rules that incorporate those standards  set
11        forth in the Health Maintenance Organization Act.
12             (9)  Maintain,  retain,  and  make  available to the
13        Illinois Department records, data, and information, in  a
14        uniform  manner  determined  by  the Illinois Department,
15        sufficient  for  the  Illinois  Department   to   monitor
16        utilization, accessibility, and quality of care.
17             (10)  Provide  that  the  pharmacy formulary used by
18        the managed  care  community  network  and  its  contract
19        providers  be  no  more  restrictive  than  the  Illinois
20        Department's pharmaceutical program on the effective date
21        of  this amendatory Act of 1998 and as amended after that
22        date.
23        The Illinois Department shall contract with an entity  or
24    entities  to  provide  external  peer-based quality assurance
25    review for the managed health care programs  administered  by
26    the  Illinois Department.  The entity shall be representative
27    of Illinois physicians licensed to practice medicine  in  all
28    its  branches and have statewide geographic representation in
29    all specialities of medical care that are provided in managed
30    health care programs administered by the Illinois Department.
31    The entity may not be a third party payer and shall  maintain
32    offices  in  locations  around  the State in order to provide
33    service  and  continuing  medical  education   to   physician
34    participants   within  those  managed  health  care  programs
 
SB873 Enrolled             -31-                LRB9201523DJgc
 1    administered by the Illinois Department.  The review  process
 2    shall  be  developed  and  conducted  by  Illinois physicians
 3    licensed to  practice  medicine  in  all  its  branches.   In
 4    consultation  with  the  entity,  the Illinois Department may
 5    contract with  other  entities  for  professional  peer-based
 6    quality assurance review of individual categories of services
 7    other  than  services provided, supervised, or coordinated by
 8    physicians licensed to practice medicine in all its branches.
 9    The Illinois Department shall establish, by rule, criteria to
10    avoid  conflicts  of  interest  in  the  conduct  of  quality
11    assurance activities consistent with professional peer-review
12    standards.   All  quality  assurance  activities   shall   be
13    coordinated by the Illinois Department.
14        Each  managed care community network must demonstrate its
15    ability to bear the financial  risk  of  serving  individuals
16    under  this  program.  The  Illinois Department shall by rule
17    adopt standards for  assessing  the  solvency  and  financial
18    soundness   of  each  managed  care  community  network.  Any
19    solvency and financial standards  adopted  for  managed  care
20    community  networks  shall  be  no  more restrictive than the
21    solvency  and  financial  standards  adopted  under   Section
22    1856(a)  of  the  Social  Security Act for provider-sponsored
23    organizations under Part C  of  Title  XVIII  of  the  Social
24    Security Act.
25        The  Illinois  Department  may  implement  the amendatory
26    changes to this Code made by  this  amendatory  Act  of  1998
27    through the use of emergency rules in accordance with Section
28    5-45  of  the  Illinois  Administrative  Procedure  Act.  For
29    purposes of that Act, the  adoption  of  rules  to  implement
30    these  changes  is  deemed an emergency and necessary for the
31    public interest, safety, and welfare.
32        (c)  Not  later  than  June  30,   1996,   the   Illinois
33    Department   shall   enter   into  one  or  more  cooperative
34    arrangements with the Department of  Public  Health  for  the
 
SB873 Enrolled             -32-                LRB9201523DJgc
 1    purpose of developing a single survey for nursing facilities,
 2    including  but  not  limited to facilities funded under Title
 3    XVIII or Title XIX of the  federal  Social  Security  Act  or
 4    both, which shall be administered and conducted solely by the
 5    Department  of  Public Health. The Departments shall test the
 6    single survey  process  on  a  pilot  basis,  with  both  the
 7    Departments  of  Public  Aid and Public Health represented on
 8    the consolidated survey team.  The pilot will sunset June 30,
 9    1997.  After June 30, 1997, unless  otherwise  determined  by
10    the  Governor,  a  single  survey shall be implemented by the
11    Department of Public Health which would  not  preclude  staff
12    from  the  Department  of  Public  Aid  from going on-site to
13    nursing facilities to perform necessary  audits  and  reviews
14    which  shall  not  replicate  the  single State agency survey
15    required by this  Act.   This  Section  shall  not  apply  to
16    community  or  intermediate  care facilities for persons with
17    developmental disabilities.
18        (d)  Nothing in this Code in any way limits or  otherwise
19    impairs  the authority or power of the Illinois Department to
20    enter into a negotiated contract  pursuant  to  this  Section
21    with a managed care community network or a health maintenance
22    organization,   as   defined   in   the   Health  Maintenance
23    Organization Act, that provides for termination or nonrenewal
24    of the contract without cause, upon notice as provided in the
25    contract, and without a hearing.
26    (Source: P.A.  89-415,  eff.  1-1-96;  89-507,  eff.  7-1-97;
27    90-618, eff. 7-10-98.)

28        (305 ILCS 5/5-16.9)
29        Sec. 5-16.9.  Woman's health care provider.  The  medical
30    assistance  program  is  subject to the provisions of Section
31    356r of the Illinois Insurance Code.  The Illinois Department
32    shall adopt rules to implement the  requirements  of  Section
33    356r of the Illinois Insurance Code in the medical assistance
 
SB873 Enrolled             -33-                LRB9201523DJgc
 1    program  including managed care components defined in Section
 2    5-16.3.
 3    (Source: P.A. 89-514, eff. 7-17-96.)

 4        (305 ILCS 5/5-16.11)
 5        Sec. 5-16.11.  Uniform standards applied to managed  care
 6    entities.   Any  managed care entity providing services under
 7    this Code shall use a pharmacy  formulary  that  is  no  more
 8    restrictive  than  the  Illinois  Department's pharmaceutical
 9    program comply with the criteria, standards,  and  procedures
10    imposed  on  managed  care  entities  under paragraph (14) of
11    subsection (d) of Section 5-16.3 of this Code.
12    (Source: P.A. 90-538, eff. 12-1-97.)

13        (305 ILCS 5/15-2) (from Ch. 23, par. 15-2)
14        Sec. 15-2. County Provider Trust Fund.
15        (a)  There is created in the State  Treasury  the  County
16    Provider  Trust  Fund.   Interest earned by the Fund shall be
17    credited to the Fund.  The Fund shall not be used to  replace
18    any funds appropriated to the Medicaid program by the General
19    Assembly.
20        (b)  The  Fund  is  created  solely  for  the purposes of
21    receiving, investing, and distributing monies  in  accordance
22    with this Article XV.  The Fund shall consist of:
23             (1)  All   monies   collected  or  received  by  the
24        Illinois Department under Section 15-3 of this Code;
25             (2)  All  federal  financial  participation   monies
26        received by the Illinois Department pursuant to Title XIX
27        of   the   Social   Security   Act,  42  U.S.C.  1396(b),
28        attributable  to  eligible  expenditures  made   by   the
29        Illinois  Department  pursuant  to  Section  15-5 of this
30        Code;
31             (3)  All federal moneys  received  by  the  Illinois
32        Department  pursuant  to Title XXI of the Social Security
 
SB873 Enrolled             -34-                LRB9201523DJgc
 1        Act attributable to eligible  expenditures  made  by  the
 2        Illinois  Department  pursuant  to  Section  15-5 of this
 3        Code; and
 4             (4)  All other monies received by the Fund from  any
 5        source, including interest thereon.
 6        (c)  Disbursements  from  the  Fund  shall be by warrants
 7    drawn by the State Comptroller upon receipt of vouchers  duly
 8    executed  and  certified by the Illinois Department and shall
 9    be made only:
10             (1)  For   hospital   inpatient    care,    hospital
11        outpatient   care,  care  provided  by  other  outpatient
12        facilities operated by  a  county,  and  disproportionate
13        share  hospital  payments  made  under  Title  XIX of the
14        Social Security  Act  and  Article  V  of  this  Code  as
15        required by Section 15-5 of this Code;
16             (1.5)  For  services  provided  by  county providers
17        pursuant to Section 5-11 or 5-16.3 of this Code;
18             (2)  For   the   reimbursement   of   administrative
19        expenses incurred by county providers on  behalf  of  the
20        Illinois  Department as permitted by Section 15-4 of this
21        Code;
22             (3)  For the reimbursement of monies received by the
23        Fund through error or mistake;
24             (4)  For  the  payment  of  administrative  expenses
25        necessarily incurred by the Illinois  Department  or  its
26        agent  in  performing  the  activities  required  by this
27        Article XV;
28             (5)  For  the  payment  of  any  amounts  that   are
29        reimbursable  to  the  federal  government,  attributable
30        solely  to  the  Fund,  and  required to be paid by State
31        warrant; and
32             (6)  For   hospital   inpatient    care,    hospital
33        outpatient   care,  care  provided  by  other  outpatient
34        facilities operated by  a  county,  and  disproportionate
 
SB873 Enrolled             -35-                LRB9201523DJgc
 1        share  hospital  payments  made  under  Title  XXI of the
 2        Social Security Act, pursuant to  Section  15-5  of  this
 3        Code.
 4    (Source: P.A. 90-618, eff. 7-10-98; 91-24, eff. 7-1-99.)

 5        (305 ILCS 5/15-3) (from Ch. 23, par. 15-3)
 6        Sec. 15-3.  Intergovernmental Transfers.
 7        (a)  Each   qualifying   county   shall  make  an  annual
 8    intergovernmental transfer to the Illinois Department  in  an
 9    amount  equal  to  71.7%  of the difference between the total
10    payments made by  the  Illinois  Department  to  such  county
11    provider  for  hospital  services under Titles XIX and XXI of
12    the Social Security Act or pursuant to Section 5-11 or 5-16.3
13    of this Code in each fiscal year ending June 30 (or  fraction
14    thereof  during  the  fiscal  year  ending June 30, 1993) and
15    $108,800,000 (or fraction thereof), except  that  the  annual
16    intergovernmental   transfer   shall  not  exceed  the  total
17    payments made by  the  Illinois  Department  to  such  county
18    provider for hospital services under this Code or pursuant to
19    Section  5-16.3  of  this  Code,  less  the sum of (i) 50% of
20    payments reimbursable under the Social Security Act at a rate
21    of 50% and (ii) 65% of payments reimbursable under the Social
22    Security Act at a rate of 65%, in  each  fiscal  year  ending
23    June 30 (or fraction thereof).
24        (b)  The   payment  schedule  for  the  intergovernmental
25    transfer   made   hereunder   shall   be    established    by
26    intergovernmental  agreement  between the Illinois Department
27    and the applicable county, which agreement shall at a minimum
28    provide:
29             (1)  For periodic payments no less  frequently  than
30        monthly   to   the  county  provider  for  inpatient  and
31        outpatient  approved  or  adjudicated  claims   and   for
32        disproportionate  share  payments under Section 5-5.02 of
33        this Code (in the initial year, for services  after  July
 
SB873 Enrolled             -36-                LRB9201523DJgc
 1        1,  1991, or such other date as an approved State Medical
 2        Assistance Plan shall provide) and to the county provider
 3        pursuant to Section 5-16.3 of this Code.
 4             (2)  For periodic payments no less  frequently  than
 5        monthly   to   the   county   provider  for  supplemental
 6        disproportionate share  payments  hereunder  based  on  a
 7        federally approved State Medical Assistance Plan.
 8             (3)  For   calculation   of   the  intergovernmental
 9        transfer payment to be made by the county equal to  71.7%
10        of  the  difference  between  the  amount of the periodic
11        payment and the base amount; provided, however,  that  if
12        the periodic payment for any period is less than the base
13        amount   for   such  period,  the  base  amount  for  the
14        succeeding  period  (and   any   successive   period   if
15        necessary)  shall  be  increased  by  the  amount of such
16        shortfall.
17             (4)  For an intergovernmental  transfer  methodology
18        which  obligates  the  Illinois  Department to notify the
19        county and county provider in writing of  each  impending
20        periodic   payment  and  the  intergovernmental  transfer
21        payment attributable  thereto  and  which  obligates  the
22        Comptroller to release the periodic payment to the county
23        provider  within  one  working  day  of  receipt  of  the
24        intergovernmental transfer payment from the county.
25    (Source: P.A. 90-618, eff. 7-10-98; 91-24, eff. 7-1-99.)

26        (305 ILCS 5/15-4) (from Ch. 23, par. 15-4)
27        Sec.  15-4.  Contractual  assumption of certain expenses.
28    Hospitals  may,  at  their  election,  by  written  agreement
29    between the counties owning and operating the  hospitals  and
30    the  Illinois  Department,  assume  specified expenses of the
31    operation of the  Illinois  Department  associated  with  the
32    determination   of   eligibility,  direct  payment  of  which
33    expenses by the Illinois Department would qualify  as  public
 
SB873 Enrolled             -37-                LRB9201523DJgc
 1    funds  expended  by  the Illinois Department for the Illinois
 2    Medical Assistance Program  or  other  health  care  programs
 3    administered   by  the  Illinois  Department.   The  Illinois
 4    Department shall open an adequately staffed  special  on-site
 5    office  or offices at facilities designated by the county for
 6    the purpose of assisting the  county  in  ensuring  that  all
 7    eligible  individuals  are  enrolled  in the Illinois Medical
 8    Assistance Program and, to the extent  that  enrollment  into
 9    the  integrated health care program established under Section
10    5-16.3 of this Code is conducted at local  public  assistance
11    offices  in  the  county,  for  the  purpose of enrollment of
12    persons into any managed health care entity operated  by  the
13    county.   The  enrollment process shall meet the requirements
14    of subsection (e) of Section 5-16.3.   Each  such  agreement,
15    executed    in    accordance    with   Section   3   of   the
16    Intergovernmental  Cooperation  Act,   shall   describe   the
17    operational  expenses  to  be assumed in sufficient detail to
18    permit the Illinois Department to certify upon  such  written
19    obligation  or  performance  thereunder  that  the hospital's
20    compliance with the terms of the agreement will amount to the
21    commitment of public funds eligible for the federal financial
22    participation or other federal funding called  for  in  Title
23    XIX or Title XXI of the Social Security Act.
24    (Source: P.A. 91-24, eff. 7-1-99.)

25        (305 ILCS 5/15-5) (from Ch. 23, par. 15-5)
26        Sec. 15-5. Disbursements from the Fund.
27        (a)  The  monies  in  the Fund shall be disbursed only as
28    provided in Section 15-2 of this Code and as follows:
29             (1)  To  pay   the   county   hospitals'   inpatient
30        reimbursement rate based on actual costs, trended forward
31        annually  by  an  inflation  index  and  supplemented  by
32        teaching,  capital,  and other direct and indirect costs,
33        according  to  a  State  plan  approved  by  the  federal
 
SB873 Enrolled             -38-                LRB9201523DJgc
 1        government.  Effective October  1,  1992,  the  inpatient
 2        reimbursement  rate  (including  any  disproportionate or
 3        supplemental   disproportionate   share   payments)   for
 4        hospital services provided by county operated  facilities
 5        within the County shall be no less than the reimbursement
 6        rates in effect on June 1, 1992, except that this minimum
 7        shall  be  adjusted  as  of  July 1, 1992 and each July 1
 8        thereafter by the annual percentage  change  in  the  per
 9        diem  cost  of inpatient hospital services as reported in
10        the most recent annual Medicaid cost report.
11             (2)  To pay county  hospitals  and  county  operated
12        outpatient  facilities for outpatient services based on a
13        federally  approved  methodology  to  cover  the  maximum
14        allowable costs per patient visit.  Effective October  1,
15        1992,  the  outpatient  reimbursement rate for outpatient
16        services provided by county hospitals and county operated
17        outpatient  facilities  shall  be  no   less   than   the
18        reimbursement  rates  in  effect  on June 1, 1992, except
19        that this minimum shall be adjusted as of  July  1,  1992
20        and  each  July  1  thereafter  by  the annual percentage
21        change  in  the  per  diem  cost  of  inpatient  hospital
22        services as reported in the most recent  annual  Medicaid
23        cost report.
24             (3)  To  pay  the county hospitals' disproportionate
25        share payments as established by the Illinois  Department
26        under  Section 5-5.02 of this Code.  Effective October 1,
27        1992, the disproportionate share  payments  for  hospital
28        services  provided  by  county operated facilities within
29        the County shall be no less than the reimbursement  rates
30        in effect on June 1, 1992, except that this minimum shall
31        be adjusted as of July 1, 1992 and each July 1 thereafter
32        by  the  annual percentage change in the per diem cost of
33        inpatient hospital  services  as  reported  in  the  most
34        recent annual Medicaid cost report.
 
SB873 Enrolled             -39-                LRB9201523DJgc
 1             (3.5)  To pay county providers for services provided
 2        pursuant to Section 5-11 or 5-16.3 of this Code.
 3             (4)  To  reimburse the county providers for expenses
 4        contractually assumed pursuant to Section  15-4  of  this
 5        Code.
 6             (5)  To  pay  the  Illinois Department its necessary
 7        administrative expenses relative to the  Fund  and  other
 8        amounts agreed to, if any, by the county providers in the
 9        agreement provided for in subsection (c).
10             (6)  To   pay  the  county  hospitals'  supplemental
11        disproportionate share payments,  hereby  authorized,  as
12        specified in the agreement provided for in subsection (c)
13        and   according  to  a  federally  approved  State  plan.
14        Effective   October    1,    1992,    the    supplemental
15        disproportionate  share  payments  for  hospital services
16        provided by county operated facilities within the  County
17        shall  be  no less than the reimbursement rates in effect
18        on June 1,  1992,  except  that  this  minimum  shall  be
19        adjusted as of July 1, 1992 and each July 1 thereafter by
20        the  annual  percentage  change  in  the per diem cost of
21        inpatient hospital  services  as  reported  in  the  most
22        recent annual Medicaid cost report.
23        (b)  The  Illinois  Department  shall  promptly  seek all
24    appropriate amendments to the Illinois State Plan  to  effect
25    the foregoing payment methodology.
26        (c)  The  Illinois Department shall implement the changes
27    made by Article 3 of this amendatory Act  of  1992  beginning
28    October   1,   1992.    All   terms  and  conditions  of  the
29    disbursement of monies from the Fund not set forth  expressly
30    in  this Article shall be set forth in the agreement executed
31    under the Intergovernmental Cooperation Act so long as  those
32    terms  and  conditions are not inconsistent with this Article
33    or applicable federal law.   The  Illinois  Department  shall
34    report   in  writing  to  the  Hospital  Service  Procurement
 
SB873 Enrolled             -40-                LRB9201523DJgc
 1    Advisory Board and the Health Care Cost  Containment  Council
 2    by  October  15,  1992,  the terms and conditions of all such
 3    initial agreements and, where no such initial  agreement  has
 4    yet  been  executed  with  a  qualifying county, the Illinois
 5    Department's reasons that each such initial agreement has not
 6    been executed.  Copies  and  reports  of  amended  agreements
 7    following  the  initial agreements shall likewise be filed by
 8    the Illinois Department with the Hospital Service Procurement
 9    Advisory Board and the Health Care Cost  Containment  Council
10    within  30  days  following  their  execution.  The foregoing
11    filing   obligations   of   the   Illinois   Department   are
12    informational  only,  to  allow  the   Board   and   Council,
13    respectively,  to  better  perform their public roles, except
14    that the Board or Council may, at its discretion, advise  the
15    Illinois  Department  in  the  case  of  the  failure  of the
16    Illinois Department to reach agreement  with  any  qualifying
17    county by the required date.
18        (d)  The  payments  provided  for  herein are intended to
19    cover services rendered on and after July 1,  1991,  and  any
20    agreement  executed  between  a  qualifying  county  and  the
21    Illinois  Department pursuant to this Section may relate back
22    to  that  date,  provided  the  Illinois  Department  obtains
23    federal approval.  Any changes  in  payment  rates  resulting
24    from  the  provisions  of Article 3 of this amendatory Act of
25    1992 are intended to apply to services rendered on  or  after
26    October  1,  1992,  and  any  agreement  executed  between  a
27    qualifying  county  and  the  Illinois Department pursuant to
28    this Section may be effective as of that date.
29        (e)  If one or more hospitals  file  suit  in  any  court
30    challenging   any  part  of  this  Article  XV,  payments  to
31    hospitals from the Fund under this Article XV shall  be  made
32    only  to  the  extent that sufficient monies are available in
33    the Fund and only to the extent that any monies in  the  Fund
34    are  not  prohibited  from  disbursement and may be disbursed
 
SB873 Enrolled             -41-                LRB9201523DJgc
 1    under any order of the court.
 2        (f)  All payments under this Section are contingent  upon
 3    federal  approval  of  changes  to  the  State  plan, if that
 4    approval is required.
 5    (Source: P.A. 90-618, eff. 7-10-98.)

 6        (305 ILCS 5/5-16.3 rep.)
 7        Section 31.  The Illinois Public Aid Code is  amended  by
 8    repealing Section 5-16.3.

 9        Section  99.  Effective date.  This Act takes effect upon
10    becoming law.

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