HB6769 93RD GENERAL ASSEMBLY

LRB093 18334 AMC 44040 b

93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
HB6769

Introduced 02/09/04, by Deborah L. Graham

SYNOPSIS AS INTRODUCED:

20 ILCS 3960/3	from Ch. 111 1/2, par. 1153
20 ILCS 3960/4.2
20 ILCS 3960/5.5 new
20 ILCS 3960/6	from Ch. 111 1/2, par. 1156
20 ILCS 3960/8	from Ch. 111 1/2, par. 1158

Amends the Illinois Health Facilities Planning Act. Provides that changes of ownership, mergers, and consolidations of health care facilities require a permit from the Health Facilities Planning Board and sets forth requirements for the permit application. Sets forth conditions that require a public hearing for a permit application and requires that the notice of the public hearing be published in a newspaper for 3 consecutive days. Makes other changes.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning health facilities.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Health Facilities Planning Act is amended by changing Sections 3, 4.2, 6, and 8 and by adding Section 5.5 as follows:

(20 ILCS 3960/3) (from Ch. 111 1/2, par. 1153)

(Section scheduled to be repealed on July 1, 2008)

Sec. 3. Definitions. As used in this Act:

"Health care facilities" means and includes the following facilities and organizations:

1. An ambulatory surgical treatment center required to be licensed pursuant to the Ambulatory Surgical Treatment Center Act;

2. An institution, place, building, or agency required to be licensed pursuant to the Hospital Licensing Act;

3. Skilled and intermediate long term care facilities licensed under the Nursing Home Care Act;

3. Skilled and intermediate long term care facilities licensed under the Nursing Home Care Act;

4. Hospitals, nursing homes, ambulatory surgical treatment centers, or kidney disease treatment centers maintained by the State or any department or agency thereof;

5. Kidney disease treatment centers, including a free-standing hemodialysis unit; and

6. An institution, place, building, or room used for the performance of outpatient surgical procedures that is leased, owned, or operated by or on behalf of an out-of-state facility.

No federally owned facility shall be subject to the provisions of this Act, nor facilities used solely for healing by prayer or spiritual means.

No facility licensed under the Supportive Residences Licensing Act or the Assisted Living and Shared Housing Act shall be subject to the provisions of this Act.

A facility designated as a supportive living facility that is in good standing with the demonstration project established under Section 5-5.01a of the Illinois Public Aid Code shall not be subject to the provisions of this Act.

This Act does not apply to facilities granted waivers under Section 3-102.2 of the Nursing Home Care Act. However, if a demonstration project under that Act applies for a certificate of need to convert to a nursing facility, it shall meet the licensure and certificate of need requirements in effect as of the date of application.

This Act shall not apply to the closure of an entity or a portion of an entity licensed under the Nursing Home Care Act that elects to convert, in whole or in part, to an assisted living or shared housing establishment licensed under the Assisted Living and Shared Housing Act.

With the exception of those health care facilities specifically included in this Section, nothing in this Act shall be intended to include facilities operated as a part of the practice of a physician or other licensed health care professional, whether practicing in his individual capacity or within the legal structure of any partnership, medical or professional corporation, or unincorporated medical or professional group. Further, this Act shall not apply to physicians or other licensed health care professional's practices where such practices are carried out in a portion of a health care facility under contract with such health care facility by a physician or by other licensed health care professionals, whether practicing in his individual capacity or within the legal structure of any partnership, medical or professional corporation, or unincorporated medical or professional groups. This Act shall apply to construction or modification and to establishment by such health care facility of such contracted portion which is subject to facility licensing requirements, irrespective of the party responsible for such action or attendant financial obligation.

"Person" means any one or more natural persons, legal entities, governmental bodies other than federal, or any combination thereof.

"Consumer" means any person other than a person (a) whose major occupation currently involves or whose official capacity within the last 12 months has involved the providing, administering or financing of any type of health care facility, (b) who is engaged in health research or the teaching of health, (c) who has a material financial interest in any activity which involves the providing, administering or financing of any type of health care facility, or (d) who is or ever has been a member of the immediate family of the person defined by (a), (b), or (c).

"State Board" means the Health Facilities Planning Board.

"Construction or modification" means the establishment, erection, building, alteration, reconstruction, modernization, improvement, extension, discontinuation, change of ownership, of or by a health care facility, or the purchase or acquisition by or through a health care facility of equipment or service for diagnostic or therapeutic purposes or for facility administration or operation, or any capital expenditure made by or on behalf of a health care facility which exceeds the capital expenditure minimum; however, any capital expenditure made by or on behalf of a health care facility for the construction or modification of a facility licensed under the Assisted Living and Shared Housing Act shall be excluded from any obligations under this Act.

"Establish" means the construction of a health care facility or the replacement of an existing facility on another site.

"Major medical equipment" means medical equipment which is used for the provision of medical and other health services and which costs in excess of the capital expenditure minimum, except that such term does not include medical equipment acquired by or on behalf of a clinical laboratory to provide clinical laboratory services if the clinical laboratory is independent of a physician's office and a hospital and it has been determined under Title XVIII of the Social Security Act to meet the requirements of paragraphs (10) and (11) of Section 1861(s) of such Act. In determining whether medical equipment has a value in excess of the capital expenditure minimum, the value of studies, surveys, designs, plans, working drawings, specifications, and other activities essential to the acquisition of such equipment shall be included.

"Capital Expenditure" means an expenditure: (A) made by or on behalf of a health care facility (as such a facility is defined in this Act); and (B) which under generally accepted accounting principles is not properly chargeable as an expense of operation and maintenance, or is made to obtain by lease or comparable arrangement any facility or part thereof or any equipment for a facility or part; and which exceeds the capital expenditure minimum.

For the purpose of this paragraph, the cost of any studies, surveys, designs, plans, working drawings, specifications, and other activities essential to the acquisition, improvement, expansion, or replacement of any plant or equipment with respect to which an expenditure is made shall be included in determining if such expenditure exceeds the capital expenditures minimum. Donations of equipment or facilities to a health care facility which if acquired directly by such facility would be subject to review under this Act shall be considered capital expenditures, and a transfer of equipment or facilities for less than fair market value shall be considered a capital expenditure for purposes of this Act if a transfer of the equipment or facilities at fair market value would be subject to review.

"Capital expenditure minimum" means $6,000,000, which shall be annually adjusted to reflect the increase in construction costs due to inflation, for major medical equipment and for all other capital expenditures; provided, however, that when a capital expenditure is for the construction or modification of a health and fitness center, "capital expenditure minimum" means the capital expenditure minimum for all other capital expenditures in effect on March 1, 2000, which shall be annually adjusted to reflect the increase in construction costs due to inflation.

"Non-clinical service area" means an area (i) for the benefit of the patients, visitors, staff, or employees of a health care facility and (ii) not directly related to the diagnosis, treatment, or rehabilitation of persons receiving services from the health care facility. "Non-clinical service areas" include, but are not limited to, chapels; gift shops; news stands; computer systems; tunnels, walkways, and elevators; telephone systems; projects to comply with life safety codes; educational facilities; student housing; patient, employee, staff, and visitor dining areas; administration and volunteer offices; modernization of structural components (such as roof replacement and masonry work); boiler repair or replacement; vehicle maintenance and storage facilities; parking facilities; mechanical systems for heating, ventilation, and air conditioning; loading docks; and repair or replacement of carpeting, tile, wall coverings, window coverings or treatments, or furniture. Solely for the purpose of this definition, "non-clinical service area" does not include health and fitness centers.

"Areawide" means a major area of the State delineated on a geographic, demographic, and functional basis for health planning and for health service and having within it one or more local areas for health planning and health service. The term "region", as contrasted with the term "subregion", and the word "area" may be used synonymously with the term "areawide".

"Local" means a subarea of a delineated major area that on a geographic, demographic, and functional basis may be considered to be part of such major area. The term "subregion" may be used synonymously with the term "local".

"Areawide health planning organization" or "Comprehensive health planning organization" means the health systems agency designated by the Secretary, Department of Health and Human Services or any successor agency.

"Local health planning organization" means those local health planning organizations that are designated as such by the areawide health planning organization of the appropriate area.

"Physician" means a person licensed to practice in accordance with the Medical Practice Act of 1987, as amended.

"Licensed health care professional" means a person licensed to practice a health profession under pertinent licensing statutes of the State of Illinois.

"Director" means the Director of the Illinois Department of Public Health.

"Agency" means the Illinois Department of Public Health.

"Comprehensive health planning" means health planning concerned with the total population and all health and associated problems that affect the well-being of people and that encompasses health services, health manpower, and health facilities; and the coordination among these and with those social, economic, and environmental factors that affect health.

"Alternative health care model" means a facility or program authorized under the Alternative Health Care Delivery Act.

"Out-of-state facility" means a person that is both (i) licensed as a hospital or as an ambulatory surgery center under the laws of another state or that qualifies as a hospital or an ambulatory surgery center under regulations adopted pursuant to the Social Security Act and (ii) not licensed under the Ambulatory Surgical Treatment Center Act, the Hospital Licensing Act, or the Nursing Home Care Act. Affiliates of out-of-state facilities shall be considered out-of-state facilities. Affiliates of Illinois licensed health care facilities 100% owned by an Illinois licensed health care facility, its parent, or Illinois physicians licensed to practice medicine in all its branches shall not be considered out-of-state facilities. Nothing in this definition shall be construed to include an office or any part of an office of a physician licensed to practice medicine in all its branches in Illinois that is not required to be licensed under the Ambulatory Surgical Treatment Center Act.

"Change of ownership of a health care facility" means a change in the person who has ownership or control of a health care facility's physical plant and capital assets. A change in ownership is indicated by the following transactions: sale, transfer, acquisition, lease, change of sponsorship, or other means of transferring control.

"Related person" means any person that: (i) is at least 50% owned, directly or indirectly, by either the health care facility or a person owning, directly or indirectly, at least 50% of the health care facility; or (ii) owns, directly or indirectly, at least 50% of the health care facility.

"Charity care" means care provided by a health care facility for which the provider does not expect to receive payment from the patient or a third-party payer.

"Community benefits" means the unreimbursed cost to a health care facility of providing charity care, language assistance services, government-sponsored indigent health care, donations, volunteer services, education, government-sponsored program services, research, and subsidized health services and collecting bad debts. "Community benefits" does not include the cost of paying any taxes or other governmental assessments.

(Source: P.A. 93-41, eff. 6-27-03.)

(20 ILCS 3960/4.2)

(Section scheduled to be repealed on July 1, 2008)

Sec. 4.2. Ex parte communications.

(a) Except in the disposition of matters that agencies are authorized by law to entertain or dispose of on an ex parte basis including, but not limited to rule making, the State Board, any State Board member, employee, or a hearing officer shall not engage in ex parte communication, after an application for a permit is received, in connection with the substance of any application for a permit with any person or party or the representative of any party.

(b) A State Board member or employee may communicate with other members or employees and any State Board member or hearing officer may have the aid and advice of one or more personal assistants.

(c) An ex parte communication received by the State Board, any State Board member, employee, or a hearing officer shall be made a part of the record of the pending matter, including all written communications, all written responses to the communications, and a memorandum stating the substance of all oral communications and all responses made and the identity of each person from whom the ex parte communication was received.

(d) "Ex parte communication" means a communication between a person who is not a State Board member or employee and a State Board member or employee concerning the merits of an application before the Board, except on notice and opportunity for all parties to participate that reflects on the substance of a pending State Board proceeding and that takes place outside the record of the proceeding. Communications regarding matters of procedure and practice, such as the format of pleading, number of copies required, manner of service, and status of proceedings, are not considered ex parte communications. Technical assistance with respect to an application, not intended to influence any decision on the application, may be provided by employees to the applicant. Any assistance shall be documented in writing by the applicant and employees within 10 business days after the assistance is provided.

(e) For purposes of this Section, "employee" means a person the State Board or the Agency employs on a full-time, part-time, contract, or intern basis.

(f) The State Board, State Board member, or hearing examiner presiding over the proceeding, in the event of a violation of this Section, must take whatever action is necessary to ensure that the violation does not prejudice any party or adversely affect the fairness of the proceedings.

(g) Nothing in this Section shall be construed to prevent the State Board or any member of the State Board from consulting with the attorney for the State Board.

(Source: P.A. 91-782, eff. 6-9-00.)

(20 ILCS 3960/5.5 new)

Sec. 5.5. Changes of ownership, mergers, and consolidations; permit required. Changes of ownership, mergers, and consolidations of health care facilities require a permit from the State Board. As part of the permit application for a change of ownership, merger, or consolidation, the proposed owner must certify in writing that, for the 5-year period following the transaction, the percentages of charity care and community benefits provided each year to the population served by the health care facility will be equal to or exceed the average percentages of charity care and community benefits provided by the health care facility for the 2 fiscal years immediately preceding the acquisition.

(20 ILCS 3960/6) (from Ch. 111 1/2, par. 1156)

(Section scheduled to be repealed on July 1, 2008)

Sec. 6. Application for permit or exemption; exemption regulations.

(a) An application for a permit or exemption shall be made to the State Board upon forms provided by the State Board. This application shall contain such information as the State Board deems necessary. Such application shall include affirmative evidence on which the Director may make the findings required under this Section and upon which the State Board may make its decision on the approval or denial of the permit or exemption.

(b) The State Board shall establish by regulation the procedures and requirements regarding issuance of exemptions. An exemption shall be approved when information required by the Board by rule is submitted. Projects eligible for an exemption, rather than a permit, include, but are not limited to, change of ownership of a health care facility. For a change of ownership of a health care facility between related persons, the State Board shall provide by rule for an expedited process for obtaining an exemption.

(c) All applications shall be signed by the applicant and shall be verified by any 2 officers thereof.

(d) Upon receipt of an application for a permit, the State Board shall approve and authorize the issuance of a permit if it finds (1) that the applicant is fit, willing, and able to provide a proper standard of health care service for the community with particular regard to the qualification, background and character of the applicant, (2) that economic feasibility is demonstrated in terms of effect on the existing and projected operating budget of the applicant and of the health care facility; in terms of the applicant's ability to establish and operate such facility in accordance with licensure regulations promulgated under pertinent state laws; and in terms of the projected impact on the total health care expenditures in the facility and community, (3) that safeguards are provided which assure that the establishment, construction or modification of the health care facility or acquisition of major medical equipment is consistent with the public interest and maintain or enhance access to health care services, the level of community benefits, and the level of charity care, and (4) that the proposed project is consistent with the orderly and economic development of such facilities and equipment and is in accord with standards, criteria, or plans of need adopted and approved pursuant to the provisions of Section 12 of this Act.

(Source: P.A. 93-41, eff. 6-27-03.)

(20 ILCS 3960/8) (from Ch. 111 1/2, par. 1158)

(Section scheduled to be repealed on July 1, 2008)

Sec. 8. The Agency shall assist communities and regions throughout the State to establish areawide health planning organizations and, in particular, shall assist such organizations to develop health care facilities planning which meets the criteria for recognition thereof. Areawide health planning organizations may be recognized to do health facilities planning by providing this component of health planning within the organization or by contracting with a special-purpose health planning organization that meets the criteria for health facilities planning.

Recognition of these organizations with regard to health facilities planning, including establishment of the criteria for such recognition, shall be the responsibility of the State Board, as provided elsewhere in this Act.

The Agency is authorized to make grants-in-aid or to furnish direct services to organizations in the development of health facilities planning capability, as a part of other financial and service assistance which the Agency is empowered and required to provide in support of health planning organizations.

Upon receipt of an application for a permit to establish, construct or modify a health care facility, the Agency shall notify the applicant in writing within 10 working days either that the application is complete or the reasons why the application is not complete. If the application is complete, the Agency shall notify affected persons of the beginning of a review and the review time cycle for the purposes of this Act shall begin on the date this notification is mailed.

Upon notifying affected persons of the beginning of a review of an application for a permit, a complete copy of such application shall be transmitted to the areawide health planning organization serving the area or community where the health care facility or major medical equipment is proposed to be acquired, established, constructed or modified. The Agency shall also transmit a complete copy of such application to any reasonably contiguous areawide health planning organization. The Agency shall afford a reasonable time as established by the State Board, but not to exceed 120 days in length, for the areawide planning organizations' review of the application. After reviewing the application, each recognized areawide planning organization shall certify its findings to the State Board as to whether or not the application is approved or disapproved in accordance with standards, criteria or plans of need adopted and approved by the recognized areawide health planning organization pursuant to its recognition by the State Board for health care facilities planning. The 120-day period shall begin on the day the application is found to be substantially complete, as that term is defined by the State Board. During such 120-day period, the applicant may request an extension. An applicant may modify the application at any time prior to a final administrative decision on the application.

Upon its receipt of an application, the areawide health planning organization or the Agency, as the case may be, may submit a copy of such application to the federally-recognized professional standards review organization, if any, and appropriate local health planning organization, if any, existing in the area where the proposed project is to occur. Such organizations may review the application for a permit and submit, within 30 days from the receipt of the application, a finding to the agency or to the areawide health planning organization, as the case may be. A review and finding by a federally-recognized professional standards review organization must be relevant to the activities for which such organization is recognized, and shall be considered by the Agency or the areawide health planning organization, as the case may be, in its review of the application.

The State Board shall prescribe and provide the forms upon which the review and finding of the organization shall be made. The recognized areawide health planning organizations shall submit their review and finding to the Agency for its finding on the application and transmittal to the State Board for its consideration of denial or approval.

If there is no areawide health planning organization in the area where the proposed establishment, construction or modification of a health care facility is to occur, then the Agency shall be afforded a reasonable time, but not to exceed 120 days, for its review and finding thereon. The Agency shall submit its review and finding to the State Board for its approval or denial of the permit.

When an application for a permit is initially reviewed by a recognized areawide health planning organization or the Agency, as herein provided, the organization or the Agency, as the case may be, shall ensure that a public hearing is conducted if one or more of the following circumstances apply: the review to be conducted is competitive; the proponent proposes to spend $5,000,000 or more; a written request for a public hearing is received before the end of the comment period; or the Agency determines that a hearing is in the public interest. The afford an opportunity for a public hearing must be held within a reasonable time after receipt of the complete application, not to exceed 90 days. Notice of such hearing shall be made promptly by certified mail to the applicant and, within 20 10 days of the hearing, by publication on 3 consecutive days in a newspaper of general circulation in the area or community to be affected. For hearings pertaining to facilities located within a metropolitan statistical area, notice of the hearing must be made by publication on 3 consecutive days in 2 newspapers of general circulation in the area or community to be affected. Such hearing shall be conducted in the area or community where the proposed project is to occur, and shall be for the purpose of allowing the applicant and any interested person to present public testimony concerning the approval, denial, renewal or revocation of the permit. All interested persons attending such hearing shall be given reasonable opportunity to present their views or arguments in writing or orally, and a record of all such testimony shall accompany any recommendation of the Agency or the recognized areawide health planning organization for the issuance, denial, revocation or renewal of a permit to the State Board. The State Board shall promulgate reasonable rules and regulations governing the procedure and conduct of such hearings.

(Source: P.A. 88-18.)