97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1546

 

Introduced 2/15/2011, by Rep. Lisa M. Dugan

 

SYNOPSIS AS INTRODUCED:
 
305 ILCS 5/14-8  from Ch. 23, par. 14-8

    Amends the Illinois Public Aid Code. Requires the Department of Healthcare and Family Services to establish by rule methodologies for payments to hospital-based organized clinics. Sets forth certain requirements clinics must meet in order to qualify for payments, including the requirement that the clinic be adjacent to or on the premises of the hospital and be licensed under the Hospital Licensing Act or the University of Illinois Hospital Act, and the requirement that the clinic have provider-based status under the federal Medicare program. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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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 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 after
9September 1, 1991, the Illinois Department shall reimburse
10hospitals for inpatient services at an inpatient payment rate
11calculated for each hospital based upon the Medicare
12Prospective Payment System as set forth in Sections 1886(b),
13(d), (g), and (h) of the federal Social Security Act, and the
14regulations, policies, and procedures promulgated thereunder,
15except as modified by this Section. Payment rates for inpatient
16hospital services rendered on or after September 1, 1991 and on
17or before September 30, 1992 shall be calculated using the
18Medicare Prospective Payment rates in effect on September 1,
191991. Payment rates for inpatient hospital services rendered on
20or after October 1, 1992 and on or before March 31, 1994 shall
21be calculated using the Medicare Prospective Payment rates in
22effect on September 1, 1992. Payment rates for inpatient
23hospital services rendered on or after April 1, 1994 shall be

 

 

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1calculated using the Medicare Prospective Payment rates
2(including the Medicare grouping methodology and weighting
3factors as adjusted pursuant to paragraph (1) of this
4subsection) in effect 90 days prior to the date of admission.
5For services rendered on or after July 1, 1995, the
6reimbursement methodology implemented under this subsection
7shall not include those costs referred to in Sections
81886(d)(5)(B) and 1886(h) of the Social Security Act. The
9additional payment amounts required under Section
101886(d)(5)(F) of the Social Security Act, for hospitals serving
11a disproportionate share of low-income or indigent patients,
12are not required under this Section. For hospital inpatient
13services rendered on or after July 1, 1995, the Illinois
14Department shall reimburse hospitals using the relative
15weighting factors and the base payment rates calculated for
16each hospital that were in effect on June 30, 1995, less the
17portion of such rates attributed by the Illinois Department to
18the cost of medical education.
19        (1) The weighting factors established under Section
20    1886(d)(4) of the Social Security Act shall not be used in
21    the reimbursement system established under this Section.
22    Rather, the Illinois Department shall establish by rule
23    Medicaid weighting factors to be used in the reimbursement
24    system established under this Section.
25        (2) The Illinois Department shall define by rule those
26    hospitals or distinct parts of hospitals that shall be

 

 

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1    exempt from the reimbursement system established under
2    this Section. In defining such hospitals, the Illinois
3    Department shall take into consideration those hospitals
4    exempt from the Medicare Prospective Payment System as of
5    September 1, 1991. For hospitals defined as exempt under
6    this subsection, the Illinois Department shall by rule
7    establish a reimbursement system for payment of inpatient
8    hospital services rendered on and after September 1, 1991.
9    For all hospitals that are children's hospitals as defined
10    in Section 5-5.02 of this Code, the reimbursement
11    methodology shall, through June 30, 1992, net of all
12    applicable fees, at least equal each children's hospital
13    1990 ICARE payment rates, indexed to the current year by
14    application of the DRI hospital cost index from 1989 to the
15    year in which payments are made. Excepting county providers
16    as defined in Article XV of this Code, hospitals licensed
17    under the University of Illinois Hospital Act, and
18    facilities operated by the Department of Mental Health and
19    Developmental Disabilities (or its successor, the
20    Department of Human Services) for hospital inpatient
21    services rendered on or after July 1, 1995, the Illinois
22    Department shall reimburse children's hospitals, as
23    defined in 89 Illinois Administrative Code Section
24    149.50(c)(3), at the rates in effect on June 30, 1995, and
25    shall reimburse all other hospitals at the rates in effect
26    on June 30, 1995, less the portion of such rates attributed

 

 

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1    by the Illinois Department to the cost of medical
2    education. For inpatient hospital services provided on or
3    after August 1, 1998, the Illinois Department may establish
4    by rule a means of adjusting the rates of children's
5    hospitals, as defined in 89 Illinois Administrative Code
6    Section 149.50(c)(3), that did not meet that definition on
7    June 30, 1995, in order for the inpatient hospital rates of
8    such hospitals to take into account the average inpatient
9    hospital rates of those children's hospitals that did meet
10    the definition of children's hospitals on June 30, 1995.
11        (3) (Blank)
12        (4) Notwithstanding any other provision of this
13    Section, hospitals that on August 31, 1991, have a contract
14    with the Illinois Department under Section 3-4 of the
15    Illinois Health Finance Reform Act may elect to continue to
16    be reimbursed at rates stated in such contracts for general
17    and specialty care.
18        (5) In addition to any payments made under this
19    subsection (a), the Illinois Department shall make the
20    adjustment payments required by Section 5-5.02 of this
21    Code; provided, that in the case of any hospital reimbursed
22    under a per case methodology, the Illinois Department shall
23    add an amount equal to the product of the hospital's
24    average length of stay, less one day, multiplied by 20, for
25    inpatient hospital services rendered on or after September
26    1, 1991 and on or before September 30, 1992.

 

 

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1    (b) (Blank)
2    (b-5) Excepting county providers as defined in Article XV
3of this Code, hospitals licensed under the University of
4Illinois Hospital Act, and facilities operated by the Illinois
5Department of Mental Health and Developmental Disabilities (or
6its successor, the Department of Human Services), for
7outpatient services rendered on or after July 1, 1995 and
8before July 1, 1998 the Illinois Department shall reimburse
9children's hospitals, as defined in the Illinois
10Administrative Code Section 149.50(c)(3), at the rates in
11effect on June 30, 1995, less that portion of such rates
12attributed by the Illinois Department to the outpatient
13indigent volume adjustment and shall reimburse all other
14hospitals at the rates in effect on June 30, 1995, less the
15portions of such rates attributed by the Illinois Department to
16the cost of medical education and attributed by the Illinois
17Department to the outpatient indigent volume adjustment. For
18outpatient services provided on or after July 1, 1998,
19reimbursement rates shall be established by rule.
20    (c) In addition to any other payments under this Code, the
21Illinois Department shall develop a hospital disproportionate
22share reimbursement methodology that, effective July 1, 1991,
23through September 30, 1992, shall reimburse hospitals
24sufficiently to expend the fee monies described in subsection
25(b) of Section 14-3 of this Code and the federal matching funds
26received by the Illinois Department as a result of expenditures

 

 

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1made by the Illinois Department as required by this subsection
2(c) and Section 14-2 that are attributable to fee monies
3deposited in the Fund, less amounts applied to adjustment
4payments under Section 5-5.02.
5    (d) Critical Care Access Payments.
6        (1) In addition to any other payments made under this
7    Code, the Illinois Department shall develop a
8    reimbursement methodology that shall reimburse Critical
9    Care Access Hospitals for the specialized services that
10    qualify them as Critical Care Access Hospitals. No
11    adjustment payments shall be made under this subsection on
12    or after July 1, 1995.
13        (2) "Critical Care Access Hospitals" includes, but is
14    not limited to, hospitals that meet at least one of the
15    following criteria:
16            (A) Hospitals located outside of a metropolitan
17        statistical area that are designated as Level II
18        Perinatal Centers and that provide a disproportionate
19        share of perinatal services to recipients; or
20            (B) Hospitals that are designated as Level I Trauma
21        Centers (adult or pediatric) and certain Level II
22        Trauma Centers as determined by the Illinois
23        Department; or
24            (C) Hospitals located outside of a metropolitan
25        statistical area and that provide a disproportionate
26        share of obstetrical services to recipients.

 

 

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1    (e) Inpatient high volume adjustment. For hospital
2inpatient services, effective with rate periods beginning on or
3after October 1, 1993, in addition to rates paid for inpatient
4services by the Illinois Department, the Illinois Department
5shall make adjustment payments for inpatient services
6furnished by Medicaid high volume hospitals. The Illinois
7Department shall establish by rule criteria for qualifying as a
8Medicaid high volume hospital and shall establish by rule a
9reimbursement methodology for calculating these adjustment
10payments to Medicaid high volume hospitals. No adjustment
11payment shall be made under this subsection for services
12rendered on or after July 1, 1995.
13    (f) The Illinois Department shall modify its current rules
14governing adjustment payments for targeted access, critical
15care access, and uncompensated care to classify those
16adjustment payments as not being payments to disproportionate
17share hospitals under Title XIX of the federal Social Security
18Act. Rules adopted under this subsection shall not be effective
19with respect to services rendered on or after July 1, 1995. The
20Illinois Department has no obligation to adopt or implement any
21rules or make any payments under this subsection for services
22rendered on or after July 1, 1995.
23    (f-5) The State recognizes that adjustment payments to
24hospitals providing certain services or incurring certain
25costs may be necessary to assure that recipients of medical
26assistance have adequate access to necessary medical services.

 

 

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1These adjustments include payments for teaching costs and
2uncompensated care, trauma center payments, rehabilitation
3hospital payments, perinatal center payments, obstetrical care
4payments, targeted access payments, Medicaid high volume
5payments, and outpatient indigent volume payments. On or before
6April 1, 1995, the Illinois Department shall issue
7recommendations regarding (i) reimbursement mechanisms or
8adjustment payments to reflect these costs and services,
9including methods by which the payments may be calculated and
10the method by which the payments may be financed, and (ii)
11reimbursement mechanisms or adjustment payments to reflect
12costs and services of federally qualified health centers with
13respect to recipients of medical assistance.
14    (g) If one or more hospitals file suit in any court
15challenging any part of this Article XIV, payments to hospitals
16under this Article XIV shall be made only to the extent that
17sufficient monies are available in the Fund and only to the
18extent that any monies in the Fund are not prohibited from
19disbursement under any order of the court.
20    (h) Payments under the disbursement methodology described
21in this Section are subject to approval by the federal
22government in an appropriate State plan amendment.
23    (i) The Illinois Department may by rule establish criteria
24for and develop methodologies for adjustment payments to
25hospitals participating under this Article.
26    (j) Hospital Residing Long Term Care Services. In addition

 

 

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1to any other payments made under this Code, the Illinois
2Department may by rule establish criteria and develop
3methodologies for payments to hospitals for Hospital Residing
4Long Term Care Services.
5    (k) Critical Access Hospital outpatient payments. In
6addition to any other payments authorized under this Code, the
7Illinois Department shall reimburse critical access hospitals,
8as designated by the Illinois Department of Public Health in
9accordance with 42 CFR 485, Subpart F, for outpatient services
10at an amount that is no less than the cost of providing such
11services, based on Medicare cost principles. Payments under
12this subsection shall be subject to appropriation.
13    (l) Hospital-based organized clinics. The Illinois
14Department shall establish by rule methodologies for payments
15to hospital-based organized clinics. In addition to any
16hospital-based organized clinics eligible for reimbursement as
17of January 1, 2011, the Illinois Department shall, at a
18minimum, include those clinics that meet the following
19requirements:
20        (1) The clinic is adjacent to or on the premises of the
21    hospital and is licensed under the Hospital Licensing Act
22    or the University of Illinois Hospital Act;
23        (2) The clinic has provider-based status under
24    Medicare pursuant to 42 CFR 413.65; or
25        (3) The clinic is clinically integrated as evidenced by
26    the following:

 

 

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1            (A) Professional staff of the clinic have clinical
2        privileges at the main hospital; the main hospital
3        maintains the same monitoring and oversight of the
4        clinic as it does for any other department of the
5        hospital; medical staff committees or other
6        professional committees at the main hospital are
7        responsible for medical activities in the clinic,
8        including quality assurance, utilization review, and
9        the coordination and integration of services, to the
10        extent practicable, between the clinic and the main
11        hospital; medical records for patients treated in the
12        clinic are integrated into a unified retrieval system
13        of the main hospital, or cross-reference that
14        retrieval system; and inpatient and outpatient
15        services of the clinic and the main hospital are
16        integrated, and patients treated at the clinic who
17        require further care have full access to all services
18        of the main hospital and are referred when appropriate
19        to the corresponding inpatient or outpatient
20        department or service of the main hospital; and
21            (B) The clinic is fully integrated within the
22        financial system of the main hospital, as evidenced by
23        shared income and expenses between the main hospital
24        and the clinic; and
25            (C) The clinic is held out to the public and other
26        payers as part of the main hospital; and

 

 

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1            (D) The clinic operates under the ownership and
2        control of the main hospital, as evidenced by the
3        following: the business enterprise that constitutes
4        the clinic is 100% owned by the main hospital; the main
5        hospital and the clinic have the same governing body;
6        the clinic is operated under the same organizational
7        documents (e.g., bylaws and operating decisions) as
8        the main hospital; and the main hospital has final
9        responsibility for personnel policies (such as fringe
10        benefits or code of conduct), and final approval for
11        medical staff appointments in the clinic; and
12            (E) The clinic is located within a 35 mile radius
13        of the main hospital campus as defined in 42 CFR
14        413.65.
15(Source: P.A. 96-1382, eff. 1-1-11.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.