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92_SB2308 LRB9215822DJmg 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 Illinois Public Aid Code is amended by 5 changing Section 14-8 as follows: 6 (305 ILCS 5/14-8) (from Ch. 23, par. 14-8) 7 Sec. 14-8. Disbursements to hospitalsHospitals. 8 (a) For inpatient hospital services rendered on and 9 after September 1, 1991, the Illinois Department shall 10 reimburse hospitals for inpatient services at an inpatient 11 payment rate calculated for each hospital based upon the 12 Medicare Prospective Payment System as set forth in Sections 13 1886(b), (d), (g), and (h) of the federal Social Security 14 Act, and the regulations, policies, and procedures 15 promulgated thereunder, except as modified by this Section. 16 Payment rates for inpatient hospital services rendered on or 17 after September 1, 1991 and on or before September 30, 1992 18 shall be calculated using the Medicare Prospective Payment 19 rates in effect on September 1, 1991. Payment rates for 20 inpatient hospital services rendered on or after October 1, 21 1992 and on or before March 31, 1994 shall be calculated 22 using the Medicare Prospective Payment rates in effect on 23 September 1, 1992. Payment rates for inpatient hospital 24 services rendered on or after April 1, 1994 shall be 25 calculated using the Medicare Prospective Payment rates 26 (including the Medicare grouping methodology and weighting 27 factors as adjusted pursuant to paragraph (1) of this 28 subsection) in effect 90 days prior to the date of 29 admission. For services rendered on or after July 1, 1995, 30 the reimbursement methodology implemented under this 31 subsection shall not include those costs referred to in -2- LRB9215822DJmg 1 Sections 1886(d)(5)(B) and 1886(h) of the Social Security 2 Act. The additional payment amounts required under Section 3 1886(d)(5)(F) of the Social Security Act, for hospitals 4 serving a disproportionate share of low-income or indigent 5 patients, are not required under this Section. For hospital 6 inpatient services rendered on or after July 1, 1995, the 7 Illinois Department shall reimburse hospitals using the 8 relative weighting factors and the base payment rates 9 calculated for each hospital that were in effect on June 30, 10 1995, less the portion of such rates attributed by the 11 Illinois Department to the cost of medical education. 12 (1) The weighting factors established under Section 13 1886(d)(4) of the Social Security Act shall not be used 14 in the reimbursement system established under this 15 Section. Rather, the Illinois Department shall establish 16 by rule Medicaid weighting factors to be used in the 17 reimbursement system established under this Section. 18 (2) The Illinois Department shall define by rule 19 those hospitals or distinct parts of hospitals that shall 20 be exempt from the reimbursement system established under 21 this Section. In defining such hospitals, the Illinois 22 Department shall take into consideration those hospitals 23 exempt from the Medicare Prospective Payment System as of 24 September 1, 1991. For hospitals defined as exempt under 25 this subsection, the Illinois Department shall by rule 26 establish a reimbursement system for payment of inpatient 27 hospital services rendered on and after September 1, 28 1991. For all hospitals that are children's hospitals as 29 defined in Section 5-5.02 of this Code, the reimbursement 30 methodology shall, through June 30, 1992, net of all 31 applicable fees, at least equal each children's hospital 32 1990 ICARE payment rates, indexed to the current year by 33 application of the DRI hospital cost index from 1989 to 34 the year in which payments are made. Excepting county -3- LRB9215822DJmg 1 providers as defined in Article XV of this Code, 2 hospitals licensed under the University of Illinois 3 Hospital Act, and facilities operated by the Department 4 of Mental Health and Developmental Disabilities (or its 5 successor, the Department of Human Services) for hospital 6 inpatient services rendered on or after July 1, 1995, the 7 Illinois Department shall reimburse children's hospitals, 8 as defined in 89 Illinois Administrative Code Section 9 149.50(c)(3), at the rates in effect on June 30, 1995, 10 and shall reimburse all other hospitals at the rates in 11 effect on June 30, 1995, less the portion of such rates 12 attributed by the Illinois Department to the cost of 13 medical education. For inpatient hospital services 14 provided on or after August 1, 1998, the Illinois 15 Department may establish by rule a means of adjusting the 16 rates of children's hospitals, as defined in 89 Illinois 17 Administrative Code Section 149.50(c)(3), that did not 18 meet that definition on June 30, 1995, in order for the 19 inpatient hospital rates of such hospitals to take into 20 account the average inpatient hospital rates of those 21 children's hospitals that did meet the definition of 22 children's hospitals on June 30, 1995. 23 (3) (Blank) 24 (4) Notwithstanding any other provision of this 25 Section, hospitals that on August 31, 1991, have a 26 contract with the Illinois Department under Section 3-4 27 of the Illinois Health Finance Reform Act may elect to 28 continue to be reimbursed at rates stated in such 29 contracts for general and specialty care. 30 (5) In addition to any payments made under this 31 subsection (a), the Illinois Department shall make the 32 adjustment payments required by Section 5-5.02 of this 33 Code; provided, that in the case of any hospital 34 reimbursed under a per case methodology, the Illinois -4- LRB9215822DJmg 1 Department shall add an amount equal to the product of 2 the hospital's average length of stay, less one day, 3 multiplied by 20, for inpatient hospital services 4 rendered on or after September 1, 1991 and on or before 5 September 30, 1992. 6 (b) (Blank) 7 (b-5) Excepting county providers as defined in Article 8 XV of this Code, hospitals licensed under the University of 9 Illinois Hospital Act, and facilities operated by the 10 Illinois Department of Mental Health and Developmental 11 Disabilities (or its successor, the Department of Human 12 Services), for outpatient services rendered on or after July 13 1, 1995 and before July 1, 1998 the Illinois Department shall 14 reimburse children's hospitals, as defined in the Illinois 15 Administrative Code Section 149.50(c)(3), at the rates in 16 effect on June 30, 1995, less that portion of such rates 17 attributed by the Illinois Department to the outpatient 18 indigent volume adjustment and shall reimburse all other 19 hospitals at the rates in effect on June 30, 1995, less the 20 portions of such rates attributed by the Illinois Department 21 to the cost of medical education and attributed by the 22 Illinois Department to the outpatient indigent volume 23 adjustment. For outpatient services provided on or after 24 July 1, 1998, reimbursement rates shall be established by 25 rule. 26 (c) In addition to any other payments under this Code, 27 the Illinois Department shall develop a hospital 28 disproportionate share reimbursement methodology that, 29 effective July 1, 1991, through September 30, 1992, shall 30 reimburse hospitals sufficiently to expend the fee monies 31 described in subsection (b) of Section 14-3 of this Code and 32 the federal matching funds received by the Illinois 33 Department as a result of expenditures made by the Illinois 34 Department as required by this subsection (c) and Section -5- LRB9215822DJmg 1 14-2 that are attributable to fee monies deposited in the 2 Fund, less amounts applied to adjustment payments under 3 Section 5-5.02. 4 (d) Critical Care Access Payments. 5 (1) In addition to any other payments made under 6 this Code, the Illinois Department shall develop a 7 reimbursement methodology that shall reimburse Critical 8 Care Access Hospitals for the specialized services that 9 qualify them as Critical Care Access Hospitals. No 10 adjustment payments shall be made under this subsection 11 on or after July 1, 1995. 12 (2) "Critical Care Access Hospitals" includes, but 13 is not limited to, hospitals that meet at least one of 14 the following criteria: 15 (A) Hospitals located outside of a 16 metropolitan statistical area that are designated as 17 Level II Perinatal Centers and that provide a 18 disproportionate share of perinatal services to 19 recipients; or 20 (B) Hospitals that are designated as Level I 21 Trauma Centers (adult or pediatric) and certain 22 Level II Trauma Centers as determined by the 23 Illinois Department; or 24 (C) Hospitals located outside of a 25 metropolitan statistical area and that provide a 26 disproportionate share of obstetrical services to 27 recipients. 28 (e) Inpatient high volume adjustment. For hospital 29 inpatient services, effective with rate periods beginning on 30 or after October 1, 1993, in addition to rates paid for 31 inpatient services by the Illinois Department, the Illinois 32 Department shall make adjustment payments for inpatient 33 services furnished by Medicaid high volume hospitals. The 34 Illinois Department shall establish by rule criteria for -6- LRB9215822DJmg 1 qualifying as a Medicaid high volume hospital and shall 2 establish by rule a reimbursement methodology for calculating 3 these adjustment payments to Medicaid high volume hospitals. 4 No adjustment payment shall be made under this subsection for 5 services rendered on or after July 1, 1995. 6 (f) The Illinois Department shall modify its current 7 rules governing adjustment payments for targeted access, 8 critical care access, and uncompensated care to classify 9 those adjustment payments as not being payments to 10 disproportionate share hospitals under Title XIX of the 11 federal Social Security Act. Rules adopted under this 12 subsection shall not be effective with respect to services 13 rendered on or after July 1, 1995. The Illinois Department 14 has no obligation to adopt or implement any rules or make any 15 payments under this subsection for services rendered on or 16 after July 1, 1995. 17 (f-5) The State recognizes that adjustment payments to 18 hospitals providing certain services or incurring certain 19 costs may be necessary to assure that recipients of medical 20 assistance have adequate access to necessary medical 21 services. These adjustments include payments for teaching 22 costs and uncompensated care, trauma center payments, 23 rehabilitation hospital payments, perinatal center payments, 24 obstetrical care payments, targeted access payments, Medicaid 25 high volume payments, and outpatient indigent volume 26 payments. On or before April 1, 1995, the Illinois 27 Department shall issue recommendations regarding (i) 28 reimbursement mechanisms or adjustment payments to reflect 29 these costs and services, including methods by which the 30 payments may be calculated and the method by which the 31 payments may be financed, and (ii) reimbursement mechanisms 32 or adjustment payments to reflect costs and services of 33 federally qualified health centers with respect to recipients 34 of medical assistance. -7- LRB9215822DJmg 1 (g) If one or more hospitals file suit in any court 2 challenging any part of this Article XIV, payments to 3 hospitals under this Article XIV shall be made only to the 4 extent that sufficient monies are available in the Fund and 5 only to the extent that any monies in the Fund are not 6 prohibited from disbursement under any order of the court. 7 (h) Payments under the disbursement methodology 8 described in this Section are subject to approval by the 9 federal government in an appropriate State plan amendment. 10 (i) The Illinois Department may by rule establish 11 criteria for and develop methodologies for adjustment 12 payments to hospitals participating under this Article. 13 (Source: P.A. 89-21, eff. 7-1-95; 89-499, eff. 6-28-96; 14 89-507, eff. 7-1-97; 90-9, eff. 7-1-97; 90-14, eff. 7-1-97; 15 90-588, eff. 7-1-98.)