Section 140.76  Hospital Managed Care Utilization Review Standardization and Transparency Practices

a)         Definitions. As used in this Section:

"Administrative days" means hospital long term care days as defined in 89 Ill. Adm. Code 148.50(c)(1).

"Adverse benefit determination" means the denial or limited authorization of a service authorization request for coverage of a health care service, including determinations based on the type or level of service, requirements for medical necessity, appropriateness, setting, or effectiveness of a covered benefit; the reduction, suspension, or termination of a previously authorized health care service; or the denial, in whole or in part, of payment for a service (unrelated to whether the claim is submitted timely or properly coded).

"Enrollee" means any person who is eligible for medical assistance under the Public Aid Code, is not eligible for or enrolled in Medicare, and is enrolled in a managed care organization.

"Generally accepted standards of care" for a health care service means standards of care and clinical practice that are generally recognized by health care clinicians practicing in relevant clinical specialties for the illness, injury, or condition or its symptoms and comorbidities. Valid, evidence-based sources reflecting generally accepted standards of care include peer-reviewed scientific studies and medical literature, recommendations of nonprofit health care provider professional associations and specialty societies, including, but not limited to, enrollee placement criteria and clinical practice guidelines, recommendations of federal government agencies, and drug labeling approved by the United States Food and Drug Administration.

"Health care service" means any medical or behavioral health service covered under the medical assistance program that is subject to review under a service authorization program, except for durable medical equipment as described in 89 Ill. Adm. Code 140.475 and pharmacy services as described in 89 Ill. Adm. Code 140.440. [305 ILCS 5/5-30.1(a)]

"Managed care organization" or "MCO" means any entity that contracts with the Department to provide health care services to enrollees where payment for services is made on a capitated basis. For purposes of this Section, MCOs shall also mean an MCO's utilization review department, a peer review organization, a quality improvement organization, or a utilization review organization (URO) that contracts with an MCO to administer a service authorization program and make service authorization determinations. For purposes of this Section, MCO does not mean an entity that contracts with the Department to provide health care services to Medicare-eligible enrollees where payment is made on a capitated basis.

"Medically necessary" or "medical necessity" means that a service addresses the specific needs of an enrollee for the purpose of:

screening, preventing, diagnosing, managing, or treating an illness, injury, or condition and disorder that results in health impairments and/or disability or its symptoms and comorbidities;

minimizing the progression of an illness, injury, or condition or its symptoms and comorbidities;

achieving age-appropriate growth and development;

attaining, maintaining, or regaining functional capacity; and

is provided in a manner that is:

in accordance with generally accepted standards of care;

clinically appropriate in terms of type, frequency, extent, site, and duration; and

not primarily for the economic benefit of the MCO or for the convenience of the enrollee or provider.

"Provider" means a facility or individual who is enrolled in the medical assistance program and licensed or otherwise authorized to order, prescribe, refer, or render health care services in this State.

"Service authorization determination" means a decision made by a service authorization program in advance of, concurrent to, or after the provision of a health care service to approve, change the level of care, partially deny, deny, or otherwise limit coverage and reimbursement for a health care service upon review of a service authorization request. [305 ILCS 5/5-30.1(a)]

"Service authorization program" means any utilization review, utilization management, peer review, quality review, or other medical management activity conducted by an MCO including but not limited to, prior authorization, prior approval, pre-certification, concurrent review, retrospective review, or certification of admission, of health care services provided in an inpatient or outpatient hospital setting. [305 ILCS 5/5-30.1(a)]  Unless otherwise specifically stated in this Section, "inpatient hospital setting" means as defined in 89 Ill. Adm. Code 148.25 (b)(1). "Outpatient hospital setting" means as defined in 89 Ill. Adm. Code 148.25 (b)(2).

"Service authorization request" means a request submitted by a provider to a service authorization program for a service authorization determination.

b)         This Section is effective for dates of service or admission on and after July 1, 2025, except for subsection (d) which shall be effective September 2, 2025.

c)         An MCO shall provide documents to the Department showing compliance with this Section as requested by the Department. The MCO shall provide all documents deemed necessary by the Department and within the timeframes requested by the Department. Nothing in this Section shall be construed to alleviate each MCO's obligations to notify providers of changes in policies and procedures as required by the Department in its contracts with the MCOs. Where the MCO contract language is inconsistent or in conflict with this Section, the MCO shall follow the requirements set forth in this Section.

d)         Publication Guidelines for Hospital Service Authorization Programs.

1)         Each MCO shall clearly publish on the home page of its public-facing website or provide a link on the home page to policies and procedures specific to Illinois for its service authorization programs. The website must be readily accessible to enrollees, in-network providers and out-of-network providers, and members of the public without requiring an individual to create any account or enter any credentials to access it. The policies and procedures shall be conspicuously posted on the website, detailed, written in easily understandable language, and readily available to the provider at the point of care.

2)         The website shall minimally include all the following:

A)        A complete list of health care services included in each service authorization program.

B)        For each health care service referenced in subsection (d)(2)(A), the MCO must:

i)          Categorize the health care service by in-network and out-of-network.

ii)         Categorize the health care service by type of service authorization program.

iii)        Include all MCO-specific payment and clinical review criteria, guidelines, and policies that are used instead of or to supplement nationally recognized decision support criteria.

iv)        Include any proprietary, nationally recognized decision support criteria on its secure provider portal. 

v)         Include a list of commonly used service authorization program terms and their definitions, as approved by the Department.

vi)        Identify the date the service authorization program requirement became effective in Illinois; the date the requirement was listed on the MCO's Illinois-specific website; the effective date of any removal, termination, or revision of service authorization program requirements; and a summary of and rationale for the terminations, removals, and revisions.

C)        Policies and procedures for requesting approval of administrative days.

D)        A clear outline of the process for a provider to request an appeal of an adverse benefit determination on behalf of an enrollee, including all timelines and required forms.

E)        A clear outline of the process for an enrollee, or provider on behalf of an enrollee, to request a review by an external independent entity of an adverse benefit determination, except for Home and Community-Based Services (HCBS) waiver service determinations.

F)         Access to standard electronic service authorization requests.

G)        If an MCO intends either to implement a new requirement or restrict or amend an existing requirement, the MCO shall update its website and provide contracted providers written notice no less than 60 days prior to implementation. The written notice may be provided in an electronic format, including email or facsimile, if the provider has agreed in advance to receive notices electronically.

e)         Procedures Covered in the Inpatient Hospital Setting.

1)         This subsection (e) shall not apply to behavioral health and substance use disorder health care services and health care services rendered in "psychiatric hospitals" defined in 89 Ill. Adm. Code 148.25 (d)(1); "rehabilitation hospitals" defined in 89 Ill. Adm. Code 148.25 (d)(2); and "long-term acute care hospitals" defined in 89 Ill. Adm. Code 148.25 (d)(4). (See 215 ILCS 5/532(e), 370c and 370c.1)

2)         For a health care service listed on the HFS Inpatient Only (IPO) list, as published by the Department on November 19, 2025, at https://hfs.illinois.gov/medicalproviders/cc/managedcareprogrampolicies.html, service authorization programs must approve the level of care as requested by the provider on the service authorization request and provide reimbursement under the applicable payment methodology as billed by the provider. In enrollee-specific cases where the provider determines that it is clinically appropriate and safe for such procedure to be performed in an outpatient hospital setting, and the provider bills the service as outpatient hospital level of care, the MCO must reimburse under the applicable outpatient hospital payment methodology.

f)          Hospital Administrative Forms Used in Enrollee Appeal Process.

1)         Each MCO must use the standard appointment of representative (AOR) form, both paper and electronic, as published by the Department. The MCOs shall allow the form to be signed prior to the rendering of the determination on the service authorization request for the health care service.

2)         MCOs shall allow alternatives to the standardized AOR form if the alternative is a separate and distinct document from the general consent to treatment form and contains all elements included in the standardized AOR form. Alternatives may include, but are not limited to, electronic medical record-generated forms.

g)         Limitations on Second or Subsequent Medical Necessity Reviews for Health Care Services in a Hospital Setting.

1)         Nothing in this Section supersedes or waives requirements regarding behavioral health and substance use disorder health care services necessary to comply with applicable federal or state law, federal regulation, federal grant requirements, any State or federal consent decrees or court orders, or applicable case law.

2)         Health care services authorized by a service authorization program that have been or are in the process of being rendered shall not be subject to a second or subsequent medical necessity review to revoke or further limit, condition, or restrict an approval received, or reduce or recover payment for a service which the service authorization program previously determined was medically necessary. Nothing in this subsection prevents a service authorization program from requiring authorization for health care services beyond the scope of the initial approval. Nothing in subsection (g)(2) supersedes subsection (g)(5).

3)         The MCO shall not deny a claim due to readmission policies for approved, planned readmissions. Each MCO shall update its payment systems to allow providers to indicate on the institutional claim that an admission was planned and allow a claim for a planned readmission to bypass any edits that would cause a denial of a claim due to readmission policies.

4)         Nothing in this subsection (g) shall prevent an MCO from requiring a provider to submit a timely, complete, and properly coded claim. The MCO shall not be liable for payments for individuals who are not enrollees of the MCO at the time the health care service is rendered.

5)         Nothing in this subsection (g) shall prevent an MCO from denying payments or recovering overpayments based on fraud, waste, or abuse. The MCO and the Department shall continue to implement and enforce any program integrity safeguards mandated by state or federal law, regulations, and policies including but not limited to 305 ILCS 5/12-13.1 and Title 42, Chapter IV, Subchapter C, Part 438, Subpart H of the Code of Federal Regulations and Title 42, Chapter IV, Subchapter F, Part 455 of the Code of Federal Regulations. The MCO or Department may require documentation, including documentation of medical necessity, in cases where the MCO or the Department is investigating fraud, waste, or abuse. When a service authorization program has approved an inpatient hospital level of care as medically necessary, and that service meets medical necessity based on nationally recognized decision support criteria, an MCO shall not subsequently classify that service as waste if it subsequently determines that the enrollee could have been treated in the hospital outpatient setting.

h)         Standardization of Peer-to-Peer Processes and Timelines in the Hospital Setting

1)         Each MCO shall adhere to the requirements of this subsection for peer-to-peer reviews for health care services that are subject to its service authorization programs.

2)         Providers may request a peer-to-peer review within 10 calendar days of receipt of the MCO's notice of intent to make an adverse determination, request for further documentation, or notice of adverse benefit determination. MCOs shall make exceptions to this timeframe on a case-by-case basis to accommodate unique, provider-specific circumstances. A peer-to-peer review request shall not alter the grievance and appeals rights of enrollees.

3)         MCOs may request peer-to-peer reviews but shall not automatically require peer-to-peer reviews as part of its service authorization program.

4)         Nothing in this subsection (h) alters the timeframes in subsection (j) for MCOs to make service authorization determinations. If compliance with these timeframes results in a determination being made after a peer-to-peer is scheduled but before the peer-to-peer occurs, the MCO shall not be out of compliance with subsection (h)(2).

5)         MCOs shall respond to a request for a peer-to-peer review within one business day of receipt of the request confirming the date and time of the peer-to-peer review and instructions for facilitating the review.

6)         Unless otherwise agreed to by the MCO and provider, the MCO shall hold a peer-to-peer review within three business days of the receipt of the request.

7)         In cases where an MCO fails to attend a scheduled peer-to-peer review or otherwise is unable to hold a peer-to-peer review within three business days of the receipt of the request, the MCO must treat all post-denial actions, including, but not limited to, appeals as when the provider submits the appeal or other post-denial action as urgent.

8)         MCOs shall allow both in-network and out-of-network providers to schedule and request a peer-to-peer review telephonically or in writing by electronic means, facsimile, and web-based secure functionality.  MCOs must also allow in-network providers to request and schedule a peer-to-peer review through the provider portal.

9)         When scheduling a peer-to-peer review, MCOs shall allow the providers to minimally offer three dates and times for the review from which the MCO will select a date and time.

10)       Peer-to-peer reviews shall be held in a manner most efficient to meet the needs of the enrollee and may be in-person, telephonic, or web based as agreed to by the provider and MCO. MCOs must use physicians who are in the same or similar specialty as a physician who typically manages the medical condition or disease.

11)       MCOs shall allow providers to submit additional clinical documentation which shall be considered during the peer-to-peer review. If requested by the provider, the MCO shall accept the documentation in lieu of the peer-to-peer review.

12)       If the MCO modifies its original intent to make an adverse determination or modifies an adverse benefit determination prior to the date of the peer-to-peer review, the MCO shall notify the provider of its decision before the date of the peer-to-peer review to allow the provider the option to cancel the review. The MCOs shall follow the notification provisions set forth in subsection (h)(13).

13)       MCO Notification of Peer-to-Peer Decisions.

A)        The MCO may verbally notify the provider of its decision during or after the peer-to-peer review. However, the MCO must issue a written decision to the provider submitting the service authorization request within 24 hours of the date and time of the peer-to-peer review.

B)        The written notice shall be issued by electronic means, facsimile, portal, or web-based secure functionality.

C)        The written notice shall minimally include the following:

i)          Date notice is issued.

ii)         Identification of the health care service.

iii)        The effective date of the decision.

iv)        Plain language instructions on a provider's right to appeal an adverse benefit determination on behalf of an enrollee in accordance with the procedures outlined in subsection (f); the right of the provider to submit a service authorization dispute of the medical necessity denial and the process, and the circumstances, under which an external independent review may be requested, consistent with Department policy.

v)         For service authorization determinations not wholly in favor of the enrollee, such as denials, limits, conditions, or restrictions of a health care service, a detailed basis for the determination with any data used to explain the decision, including:

•           The principal reason(s) for the determination, including, if applicable, a statement that the determination was based on a failure to submit specified medical records.

•           Additional documentation necessary for reconsideration or to support an appeal of an adverse benefit determination.

•           The clinical basis for the determination.

•           A description of the sources, including citations, that were used in making the determination.

•           The professional specialty of the individual who made the determination.

i)          Standard Criteria for Admission to a Long-Term Acute Care Hospital.

1)         Except for (i)(11), this subsection applies only to service authorization requests for initial admissions to a long-term acute care hospital (LTACH), as defined in 89 Ill. Adm. Code 148.25 (d)(4), from a discharging hospital.

2)         The service authorization program shall make medical necessity determinations in a manner that is no more restrictive than that used by the Department, including quantitative and non-quantitative treatment limits, as indicated in federal and State laws and regulations.

3)         Each service authorization program shall determine medical necessity for initial admission to an LTACH based on nationally recognized decision support criteria, except as outlined in subsection (i)(4) and (i)(5). If an MCO purchases or licenses service authorization program LTACH review criteria, the MCO shall, before using the criteria, verify and document that the criteria were developed in accordance with this subsection.

4)         In cases where the enrollee's condition does not specifically meet nationally recognized decision support criteria, service authorization programs must consider all clinical factors and make enrollee-specific determinations on a case-by-case basis, which may include approving service authorization requests for LTACH level of care when an enrollee's individual needs support approval.

5)         In cases where a multidisciplinary team at the discharging hospital determines and documents that the enrollee is appropriate for and will benefit from care in an LTACH and a lower level of care will not meet the enrollee's clinical needs, the service authorization program shall not deny a service authorization request for initial admission to an LTACH when the level of care is medically necessary, pursuant to subsection (i)(2), (i)(3), or (i)(4), and instead approve only skilled nursing facility level of care or alternate lower level of care. The MCO may request and conduct a peer-to-peer review with the provider prior to approval of the service authorization request to collaboratively discuss alternative settings of care, including any community-based alternatives that may be part of a quality program.

6)         Nothing in this subsection (i)prohibits an enrollee from choosing or electing an alternate level of care.

7)         Service authorization programs must have mechanisms in place to ensure consistent application of review criteria, allowing for enrollee-specific exceptions pursuant to (i)(4), and shall consult with the provider involved in the service authorization request when appropriate. Any decision to deny a service authorization request or to authorize a health care service in an amount, duration, or scope that is less than requested must be made by an individual who has appropriate expertise in addressing the enrollee's medical needs.

8)         The MCO shall continue to establish practice guidelines as mandated by federal regulations, including but not limited to 42 CFR 438.236. Practice guidelines must incorporate requirements set forth in this subsection.

9)         Nothing in this subsection alters a service authorization program's obligation to make medical necessity determinations on requests for continuing stays at LTACHs based on all contractual requirements and applicable federal and state laws and regulations, including but not limited to 42 CFR 438.210.

j)          Timelines for Standard and Urgent Service Authorization Requests for Long Term Acute Care Hospitals and Post-Acute Care Services.

1)         Nothing in this subsection (j) supersedes or waives requirements regarding behavioral health and substance use disorder health care services necessary to comply with applicable federal or state law, federal regulation, federal grant requirements, any State or federal consent decrees or court orders, or applicable case law.

2)         A service authorization program shall issue a service authorization determination as expeditiously as the enrollee's health condition requires and no later than the timelines outlined in this subsection (j).

3)         Except for subsection (j)(4), the MCO must render a service authorization determination and notify the enrollee and the provider of the determination within five calendar days of receipt of the service authorization request, with an extension of up to five additional calendar days if the enrollee requests the extension or the service authorization program informs the provider that there is a need for additional written justification demonstrating that the health care service is medically necessary and the enrollee will not be harmed by the extension.

4)         If the provider indicates or the MCO determines that following the timeframes listed in subsection (j)(3) could seriously jeopardize the enrollee's life or health, or could potentially result in a hospital stay beyond medical necessity, the service authorization program must render a service authorization determination and notify the enrollee and the provider no later than 48 hours after receipt of the service authorization request, unless the service authorization program has not received clinical information sufficient upon which to make a service authorization determination. Where the service authorization program has not received sufficient clinical information upon which to make a determination, the service authorization program shall notify the provider no later than 24 hours after receipt of the service authorization request that additional clinical information is needed and shall allow the provider 24 hours to submit the requested additional clinical documentation.  The MCO must then render an approval or adverse benefit determination no later than 72 hours after receipt of the original service authorization request.

5)         In cases where the provider indicates that the service authorization request must be decided within the urgent timeframe, the service authorization program cannot override the provider's determination and treat the request as a standard request.

(Source:  Amended at 49 Ill. Reg. 15705, effective November 26, 2025)

Section 140.80  Hospital Provider Fund

a)         Purpose and Contents

1)         The Hospital Provider Fund (Fund) was created in the State Treasury on February 3, 2004 (see 305 ILCS 5/5A-8).  Interest earned by the Fund shall be credited to the Fund. The Fund shall not be used to replace any funds appropriated to the Medicaid program by the General Assembly.

2)         The Fund is created for the purpose of receiving and disbursing monies in accordance with this Section and Article 5A of the Code.

3)         The Fund shall consist of:

A)        All monies collected or received by the Department under subsection (b);

B)        All federal matching funds received by the Department as a result of expenditures made by the Department that are attributable to monies deposited in the Fund;

C)        Any interest or penalty levied in conjunction with the administration of the Fund;

D)        Monies transferred from another fund in the State treasury;

E)        All other monies received for the Fund from any other source, including interest earned on those monies.

b)         Provider Assessments

1)         Subject to Sections 5A-3, 5A-10 and 5A-15 of the Code, for State fiscal years 2009 through 2018, or as long as continued under Section 5A-16, an annual assessment on inpatient services is imposed on each hospital provider in an amount equal to $218.38 multiplied by the difference of the hospital's occupied bed days less the hospital's Medicare bed days; provided, however, the amount of $218.38 shall be increased by a uniform percentage to generate an amount equal to 75% of the State share of the payments authorized under Section 5A-12-5 of the Code, with that increase only taking effect upon the date that a State share for those payments is required under federal law.  For the period of April through June 2015, the amount of $218.38 used to calculate the assessment under this subsection (b)(1) shall be increased by a uniform percentage to generate $20,250,000 in the aggregate for that period from all hospitals subject to the annual assessment under this Section.  For State fiscal years 2009 and after, a hospital's occupied bed days and Medicare bed days shall be determined using the most recent data available from each hospital's 2005 Medicare cost report as contained in the Healthcare Cost Report Information System file, for the quarter ending on December 31, 2006, without regard to any subsequent adjustments or changes to such data. If a hospital's 2005 Medicare cost report is not contained in the Healthcare Cost Report Information System, then the Department may obtain the hospital provider's occupied bed days and Medicare bed days from any source available, including, but not limited to, records maintained by the hospital provider, which may be inspected at all times during business hours of the day by the Department or its duly authorized agents and employees.  Subject to Sections 5A-3, 5A-10, and 5A-16 of the Code, for State fiscal years 2019 and 2020, an annual assessment on inpatient services is imposed on each hospital provider in an amount equal to $197.19 multiplied by the difference of the hospital's occupied bed days less the hospital's Medicare bed days. For State fiscal years 2019 and 2020, a hospital's occupied bed days and Medicare bed days shall be determined using the most recent data available from each hospital's 2015 Medicare cost report as contained in the Healthcare Cost Report Information System file, for the quarter ending on March 31, 2017, without regard to any subsequent adjustments or changes to such data. If a hospital's 2015 Medicare cost report is not contained in the Healthcare Cost Report Information System, then the Illinois Department may obtain the hospital provider's occupied bed days and Medicare bed days from any source available, including, but not limited to, records maintained by the hospital provider, which may be inspected at all times during business hours of the day by the Illinois Department or its duly authorized agents and employees. Notwithstanding any other provision in this Section, for a hospital provider that did not have a 2015 Medicare cost report, but paid an assessment in State fiscal year 2018 on the basis of hypothetical data, that assessment amount shall be used for State fiscal years 2019 and 2020.  Subject to Sections 5A-3 and 5A-10, and in accordance with federal approval and P.A. 101-0650, for the period of July 1, 2020 through December 31, 2020 and calendar years 2021 and 2022, an annual assessment on inpatient services is imposed on each hospital provider in an amount equal to $221.50 multiplied by the difference of the hospital's occupied bed days less the hospital's Medicare bed days, provided, however, for the period of July 1, 2020 through December 31, 2020, the assessment shall be equal to 50% of the annual amount and the amount of $221.50 shall be retroactively adjusted by a uniform percentage to generate an amount equal to 50% of the Assessment Adjustment as defined in subsection (l). For the period of July 1, 2020 through December 31, 2020 and calendar years 2021 and 2022, a hospital's occupied bed days and Medicare bed days shall be determined using the most recent data available from each hospital's 2015 Medicare cost report as contained in the Healthcare Cost Report Information System file, for the quarter ending on March 31, 2017, without regard to any subsequent adjustments or changes to such data. If a hospital's 2015 Medicare cost report is not contained in the Healthcare Cost Report Information System, then the Illinois Department may obtain the hospital provider's occupied bed days and Medicare bed days from any source available, including, but not limited to, records maintained by the hospital provider, which may be inspected at all times during business hours of the day by the Illinois Department or its duly authorized agents and employees. For a hospital provider that did not have a 2015 Medicare cost report, but paid an assessment in State Fiscal Year 2020 on the basis of hypothetical data, the data that was the basis for the 2020 assessment shall be used to calculate the assessment under this subsection (b)(1).

2)         In addition to any other assessments imposed under this Section, effective July 1, 2016 and semiannually thereafter through June 2018, or as provided in Section 5A-16, in addition to any federally required State share as authorized under subsection (b)(1), the amount of $218.38 shall be increased by a uniform percentage to generate an amount equal to 75% of the ACA Assessment Adjustment, as defined in subsection (l)(1).

3)         Subject to Sections 5A-3, 5A-10, and 5A-15 of the Code for the portion of State fiscal year 2012 beginning June 10, 2012 through June 30, 2012, and for State fiscal years 2013 through 2018, an annual assessment on outpatient services is imposed on each hospital provider in an amount equal to .008766 multiplied by the hospital's outpatient gross revenue; provided, however, the multiplier of .008766 shall be increased by a uniform percentage to generate an amount equal to 25% of the State share of the payments authorized under Section 5A-12-5, with that increase only taking effect upon the date that a State share for those payments is required under federal law.  For the period of April through June 2015, the amount of .008766 used to calculate the assessment under this subsection (b)(3) shall be increased by a uniform percentage to generate $6,750,000 in the aggregate for that period from all hospitals subject to the annual assessment under this Section.  For the portion of State fiscal year 2012 beginning June 10, 2012 through June 30, 2012 and for State fiscal years 2013 through 2018, a hospital's outpatient gross revenue shall be determined using the most recent data available from each hospital's 2009 Medicare cost report as contained in the Healthcare Cost Report Information System file, for the quarter ending on June 30, 2011, without regard to any subsequent adjustments or changes to that data.  If a hospital's 2009 Medicare cost report is not contained in the Healthcare Cost Report Information System, then the Department may obtain the hospital provider's outpatient gross revenue from any source available, including, but not limited to, records maintained by the hospital provider, which may be inspected at all times during business hours of the day by the Department or its duly authorized agents and employees. For the period beginning June 10, 2012 through June 30, 2012, the annual assessment on outpatient services shall be prorated by multiplying the assessment amount by a fraction, the numerator of which is 21 days and the denominator of which is 365 days.  Subject to Sections 5A-3, 5A-10, and 5A-16, for State fiscal years 2019 and 2020, an annual assessment on outpatient services is imposed on each hospital provider in an amount equal to .01358 multiplied by the hospital's outpatient gross revenue. For State fiscal years 2019 and 2020, a hospital's outpatient gross revenue shall be determined using the most recent data available from each hospital's 2015 Medicare cost report as contained in the Healthcare Cost Report Information System file, for the quarter ending on March 31, 2017, without regard to any subsequent adjustments or changes to such data. If a hospital's 2015 Medicare cost report is not contained in the Healthcare Cost Report Information System, then the Department may obtain the hospital provider's outpatient gross revenue from any source available, including, but not limited to, records maintained by the hospital provider, which may be inspected at all times during business hours of the day by the Department or its duly authorized agents and employees. Notwithstanding any other provision in this Section, for a hospital provider that did not have a 2015 Medicare cost report, but paid an assessment in State fiscal year 2018 on the basis of hypothetical data, that assessment amount shall be used for State fiscal years 2019 and 2020.  Subject to Sections 5A-3 and 5A-10, for the period of July 1, 2020 through December 31, 2020 and calendar years 2021 and 2022, an annual assessment on outpatient services is imposed on each hospital provider in an amount equal to .01525 multiplied by the hospital's outpatient gross revenue, provided however, for the period of July 1, 2020 through December 31, 2020, the assessment shall be equal to 50% of the annual amount and the amount of .01525 shall be retroactively adjusted by a uniform percentage to generate an amount equal to 50% of the Assessment Adjustment, as defined in subsection (1). For the period of July 1, 2020 through December 31, 2020 and calendar years 2021 and 2022, a hospital's outpatient gross revenue shall be determined using the most recent data available from each hospital's 2015 Medicare cost report as contained in the Healthcare Cost Report Information System file, for the quarter ending on March 31, 2017, without regard to any subsequent adjustments or changes to that data. If a hospital's 2015 Medicare cost report is not contained in the Healthcare Cost Report Information System, then the Illinois Department may obtain the hospital provider's outpatient revenue data from any source available, including, but not limited to, records maintained by the hospital provider. The data may be inspected at all times during business hours of the day by the Illinois Department or its duly authorized agents and employees. For a hospital provider that did not have a 2015 Medicare cost report, but paid an assessment in State Fiscal Year 2020 on the basis of hypothetical data, the data that was the basis for the 2020 assessment shall be used to calculate the assessment under this subsection (b)(3).

c)         Payment of Assessment Due

1)         The inpatient assessment imposed by Section 5A-2 of the Code for State fiscal year 2009 through State fiscal year 2018, or as provided in Section 5A-16, shall be due and payable in monthly installments, each equaling one-twelfth of the assessment for the year, on the 14^th State business day of each month.  No installment payments of an inpatient assessment shall be due and payable, however, until after the Comptroller has issued the payments required under Section 5A-12.2 of the Code.  Assessment payments postmarked on the due date will be considered as paid on time.

2)         Except as provided in Section 5A-4(a-5) of the Code, the outpatient assessment imposed by subsection (b)(3) for the portion of State fiscal year 2012 beginning June 10, 2012 through June 30, 2012 and for State fiscal year 2013 through State fiscal year 2018, or as provided in Section 5A-16, shall be due and payable in monthly installments, each equaling one-twelfth of the assessment for the year, on the 14^th State business day of each month.

A)        No installment payment of an outpatient assessment imposed by subsection (b)(3) shall be due and payable, however, until after:

i)          the Department notifies the hospital provider, in writing, that the payment methodologies to hospitals required under Section 5A-12.4 of the Code have been approved by the Centers for Medicare and Medicaid Services of the U.S. Department of Health and Human Services (CMMS), and the waiver under 42 CFR 433.68 for the assessment imposed by subsection (b) of this Section, if necessary, has been granted by CMMS; and

ii)         the Comptroller has issued the payments required under Section 5A-12.4 of the Code.

B)        Assessment payments postmarked on the due date will be considered as paid on time. Upon notification to the Department of approval of the payment methodologies required under Section 5A-12.4 of the Code and the waiver granted under 42 CFR 433.68, if necessary, all installments otherwise due under subsection (b)(3) of this Section prior to the date of notification shall be due and payable to the Department upon written direction from the Department and issuance by the Comptroller of the payments required under Section 5A-12.4 of the Code.

3)         The assessment imposed under P.A. 101-0650 and Section 5A-2 of the Code for State fiscal year 2019 and each subsequent State fiscal year shall be due and payable in monthly installments, each equaling one-twelfth of the assessment for the year, on the 17^th State business day of each month.  The Department has discretion to establish a late date due to delays in payments being made to hospitals, as required by Section 5A-12.7 of the Code.

A)        No installment payment of an assessment imposed by P.A. 101-0650 and Section 5A-2 of the Code shall be due and payable, however, until after:

i)          The Department notifies the hospital provider, in writing, that the payment methodologies to hospitals required under Section 5A-12.6 or 5A-12.7 of the Code have been approved by the Centers for Medicare and Medicaid Services of the U.S. Department of Health and Human Services, and the waiver under 42 CFR 433.68 for the assessment imposed by P.A. 101-0650 and Section 5A-2 of the Code, if necessary, has been granted by the Centers for Medicare and Medicaid Services of the U.S. Department of Health and Human Services; and

ii)         The Comptroller and managed care organizations have issued the payments required under Section 5A-12.6 or 5A-12.7 of the Code.

B)        Upon notification to the Department of approval of the payment methodologies required under Section 5A-12.6 or 5A-12.7 of the Code and the waiver granted under 42 CFR 433.68, if necessary, all installments otherwise due under subsection (b)(3) prior to the date of notification shall be due and payable to the Department upon written direction from the Department and issuance by the Comptroller and managed care organizations of the payments required under Section 5A-12.6 or 5A-12.7 of the Code.

4)         Any assessment amount that is due and payable to the Department more frequently than once per calendar quarter shall be remitted to the Department by the hospital provider by means of electronic funds transfer.  The Department may provide for remittance by other means if the amount due is less than $10,000 or electronic funds transfer is unavailable for this purpose.

5)         All payments received by the Department shall be credited first to unpaid installment amounts (rather than to penalty or interest), beginning with the most delinquent installments.

d)         Notice Requirements, Penalty, and Maintenance of Records

1)         The Department shall send a notice of assessment to every hospital provider subject to an assessment under subsection (b), except that no notice shall be sent for the outpatient assessment imposed under subsection (b)(3) until the Department receives written notice that the payment methodologies to hospitals required under Section 5A-12.4 of the Code has been approved and the waiver under 42 CFR 433.68, if necessary, has been granted by CMMS.

2)         If a hospital provider conducts, operates, or maintains more than one hospital licensed by the Illinois Department of Public Health, a separate notice shall be sent for each hospital.

e)         Procedure for Partial Year Reporting/Operating Adjustments

1)         Cessation of business during the fiscal year in which the assessment is being paid.  If a hospital provider ceases to conduct, operate, or maintain a hospital for which the person is subject to assessment under subsection (b), the assessment for the State fiscal year in which the cessation occurs shall be adjusted by multiplying the assessment computed under subsection (d) by a fraction, the numerator of which is the number of days in the year during which the provider conducts, operates, or maintains the hospital and the denominator of which is 365.  Immediately upon ceasing to conduct, operate or maintain a hospital, the person shall pay the assessment for the year as adjusted (to the extent not previously paid).

2)         Commencing of business during the fiscal year in which the assessment is being paid.  A hospital provider who commences conducting, operating, or maintaining a hospital for which the person is subject to assessment under subsection (b), upon notice by the Department, shall pay the assessment under subsection (d) as computed by the Department in installments on the due dates stated on the notices and on the regular installment due dates for the State fiscal year occurring after the due date of the initial assessment notice. For State fiscal years 2009 through 2018, in the case of a hospital provider that did not conduct, operate or maintain a hospital in 2005, the inpatient assessment for that State fiscal year shall be computed on the basis of hypothetical occupied bed days for the full calendar year as determined by the Department.  For the portion of State fiscal year 2012 beginning June 10, 2012 through June 30, 2012, and for State fiscal years 2013 through 2018, in the case of a hospital provider that did not conduct, operate or maintain a hospital in 2009, the outpatient assessment imposed under subsection (b)(3) shall be computed on the basis of hypothetical gross outpatient revenue for the full calendar year as determined by the Department.  The assessment determination made by the Department is final.

3)                  Partial Calendar Year Operation Adjustment.  For a hospital provider that did not conduct, operate, or maintain a hospital throughout the entire calendar year reporting period, the assessment for the State fiscal year shall be annualized for the portion of the reporting period the hospital was operational (dividing the assessment due by the number of days the hospital was in operation and then multiplying the amount by 365).  Information reported by a prior provider from the same hospital during the calendar year shall be used in the annualization equation, if available.

4)         Notwithstanding any other provision in this Section, for State fiscal years 2019 through calendar year 2022, in the case of a hospital provider that did not conduct, operate, or maintain a hospital in the year that is the basis of the calculation of the assessment under this Section, the assessment under subsection (b) for the State fiscal year shall be computed on the basis of hypothetical occupied bed days for the full calendar year as determined by the Illinois Department, except that for a hospital provider that did not have a 2015 Medicare cost report, but paid an assessment in State fiscal year 2018 on the basis of hypothetical data, that assessment amount shall be used for State fiscal years 2019 and 2020.

5)         Notwithstanding any other provision in this Section, for State fiscal years 2019 through calendar year 2022, in the case of a hospital provider that did not conduct, operate, or maintain a hospital in the year that is the basis of the calculation of the assessment under this Section, the assessment under subsection (b) for that State fiscal year shall be computed on the basis of hypothetical gross outpatient revenue for the full calendar year as determined by the Illinois Department, except that for a hospital provider that did not have a 2015 Medicare cost report, but paid an assessment in State fiscal year 2018 on the basis of hypothetical data, that assessment amount shall be used for State fiscal years 2019 and 2020.

6)         Change in Ownership and/or Operators.  The full quarterly installment must be paid on the designated due dates regardless of changes in ownership or operators.  Liability for the payment of the assessment amount (including past due assessments and any interest or penalties that may have accrued against the amount) rests on the hospital provider currently operating or maintaining the hospital regardless if these amounts were incurred by the current owner or were incurred by previous owners.  Collection of delinquent assessment fees from previous providers will be made against the current provider.  Failure of the current provider to pay any outstanding assessment liabilities incurred by previous providers shall result in the application of penalties described in subsection (f)(1).

f)         Penalties

1)         Any hospital that fails to pay the full amount of an installment when due shall be charged, unless waived by the Department for reasonable cause, a penalty equal to 5% of the amount of the installment not paid on or before the due date, plus 5% of the portion remaining unpaid on the last day of each monthly period thereafter, not to exceed 100% of the installment amount not paid on or before the due date. Waiver due to reasonable cause may include but is not limited to:

A)        provider has not been delinquent on payment of an assessment due, within the last three calendar years from the time the delinquency occurs.

B)        provider can demonstrate to the Department's satisfaction that a payment was made prior to the due date.

C)        provider is a new owner/operator and the late payment occurred in the quarter in which the new owner/operator assumed control of the facility.

2)         Within 30 days after the due date, the Department may begin recovery actions against delinquent hospitals participating in the Medicaid Program. Payments may be withheld from the hospital until the entire assessment, including any interest and penalties, is satisfied or until a reasonable repayment schedule has been approved by the Department.  If a reasonable agreement cannot be reached or if a hospital fails to comply with an agreement, the Department reserves the right to recover any outstanding provider assessment, interest and penalty by recouping the amount or a portion thereof from the hospital's future payments from the Department.  The provider may appeal this recoupment in accordance with the Department's rules at 89 Ill. Adm. Code 104.  The Department has the right to continue recoupment during the appeal process. Penalties pursuant to subsection (f)(1) will continue to accrue during the recoupment process.  Recoupment proceedings against the same hospital two times in a fiscal year may be cause for termination from the Medicaid Program.  Failure by the Department to initiate recoupment activities within 30 days shall not reduce the provider's liabilities nor shall it preclude the Department from taking action at a later date.

3)         If the hospital does not participate in the Medicaid Program, or is no longer doing business with the Department, or the Department cannot recover the full amount due through the claims processing system, within three months after the fee due date, the Department may begin legal action to recover the monies, including penalties and interest owed, plus court costs.

g)         Delayed Payment – Groups of Hospitals

The Department may establish delayed payment of assessments and/or waive the payment of interest and penalties for groups of hospitals such as disproportionate share hospitals or all other hospitals when:

1)         The State delays payments to hospitals due to problems related to State cash flow; or

2)         A cash flow bond pool's, or any other group financing plans', requests from providers for loans are in excess of its scheduled proceeds such that a significant number of hospitals will be unable to obtain a loan to pay the assessment.

h)         Delayed Payment – Individual Hospitals

In addition to the provisions of subsection (g), the Department may delay assessments for individual hospitals that are unable to make timely payments under this Section due to financial difficulties.  No delayed payment arrangements shall extend beyond the last business day of the calendar quarter following the quarter in which the assessment was to have been received by the Department as described in subsection (c). The request must be received by the Department prior to the due date of the assessment.

1)         Criteria.  Delayed payment provisions may be instituted only under extraordinary circumstances.  Delayed payment provisions may be made only to qualified hospitals who meet all of the following requirements:

A)        The provider has experienced an emergency that necessitates institution of delayed payment provisions.  Emergency in this instance is defined as a circumstance under which institution of the payment and penalty provisions described in subsections (c)(1), (c)(2), (f)(1) and (f)(2) would impose severe and irreparable harm to the clients served.  Circumstances that may create these emergencies include, but are not limited to, the following:

i)          Department system errors (either automated system or clerical) that have precluded payments, or that have caused erroneous payments such that the provider's ability to provide further services to clients is severely impaired;

ii)         Cash flow problems encountered by a provider that are unrelated to Department technical system problems and that result in extensive financial problems to a facility, adversely impacting on its ability to serve its clients.

B)        The provider serves a significant number of clients under the medical assistance program.  "Significant" in this instance means:

i)          A hospital that serves a significant number of clients under the medical assistance program; significant in this instance means that the hospital qualifies as a disproportionate share hospital (DSH) under 89 Ill. Adm. Code 148.120(a)(1) through 148.120(a)(2); or qualifies as a Medicare DSH hospital under the current federal guidelines.

ii)         A government-owned facility that meets the cash flow criterion under subsection (h)(1)(A)(ii).

iii)        A hospital that has filed for Chapter 11 bankruptcy and that meets the cash flow criterion under subsection (h)(1)(A)(ii).

C)        The provider must ensure that a delay of payment request, as defined under subsection (h)(3)(A), is received by the Department prior to the payment due date, and the request must include a Cash Position Statement that is based upon current assets, current liabilities and other data for a date that is less than 60 days prior to the date of filing.  Any liabilities payable to owners or related parties must not be reported as current liabilities on the Cash Position Statement.  A deferral of assessment payments will be denied if any of the following criteria are met:

i)          The ratio of current assets divided by current liabilities is greater than 2.0.

ii)         Cash, short term investments and long term investments equal or exceed the total of accrued wages payable and the assessment payment.  Long term investments that are unavailable for expenditure for current operations due to donor restrictions or contractual requirements will not be used in this calculation.

D)        The provider must show evidence of denial of an application to borrow assessment funds through a cash flow bond pool or financial institutions such as a commercial bank.  The denial must be 90 days old or less.

E)        The provider must sign an agreement with the Department that specifies the terms and conditions of the delayed payment provisions.  The agreement shall contain the following provisions:

i)          Specific reasons for institution of the delayed payment provisions;

ii)         Specific dates on which payments must be received and the amount of payment that must be received on each specific date described;

iii)        The interest or a statement of interest waiver as described in subsection (h)(5) that shall be due from the provider as a result of institution of the delayed payment provisions;

iv)        A certification stating that, should the entity be sold, the new owners will be made aware of the liability and any agreement selling the entity will include provisions that the new owners will assume responsibility for repaying the debt to the Department according to the original agreement;

v)         A certification stating that all information submitted to the Department in support of the delayed payment request is true and accurate to the best of the signator's knowledge; and

vi)        Other terms and conditions that may be required by the Department.

2)         A hospital that does not meet the above criteria may request a delayed payment schedule.  The Department may approve the request, notwithstanding the hospital not meeting the above criteria, upon a sufficient showing of financial difficulties and good cause by the hospital.  If the request for a delayed payment schedule is approved, all other conditions of this subsection (h) shall apply.

3)         Approval Process

A)        In order to receive consideration for delayed payment provisions, providers must ensure their request is received by the Department prior to the payment due date, in writing (telefax requests are acceptable) to the Bureau of Hospital and Provider Services.  The request must be received by the date designated by the Department.  Providers will be notified, in writing, as to the due dates for submitting delay of payment requests.  Requests must be complete and contain all required information before they are considered to have met the time requirements for filing a delayed payment request.  All telefax requests must be followed up with original written requests, postmarked no later than the date of the telefax.  The request must include:

i)          An explanation of the circumstances creating the need for the delayed payment provisions;

ii)         Supportive documentation to substantiate the emergency nature of the request including a cash position statement as defined in subsection (h)(1)(C), a denial of application to borrow the assessment as defined in subsection (h)(1)(D) and an explanation of the risk of irreparable harm to the clients; and

iii)        Specification of the specific arrangements requested by the provider.

B)        The hospital shall be notified by the Department, in writing prior to the assessment due date, of the Department's decision with regard to the request for institution of delayed payment provisions.  An agreement shall be issued to the provider for all approved requests.  The agreement must be signed by the administrator, owner, chief executive officer or other authorized representative and be received by the Department prior to the first scheduled payment date listed in that agreement.

4)         Waiver of Penalties.  The penalties described in subsections (f)(1) and (f)(2) may be waived upon approval of the provider's request for institution of delayed payment provisions.  In the event a provider's request for institution of delayed payment provisions is approved and the Department has received the signed agreement in accordance with subsection (h)(3)(B), the penalties shall be permanently waived for the subject quarter unless the provider fails to meet all of the terms and conditions of the agreement. In the event the provider fails to meet all of the terms and conditions of the agreement, the agreement shall be considered null and void and the penalties shall be fully reinstated.

5)         Interest.  The delayed payments shall include interest at a rate not to exceed the State of Illinois borrowing rate.  The applicable interest rate shall be identified in the agreement described in subsection (h)(1)(E). The interest may be waived by the Department if the facility's current ratio, as described in subsection (h)(1)(C), is 1.5 or less and the hospital meets the criteria in subsections (h)(1)(A) and (B).  Any waivers granted shall be expressly identified in the agreement described in subsection (h)(1)(E).

6)         Subsequent Delayed Payment Arrangements.  Once a provider has requested and received approval for delayed payment arrangements, the provider shall not receive approval for subsequent delayed payment arrangements until such time as the terms and conditions of any current delayed payment agreement have been satisfied or unless the provider is in full compliance with the terms of the current delayed payment agreement.  The waiver of penalties described in subsection (h)(4) shall not apply to a provider that has not satisfied the terms and conditions of any current delayed payment agreement.

i)          Administration and Enforcement Provisions

The Department shall establish and maintain a listing of all hospital providers appearing in the licensing records of the Department of Public Health, which shall show each provider's name and principal place of business and the name and address of each hospital operated, conducted, or maintained by the provider in this State.  The Department shall administer and enforce Sections 5A-1, 2, 3, 4, 5, 7, 8, 10, 12, 15, and 16 of the Code and collect the assessments and penalty assessments imposed under P.A. 101-0650 and Sections 5A-2 and 4 of the Code.  The Department, its Director, and every hospital provider subject to assessment measured by occupied bed days shall have the following powers, duties and rights:

1)         The Department may initiate either administrative or judicial proceedings, or both, to enforce the provisions of Sections 5A-1, 2, 3, 4, 5, 7, 8, 10, 12, 15 and 16 of the Code.  Administrative enforcement proceedings initiated shall be governed by the Department's rules at 89 Ill. Adm. Code 104.200 through 104.330.  Judicial enforcement proceedings initiated shall be governed by the rules of procedure applicable in the courts of this State.

2)         No proceedings for collection, refund, credit, or other adjustment of an assessment amount shall be issued more than three years after the due date of the assessment, except in the case of an extended period agreed to in writing by the Department and the hospital provider before the expiration of this limitation period.

3)         Any unpaid assessment under P.A. 101-0650 and Section 5A-2 of the Code shall become a lien upon the assets of the hospital upon which it was assessed.  If any hospital provider, outside the usual course of its business, sells or transfers the major part of any one or more of the real property and improvements, the machinery and equipment, or the furniture or fixtures of any hospital that is subject to the provisions of Sections 5A-1, 2, 3, 4, 5, 7, 8, 10, 12, 15 and 16 of the Code, the seller or transferor shall pay the Department the amount of any assessment, assessment penalty, and interest (if any) due from it under P.A. 101-0650 and Sections 5A-2 and 4 of the Code up to the date of the sale or transfer.  If the seller or transferor fails to pay any assessment, assessment penalty, and interest (if any) due, the purchaser or transferee of the asset shall be liable for the amount of the assessment, penalties and interest (if any) up to the amount of the reasonable value of the property acquired by the purchaser or transferee.  The purchaser or transferee shall continue to be liable until the purchaser or transferee pays the full amount of the assessment, penalties, and interest (if any) up to the amount of the reasonable value of the property acquired by the purchaser or transferee or until the purchaser or transferee receives from the Department a certificate showing that the assessment, penalty and interest have been paid or a certificate from the Department showing that no assessment, penalty or interest is due from the seller or transferor under P.A. 101-0650 and Sections 5A-2, 4 and 5 of the Code.

4)         Payments under Section 5A-4 of the Code are not subject to the Illinois Prompt Payment Act [30 ILCS 540].  Credits or refunds shall not bear interest.

5)         In addition to any other remedy provided for and without sending a notice of assessment liability, the Department may collect an unpaid assessment by withholding, as payment of the assessment, reimbursements or other amounts otherwise payable by the Department to the hospital provider.

j)          Exemptions

The following classes of providers are exempt from the assessment imposed under Section 5A-4 of the Code unless the exemption is adjudged to be unconstitutional or otherwise invalid:

1)         A hospital provider that is a State agency, a State university, or a county with a population of 3,000,000 or more.

2)         A hospital provider that is a county with a population of less than 3,000,000 or a township, municipality, hospital district, or any other local governmental unit.

k)         Nothing in Section 5A-4 of the Code shall be construed to prevent the Department from collecting all amounts due under this Section pursuant to an assessment imposed before February 3, 2004.

l)          Definitions

As used in this Section, unless the context requires otherwise:

1)         "ACA Assessment Adjustment" means:

A)        For the period of July 1, 2016 through December 31, 2016, the product of .19125 multiplied by the sum of the fee-for-service payments to hospitals authorized under Section 5A-12.5 of the Code and the adjustments authorized under Section 5A-12.2(t) of the Code to managed care organizations for hospital services due and payable in the month of April 2016 multiplied by 6.

B)        For the period of January 1, 2017 through June 30, 2017, the product of .19125 multiplied by the sum of the fee-for-service payments to hospitals authorized under Section 5A-12.5 of the Code and the adjustments authorized under Section 5A-12.2(t) to managed care organizations for hospital services due and payable in the month of October 2016 multiplied by 6, except that the amount calculated under this subsection (l)(1)(B) shall be adjusted, either positively or negatively, to account for the difference between the actual payments issued under Code Section 5A-12.5 for the period beginning July 1, 2016 through December 31, 2016 and the estimated payments due and payable in the month of April 2016 multiplied by 6 as described in subsection (l)(1)(A).

C)        For the period of July 1, 2017 through December 31, 2017, the product of .19125 multiplied by the sum of the fee-for-service payments to hospitals authorized under Section 5A-12.5 of the Code and the adjustments authorized under Section 5A-12.2(t) of the Code to managed care organizations for hospital services due and payable in the month of April 2017 multiplied by 6, except that the amount calculated under this subsection (l)(1)(C) shall be adjusted, either positively or negatively, to account for the difference between the actual payments issued under Code Section 5A-12.5 for the period beginning January 1, 2017 through June 30, 2017 and the estimated payments due and payable in the month of October 2016 multiplied by 6 as described in subsection (l)(1)(B).

D)        For the period of January 1, 2018 through June 30, 2018, the product of .19125 multiplied by the sum of the fee-for-service payments to hospitals authorized under Section 5A-12.5 of the Code and the adjustments authorized under Section 5A-12.2(t) of the Code to managed care organizations for hospital services due and payable in the month of October 2017 multiplied by 6, except that:

i)          the amount calculated under this subsection (l)(1)(D) shall be adjusted, either positively or negatively, to account for the difference between the actual payments issued under Code Section 5A-12.5 for the period of July 1, 2017 through December 31, 2017 and the estimated payments due and payable in the month of April 2017 multiplied by 6 as described in subsection (l)(1)(C); and

ii)         the amount calculated under this subsection (l)(1)(D) shall be adjusted to include the product of .19125 multiplied by the sum of the fee-for-service payments, if any, estimated to be paid to hospitals under Section 5A-12.5(b) of the Code.

2)         "Assessment Adjustment" means, for the period of July 1, 2020 through December 31, 2020, the product of .3853 multiplied by the total of the actual payments made under Section 5A-12.7(c) through (k) of P.A. 101-0650 attributable to that period, less the total of the assessment imposed under subsections (b)(1) and (b)(3) of this Section for the period. For each calendar quarter beginning on and after January 1, 2021, the product of .3853 multiplied by the total of the actual payments made under Section 5A-12.7(c) through (k) of P.A. 101-0650 attributable to the period, less the total of the assessment imposed under subsections (b)(1) and (b)(3) of this Section for that period.

3)         "CMMS" means the Centers for Medicare and Medicaid Services of the U.S. Department of Health and Human Services.

4)         "Code" means the Illinois Public Aid Code [305 ILCS 5].

5)         "Department" means the Illinois Department of Healthcare and Family Services.

6)         "Fund" means the Hospital Provider Fund.

7)         "HCRIS" means the federal Centers for Medicare and Medicaid Services Healthcare Cost Report Information System.

8)         "Hospital" means an institution, place, building, or agency located in this State that is subject to licensure by the Illinois Department of Public Health under the Hospital Licensing Act, whether public or private and whether organized for profit or not-for-profit.

9)         "Hospital Provider" means a person licensed by the Department of Public Health to conduct, operate, or maintain a hospital, regardless of whether the person is a Medicaid provider.  For purposes of this definition, "person" means any political subdivision of the State, municipal corporation, individual, firm, partnership, corporation, company, limited liability company, association, joint stock association or trust, or a receiver, executor, trustee, guardian, or other representative appointed by order of any court.

10)        "Inpatient Gross Revenue" means total inpatient gross revenue, as reported on the HCRIS Worksheet C, Part 1, Column 6, Line 101, less the sum of the following lines (including any subset lines of these lines):

A)        Line 34:  Skilled Nursing Facility.

B)        Line 35:  Other Nursing Facility.

C)        Line 35.01:  Intermediate Care Facility for the Mentally Retarded.

D)        Line 36:  Other Long Term Care.

E)        Line 45:  PBC Clinical Laboratory Services – Program Only.

F)         Line 60:  Clinic.

G)        Line 63:  Other Outpatient Services.

H)        Line 64:  Home Program Dialysis.

I)         Line 65:  Ambulance Services.

J)         Line 66:  Durable Medical Equipment – Rented.

K)        Line 67:  Durable Medical Equipment – Sold.

L)        Line 68:  Other Reimbursable.

11)        "Medicare Bed Days" means, for each hospital, the sum of the number of days that each bed was occupied by a patient who was covered by Title XVIII of the Social Security Act, excluding days attributable to the routine services provided to persons receiving skilled or intermediate long term care services. Medicare bed days shall be computed separately for each hospital operated or maintained by a hospital provider.

12)        "Medicare Gross Inpatient Revenue" means the sum of the following:

A)        The sum of the following lines from the HCRIS Worksheet D-4, Column 2 (excluding the Medicare gross revenue attributable to the routine services provided to patients in a psychiatric hospital, a rehabilitation hospital, a distinct part psychiatric unit, a distinct part rehabilitation unit or swing beds):

i)          Line 25:  Adults and Pediatrics.

ii)         Line 26:  Intensive Care Unit.

iii)        Line 27:  Coronary Care Unit.

iv)        Line 28:  Burn Intensive Care Unit.

v)         Line 29:  Surgical Intensive Care Unit.

vi)        Line 30:  Other Special Care Unit.

B)        From Worksheet D-4, Column 2, the amount from Line 103 less the sum of Lines 60, 63, 64, 66, 67 and 68 (and any subset lines of these lines).

C)        The amount from Worksheet D-6, Part 3, Column 3, Line 53.

13)        "Medicare Gross Outpatient Revenue" means the amount from the HCRIS Worksheet D, Part V, Line 101, Columns 5, 5.01, 5.02, 5.03 and 5.04 less the sum of Lines 45, 60, 63, 64, 65, 66 and 67 (and any subset lines of these lines).

14)        "Occupied Bed Days" means the sum of the number of days that each bed was occupied by a patient for all beds, excluding beds classified as long term care beds and assessed a licensed bed fee during calendar year 2001. Occupied bed days shall be computed separately for each hospital operated or maintained by a hospital provider.

15)        "Outpatient Gross Revenue" (prior to State fiscal year 2019 from Medicare 2552-96 cost reports) means, for each hospital, its total gross charges attributed to outpatient services as reported on the Medicare cost report at Worksheet C, Part I, Column 7, Line 101 less the sum of lines 45, 60, 63, 64, 65, 66, 67 and 68 (and any subset lines of these lines).

16)        "Outpatient Gross Revenue" (for State fiscal year 2019 and thereafter from Medicare 2552-10 cost reports) means, for each hospital, its total gross charges attributed to outpatient services as reported on the Medicare cost report at Worksheet C, Part I, Column 7, Line 200 less the sum of lines 61, 90, 94, 95, 96, 97, 99, 100, 101, 115, 116, and 117 (and any subset lines of these lines).

(Source:  Amended at 44 Ill. Reg. 19713, effective December 11, 2020)

Section 140.82  Developmentally Disabled Care Provider Fund

a)         Purpose and Contents

1)         The Developmentally Disabled Care Provider Fund was created in the State Treasury on July 1, 1992, July 14, 1993 and July 1, 1995 (see 305 ILCS 5/5C-7).  Interest earned by the Fund shall be credited to the Fund.  The Fund shall not be used to replace any funds appropriated to the Medicaid program by the General Assembly.

2)         The Fund is created for the purpose of receiving and disbursing monies in accordance with this Section and Sections 5C-2 and 7 of the Code.

3)         The Fund shall consist of:

A)        All monies collected or received by the Department under subsection (b);

B)        All federal matching funds received by the Department as a result of expenditures made by the Department that are attributable to monies deposited in the Fund;

C)        Any interest or penalty levied in conjunction with the administration of the Fund;

D)        All other monies received for the Fund from any other source, including interest earned thereon; and

E)        All monies transferred from the Medicaid Developmentally Disabled Provider Participation Fee Trust Fund.

b)         Provider Assessments

1)         Beginning on July 1, 1993, an assessment is imposed upon each developmentally disabled care provider in an amount equal to 6%, or the maximum allowed under federal regulation, whichever is less, of its adjusted gross developmentally disabled care revenue for the prior State fiscal year.  The revenue for each year will be reported on the Developmentally Disabled Care Provider Tax form to be filed by a date designated by the Department.  The Department reserves the right to audit the reported data. 

2)         Effective July 1, 2013, for the privilege of engaging in the occupation of long term care facility for persons under 22 years of age serving clinically complex residents provider, an assessment is imposed upon each long term care facility for persons under 22 years of age serving clinically complex residents in the same amount and upon the same conditions and requirements as imposed in Section 140.84 and a license fee is imposed in the same amount and upon the same conditions and requirements as imposed in Section 140.84.  Notwithstanding any provision of any other Act, the assessment and license fee imposed by this subsection (b)(2) shall be construed as a tax, but may not be added to the charges of an individual's nursing home care that is paid for in whole, or in part, by a federal, State, or combined federal-State medical care program, except for those individuals receiving Medicare Part B benefits solely.

c)         Payment of Assessment Due

1)         The assessment described in subsection (b) shall be due and payable in quarterly installments, each equaling one-fourth of the assessment for the year, on September 30, December 31, March 31, and May 31 of the year, modified to accommodate weekends and holidays.  Providers will be notified, in writing, of the due dates.  Assessment payments postmarked on the due date will be considered paid on time.

2)         All payments received by the Department shall be credited first to unpaid installment amounts (rather than to penalty or interest), beginning with the most delinquent installments.

d)         Reporting Requirements, Penalty, and Maintenance of Records

1)         After June 30 of each State fiscal year, and on or before September 30 of the succeeding State fiscal year, every developmentally disabled care provider subject to an assessment under subsection (b) shall file a report with the Department.  The report shall be on a form prepared by the Department.  The report shall include the adjusted gross developmentally disabled care revenue from the State fiscal year just ended and shall be utilized by the Department to calculate the assessment for the State fiscal year commencing on the preceding July 1.  If a developmentally disabled care provider operates or maintains more than one developmentally disabled care facility, a separate report shall be filed for each facility.  In the case of a developmentally disabled care provider existing as a corporation or legal entity other than an individual, the report filed by it shall be signed by its president, vice-president, secretary, or treasurer or by its properly authorized agent.

2)         If the developmentally disabled care provider fails to file its report for a State fiscal year on or before the due date of the report, there shall, unless waived by the Department for reasonable cause, be added to the assessment imposed in subsection (b) a penalty assessment equal to 25 percent of the assessment imposed for the year.

3)         Every developmentally disabled care provider subject to an assessment under subsection (b) shall keep records and books that will permit the determination of adjusted gross developmentally disabled care revenue on a State fiscal year basis.  All such books and records shall be maintained for a minimum of three years following the filing date of the assessment report and shall, at all times during business hours of the day, be subject to inspection by the Department or its duly authorized agents and employees.

4)         Amended Assessment Reports.  With the exception of amended assessment reports filed in accordance with subsections (d)(5) or (6), an amended assessment report must be filed within 30 calendar days after the original report due date.  The amended report must be accompanied by a letter identifying the changes and the justification for the amended report.  The provider will be advised of any adjustments to the original annual assessment amount through a written notification from the Department.  Penalties may be applied to the amount underpaid due to a filing error.

5)         Submission of Financial Audit Statements.  All developmentally disabled care providers are required to submit a copy of all financial statements audited by an external, independent auditor to the Department within 30 days after the close of the externally performed financial audits.  If the provider's year end does not coincide with the June 30 ending date for the assessment report, the provider must submit all financial audits covering the tax report period. An amended assessment report must accompany the external financial audit statements if the data submitted on the initial tax report changes based upon the findings of the external financial audits and as indicated in the audited external financial statements.  Penalties may be applied to the amount underpaid due to a filing error.

6)         Reconsideration of Adjusted Tax.  If the Department, through an audit conducted by the Department or its agent within three years after the end of the fiscal year in which the assessment was due, changes the assessment liability of a developmentally disabled care provider, the developmentally disabled care provider may request a review or reconsideration of the adjusted assessment within 30 days after the Department's notification of the change in assessment liability.  Requests for reconsideration of the assessment adjustment shall not be considered if those requests are not postmarked on or before the end of the 30 day review period.  Penalties may be applied to the amount underpaid due to a filing error.

e)         Procedure for Partial Year Reporting/Operating Adjustments

1)         Cessation of business during the fiscal year in which the assessment is being paid.  For a developmentally disabled care provider who ceases to conduct, operate, or maintain a facility for which the person is subject to assessment under subsection (b), the assessment for the State fiscal year in which the cessation occurs shall be adjusted by multiplying the assessment computed under subsection (d) by a fraction, the numerator of which is the number of months in the year during which the provider conducts, operates, or maintains the facility and the denominator of which is 12.  The person shall file a final, amended report with the Department not more than 30 calendar days after the cessation, reflecting the adjustment, and shall pay with the final report the assessment for the year as so adjusted, to the extent not previously paid.

2)         Commencing of business during the fiscal year in which the assessment is being paid.  A developmentally disabled care provider who commences conducting, operating, or maintaining a facility for which the person is subject to assessment under subsection (b) shall file an initial return for the State fiscal year in which the commencement occurs within 30 calendar days thereafter and shall pay the assessment under subsection (d) as computed by the Department in equal installments on the due date of the initial assessment determination and on the regular installment due dates for the State fiscal year occurring after the due date of the initial assessment determination.  In determining the annual assessment amount for the provider the Department shall develop hypothetical annualized revenue projections based upon geographic location, facility size and patient case mix.  The assessment determination made by the Department is final.

3)         Partial Fiscal Year Operation Adjustment.  For a developmentally disabled care provider that did not conduct, operate, or maintain a facility throughout the entire fiscal year reporting period, the assessment for the following State fiscal year shall be annualized based on the provider's actual developmentally disabled care revenue for the portion of the reporting period the facility was operational (dividing adjusted developmentally disabled care revenue by the number of months the facility was in operation and then multiplying that amount by 12).  Developmentally disabled care revenue realized by a prior provider from the same facility during the fiscal year shall be used in the annualization equation, if available.

4)         Change in Ownership and/or Operators.  The full quarterly assessment must be paid on the designated due dates regardless of changes in ownership or operators.  Liability for the payment of the assessment amount (including past due assessments and any interest or penalties that may have accrued against the amount) rests on the developmentally disabled care provider currently operating or maintaining the developmentally disabled care facility regardless if these amounts were incurred by the current owner or were incurred by previous owners.  Collection of delinquent assessment fees from previous providers will be made against the current provider.  Failure of the current provider to pay any outstanding assessment liabilities incurred by previous providers shall result in the application of penalties described in subsection (f)(1).

f)         Penalties

1)         Any facility that fails to pay the full amount of an installment when due shall be charged, unless waived by the Department for reasonable cause, a penalty equal to five percent of the amount of the installment not paid on or before the due date, plus five percent of the portion thereof remaining unpaid on the last day of each monthly period thereafter, not to exceed 100% of the installment amount not paid on or before the due date. Reasonable cause may include but is not limited to:

A)        a provider who has not been delinquent on payment of an assessment due within the last three calendar years from the time the delinquency occurs;

B)        a provider who can demonstrate to the Department's satisfaction that a payment was made prior to the due date; or

C)        that the provider is a new owner/operator and the late payment occurred in the quarter in which the new owner/operator assumed control of the facility.

2)         Within 30 days after the due date, the Department may begin recovery actions against delinquent facilities participating in the Medicaid Program. Payments may be withheld from the facility until the entire provider assessment, including any penalties, is satisfied, or until a reasonable repayment schedule has been approved by the Department.  If a reasonable agreement cannot be reached, or if the facility fails to comply with an agreement the Department reserves the right to recover any outstanding provider assessment, interest and penalty by recouping the amount or a portion thereof from the provider's future payments from the Department.  The provider may appeal this recoupment in accordance with the Department's rules at 89 Ill. Adm. Code 104.  The Department has the right to continue recoupment during the appeal process.  Penalties pursuant to subsection (f)(1) will continue to accrue during the recoupment process.  Recoupment proceedings against the same facility two times in a fiscal year may be cause for termination from the Program.  Failure by the Department to initiate recoupment activities within 30 days shall not reduce the provider's liabilities nor shall it preclude the Department from taking action at a later date.

3)         If the facility does not participate in the Medicaid Program, or is no longer doing business with the Department, or the Department cannot recover the full amount due through the claims processing system, within three months of the assessment due date, the Department may begin legal action to recover the monies, including penalties and interest owed, plus court costs.

g)         Delayed Payment – Groups of Facilities

The Department may establish delayed payment of assessments and/or waive the payment of interest and penalties for groups of facilities when:

1)         the State delays payments to facilities due to problems related to State cash flow; or

2)         a cash flow bond pool's or any other group financing plans' requests from providers for loans are in excess of its scheduled proceeds such that a significant number of facilities will be unable to obtain a loan to pay the assessment.

h)         Delayed Payment – Individual Facilities

In addition to the provisions of subsection (g), the Department may delay assessments for individual facilities that are unable to make timely payments under this Section due to financial difficulties.  No delayed payment arrangements shall extend beyond the last business day of the calendar quarter following the quarter in which the assessment was to have been received by the Department as described in subsection (c). The request must be received by the Department prior to the date of the assessment.

1)         Criteria.  Delayed payment provisions may be instituted only under extraordinary circumstances.  Delayed payment provisions shall be made only to qualified facilities who meet all of the following requirements:

A)        the facility has experienced an emergency which necessitates institution of delayed payment provisions.  Emergency in this instance is defined as a circumstance under which institution of the payment and penalty provisions described in subsections (c)(1), (c)(2), (f)(1), (f)(2) and (f)(3) would impose severe and irreparable harm to the clients served.  Circumstances that may create such emergencies include, but are not limited to, the following:

i)          Department system errors (either automated system or clerical) that have precluded payments, or that have caused erroneous payments such that the facility's ability to provide further services to clients is severely impaired;

ii)         cash flow problems encountered by a facility that are unrelated to Department technical system problems and that result in extensive financial problems to a facility adversely impacting on its ability to serve its clients.

B)        the facility serves a significant number of clients under the Medical Assistance Program.  Significant in this instance means:

i)          85 percent or more of their residents must be eligible for public assistance;

ii)         a government-owned facility, that meets the cash flow criteria under subsection (h)(1)(A)(ii).

iii)        a provider who has filed for Chapter 11 bankruptcy that meets the cash flow criterion under subsection (h)(1)(A)(ii).

C)        the facility must ensure that a delay of payment request, as defined in subsection (h)(3)(A), is received by the Department prior to the payment due date, and the request must include a Cash Position Statement that is based upon current assets, current liabilities and other data for a date that is less than 60 days prior to the date of filing.  Any liabilities payable to owners or related parties must not be reported as current liabilities on the Cash Position Statement.  A deferral of assessment payments will be denied if any of the following criteria are met:

i)          the ratio of current assets divided by current liabilities is greater than 2.0;

ii)         cash, short-term investments and long-term investments equal or exceed the total of accrued wages payable and the assessment payment.  Long-term investments that are unavailable for expenditure for current operations due to donor restrictions or contractual requirements will not be used in this calculation;

iii)        cash or other assets have been distributed during the previous 90 days to owners or related parties in an amount equal to or exceeding the assessment payment for dividends, salaries in excess of those allowable under Section 140.541 or payments for purchase of goods or services in excess of cost as defined in Section 140.537.

D)        the facility, with the exception of government owned facilities, must show evidence of denial of an application to borrow the assessment funds through a cash flow bond pool or financial institutions such as a commercial bank.  The denial must be 90 days old or less.

E)        the facility must sign an agreement with the Department that specifies the terms and conditions of the delayed payment provisions.  The agreement shall contain the following provisions:

i)          specific reasons for institution of the delayed payment provisions;

ii)         specific dates on which payments must be received and the amount of payment that must be received on each specific date described;

iii)        the interest or a statement of interest waiver as described in subsection (h)(5) that shall be due from the facility as a result of institution of the delayed payment provisions;

iv)        a certification stating that, should the entity be sold, the new owners will be made aware of the liability and any agreement selling the entity will include provisions that the new owners will assume responsibility for repaying the debt to the Department according to the original agreement;

v)         a certification stating that all information submitted to the Department in support of the delayed payment request is true and accurate to the best of the signator's knowledge; and

vi)        such other terms and conditions that may be required by the Department.

2)         A facility that does not meet the criteria listed in subsection (h)(1) may request a delayed payment schedule.  The Department may approve the request, notwithstanding the facility not meeting the above criteria, upon a sufficient showing of financial difficulties and good cause by the facility.  If the request for a delayed payment schedule is approved, all other conditions of this subsection (h) shall apply.

3)         Approval Process

A)        In order to receive consideration for delayed payment provisions, facilities must ensure that their request is received by the Department prior to the payment due date, in writing (telefax requests are acceptable) to the Bureau of Program and Reimbursement Analysis.  The request must be received by the due date designated by the Department.  Providers will be notified, in writing, of the due dates for submitting delay of payment requests. Requests must be complete and contain all required information before they are considered to have met the time requirements for filing a delayed payment request.  All telefax requests must be followed up with original written requests postmarked no later than the date of the telefax.  The request must include:

i)          an explanation of the circumstances creating the need for the delayed payment provisions;

ii)         supportive documentation to substantiate the emergency nature of the request and risk of irreparable harm to the clients; and

iii)        specification of the specific arrangements requested by the facility

B)        The facility shall be notified by the Department, in writing prior to the assessment due date, of the Department's decision with regard to the request for institution of delayed payment provisions.  An agreement shall be issued to the facility for all approved requests.  The agreement must be signed by the administrator, owner or other authorized representative and be received by the Department prior to the first scheduled payment date listed in such agreement.

4)         Waiver of Penalties.  The penalties described in subsections (f)(1) and (f)(2) may be waived upon approval of the facility's request for institution of delayed payment provisions.  In the event a facility's request for institution of delayed payment provisions is approved and the Department has received the signed agreement in accordance with subsection (h)(3)(B), the penalties shall be permanently waived for the subject quarter unless the facility fails to meet all of the terms and conditions of the agreement.  In the event the facility fails to meet all of the terms and conditions of the agreement, the agreement shall be considered null and void and the penalties shall be fully reinstated.

5)         Interest.  The delayed payments shall include interest at a rate not to exceed the State of Illinois borrowing rate.  The applicable interest rate shall be identified in the agreement described in subsection (h)(1)(E). The interest may be waived by the Department if the facility's current ratio, as described in subsection (h)(1)(C), is 1.5 or less and the facility meets the criteria in subsections (h)(1)(A) and (B).  Any such waivers granted shall be expressly identified in the agreement described in subsection (h)(1)(E).

6)         Subsequent Delayed Payment Arrangements.  Once a facility has requested and received approval for delayed payment arrangements, the facility shall not receive approval for subsequent delayed payment arrangements until the terms and conditions of any current delayed payment agreement have been satisfied or unless the provider is in full compliance with the terms of the current delay of payment agreement.  The waiver of penalties described in subsection (h)(4) shall not apply to a facility that has not satisfied the terms and conditions of any current delayed payment agreement.

i)          Administration and Enforcement Provisions

The Department shall administer and enforce Section 5C-6 of the Public Aid Code and collect the assessments, interest, and penalty assessments imposed under the law, using procedures employed in its administration of the Code generally and, as it deems appropriate, in a manner similar to that in which the Department of Revenue administers and collects the retailers' occupation tax under the Retailers' Occupation Tax Act ("ROTA").

j)          Nothing in Section 5C of the Code shall be construed to prevent the Department from collecting all amounts due under this Section pursuant to an assessment imposed before July 1, 1995.

k)         Definitions

1)         "Adjusted gross developmentally disabled care revenue" means the developmentally disabled care provider's total revenue for inpatient residential services, less contractual allowances and discounts on patients' accounts, but does not include non-patient revenue from sources such as contributions, donations or bequests, investments, day training services, television and telephone service, rental of facility space, or sheltered care revenue.  Adjusted gross developmentally disabled care revenue must be reported on an accrual basis for the tax reporting period.  All patient revenue accrued during the tax reporting period must be included even though reimbursement may occur after the tax reporting period.  Patient revenue must be reported on a basis that is consistent with methods used on the facility's last two cost reports.

2)         "Contractual Allowance" means the difference between charges at established rates and the amount estimated to be paid by third party payors or patients, as appropriate, pursuant to agreements/contracts with the developmentally disabled care provider; courtesy and policy discounts provided to employees, medical staff and clergy; and charity care, but "contractual allowance" does not mean any Provider Participation fees/taxes paid to the Department.

3)         "Department" means the Illinois Department of Healthcare and Family Services.

4)         "Developmentally disabled care facility" means an intermediate care facility for the mentally retarded within the meaning of Title XIX of the Social Security Act, whether public or private and whether organized for profit or not-for-profit, but shall not include any facility operated by the State.

5)         "Developmentally disabled care provider" means a person conducting, operating, or maintaining a developmentally disabled care facility.  For this purpose, "person" means any political subdivision of the State, municipal corporation, individual, firm, partnership, corporation, company, limited liability company, association, joint stock association, or trust, or a receiver, executor, trustee, guardian or other representative appointed by order of any court.

6)         "Facility" means all intermediate care facilities as defined under "developmentally disabled care facility" (see subsection (k)(4)).

7)         "Fund" means the Developmentally Disabled Care Provider Fund.

8)         "Long term care facility for persons under 22 years of age serving clinically complex residents" means a facility licensed by the Department of Public Health as a long term care facility for persons under 22 meeting the qualifications of Section 5.4h of the Code.

(Source:  Amended at 38 Ill. Reg. 23623, effective December 2, 2014)