State of Illinois
2017 and 2018


Introduced , by Rep. Sara Feigenholtz


305 ILCS 5/5-11  from Ch. 23, par. 5-11

    Amends the Medical Assistance Article of the Illinois Public Aid Code. In addition to other specified actions required under the Code, requires a managed care community network that contracts with the Department of Healthcare and Family Services to establish, maintain, and provide a fair and reasonable reimbursement rate to pharmacy providers for pharmaceutical services, prescription drugs and drug products, and pharmacy or pharmacist-provided services. Provides that the reimbursement methodology shall not be less than the current reimbursement rate utilized by the Department for prescription and pharmacy or pharmacist-provided services and shall not be below the actual acquisition cost of the pharmacy provider. Requires a managed care community network to ensure that the pharmacy formulary used by the managed care community network and its contract providers is no more restrictive than the Department's pharmaceutical program. Effective July 1, 2018.

LRB100 10189 KTG 20371 b






HB3479LRB100 10189 KTG 20371 b

1    AN ACT concerning public aid.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Public Aid Code is amended by
5changing Section 5-11 as follows:
6    (305 ILCS 5/5-11)  (from Ch. 23, par. 5-11)
7    Sec. 5-11. Co-operative arrangements; contracts with other
8State agencies, health care and rehabilitation organizations,
9and fiscal intermediaries.
10    (a) The Illinois Department may enter into co-operative
11arrangements with State agencies responsible for administering
12or supervising the administration of health services and
13vocational rehabilitation services to the end that there may be
14maximum utilization of such services in the provision of
15medical assistance.
16    The Illinois Department shall, not later than June 30,
171993, enter into one or more co-operative arrangements with the
18Department of Mental Health and Developmental Disabilities
19providing that the Department of Mental Health and
20Developmental Disabilities will be responsible for
21administering or supervising all programs for services to
22persons in community care facilities for persons with
23developmental disabilities, including but not limited to



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1intermediate care facilities, that are supported by State funds
2or by funding under Title XIX of the federal Social Security
3Act. The responsibilities of the Department of Mental Health
4and Developmental Disabilities under these agreements are
5transferred to the Department of Human Services as provided in
6the Department of Human Services Act.
7    The Department may also contract with such State health and
8rehabilitation agencies and other public or private health care
9and rehabilitation organizations to act for it in supplying
10designated medical services to persons eligible therefor under
11this Article. Any contracts with health services or health
12maintenance organizations shall be restricted to organizations
13which have been certified as being in compliance with standards
14promulgated pursuant to the laws of this State governing the
15establishment and operation of health services or health
16maintenance organizations. The Department shall renegotiate
17the contracts with health maintenance organizations and
18managed care community networks that took effect August 1,
192003, so as to produce $70,000,000 savings to the Department
20net of resulting increases to the fee-for-service program for
21State fiscal year 2006. The Department may also contract with
22insurance companies or other corporate entities serving as
23fiscal intermediaries in this State for the Federal Government
24in respect to Medicare payments under Title XVIII of the
25Federal Social Security Act to act for the Department in paying
26medical care suppliers. The provisions of Section 9 of "An Act



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1in relation to State finance", approved June 10, 1919, as
2amended, notwithstanding, such contracts with State agencies,
3other health care and rehabilitation organizations, or fiscal
4intermediaries may provide for advance payments.
5    (b) For purposes of this subsection (b), "managed care
6community network" means an entity, other than a health
7maintenance organization, that is owned, operated, or governed
8by providers of health care services within this State and that
9provides or arranges primary, secondary, and tertiary managed
10health care services under contract with the Illinois
11Department exclusively to persons participating in programs
12administered by the Illinois Department.
13    The Illinois Department may certify managed care community
14networks, including managed care community networks owned,
15operated, managed, or governed by State-funded medical
16schools, as risk-bearing entities eligible to contract with the
17Illinois Department as Medicaid managed care organizations.
18The Illinois Department may contract with those managed care
19community networks to furnish health care services to or
20arrange those services for individuals participating in
21programs administered by the Illinois Department. The rates for
22those provider-sponsored organizations may be determined on a
23prepaid, capitated basis. A managed care community network may
24choose to contract with the Illinois Department to provide only
25pediatric health care services. The Illinois Department shall
26by rule adopt the criteria, standards, and procedures by which



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1a managed care community network may be permitted to contract
2with the Illinois Department and shall consult with the
3Department of Insurance in adopting these rules.
4    A county provider as defined in Section 15-1 of this Code
5may contract with the Illinois Department to provide primary,
6secondary, or tertiary managed health care services as a
7managed care community network without the need to establish a
8separate entity and shall be deemed a managed care community
9network for purposes of this Code only to the extent it
10provides services to participating individuals. A county
11provider is entitled to contract with the Illinois Department
12with respect to any contracting region located in whole or in
13part within the county. A county provider is not required to
14accept enrollees who do not reside within the county.
15    In order to (i) accelerate and facilitate the development
16of integrated health care in contracting areas outside counties
17with populations in excess of 3,000,000 and counties adjacent
18to those counties and (ii) maintain and sustain the high
19quality of education and residency programs coordinated and
20associated with local area hospitals, the Illinois Department
21may develop and implement a demonstration program from managed
22care community networks owned, operated, managed, or governed
23by State-funded medical schools. The Illinois Department shall
24prescribe by rule the criteria, standards, and procedures for
25effecting this demonstration program.
26    A managed care community network that contracts with the



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1Illinois Department to furnish health care services to or
2arrange those services for enrollees participating in programs
3administered by the Illinois Department shall do all of the
5        (1) Provide that any provider affiliated with the
6    managed care community network may also provide services on
7    a fee-for-service basis to Illinois Department clients not
8    enrolled in such managed care entities.
9        (2) Provide client education services as determined
10    and approved by the Illinois Department, including but not
11    limited to (i) education regarding appropriate utilization
12    of health care services in a managed care system, (ii)
13    written disclosure of treatment policies and restrictions
14    or limitations on health services, including, but not
15    limited to, physical services, clinical laboratory tests,
16    hospital and surgical procedures, prescription drugs and
17    biologics, and radiological examinations, and (iii)
18    written notice that the enrollee may receive from another
19    provider those covered services that are not provided by
20    the managed care community network.
21        (3) Provide that enrollees within the system may choose
22    the site for provision of services and the panel of health
23    care providers.
24        (4) Not discriminate in enrollment or disenrollment
25    practices among recipients of medical services or
26    enrollees based on health status.



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1        (5) Provide a quality assurance and utilization review
2    program that meets the requirements established by the
3    Illinois Department in rules that incorporate those
4    standards set forth in the Health Maintenance Organization
5    Act.
6        (6) Issue a managed care community network
7    identification card to each enrollee upon enrollment. The
8    card must contain all of the following:
9            (A) The enrollee's health plan.
10            (B) The name and telephone number of the enrollee's
11        primary care physician or the site for receiving
12        primary care services.
13            (C) A telephone number to be used to confirm
14        eligibility for benefits and authorization for
15        services that is available 24 hours per day, 7 days per
16        week.
17        (7) Ensure that every primary care physician and
18    pharmacy in the managed care community network meets the
19    standards established by the Illinois Department for
20    accessibility and quality of care. The Illinois Department
21    shall arrange for and oversee an evaluation of the
22    standards established under this paragraph (7) and may
23    recommend any necessary changes to these standards.
24        (8) Provide a procedure for handling complaints that
25    meets the requirements established by the Illinois
26    Department in rules that incorporate those standards set



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1    forth in the Health Maintenance Organization Act.
2        (9) Maintain, retain, and make available to the
3    Illinois Department records, data, and information, in a
4    uniform manner determined by the Illinois Department,
5    sufficient for the Illinois Department to monitor
6    utilization, accessibility, and quality of care.
7        (10) (Blank).
8        (11) Establish, maintain, and provide a fair and
9    reasonable reimbursement rate to pharmacy providers for
10    pharmaceutical services, prescription drugs and drug
11    products, and pharmacy or pharmacist-provided services.
12    The reimbursement methodology shall include a fair and
13    reasonable professional dispensing fee for pharmaceutical
14    services, prescription drugs, and drug products and a fair
15    and reasonable professional fee for pharmacy or
16    pharmacist-provided services. The reimbursement
17    methodology shall not be less than the current
18    reimbursement rate utilized by the Illinois Department for
19    prescription and pharmacy or pharmacist-provided services
20    as described in Section 5-5.12 and shall not be below the
21    actual acquisition cost of the pharmacy provider.
22        (12) Ensure that the pharmacy formulary used by the
23    managed care community network and its contract providers
24    is no more restrictive than the Illinois Department's
25    pharmaceutical program.
26    The Illinois Department shall contract with an entity or



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1entities to provide external peer-based quality assurance
2review for the managed health care programs administered by the
3Illinois Department. The entity shall meet all federal
4requirements for an external quality review organization.
5    Each managed care community network must demonstrate its
6ability to bear the financial risk of serving individuals under
7this program. The Illinois Department shall by rule adopt
8standards for assessing the solvency and financial soundness of
9each managed care community network. Any solvency and financial
10standards adopted for managed care community networks shall be
11no more restrictive than the solvency and financial standards
12adopted under Section 1856(a) of the Social Security Act for
13provider-sponsored organizations under Part C of Title XVIII of
14the Social Security Act.
15    The Illinois Department may implement the amendatory
16changes to this Code made by this amendatory Act of 1998
17through the use of emergency rules in accordance with Section
185-45 of the Illinois Administrative Procedure Act. For purposes
19of that Act, the adoption of rules to implement these changes
20is deemed an emergency and necessary for the public interest,
21safety, and welfare.
22    (c) Not later than June 30, 1996, the Illinois Department
23shall enter into one or more cooperative arrangements with the
24Department of Public Health for the purpose of developing a
25single survey for nursing facilities, including but not limited
26to facilities funded under Title XVIII or Title XIX of the



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1federal Social Security Act or both, which shall be
2administered and conducted solely by the Department of Public
3Health. The Departments shall test the single survey process on
4a pilot basis, with both the Departments of Public Aid and
5Public Health represented on the consolidated survey team. The
6pilot will sunset June 30, 1997. After June 30, 1997, unless
7otherwise determined by the Governor, a single survey shall be
8implemented by the Department of Public Health which would not
9preclude staff from the Department of Healthcare and Family
10Services (formerly Department of Public Aid) from going on-site
11to nursing facilities to perform necessary audits and reviews
12which shall not replicate the single State agency survey
13required by this Act. This Section shall not apply to community
14or intermediate care facilities for persons with developmental
16    (d) Nothing in this Code in any way limits or otherwise
17impairs the authority or power of the Illinois Department to
18enter into a negotiated contract pursuant to this Section with
19a managed care community network or a health maintenance
20organization, as defined in the Health Maintenance
21Organization Act, that provides for termination or nonrenewal
22of the contract without cause, upon notice as provided in the
23contract, and without a hearing.
24(Source: P.A. 95-331, eff. 8-21-07; 96-1501, eff. 1-25-11.)
25    Section 99. Effective date. This Act takes effect January
261, 2018.