093_SB1202

 
                                     LRB093 09793 DRJ 10038 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 (ninety) 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 09793 DRJ 10038 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 09793 DRJ 10038 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 09793 DRJ 10038 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 09793 DRJ 10038 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 09793 DRJ 10038 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 09793 DRJ 10038 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    (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.)

16        Section 99.  Effective date.  This Act takes effect  upon
17    becoming law.