SB1469enr 100TH GENERAL ASSEMBLY

  
  
  

 


 
SB1469 EnrolledLRB100 09786 MJP 19956 b

1    AN ACT concerning health.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Administrative Procedure Act is
5amended by changing Section 5-45 as follows:
 
6    (5 ILCS 100/5-45)  (from Ch. 127, par. 1005-45)
7    Sec. 5-45. Emergency rulemaking.
8    (a) "Emergency" means the existence of any situation that
9any agency finds reasonably constitutes a threat to the public
10interest, safety, or welfare.
11    (b) If any agency finds that an emergency exists that
12requires adoption of a rule upon fewer days than is required by
13Section 5-40 and states in writing its reasons for that
14finding, the agency may adopt an emergency rule without prior
15notice or hearing upon filing a notice of emergency rulemaking
16with the Secretary of State under Section 5-70. The notice
17shall include the text of the emergency rule and shall be
18published in the Illinois Register. Consent orders or other
19court orders adopting settlements negotiated by an agency may
20be adopted under this Section. Subject to applicable
21constitutional or statutory provisions, an emergency rule
22becomes effective immediately upon filing under Section 5-65 or
23at a stated date less than 10 days thereafter. The agency's

 

 

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1finding and a statement of the specific reasons for the finding
2shall be filed with the rule. The agency shall take reasonable
3and appropriate measures to make emergency rules known to the
4persons who may be affected by them.
5    (c) An emergency rule may be effective for a period of not
6longer than 150 days, but the agency's authority to adopt an
7identical rule under Section 5-40 is not precluded. No
8emergency rule may be adopted more than once in any 24-month
9period, except that this limitation on the number of emergency
10rules that may be adopted in a 24-month period does not apply
11to (i) emergency rules that make additions to and deletions
12from the Drug Manual under Section 5-5.16 of the Illinois
13Public Aid Code or the generic drug formulary under Section
143.14 of the Illinois Food, Drug and Cosmetic Act, (ii)
15emergency rules adopted by the Pollution Control Board before
16July 1, 1997 to implement portions of the Livestock Management
17Facilities Act, (iii) emergency rules adopted by the Illinois
18Department of Public Health under subsections (a) through (i)
19of Section 2 of the Department of Public Health Act when
20necessary to protect the public's health, (iv) emergency rules
21adopted pursuant to subsection (n) of this Section, (v)
22emergency rules adopted pursuant to subsection (o) of this
23Section, or (vi) emergency rules adopted pursuant to subsection
24(c-5) of this Section. Two or more emergency rules having
25substantially the same purpose and effect shall be deemed to be
26a single rule for purposes of this Section.

 

 

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1    (c-5) To facilitate the maintenance of the program of group
2health benefits provided to annuitants, survivors, and retired
3employees under the State Employees Group Insurance Act of
41971, rules to alter the contributions to be paid by the State,
5annuitants, survivors, retired employees, or any combination
6of those entities, for that program of group health benefits,
7shall be adopted as emergency rules. The adoption of those
8rules shall be considered an emergency and necessary for the
9public interest, safety, and welfare.
10    (d) In order to provide for the expeditious and timely
11implementation of the State's fiscal year 1999 budget,
12emergency rules to implement any provision of Public Act 90-587
13or 90-588 or any other budget initiative for fiscal year 1999
14may be adopted in accordance with this Section by the agency
15charged with administering that provision or initiative,
16except that the 24-month limitation on the adoption of
17emergency rules and the provisions of Sections 5-115 and 5-125
18do not apply to rules adopted under this subsection (d). The
19adoption of emergency rules authorized by this subsection (d)
20shall be deemed to be necessary for the public interest,
21safety, and welfare.
22    (e) In order to provide for the expeditious and timely
23implementation of the State's fiscal year 2000 budget,
24emergency rules to implement any provision of Public Act 91-24
25or any other budget initiative for fiscal year 2000 may be
26adopted in accordance with this Section by the agency charged

 

 

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1with administering that provision or initiative, except that
2the 24-month limitation on the adoption of emergency rules and
3the provisions of Sections 5-115 and 5-125 do not apply to
4rules adopted under this subsection (e). The adoption of
5emergency rules authorized by this subsection (e) shall be
6deemed to be necessary for the public interest, safety, and
7welfare.
8    (f) In order to provide for the expeditious and timely
9implementation of the State's fiscal year 2001 budget,
10emergency rules to implement any provision of Public Act 91-712
11or any other budget initiative for fiscal year 2001 may be
12adopted in accordance with this Section by the agency charged
13with administering that provision or initiative, except that
14the 24-month limitation on the adoption of emergency rules and
15the provisions of Sections 5-115 and 5-125 do not apply to
16rules adopted under this subsection (f). The adoption of
17emergency rules authorized by this subsection (f) shall be
18deemed to be necessary for the public interest, safety, and
19welfare.
20    (g) In order to provide for the expeditious and timely
21implementation of the State's fiscal year 2002 budget,
22emergency rules to implement any provision of Public Act 92-10
23or any other budget initiative for fiscal year 2002 may be
24adopted in accordance with this Section by the agency charged
25with administering that provision or initiative, except that
26the 24-month limitation on the adoption of emergency rules and

 

 

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1the provisions of Sections 5-115 and 5-125 do not apply to
2rules adopted under this subsection (g). The adoption of
3emergency rules authorized by this subsection (g) shall be
4deemed to be necessary for the public interest, safety, and
5welfare.
6    (h) In order to provide for the expeditious and timely
7implementation of the State's fiscal year 2003 budget,
8emergency rules to implement any provision of Public Act 92-597
9or any other budget initiative for fiscal year 2003 may be
10adopted in accordance with this Section by the agency charged
11with administering that provision or initiative, except that
12the 24-month limitation on the adoption of emergency rules and
13the provisions of Sections 5-115 and 5-125 do not apply to
14rules adopted under this subsection (h). The adoption of
15emergency rules authorized by this subsection (h) shall be
16deemed to be necessary for the public interest, safety, and
17welfare.
18    (i) In order to provide for the expeditious and timely
19implementation of the State's fiscal year 2004 budget,
20emergency rules to implement any provision of Public Act 93-20
21or any other budget initiative for fiscal year 2004 may be
22adopted in accordance with this Section by the agency charged
23with administering that provision or initiative, except that
24the 24-month limitation on the adoption of emergency rules and
25the provisions of Sections 5-115 and 5-125 do not apply to
26rules adopted under this subsection (i). The adoption of

 

 

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1emergency rules authorized by this subsection (i) shall be
2deemed to be necessary for the public interest, safety, and
3welfare.
4    (j) In order to provide for the expeditious and timely
5implementation of the provisions of the State's fiscal year
62005 budget as provided under the Fiscal Year 2005 Budget
7Implementation (Human Services) Act, emergency rules to
8implement any provision of the Fiscal Year 2005 Budget
9Implementation (Human Services) Act may be adopted in
10accordance with this Section by the agency charged with
11administering that provision, except that the 24-month
12limitation on the adoption of emergency rules and the
13provisions of Sections 5-115 and 5-125 do not apply to rules
14adopted under this subsection (j). The Department of Public Aid
15may also adopt rules under this subsection (j) necessary to
16administer the Illinois Public Aid Code and the Children's
17Health Insurance Program Act. The adoption of emergency rules
18authorized by this subsection (j) shall be deemed to be
19necessary for the public interest, safety, and welfare.
20    (k) In order to provide for the expeditious and timely
21implementation of the provisions of the State's fiscal year
222006 budget, emergency rules to implement any provision of
23Public Act 94-48 or any other budget initiative for fiscal year
242006 may be adopted in accordance with this Section by the
25agency charged with administering that provision or
26initiative, except that the 24-month limitation on the adoption

 

 

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1of emergency rules and the provisions of Sections 5-115 and
25-125 do not apply to rules adopted under this subsection (k).
3The Department of Healthcare and Family Services may also adopt
4rules under this subsection (k) necessary to administer the
5Illinois Public Aid Code, the Senior Citizens and Persons with
6Disabilities Property Tax Relief Act, the Senior Citizens and
7Disabled Persons Prescription Drug Discount Program Act (now
8the Illinois Prescription Drug Discount Program Act), and the
9Children's Health Insurance Program Act. The adoption of
10emergency rules authorized by this subsection (k) shall be
11deemed to be necessary for the public interest, safety, and
12welfare.
13    (l) In order to provide for the expeditious and timely
14implementation of the provisions of the State's fiscal year
152007 budget, the Department of Healthcare and Family Services
16may adopt emergency rules during fiscal year 2007, including
17rules effective July 1, 2007, in accordance with this
18subsection to the extent necessary to administer the
19Department's responsibilities with respect to amendments to
20the State plans and Illinois waivers approved by the federal
21Centers for Medicare and Medicaid Services necessitated by the
22requirements of Title XIX and Title XXI of the federal Social
23Security Act. The adoption of emergency rules authorized by
24this subsection (l) shall be deemed to be necessary for the
25public interest, safety, and welfare.
26    (m) In order to provide for the expeditious and timely

 

 

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1implementation of the provisions of the State's fiscal year
22008 budget, the Department of Healthcare and Family Services
3may adopt emergency rules during fiscal year 2008, including
4rules effective July 1, 2008, in accordance with this
5subsection to the extent necessary to administer the
6Department's responsibilities with respect to amendments to
7the State plans and Illinois waivers approved by the federal
8Centers for Medicare and Medicaid Services necessitated by the
9requirements of Title XIX and Title XXI of the federal Social
10Security Act. The adoption of emergency rules authorized by
11this subsection (m) shall be deemed to be necessary for the
12public interest, safety, and welfare.
13    (n) In order to provide for the expeditious and timely
14implementation of the provisions of the State's fiscal year
152010 budget, emergency rules to implement any provision of
16Public Act 96-45 or any other budget initiative authorized by
17the 96th General Assembly for fiscal year 2010 may be adopted
18in accordance with this Section by the agency charged with
19administering that provision or initiative. The adoption of
20emergency rules authorized by this subsection (n) shall be
21deemed to be necessary for the public interest, safety, and
22welfare. The rulemaking authority granted in this subsection
23(n) shall apply only to rules promulgated during Fiscal Year
242010.
25    (o) In order to provide for the expeditious and timely
26implementation of the provisions of the State's fiscal year

 

 

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12011 budget, emergency rules to implement any provision of
2Public Act 96-958 or any other budget initiative authorized by
3the 96th General Assembly for fiscal year 2011 may be adopted
4in accordance with this Section by the agency charged with
5administering that provision or initiative. The adoption of
6emergency rules authorized by this subsection (o) is deemed to
7be necessary for the public interest, safety, and welfare. The
8rulemaking authority granted in this subsection (o) applies
9only to rules promulgated on or after July 1, 2010 (the
10effective date of Public Act 96-958) through June 30, 2011.
11    (p) In order to provide for the expeditious and timely
12implementation of the provisions of Public Act 97-689,
13emergency rules to implement any provision of Public Act 97-689
14may be adopted in accordance with this subsection (p) by the
15agency charged with administering that provision or
16initiative. The 150-day limitation of the effective period of
17emergency rules does not apply to rules adopted under this
18subsection (p), and the effective period may continue through
19June 30, 2013. The 24-month limitation on the adoption of
20emergency rules does not apply to rules adopted under this
21subsection (p). The adoption of emergency rules authorized by
22this subsection (p) is deemed to be necessary for the public
23interest, safety, and welfare.
24    (q) In order to provide for the expeditious and timely
25implementation of the provisions of Articles 7, 8, 9, 11, and
2612 of Public Act 98-104, emergency rules to implement any

 

 

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1provision of Articles 7, 8, 9, 11, and 12 of Public Act 98-104
2may be adopted in accordance with this subsection (q) by the
3agency charged with administering that provision or
4initiative. The 24-month limitation on the adoption of
5emergency rules does not apply to rules adopted under this
6subsection (q). The adoption of emergency rules authorized by
7this subsection (q) is deemed to be necessary for the public
8interest, safety, and welfare.
9    (r) In order to provide for the expeditious and timely
10implementation of the provisions of Public Act 98-651,
11emergency rules to implement Public Act 98-651 may be adopted
12in accordance with this subsection (r) by the Department of
13Healthcare and Family Services. The 24-month limitation on the
14adoption of emergency rules does not apply to rules adopted
15under this subsection (r). The adoption of emergency rules
16authorized by this subsection (r) is deemed to be necessary for
17the public interest, safety, and welfare.
18    (s) In order to provide for the expeditious and timely
19implementation of the provisions of Sections 5-5b.1 and 5A-2 of
20the Illinois Public Aid Code, emergency rules to implement any
21provision of Section 5-5b.1 or Section 5A-2 of the Illinois
22Public Aid Code may be adopted in accordance with this
23subsection (s) by the Department of Healthcare and Family
24Services. The rulemaking authority granted in this subsection
25(s) shall apply only to those rules adopted prior to July 1,
262015. Notwithstanding any other provision of this Section, any

 

 

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1emergency rule adopted under this subsection (s) shall only
2apply to payments made for State fiscal year 2015. The adoption
3of emergency rules authorized by this subsection (s) is deemed
4to be necessary for the public interest, safety, and welfare.
5    (t) In order to provide for the expeditious and timely
6implementation of the provisions of Article II of Public Act
799-6, emergency rules to implement the changes made by Article
8II of Public Act 99-6 to the Emergency Telephone System Act may
9be adopted in accordance with this subsection (t) by the
10Department of State Police. The rulemaking authority granted in
11this subsection (t) shall apply only to those rules adopted
12prior to July 1, 2016. The 24-month limitation on the adoption
13of emergency rules does not apply to rules adopted under this
14subsection (t). The adoption of emergency rules authorized by
15this subsection (t) is deemed to be necessary for the public
16interest, safety, and welfare.
17    (u) In order to provide for the expeditious and timely
18implementation of the provisions of the Burn Victims Relief
19Act, emergency rules to implement any provision of the Act may
20be adopted in accordance with this subsection (u) by the
21Department of Insurance. The rulemaking authority granted in
22this subsection (u) shall apply only to those rules adopted
23prior to December 31, 2015. The adoption of emergency rules
24authorized by this subsection (u) is deemed to be necessary for
25the public interest, safety, and welfare.
26    (v) In order to provide for the expeditious and timely

 

 

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1implementation of the provisions of Public Act 99-516,
2emergency rules to implement Public Act 99-516 may be adopted
3in accordance with this subsection (v) by the Department of
4Healthcare and Family Services. The 24-month limitation on the
5adoption of emergency rules does not apply to rules adopted
6under this subsection (v). The adoption of emergency rules
7authorized by this subsection (v) is deemed to be necessary for
8the public interest, safety, and welfare.
9    (w) In order to provide for the expeditious and timely
10implementation of the provisions of Public Act 99-796,
11emergency rules to implement the changes made by Public Act
1299-796 may be adopted in accordance with this subsection (w) by
13the Adjutant General. The adoption of emergency rules
14authorized by this subsection (w) is deemed to be necessary for
15the public interest, safety, and welfare.
16    (x) In order to provide for the expeditious and timely
17implementation of the provisions of Public Act 99-906,
18emergency rules to implement subsection (i) of Section 16-115D,
19subsection (g) of Section 16-128A, and subsection (a) of
20Section 16-128B of the Public Utilities Act may be adopted in
21accordance with this subsection (x) by the Illinois Commerce
22Commission. The rulemaking authority granted in this
23subsection (x) shall apply only to those rules adopted within
24180 days after June 1, 2017 (the effective date of Public Act
2599-906). The adoption of emergency rules authorized by this
26subsection (x) is deemed to be necessary for the public

 

 

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1interest, safety, and welfare.
2    (y) In order to provide for the expeditious and timely
3implementation of the provisions of Public Act 100-23 this
4amendatory Act of the 100th General Assembly, emergency rules
5to implement the changes made by Public Act 100-23 this
6amendatory Act of the 100th General Assembly to Section 4.02 of
7the Illinois Act on the Aging, Sections 5.5.4 and 5-5.4i of the
8Illinois Public Aid Code, Section 55-30 of the Alcoholism and
9Other Drug Abuse and Dependency Act, and Sections 74 and 75 of
10the Mental Health and Developmental Disabilities
11Administrative Act may be adopted in accordance with this
12subsection (y) by the respective Department. The adoption of
13emergency rules authorized by this subsection (y) is deemed to
14be necessary for the public interest, safety, and welfare.
15    (z) In order to provide for the expeditious and timely
16implementation of the provisions of Public Act 100-554 this
17amendatory Act of the 100th General Assembly, emergency rules
18to implement the changes made by Public Act 100-554 this
19amendatory Act of the 100th General Assembly to Section 4.7 of
20the Lobbyist Registration Act may be adopted in accordance with
21this subsection (z) by the Secretary of State. The adoption of
22emergency rules authorized by this subsection (z) is deemed to
23be necessary for the public interest, safety, and welfare.
24    (aa) In order to provide for the expeditious and timely
25initial implementation of the changes made to Articles 5, 5A,
2612, and 14 of the Illinois Public Aid Code under the provisions

 

 

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1of Public Act 100-581 this amendatory Act of the 100th General
2Assembly, the Department of Healthcare and Family Services may
3adopt emergency rules in accordance with this subsection (aa).
4The 24-month limitation on the adoption of emergency rules does
5not apply to rules to initially implement the changes made to
6Articles 5, 5A, 12, and 14 of the Illinois Public Aid Code
7adopted under this subsection (aa). The adoption of emergency
8rules authorized by this subsection (aa) is deemed to be
9necessary for the public interest, safety, and welfare.
10    (bb) In order to provide for the expeditious and timely
11implementation of the provisions of Public Act 100-587 this
12amendatory Act of the 100th General Assembly, emergency rules
13to implement the changes made by Public Act 100-587 this
14amendatory Act of the 100th General Assembly to Section 4.02 of
15the Illinois Act on the Aging, Sections 5.5.4 and 5-5.4i of the
16Illinois Public Aid Code, subsection (b) of Section 55-30 of
17the Alcoholism and Other Drug Abuse and Dependency Act, Section
185-104 of the Specialized Mental Health Rehabilitation Act of
192013, and Section 75 and subsection (b) of Section 74 of the
20Mental Health and Developmental Disabilities Administrative
21Act may be adopted in accordance with this subsection (bb) by
22the respective Department. The adoption of emergency rules
23authorized by this subsection (bb) is deemed to be necessary
24for the public interest, safety, and welfare.
25    (cc) (bb) In order to provide for the expeditious and
26timely implementation of the provisions of Public Act 100-587

 

 

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1this amendatory Act of the 100th General Assembly, emergency
2rules may be adopted in accordance with this subsection (cc)
3(bb) to implement the changes made by Public Act 100-587 this
4amendatory Act of the 100th General Assembly to: Sections
514-147.5 and 14-147.6 of the Illinois Pension Code by the Board
6created under Article 14 of the Code; Sections 15-185.5 and
715-185.6 of the Illinois Pension Code by the Board created
8under Article 15 of the Code; and Sections 16-190.5 and
916-190.6 of the Illinois Pension Code by the Board created
10under Article 16 of the Code. The adoption of emergency rules
11authorized by this subsection (cc) (bb) is deemed to be
12necessary for the public interest, safety, and welfare.
13    (dd) (aa) In order to provide for the expeditious and
14timely implementation of the provisions of Public Act 100-864
15this amendatory Act of the 100th General Assembly, emergency
16rules to implement the changes made by Public Act 100-864 this
17amendatory Act of the 100th General Assembly to Section 3.35 of
18the Newborn Metabolic Screening Act may be adopted in
19accordance with this subsection (dd) (aa) by the Secretary of
20State. The adoption of emergency rules authorized by this
21subsection (dd) (aa) is deemed to be necessary for the public
22interest, safety, and welfare.
23    (ee) In order to provide for the expeditious and timely
24initial implementation of the changes made to Articles 5A and
2514 of the Illinois Public Aid Code under the provisions of this
26amendatory Act of the 100th General Assembly, the Department of

 

 

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1Healthcare and Family Services may on a one-time-only basis
2adopt emergency rules in accordance with this subsection (ee).
3The 24-month limitation on the adoption of emergency rules does
4not apply to rules to initially implement the changes made to
5Articles 5A and 14 of the Illinois Public Aid Code adopted
6under this subsection (ee). The adoption of emergency rules
7authorized by this subsection (ee) is deemed to be necessary
8for the public interest, safety, and welfare.
9(Source: P.A. 99-2, eff. 3-26-15; 99-6, eff. 1-1-16; 99-143,
10eff. 7-27-15; 99-455, eff. 1-1-16; 99-516, eff. 6-30-16;
1199-642, eff. 7-28-16; 99-796, eff. 1-1-17; 99-906, eff. 6-1-17;
12100-23, eff. 7-6-17; 100-554, eff. 11-16-17; 100-581, eff.
133-12-18; 100-587, Article 95, Section 95-5, eff. 6-4-18;
14100-587, Article 110, Section 110-5, eff. 6-4-18; 100-864, eff.
158-14-18; revised 10-18-18.)
 
16    Section 15. The Use Tax Act is amended by changing Section
173-8 as follows:
 
18    (35 ILCS 105/3-8)
19    Sec. 3-8. Hospital exemption.
20    (a) Until July 1, 2022, tangible Tangible personal property
21sold to or used by a hospital owner that owns one or more
22hospitals licensed under the Hospital Licensing Act or operated
23under the University of Illinois Hospital Act, or a hospital
24affiliate that is not already exempt under another provision of

 

 

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1this Act and meets the criteria for an exemption under this
2Section, is exempt from taxation under this Act.
3    (b) A hospital owner or hospital affiliate satisfies the
4conditions for an exemption under this Section if the value of
5qualified services or activities listed in subsection (c) of
6this Section for the hospital year equals or exceeds the
7relevant hospital entity's estimated property tax liability,
8without regard to any property tax exemption granted under
9Section 15-86 of the Property Tax Code, for the calendar year
10in which exemption or renewal of exemption is sought. For
11purposes of making the calculations required by this subsection
12(b), if the relevant hospital entity is a hospital owner that
13owns more than one hospital, the value of the services or
14activities listed in subsection (c) shall be calculated on the
15basis of only those services and activities relating to the
16hospital that includes the subject property, and the relevant
17hospital entity's estimated property tax liability shall be
18calculated only with respect to the properties comprising that
19hospital. In the case of a multi-state hospital system or
20hospital affiliate, the value of the services or activities
21listed in subsection (c) shall be calculated on the basis of
22only those services and activities that occur in Illinois and
23the relevant hospital entity's estimated property tax
24liability shall be calculated only with respect to its property
25located in Illinois.
26    (c) The following services and activities shall be

 

 

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1considered for purposes of making the calculations required by
2subsection (b):
3        (1) Charity care. Free or discounted services provided
4    pursuant to the relevant hospital entity's financial
5    assistance policy, measured at cost, including discounts
6    provided under the Hospital Uninsured Patient Discount
7    Act.
8        (2) Health services to low-income and underserved
9    individuals. Other unreimbursed costs of the relevant
10    hospital entity for providing without charge, paying for,
11    or subsidizing goods, activities, or services for the
12    purpose of addressing the health of low-income or
13    underserved individuals. Those activities or services may
14    include, but are not limited to: financial or in-kind
15    support to affiliated or unaffiliated hospitals, hospital
16    affiliates, community clinics, or programs that treat
17    low-income or underserved individuals; paying for or
18    subsidizing health care professionals who care for
19    low-income or underserved individuals; providing or
20    subsidizing outreach or educational services to low-income
21    or underserved individuals for disease management and
22    prevention; free or subsidized goods, supplies, or
23    services needed by low-income or underserved individuals
24    because of their medical condition; and prenatal or
25    childbirth outreach to low-income or underserved persons.
26        (3) Subsidy of State or local governments. Direct or

 

 

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1    indirect financial or in-kind subsidies of State or local
2    governments by the relevant hospital entity that pay for or
3    subsidize activities or programs related to health care for
4    low-income or underserved individuals.
5        (4) Support for State health care programs for
6    low-income individuals. At the election of the hospital
7    applicant for each applicable year, either (A) 10% of
8    payments to the relevant hospital entity and any hospital
9    affiliate designated by the relevant hospital entity
10    (provided that such hospital affiliate's operations
11    provide financial or operational support for or receive
12    financial or operational support from the relevant
13    hospital entity) under Medicaid or other means-tested
14    programs, including, but not limited to, General
15    Assistance, the Covering ALL KIDS Health Insurance Act, and
16    the State Children's Health Insurance Program or (B) the
17    amount of subsidy provided by the relevant hospital entity
18    and any hospital affiliate designated by the relevant
19    hospital entity (provided that such hospital affiliate's
20    operations provide financial or operational support for or
21    receive financial or operational support from the relevant
22    hospital entity) to State or local government in treating
23    Medicaid recipients and recipients of means-tested
24    programs, including but not limited to General Assistance,
25    the Covering ALL KIDS Health Insurance Act, and the State
26    Children's Health Insurance Program. The amount of subsidy

 

 

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1    for purpose of this item (4) is calculated in the same
2    manner as unreimbursed costs are calculated for Medicaid
3    and other means-tested government programs in the Schedule
4    H of IRS Form 990 in effect on the effective date of this
5    amendatory Act of the 97th General Assembly.
6        (5) Dual-eligible subsidy. The amount of subsidy
7    provided to government by treating dual-eligible
8    Medicare/Medicaid patients. The amount of subsidy for
9    purposes of this item (5) is calculated by multiplying the
10    relevant hospital entity's unreimbursed costs for
11    Medicare, calculated in the same manner as determined in
12    the Schedule H of IRS Form 990 in effect on the effective
13    date of this amendatory Act of the 97th General Assembly,
14    by the relevant hospital entity's ratio of dual-eligible
15    patients to total Medicare patients.
16        (6) Relief of the burden of government related to
17    health care. Except to the extent otherwise taken into
18    account in this subsection, the portion of unreimbursed
19    costs of the relevant hospital entity attributable to
20    providing, paying for, or subsidizing goods, activities,
21    or services that relieve the burden of government related
22    to health care for low-income individuals. Such activities
23    or services shall include, but are not limited to,
24    providing emergency, trauma, burn, neonatal, psychiatric,
25    rehabilitation, or other special services; providing
26    medical education; and conducting medical research or

 

 

SB1469 Enrolled- 21 -LRB100 09786 MJP 19956 b

1    training of health care professionals. The portion of those
2    unreimbursed costs attributable to benefiting low-income
3    individuals shall be determined using the ratio calculated
4    by adding the relevant hospital entity's costs
5    attributable to charity care, Medicaid, other means-tested
6    government programs, Medicare patients with disabilities
7    under age 65, and dual-eligible Medicare/Medicaid patients
8    and dividing that total by the relevant hospital entity's
9    total costs. Such costs for the numerator and denominator
10    shall be determined by multiplying gross charges by the
11    cost to charge ratio taken from the hospital's most
12    recently filed Medicare cost report (CMS 2252-10
13    Worksheet, Part I). In the case of emergency services, the
14    ratio shall be calculated using costs (gross charges
15    multiplied by the cost to charge ratio taken from the
16    hospital's most recently filed Medicare cost report (CMS
17    2252-10 Worksheet, Part I)) of patients treated in the
18    relevant hospital entity's emergency department.
19        (7) Any other activity by the relevant hospital entity
20    that the Department determines relieves the burden of
21    government or addresses the health of low-income or
22    underserved individuals.
23    (d) The hospital applicant shall include information in its
24exemption application establishing that it satisfies the
25requirements of subsection (b). For purposes of making the
26calculations required by subsection (b), the hospital

 

 

SB1469 Enrolled- 22 -LRB100 09786 MJP 19956 b

1applicant may for each year elect to use either (1) the value
2of the services or activities listed in subsection (e) for the
3hospital year or (2) the average value of those services or
4activities for the 3 fiscal years ending with the hospital
5year. If the relevant hospital entity has been in operation for
6less than 3 completed fiscal years, then the latter
7calculation, if elected, shall be performed on a pro rata
8basis.
9    (e) For purposes of making the calculations required by
10this Section:
11        (1) particular services or activities eligible for
12    consideration under any of the paragraphs (1) through (7)
13    of subsection (c) may not be counted under more than one of
14    those paragraphs; and
15        (2) the amount of unreimbursed costs and the amount of
16    subsidy shall not be reduced by restricted or unrestricted
17    payments received by the relevant hospital entity as
18    contributions deductible under Section 170(a) of the
19    Internal Revenue Code.
20    (f) (Blank).
21    (g) Estimation of Exempt Property Tax Liability. The
22estimated property tax liability used for the determination in
23subsection (b) shall be calculated as follows:
24        (1) "Estimated property tax liability" means the
25    estimated dollar amount of property tax that would be owed,
26    with respect to the exempt portion of each of the relevant

 

 

SB1469 Enrolled- 23 -LRB100 09786 MJP 19956 b

1    hospital entity's properties that are already fully or
2    partially exempt, or for which an exemption in whole or in
3    part is currently being sought, and then aggregated as
4    applicable, as if the exempt portion of those properties
5    were subject to tax, calculated with respect to each such
6    property by multiplying:
7            (A) the lesser of (i) the actual assessed value, if
8        any, of the portion of the property for which an
9        exemption is sought or (ii) an estimated assessed value
10        of the exempt portion of such property as determined in
11        item (2) of this subsection (g), by
12            (B) the applicable State equalization rate
13        (yielding the equalized assessed value), by
14            (C) the applicable tax rate.
15        (2) The estimated assessed value of the exempt portion
16    of the property equals the sum of (i) the estimated fair
17    market value of buildings on the property, as determined in
18    accordance with subparagraphs (A) and (B) of this item (2),
19    multiplied by the applicable assessment factor, and (ii)
20    the estimated assessed value of the land portion of the
21    property, as determined in accordance with subparagraph
22    (C).
23            (A) The "estimated fair market value of buildings
24        on the property" means the replacement value of any
25        exempt portion of buildings on the property, minus
26        depreciation, determined utilizing the cost

 

 

SB1469 Enrolled- 24 -LRB100 09786 MJP 19956 b

1        replacement method whereby the exempt square footage
2        of all such buildings is multiplied by the replacement
3        cost per square foot for Class A Average building found
4        in the most recent edition of the Marshall & Swift
5        Valuation Services Manual, adjusted by any appropriate
6        current cost and local multipliers.
7            (B) Depreciation, for purposes of calculating the
8        estimated fair market value of buildings on the
9        property, is applied by utilizing a weighted mean life
10        for the buildings based on original construction and
11        assuming a 40-year life for hospital buildings and the
12        applicable life for other types of buildings as
13        specified in the American Hospital Association
14        publication "Estimated Useful Lives of Depreciable
15        Hospital Assets". In the case of hospital buildings,
16        the remaining life is divided by 40 and this ratio is
17        multiplied by the replacement cost of the buildings to
18        obtain an estimated fair market value of buildings. If
19        a hospital building is older than 35 years, a remaining
20        life of 5 years for residual value is assumed; and if a
21        building is less than 8 years old, a remaining life of
22        32 years is assumed.
23            (C) The estimated assessed value of the land
24        portion of the property shall be determined by
25        multiplying (i) the per square foot average of the
26        assessed values of three parcels of land (not including

 

 

SB1469 Enrolled- 25 -LRB100 09786 MJP 19956 b

1        farm land, and excluding the assessed value of the
2        improvements thereon) reasonably comparable to the
3        property, by (ii) the number of square feet comprising
4        the exempt portion of the property's land square
5        footage.
6        (3) The assessment factor, State equalization rate,
7    and tax rate (including any special factors such as
8    Enterprise Zones) used in calculating the estimated
9    property tax liability shall be for the most recent year
10    that is publicly available from the applicable chief county
11    assessment officer or officers at least 90 days before the
12    end of the hospital year.
13        (4) The method utilized to calculate estimated
14    property tax liability for purposes of this Section 15-86
15    shall not be utilized for the actual valuation, assessment,
16    or taxation of property pursuant to the Property Tax Code.
17    (h) For the purpose of this Section, the following terms
18shall have the meanings set forth below:
19        (1) "Hospital" means any institution, place, building,
20    buildings on a campus, or other health care facility
21    located in Illinois that is licensed under the Hospital
22    Licensing Act and has a hospital owner.
23        (2) "Hospital owner" means a not-for-profit
24    corporation that is the titleholder of a hospital, or the
25    owner of the beneficial interest in an Illinois land trust
26    that is the titleholder of a hospital.

 

 

SB1469 Enrolled- 26 -LRB100 09786 MJP 19956 b

1        (3) "Hospital affiliate" means any corporation,
2    partnership, limited partnership, joint venture, limited
3    liability company, association or other organization,
4    other than a hospital owner, that directly or indirectly
5    controls, is controlled by, or is under common control with
6    one or more hospital owners and that supports, is supported
7    by, or acts in furtherance of the exempt health care
8    purposes of at least one of those hospital owners'
9    hospitals.
10        (4) "Hospital system" means a hospital and one or more
11    other hospitals or hospital affiliates related by common
12    control or ownership.
13        (5) "Control" relating to hospital owners, hospital
14    affiliates, or hospital systems means possession, direct
15    or indirect, of the power to direct or cause the direction
16    of the management and policies of the entity, whether
17    through ownership of assets, membership interest, other
18    voting or governance rights, by contract or otherwise.
19        (6) "Hospital applicant" means a hospital owner or
20    hospital affiliate that files an application for an
21    exemption or renewal of exemption under this Section.
22        (7) "Relevant hospital entity" means (A) the hospital
23    owner, in the case of a hospital applicant that is a
24    hospital owner, and (B) at the election of a hospital
25    applicant that is a hospital affiliate, either (i) the
26    hospital affiliate or (ii) the hospital system to which the

 

 

SB1469 Enrolled- 27 -LRB100 09786 MJP 19956 b

1    hospital applicant belongs, including any hospitals or
2    hospital affiliates that are related by common control or
3    ownership.
4        (8) "Subject property" means property used for the
5    calculation under subsection (b) of this Section.
6        (9) "Hospital year" means the fiscal year of the
7    relevant hospital entity, or the fiscal year of one of the
8    hospital owners in the hospital system if the relevant
9    hospital entity is a hospital system with members with
10    different fiscal years, that ends in the year for which the
11    exemption is sought.
12    (i) It is the intent of the General Assembly that any
13exemptions taken, granted, or renewed under this Section prior
14to the effective date of this amendatory Act of the 100th
15General Assembly are hereby validated.
16(Source: P.A. 98-463, eff. 8-16-13; 99-143, eff. 7-27-15.)
 
17    Section 20. The Service Use Tax Act is amended by changing
18Section 3-8 as follows:
 
19    (35 ILCS 110/3-8)
20    Sec. 3-8. Hospital exemption.
21    (a) Until July 1, 2022, tangible Tangible personal property
22sold to or used by a hospital owner that owns one or more
23hospitals licensed under the Hospital Licensing Act or operated
24under the University of Illinois Hospital Act, or a hospital

 

 

SB1469 Enrolled- 28 -LRB100 09786 MJP 19956 b

1affiliate that is not already exempt under another provision of
2this Act and meets the criteria for an exemption under this
3Section, is exempt from taxation under this Act.
4    (b) A hospital owner or hospital affiliate satisfies the
5conditions for an exemption under this Section if the value of
6qualified services or activities listed in subsection (c) of
7this Section for the hospital year equals or exceeds the
8relevant hospital entity's estimated property tax liability,
9without regard to any property tax exemption granted under
10Section 15-86 of the Property Tax Code, for the calendar year
11in which exemption or renewal of exemption is sought. For
12purposes of making the calculations required by this subsection
13(b), if the relevant hospital entity is a hospital owner that
14owns more than one hospital, the value of the services or
15activities listed in subsection (c) shall be calculated on the
16basis of only those services and activities relating to the
17hospital that includes the subject property, and the relevant
18hospital entity's estimated property tax liability shall be
19calculated only with respect to the properties comprising that
20hospital. In the case of a multi-state hospital system or
21hospital affiliate, the value of the services or activities
22listed in subsection (c) shall be calculated on the basis of
23only those services and activities that occur in Illinois and
24the relevant hospital entity's estimated property tax
25liability shall be calculated only with respect to its property
26located in Illinois.

 

 

SB1469 Enrolled- 29 -LRB100 09786 MJP 19956 b

1    (c) The following services and activities shall be
2considered for purposes of making the calculations required by
3subsection (b):
4        (1) Charity care. Free or discounted services provided
5    pursuant to the relevant hospital entity's financial
6    assistance policy, measured at cost, including discounts
7    provided under the Hospital Uninsured Patient Discount
8    Act.
9        (2) Health services to low-income and underserved
10    individuals. Other unreimbursed costs of the relevant
11    hospital entity for providing without charge, paying for,
12    or subsidizing goods, activities, or services for the
13    purpose of addressing the health of low-income or
14    underserved individuals. Those activities or services may
15    include, but are not limited to: financial or in-kind
16    support to affiliated or unaffiliated hospitals, hospital
17    affiliates, community clinics, or programs that treat
18    low-income or underserved individuals; paying for or
19    subsidizing health care professionals who care for
20    low-income or underserved individuals; providing or
21    subsidizing outreach or educational services to low-income
22    or underserved individuals for disease management and
23    prevention; free or subsidized goods, supplies, or
24    services needed by low-income or underserved individuals
25    because of their medical condition; and prenatal or
26    childbirth outreach to low-income or underserved persons.

 

 

SB1469 Enrolled- 30 -LRB100 09786 MJP 19956 b

1        (3) Subsidy of State or local governments. Direct or
2    indirect financial or in-kind subsidies of State or local
3    governments by the relevant hospital entity that pay for or
4    subsidize activities or programs related to health care for
5    low-income or underserved individuals.
6        (4) Support for State health care programs for
7    low-income individuals. At the election of the hospital
8    applicant for each applicable year, either (A) 10% of
9    payments to the relevant hospital entity and any hospital
10    affiliate designated by the relevant hospital entity
11    (provided that such hospital affiliate's operations
12    provide financial or operational support for or receive
13    financial or operational support from the relevant
14    hospital entity) under Medicaid or other means-tested
15    programs, including, but not limited to, General
16    Assistance, the Covering ALL KIDS Health Insurance Act, and
17    the State Children's Health Insurance Program or (B) the
18    amount of subsidy provided by the relevant hospital entity
19    and any hospital affiliate designated by the relevant
20    hospital entity (provided that such hospital affiliate's
21    operations provide financial or operational support for or
22    receive financial or operational support from the relevant
23    hospital entity) to State or local government in treating
24    Medicaid recipients and recipients of means-tested
25    programs, including but not limited to General Assistance,
26    the Covering ALL KIDS Health Insurance Act, and the State

 

 

SB1469 Enrolled- 31 -LRB100 09786 MJP 19956 b

1    Children's Health Insurance Program. The amount of subsidy
2    for purposes of this item (4) is calculated in the same
3    manner as unreimbursed costs are calculated for Medicaid
4    and other means-tested government programs in the Schedule
5    H of IRS Form 990 in effect on the effective date of this
6    amendatory Act of the 97th General Assembly.
7        (5) Dual-eligible subsidy. The amount of subsidy
8    provided to government by treating dual-eligible
9    Medicare/Medicaid patients. The amount of subsidy for
10    purposes of this item (5) is calculated by multiplying the
11    relevant hospital entity's unreimbursed costs for
12    Medicare, calculated in the same manner as determined in
13    the Schedule H of IRS Form 990 in effect on the effective
14    date of this amendatory Act of the 97th General Assembly,
15    by the relevant hospital entity's ratio of dual-eligible
16    patients to total Medicare patients.
17        (6) Relief of the burden of government related to
18    health care. Except to the extent otherwise taken into
19    account in this subsection, the portion of unreimbursed
20    costs of the relevant hospital entity attributable to
21    providing, paying for, or subsidizing goods, activities,
22    or services that relieve the burden of government related
23    to health care for low-income individuals. Such activities
24    or services shall include, but are not limited to,
25    providing emergency, trauma, burn, neonatal, psychiatric,
26    rehabilitation, or other special services; providing

 

 

SB1469 Enrolled- 32 -LRB100 09786 MJP 19956 b

1    medical education; and conducting medical research or
2    training of health care professionals. The portion of those
3    unreimbursed costs attributable to benefiting low-income
4    individuals shall be determined using the ratio calculated
5    by adding the relevant hospital entity's costs
6    attributable to charity care, Medicaid, other means-tested
7    government programs, Medicare patients with disabilities
8    under age 65, and dual-eligible Medicare/Medicaid patients
9    and dividing that total by the relevant hospital entity's
10    total costs. Such costs for the numerator and denominator
11    shall be determined by multiplying gross charges by the
12    cost to charge ratio taken from the hospital's most
13    recently filed Medicare cost report (CMS 2252-10
14    Worksheet, Part I). In the case of emergency services, the
15    ratio shall be calculated using costs (gross charges
16    multiplied by the cost to charge ratio taken from the
17    hospital's most recently filed Medicare cost report (CMS
18    2252-10 Worksheet, Part I)) of patients treated in the
19    relevant hospital entity's emergency department.
20        (7) Any other activity by the relevant hospital entity
21    that the Department determines relieves the burden of
22    government or addresses the health of low-income or
23    underserved individuals.
24    (d) The hospital applicant shall include information in its
25exemption application establishing that it satisfies the
26requirements of subsection (b). For purposes of making the

 

 

SB1469 Enrolled- 33 -LRB100 09786 MJP 19956 b

1calculations required by subsection (b), the hospital
2applicant may for each year elect to use either (1) the value
3of the services or activities listed in subsection (e) for the
4hospital year or (2) the average value of those services or
5activities for the 3 fiscal years ending with the hospital
6year. If the relevant hospital entity has been in operation for
7less than 3 completed fiscal years, then the latter
8calculation, if elected, shall be performed on a pro rata
9basis.
10    (e) For purposes of making the calculations required by
11this Section:
12        (1) particular services or activities eligible for
13    consideration under any of the paragraphs (1) through (7)
14    of subsection (c) may not be counted under more than one of
15    those paragraphs; and
16        (2) the amount of unreimbursed costs and the amount of
17    subsidy shall not be reduced by restricted or unrestricted
18    payments received by the relevant hospital entity as
19    contributions deductible under Section 170(a) of the
20    Internal Revenue Code.
21    (f) (Blank).
22    (g) Estimation of Exempt Property Tax Liability. The
23estimated property tax liability used for the determination in
24subsection (b) shall be calculated as follows:
25        (1) "Estimated property tax liability" means the
26    estimated dollar amount of property tax that would be owed,

 

 

SB1469 Enrolled- 34 -LRB100 09786 MJP 19956 b

1    with respect to the exempt portion of each of the relevant
2    hospital entity's properties that are already fully or
3    partially exempt, or for which an exemption in whole or in
4    part is currently being sought, and then aggregated as
5    applicable, as if the exempt portion of those properties
6    were subject to tax, calculated with respect to each such
7    property by multiplying:
8            (A) the lesser of (i) the actual assessed value, if
9        any, of the portion of the property for which an
10        exemption is sought or (ii) an estimated assessed value
11        of the exempt portion of such property as determined in
12        item (2) of this subsection (g), by
13            (B) the applicable State equalization rate
14        (yielding the equalized assessed value), by
15            (C) the applicable tax rate.
16        (2) The estimated assessed value of the exempt portion
17    of the property equals the sum of (i) the estimated fair
18    market value of buildings on the property, as determined in
19    accordance with subparagraphs (A) and (B) of this item (2),
20    multiplied by the applicable assessment factor, and (ii)
21    the estimated assessed value of the land portion of the
22    property, as determined in accordance with subparagraph
23    (C).
24            (A) The "estimated fair market value of buildings
25        on the property" means the replacement value of any
26        exempt portion of buildings on the property, minus

 

 

SB1469 Enrolled- 35 -LRB100 09786 MJP 19956 b

1        depreciation, determined utilizing the cost
2        replacement method whereby the exempt square footage
3        of all such buildings is multiplied by the replacement
4        cost per square foot for Class A Average building found
5        in the most recent edition of the Marshall & Swift
6        Valuation Services Manual, adjusted by any appropriate
7        current cost and local multipliers.
8            (B) Depreciation, for purposes of calculating the
9        estimated fair market value of buildings on the
10        property, is applied by utilizing a weighted mean life
11        for the buildings based on original construction and
12        assuming a 40-year life for hospital buildings and the
13        applicable life for other types of buildings as
14        specified in the American Hospital Association
15        publication "Estimated Useful Lives of Depreciable
16        Hospital Assets". In the case of hospital buildings,
17        the remaining life is divided by 40 and this ratio is
18        multiplied by the replacement cost of the buildings to
19        obtain an estimated fair market value of buildings. If
20        a hospital building is older than 35 years, a remaining
21        life of 5 years for residual value is assumed; and if a
22        building is less than 8 years old, a remaining life of
23        32 years is assumed.
24            (C) The estimated assessed value of the land
25        portion of the property shall be determined by
26        multiplying (i) the per square foot average of the

 

 

SB1469 Enrolled- 36 -LRB100 09786 MJP 19956 b

1        assessed values of three parcels of land (not including
2        farm land, and excluding the assessed value of the
3        improvements thereon) reasonably comparable to the
4        property, by (ii) the number of square feet comprising
5        the exempt portion of the property's land square
6        footage.
7        (3) The assessment factor, State equalization rate,
8    and tax rate (including any special factors such as
9    Enterprise Zones) used in calculating the estimated
10    property tax liability shall be for the most recent year
11    that is publicly available from the applicable chief county
12    assessment officer or officers at least 90 days before the
13    end of the hospital year.
14        (4) The method utilized to calculate estimated
15    property tax liability for purposes of this Section 15-86
16    shall not be utilized for the actual valuation, assessment,
17    or taxation of property pursuant to the Property Tax Code.
18    (h) For the purpose of this Section, the following terms
19shall have the meanings set forth below:
20        (1) "Hospital" means any institution, place, building,
21    buildings on a campus, or other health care facility
22    located in Illinois that is licensed under the Hospital
23    Licensing Act and has a hospital owner.
24        (2) "Hospital owner" means a not-for-profit
25    corporation that is the titleholder of a hospital, or the
26    owner of the beneficial interest in an Illinois land trust

 

 

SB1469 Enrolled- 37 -LRB100 09786 MJP 19956 b

1    that is the titleholder of a hospital.
2        (3) "Hospital affiliate" means any corporation,
3    partnership, limited partnership, joint venture, limited
4    liability company, association or other organization,
5    other than a hospital owner, that directly or indirectly
6    controls, is controlled by, or is under common control with
7    one or more hospital owners and that supports, is supported
8    by, or acts in furtherance of the exempt health care
9    purposes of at least one of those hospital owners'
10    hospitals.
11        (4) "Hospital system" means a hospital and one or more
12    other hospitals or hospital affiliates related by common
13    control or ownership.
14        (5) "Control" relating to hospital owners, hospital
15    affiliates, or hospital systems means possession, direct
16    or indirect, of the power to direct or cause the direction
17    of the management and policies of the entity, whether
18    through ownership of assets, membership interest, other
19    voting or governance rights, by contract or otherwise.
20        (6) "Hospital applicant" means a hospital owner or
21    hospital affiliate that files an application for an
22    exemption or renewal of exemption under this Section.
23        (7) "Relevant hospital entity" means (A) the hospital
24    owner, in the case of a hospital applicant that is a
25    hospital owner, and (B) at the election of a hospital
26    applicant that is a hospital affiliate, either (i) the

 

 

SB1469 Enrolled- 38 -LRB100 09786 MJP 19956 b

1    hospital affiliate or (ii) the hospital system to which the
2    hospital applicant belongs, including any hospitals or
3    hospital affiliates that are related by common control or
4    ownership.
5        (8) "Subject property" means property used for the
6    calculation under subsection (b) of this Section.
7        (9) "Hospital year" means the fiscal year of the
8    relevant hospital entity, or the fiscal year of one of the
9    hospital owners in the hospital system if the relevant
10    hospital entity is a hospital system with members with
11    different fiscal years, that ends in the year for which the
12    exemption is sought.
13    (i) It is the intent of the General Assembly that any
14exemptions taken, granted, or renewed under this Section prior
15to the effective date of this amendatory Act of the 100th
16General Assembly are hereby validated.
17(Source: P.A. 98-463, eff. 8-16-13; 99-143, eff. 7-27-15.)
 
18    Section 25. The Service Occupation Tax Act is amended by
19changing Section 3-8 as follows:
 
20    (35 ILCS 115/3-8)
21    Sec. 3-8. Hospital exemption.
22    (a) Until July 1, 2022, tangible Tangible personal property
23sold to or used by a hospital owner that owns one or more
24hospitals licensed under the Hospital Licensing Act or operated

 

 

SB1469 Enrolled- 39 -LRB100 09786 MJP 19956 b

1under the University of Illinois Hospital Act, or a hospital
2affiliate that is not already exempt under another provision of
3this Act and meets the criteria for an exemption under this
4Section, is exempt from taxation under this Act.
5    (b) A hospital owner or hospital affiliate satisfies the
6conditions for an exemption under this Section if the value of
7qualified services or activities listed in subsection (c) of
8this Section for the hospital year equals or exceeds the
9relevant hospital entity's estimated property tax liability,
10without regard to any property tax exemption granted under
11Section 15-86 of the Property Tax Code, for the calendar year
12in which exemption or renewal of exemption is sought. For
13purposes of making the calculations required by this subsection
14(b), if the relevant hospital entity is a hospital owner that
15owns more than one hospital, the value of the services or
16activities listed in subsection (c) shall be calculated on the
17basis of only those services and activities relating to the
18hospital that includes the subject property, and the relevant
19hospital entity's estimated property tax liability shall be
20calculated only with respect to the properties comprising that
21hospital. In the case of a multi-state hospital system or
22hospital affiliate, the value of the services or activities
23listed in subsection (c) shall be calculated on the basis of
24only those services and activities that occur in Illinois and
25the relevant hospital entity's estimated property tax
26liability shall be calculated only with respect to its property

 

 

SB1469 Enrolled- 40 -LRB100 09786 MJP 19956 b

1located in Illinois.
2    (c) The following services and activities shall be
3considered for purposes of making the calculations required by
4subsection (b):
5        (1) Charity care. Free or discounted services provided
6    pursuant to the relevant hospital entity's financial
7    assistance policy, measured at cost, including discounts
8    provided under the Hospital Uninsured Patient Discount
9    Act.
10        (2) Health services to low-income and underserved
11    individuals. Other unreimbursed costs of the relevant
12    hospital entity for providing without charge, paying for,
13    or subsidizing goods, activities, or services for the
14    purpose of addressing the health of low-income or
15    underserved individuals. Those activities or services may
16    include, but are not limited to: financial or in-kind
17    support to affiliated or unaffiliated hospitals, hospital
18    affiliates, community clinics, or programs that treat
19    low-income or underserved individuals; paying for or
20    subsidizing health care professionals who care for
21    low-income or underserved individuals; providing or
22    subsidizing outreach or educational services to low-income
23    or underserved individuals for disease management and
24    prevention; free or subsidized goods, supplies, or
25    services needed by low-income or underserved individuals
26    because of their medical condition; and prenatal or

 

 

SB1469 Enrolled- 41 -LRB100 09786 MJP 19956 b

1    childbirth outreach to low-income or underserved persons.
2        (3) Subsidy of State or local governments. Direct or
3    indirect financial or in-kind subsidies of State or local
4    governments by the relevant hospital entity that pay for or
5    subsidize activities or programs related to health care for
6    low-income or underserved individuals.
7        (4) Support for State health care programs for
8    low-income individuals. At the election of the hospital
9    applicant for each applicable year, either (A) 10% of
10    payments to the relevant hospital entity and any hospital
11    affiliate designated by the relevant hospital entity
12    (provided that such hospital affiliate's operations
13    provide financial or operational support for or receive
14    financial or operational support from the relevant
15    hospital entity) under Medicaid or other means-tested
16    programs, including, but not limited to, General
17    Assistance, the Covering ALL KIDS Health Insurance Act, and
18    the State Children's Health Insurance Program or (B) the
19    amount of subsidy provided by the relevant hospital entity
20    and any hospital affiliate designated by the relevant
21    hospital entity (provided that such hospital affiliate's
22    operations provide financial or operational support for or
23    receive financial or operational support from the relevant
24    hospital entity) to State or local government in treating
25    Medicaid recipients and recipients of means-tested
26    programs, including but not limited to General Assistance,

 

 

SB1469 Enrolled- 42 -LRB100 09786 MJP 19956 b

1    the Covering ALL KIDS Health Insurance Act, and the State
2    Children's Health Insurance Program. The amount of subsidy
3    for purposes of this item (4) is calculated in the same
4    manner as unreimbursed costs are calculated for Medicaid
5    and other means-tested government programs in the Schedule
6    H of IRS Form 990 in effect on the effective date of this
7    amendatory Act of the 97th General Assembly.
8        (5) Dual-eligible subsidy. The amount of subsidy
9    provided to government by treating dual-eligible
10    Medicare/Medicaid patients. The amount of subsidy for
11    purposes of this item (5) is calculated by multiplying the
12    relevant hospital entity's unreimbursed costs for
13    Medicare, calculated in the same manner as determined in
14    the Schedule H of IRS Form 990 in effect on the effective
15    date of this amendatory Act of the 97th General Assembly,
16    by the relevant hospital entity's ratio of dual-eligible
17    patients to total Medicare patients.
18        (6) Relief of the burden of government related to
19    health care. Except to the extent otherwise taken into
20    account in this subsection, the portion of unreimbursed
21    costs of the relevant hospital entity attributable to
22    providing, paying for, or subsidizing goods, activities,
23    or services that relieve the burden of government related
24    to health care for low-income individuals. Such activities
25    or services shall include, but are not limited to,
26    providing emergency, trauma, burn, neonatal, psychiatric,

 

 

SB1469 Enrolled- 43 -LRB100 09786 MJP 19956 b

1    rehabilitation, or other special services; providing
2    medical education; and conducting medical research or
3    training of health care professionals. The portion of those
4    unreimbursed costs attributable to benefiting low-income
5    individuals shall be determined using the ratio calculated
6    by adding the relevant hospital entity's costs
7    attributable to charity care, Medicaid, other means-tested
8    government programs, Medicare patients with disabilities
9    under age 65, and dual-eligible Medicare/Medicaid patients
10    and dividing that total by the relevant hospital entity's
11    total costs. Such costs for the numerator and denominator
12    shall be determined by multiplying gross charges by the
13    cost to charge ratio taken from the hospital's most
14    recently filed Medicare cost report (CMS 2252-10
15    Worksheet, Part I). In the case of emergency services, the
16    ratio shall be calculated using costs (gross charges
17    multiplied by the cost to charge ratio taken from the
18    hospital's most recently filed Medicare cost report (CMS
19    2252-10 Worksheet, Part I)) of patients treated in the
20    relevant hospital entity's emergency department.
21        (7) Any other activity by the relevant hospital entity
22    that the Department determines relieves the burden of
23    government or addresses the health of low-income or
24    underserved individuals.
25    (d) The hospital applicant shall include information in its
26exemption application establishing that it satisfies the

 

 

SB1469 Enrolled- 44 -LRB100 09786 MJP 19956 b

1requirements of subsection (b). For purposes of making the
2calculations required by subsection (b), the hospital
3applicant may for each year elect to use either (1) the value
4of the services or activities listed in subsection (e) for the
5hospital year or (2) the average value of those services or
6activities for the 3 fiscal years ending with the hospital
7year. If the relevant hospital entity has been in operation for
8less than 3 completed fiscal years, then the latter
9calculation, if elected, shall be performed on a pro rata
10basis.
11    (e) For purposes of making the calculations required by
12this Section:
13        (1) particular services or activities eligible for
14    consideration under any of the paragraphs (1) through (7)
15    of subsection (c) may not be counted under more than one of
16    those paragraphs; and
17        (2) the amount of unreimbursed costs and the amount of
18    subsidy shall not be reduced by restricted or unrestricted
19    payments received by the relevant hospital entity as
20    contributions deductible under Section 170(a) of the
21    Internal Revenue Code.
22    (f) (Blank).
23    (g) Estimation of Exempt Property Tax Liability. The
24estimated property tax liability used for the determination in
25subsection (b) shall be calculated as follows:
26        (1) "Estimated property tax liability" means the

 

 

SB1469 Enrolled- 45 -LRB100 09786 MJP 19956 b

1    estimated dollar amount of property tax that would be owed,
2    with respect to the exempt portion of each of the relevant
3    hospital entity's properties that are already fully or
4    partially exempt, or for which an exemption in whole or in
5    part is currently being sought, and then aggregated as
6    applicable, as if the exempt portion of those properties
7    were subject to tax, calculated with respect to each such
8    property by multiplying:
9            (A) the lesser of (i) the actual assessed value, if
10        any, of the portion of the property for which an
11        exemption is sought or (ii) an estimated assessed value
12        of the exempt portion of such property as determined in
13        item (2) of this subsection (g), by
14            (B) the applicable State equalization rate
15        (yielding the equalized assessed value), by
16            (C) the applicable tax rate.
17        (2) The estimated assessed value of the exempt portion
18    of the property equals the sum of (i) the estimated fair
19    market value of buildings on the property, as determined in
20    accordance with subparagraphs (A) and (B) of this item (2),
21    multiplied by the applicable assessment factor, and (ii)
22    the estimated assessed value of the land portion of the
23    property, as determined in accordance with subparagraph
24    (C).
25            (A) The "estimated fair market value of buildings
26        on the property" means the replacement value of any

 

 

SB1469 Enrolled- 46 -LRB100 09786 MJP 19956 b

1        exempt portion of buildings on the property, minus
2        depreciation, determined utilizing the cost
3        replacement method whereby the exempt square footage
4        of all such buildings is multiplied by the replacement
5        cost per square foot for Class A Average building found
6        in the most recent edition of the Marshall & Swift
7        Valuation Services Manual, adjusted by any appropriate
8        current cost and local multipliers.
9            (B) Depreciation, for purposes of calculating the
10        estimated fair market value of buildings on the
11        property, is applied by utilizing a weighted mean life
12        for the buildings based on original construction and
13        assuming a 40-year life for hospital buildings and the
14        applicable life for other types of buildings as
15        specified in the American Hospital Association
16        publication "Estimated Useful Lives of Depreciable
17        Hospital Assets". In the case of hospital buildings,
18        the remaining life is divided by 40 and this ratio is
19        multiplied by the replacement cost of the buildings to
20        obtain an estimated fair market value of buildings. If
21        a hospital building is older than 35 years, a remaining
22        life of 5 years for residual value is assumed; and if a
23        building is less than 8 years old, a remaining life of
24        32 years is assumed.
25            (C) The estimated assessed value of the land
26        portion of the property shall be determined by

 

 

SB1469 Enrolled- 47 -LRB100 09786 MJP 19956 b

1        multiplying (i) the per square foot average of the
2        assessed values of three parcels of land (not including
3        farm land, and excluding the assessed value of the
4        improvements thereon) reasonably comparable to the
5        property, by (ii) the number of square feet comprising
6        the exempt portion of the property's land square
7        footage.
8        (3) The assessment factor, State equalization rate,
9    and tax rate (including any special factors such as
10    Enterprise Zones) used in calculating the estimated
11    property tax liability shall be for the most recent year
12    that is publicly available from the applicable chief county
13    assessment officer or officers at least 90 days before the
14    end of the hospital year.
15        (4) The method utilized to calculate estimated
16    property tax liability for purposes of this Section 15-86
17    shall not be utilized for the actual valuation, assessment,
18    or taxation of property pursuant to the Property Tax Code.
19    (h) For the purpose of this Section, the following terms
20shall have the meanings set forth below:
21        (1) "Hospital" means any institution, place, building,
22    buildings on a campus, or other health care facility
23    located in Illinois that is licensed under the Hospital
24    Licensing Act and has a hospital owner.
25        (2) "Hospital owner" means a not-for-profit
26    corporation that is the titleholder of a hospital, or the

 

 

SB1469 Enrolled- 48 -LRB100 09786 MJP 19956 b

1    owner of the beneficial interest in an Illinois land trust
2    that is the titleholder of a hospital.
3        (3) "Hospital affiliate" means any corporation,
4    partnership, limited partnership, joint venture, limited
5    liability company, association or other organization,
6    other than a hospital owner, that directly or indirectly
7    controls, is controlled by, or is under common control with
8    one or more hospital owners and that supports, is supported
9    by, or acts in furtherance of the exempt health care
10    purposes of at least one of those hospital owners'
11    hospitals.
12        (4) "Hospital system" means a hospital and one or more
13    other hospitals or hospital affiliates related by common
14    control or ownership.
15        (5) "Control" relating to hospital owners, hospital
16    affiliates, or hospital systems means possession, direct
17    or indirect, of the power to direct or cause the direction
18    of the management and policies of the entity, whether
19    through ownership of assets, membership interest, other
20    voting or governance rights, by contract or otherwise.
21        (6) "Hospital applicant" means a hospital owner or
22    hospital affiliate that files an application for an
23    exemption or renewal of exemption under this Section.
24        (7) "Relevant hospital entity" means (A) the hospital
25    owner, in the case of a hospital applicant that is a
26    hospital owner, and (B) at the election of a hospital

 

 

SB1469 Enrolled- 49 -LRB100 09786 MJP 19956 b

1    applicant that is a hospital affiliate, either (i) the
2    hospital affiliate or (ii) the hospital system to which the
3    hospital applicant belongs, including any hospitals or
4    hospital affiliates that are related by common control or
5    ownership.
6        (8) "Subject property" means property used for the
7    calculation under subsection (b) of this Section.
8        (9) "Hospital year" means the fiscal year of the
9    relevant hospital entity, or the fiscal year of one of the
10    hospital owners in the hospital system if the relevant
11    hospital entity is a hospital system with members with
12    different fiscal years, that ends in the year for which the
13    exemption is sought.
14    (i) It is the intent of the General Assembly that any
15exemptions taken, granted, or renewed under this Section prior
16to the effective date of this amendatory Act of the 100th
17General Assembly are hereby validated.
18(Source: P.A. 98-463, eff. 8-16-13; 99-143, eff. 7-27-15.)
 
19    Section 30. The Retailers' Occupation Tax Act is amended by
20changing Section 2-9 as follows:
 
21    (35 ILCS 120/2-9)
22    Sec. 2-9. Hospital exemption.
23    (a) Until July 1, 2022, tangible Tangible personal property
24sold to or used by a hospital owner that owns one or more

 

 

SB1469 Enrolled- 50 -LRB100 09786 MJP 19956 b

1hospitals licensed under the Hospital Licensing Act or operated
2under the University of Illinois Hospital Act, or a hospital
3affiliate that is not already exempt under another provision of
4this Act and meets the criteria for an exemption under this
5Section, is exempt from taxation under this Act.
6    (b) A hospital owner or hospital affiliate satisfies the
7conditions for an exemption under this Section if the value of
8qualified services or activities listed in subsection (c) of
9this Section for the hospital year equals or exceeds the
10relevant hospital entity's estimated property tax liability,
11without regard to any property tax exemption granted under
12Section 15-86 of the Property Tax Code, for the calendar year
13in which exemption or renewal of exemption is sought. For
14purposes of making the calculations required by this subsection
15(b), if the relevant hospital entity is a hospital owner that
16owns more than one hospital, the value of the services or
17activities listed in subsection (c) shall be calculated on the
18basis of only those services and activities relating to the
19hospital that includes the subject property, and the relevant
20hospital entity's estimated property tax liability shall be
21calculated only with respect to the properties comprising that
22hospital. In the case of a multi-state hospital system or
23hospital affiliate, the value of the services or activities
24listed in subsection (c) shall be calculated on the basis of
25only those services and activities that occur in Illinois and
26the relevant hospital entity's estimated property tax

 

 

SB1469 Enrolled- 51 -LRB100 09786 MJP 19956 b

1liability shall be calculated only with respect to its property
2located in Illinois.
3    (c) The following services and activities shall be
4considered for purposes of making the calculations required by
5subsection (b):
6        (1) Charity care. Free or discounted services provided
7    pursuant to the relevant hospital entity's financial
8    assistance policy, measured at cost, including discounts
9    provided under the Hospital Uninsured Patient Discount
10    Act.
11        (2) Health services to low-income and underserved
12    individuals. Other unreimbursed costs of the relevant
13    hospital entity for providing without charge, paying for,
14    or subsidizing goods, activities, or services for the
15    purpose of addressing the health of low-income or
16    underserved individuals. Those activities or services may
17    include, but are not limited to: financial or in-kind
18    support to affiliated or unaffiliated hospitals, hospital
19    affiliates, community clinics, or programs that treat
20    low-income or underserved individuals; paying for or
21    subsidizing health care professionals who care for
22    low-income or underserved individuals; providing or
23    subsidizing outreach or educational services to low-income
24    or underserved individuals for disease management and
25    prevention; free or subsidized goods, supplies, or
26    services needed by low-income or underserved individuals

 

 

SB1469 Enrolled- 52 -LRB100 09786 MJP 19956 b

1    because of their medical condition; and prenatal or
2    childbirth outreach to low-income or underserved persons.
3        (3) Subsidy of State or local governments. Direct or
4    indirect financial or in-kind subsidies of State or local
5    governments by the relevant hospital entity that pay for or
6    subsidize activities or programs related to health care for
7    low-income or underserved individuals.
8        (4) Support for State health care programs for
9    low-income individuals. At the election of the hospital
10    applicant for each applicable year, either (A) 10% of
11    payments to the relevant hospital entity and any hospital
12    affiliate designated by the relevant hospital entity
13    (provided that such hospital affiliate's operations
14    provide financial or operational support for or receive
15    financial or operational support from the relevant
16    hospital entity) under Medicaid or other means-tested
17    programs, including, but not limited to, General
18    Assistance, the Covering ALL KIDS Health Insurance Act, and
19    the State Children's Health Insurance Program or (B) the
20    amount of subsidy provided by the relevant hospital entity
21    and any hospital affiliate designated by the relevant
22    hospital entity (provided that such hospital affiliate's
23    operations provide financial or operational support for or
24    receive financial or operational support from the relevant
25    hospital entity) to State or local government in treating
26    Medicaid recipients and recipients of means-tested

 

 

SB1469 Enrolled- 53 -LRB100 09786 MJP 19956 b

1    programs, including but not limited to General Assistance,
2    the Covering ALL KIDS Health Insurance Act, and the State
3    Children's Health Insurance Program. The amount of subsidy
4    for purposes of this item (4) is calculated in the same
5    manner as unreimbursed costs are calculated for Medicaid
6    and other means-tested government programs in the Schedule
7    H of IRS Form 990 in effect on the effective date of this
8    amendatory Act of the 97th General Assembly.
9        (5) Dual-eligible subsidy. The amount of subsidy
10    provided to government by treating dual-eligible
11    Medicare/Medicaid patients. The amount of subsidy for
12    purposes of this item (5) is calculated by multiplying the
13    relevant hospital entity's unreimbursed costs for
14    Medicare, calculated in the same manner as determined in
15    the Schedule H of IRS Form 990 in effect on the effective
16    date of this amendatory Act of the 97th General Assembly,
17    by the relevant hospital entity's ratio of dual-eligible
18    patients to total Medicare patients.
19        (6) Relief of the burden of government related to
20    health care. Except to the extent otherwise taken into
21    account in this subsection, the portion of unreimbursed
22    costs of the relevant hospital entity attributable to
23    providing, paying for, or subsidizing goods, activities,
24    or services that relieve the burden of government related
25    to health care for low-income individuals. Such activities
26    or services shall include, but are not limited to,

 

 

SB1469 Enrolled- 54 -LRB100 09786 MJP 19956 b

1    providing emergency, trauma, burn, neonatal, psychiatric,
2    rehabilitation, or other special services; providing
3    medical education; and conducting medical research or
4    training of health care professionals. The portion of those
5    unreimbursed costs attributable to benefiting low-income
6    individuals shall be determined using the ratio calculated
7    by adding the relevant hospital entity's costs
8    attributable to charity care, Medicaid, other means-tested
9    government programs, Medicare patients with disabilities
10    under age 65, and dual-eligible Medicare/Medicaid patients
11    and dividing that total by the relevant hospital entity's
12    total costs. Such costs for the numerator and denominator
13    shall be determined by multiplying gross charges by the
14    cost to charge ratio taken from the hospital's most
15    recently filed Medicare cost report (CMS 2252-10
16    Worksheet, Part I). In the case of emergency services, the
17    ratio shall be calculated using costs (gross charges
18    multiplied by the cost to charge ratio taken from the
19    hospital's most recently filed Medicare cost report (CMS
20    2252-10 Worksheet, Part I)) of patients treated in the
21    relevant hospital entity's emergency department.
22        (7) Any other activity by the relevant hospital entity
23    that the Department determines relieves the burden of
24    government or addresses the health of low-income or
25    underserved individuals.
26    (d) The hospital applicant shall include information in its

 

 

SB1469 Enrolled- 55 -LRB100 09786 MJP 19956 b

1exemption application establishing that it satisfies the
2requirements of subsection (b). For purposes of making the
3calculations required by subsection (b), the hospital
4applicant may for each year elect to use either (1) the value
5of the services or activities listed in subsection (e) for the
6hospital year or (2) the average value of those services or
7activities for the 3 fiscal years ending with the hospital
8year. If the relevant hospital entity has been in operation for
9less than 3 completed fiscal years, then the latter
10calculation, if elected, shall be performed on a pro rata
11basis.
12    (e) For purposes of making the calculations required by
13this Section:
14        (1) particular services or activities eligible for
15    consideration under any of the paragraphs (1) through (7)
16    of subsection (c) may not be counted under more than one of
17    those paragraphs; and
18        (2) the amount of unreimbursed costs and the amount of
19    subsidy shall not be reduced by restricted or unrestricted
20    payments received by the relevant hospital entity as
21    contributions deductible under Section 170(a) of the
22    Internal Revenue Code.
23    (f) (Blank).
24    (g) Estimation of Exempt Property Tax Liability. The
25estimated property tax liability used for the determination in
26subsection (b) shall be calculated as follows:

 

 

SB1469 Enrolled- 56 -LRB100 09786 MJP 19956 b

1        (1) "Estimated property tax liability" means the
2    estimated dollar amount of property tax that would be owed,
3    with respect to the exempt portion of each of the relevant
4    hospital entity's properties that are already fully or
5    partially exempt, or for which an exemption in whole or in
6    part is currently being sought, and then aggregated as
7    applicable, as if the exempt portion of those properties
8    were subject to tax, calculated with respect to each such
9    property by multiplying:
10            (A) the lesser of (i) the actual assessed value, if
11        any, of the portion of the property for which an
12        exemption is sought or (ii) an estimated assessed value
13        of the exempt portion of such property as determined in
14        item (2) of this subsection (g), by
15            (B) the applicable State equalization rate
16        (yielding the equalized assessed value), by
17            (C) the applicable tax rate.
18        (2) The estimated assessed value of the exempt portion
19    of the property equals the sum of (i) the estimated fair
20    market value of buildings on the property, as determined in
21    accordance with subparagraphs (A) and (B) of this item (2),
22    multiplied by the applicable assessment factor, and (ii)
23    the estimated assessed value of the land portion of the
24    property, as determined in accordance with subparagraph
25    (C).
26            (A) The "estimated fair market value of buildings

 

 

SB1469 Enrolled- 57 -LRB100 09786 MJP 19956 b

1        on the property" means the replacement value of any
2        exempt portion of buildings on the property, minus
3        depreciation, determined utilizing the cost
4        replacement method whereby the exempt square footage
5        of all such buildings is multiplied by the replacement
6        cost per square foot for Class A Average building found
7        in the most recent edition of the Marshall & Swift
8        Valuation Services Manual, adjusted by any appropriate
9        current cost and local multipliers.
10            (B) Depreciation, for purposes of calculating the
11        estimated fair market value of buildings on the
12        property, is applied by utilizing a weighted mean life
13        for the buildings based on original construction and
14        assuming a 40-year life for hospital buildings and the
15        applicable life for other types of buildings as
16        specified in the American Hospital Association
17        publication "Estimated Useful Lives of Depreciable
18        Hospital Assets". In the case of hospital buildings,
19        the remaining life is divided by 40 and this ratio is
20        multiplied by the replacement cost of the buildings to
21        obtain an estimated fair market value of buildings. If
22        a hospital building is older than 35 years, a remaining
23        life of 5 years for residual value is assumed; and if a
24        building is less than 8 years old, a remaining life of
25        32 years is assumed.
26            (C) The estimated assessed value of the land

 

 

SB1469 Enrolled- 58 -LRB100 09786 MJP 19956 b

1        portion of the property shall be determined by
2        multiplying (i) the per square foot average of the
3        assessed values of three parcels of land (not including
4        farm land, and excluding the assessed value of the
5        improvements thereon) reasonably comparable to the
6        property, by (ii) the number of square feet comprising
7        the exempt portion of the property's land square
8        footage.
9        (3) The assessment factor, State equalization rate,
10    and tax rate (including any special factors such as
11    Enterprise Zones) used in calculating the estimated
12    property tax liability shall be for the most recent year
13    that is publicly available from the applicable chief county
14    assessment officer or officers at least 90 days before the
15    end of the hospital year.
16        (4) The method utilized to calculate estimated
17    property tax liability for purposes of this Section 15-86
18    shall not be utilized for the actual valuation, assessment,
19    or taxation of property pursuant to the Property Tax Code.
20    (h) For the purpose of this Section, the following terms
21shall have the meanings set forth below:
22        (1) "Hospital" means any institution, place, building,
23    buildings on a campus, or other health care facility
24    located in Illinois that is licensed under the Hospital
25    Licensing Act and has a hospital owner.
26        (2) "Hospital owner" means a not-for-profit

 

 

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1    corporation that is the titleholder of a hospital, or the
2    owner of the beneficial interest in an Illinois land trust
3    that is the titleholder of a hospital.
4        (3) "Hospital affiliate" means any corporation,
5    partnership, limited partnership, joint venture, limited
6    liability company, association or other organization,
7    other than a hospital owner, that directly or indirectly
8    controls, is controlled by, or is under common control with
9    one or more hospital owners and that supports, is supported
10    by, or acts in furtherance of the exempt health care
11    purposes of at least one of those hospital owners'
12    hospitals.
13        (4) "Hospital system" means a hospital and one or more
14    other hospitals or hospital affiliates related by common
15    control or ownership.
16        (5) "Control" relating to hospital owners, hospital
17    affiliates, or hospital systems means possession, direct
18    or indirect, of the power to direct or cause the direction
19    of the management and policies of the entity, whether
20    through ownership of assets, membership interest, other
21    voting or governance rights, by contract or otherwise.
22        (6) "Hospital applicant" means a hospital owner or
23    hospital affiliate that files an application for an
24    exemption or renewal of exemption under this Section.
25        (7) "Relevant hospital entity" means (A) the hospital
26    owner, in the case of a hospital applicant that is a

 

 

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1    hospital owner, and (B) at the election of a hospital
2    applicant that is a hospital affiliate, either (i) the
3    hospital affiliate or (ii) the hospital system to which the
4    hospital applicant belongs, including any hospitals or
5    hospital affiliates that are related by common control or
6    ownership.
7        (8) "Subject property" means property used for the
8    calculation under subsection (b) of this Section.
9        (9) "Hospital year" means the fiscal year of the
10    relevant hospital entity, or the fiscal year of one of the
11    hospital owners in the hospital system if the relevant
12    hospital entity is a hospital system with members with
13    different fiscal years, that ends in the year for which the
14    exemption is sought.
15    (i) It is the intent of the General Assembly that any
16exemptions taken, granted, or renewed under this Section prior
17to the effective date of this amendatory Act of the 100th
18General Assembly are hereby validated.
19(Source: P.A. 98-463, eff. 8-16-13; 99-143, eff. 7-27-15.)
 
20    Section 35. The Specialized Mental Health Rehabilitation
21Act of 2013 is amended by changing Sections 2-101 and 4-102 as
22follows:
 
23    (210 ILCS 49/2-101)
24    Sec. 2-101. Standards for facilities.

 

 

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1    (a) The Department shall, by rule, prescribe minimum
2standards for each level of care for facilities to be in place
3during the provisional licensure period and thereafter. These
4standards shall include, but are not limited to, the following:
5        (1) life safety standards that will ensure the health,
6    safety and welfare of residents and their protection from
7    hazards;
8        (2) number and qualifications of all personnel,
9    including management and clinical personnel, having
10    responsibility for any part of the care given to consumers;
11    specifically, the Department shall establish staffing
12    ratios for facilities which shall specify the number of
13    staff hours per consumer of care that are needed for each
14    level of care offered within the facility;
15        (3) all sanitary conditions within the facility and its
16    surroundings, including water supply, sewage disposal,
17    food handling, and general hygiene which shall ensure the
18    health and comfort of consumers;
19        (4) a program for adequate maintenance of physical
20    plant and equipment;
21        (5) adequate accommodations, staff, and services for
22    the number and types of services being offered to consumers
23    for whom the facility is licensed to care;
24        (6) development of evacuation and other appropriate
25    safety plans for use during weather, health, fire, physical
26    plant, environmental, and national defense emergencies;

 

 

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1        (7) maintenance of minimum financial or other
2    resources necessary to meet the standards established
3    under this Section, and to operate and conduct the facility
4    in accordance with this Act; and
5        (8) standards for coercive free environment,
6    restraint, and therapeutic separation.
7    (b) Any requirement contained in administrative rule
8concerning a percentage of single occupancy rooms shall be
9calculated based on the total number of licensed or
10provisionally licensed beds under this Act on January 1, 2019
11and shall not be calculated on a per-facility basis.
12(Source: P.A. 98-104, eff. 7-22-13.)
 
13    (210 ILCS 49/4-102)
14    Sec. 4-102. Necessity of license. No person may establish,
15operate, maintain, offer, or advertise a facility within this
16State unless and until he or she obtains a valid license
17therefor as hereinafter provided, which license remains
18unsuspended, unrevoked, and unexpired. No public official or
19employee may place any person in, or recommend that any person
20be in, or directly or indirectly cause any person to be placed
21in any facility that is being operated without a valid license.
22All licenses and licensing procedures established under
23Article III of the Nursing Home Care Act, except those
24contained in Section 3-202, shall be deemed valid under this
25Act until the Department establishes licensure. The Department

 

 

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1is granted the authority under this Act to establish
2provisional licensure and licensing procedures under this Act
3by emergency rule and shall do so within 120 days of the
4effective date of this Act. The Department shall not grant a
5provisional license to any facility that does not possess a
6provisional license on November 30, 2018 and is licensed under
7the Nursing Home Care Act on or before November 30, 2018. The
8Department shall not grant a license to any facility that has
9not first received a provisional license. The changes made by
10this amendatory Act of the 100th General Assembly do not apply
11to the provisions of subsection (c) of Section 1-101.5
12concerning facility closure and relocation.
13(Source: P.A. 98-104, eff. 7-22-13.)
 
14    Section 40. The Illinois Public Aid Code is amended by
15changing Sections 5-5.07, 5A-4, 5A-13, and 14-12 as follows:
 
16    (305 ILCS 5/5-5.07)
17    (Section scheduled to be repealed on January 27, 2019)
18    Sec. 5-5.07. Inpatient psychiatric stay; DCFS per diem
19rate. The Department of Children and Family Services shall pay
20the DCFS per diem rate for inpatient psychiatric stay at a
21free-standing psychiatric hospital effective the 11th day when
22a child is in the hospital beyond medical necessity, and the
23parent or caregiver has denied the child access to the home and
24has refused or failed to make provisions for another living

 

 

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1arrangement for the child or the child's discharge is being
2delayed due to a pending inquiry or investigation by the
3Department of Children and Family Services. This Section is
4repealed on July 1, 2019 6 months after the effective date of
5this amendatory Act of the 100th General Assembly.
6(Source: P.A. 100-646, eff. 7-27-18.)
 
7    (305 ILCS 5/5A-4)  (from Ch. 23, par. 5A-4)
8    Sec. 5A-4. Payment of assessment; penalty.
9    (a) The assessment imposed by Section 5A-2 for State fiscal
10year 2009 through State fiscal year 2018 or as provided in
11Section 5A-16, shall be due and payable in monthly
12installments, each equaling one-twelfth of the assessment for
13the year, on the fourteenth State business day of each month.
14No installment payment of an assessment imposed by Section 5A-2
15shall be due and payable, however, until after the Comptroller
16has issued the payments required under this Article.
17    Except as provided in subsection (a-5) of this Section, the
18assessment imposed by subsection (b-5) of Section 5A-2 for the
19portion of State fiscal year 2012 beginning June 10, 2012
20through June 30, 2012, and for State fiscal year 2013 through
21State fiscal year 2018 or as provided in Section 5A-16, shall
22be due and payable in monthly installments, each equaling
23one-twelfth of the assessment for the year, on the 17th 14th
24State business day of each month. No installment payment of an
25assessment imposed by subsection (b-5) of Section 5A-2 shall be

 

 

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1due and payable, however, until after: (i) the Department
2notifies the hospital provider, in writing, that the payment
3methodologies to hospitals required under Section 5A-12.4,
4have been approved by the Centers for Medicare and Medicaid
5Services of the U.S. Department of Health and Human Services,
6and the waiver under 42 CFR 433.68 for the assessment imposed
7by subsection (b-5) of Section 5A-2, if necessary, has been
8granted by the Centers for Medicare and Medicaid Services of
9the U.S. Department of Health and Human Services; and (ii) the
10Comptroller has issued the payments required under Section
115A-12.4. Upon notification to the Department of approval of the
12payment methodologies required under Section 5A-12.4 and the
13waiver granted under 42 CFR 433.68, if necessary, all
14installments otherwise due under subsection (b-5) of Section
155A-2 prior to the date of notification shall be due and payable
16to the Department upon written direction from the Department
17and issuance by the Comptroller of the payments required under
18Section 5A-12.4.
19    Except as provided in subsection (a-5) of this Section, the
20assessment imposed under Section 5A-2 for State fiscal year
212019 and each subsequent State fiscal year shall be due and
22payable in monthly installments, each equaling one-twelfth of
23the assessment for the year, on the 14th State business day of
24each month. No installment payment of an assessment imposed by
25Section 5A-2 shall be due and payable, however, until after:
26(i) the Department notifies the hospital provider, in writing,

 

 

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1that the payment methodologies to hospitals required under
2Section 5A-12.6 have been approved by the Centers for Medicare
3and Medicaid Services of the U.S. Department of Health and
4Human Services, and the waiver under 42 CFR 433.68 for the
5assessment imposed by Section 5A-2, if necessary, has been
6granted by the Centers for Medicare and Medicaid Services of
7the U.S. Department of Health and Human Services; and (ii) the
8Comptroller has issued the payments required under Section
95A-12.6. Upon notification to the Department of approval of the
10payment methodologies required under Section 5A-12.6 and the
11waiver granted under 42 CFR 433.68, if necessary, all
12installments otherwise due under Section 5A-2 prior to the date
13of notification shall be due and payable to the Department upon
14written direction from the Department and issuance by the
15Comptroller of the payments required under Section 5A-12.6.
16    (a-5) The Illinois Department may accelerate the schedule
17upon which assessment installments are due and payable by
18hospitals with a payment ratio greater than or equal to one.
19Such acceleration of due dates for payment of the assessment
20may be made only in conjunction with a corresponding
21acceleration in access payments identified in Section 5A-12.2,
22Section 5A-12.4, or Section 5A-12.6 to the same hospitals. For
23the purposes of this subsection (a-5), a hospital's payment
24ratio is defined as the quotient obtained by dividing the total
25payments for the State fiscal year, as authorized under Section
265A-12.2, Section 5A-12.4, or Section 5A-12.6, by the total

 

 

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1assessment for the State fiscal year imposed under Section 5A-2
2or subsection (b-5) of Section 5A-2.
3    (b) The Illinois Department is authorized to establish
4delayed payment schedules for hospital providers that are
5unable to make installment payments when due under this Section
6due to financial difficulties, as determined by the Illinois
7Department.
8    (c) If a hospital provider fails to pay the full amount of
9an installment when due (including any extensions granted under
10subsection (b)), there shall, unless waived by the Illinois
11Department for reasonable cause, be added to the assessment
12imposed by Section 5A-2 a penalty assessment equal to the
13lesser of (i) 5% of the amount of the installment not paid on
14or before the due date plus 5% of the portion thereof remaining
15unpaid on the last day of each 30-day period thereafter or (ii)
16100% of the installment amount not paid on or before the due
17date. For purposes of this subsection, payments will be
18credited first to unpaid installment amounts (rather than to
19penalty or interest), beginning with the most delinquent
20installments.
21    (d) Any assessment amount that is due and payable to the
22Illinois Department more frequently than once per calendar
23quarter shall be remitted to the Illinois Department by the
24hospital provider by means of electronic funds transfer. The
25Illinois Department may provide for remittance by other means
26if (i) the amount due is less than $10,000 or (ii) electronic

 

 

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1funds transfer is unavailable for this purpose.
2(Source: P.A. 100-581, eff. 3-12-18.)
 
3    (305 ILCS 5/5A-13)
4    Sec. 5A-13. Emergency rulemaking.
5    (a) The Department of Healthcare and Family Services
6(formerly Department of Public Aid) may adopt rules necessary
7to implement this amendatory Act of the 94th General Assembly
8through the use of emergency rulemaking in accordance with
9Section 5-45 of the Illinois Administrative Procedure Act. For
10purposes of that Act, the General Assembly finds that the
11adoption of rules to implement this amendatory Act of the 94th
12General Assembly is deemed an emergency and necessary for the
13public interest, safety, and welfare.
14    (b) The Department of Healthcare and Family Services may
15adopt rules necessary to implement this amendatory Act of the
1697th General Assembly through the use of emergency rulemaking
17in accordance with Section 5-45 of the Illinois Administrative
18Procedure Act. For purposes of that Act, the General Assembly
19finds that the adoption of rules to implement this amendatory
20Act of the 97th General Assembly is deemed an emergency and
21necessary for the public interest, safety, and welfare.
22    (c) The Department of Healthcare and Family Services may
23adopt rules necessary to initially implement the changes to
24Articles 5, 5A, 12, and 14 of this Code under this amendatory
25Act of the 100th General Assembly through the use of emergency

 

 

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1rulemaking in accordance with subsection (aa) of Section 5-45
2of the Illinois Administrative Procedure Act. For purposes of
3that Act, the General Assembly finds that the adoption of rules
4to implement the changes to Articles 5, 5A, 12, and 14 of this
5Code under this amendatory Act of the 100th General Assembly is
6deemed an emergency and necessary for the public interest,
7safety, and welfare. The 24-month limitation on the adoption of
8emergency rules does not apply to rules adopted to initially
9implement the changes to Articles 5, 5A, 12, and 14 of this
10Code under this amendatory Act of the 100th General Assembly.
11For purposes of this subsection, "initially" means any
12emergency rules necessary to immediately implement the changes
13authorized to Articles 5, 5A, 12, and 14 of this Code under
14this amendatory Act of the 100th General Assembly; however,
15emergency rulemaking authority shall not be used to make
16changes that could otherwise be made following the process
17established in the Illinois Administrative Procedure Act.
18    (d) The Department of Healthcare and Family Services may on
19a one-time-only basis adopt rules necessary to initially
20implement the changes to Articles 5A and 14 of this Code under
21this amendatory Act of the 100th General Assembly through the
22use of emergency rulemaking in accordance with subsection (ee)
23of Section 5-45 of the Illinois Administrative Procedure Act.
24For purposes of that Act, the General Assembly finds that the
25adoption of rules on a one-time-only basis to implement the
26changes to Articles 5A and 14 of this Code under this

 

 

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1amendatory Act of the 100th General Assembly is deemed an
2emergency and necessary for the public interest, safety, and
3welfare. The 24-month limitation on the adoption of emergency
4rules does not apply to rules adopted to initially implement
5the changes to Articles 5A and 14 of this Code under this
6amendatory Act of the 100th General Assembly.
7(Source: P.A. 100-581, eff. 3-12-18.)
 
8    (305 ILCS 5/14-12)
9    Sec. 14-12. Hospital rate reform payment system. The
10hospital payment system pursuant to Section 14-11 of this
11Article shall be as follows:
12    (a) Inpatient hospital services. Effective for discharges
13on and after July 1, 2014, reimbursement for inpatient general
14acute care services shall utilize the All Patient Refined
15Diagnosis Related Grouping (APR-DRG) software, version 30,
16distributed by 3MTM Health Information System.
17        (1) The Department shall establish Medicaid weighting
18    factors to be used in the reimbursement system established
19    under this subsection. Initial weighting factors shall be
20    the weighting factors as published by 3M Health Information
21    System, associated with Version 30.0 adjusted for the
22    Illinois experience.
23        (2) The Department shall establish a
24    statewide-standardized amount to be used in the inpatient
25    reimbursement system. The Department shall publish these

 

 

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1    amounts on its website no later than 10 calendar days prior
2    to their effective date.
3        (3) In addition to the statewide-standardized amount,
4    the Department shall develop adjusters to adjust the rate
5    of reimbursement for critical Medicaid providers or
6    services for trauma, transplantation services, perinatal
7    care, and Graduate Medical Education (GME).
8        (4) The Department shall develop add-on payments to
9    account for exceptionally costly inpatient stays,
10    consistent with Medicare outlier principles. Outlier fixed
11    loss thresholds may be updated to control for excessive
12    growth in outlier payments no more frequently than on an
13    annual basis, but at least triennially. Upon updating the
14    fixed loss thresholds, the Department shall be required to
15    update base rates within 12 months.
16        (5) The Department shall define those hospitals or
17    distinct parts of hospitals that shall be exempt from the
18    APR-DRG reimbursement system established under this
19    Section. The Department shall publish these hospitals'
20    inpatient rates on its website no later than 10 calendar
21    days prior to their effective date.
22        (6) Beginning July 1, 2014 and ending on June 30, 2024,
23    in addition to the statewide-standardized amount, the
24    Department shall develop an adjustor to adjust the rate of
25    reimbursement for safety-net hospitals defined in Section
26    5-5e.1 of this Code excluding pediatric hospitals.

 

 

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1        (7) Beginning July 1, 2014 and ending on June 30, 2020,
2    or upon implementation of inpatient psychiatric rate
3    increases as described in subsection (n) of Section
4    5A-12.6, in addition to the statewide-standardized amount,
5    the Department shall develop an adjustor to adjust the rate
6    of reimbursement for Illinois freestanding inpatient
7    psychiatric hospitals that are not designated as
8    children's hospitals by the Department but are primarily
9    treating patients under the age of 21.
10        (7.5) Beginning July 1, 2020, the reimbursement for
11    inpatient psychiatric services shall be so that base claims
12    projected reimbursement is increased by an amount equal to
13    the funds allocated in paragraph (2) of subsection (b) of
14    Section 5A-12.6, less the amount allocated under
15    paragraphs (8) and (9) of this subsection and paragraphs
16    (3) and (4) of subsection (b) multiplied by 13%. Beginning
17    July 1, 2022, the reimbursement for inpatient psychiatric
18    services shall be so that base claims projected
19    reimbursement is increased by an amount equal to the funds
20    allocated in paragraph (3) of subsection (b) of Section
21    5A-12.6, less the amount allocated under paragraphs (8) and
22    (9) of this subsection and paragraphs (3) and (4) of
23    subsection (b) multiplied by 13%. Beginning July 1, 2024,
24    the reimbursement for inpatient psychiatric services shall
25    be so that base claims projected reimbursement is increased
26    by an amount equal to the funds allocated in paragraph (4)

 

 

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1    of subsection (b) of Section 5A-12.6, less the amount
2    allocated under paragraphs (8) and (9) of this subsection
3    and paragraphs (3) and (4) of subsection (b) multiplied by
4    13%.
5        (8) Beginning July 1, 2018, in addition to the
6    statewide-standardized amount, the Department shall adjust
7    the rate of reimbursement for hospitals designated by the
8    Department of Public Health as a Perinatal Level II or II+
9    center by applying the same adjustor that is applied to
10    Perinatal and Obstetrical care cases for Perinatal Level
11    III centers, as of December 31, 2017.
12        (9) Beginning July 1, 2018, in addition to the
13    statewide-standardized amount, the Department shall apply
14    the same adjustor that is applied to trauma cases as of
15    December 31, 2017 to inpatient claims to treat patients
16    with burns, including, but not limited to, APR-DRGs 841,
17    842, 843, and 844.
18        (10) Beginning July 1, 2018, the
19    statewide-standardized amount for inpatient general acute
20    care services shall be uniformly increased so that base
21    claims projected reimbursement is increased by an amount
22    equal to the funds allocated in paragraph (1) of subsection
23    (b) of Section 5A-12.6, less the amount allocated under
24    paragraphs (8) and (9) of this subsection and paragraphs
25    (3) and (4) of subsection (b) multiplied by 40%. Beginning
26    July 1, 2020, the statewide-standardized amount for

 

 

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1    inpatient general acute care services shall be uniformly
2    increased so that base claims projected reimbursement is
3    increased by an amount equal to the funds allocated in
4    paragraph (2) of subsection (b) of Section 5A-12.6, less
5    the amount allocated under paragraphs (8) and (9) of this
6    subsection and paragraphs (3) and (4) of subsection (b)
7    multiplied by 40%. Beginning July 1, 2022, the
8    statewide-standardized amount for inpatient general acute
9    care services shall be uniformly increased so that base
10    claims projected reimbursement is increased by an amount
11    equal to the funds allocated in paragraph (3) of subsection
12    (b) of Section 5A-12.6, less the amount allocated under
13    paragraphs (8) and (9) of this subsection and paragraphs
14    (3) and (4) of subsection (b) multiplied by 40%. Beginning
15    July 1, 2023 the statewide-standardized amount for
16    inpatient general acute care services shall be uniformly
17    increased so that base claims projected reimbursement is
18    increased by an amount equal to the funds allocated in
19    paragraph (4) of subsection (b) of Section 5A-12.6, less
20    the amount allocated under paragraphs (8) and (9) of this
21    subsection and paragraphs (3) and (4) of subsection (b)
22    multiplied by 40%.
23        (11) Beginning July 1, 2018, the reimbursement for
24    inpatient rehabilitation services shall be increased by
25    the addition of a $96 per day add-on.
26        Beginning July 1, 2020, the reimbursement for

 

 

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1    inpatient rehabilitation services shall be uniformly
2    increased so that the $96 per day add-on is increased by an
3    amount equal to the funds allocated in paragraph (2) of
4    subsection (b) of Section 5A-12.6, less the amount
5    allocated under paragraphs (8) and (9) of this subsection
6    and paragraphs (3) and (4) of subsection (b) multiplied by
7    0.9%.
8        Beginning July 1, 2022, the reimbursement for
9    inpatient rehabilitation services shall be uniformly
10    increased so that the $96 per day add-on as adjusted by the
11    July 1, 2020 increase, is increased by an amount equal to
12    the funds allocated in paragraph (3) of subsection (b) of
13    Section 5A-12.6, less the amount allocated under
14    paragraphs (8) and (9) of this subsection and paragraphs
15    (3) and (4) of subsection (b) multiplied by 0.9%.
16        Beginning July 1, 2023, the reimbursement for
17    inpatient rehabilitation services shall be uniformly
18    increased so that the $96 per day add-on as adjusted by the
19    July 1, 2022 increase, is increased by an amount equal to
20    the funds allocated in paragraph (4) of subsection (b) of
21    Section 5A-12.6, less the amount allocated under
22    paragraphs (8) and (9) of this subsection and paragraphs
23    (3) and (4) of subsection (b) multiplied by 0.9%.
24    (b) Outpatient hospital services. Effective for dates of
25service on and after July 1, 2014, reimbursement for outpatient
26services shall utilize the Enhanced Ambulatory Procedure

 

 

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1Grouping (EAPG E-APG) software, version 3.7 distributed by 3MTM
2Health Information System.
3        (1) The Department shall establish Medicaid weighting
4    factors to be used in the reimbursement system established
5    under this subsection. The initial weighting factors shall
6    be the weighting factors as published by 3M Health
7    Information System, associated with Version 3.7.
8        (2) The Department shall establish service specific
9    statewide-standardized amounts to be used in the
10    reimbursement system.
11            (A) The initial statewide standardized amounts,
12        with the labor portion adjusted by the Calendar Year
13        2013 Medicare Outpatient Prospective Payment System
14        wage index with reclassifications, shall be published
15        by the Department on its website no later than 10
16        calendar days prior to their effective date.
17            (B) The Department shall establish adjustments to
18        the statewide-standardized amounts for each Critical
19        Access Hospital, as designated by the Department of
20        Public Health in accordance with 42 CFR 485, Subpart F.
21        For outpatient services provided on or before June 30,
22        2018, the The EAPG standardized amounts are determined
23        separately for each critical access hospital such that
24        simulated EAPG payments using outpatient base period
25        paid claim data plus payments under Section 5A-12.4 of
26        this Code net of the associated tax costs are equal to

 

 

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1        the estimated costs of outpatient base period claims
2        data with a rate year cost inflation factor applied.
3        (3) In addition to the statewide-standardized amounts,
4    the Department shall develop adjusters to adjust the rate
5    of reimbursement for critical Medicaid hospital outpatient
6    providers or services, including outpatient high volume or
7    safety-net hospitals. Beginning July 1, 2018, the
8    outpatient high volume adjustor shall be increased to
9    increase annual expenditures associated with this adjustor
10    by $79,200,000, based on the State Fiscal Year 2015 base
11    year data and this adjustor shall apply to public
12    hospitals, except for large public hospitals, as defined
13    under 89 Ill. Adm. Code 148.25(a).
14        (4) Beginning July 1, 2018, in addition to the
15    statewide standardized amounts, the Department shall make
16    an add-on payment for outpatient expensive devices and
17    drugs. This add-on payment shall at least apply to claim
18    lines that: (i) are assigned with one of the following
19    EAPGs: 490, 1001 to 1020, and coded with one of the
20    following revenue codes: 0274 to 0276, 0278; or (ii) are
21    assigned with one of the following EAPGs: 430 to 441, 443,
22    444, 460 to 465, 495, 496, 1090. The add-on payment shall
23    be calculated as follows: the claim line's covered charges
24    multiplied by the hospital's total acute cost to charge
25    ratio, less the claim line's EAPG payment plus $1,000,
26    multiplied by 0.8.

 

 

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1        (5) Beginning July 1, 2018, the statewide-standardized
2    amounts for outpatient services shall be increased by a
3    uniform percentage so that base claims projected
4    reimbursement is increased by an amount equal to no less
5    than the funds allocated in paragraph (1) of subsection (b)
6    of Section 5A-12.6, less the amount allocated under
7    paragraphs (8) and (9) of subsection (a) and paragraphs (3)
8    and (4) of this subsection multiplied by 46%. Beginning
9    July 1, 2020, the statewide-standardized amounts for
10    outpatient services shall be increased by a uniform
11    percentage so that base claims projected reimbursement is
12    increased by an amount equal to no less than the funds
13    allocated in paragraph (2) of subsection (b) of Section
14    5A-12.6, less the amount allocated under paragraphs (8) and
15    (9) of subsection (a) and paragraphs (3) and (4) of this
16    subsection multiplied by 46%. Beginning July 1, 2022, the
17    statewide-standardized amounts for outpatient services
18    shall be increased by a uniform percentage so that base
19    claims projected reimbursement is increased by an amount
20    equal to the funds allocated in paragraph (3) of subsection
21    (b) of Section 5A-12.6, less the amount allocated under
22    paragraphs (8) and (9) of subsection (a) and paragraphs (3)
23    and (4) of this subsection multiplied by 46%. Beginning
24    July 1, 2023, the statewide-standardized amounts for
25    outpatient services shall be increased by a uniform
26    percentage so that base claims projected reimbursement is

 

 

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1    increased by an amount equal to no less than the funds
2    allocated in paragraph (4) of subsection (b) of Section
3    5A-12.6, less the amount allocated under paragraphs (8) and
4    (9) of subsection (a) and paragraphs (3) and (4) of this
5    subsection multiplied by 46%.
6        (6) Effective for dates of service on or after July 1,
7    2018, the Department shall establish adjustments to the
8    statewide-standardized amounts for each Critical Access
9    Hospital, as designated by the Department of Public Health
10    in accordance with 42 CFR 485, Subpart F, such that each
11    Critical Access Hospital's standardized amount for
12    outpatient services shall be increased by the applicable
13    uniform percentage determined pursuant to paragraph (5) of
14    this subsection. It is the intent of the General Assembly
15    that the adjustments required under this paragraph (6) by
16    this amendatory Act of the 100th General Assembly shall be
17    applied retroactively to claims for dates of service
18    provided on or after July 1, 2018.
19        (7) Effective for dates of service on or after the
20    effective date of this amendatory Act of the 100th General
21    Assembly, the Department shall recalculate and implement
22    an updated statewide-standardized amount for outpatient
23    services provided by hospitals that are not Critical Access
24    Hospitals to reflect the applicable uniform percentage
25    determined pursuant to paragraph (5).
26            (1) Any recalculation to the

 

 

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1        statewide-standardized amounts for outpatient services
2        provided by hospitals that are not Critical Access
3        Hospitals shall be the amount necessary to achieve the
4        increase in the statewide-standardized amounts for
5        outpatient services increased by a uniform percentage,
6        so that base claims projected reimbursement is
7        increased by an amount equal to no less than the funds
8        allocated in paragraph (1) of subsection (b) of Section
9        5A-12.6, less the amount allocated under paragraphs
10        (8) and (9) of subsection (a) and paragraphs (3) and
11        (4) of this subsection, for all hospitals that are not
12        Critical Access Hospitals, multiplied by 46%.
13            (2) It is the intent of the General Assembly that
14        the recalculations required under this paragraph (7)
15        by this amendatory Act of the 100th General Assembly
16        shall be applied prospectively to claims for dates of
17        service provided on or after the effective date of this
18        amendatory Act of the 100th General Assembly and that
19        no recoupment or repayment by the Department or an MCO
20        of payments attributable to recalculation under this
21        paragraph (7), issued to the hospital for dates of
22        service on or after July 1, 2018 and before the
23        effective date of this amendatory Act of the 100th
24        General Assembly, shall be permitted.
25        (8) The Department shall ensure that all necessary
26    adjustments to the managed care organization capitation

 

 

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1    base rates necessitated by the adjustments under
2    subparagraph (6) or (7) of this subsection are completed
3    and applied retroactively in accordance with Section
4    5-30.8 of this Code within 90 days of the effective date of
5    this amendatory Act of the 100th General Assembly.
6    (c) In consultation with the hospital community, the
7Department is authorized to replace 89 Ill. Admin. Code 152.150
8as published in 38 Ill. Reg. 4980 through 4986 within 12 months
9of June 16, 2014 (the effective date of Public Act 98-651) this
10amendatory Act of the 98th General Assembly. If the Department
11does not replace these rules within 12 months of June 16, 2014
12(the effective date of Public Act 98-651) this amendatory Act
13of the 98th General Assembly, the rules in effect for 152.150
14as published in 38 Ill. Reg. 4980 through 4986 shall remain in
15effect until modified by rule by the Department. Nothing in
16this subsection shall be construed to mandate that the
17Department file a replacement rule.
18    (d) Transition period. There shall be a transition period
19to the reimbursement systems authorized under this Section that
20shall begin on the effective date of these systems and continue
21until June 30, 2018, unless extended by rule by the Department.
22To help provide an orderly and predictable transition to the
23new reimbursement systems and to preserve and enhance access to
24the hospital services during this transition, the Department
25shall allocate a transitional hospital access pool of at least
26$290,000,000 annually so that transitional hospital access

 

 

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1payments are made to hospitals.
2        (1) After the transition period, the Department may
3    begin incorporating the transitional hospital access pool
4    into the base rate structure; however, the transitional
5    hospital access payments in effect on June 30, 2018 shall
6    continue to be paid, if continued under Section 5A-16.
7        (2) After the transition period, if the Department
8    reduces payments from the transitional hospital access
9    pool, it shall increase base rates, develop new adjustors,
10    adjust current adjustors, develop new hospital access
11    payments based on updated information, or any combination
12    thereof by an amount equal to the decreases proposed in the
13    transitional hospital access pool payments, ensuring that
14    the entire transitional hospital access pool amount shall
15    continue to be used for hospital payments.
16    (d-5) Hospital transformation program. The Department, in
17conjunction with the Hospital Transformation Review Committee
18created under subsection (d-5), shall develop a hospital
19transformation program to provide financial assistance to
20hospitals in transforming their services and care models to
21better align with the needs of the communities they serve. The
22payments authorized in this Section shall be subject to
23approval by the federal government.
24        (1) Phase 1. In State fiscal years 2019 through 2020,
25    the Department shall allocate funds from the transitional
26    access hospital pool to create a hospital transformation

 

 

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1    pool of at least $262,906,870 annually and make hospital
2    transformation payments to hospitals. Subject to Section
3    5A-16, in State fiscal years 2019 and 2020, an Illinois
4    hospital that received either a transitional hospital
5    access payment under subsection (d) or a supplemental
6    payment under subsection (f) of this Section in State
7    fiscal year 2018, shall receive a hospital transformation
8    payment as follows:
9            (A) If the hospital's Rate Year 2017 Medicaid
10        inpatient utilization rate is equal to or greater than
11        45%, the hospital transformation payment shall be
12        equal to 100% of the sum of its transitional hospital
13        access payment authorized under subsection (d) and any
14        supplemental payment authorized under subsection (f).
15            (B) If the hospital's Rate Year 2017 Medicaid
16        inpatient utilization rate is equal to or greater than
17        25% but less than 45%, the hospital transformation
18        payment shall be equal to 75% of the sum of its
19        transitional hospital access payment authorized under
20        subsection (d) and any supplemental payment authorized
21        under subsection (f).
22            (C) If the hospital's Rate Year 2017 Medicaid
23        inpatient utilization rate is less than 25%, the
24        hospital transformation payment shall be equal to 50%
25        of the sum of its transitional hospital access payment
26        authorized under subsection (d) and any supplemental

 

 

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1        payment authorized under subsection (f).
2        (2) Phase 2. During State fiscal years 2021 and 2022,
3    the Department shall allocate funds from the transitional
4    access hospital pool to create a hospital transformation
5    pool annually and make hospital transformation payments to
6    hospitals participating in the transformation program. Any
7    hospital may seek transformation funding in Phase 2. Any
8    hospital that seeks transformation funding in Phase 2 to
9    update or repurpose the hospital's physical structure to
10    transition to a new delivery model, must submit to the
11    Department in writing a transformation plan, based on the
12    Department's guidelines, that describes the desired
13    delivery model with projections of patient volumes by
14    service lines and projected revenues, expenses, and net
15    income that correspond to the new delivery model. In Phase
16    2, subject to the approval of rules, the Department may use
17    the hospital transformation pool to increase base rates,
18    develop new adjustors, adjust current adjustors, or
19    develop new access payments in order to support and
20    incentivize hospitals to pursue such transformation. In
21    developing such methodologies, the Department shall ensure
22    that the entire hospital transformation pool continues to
23    be expended to ensure access to hospital services or to
24    support organizations that had received hospital
25    transformation payments under this Section.
26            (A) Any hospital participating in the hospital

 

 

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1        transformation program shall provide an opportunity
2        for public input by local community groups, hospital
3        workers, and healthcare professionals and assist in
4        facilitating discussions about any transformations or
5        changes to the hospital.
6            (B) As provided in paragraph (9) of Section 3 of
7        the Illinois Health Facilities Planning Act, any
8        hospital participating in the transformation program
9        may be excluded from the requirements of the Illinois
10        Health Facilities Planning Act for those projects
11        related to the hospital's transformation. To be
12        eligible, the hospital must submit to the Health
13        Facilities and Services Review Board certification
14        from the Department, approved by the Hospital
15        Transformation Review Committee, that the project is a
16        part of the hospital's transformation.
17            (C) As provided in subsection (a-20) of Section
18        32.5 of the Emergency Medical Services (EMS) Systems
19        Act, a hospital that received hospital transformation
20        payments under this Section may convert to a
21        freestanding emergency center. To be eligible for such
22        a conversion, the hospital must submit to the
23        Department of Public Health certification from the
24        Department, approved by the Hospital Transformation
25        Review Committee, that the project is a part of the
26        hospital's transformation.

 

 

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1        (3) By April 1, 2019 Within 6 months after the
2    effective date of this amendatory Act of the 100th General
3    Assembly, the Department, in conjunction with the Hospital
4    Transformation Review Committee, shall develop and file as
5    an administrative rule with the Secretary of State adopt,
6    by rule, the goals, objectives, policies, standards,
7    payment models, or criteria to be applied in Phase 2 of the
8    program to allocate the hospital transformation funds. The
9    goals, objectives, and policies to be considered may
10    include, but are not limited to, achieving unmet needs of a
11    community that a hospital serves such as behavioral health
12    services, outpatient services, or drug rehabilitation
13    services; attaining certain quality or patient safety
14    benchmarks for health care services; or improving the
15    coordination, effectiveness, and efficiency of care
16    delivery. Notwithstanding any other provision of law, any
17    rule adopted in accordance with this subsection (d-5) may
18    be submitted to the Joint Committee on Administrative Rules
19    for approval only if the rule has first been approved by 9
20    of the 14 members of the Hospital Transformation Review
21    Committee.
22        (4) Hospital Transformation Review Committee. There is
23    created the Hospital Transformation Review Committee. The
24    Committee shall consist of 14 members. No later than 30
25    days after March 12, 2018 (the effective date of Public Act
26    100-581) this amendatory Act of the 100th General Assembly,

 

 

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1    the 4 legislative leaders shall each appoint 3 members; the
2    Governor shall appoint the Director of Healthcare and
3    Family Services, or his or her designee, as a member; and
4    the Director of Healthcare and Family Services shall
5    appoint one member. Any vacancy shall be filled by the
6    applicable appointing authority within 15 calendar days.
7    The members of the Committee shall select a Chair and a
8    Vice-Chair from among its members, provided that the Chair
9    and Vice-Chair cannot be appointed by the same appointing
10    authority and must be from different political parties. The
11    Chair shall have the authority to establish a meeting
12    schedule and convene meetings of the Committee, and the
13    Vice-Chair shall have the authority to convene meetings in
14    the absence of the Chair. The Committee may establish its
15    own rules with respect to meeting schedule, notice of
16    meetings, and the disclosure of documents; however, the
17    Committee shall not have the power to subpoena individuals
18    or documents and any rules must be approved by 9 of the 14
19    members. The Committee shall perform the functions
20    described in this Section and advise and consult with the
21    Director in the administration of this Section. In addition
22    to reviewing and approving the policies, procedures, and
23    rules for the hospital transformation program, the
24    Committee shall consider and make recommendations related
25    to qualifying criteria and payment methodologies related
26    to safety-net hospitals and children's hospitals. Members

 

 

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1    of the Committee appointed by the legislative leaders shall
2    be subject to the jurisdiction of the Legislative Ethics
3    Commission, not the Executive Ethics Commission, and all
4    requests under the Freedom of Information Act shall be
5    directed to the applicable Freedom of Information officer
6    for the General Assembly. The Department shall provide
7    operational support to the Committee as necessary. The
8    Committee is dissolved on April 1, 2019.
9    (e) Beginning 36 months after initial implementation, the
10Department shall update the reimbursement components in
11subsections (a) and (b), including standardized amounts and
12weighting factors, and at least triennially and no more
13frequently than annually thereafter. The Department shall
14publish these updates on its website no later than 30 calendar
15days prior to their effective date.
16    (f) Continuation of supplemental payments. Any
17supplemental payments authorized under Illinois Administrative
18Code 148 effective January 1, 2014 and that continue during the
19period of July 1, 2014 through December 31, 2014 shall remain
20in effect as long as the assessment imposed by Section 5A-2
21that is in effect on December 31, 2017 remains in effect.
22    (g) Notwithstanding subsections (a) through (f) of this
23Section and notwithstanding the changes authorized under
24Section 5-5b.1, any updates to the system shall not result in
25any diminishment of the overall effective rates of
26reimbursement as of the implementation date of the new system

 

 

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1(July 1, 2014). These updates shall not preclude variations in
2any individual component of the system or hospital rate
3variations. Nothing in this Section shall prohibit the
4Department from increasing the rates of reimbursement or
5developing payments to ensure access to hospital services.
6Nothing in this Section shall be construed to guarantee a
7minimum amount of spending in the aggregate or per hospital as
8spending may be impacted by factors including but not limited
9to the number of individuals in the medical assistance program
10and the severity of illness of the individuals.
11    (h) The Department shall have the authority to modify by
12rulemaking any changes to the rates or methodologies in this
13Section as required by the federal government to obtain federal
14financial participation for expenditures made under this
15Section.
16    (i) Except for subsections (g) and (h) of this Section, the
17Department shall, pursuant to subsection (c) of Section 5-40 of
18the Illinois Administrative Procedure Act, provide for
19presentation at the June 2014 hearing of the Joint Committee on
20Administrative Rules (JCAR) additional written notice to JCAR
21of the following rules in order to commence the second notice
22period for the following rules: rules published in the Illinois
23Register, rule dated February 21, 2014 at 38 Ill. Reg. 4559
24(Medical Payment), 4628 (Specialized Health Care Delivery
25Systems), 4640 (Hospital Services), 4932 (Diagnostic Related
26Grouping (DRG) Prospective Payment System (PPS)), and 4977

 

 

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1(Hospital Reimbursement Changes), and published in the
2Illinois Register dated March 21, 2014 at 38 Ill. Reg. 6499
3(Specialized Health Care Delivery Systems) and 6505 (Hospital
4Services).
5    (j) Out-of-state hospitals. Beginning July 1, 2018, for
6purposes of determining for State fiscal years 2019 and 2020
7the hospitals eligible for the payments authorized under
8subsections (a) and (b) of this Section, the Department shall
9include out-of-state hospitals that are designated a Level I
10pediatric trauma center or a Level I trauma center by the
11Department of Public Health as of December 1, 2017.
12    (k) The Department shall notify each hospital and managed
13care organization, in writing, of the impact of the updates
14under this Section at least 30 calendar days prior to their
15effective date.
16(Source: P.A. 99-2, eff. 3-26-15; 100-581, eff. 3-12-18;
17revised 10-3-18.)
 
18    Section 97. Severability. The provisions of this Act are
19severable under Section 1.31 of the Statute on Statutes.
 
20    Section 99. Effective date. This Act takes effect upon
21becoming law.