State of Illinois
91st General Assembly
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91_HB0733ham001

 










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 1                     AMENDMENT TO HOUSE BILL 733

 2        AMENDMENT NO.     .  Amend House Bill  733  by  replacing
 3    the title with the following:
 4        "AN  ACT concerning health care providers, amending named
 5    Acts."; and

 6    by replacing everything after the enacting  clause  with  the
 7    following:

 8        "Section  5.  The Illinois Health Facilities Planning Act
 9    is amended by  adding  Sections  13.5,  13.9,  13.10,  13.15,
10    13.20, 13.25, 13.30, and 13.35 as follows:

11        (20 ILCS 3960/13.5 new)
12        Sec.  13.5.  Health care provider cooperative agreements.
13    The General Assembly finds  that  the  goals  of  controlling
14    health  care costs and improving the quality of and access to
15    health care services will be significantly enhanced  by  some
16    cooperative  arrangements  involving  providers or purchasers
17    that would be prohibited by State and federal antitrust  laws
18    if   undertaken   without   governmental  involvement.   Both
19    currently and historically Illinois, other  states,  and  the
20    United  States  have determined that unrestricted marketplace
21    competition is unlikely to produce the optimum mix  of  cost,
 
                            -2-            LRB9103765DHmgam03
 1    access,  and  quality  which  can be achieved in health care.
 2    The purpose of Sections 13.5 through 13.35 is  to  create  an
 3    opportunity for the State to review proposed arrangements and
 4    to  substitute regulation for competition when an arrangement
 5    is likely to result in lower  costs,  or  greater  access  or
 6    improved   quality,   than   would  otherwise  occur  in  the
 7    competitive marketplace.  The General Assembly  intends  that
 8    approval  of  relationships  be  accompanied  by  appropriate
 9    conditions,  supervision,  and  regulation to protect against
10    private abuses of economic power, and that an arrangement  or
11    relationship  approved  by the State Board and accompanied by
12    appropriate conditions, supervision, and regulation shall not
13    be subject to State or federal antitrust liability.
14        The General Assembly finds that  the  market  for  health
15    care  services  is extremely diverse in Illinois.  Some parts
16    of Illinois are national  destinations  for  tertiary  health
17    care services and receive patients from throughout the United
18    States and the Western Hemisphere.  Other regions of Illinois
19    have  extraordinary  rates  of  outmigration,  with residents
20    travelling hundreds of miles, often out-of-state,  for  care.
21    Providing  health care close to home is medically useful to a
22    patient's recovery, because visits of  families  and  friends
23    can  improve  a patient's psycho-social capacity to cope with
24    disease.  Providing incentives to increase  quality  care  in
25    areas without it is desirable.

26        (20 ILCS 3960/13.9 new)
27        Sec. 13.9.  Regional application.
28        (a)  The provisions of this law shall apply to any region
29    in Illinois where the following health care conditions exist:
30             (1)  in  any area of at least 25 contiguous counties
31        containing at least  20  facilities  licensed  under  the
32        Hospital Licensing Act; and
33             (2)  where  during  the  calendar year preceding the
 
                            -3-            LRB9103765DHmgam03
 1        effective date of this amendatory Act of the 91st General
 2        Assembly, no facility has been  approved  or  received  a
 3        permit  to establish neo-natal intensive care, open-heart
 4        surgery, level-one trauma, or organ transplantation; and
 5             (3)  where  at  least  50%  of  residents  receiving
 6        open-heart surgery procedures at Illinois hospitals  must
 7        travel at least 75 miles; and
 8             (4)  where  no  Illinois  university  with a medical
 9        school has a primary medical  school  campus  within  100
10        miles of the most distant point in the region.
11        (b)  For  purposes  of  this  law,  health care providers
12    shall include any institution or individual licensed  by  the
13    state  under: the Medical Practice Act of 1987; the Podiatric
14    Medical Practice  Act  of  1987;  the  Nursing  and  Advanced
15    Practice Nursing Act; the Illinois Optometric Practice Act of
16    1987;  the Respiratory Care Practice Act; the Illinois Dental
17    Practice Act; the Illinois Occupational Therapy Practice Act;
18    the Illinois Physical Therapy  Act;  the  Hospital  Licensing
19    Act;  the  Nursing  Home Care Act; or the Ambulatory Surgical
20    Treatment Center Act.

21        (20 ILCS 3960/13.10 new)
22        Sec. 13.10.  Health care provider cooperative agreements;
23    goals.  Acting by their boards  of  directors  or  boards  of
24    trustees  or  as individuals, 2 or more health care providers
25    may  enter  into  a  cooperative  agreement  concerning   the
26    allocation  of  health care equipment or health care services
27    among those health care providers.  The agreement  shall  not
28    involve  price-fixing  or  predatory  pricing  and  shall  be
29    designed to achieve one or more of the following goals:
30             (1)  Reducing   health   care   costs  for  Illinois
31        consumers.
32             (2)  Improving access to  health  care  services  in
33        Illinois.
 
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 1             (3)  Improving   the  quality  of  patient  care  in
 2        Illinois.

 3        (20 ILCS 3960/13.15 new)
 4        Sec. 13.15.  Health care provider cooperative agreements;
 5    approval.
 6        (a)  No  cooperative  agreement   between   health   care
 7    providers  implemented  without first obtaining approval from
 8    the State Board as provided in this Section shall be eligible
 9    for any protection or immunity created by Section 13.30.
10        (b)  Health  care  providers  desiring  to  implement   a
11    cooperative  agreement  authorized  under  Section  13.10 may
12    apply to the State  Board  for  approval  of  the  agreement.
13    Applications  for  approval  shall be in a form prescribed by
14    the State Board but shall contain at least the following:
15             (1)  A copy of the proposed agreement.
16             (2)  An implementation plan that states how and when
17        the cooperative action identified in the  agreement  will
18        meet one or more of the goals specified in Section 13.10.
19        Each application shall be accompanied by a fee determined
20        by  the State Board, but in an amount sufficient to cover
21        the cost of  processing  applications  and  the  cost  of
22        periodic  reviews  of  the  implementation of cooperative
23        agreements under Section 13.20.
24        (c)  The State Board shall adopt rules for the  operation
25    of  this Act under the Illinois Administrative Procedure Act.
26    The General Assembly  finds  that  the  current  health  care
27    situation  constitutes  an  emergency  for  purposes  of  the
28    Illinois  Administrative Procedure Act.  Therefore, the State
29    Board may implement the provisions of  Section  13.5  through
30    13.30    by   emergency   rulemaking   under   the   Illinois
31    Administrative Procedure Act.
32        (d)  The  rules  shall  require  applicants  to   provide
33    substantial  evidence  in  the application demonstrating that
 
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 1    quality cost or access improvements cannot be accomplished by
 2    the applicants without the agreement.
 3        (e)  Upon receiving a staff review  as  provided  by  the
 4    rules,  the  State Board may approve an agreement if it finds
 5    by substantial evidence that its implementation will lead  to
 6    the improvements in cost, access, or quality described in the
 7    application,  that  these improvements are likely to outweigh
 8    any probable negative results,  and  that  predatory  pricing
 9    will not occur.
10        (f)  The  State  Board  may  condition  its  approval  of
11    cooperative  agreements  with  terms  it  finds  necessary to
12    protect consumers  from  predatory  pricing  or  insufficient
13    competition.

14        (20 ILCS 3960/13.20 new)
15        Sec.  13.20. Health care provider cooperative agreements;
16    periodic review. The  State  Board  shall  require  from  the
17    parties  to a cooperative agreement periodic progress reports
18    concerning the implementation of the agreement.

19        (20 ILCS 3960/13.25 new)
20        Sec. 13.25. Health care provider cooperative  agreements;
21    rescinding approval. If the State Board finds that any of the
22    following  circumstances  exist,  it  may  issue  a  decision
23    rescinding its approval of a hospital cooperative agreement:
24             (1)  The  parties  to  the  agreement fail to submit
25        periodic progress reports requested by the State Board;
26             (2)  Materially misleading information was submitted
27        in the application;
28             (3)  The  parties  have  failed  to  implement   the
29        agreement with due diligence;
30             (4)  The  agreement  has  failed  to  accomplish its
31        purposes as described in the application; or
32             (5)  The State Board has subsequently found by clear
 
                            -6-            LRB9103765DHmgam03
 1        and   convincing   evidence   that    negative    results
 2        substantially outweigh benefits.

 3        (20 ILCS 3960/13.30 new)
 4        Sec.  13.30. Health care provider cooperative agreements;
 5    antitrust exception.
 6        (a)  Neither this subsection nor any other  provision  of
 7    this  Act  is  intended  to  confer,  and  does  not  confer,
 8    authority   to  engage  in  agreements,  tacit,  implied,  or
 9    express, which are not  submitted  to  the  State  Board  for
10    approval  if  those  agreements  are in violation of State or
11    federal  antitrust  laws.   Conduct  seemingly  pursuant   to
12    provisions  of this law done without the good faith intention
13    to accomplish an agreement approved by the State Board is not
14    entitled to the protections and immunities of Section 13.30.
15        (b)  It is  the  intent  of  Section  13.5  through  this
16    Section  to  require  the  State, through the State Board, to
17    provide direction, supervision, and control over  cooperative
18    agreements  approved  under  Section  13.15.   To achieve the
19    goals specified  in  Section  13.10,  this  State  direction,
20    supervision, and control will provide immunity from any civil
21    or  criminal  liability  under the Illinois Antitrust Act and
22    State-action immunity under federal  antitrust  laws  to  (i)
23    health  care  providers,  their  governing board members, and
24    their officers, agents, and  employees  who  take  authorized
25    actions  to  implement a cooperative agreement approved under
26    Section 13.15 and (ii) health care providers' governing board
27    members  who  participate  in  discussions  or   negotiations
28    concerning  the allocation of health care equipment or health
29    care services as authorized under Section 13.10.

30        (20 ILCS 3960/13.35 new)
31        Sec.   13.35.  Health   care    providers'    cooperative
32    agreements;  Attorney  General  action.   Nothing in Sections
 
                            -7-            LRB9103765DHmgam03
 1    13.5 through 13.30 shall limit the authority of the  Attorney
 2    General  to  initiate  an  action  to  enforce  the  civil or
 3    criminal liability provisions of the Illinois  Antitrust  Act
 4    if  the  Attorney  General  determines  that  a  health  care
 5    provider,   the  members  of  its  governing  board,  or  its
 6    officers, agents, or employees have exceeded the scope of the
 7    actions authorized under those Sections.

 8        Section 10.  The Illinois Antitrust  Act  is  amended  by
 9    changing Section 5 as follows:

10        (740 ILCS 10/5) (from Ch. 38, par. 60-5)
11        Sec.  5.  No provisions of this Act shall be construed to
12    make illegal:
13        (1)  the activities  of  any  labor  organization  or  of
14    individual members thereof which are directed solely to labor
15    objectives  which are legitimate under the laws of either the
16    State of Illinois or the United States;
17        (2)  the activities of any agricultural or  horticultural
18    cooperative    organization,    whether    incorporated    or
19    unincorporated,  or  of individual members thereof, which are
20    directed   solely   to   objectives   of   such   cooperative
21    organizations which are legitimate under the laws  of  either
22    the State of Illinois or the United States;
23        (3)  the  activities of any public utility, as defined in
24    Section 3-105 of the Public Utilities Act to the extent  that
25    such  activities  are  subject  to  a clearly articulated and
26    affirmatively expressed State policy to  replace  competition
27    with regulation, where the conduct to be exempted is actively
28    supervised by the State itself;
29        (4)  The  activities  of a telecommunications carrier, as
30    defined in Section 13-202 of the Public Utilities Act, to the
31    extent  those  activities  relate   to   the   provision   of
32    noncompetitive  telecommunications  services under the Public
 
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 1    Utilities Act and are subject  to  the  jurisdiction  of  the
 2    Illinois   Commerce   Commission  or  to  the  activities  of
 3    telephone mutual concerns referred to in  Section  13-202  of
 4    the  Public  Utilities  Act  to  the  extent those activities
 5    relate to the provision and maintenance of telephone  service
 6    to owners and customers;
 7        (5)  the  activities  (including, but not limited to, the
 8    making of or participating in  joint  underwriting  or  joint
 9    reinsurance  arrangement)  of  any  insurer, insurance agent,
10    insurance broker, independent insurance  adjuster  or  rating
11    organization  to  the extent that such activities are subject
12    to regulation by the Director  of  Insurance  of  this  State
13    under,  or  are permitted or are authorized by, the Insurance
14    Code or any other law of this State;
15        (6)  the  religious  and  charitable  activities  of  any
16    not-for-profit corporation, trust or organization established
17    exclusively for religious or charitable purposes, or for both
18    purposes;
19        (7)  the activities  of  any  not-for-profit  corporation
20    organized  to  provide  telephone  service  on  a  mutual  or
21    co-operative  basis  or  electrification  on  a  co-operative
22    basis,  to the extent such activities relate to the marketing
23    and distribution of telephone or electrical service to owners
24    and customers;
25        (8)  the activities engaged in by securities dealers  who
26    are  (i) licensed by the State of Illinois or (ii) members of
27    the National  Association  of  Securities  Dealers  or  (iii)
28    members  of  any National Securities Exchange registered with
29    the Securities and Exchange Commission under  the  Securities
30    Exchange  Act  of  1934,  as  amended, in the course of their
31    business  of  offering,  selling,  buying  and  selling,   or
32    otherwise  trading  in  or underwriting securities, as agent,
33    broker,  or  principal,  and  activities  of   any   National
34    Securities    Exchange    so    registered,   including   the
 
                            -9-            LRB9103765DHmgam03
 1    establishment of commission rates and schedules of charges;
 2        (9)  the activities of any board of trade designated as a
 3    "contract market" by the  Secretary  of  Agriculture  of  the
 4    United States pursuant to Section 5 of the Commodity Exchange
 5    Act, as amended;
 6        (10)  the  activities of any motor carrier, rail carrier,
 7    or common carrier by  pipeline,  as  defined  in  the  Common
 8    Carrier  by  Pipeline Law of the Public Utilities Act, to the
 9    extent that such activities are permitted  or  authorized  by
10    the Act or are subject to regulation by the Illinois Commerce
11    Commission;
12        (11)  the activities of any state or national bank to the
13    extent  that  such  activities are regulated or supervised by
14    officers of the state or federal government under the banking
15    laws of this State or the United States;
16        (12)  the activities of any state or federal savings  and
17    loan  association  to  the  extent  that  such activities are
18    regulated or supervised by officers of the state  or  federal
19    government  under  the savings and loan laws of this State or
20    the United States;
21        (13)  the activities  of  any  bona  fide  not-for-profit
22    association, society or board, of attorneys, practitioners of
23    medicine,  architects,  engineers,  land  surveyors  or  real
24    estate  brokers  licensed  and  regulated by an agency of the
25    State of Illinois, in  recommending  schedules  of  suggested
26    fees,  rates  or  commissions for use solely as guidelines in
27    determining charges for professional and technical services;
28        (14)  Conduct involving trade  or  commerce  (other  than
29    import trade or import commerce) with foreign nations unless:
30             (a)  such  conduct  has  a  direct, substantial, and
31        reasonably foreseeable effect:
32                  (i)  on trade or commerce which is not trade or
33             commerce with foreign nations, or on import trade or
34             import commerce with foreign nations; or
 
                            -10-           LRB9103765DHmgam03
 1                  (ii)  on export trade or export  commerce  with
 2             foreign nations of a person engaged in such trade or
 3             commerce in the United States; and
 4             (b)  such  effect  gives  rise  to a claim under the
 5        provisions of this Act, other than this subsection (14).
 6             (c)  If this Act applies to conduct referred  to  in
 7        this  subsection  (14)  only because of the provisions of
 8        paragraph (a)(ii), then this  Act  shall  apply  to  such
 9        conduct  only for injury to export business in the United
10        States which affects this State; or
11        (15)  the activities of a unit  of  local  government  or
12    school  district  and the activities of the employees, agents
13    and officers of a unit of local government or school district
14    ; or
15        (16)  the activities of a health care  provider  and  the
16    activities  of  its governing board members and its officers,
17    agents, and employees in  discussing,  negotiating,  entering
18    into,  or implementing a cooperative agreement concerning the
19    allocation of health care equipment or health  care  services
20    resulting  in  one  or  more proposals or agreements that are
21    approved by the Board, or if submitted  to  the  Board  might
22    reasonably  have  been approved, as authorized under Sections
23    13.5 through 13.35 of the Illinois Health Facilities Planning
24    Act.
25    (Source: P.A. 90-185, eff. 7-23-97; 90-561, eff. 12-16-97.)".

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