(305 ILCS 5/14-8) (from Ch. 23, par. 14-8)
Sec. 14-8. Disbursements to Hospitals.
(a) For inpatient hospital services rendered on and after September 1,
1991, the Illinois Department shall reimburse
hospitals for inpatient services at an inpatient payment rate calculated for
each hospital based upon the Medicare Prospective Payment System as set forth
in Sections 1886(b), (d), (g), and (h) of the federal Social Security Act, and
the regulations, policies, and procedures promulgated thereunder, except as
modified by this Section. Payment rates for inpatient hospital services
rendered on or after September 1, 1991 and on or before September 30, 1992
shall be calculated using the Medicare Prospective Payment rates in effect on
September 1, 1991. Payment rates for inpatient hospital services rendered on
or after October 1, 1992 and on or before March 31, 1994 shall be calculated
using the Medicare Prospective Payment rates in effect on September 1, 1992.
Payment rates for inpatient hospital services rendered on or after April 1,
1994 shall be calculated using the Medicare Prospective Payment rates
(including the Medicare grouping methodology and weighting factors as adjusted
pursuant to paragraph (1) of this subsection) in effect 90 days prior to the
date of admission. For services rendered on or after July 1, 1995, the
reimbursement methodology implemented under this subsection shall not include
those costs referred to in Sections 1886(d)(5)(B) and 1886(h) of the Social
Security Act. The additional payment amounts required under Section
1886(d)(5)(F) of the Social Security Act, for hospitals serving a
disproportionate share of low-income or indigent patients, are not required
under this Section. For hospital inpatient services rendered on or after July
1, 1995 and on or before June 30, 2014, the Illinois Department shall
reimburse hospitals using the relative weighting factors and the base payment
rates calculated for each hospital that were in effect on June 30, 1995, less
the portion of such rates attributed by the Illinois Department to the cost of
medical education.
(1) The weighting factors established under Section |
| 1886(d)(4) of the Social Security Act shall not be used in the reimbursement system established under this Section. Rather, the Illinois Department shall establish by rule Medicaid weighting factors to be used in the reimbursement system established under this Section.
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(2) The Illinois Department shall define by rule
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| those hospitals or distinct parts of hospitals that shall be exempt from the reimbursement system established under this Section. In defining such hospitals, the Illinois Department shall take into consideration those hospitals exempt from the Medicare Prospective Payment System as of September 1, 1991. For hospitals defined as exempt under this subsection, the Illinois Department shall by rule establish a reimbursement system for payment of inpatient hospital services rendered on and after September 1, 1991. For all hospitals that are children's hospitals as defined in Section 5-5.02 of this Code, the reimbursement methodology shall, through June 30, 1992, net of all applicable fees, at least equal each children's hospital 1990 ICARE payment rates, indexed to the current year by application of the DRI hospital cost index from 1989 to the year in which payments are made. Excepting county providers as defined in Article XV of this Code, hospitals licensed under the University of Illinois Hospital Act, and facilities operated by the Department of Mental Health and Developmental Disabilities (or its successor, the Department of Human Services) for hospital inpatient services rendered on or after July 1, 1995 and on or before June 30, 2014, the Illinois Department shall reimburse children's hospitals, as defined in 89 Illinois Administrative Code Section 149.50(c)(3), at the rates in effect on June 30, 1995, and shall reimburse all other hospitals at the rates in effect on June 30, 1995, less the portion of such rates attributed by the Illinois Department to the cost of medical education. For inpatient hospital services provided on or after August 1, 1998, the Illinois Department may establish by rule a means of adjusting the rates of children's hospitals, as defined in 89 Illinois Administrative Code Section 149.50(c)(3), that did not meet that definition on June 30, 1995, in order for the inpatient hospital rates of such hospitals to take into account the average inpatient hospital rates of those children's hospitals that did meet the definition of children's hospitals on June 30, 1995.
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(3) (Blank).
(4) Notwithstanding any other provision of this
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| Section, hospitals that on August 31, 1991, have a contract with the Illinois Department under Section 3-4 of the Illinois Health Finance Reform Act may elect to continue to be reimbursed at rates stated in such contracts for general and specialty care.
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(5) In addition to any payments made under this
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| subsection (a), the Illinois Department shall make the adjustment payments required by Section 5-5.02 of this Code; provided, that in the case of any hospital reimbursed under a per case methodology, the Illinois Department shall add an amount equal to the product of the hospital's average length of stay, less one day, multiplied by 20, for inpatient hospital services rendered on or after September 1, 1991 and on or before September 30, 1992.
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(b) (Blank).
(b-5) Excepting county providers as defined in Article XV of this Code,
hospitals licensed under the University of Illinois Hospital Act, and
facilities operated by the Illinois Department of Mental Health and
Developmental Disabilities (or its successor, the Department of Human
Services), for outpatient services rendered on or after July 1, 1995
and before July 1, 1998 the Illinois Department shall reimburse
children's hospitals, as defined in the Illinois Administrative Code
Section 149.50(c)(3), at the rates in effect on June 30, 1995, less that
portion of such rates attributed by the Illinois Department to the outpatient
indigent volume adjustment and shall reimburse all other hospitals at the rates
in effect on June 30, 1995, less the portions of such rates attributed by the
Illinois Department to the cost of medical education and attributed by the
Illinois Department to the outpatient indigent volume adjustment. For
outpatient services provided on or after July 1, 1998 and on or before June 30, 2014, reimbursement rates
shall be established by rule.
(c) In addition to any other payments under this Code, the Illinois
Department shall develop a hospital disproportionate share reimbursement
methodology that, effective July 1, 1991, through September 30, 1992,
shall reimburse hospitals sufficiently to expend the fee monies described
in subsection (b) of Section 14-3 of this Code and the federal matching
funds received by the Illinois Department as a result of expenditures made
by the Illinois Department as required by this subsection (c) and Section
14-2 that are attributable to fee monies deposited in the Fund, less
amounts applied to adjustment payments under Section 5-5.02.
(d) Critical Care Access Payments.
(1) In addition to any other payments made under this
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| Code, the Illinois Department shall develop a reimbursement methodology that shall reimburse Critical Care Access Hospitals for the specialized services that qualify them as Critical Care Access Hospitals. No adjustment payments shall be made under this subsection on or after July 1, 1995.
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(2) "Critical Care Access Hospitals" includes, but is
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| not limited to, hospitals that meet at least one of the following criteria:
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(A) Hospitals located outside of a metropolitan
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| statistical area that are designated as Level II Perinatal Centers and that provide a disproportionate share of perinatal services to recipients; or
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(B) Hospitals that are designated as Level I
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| Trauma Centers (adult or pediatric) and certain Level II Trauma Centers as determined by the Illinois Department; or
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(C) Hospitals located outside of a metropolitan
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| statistical area and that provide a disproportionate share of obstetrical services to recipients.
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(e) Inpatient high volume adjustment. For hospital inpatient services,
effective with rate periods beginning on or after October 1, 1993, in
addition to rates paid for inpatient services by the Illinois Department, the
Illinois Department shall make adjustment payments for inpatient services
furnished by Medicaid high volume hospitals. The Illinois Department shall
establish by rule criteria for qualifying as a Medicaid high volume hospital
and shall establish by rule a reimbursement methodology for calculating these
adjustment payments to Medicaid high volume hospitals. No adjustment payment
shall be made under this subsection for services rendered on or after July 1,
1995.
(f) The Illinois Department shall modify its current rules governing
adjustment payments for targeted access, critical care access, and
uncompensated care to classify those adjustment payments as not being payments
to disproportionate share hospitals under Title XIX of the federal Social
Security Act. Rules adopted under this subsection shall not be effective with
respect to services rendered on or after July 1, 1995. The Illinois Department
has no obligation to adopt or implement any rules or make any payments under
this subsection for services rendered on or after July 1, 1995.
(f-5) The State recognizes that adjustment payments to hospitals providing
certain services or incurring certain costs may be necessary to assure that
recipients of medical assistance have adequate access to necessary medical
services. These adjustments include payments for teaching costs and
uncompensated care, trauma center payments, rehabilitation hospital payments,
perinatal center payments, obstetrical care payments, targeted access payments,
Medicaid high volume payments, and outpatient indigent volume payments. On or
before April 1, 1995, the Illinois Department shall issue recommendations
regarding (i) reimbursement mechanisms or adjustment payments to reflect these
costs and services, including methods by which the payments may be calculated
and the method by which the payments may be financed, and (ii) reimbursement
mechanisms or adjustment payments to reflect costs and services of federally
qualified health centers with respect to recipients of medical assistance.
(g) If one or more hospitals file suit in any court challenging any part of
this Article XIV, payments to hospitals under this Article XIV shall be made
only to the extent that sufficient monies are available in the Fund and only to
the extent that any monies in the Fund are not prohibited from disbursement
under any order of the court.
(h) Payments under the disbursement methodology described in this Section
are subject to approval by the federal government in an appropriate State plan
amendment.
(i) The Illinois Department may by rule establish criteria for and develop
methodologies for adjustment payments to hospitals participating under this
Article.
(j) Hospital Residing Long Term Care Services. In addition to any other
payments made under this Code, the Illinois Department may by rule establish
criteria and develop methodologies for payments to hospitals for Hospital
Residing Long Term Care Services.
(k) Critical Access Hospital outpatient payments. In addition to any other payments authorized under this Code, the Illinois Department shall reimburse critical access hospitals, as designated by the Illinois Department of Public Health in accordance with 42 CFR 485, Subpart F, for outpatient services at an amount that is no less than the cost of providing such services, based on Medicare cost principles. Payments under this subsection shall be subject to appropriation.
(l) On and after July 1, 2012, the Department shall reduce any rate of reimbursement for services or other payments or alter any methodologies authorized by this Code to reduce any rate of reimbursement for services or other payments in accordance with Section 5-5e.
(Source: P.A. 97-689, eff. 6-14-12; 98-463, eff. 8-16-13; 98-651, eff. 6-16-14.)
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(305 ILCS 5/14-11) Sec. 14-11. Hospital payment reform. (a) The Department may, by rule, implement the All Patient Refined Diagnosis Related Groups (APR-DRG) payment system for inpatient services provided on or after July 1, 2013, in a manner consistent with the actions authorized in this Section. (b) On or before October 1, 2012 and through June 30, 2013, the Department shall begin testing the APR-DRG system. During the testing period the Department shall process and price inpatient services using the APR-DRG system; however, actual payments for those inpatient services shall be made using the current reimbursement system. During the testing period, the Department, in collaboration with the statewide representative of hospitals, shall provide information and technical assistance to hospitals to encourage and facilitate their transition to the APR-DRG system. (c) The Department may, by rule, implement the Enhanced Ambulatory Procedure Grouping (EAPG) system for outpatient services provided on or after January 1, 2014, in a manner consistent with the actions authorized in this Section. On or before January 1, 2013 and through December 31, 2013, the Department shall begin testing the EAPG system. During the testing period the Department shall process and price outpatient services using the EAPG system; however, actual payments for those outpatient services shall be made using the current reimbursement system. During the testing period, the Department, in collaboration with the statewide representative of hospitals, shall provide information and technical assistance to hospitals to encourage and facilitate their transition to the EAPG system. (d) The Department in consultation with the current hospital technical advisory group shall review the test claims for inpatient and outpatient services at least monthly, including the estimated impact on hospitals, and, in developing the rules, policies, and procedures to implement the new payment systems, shall consider at least the following issues: (1) The use of national relative weights provided by |
| the vendor of the APR-DRG system, adjusted to reflect characteristics of the Illinois Medical Assistance population.
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(2) An updated outlier payment methodology based on
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| current data and consistent with the APR-DRG system.
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(3) The use of policy adjusters to enhance payments
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| to hospitals treating a high percentage of individuals covered by the Medical Assistance program and uninsured patients.
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(4) Reimbursement for inpatient specialty services
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| such as psychiatric, rehabilitation, and long-term acute care using updated per diem rates that account for service acuity.
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(5) The creation of one or more transition funding
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| pools to preserve access to care and to ensure financial stability as hospitals transition to the new payment system.
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(6) Whether, beginning July 1, 2014, some of the
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| static adjustment payments financed by General Revenue funds should be used as part of the base payment system, including as policy adjusters to recognize the additional costs of certain services, such as pediatric or neonatal, or providers, such as trauma centers, Critical Access Hospitals, or high Medicaid hospitals, or for services to uninsured patients.
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(e) The Department shall provide the association representing the majority of hospitals in Illinois, as the statewide representative of the hospital community, with a monthly file of claims adjudicated under the test system for the purpose of review and analysis as part of the collaboration between the State and the hospital community. The file shall consist of a de-identified extract compliant with the Health Insurance Portability and Accountability Act (HIPAA).
(f) The current hospital technical advisory group shall make recommendations for changes during the testing period and recommendations for changes prior to the effective dates of the new payment systems. The Department shall draft administrative rules to implement the new payment systems and provide them to the technical advisory group at least 90 days prior to the proposed effective dates of the new payment systems.
(g) The payments to hospitals financed by the current hospital assessment, authorized under Article V-A of this Code, are scheduled to sunset on June 30, 2014. The continuation of or revisions to the hospital assessment program shall take into consideration the impact on hospitals and access to care as a result of the changes to the hospital payment system.
(h) Beginning July 1, 2014, the Department may transition current General Revenue funded supplemental payments into the claims based system over a period of no less than 2 years from the implementation date of the new payment systems and no more than 4 years from the implementation date of the new payment systems, provided however that the Department may adopt, by rule, supplemental payments to help ensure access to care in a geographic area or to help ensure access to specialty services. For any supplemental payments that are adopted that are based on historic data, the data shall be no older than 3 years and the supplemental payment shall be effective for no longer than 2 years before requiring the data to be updated.
(i) Any payments authorized under 89 Illinois Administrative Code 148 set to expire in State fiscal year 2012 and that were paid out to hospitals in State fiscal year 2012 shall remain in effect as long as the assessment imposed by Section 5A-2 is in effect.
(j) Subsections (a) and (c) of this Section shall remain operative unless the Auditor General has reported that: (i) the Department has not undertaken the required actions listed in the report required by subsection (a) of Section 2-20 of the Illinois State Auditing Act; or (ii) the Department has failed to comply with the reporting requirements of Section 2-20 of the Illinois State Auditing Act.
(k) Subsections (a) and (c) of this Section shall not be operative until final federal approval by the Centers for Medicare and Medicaid Services of the U.S. Department of Health and Human Services and implementation of all of the payments and assessments in Article V-A in its form as of the effective date of this amendatory Act of the 97th General Assembly or as it may be amended.
(Source: P.A. 97-689, eff. 6-14-12.)
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