100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB1391

 

Introduced , by Rep. Michael J. Madigan

 

SYNOPSIS AS INTRODUCED:
 
225 ILCS 47/20

    Amends the Health Care Worker Self-Referral Act. Makes a technical change in a Section concerning prohibited referrals and claims for payment.


LRB100 03089 SMS 13094 b

 

 

A BILL FOR

 

HB1391LRB100 03089 SMS 13094 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Health Care Worker Self-Referral Act is
5amended by changing Section 20 as follows:
 
6    (225 ILCS 47/20)
7    Sec. 20. Prohibited referrals and claims for payment.
8    (a) A health care worker shall not refer a patient for
9health services to an entity outside the the health care
10worker's office or group practice in which the health care
11worker is an investor, unless the health care worker directly
12provides health services within the entity and will be
13personally involved with the provision of care to the referred
14patient.
15    (b) Pursuant to Board determination that the following
16exception is applicable, a health care worker may invest in and
17refer to an entity, whether or not the health care worker
18provides direct services within said entity, if there is a
19demonstrated need in the community for the entity and
20alternative financing is not available. For purposes of this
21subsection (b), "demonstrated need" in the community for the
22entity may exist if (1) there is no facility of reasonable
23quality that provides medically appropriate service, (2) use of

 

 

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1existing facilities is onerous or creates too great a hardship
2for patients, (3) the entity is formed to own or lease medical
3equipment which replaces obsolete or otherwise inadequate
4equipment in or under the control of a hospital located in a
5federally designated health manpower shortage area, or (4) such
6other standards as established, by rule, by the Board.
7"Community" shall be defined as a metropolitan area for a city,
8and a county for a rural area. In addition, the following
9provisions must be met to be exempt under this Section:
10        (1) Individuals who are not in a position to refer
11    patients to an entity are given a bona fide opportunity to
12    also invest in the entity on the same terms as those
13    offered a referring health care worker; and
14        (2) No health care worker who invests shall be required
15    or encouraged to make referrals to the entity or otherwise
16    generate business as a condition of becoming or remaining
17    an investor; and
18        (3) The entity shall market or furnish its services to
19    referring health care worker investors and other investors
20    on equal terms; and
21        (4) The entity shall not loan funds or guarantee any
22    loans for health care workers who are in a position to
23    refer to an entity; and
24        (5) The income on the health care worker's investment
25    shall be tied to the health care worker's equity in the
26    facility rather than to the volume of referrals made; and

 

 

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1        (6) Any investment contract between the entity and the
2    health care worker shall not include any covenant or
3    non-competition clause that prevents a health care worker
4    from investing in other entities; and
5        (7) When making a referral, a health care worker must
6    disclose his investment interest in an entity to the
7    patient being referred to such entity. If alternative
8    facilities are reasonably available, the health care
9    worker must provide the patient with a list of alternative
10    facilities. The health care worker shall inform the patient
11    that they have the option to use an alternative facility
12    other than one in which the health care worker has an
13    investment interest and the patient will not be treated
14    differently by the health care worker if the patient
15    chooses to use another entity. This shall be applicable to
16    all health care worker investors, including those who
17    provide direct care or services for their patients in
18    entities outside their office practices; and
19        (8) If a third party payor requests information with
20    regard to a health care worker's investment interest, the
21    same shall be disclosed; and
22        (9) The entity shall establish an internal utilization
23    review program to ensure that investing health care workers
24    provided appropriate or necessary utilization; and
25        (10) If a health care worker's financial interest in an
26    entity is incompatible with a referred patient's interest,

 

 

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1    the health care worker shall make alternative arrangements
2    for the patient's care.
3    The Board shall make such a determination for a health care
4worker within 90 days of a completed written request. Failure
5to make such a determination within the 90 day time frame shall
6mean that no alternative is practical based upon the facts set
7forth in the completed written request.
8    (c) It shall not be a violation of this Act for a health
9care worker to refer a patient for health services to a
10publicly traded entity in which he or she has an investment
11interest provided that:
12        (1) the entity is listed for trading on the New York
13    Stock Exchange or on the American Stock Exchange, or is a
14    national market system security traded under an automated
15    inter-dealer quotation system operated by the National
16    Association of Securities Dealers; and
17        (2) the entity had, at the end of the corporation's
18    most recent fiscal year, total net assets of at least
19    $30,000,000 related to the furnishing of health services;
20    and
21        (3) any investment interest obtained after the
22    effective date of this Act is traded on the exchanges
23    listed in paragraph 1 of subsection (c) of this Section
24    after the entity became a publicly traded corporation; and
25        (4) the entity markets or furnishes its services to
26    referring health care worker investors and other health

 

 

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1    care workers on equal terms; and
2        (5) all stock held in such publicly traded companies,
3    including stock held in the predecessor privately held
4    company, shall be of one class without preferential
5    treatment as to status or remuneration; and
6        (6) the entity does not loan funds or guarantee any
7    loans for health care workers who are in a position to be
8    referred to an entity; and
9        (7) the income on the health care worker's investment
10    is tied to the health care worker's equity in the entity
11    rather than to the volume of referrals made; and
12        (8) the investment interest does not exceed 1/2 of 1%
13    of the entity's total equity.
14    (d) Any hospital licensed under the Hospital Licensing Act
15shall not discriminate against or otherwise penalize a health
16care worker for compliance with this Act.
17    (e) Any health care worker or other entity shall not enter
18into an arrangement or scheme seeking to make referrals to
19another health care worker or entity based upon the condition
20that the health care worker or entity will make referrals with
21an intent to evade the prohibitions of this Act by inducing
22patient referrals which would be prohibited by this Section if
23the health care worker or entity made the referral directly.
24    (f) If compliance with the need and alternative investor
25criteria is not practical, the health care worker shall
26identify to the patient reasonably available alternative

 

 

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1facilities. The Board shall, by rule, designate when compliance
2is "not practical".
3    (g) Health care workers may request from the Board that it
4render an advisory opinion that a referral to an existing or
5proposed entity under specified circumstances does or does not
6violate the provisions of this Act. The Board's opinion shall
7be presumptively correct. Failure to render such an advisory
8opinion within 90 days of a completed written request pursuant
9to this Section shall create a rebuttable presumption that a
10referral described in the completed written request is not or
11will not be a violation of this Act.
12    (h) Notwithstanding any provision of this Act to the
13contrary, a health care worker may refer a patient, who is a
14member of a health maintenance organization "HMO" licensed in
15this State, for health services to an entity, outside the
16health care worker's office or group practice, in which the
17health care worker is an investor, provided that any such
18referral is made pursuant to a contract with the HMO.
19Furthermore, notwithstanding any provision of this Act to the
20contrary, a health care worker may refer an enrollee of a
21"managed care community network", as defined in subsection (b)
22of Section 5-11 of the Illinois Public Aid Code, for health
23services to an entity, outside the health care worker's office
24or group practice, in which the health care worker is an
25investor, provided that any such referral is made pursuant to a
26contract with the managed care community network.

 

 

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1(Source: P.A. 92-370, eff. 8-15-01.)