093_HB2031eng

 
HB2031 Engrossed                     LRB093 04874 AMC 04933 b

 1        AN ACT concerning professional regulation.

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

 4        Section  5.  The  Health Care Worker Self-Referral Act is
 5    amended by changing Section 20 as follows:

 6        (225 ILCS 47/20)
 7        Sec. 20.  Prohibited referrals and claims for payment.
 8        (a)  A health care worker must shall not refer a  patient
 9    for  health  services  to  an  entity outside the health care
10    worker's office or group practice in which  the  health  care
11    worker is an investor, unless the health care worker directly
12    provides  health  services  within  the  entity  and  will be
13    personally  involved  with  the  provision  of  care  to  the
14    referred patient.
15        (b)  Pursuant to Board determination that  the  following
16    exception  is  applicable, a health care worker may invest in
17    and refer to an entity, whether or not the health care worker
18    provides direct services within said entity, if  there  is  a
19    demonstrated  need  in  the  community  for  the  entity  and
20    alternative financing is not available.  For purposes of this
21    subsection  (b), "demonstrated need" in the community for the
22    entity may exist if (1) there is no  facility  of  reasonable
23    quality  that provides medically appropriate service, (2) use
24    of existing facilities is onerous  or  creates  too  great  a
25    hardship  for  patients,  (3)  the entity is formed to own or
26    lease medical equipment which replaces obsolete or  otherwise
27    inadequate  equipment  in  or under the control of a hospital
28    located in a federally designated  health  manpower  shortage
29    area, or (4) such other standards as established, by rule, by
30    the  Board.   "Community"  shall be defined as a metropolitan
31    area for a city, and a county for a rural area.  In addition,
 
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 1    the following provisions must be met to be exempt under  this
 2    Section:
 3             (1)  Individuals  who are not in a position to refer
 4        patients to an entity are given a bona  fide  opportunity
 5        to  also  invest in the entity on the same terms as those
 6        offered a referring health care worker; and
 7             (2)  No health care  worker  who  invests  shall  be
 8        required or encouraged to make referrals to the entity or
 9        otherwise generate business as a condition of becoming or
10        remaining an investor; and
11             (3)  The entity shall market or furnish its services
12        to  referring  health  care  worker  investors  and other
13        investors on equal terms; and
14             (4)  The entity shall not loan  funds  or  guarantee
15        any  loans  for health care workers who are in a position
16        to refer to an entity; and
17             (5)  The  income  on  the   health   care   worker's
18        investment  shall  be  tied  to  the health care worker's
19        equity in the facility  rather  than  to  the  volume  of
20        referrals made; and
21             (6)  Any  investment contract between the entity and
22        the health care worker shall not include any covenant  or
23        non-competition clause that prevents a health care worker
24        from investing in other entities; and
25             (7)  When  making  a  referral, a health care worker
26        must disclose his investment interest in an entity to the
27        patient being referred to  such  entity.  If  alternative
28        facilities  are  reasonably  available,  the  health care
29        worker  must  provide  the  patient  with   a   list   of
30        alternative  facilities.  The  health  care  worker shall
31        inform the patient that they have the option  to  use  an
32        alternative  facility  other than one in which the health
33        care worker has an investment interest  and  the  patient
34        will not be treated differently by the health care worker
 
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 1        if  the patient chooses to use another entity. This shall
 2        be  applicable  to  all  health  care  worker  investors,
 3        including those who provide direct care or  services  for
 4        their   patients   in   entities   outside  their  office
 5        practices; and
 6             (8)  If a third  party  payor  requests  information
 7        with   regard   to  a  health  care  worker's  investment
 8        interest, the same shall be disclosed; and
 9             (9)  The  entity   shall   establish   an   internal
10        utilization  review  program  to  ensure  that  investing
11        health  care  workers  provided  appropriate or necessary
12        utilization; and
13             (10)  If a health care worker's  financial  interest
14        in  an  entity  is incompatible with a referred patient's
15        interest, the health care worker shall  make  alternative
16        arrangements for the patient's care.
17        The  Board  shall  make such a determination for a health
18    care worker within 90 days of a  completed  written  request.
19    Failure  to  make such a determination within the 90 day time
20    frame shall mean that no alternative is practical based  upon
21    the facts set forth in the completed written request.
22        (c)  It shall not be a violation of this Act for a health
23    care  worker  to  refer  a  patient  for health services to a
24    publicly traded entity in which he or she has  an  investment
25    interest provided that:
26             (1)  the  entity  is  listed  for trading on the New
27        York Stock Exchange or on the American Stock Exchange, or
28        is a national market  system  security  traded  under  an
29        automated  inter-dealer  quotation system operated by the
30        National Association of Securities Dealers; and
31             (2)  the entity had, at the end of the corporation's
32        most recent fiscal year, total net  assets  of  at  least
33        $30,000,000 related to the furnishing of health services;
34        and
 
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 1             (3)  any  investment  interest  obtained  after  the
 2        effective  date  of  this  Act is traded on the exchanges
 3        listed in paragraph 1 of subsection (c) of  this  Section
 4        after  the  entity  became a publicly traded corporation;
 5        and
 6             (4)  the entity markets or furnishes its services to
 7        referring health care worker investors and  other  health
 8        care workers on equal terms; and
 9             (5)  all   stock   held   in  such  publicly  traded
10        companies,  including  stock  held  in  the   predecessor
11        privately  held  company,  shall  be of one class without
12        preferential treatment as to status or remuneration; and
13             (6)  the entity does not loan funds or guarantee any
14        loans for health care workers who are in a position to be
15        referred to an entity; and
16             (7)  the  income  on  the   health   care   worker's
17        investment  is tied to the health care worker's equity in
18        the entity rather than to the volume of  referrals  made;
19        and
20             (8)  the  investment interest does not exceed 1/2 of
21        1% of the entity's total equity.
22        (d)  Any hospital licensed under the  Hospital  Licensing
23    Act  shall  not  discriminate against or otherwise penalize a
24    health care worker for compliance with this Act.
25        (e)  Any health care worker or  other  entity  shall  not
26    enter into an arrangement or scheme seeking to make referrals
27    to  another  health  care  worker  or  entity  based upon the
28    condition that the health care worker  or  entity  will  make
29    referrals  with  an  intent to evade the prohibitions of this
30    Act by inducing patient referrals which would  be  prohibited
31    by  this Section if the health care worker or entity made the
32    referral directly.
33        (f)  If compliance with the need and alternative investor
34    criteria is not  practical,  the  health  care  worker  shall
 
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 1    identify  to  the  patient  reasonably  available alternative
 2    facilities.  The  Board  shall,  by  rule,   designate   when
 3    compliance is "not practical".
 4        (g)  Health  care workers may request from the Board that
 5    it render an advisory opinion that a referral to an  existing
 6    or proposed entity under specified circumstances does or does
 7    not  violate the provisions of this Act.  The Board's opinion
 8    shall be presumptively correct.  Failure to  render  such  an
 9    advisory  opinion  within  90  days  of  a  completed written
10    request pursuant to this Section shall  create  a  rebuttable
11    presumption  that  a  referral  described  in  the  completed
12    written  request  is  not  or will not be a violation of this
13    Act.
14        (h)  Notwithstanding any provision of  this  Act  to  the
15    contrary,  a health care worker may refer a patient, who is a
16    member of a health maintenance organization "HMO" licensed in
17    this State, for health services to  an  entity,  outside  the
18    health  care  worker's office or group practice, in which the
19    health care worker is an investor,  provided  that  any  such
20    referral  is  made  pursuant  to  a  contract  with  the HMO.
21    Furthermore, notwithstanding any provision of this Act to the
22    contrary, a health care worker may refer  an  enrollee  of  a
23    "managed  care  community  network", as defined in subsection
24    (b) of Section 5-11 of the  Illinois  Public  Aid  Code,  for
25    health  services  to  an  entity,  outside  the  health  care
26    worker's  office  or group practice, in which the health care
27    worker is an investor, provided that  any  such  referral  is
28    made  pursuant  to a contract with the managed care community
29    network.
30    (Source: P.A. 92-370, eff. 8-15-01.)