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92_SB0873ham001 LRB9201523DJgcam01 1 AMENDMENT TO SENATE BILL 873 2 AMENDMENT NO. . Amend Senate Bill 873 by replacing 3 everything after the enacting clause with the following: 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 -2- LRB9201523DJgcam01 1 to the pro rata share of the annual dues plus any payments or 2 contributions, and the trustees shall transmit such 3 withholdings to the specified labor organization within 10 4 working days from the time of the withholding. They may 5 accept the endowments and voluntary professorships or 6 departments in the University, from any person or persons or 7 corporations who may offer the same, and, at any regular 8 meeting of the board, may prescribe rules and regulations in 9 relation to such endowments and declare on what general 10 principles they may be admitted: Provided, that such special 11 voluntary endowments or professorships shall not be 12 incompatible with the true design and scope of the act of 13 congress, or of this Act: Provided, that no student shall at 14 any time be allowed to remain in or about the University in 15 idleness, or without full mental or industrial occupation: 16 And provided further, that the trustees, in the exercise of 17 any of the powers conferred by this Act, shall not create any 18 liability or indebtedness in excess of the funds in the hands 19 of the treasurer of the University at the time of creating 20 such liability or indebtedness, and which may be specially 21 and properly applied to the payment of the same. Any lease to 22 the trustees of lands, buildings or facilities which will 23 support scientific research and development in such areas as 24 high technology, super computing, microelectronics, 25 biotechnology, robotics, physics and engineering shall be for 26 a term not to exceed 18 years, and may grant to the trustees 27 the option to purchase the lands, buildings or facilities. 28 The lease shall recite that it is subject to termination and 29 cancellation in any year for which the General Assembly fails 30 to make an appropriation to pay the rent payable under the 31 terms of the lease. 32 Leases for the purposes described herein exceeding 5 33 years shall have the approval of the Illinois Board of Higher 34 Education. -3- LRB9201523DJgcam01 1 The Board of Trustees may, directly or in cooperation 2 with other institutions of higher education, acquire by 3 purchase or lease or otherwise, and construct, enlarge, 4 improve, equip, complete, operate, control and manage medical 5 research and high technology parks, together with the 6 necessary lands, buildings, facilities, equipment and 7 personal property therefor, to encourage and facilitate (a) 8 the location and development of business and industry in the 9 State of Illinois, and (b) the increased application and 10 development of technology and (c) the improvement and 11 development of the State's economy. The Board of Trustees may 12 lease to nonprofit corporations all or any part of the land, 13 buildings, facilities, equipment or other property included 14 in a medical research and high technology park upon such 15 terms and conditions as the University of Illinois may deem 16 advisable and enter into any contract or agreement with such 17 nonprofit corporations as may be necessary or suitable for 18 the construction, financing, operation and maintenance and 19 management of any such park; and may lease to any person, 20 firm, partnership or corporation, either public or private, 21 any part or all of the land, building, facilities, equipment 22 or other property of such park for such purposes and upon 23 such rentals, terms and conditions as the University may deem 24 advisable; and may finance all or part of the cost of any 25 such park, including the purchase, lease, construction, 26 reconstruction, improvement, remodeling, addition to, and 27 extension and maintenance of all or part of such high 28 technology park, and all equipment and furnishings, by 29 legislative appropriations, government grants, contracts, 30 private gifts, loans, receipts from the operation of such 31 high technology park, rentals and similar receipts; and may 32 make its other facilities and services available to tenants 33 or other occupants of any such park at rates which are 34 reasonable and appropriate. -4- LRB9201523DJgcam01 1 The Trustees shall have power (a) to purchase real 2 property and easements, and (b) to acquire real property and 3 easements in the manner provided by law for the exercise of 4 the right of eminent domain, and in the event negotiations 5 for the acquisition of real property or easements for making 6 any improvement which the Trustees are authorized to make 7 shall have proven unsuccessful and the Trustees shall have by 8 resolution adopted a schedule or plan of operation for the 9 execution of the project and therein made a finding that it 10 is necessary to take such property or easements immediately 11 or at some specified later date in order to comply with the 12 schedule, the Trustees may acquire such property or easements 13 in the same manner provided in Sections 7-103 through 7-112 14 of the Code of Civil Procedure. 15 The Board of Trustees also shall have power to agree with 16 the State's Attorney of the county in which any properties of 17 the Board are located to pay for services rendered by the 18 various taxing districts for the years 1944 through 1949 and 19 to pay annually for services rendered thereafter by such 20 district such sums as may be determined by the Board upon 21 properties used solely for income producing purposes, title 22 to which is held by said Board of Trustees, upon properties 23 leased to members of the staff of the University of Illinois, 24 title to which is held in trust for said Board of Trustees 25 and upon properties leased to for-profit entities the title 26 to which properties is held by the Board of Trustees. A 27 certified copy of any such agreement made with the State's 28 Attorney shall be filed with the County Clerk and such sums 29 shall be distributed to the respective taxing districts by 30 the County Collector in such proportions that each taxing 31 district will receive therefrom such proportion as the tax 32 rate of such taxing district bears to the total tax rate that 33 would be levied against such properties if they were not 34 exempt from taxation under the Property Tax Code. -5- LRB9201523DJgcam01 1 The Board of Trustees of the University of Illinois, 2 subject to the applicable civil service law, may appoint 3 persons to be members of the University of Illinois Police 4 Department. Members of the Police Department shall be peace 5 officers and as such have all powers possessed by policemen 6 in cities, and sheriffs, including the power to make arrests 7 on view or warrants of violations of state statutes and city 8 or county ordinances, except that they may exercise such 9 powers only in counties wherein the University and any of its 10 branches or properties are located when such is required for 11 the protection of university properties and interests, and 12 its students and personnel, and otherwise, within such 13 counties, when requested by appropriate state or local law 14 enforcement officials; provided, however, that such officer 15 shall have no power to serve and execute civil processes. 16 The Board of Trustees must authorize to each member of 17 the University of Illinois Police Department and to any other 18 employee of the University of Illinois exercising the powers 19 of a peace officer a distinct badge that, on its face, (i) 20 clearly states that the badge is authorized by the University 21 of Illinois and (ii) contains a unique identifying number. No 22 other badge shall be authorized by the University of 23 Illinois. 24 The Board of Trustees may own, operate, or govern, by or 25 through the College of Medicine at Peoria, a managed care 26 community network established under subsection (b)(r)of 27 Section 5-115-16.3of the Illinois Public Aid Code. 28 The powers of the trustees as herein designated are 29 subject to the provisions of "An Act creating a Board of 30 Higher Education, defining its powers and duties, making an 31 appropriation therefor, and repealing an Act herein named", 32 approved August 22, 1961, as amended. 33 The Board of Trustees shall have the authority to adopt 34 all administrative rules which may be necessary for the -6- LRB9201523DJgcam01 1 effective administration, enforcement and regulation of all 2 matters for which the Board has jurisdiction or 3 responsibility. 4 (b) To assist in the provision of buildings and 5 facilities beneficial to, useful for, or supportive of 6 University purposes, the Board of Trustees of the University 7 of Illinois may exercise the following powers with regard to 8 the area located on or adjacent to the University of Illinois 9 at Chicago campus and bounded as follows: on the West by 10 Morgan Street; on the North by Roosevelt Road; on the East by 11 Union Street; and on the South by 16th Street, in the City of 12 Chicago: 13 (1) Acquire any interests in land, buildings, or 14 facilities by purchase, including installments payable 15 over a period allowed by law, by lease over a term of 16 such duration as the Board of Trustees shall determine, 17 or by exercise of the power of eminent domain; 18 (2) Sub-lease or contract to purchase through 19 installments all or any portion of buildings or 20 facilities for such duration and on such terms as the 21 Board of Trustees shall determine, including a term that 22 exceeds 5 years, provided that each such lease or 23 purchase contract shall be and shall recite that it is 24 subject to termination and cancellation in any year for 25 which the General Assembly fails to make an appropriation 26 to pay the rent or purchase installments payable under 27 the terms of such lease or purchase contract; and 28 (3) Sell property without compliance with the State 29 Property Control Act and retain proceeds in the 30 University Treasury in a special, separate development 31 fund account which the Auditor General shall examine to 32 assure compliance with this Act. 33 Any buildings or facilities to be developed on the land shall 34 be buildings or facilities that, in the determination of the -7- LRB9201523DJgcam01 1 Board of Trustees, in whole or in part: (i) are for use by 2 the University; or (ii) otherwise advance the interests of 3 the University, including, by way of example, residential 4 facilities for University staff and students and commercial 5 facilities which provide services needed by the University 6 community. Revenues from the development fund account may be 7 withdrawn by the University for the purpose of demolition and 8 the processes associated with demolition; routine land and 9 property acquisition; extension of utilities; streetscape 10 work; landscape work; surface and structure parking; 11 sidewalks, recreational paths, and street construction; and 12 lease and lease purchase arrangements and the professional 13 services associated with the planning and development of the 14 area. Moneys from the development fund account used for any 15 other purpose must be deposited into and appropriated from 16 the General Revenue Fund. Buildings or facilities leased to 17 an entity or person other than the University shall not be 18 subject to any limitations applicable to a State supported 19 college or university under any law. All development on the 20 land and all use of any buildings or facilities shall be 21 subject to the control and approval of the Board of Trustees. 22 (Source: P.A. 90-730, eff. 8-10-98; 91-883, eff. 1-1-01.) 23 Section 10. The Southern Illinois University Management 24 Act is amended by changing Section 8 as follows: 25 (110 ILCS 520/8) (from Ch. 144, par. 658) 26 Sec. 8. Powers and Duties of the Board. The Board shall 27 have power and it shall be its duty: 28 1. To make rules, regulations and by-laws, not 29 inconsistent with law, for the government and management 30 of Southern Illinois University and its branches; 31 2. To employ, and, for good cause, to remove a 32 president of Southern Illinois University, and all -8- LRB9201523DJgcam01 1 necessary deans, professors, associate professors, 2 assistant professors, instructors, and other educational 3 and administrative assistants, and all other necessary 4 employees, and contract with them upon matters relating 5 to tenure, salaries and retirement benefits in accordance 6 with the State Universities Civil Service Act; the Board 7 shall, upon the written request of an employee of 8 Southern Illinois University, withhold from the 9 compensation of that employee any dues, payments or 10 contributions payable by such employee to any labor 11 organization as defined in the Illinois Educational Labor 12 Relations Act. Under such arrangement, an amount shall be 13 withheld from each regular payroll period which is equal 14 to the pro rata share of the annual dues plus any 15 payments or contributions, and the Board shall transmit 16 such withholdings to the specified labor organization 17 within 10 working days from the time of the withholding. 18 Whenever the Board establishes a search committee to fill 19 the position of president of Southern Illinois 20 University, there shall be minority representation, 21 including women, on that search committee; 22 3. To prescribe the course of study to be followed, 23 and textbooks and apparatus to be used at Southern 24 Illinois University; 25 4. To issue upon the recommendation of the faculty, 26 diplomas to such persons as have satisfactorily completed 27 the required studies of Southern Illinois University, and 28 confer such professional and literary degrees as are 29 usually conferred by other institutions of like character 30 for similar or equivalent courses of study, or such as 31 the Board may deem appropriate; 32 5. To examine into the conditions, management, and 33 administration of Southern Illinois University, to 34 provide the requisite buildings, apparatus, equipment and -9- LRB9201523DJgcam01 1 auxiliary enterprises, and to fix and collect 2 matriculation fees; tuition fees; fees for student 3 activities; fees for student facilities such as student 4 union buildings or field houses or stadium or other 5 recreational facilities; student welfare fees; laboratory 6 fees and similar fees for supplies and material; 7 6. To succeed to and to administer all trusts, 8 trust property, and gifts now or hereafter belonging or 9 pertaining to Southern Illinois University; 10 7. To accept endowments of professorships or 11 departments in the University from any person who may 12 proffer them and, at regular meetings, to prescribe rules 13 and regulations in relation to endowments and declare on 14 what general principles they may be accepted; 15 8. To enter into contracts with the Federal 16 government for providing courses of instruction and other 17 services at Southern Illinois University for persons 18 serving in or with the military or naval forces of the 19 United States, and to provide such courses of instruction 20 and other services; 21 9. To provide for the receipt and expenditures of 22 Federal funds, paid to the Southern Illinois University 23 by the Federal government for instruction and other 24 services for persons serving in or with the military or 25 naval forces of the United States and to provide for 26 audits of such funds; 27 10. To appoint, subject to the applicable civil 28 service law, persons to be members of the Southern 29 Illinois University Police Department. Members of the 30 Police Department shall be conservators of the peace and 31 as such have all powers possessed by policemen in cities, 32 and sheriffs, including the power to make arrests on view 33 or warrants of violations of state statutes, university 34 rules and regulations and city or county ordinances, -10- LRB9201523DJgcam01 1 except that they may exercise such powers only within 2 counties wherein the university and any of its branches 3 or properties are located when such is required for the 4 protection of university properties and interests, and 5 its students and personnel, and otherwise, within such 6 counties, when requested by appropriate State or local 7 law enforcement officials. However, such officers shall 8 have no power to serve and execute civil processes. 9 The Board must authorize to each member of the 10 Southern Illinois University Police Department and to any 11 other employee of Southern Illinois University exercising 12 the powers of a peace officer a distinct badge that, on 13 its face, (i) clearly states that the badge is authorized 14 by Southern Illinois University and (ii) contains a 15 unique identifying number. No other badge shall be 16 authorized by Southern Illinois University. 17 11. To administer a plan or plans established by 18 the clinical faculty of the School of Medicine for the 19 billing, collection and disbursement of charges made by 20 individual faculty members for professional services 21 performed by them in the course of or in support of their 22 academic responsibilities, provided that such plan has 23 been first approved by Board action. All such collections 24 shall be deposited into a special fund or funds 25 administered by the Board from which disbursements may be 26 made according to the provisions of said plan. The 27 reasonable costs incurred, by the University, 28 administering the billing, collection and disbursement 29 provisions of a plan shall have first priority for 30 payment before distribution or disbursement for any other 31 purpose. Charges established pursuant to this plan must 32 be itemized in any billing and any amounts collected 33 which are not used to off-set the cost of operating or 34 maintaining the activity which generated the funds -11- LRB9201523DJgcam01 1 collected, must be accounted for separately. This 2 accounting must clearly show the use and application made 3 of the funds and the Board shall report such accountings 4 for the previous fiscal year to the Legislative Audit 5 Commission annually by December 31 of each fiscal year. 6 The Board of Trustees may own, operate, or govern, 7 by or through the School of Medicine, a managed care 8 community network established under subsection (b)(r)of 9 Section 5-115-16.3of the Illinois Public Aid Code. 10 12. The Board of Trustees may, directly or in 11 cooperation with other institutions of higher education, 12 acquire by purchase or lease or otherwise, and construct, 13 enlarge, improve, equip, complete, operate, control and 14 manage medical research and high technology parks, 15 together with the necessary lands, buildings, facilities, 16 equipment, and personal property therefor, to encourage 17 and facilitate (a) the location and development of 18 business and industry in the State of Illinois, and (b) 19 the increased application and development of technology 20 and (c) the improvement and development of the State's 21 economy. The Board of Trustees may lease to nonprofit 22 corporations all or any part of the land, buildings, 23 facilities, equipment or other property included in a 24 medical research and high technology park upon such terms 25 and conditions as the Board of Trustees may deem 26 advisable and enter into any contract or agreement with 27 such nonprofit corporations as may be necessary or 28 suitable for the construction, financing, operation and 29 maintenance and management of any such park; and may 30 lease to any person, firm, partnership or corporation, 31 either public or private, any part or all of the land, 32 building, facilities, equipment or other property of such 33 park for such purposes and upon such rentals, terms and 34 conditions as the Board of Trustees may deem advisable; -12- LRB9201523DJgcam01 1 and may finance all or part of the cost of any such park, 2 including the purchase, lease, construction, 3 reconstruction, improvement, remodeling, addition to, and 4 extension and maintenance of all or part of such high 5 technology park, and all equipment and furnishings, by 6 legislative appropriations, government grants, contracts, 7 private gifts, loans, receipts from the operation of such 8 high technology park, rentals and similar receipts; and 9 may make its other facilities and services available to 10 tenants or other occupants of any such park at rates 11 which are reasonable and appropriate. 12 The powers of the Board as herein designated are subject 13 to the Board of Higher Education Act. 14 (Source: P.A. 91-883, eff. 1-1-01.) 15 Section 15. The Illinois Insurance Code is amended by 16 changing Section 352 as follows: 17 (215 ILCS 5/352) (from Ch. 73, par. 964) 18 Sec. 352. Scope of Article. 19 (a) Except as provided in subsections (b), (c), (d), and 20 (e), this Article shall apply to all companies transacting in 21 this State the kinds of business enumerated in clause (b) of 22 Class 1 and clause (a) of Class 2 of section 4. Nothing in 23 this Article shall apply to, or in any way affect policies or 24 contracts described in clause (a) of Class 1 of Section 4; 25 however, this Article shall apply to policies and contracts 26 which contain benefits providing reimbursement for the 27 expenses of long term health care which are certified or 28 ordered by a physician including but not limited to 29 professional nursing care, custodial nursing care, and 30 non-nursing custodial care provided in a nursing home or at a 31 residence of the insured. 32 (b) This Article does not apply to policies of accident -13- LRB9201523DJgcam01 1 and health insurance issued in compliance with Article XIXB 2 of this Code. 3 (c) A policy issued and delivered in this State that 4 provides coverage under that policy for certificate holders 5 who are neither residents of nor employed in this State does 6 not need to provide to those nonresident certificate holders 7 who are not employed in this State the coverages or services 8 mandated by this Article. 9 (d) Stop-loss insurance is exempt from all Sections of 10 this Article, except this Section and Sections 353a, 354, 11 357.30, and 370. For purposes of this exemption, stop-loss 12 insurance is further defined as follows: 13 (1) The policy must be issued to and insure an 14 employer, trustee, or other sponsor of the plan, or the 15 plan itself, but not employees, members, or participants. 16 (2) Payments by the insurer must be made to the 17 employer, trustee, or other sponsors of the plan, or the 18 plan itself, but not to the employees, members, 19 participants, or health care providers. 20 (e) A policy issued or delivered in this State to the 21 Illinois Department of Public Aid and providing coverage, 22 under clause (b) of Class 1 or clause (a) of Class 2 as 23 described in Section 4, to persons who are enrolledin the24integrated health care program establishedunder Article V 25Section 5-16.3of the Illinois Public Aid Code or under the 26 Children's Health Insurance Program Act is exempt from all 27 restrictions, limitations, standards, rules, or regulations 28 respecting benefits imposed by or under authority of this 29 Code, except those specified by subsection (1) of Section 30 143. Nothing in this subsection, however, affects the total 31 medical services available to persons eligible for medical 32 assistance under the Illinois Public Aid Code. 33 (Source: P.A. 87-435; 87-757; 87-938; 87-956; 88-364; 88-554, 34 eff. 7-26-94.) -14- LRB9201523DJgcam01 1 Section 20. The Health Maintenance Organization Act is 2 amended by changing Sections 1-2, 2-1, and 6-3 as follows: 3 (215 ILCS 125/1-2) (from Ch. 111 1/2, par. 1402) 4 Sec. 1-2. Definitions. As used in this Act, unless the 5 context otherwise requires, the following terms shall have 6 the meanings ascribed to them: 7 (1) "Advertisement" means any printed or published 8 material, audiovisual material and descriptive literature of 9 the health care plan used in direct mail, newspapers, 10 magazines, radio scripts, television scripts, billboards and 11 similar displays; and any descriptive literature or sales 12 aids of all kinds disseminated by a representative of the 13 health care plan for presentation to the public including, 14 but not limited to, circulars, leaflets, booklets, 15 depictions, illustrations, form letters and prepared sales 16 presentations. 17 (2) "Director" means the Director of Insurance. 18 (3) "Basic health care services" means emergency care, 19 and inpatient hospital and physician care, outpatient medical 20 services, mental health services and care for alcohol and 21 drug abuse, including any reasonable deductibles and 22 co-payments, all of which are subject to such limitations as 23 are determined by the Director pursuant to rule. 24 (4) "Enrollee" means an individual who has been enrolled 25 in a health care plan. 26 (5) "Evidence of coverage" means any certificate, 27 agreement, or contract issued to an enrollee setting out the 28 coverage to which he is entitled in exchange for a per capita 29 prepaid sum. 30 (6) "Group contract" means a contract for health care 31 services which by its terms limits eligibility to members of 32 a specified group. 33 (7) "Health care plan" means any arrangement whereby any -15- LRB9201523DJgcam01 1 organization undertakes to provide or arrange for and pay for 2 or reimburse the cost of basic health care services from 3 providers selected by the Health Maintenance Organization and 4 such arrangement consists of arranging for or the provision 5 of such health care services, as distinguished from mere 6 indemnification against the cost of such services, except as 7 otherwise authorized by Section 2-3 of this Act, on a per 8 capita prepaid basis, through insurance or otherwise. A 9 "health care plan" also includes any arrangement whereby an 10 organization undertakes to provide or arrange for or pay for 11 or reimburse the cost of any health care service for persons 12 who are enrolledin the integrated health care program13establishedunder Article VSection 5-16.3of the Illinois 14 Public Aid Code or under the Children's Health Insurance 15 Program Act through providers selected by the organization 16 and the arrangement consists of making provision for the 17 delivery of health care services, as distinguished from mere 18 indemnification. A "health care plan" also includes any 19 arrangement pursuant to Section 4-17. Nothing in this 20 definition, however, affects the total medical services 21 available to persons eligible for medical assistance under 22 the Illinois Public Aid Code. 23 (8) "Health care services" means any services included 24 in the furnishing to any individual of medical or dental 25 care, or the hospitalization or incident to the furnishing of 26 such care or hospitalization as well as the furnishing to any 27 person of any and all other services for the purpose of 28 preventing, alleviating, curing or healing human illness or 29 injury. 30 (9) "Health Maintenance Organization" means any 31 organization formed under the laws of this or another state 32 to provide or arrange for one or more health care plans under 33 a system which causes any part of the risk of health care 34 delivery to be borne by the organization or its providers. -16- LRB9201523DJgcam01 1 (10) "Net worth" means admitted assets, as defined in 2 Section 1-3 of this Act, minus liabilities. 3 (11) "Organization" means any insurance company, a 4 nonprofit corporation authorized under the Dental Service 5 Plan Act or the Voluntary Health Services Plans Act, or a 6 corporation organized under the laws of this or another state 7 for the purpose of operating one or more health care plans 8 and doing no business other than that of a Health Maintenance 9 Organization or an insurance company. "Organization" shall 10 also mean the University of Illinois Hospital as defined in 11 the University of Illinois Hospital Act. 12 (12) "Provider" means any physician, hospital facility, 13 or other person which is licensed or otherwise authorized to 14 furnish health care services and also includes any other 15 entity that arranges for the delivery or furnishing of health 16 care service. 17 (13) "Producer" means a person directly or indirectly 18 associated with a health care plan who engages in 19 solicitation or enrollment. 20 (14) "Per capita prepaid" means a basis of prepayment by 21 which a fixed amount of money is prepaid per individual or 22 any other enrollment unit to the Health Maintenance 23 Organization or for health care services which are provided 24 during a definite time period regardless of the frequency or 25 extent of the services rendered by the Health Maintenance 26 Organization, except for copayments and deductibles and 27 except as provided in subsection (f) of Section 5-3 of this 28 Act. 29 (15) "Subscriber" means a person who has entered into a 30 contractual relationship with the Health Maintenance 31 Organization for the provision of or arrangement of at least 32 basic health care services to the beneficiaries of such 33 contract. 34 (Source: P.A. 89-90, eff. 6-30-95; 90-177, eff. 7-23-97; -17- LRB9201523DJgcam01 1 90-372, eff. 7-1-98; 90-376, eff. 8-14-97; 90-655, eff. 2 7-30-98.) 3 (215 ILCS 125/2-1) (from Ch. 111 1/2, par. 1403) 4 Sec. 2-1. Certificate of authority - Exception for 5 corporate employee programs - Applications - Material 6 modification of operation. 7 (a) No organization shall establish or operate a Health 8 Maintenance Organization in this State without obtaining a 9 certificate of authority under this Act. No person other 10 than an organization may lawfully establish or operate a 11 Health Maintenance Organization in this State. This Act 12 shall not apply to the establishment and operation of a 13 Health Maintenance Organization exclusively providing or 14 arranging for health care services to employees of a 15 corporate affiliate of such Health Maintenance Organization. 16 This exclusion shall be available only to those Health 17 Maintenance Organizations which require employee 18 contributions which equal less than 50% of the total cost of 19 the health care plan, with the remainder of the cost being 20 paid by the corporate affiliate which is the employer of the 21 participants in the plan. This Act shall not apply to the 22 establishment and operation of a Health Maintenance 23 Organization exclusively providing or arranging health care 24 services under contract with the State to persons committed 25 to the custody of the Illinois Department of Corrections. 26This Act does not apply to the establishment and operation of27(i) a managed care community network providing or arranging28health care services under contract with the State29exclusively to persons who are enrolled in the integrated30health care program established under Section 5-16.3 of the31Illinois Public Aid Code or (ii) a managed care community32network owned, operated, or governed by a county provider as33defined in Section 15-1 of that Code.-18- LRB9201523DJgcam01 1 This Act does not apply to the establishment and 2 operation of managed care community networks that are 3 certified as risk-bearing entities under Section 5-11 of the 4 Illinois Public Aid Code and that contract with the Illinois 5 Department of Public Aid pursuant to that Section. 6 (b) Any organization may apply to the Director for and 7 obtain a certificate of authority to establish and operate a 8 Health Maintenance Organization in compliance with this Act. 9 A foreign corporation may qualify under this Act, subject to 10 its registration to do business in this State as a foreign 11 corporation. 12 (c) Each application for a certificate of authority 13 shall be filed in triplicate and verified by an officer or 14 authorized representative of the applicant, shall be in a 15 form prescribed by the Director, and shall set forth, without 16 limiting what may be required by the Director, the following: 17 (1) A copy of the organizational document; 18 (2) A copy of the bylaws, rules and regulations, or 19 similar document regulating the conduct of the internal 20 affairs of the applicant, which shall include a mechanism 21 to afford the enrollees an opportunity to participate in 22 an advisory capacity in matters of policy and operations; 23 (3) A list of the names, addresses, and official 24 positions of the persons who are to be responsible for 25 the conduct of the affairs of the applicant; including, 26 but not limited to, all members of the board of 27 directors, executive committee, the principal officers, 28 and any person or entity owning or having the right to 29 acquire 10% or more of the voting securities or 30 subordinated debt of the applicant; 31 (4) A statement generally describing the applicant, 32 geographic area to be served, its facilities, personnel 33 and the health care services to be offered; 34 (5) A copy of the form of any contract made or to -19- LRB9201523DJgcam01 1 be made between the applicant and any providers regarding 2 the provision of health care services to enrollees; 3 (6) A copy of the form of any contract made or to 4 be made between the applicant and any person listed in 5 paragraph (3) of this subsection; 6 (7) A copy of the form of any contract made or to 7 be made between the applicant and any person, 8 corporation, partnership or other entity for the 9 performance on the applicant's behalf of any functions 10 including, but not limited to, marketing, administration, 11 enrollment, investment management and subcontracting for 12 the provision of health services to enrollees; 13 (8) A copy of the form of any group contract which 14 is to be issued to employers, unions, trustees, or other 15 organizations and a copy of any form of evidence of 16 coverage to be issued to any enrollee or subscriber and 17 any advertising material; 18 (9) Descriptions of the applicant's procedures for 19 resolving enrollee grievances which must include 20 procedures providing for enrollees participation in the 21 resolution of grievances; 22 (10) A copy of the applicant's most recent 23 financial statements audited by an independent certified 24 public accountant. If the financial affairs of the 25 applicant's parent company are audited by an independent 26 certified public accountant but those of the applicant 27 are not, then a copy of the most recent audited financial 28 statement of the applicant's parent, attached to which 29 shall be consolidating financial statements of the parent 30 including separate unaudited financial statements of the 31 applicant, unless the Director determines that additional 32 or more recent financial information is required for the 33 proper administration of this Act; 34 (11) A copy of the applicant's financial plan, -20- LRB9201523DJgcam01 1 including a three-year projection of anticipated 2 operating results, a statement of the sources of working 3 capital, and any other sources of funding and provisions 4 for contingencies; 5 (12) A description of rate methodology; 6 (13) A description of the proposed method of 7 marketing; 8 (14) A copy of every filing made with the Illinois 9 Secretary of State which relates to the applicant's 10 registered agent or registered office; 11 (15) A description of the complaint procedures to 12 be established and maintained as required under Section 13 4-6 of this Act; 14 (16) A description, in accordance with regulations 15 promulgated by the Illinois Department of Public Health, 16 of the quality assessment and utilization review 17 procedures to be utilized by the applicant; 18 (17) The fee for filing an application for issuance 19 of a certificate of authority provided in Section 408 of 20 the Illinois Insurance Code, as now or hereafter amended; 21 and 22 (18) Such other information as the Director may 23 reasonably require to make the determinations required by 24 this Act. 25 (Source: P.A. 90-618, eff. 7-10-98.) 26 (215 ILCS 125/6-3) (from Ch. 111 1/2, par. 1418.3) 27 Sec. 6-3. Scope. This Article applies to direct 28 individual contracts, group contracts and certificates issued 29 thereunder, or any other evidence of coverage, each of which 30 provides for coverage under a health care plan, and has been 31 issued by organizations licensed to transact health 32 maintenance organization business in this State under the 33 Health Maintenance Organization Act, but not to any business -21- LRB9201523DJgcam01 1 of such organization not transacted under its health 2 maintenance organization certificate of authority.This3Article does not apply to (i) a managed care community4network providing or arranging health care services under5contract with the State exclusively to persons who are6enrolled in the integrated health care program established7under Section 5-16.3 of the Illinois Public Aid Code or (ii)8a managed care community network owned, operated, or governed9by a county provider as defined in Section 15-1 of that Code.10 (Source: P.A. 88-554, eff. 7-26-94.) 11 Section 25. The Health Care Worker Self-Referral Act is 12 amended by changing Section 20 as follows: 13 (225 ILCS 47/20) 14 Sec. 20. Prohibited referrals and claims for payment. 15 (a) A health care worker shall not refer a patient for 16 health services to an entity outside the health care worker's 17 office or group practice in which the health care worker is 18 an investor, unless the health care worker directly provides 19 health services within the entity and will be personally 20 involved with the provision of care to the referred patient. 21 (b) Pursuant to Board determination that the following 22 exception is applicable, a health care worker may invest in 23 and refer to an entity, whether or not the health care worker 24 provides direct services within said entity, if there is a 25 demonstrated need in the community for the entity and 26 alternative financing is not available. For purposes of this 27 subsection (b), "demonstrated need" in the community for the 28 entity may exist if (1) there is no facility of reasonable 29 quality that provides medically appropriate service, (2) use 30 of existing facilities is onerous or creates too great a 31 hardship for patients, (3) the entity is formed to own or 32 lease medical equipment which replaces obsolete or otherwise -22- LRB9201523DJgcam01 1 inadequate equipment in or under the control of a hospital 2 located in a federally designated health manpower shortage 3 area, or (4) such other standards as established, by rule, by 4 the Board. "Community" shall be defined as a metropolitan 5 area for a city, and a county for a rural area. In addition, 6 the following provisions must be met to be exempt under this 7 Section: 8 (1) Individuals who are not in a position to refer 9 patients to an entity are given a bona fide opportunity 10 to also invest in the entity on the same terms as those 11 offered a referring health care worker; and 12 (2) No health care worker who invests shall be 13 required or encouraged to make referrals to the entity or 14 otherwise generate business as a condition of becoming or 15 remaining an investor; and 16 (3) The entity shall market or furnish its services 17 to referring health care worker investors and other 18 investors on equal terms; and 19 (4) The entity shall not loan funds or guarantee 20 any loans for health care workers who are in a position 21 to refer to an entity; and 22 (5) The income on the health care worker's 23 investment shall be tied to the health care worker's 24 equity in the facility rather than to the volume of 25 referrals made; and 26 (6) Any investment contract between the entity and 27 the health care worker shall not include any covenant or 28 non-competition clause that prevents a health care worker 29 from investing in other entities; and 30 (7) When making a referral, a health care worker 31 must disclose his investment interest in an entity to the 32 patient being referred to such entity. If alternative 33 facilities are reasonably available, the health care 34 worker must provide the patient with a list of -23- LRB9201523DJgcam01 1 alternative facilities. The health care worker shall 2 inform the patient that they have the option to use an 3 alternative facility other than one in which the health 4 care worker has an investment interest and the patient 5 will not be treated differently by the health care worker 6 if the patient chooses to use another entity. This shall 7 be applicable to all health care worker investors, 8 including those who provide direct care or services for 9 their patients in entities outside their office 10 practices; and 11 (8) If a third party payor requests information 12 with regard to a health care worker's investment 13 interest, the same shall be disclosed; and 14 (9) The entity shall establish an internal 15 utilization review program to ensure that investing 16 health care workers provided appropriate or necessary 17 utilization; and 18 (10) If a health care worker's financial interest 19 in an entity is incompatible with a referred patient's 20 interest, the health care worker shall make alternative 21 arrangements for the patient's care. 22 The Board shall make such a determination for a health 23 care worker within 90 days of a completed written request. 24 Failure to make such a determination within the 90 day time 25 frame shall mean that no alternative is practical based upon 26 the facts set forth in the completed written request. 27 (c) It shall not be a violation of this Act for a health 28 care worker to refer a patient for health services to a 29 publicly traded entity in which he or she has an investment 30 interest provided that: 31 (1) the entity is listed for trading on the New 32 York Stock Exchange or on the American Stock Exchange, or 33 is a national market system security traded under an 34 automated inter-dealer quotation system operated by the -24- LRB9201523DJgcam01 1 National Association of Securities Dealers; and 2 (2) the entity had, at the end of the corporation's 3 most recent fiscal year, total net assets of at least 4 $30,000,000 related to the furnishing of health services; 5 and 6 (3) any investment interest obtained after the 7 effective date of this Act is traded on the exchanges 8 listed in paragraph 1 of subsection (c) of this Section 9 after the entity became a publicly traded corporation; 10 and 11 (4) the entity markets or furnishes its services to 12 referring health care worker investors and other health 13 care workers on equal terms; and 14 (5) all stock held in such publicly traded 15 companies, including stock held in the predecessor 16 privately held company, shall be of one class without 17 preferential treatment as to status or remuneration; and 18 (6) the entity does not loan funds or guarantee any 19 loans for health care workers who are in a position to be 20 referred to an entity; and 21 (7) the income on the health care worker's 22 investment is tied to the health care worker's equity in 23 the entity rather than to the volume of referrals made; 24 and 25 (8) the investment interest does not exceed 1/2 of 26 1% of the entity's total equity. 27 (d) Any hospital licensed under the Hospital Licensing 28 Act shall not discriminate against or otherwise penalize a 29 health care worker for compliance with this Act. 30 (e) Any health care worker or other entity shall not 31 enter into an arrangement or scheme seeking to make referrals 32 to another health care worker or entity based upon the 33 condition that the health care worker or entity will make 34 referrals with an intent to evade the prohibitions of this -25- LRB9201523DJgcam01 1 Act by inducing patient referrals which would be prohibited 2 by this Section if the health care worker or entity made the 3 referral directly. 4 (f) If compliance with the need and alternative investor 5 criteria is not practical, the health care worker shall 6 identify to the patient reasonably available alternative 7 facilities. The Board shall, by rule, designate when 8 compliance is "not practical". 9 (g) Health care workers may request from the Board that 10 it render an advisory opinion that a referral to an existing 11 or proposed entity under specified circumstances does or does 12 not violate the provisions of this Act. The Board's opinion 13 shall be presumptively correct. Failure to render such an 14 advisory opinion within 90 days of a completed written 15 request pursuant to this Section shall create a rebuttable 16 presumption that a referral described in the completed 17 written request is not or will not be a violation of this 18 Act. 19 (h) Notwithstanding any provision of this Act to the 20 contrary, a health care worker may refer a patient, who is a 21 member of a health maintenance organization "HMO" licensed in 22 this State, for health services to an entity, outside the 23 health care worker's office or group practice, in which the 24 health care worker is an investor, provided that any such 25 referral is made pursuant to a contract with the HMO. 26 Furthermore, notwithstanding any provision of this Act to the 27 contrary, a health care worker may refer an enrollee of a 28 "managed care community network", as defined in subsection 29 (b) of Section 5-115-16.3of the Illinois Public Aid Code, 30 for health services to an entity, outside the health care 31 worker's office or group practice, in which the health care 32 worker is an investor, provided that any such referral is 33 made pursuant to a contract with the managed care community 34 network. -26- LRB9201523DJgcam01 1 (Source: P.A. 87-1207; 88-554, eff. 7-26-94.) 2 Section 30. The Illinois Public Aid Code is amended by 3 changing Sections 5-11, 5-16.9, 5-16.11, 15-2, 15-3, 15-4, 4 and 15-5 as follows: 5 (305 ILCS 5/5-11) (from Ch. 23, par. 5-11) 6 Sec. 5-11. Co-operative arrangements; contracts with 7 other State agencies, health care and rehabilitation 8 organizations, and fiscal intermediaries. 9 (a) The Illinois Department may enter into co-operative 10 arrangements with State agencies responsible for 11 administering or supervising the administration of health 12 services and vocational rehabilitation services to the end 13 that there may be maximum utilization of such services in the 14 provision of medical assistance. 15 The Illinois Department shall, not later than June 30, 16 1993, enter into one or more co-operative arrangements with 17 the Department of Mental Health and Developmental 18 Disabilities providing that the Department of Mental Health 19 and Developmental Disabilities will be responsible for 20 administering or supervising all programs for services to 21 persons in community care facilities for persons with 22 developmental disabilities, including but not limited to 23 intermediate care facilities, that are supported by State 24 funds or by funding under Title XIX of the federal Social 25 Security Act. The responsibilities of the Department of 26 Mental Health and Developmental Disabilities under these 27 agreements are transferred to the Department of Human 28 Services as provided in the Department of Human Services Act. 29 The Department may also contract with such State health 30 and rehabilitation agencies and other public or private 31 health care and rehabilitation organizations to act for it in 32 supplying designated medical services to persons eligible -27- LRB9201523DJgcam01 1 therefor under this Article. Any contracts with health 2 services or health maintenance organizations shall be 3 restricted to organizations which have been certified as 4 being in compliance with standards promulgated pursuant to 5 the laws of this State governing the establishment and 6 operation of health services or health maintenance 7 organizations. The Department may also contract with 8 insurance companies or other corporate entities serving as 9 fiscal intermediaries in this State for the Federal 10 Government in respect to Medicare payments under Title XVIII 11 of the Federal Social Security Act to act for the Department 12 in paying medical care suppliers. The provisions of Section 13 9 of "An Act in relation to State finance", approved June 10, 14 1919, as amended, notwithstanding, such contracts with State 15 agencies, other health care and rehabilitation organizations, 16 or fiscal intermediaries may provide for advance payments. 17 (b) For purposes of this subsection (b), "managed care 18 community network" means an entity, other than a health 19 maintenance organization, that is owned, operated, or 20 governed by providers of health care services within this 21 State and that provides or arranges primary, secondary, and 22 tertiary managed health care services under contract with the 23 Illinois Department exclusively to persons participating in 24 programs administered by the Illinois Department. 25 The Illinois Department may certify managed care 26 community networks, including managed care community networks 27 owned, operated, managed, or governed by State-funded medical 28 schools, as risk-bearing entities eligible to contract with 29 the Illinois Department as Medicaid managed care 30 organizations. The Illinois Department may contract with 31 those managed care community networks to furnish health care 32 services to or arrange those services for individuals 33 participating in programs administered by the Illinois 34 Department. The rates for those provider-sponsored -28- LRB9201523DJgcam01 1 organizations may be determined on a prepaid, capitated 2 basis. A managed care community network may choose to 3 contract with the Illinois Department to provide only 4 pediatric health care services. The Illinois Department shall 5 by rule adopt the criteria, standards, and procedures by 6 which a managed care community network may be permitted to 7 contract with the Illinois Department and shall consult with 8 the Department of Insurance in adopting these rules. 9 A county provider as defined in Section 15-1 of this Code 10 may contract with the Illinois Department to provide primary, 11 secondary, or tertiary managed health care services as a 12 managed care community network without the need to establish 13 a separate entity and shall be deemed a managed care 14 community network for purposes of this Code only to the 15 extent it provides services to participating individuals. A 16 county provider is entitled to contract with the Illinois 17 Department with respect to any contracting region located in 18 whole or in part within the county. A county provider is not 19 required to accept enrollees who do not reside within the 20 county. 21 In order to (i) accelerate and facilitate the development 22 of integrated health care in contracting areas outside 23 counties with populations in excess of 3,000,000 and counties 24 adjacent to those counties and (ii) maintain and sustain the 25 high quality of education and residency programs coordinated 26 and associated with local area hospitals, the Illinois 27 Department may develop and implement a demonstration program 28 from managed care community networks owned, operated, 29 managed, or governed by State-funded medical schools. The 30 Illinois Department shall prescribe by rule the criteria, 31 standards, and procedures for effecting this demonstration 32 program. 33 A managed care community network that contracts with the 34 Illinois Department to furnish health care services to or -29- LRB9201523DJgcam01 1 arrange those services for enrollees participating in 2 programs administered by the Illinois Department shall do all 3 of the following: 4 (1) Provide that any provider affiliated with the 5 managed care community network may also provide services 6 on a fee-for-service basis to Illinois Department clients 7 not enrolled in such managed care entities. 8 (2) Provide client education services as determined 9 and approved by the Illinois Department, including but 10 not limited to (i) education regarding appropriate 11 utilization of health care services in a managed care 12 system, (ii) written disclosure of treatment policies and 13 restrictions or limitations on health services, 14 including, but not limited to, physical services, 15 clinical laboratory tests, hospital and surgical 16 procedures, prescription drugs and biologics, and 17 radiological examinations, and (iii) written notice that 18 the enrollee may receive from another provider those 19 covered services that are not provided by the managed 20 care community network. 21 (3) Provide that enrollees within the system may 22 choose the site for provision of services and the panel 23 of health care providers. 24 (4) Not discriminate in enrollment or disenrollment 25 practices among recipients of medical services or 26 enrollees based on health status. 27 (5) Provide a quality assurance and utilization 28 review program that meets the requirements established by 29 the Illinois Department in rules that incorporate those 30 standards set forth in the Health Maintenance 31 Organization Act. 32 (6) Issue a managed care community network 33 identification card to each enrollee upon enrollment. 34 The card must contain all of the following: -30- LRB9201523DJgcam01 1 (A) The enrollee's health plan. 2 (B) The name and telephone number of the 3 enrollee's primary care physician or the site for 4 receiving primary care services. 5 (C) A telephone number to be used to confirm 6 eligibility for benefits and authorization for 7 services that is available 24 hours per day, 7 days 8 per week. 9 (7) Ensure that every primary care physician and 10 pharmacy in the managed care community network meets the 11 standards established by the Illinois Department for 12 accessibility and quality of care. The Illinois 13 Department shall arrange for and oversee an evaluation of 14 the standards established under this paragraph (7) and 15 may recommend any necessary changes to these standards. 16 (8) Provide a procedure for handling complaints 17 that meets the requirements established by the Illinois 18 Department in rules that incorporate those standards set 19 forth in the Health Maintenance Organization Act. 20 (9) Maintain, retain, and make available to the 21 Illinois Department records, data, and information, in a 22 uniform manner determined by the Illinois Department, 23 sufficient for the Illinois Department to monitor 24 utilization, accessibility, and quality of care. 25 (10) Provide that the pharmacy formulary used by 26 the managed care community network and its contract 27 providers be no more restrictive than the Illinois 28 Department's pharmaceutical program on the effective date 29 of this amendatory Act of 1998 and as amended after that 30 date. 31 The Illinois Department shall contract with an entity or 32 entities to provide external peer-based quality assurance 33 review for the managed health care programs administered by 34 the Illinois Department. The entity shall be representative -31- LRB9201523DJgcam01 1 of Illinois physicians licensed to practice medicine in all 2 its branches and have statewide geographic representation in 3 all specialities of medical care that are provided in managed 4 health care programs administered by the Illinois Department. 5 The entity may not be a third party payer and shall maintain 6 offices in locations around the State in order to provide 7 service and continuing medical education to physician 8 participants within those managed health care programs 9 administered by the Illinois Department. The review process 10 shall be developed and conducted by Illinois physicians 11 licensed to practice medicine in all its branches. In 12 consultation with the entity, the Illinois Department may 13 contract with other entities for professional peer-based 14 quality assurance review of individual categories of services 15 other than services provided, supervised, or coordinated by 16 physicians licensed to practice medicine in all its branches. 17 The Illinois Department shall establish, by rule, criteria to 18 avoid conflicts of interest in the conduct of quality 19 assurance activities consistent with professional peer-review 20 standards. All quality assurance activities shall be 21 coordinated by the Illinois Department. 22 Each managed care community network must demonstrate its 23 ability to bear the financial risk of serving individuals 24 under this program. The Illinois Department shall by rule 25 adopt standards for assessing the solvency and financial 26 soundness of each managed care community network. Any 27 solvency and financial standards adopted for managed care 28 community networks shall be no more restrictive than the 29 solvency and financial standards adopted under Section 30 1856(a) of the Social Security Act for provider-sponsored 31 organizations under Part C of Title XVIII of the Social 32 Security Act. 33 The Illinois Department may implement the amendatory 34 changes to this Code made by this amendatory Act of 1998 -32- LRB9201523DJgcam01 1 through the use of emergency rules in accordance with Section 2 5-45 of the Illinois Administrative Procedure Act. For 3 purposes of that Act, the adoption of rules to implement 4 these changes is deemed an emergency and necessary for the 5 public interest, safety, and welfare. 6 (c) Not later than June 30, 1996, the Illinois 7 Department shall enter into one or more cooperative 8 arrangements with the Department of Public Health for the 9 purpose of developing a single survey for nursing facilities, 10 including but not limited to facilities funded under Title 11 XVIII or Title XIX of the federal Social Security Act or 12 both, which shall be administered and conducted solely by the 13 Department of Public Health. The Departments shall test the 14 single survey process on a pilot basis, with both the 15 Departments of Public Aid and Public Health represented on 16 the consolidated survey team. The pilot will sunset June 30, 17 1997. After June 30, 1997, unless otherwise determined by 18 the Governor, a single survey shall be implemented by the 19 Department of Public Health which would not preclude staff 20 from the Department of Public Aid from going on-site to 21 nursing facilities to perform necessary audits and reviews 22 which shall not replicate the single State agency survey 23 required by this Act. This Section shall not apply to 24 community or intermediate care facilities for persons with 25 developmental disabilities. 26 (d) Nothing in this Code in any way limits or otherwise 27 impairs the authority or power of the Illinois Department to 28 enter into a negotiated contract pursuant to this Section 29 with a managed care community network or a health maintenance 30 organization, as defined in the Health Maintenance 31 Organization Act, that provides for termination or nonrenewal 32 of the contract without cause, upon notice as provided in the 33 contract, and without a hearing. 34 (Source: P.A. 89-415, eff. 1-1-96; 89-507, eff. 7-1-97; -33- LRB9201523DJgcam01 1 90-618, eff. 7-10-98.) 2 (305 ILCS 5/5-16.9) 3 Sec. 5-16.9. Woman's health care provider. The medical 4 assistance program is subject to the provisions of Section 5 356r of the Illinois Insurance Code. The Illinois Department 6 shall adopt rules to implement the requirements of Section 7 356r of the Illinois Insurance Code in the medical assistance 8 program including managed care componentsdefined in Section95-16.3. 10 (Source: P.A. 89-514, eff. 7-17-96.) 11 (305 ILCS 5/5-16.11) 12 Sec. 5-16.11. Uniform standards applied to managed care 13 entities. Any managed care entity providing services under 14 this Code shall use a pharmacy formulary that is no more 15 restrictive than the Illinois Department's pharmaceutical 16 programcomply with the criteria, standards, and procedures17imposed on managed care entities under paragraph (14) of18subsection (d) of Section 5-16.3 of this Code. 19 (Source: P.A. 90-538, eff. 12-1-97.) 20 (305 ILCS 5/15-2) (from Ch. 23, par. 15-2) 21 Sec. 15-2. County Provider Trust Fund. 22 (a) There is created in the State Treasury the County 23 Provider Trust Fund. Interest earned by the Fund shall be 24 credited to the Fund. The Fund shall not be used to replace 25 any funds appropriated to the Medicaid program by the General 26 Assembly. 27 (b) The Fund is created solely for the purposes of 28 receiving, investing, and distributing monies in accordance 29 with this Article XV. The Fund shall consist of: 30 (1) All monies collected or received by the 31 Illinois Department under Section 15-3 of this Code; -34- LRB9201523DJgcam01 1 (2) All federal financial participation monies 2 received by the Illinois Department pursuant to Title XIX 3 of the Social Security Act, 42 U.S.C. 1396(b), 4 attributable to eligible expenditures made by the 5 Illinois Department pursuant to Section 15-5 of this 6 Code; 7 (3) All federal moneys received by the Illinois 8 Department pursuant to Title XXI of the Social Security 9 Act attributable to eligible expenditures made by the 10 Illinois Department pursuant to Section 15-5 of this 11 Code; and 12 (4) All other monies received by the Fund from any 13 source, including interest thereon. 14 (c) Disbursements from the Fund shall be by warrants 15 drawn by the State Comptroller upon receipt of vouchers duly 16 executed and certified by the Illinois Department and shall 17 be made only: 18 (1) For hospital inpatient care, hospital 19 outpatient care, care provided by other outpatient 20 facilities operated by a county, and disproportionate 21 share hospital payments made under Title XIX of the 22 Social Security Act and Article V of this Code as 23 required by Section 15-5 of this Code; 24 (1.5) For services provided by county providers 25 pursuant to Section 5-11or 5-16.3of this Code; 26 (2) For the reimbursement of administrative 27 expenses incurred by county providers on behalf of the 28 Illinois Department as permitted by Section 15-4 of this 29 Code; 30 (3) For the reimbursement of monies received by the 31 Fund through error or mistake; 32 (4) For the payment of administrative expenses 33 necessarily incurred by the Illinois Department or its 34 agent in performing the activities required by this -35- LRB9201523DJgcam01 1 Article XV; 2 (5) For the payment of any amounts that are 3 reimbursable to the federal government, attributable 4 solely to the Fund, and required to be paid by State 5 warrant; and 6 (6) For hospital inpatient care, hospital 7 outpatient care, care provided by other outpatient 8 facilities operated by a county, and disproportionate 9 share hospital payments made under Title XXI of the 10 Social Security Act, pursuant to Section 15-5 of this 11 Code. 12 (Source: P.A. 90-618, eff. 7-10-98; 91-24, eff. 7-1-99.) 13 (305 ILCS 5/15-3) (from Ch. 23, par. 15-3) 14 Sec. 15-3. Intergovernmental Transfers. 15 (a) Each qualifying county shall make an annual 16 intergovernmental transfer to the Illinois Department in an 17 amount equal to 71.7% of the difference between the total 18 payments made by the Illinois Department to such county 19 provider for hospital services under Titles XIX and XXI of 20 the Social Security Act or pursuant to Section 5-11or 5-16.321 of this Code in each fiscal year ending June 30 (or fraction 22 thereof during the fiscal year ending June 30, 1993) and 23 $108,800,000 (or fraction thereof), except that the annual 24 intergovernmental transfer shall not exceed the total 25 payments made by the Illinois Department to such county 26 provider for hospital services under this Codeor pursuant to27Section 5-16.3 of this Code, less the sum of (i) 50% of 28 payments reimbursable under the Social Security Act at a rate 29 of 50% and (ii) 65% of payments reimbursable under the Social 30 Security Act at a rate of 65%, in each fiscal year ending 31 June 30 (or fraction thereof). 32 (b) The payment schedule for the intergovernmental 33 transfer made hereunder shall be established by -36- LRB9201523DJgcam01 1 intergovernmental agreement between the Illinois Department 2 and the applicable county, which agreement shall at a minimum 3 provide: 4 (1) For periodic payments no less frequently than 5 monthly to the county provider for inpatient and 6 outpatient approved or adjudicated claims and for 7 disproportionate share payments under Section 5-5.02 of 8 this Code (in the initial year, for services after July 9 1, 1991, or such other date as an approved State Medical 10 Assistance Plan shall provide)and to the county provider11pursuant to Section 5-16.3 of this Code. 12 (2) For periodic payments no less frequently than 13 monthly to the county provider for supplemental 14 disproportionate share payments hereunder based on a 15 federally approved State Medical Assistance Plan. 16 (3) For calculation of the intergovernmental 17 transfer payment to be made by the county equal to 71.7% 18 of the difference between the amount of the periodic 19 payment and the base amount; provided, however, that if 20 the periodic payment for any period is less than the base 21 amount for such period, the base amount for the 22 succeeding period (and any successive period if 23 necessary) shall be increased by the amount of such 24 shortfall. 25 (4) For an intergovernmental transfer methodology 26 which obligates the Illinois Department to notify the 27 county and county provider in writing of each impending 28 periodic payment and the intergovernmental transfer 29 payment attributable thereto and which obligates the 30 Comptroller to release the periodic payment to the county 31 provider within one working day of receipt of the 32 intergovernmental transfer payment from the county. 33 (Source: P.A. 90-618, eff. 7-10-98; 91-24, eff. 7-1-99.) -37- LRB9201523DJgcam01 1 (305 ILCS 5/15-4) (from Ch. 23, par. 15-4) 2 Sec. 15-4. Contractual assumption of certain expenses. 3 Hospitals may, at their election, by written agreement 4 between the counties owning and operating the hospitals and 5 the Illinois Department, assume specified expenses of the 6 operation of the Illinois Department associated with the 7 determination of eligibility, direct payment of which 8 expenses by the Illinois Department would qualify as public 9 funds expended by the Illinois Department for the Illinois 10 Medical Assistance Program or other health care programs 11 administered by the Illinois Department. The Illinois 12 Department shall open an adequately staffed special on-site 13 office or offices at facilities designated by the county for 14 the purpose of assisting the county in ensuring that all 15 eligible individuals are enrolled in the Illinois Medical 16 Assistance Programand, to the extent that enrollment into17the integrated health care program established under Section185-16.3 of this Code is conducted at local public assistance19offices in the county, for the purpose of enrollment of20persons into any managed health care entity operated by the21county. The enrollment process shall meet the requirements22of subsection (e) of Section 5-16.3. Each such agreement, 23 executed in accordance with Section 3 of the 24 Intergovernmental Cooperation Act, shall describe the 25 operational expenses to be assumed in sufficient detail to 26 permit the Illinois Department to certify upon such written 27 obligation or performance thereunder that the hospital's 28 compliance with the terms of the agreement will amount to the 29 commitment of public funds eligible for the federal financial 30 participation or other federal funding called for in Title 31 XIX or Title XXI of the Social Security Act. 32 (Source: P.A. 91-24, eff. 7-1-99.) 33 (305 ILCS 5/15-5) (from Ch. 23, par. 15-5) -38- LRB9201523DJgcam01 1 Sec. 15-5. Disbursements from the Fund. 2 (a) The monies in the Fund shall be disbursed only as 3 provided in Section 15-2 of this Code and as follows: 4 (1) To pay the county hospitals' inpatient 5 reimbursement rate based on actual costs, trended forward 6 annually by an inflation index and supplemented by 7 teaching, capital, and other direct and indirect costs, 8 according to a State plan approved by the federal 9 government. Effective October 1, 1992, the inpatient 10 reimbursement rate (including any disproportionate or 11 supplemental disproportionate share payments) for 12 hospital services provided by county operated facilities 13 within the County shall be no less than the reimbursement 14 rates in effect on June 1, 1992, except that this minimum 15 shall be adjusted as of July 1, 1992 and each July 1 16 thereafter by the annual percentage change in the per 17 diem cost of inpatient hospital services as reported in 18 the most recent annual Medicaid cost report. 19 (2) To pay county hospitals and county operated 20 outpatient facilities for outpatient services based on a 21 federally approved methodology to cover the maximum 22 allowable costs per patient visit. Effective October 1, 23 1992, the outpatient reimbursement rate for outpatient 24 services provided by county hospitals and county operated 25 outpatient facilities shall be no less than the 26 reimbursement rates in effect on June 1, 1992, except 27 that this minimum shall be adjusted as of July 1, 1992 28 and each July 1 thereafter by the annual percentage 29 change in the per diem cost of inpatient hospital 30 services as reported in the most recent annual Medicaid 31 cost report. 32 (3) To pay the county hospitals' disproportionate 33 share payments as established by the Illinois Department 34 under Section 5-5.02 of this Code. Effective October 1, -39- LRB9201523DJgcam01 1 1992, the disproportionate share payments for hospital 2 services provided by county operated facilities within 3 the County shall be no less than the reimbursement rates 4 in effect on June 1, 1992, except that this minimum shall 5 be adjusted as of July 1, 1992 and each July 1 thereafter 6 by the annual percentage change in the per diem cost of 7 inpatient hospital services as reported in the most 8 recent annual Medicaid cost report. 9 (3.5) To pay county providers for services provided 10 pursuant to Section 5-11or 5-16.3of this Code. 11 (4) To reimburse the county providers for expenses 12 contractually assumed pursuant to Section 15-4 of this 13 Code. 14 (5) To pay the Illinois Department its necessary 15 administrative expenses relative to the Fund and other 16 amounts agreed to, if any, by the county providers in the 17 agreement provided for in subsection (c). 18 (6) To pay the county hospitals' supplemental 19 disproportionate share payments, hereby authorized, as 20 specified in the agreement provided for in subsection (c) 21 and according to a federally approved State plan. 22 Effective October 1, 1992, the supplemental 23 disproportionate share payments for hospital services 24 provided by county operated facilities within the County 25 shall be no less than the reimbursement rates in effect 26 on June 1, 1992, except that this minimum shall be 27 adjusted as of July 1, 1992 and each July 1 thereafter by 28 the annual percentage change in the per diem cost of 29 inpatient hospital services as reported in the most 30 recent annual Medicaid cost report. 31 (b) The Illinois Department shall promptly seek all 32 appropriate amendments to the Illinois State Plan to effect 33 the foregoing payment methodology. 34 (c) The Illinois Department shall implement the changes -40- LRB9201523DJgcam01 1 made by Article 3 of this amendatory Act of 1992 beginning 2 October 1, 1992. All terms and conditions of the 3 disbursement of monies from the Fund not set forth expressly 4 in this Article shall be set forth in the agreement executed 5 under the Intergovernmental Cooperation Act so long as those 6 terms and conditions are not inconsistent with this Article 7 or applicable federal law. The Illinois Department shall 8 report in writing to the Hospital Service Procurement 9 Advisory Board and the Health Care Cost Containment Council 10 by October 15, 1992, the terms and conditions of all such 11 initial agreements and, where no such initial agreement has 12 yet been executed with a qualifying county, the Illinois 13 Department's reasons that each such initial agreement has not 14 been executed. Copies and reports of amended agreements 15 following the initial agreements shall likewise be filed by 16 the Illinois Department with the Hospital Service Procurement 17 Advisory Board and the Health Care Cost Containment Council 18 within 30 days following their execution. The foregoing 19 filing obligations of the Illinois Department are 20 informational only, to allow the Board and Council, 21 respectively, to better perform their public roles, except 22 that the Board or Council may, at its discretion, advise the 23 Illinois Department in the case of the failure of the 24 Illinois Department to reach agreement with any qualifying 25 county by the required date. 26 (d) The payments provided for herein are intended to 27 cover services rendered on and after July 1, 1991, and any 28 agreement executed between a qualifying county and the 29 Illinois Department pursuant to this Section may relate back 30 to that date, provided the Illinois Department obtains 31 federal approval. Any changes in payment rates resulting 32 from the provisions of Article 3 of this amendatory Act of 33 1992 are intended to apply to services rendered on or after 34 October 1, 1992, and any agreement executed between a -41- LRB9201523DJgcam01 1 qualifying county and the Illinois Department pursuant to 2 this Section may be effective as of that date. 3 (e) If one or more hospitals file suit in any court 4 challenging any part of this Article XV, payments to 5 hospitals from the Fund under this Article XV shall be made 6 only to the extent that sufficient monies are available in 7 the Fund and only to the extent that any monies in the Fund 8 are not prohibited from disbursement and may be disbursed 9 under any order of the court. 10 (f) All payments under this Section are contingent upon 11 federal approval of changes to the State plan, if that 12 approval is required. 13 (Source: P.A. 90-618, eff. 7-10-98.) 14 (305 ILCS 5/5-16.3 rep.) 15 Section 31. The Illinois Public Aid Code is amended by 16 repealing Section 5-16.3. 17 Section 99. Effective date. This Act takes effect upon 18 becoming law.".