093_HB3481

 
                                     LRB093 09774 DRJ 10019 b

 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 Hospitals.
 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-      LRB093 09774 DRJ 10019 b
 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-      LRB093 09774 DRJ 10019 b
 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-      LRB093 09774 DRJ 10019 b
 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-      LRB093 09774 DRJ 10019 b
 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-      LRB093 09774 DRJ 10019 b
 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-      LRB093 09774 DRJ 10019 b
 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        (j)  Hospital  pharmacy  payment.  For inpatient hospital
14    services provided on or after October 1, 2003, in addition to
15    rates  paid  for  services  under  this  Code,  the  Illinois
16    Department shall reimburse each hospital for  the  reasonable
17    costs  incurred  by  the hospital in providing pharmaceutical
18    services and supplies to  recipients.  To  qualify  for  this
19    additional  pharmacy  payment,  the  Illinois  Department, by
20    rule, may require each hospital to  submit  documentation  of
21    its annual pharmacy costs.
22    (Source:  P.A.  89-21,  eff.  7-1-95;  89-499,  eff. 6-28-96;
23    89-507, eff. 7-1-97; 90-9, eff. 7-1-97; 90-14,  eff.  7-1-97;
24    90-588, eff. 7-1-98.)

25        Section  99.  Effective date.  This Act takes effect upon
26    becoming law.