[ Search ] [ Legislation ] [ Bill Summary ]
[ Home ] [ Back ] [ Bottom ]
90_HB0774 305 ILCS 5/5-16.3 Amends the Medicaid Article of the Public Aid Code. In the Section concerning the integrated health care program, requires that a managed health care entity provide its enrollees with orientation sufficient to ensure that they comprehend the enrollment requirements and the terms and conditions of coverage. Effective immediately. LRB9000965DJcd LRB9000965DJcd 1 AN ACT to amend the Illinois Public Aid Code by changing 2 Section 5-16.3. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Illinois Public Aid Code is amended by 6 changing Section 5-16.3 as follows: 7 (305 ILCS 5/5-16.3) 8 (Text of Section before amendment by P.A. 89-507) 9 Sec. 5-16.3. System for integrated health care services. 10 (a) It shall be the public policy of the State to adopt, 11 to the extent practicable, a health care program that 12 encourages the integration of health care services and 13 manages the health care of program enrollees while preserving 14 reasonable choice within a competitive and cost-efficient 15 environment. In furtherance of this public policy, the 16 Illinois Department shall develop and implement an integrated 17 health care program consistent with the provisions of this 18 Section. The provisions of this Section apply only to the 19 integrated health care program created under this Section. 20 Persons enrolled in the integrated health care program, as 21 determined by the Illinois Department by rule, shall be 22 afforded a choice among health care delivery systems, which 23 shall include, but are not limited to, (i) fee for service 24 care managed by a primary care physician licensed to practice 25 medicine in all its branches, (ii) managed health care 26 entities, and (iii) federally qualified health centers 27 (reimbursed according to a prospective cost-reimbursement 28 methodology) and rural health clinics (reimbursed according 29 to the Medicare methodology), where available. Persons 30 enrolled in the integrated health care program also may be 31 offered indemnity insurance plans, subject to availability. -2- LRB9000965DJcd 1 For purposes of this Section, a "managed health care 2 entity" means a health maintenance organization or a managed 3 care community network as defined in this Section. A "health 4 maintenance organization" means a health maintenance 5 organization as defined in the Health Maintenance 6 Organization Act. A "managed care community network" means 7 an entity, other than a health maintenance organization, that 8 is owned, operated, or governed by providers of health care 9 services within this State and that provides or arranges 10 primary, secondary, and tertiary managed health care services 11 under contract with the Illinois Department exclusively to 12 enrollees of the integrated health care program. A managed 13 care community network may contract with the Illinois 14 Department to provide only pediatric health care services. A 15 county provider as defined in Section 15-1 of this Code may 16 contract with the Illinois Department to provide services to 17 enrollees of the integrated health care program as a managed 18 care community network without the need to establish a 19 separate entity that provides services exclusively to 20 enrollees of the integrated health care program and shall be 21 deemed a managed care community network for purposes of this 22 Code only to the extent of the provision of services to those 23 enrollees in conjunction with the integrated health care 24 program. A county provider shall be entitled to contract 25 with the Illinois Department with respect to any contracting 26 region located in whole or in part within the county. A 27 county provider shall not be required to accept enrollees who 28 do not reside within the county. 29 Each managed care community network must demonstrate its 30 ability to bear the financial risk of serving enrollees under 31 this program. The Illinois Department shall by rule adopt 32 criteria for assessing the financial soundness of each 33 managed care community network. These rules shall consider 34 the extent to which a managed care community network is -3- LRB9000965DJcd 1 comprised of providers who directly render health care and 2 are located within the community in which they seek to 3 contract rather than solely arrange or finance the delivery 4 of health care. These rules shall further consider a variety 5 of risk-bearing and management techniques, including the 6 sufficiency of quality assurance and utilization management 7 programs and whether a managed care community network has 8 sufficiently demonstrated its financial solvency and net 9 worth. The Illinois Department's criteria must be based on 10 sound actuarial, financial, and accounting principles. In 11 adopting these rules, the Illinois Department shall consult 12 with the Illinois Department of Insurance. The Illinois 13 Department is responsible for monitoring compliance with 14 these rules. 15 This Section may not be implemented before the effective 16 date of these rules, the approval of any necessary federal 17 waivers, and the completion of the review of an application 18 submitted, at least 60 days before the effective date of 19 rules adopted under this Section, to the Illinois Department 20 by a managed care community network. 21 All health care delivery systems that contract with the 22 Illinois Department under the integrated health care program 23 shall clearly recognize a health care provider's right of 24 conscience under the Right of Conscience Act. In addition to 25 the provisions of that Act, no health care delivery system 26 that contracts with the Illinois Department under the 27 integrated health care program shall be required to provide, 28 arrange for, or pay for any health care or medical service, 29 procedure, or product if that health care delivery system is 30 owned, controlled, or sponsored by or affiliated with a 31 religious institution or religious organization that finds 32 that health care or medical service, procedure, or product to 33 violate its religious and moral teachings and beliefs. 34 (b) The Illinois Department may, by rule, provide for -4- LRB9000965DJcd 1 different benefit packages for different categories of 2 persons enrolled in the program. Mental health services, 3 alcohol and substance abuse services, services related to 4 children with chronic or acute conditions requiring 5 longer-term treatment and follow-up, and rehabilitation care 6 provided by a free-standing rehabilitation hospital or a 7 hospital rehabilitation unit may be excluded from a benefit 8 package if the State ensures that those services are made 9 available through a separate delivery system. An exclusion 10 does not prohibit the Illinois Department from developing and 11 implementing demonstration projects for categories of persons 12 or services. Benefit packages for persons eligible for 13 medical assistance under Articles V, VI, and XII shall be 14 based on the requirements of those Articles and shall be 15 consistent with the Title XIX of the Social Security Act. 16 Nothing in this Act shall be construed to apply to services 17 purchased by the Department of Children and Family Services 18 and the Department of Mental Health and Developmental 19 Disabilities under the provisions of Title 59 of the Illinois 20 Administrative Code, Part 132 ("Medicaid Community Mental 21 Health Services Program"). 22 (c) The program established by this Section may be 23 implemented by the Illinois Department in various contracting 24 areas at various times. The health care delivery systems and 25 providers available under the program may vary throughout the 26 State. For purposes of contracting with managed health care 27 entities and providers, the Illinois Department shall 28 establish contracting areas similar to the geographic areas 29 designated by the Illinois Department for contracting 30 purposes under the Illinois Competitive Access and 31 Reimbursement Equity Program (ICARE) under the authority of 32 Section 3-4 of the Illinois Health Finance Reform Act or 33 similarly-sized or smaller geographic areas established by 34 the Illinois Department by rule. A managed health care entity -5- LRB9000965DJcd 1 shall be permitted to contract in any geographic areas for 2 which it has a sufficient provider network and otherwise 3 meets the contracting terms of the State. The Illinois 4 Department is not prohibited from entering into a contract 5 with a managed health care entity at any time. 6 (d) A managed health care entity that contracts with the 7 Illinois Department for the provision of services under the 8 program shall do all of the following, solely for purposes of 9 the integrated health care program: 10 (1) Provide that any individual physician licensed 11 to practice medicine in all its branches, any pharmacy, 12 any federally qualified health center, and any 13 podiatrist, that consistently meets the reasonable terms 14 and conditions established by the managed health care 15 entity, including but not limited to credentialing 16 standards, quality assurance program requirements, 17 utilization management requirements, financial 18 responsibility standards, contracting process 19 requirements, and provider network size and accessibility 20 requirements, must be accepted by the managed health care 21 entity for purposes of the Illinois integrated health 22 care program. Any individual who is either terminated 23 from or denied inclusion in the panel of physicians of 24 the managed health care entity shall be given, within 10 25 business days after that determination, a written 26 explanation of the reasons for his or her exclusion or 27 termination from the panel. This paragraph (1) does not 28 apply to the following: 29 (A) A managed health care entity that 30 certifies to the Illinois Department that: 31 (i) it employs on a full-time basis 125 32 or more Illinois physicians licensed to 33 practice medicine in all of its branches; and 34 (ii) it will provide medical services -6- LRB9000965DJcd 1 through its employees to more than 80% of the 2 recipients enrolled with the entity in the 3 integrated health care program; or 4 (B) A domestic stock insurance company 5 licensed under clause (b) of class 1 of Section 4 of 6 the Illinois Insurance Code if (i) at least 66% of 7 the stock of the insurance company is owned by a 8 professional corporation organized under the 9 Professional Service Corporation Act that has 125 or 10 more shareholders who are Illinois physicians 11 licensed to practice medicine in all of its branches 12 and (ii) the insurance company certifies to the 13 Illinois Department that at least 80% of those 14 physician shareholders will provide services to 15 recipients enrolled with the company in the 16 integrated health care program. 17 (2) Provide for reimbursement for providers for 18 emergency care, as defined by the Illinois Department by 19 rule, that must be provided to its enrollees, including 20 an emergency room screening fee, and urgent care that it 21 authorizes for its enrollees, regardless of the 22 provider's affiliation with the managed health care 23 entity. Providers shall be reimbursed for emergency care 24 at an amount equal to the Illinois Department's 25 fee-for-service rates for those medical services rendered 26 by providers not under contract with the managed health 27 care entity to enrollees of the entity. 28 (3) Provide that any provider affiliated with a 29 managed health care entity may also provide services on a 30 fee-for-service basis to Illinois Department clients not 31 enrolled in a managed health care entity. 32 (4) Provide client education services as determined 33 and approved by the Illinois Department, including but 34 not limited to (i) education regarding appropriate -7- LRB9000965DJcd 1 utilization of health care services in a managed care 2 system, (ii) written disclosure of treatment policies and 3 any restrictions or limitations on health services, 4 including, but not limited to, physical services, 5 clinical laboratory tests, hospital and surgical 6 procedures, prescription drugs and biologics, and 7 radiological examinations, and (iii) written notice that 8 the enrollee may receive from another provider those 9 services covered under this program that are not provided 10 by the managed health care entity. 11 (4.5) Provide its enrollees with orientation 12 sufficient to ensure that all enrollees comprehend the 13 enrollment requirements and the terms and conditions of 14 coverage. The managed health care entity shall certify 15 to the Illinois Department that each enrollee within the 16 entity's system has successfully completed the 17 orientation. This paragraph applies to every enrollee in 18 a managed health care entity's system, regardless of 19 whether the enrollee has chosen the system or has been 20 assigned to the system as provided in subsection (e). 21 (5) Provide that enrollees within its system may 22 choose the site for provision of services and the panel 23 of health care providers. 24 (6) Not discriminate in its enrollment or 25 disenrollment practices among recipients of medical 26 services or program enrollees based on health status. 27 (7) Provide a quality assurance and utilization 28 review program that (i) for health maintenance 29 organizations meets the requirements of the Health 30 Maintenance Organization Act and (ii) for managed care 31 community networks meets the requirements established by 32 the Illinois Department in rules that incorporate those 33 standards set forth in the Health Maintenance 34 Organization Act. -8- LRB9000965DJcd 1 (8) Issue a managed health care entity 2 identification card to each enrollee upon enrollment. 3 The card must contain all of the following: 4 (A) The enrollee's signature. 5 (B) The enrollee's health plan. 6 (C) The name and telephone number of the 7 enrollee's primary care physician. 8 (D) A telephone number to be used for 9 emergency service 24 hours per day, 7 days per week. 10 The telephone number required to be maintained 11 pursuant to this subparagraph by each managed health 12 care entity shall, at minimum, be staffed by 13 medically trained personnel and be provided 14 directly, or under arrangement, at an office or 15 offices in locations maintained solely within the 16 State of Illinois. For purposes of this 17 subparagraph, "medically trained personnel" means 18 licensed practical nurses or registered nurses 19 located in the State of Illinois who are licensed 20 pursuant to the Illinois Nursing Act of 1987. 21 (9) Ensure that every primary care physician and 22 pharmacy in the managed health care entity meets the 23 standards established by the Illinois Department for 24 accessibility and quality of care. The Illinois 25 Department shall arrange for and oversee an evaluation of 26 the standards established under this paragraph (9) and 27 may recommend any necessary changes to these standards. 28 The Illinois Department shall submit an annual report to 29 the Governor and the General Assembly by April 1 of each 30 year regarding the effect of the standards on ensuring 31 access and quality of care to enrollees. 32 (10) Provide a procedure for handling complaints 33 that (i) for health maintenance organizations meets the 34 requirements of the Health Maintenance Organization Act -9- LRB9000965DJcd 1 and (ii) for managed care community networks meets the 2 requirements established by the Illinois Department in 3 rules that incorporate those standards set forth in the 4 Health Maintenance Organization Act. 5 (11) Maintain, retain, and make available to the 6 Illinois Department records, data, and information, in a 7 uniform manner determined by the Illinois Department, 8 sufficient for the Illinois Department to monitor 9 utilization, accessibility, and quality of care. 10 (12) Except for providers who are prepaid, pay all 11 approved claims for covered services that are completed 12 and submitted to the managed health care entity within 30 13 days after receipt of the claim or receipt of the 14 appropriate capitation payment or payments by the managed 15 health care entity from the State for the month in which 16 the services included on the claim were rendered, 17 whichever is later. If payment is not made or mailed to 18 the provider by the managed health care entity by the due 19 date under this subsection, an interest penalty of 1% of 20 any amount unpaid shall be added for each month or 21 fraction of a month after the due date, until final 22 payment is made. Nothing in this Section shall prohibit 23 managed health care entities and providers from mutually 24 agreeing to terms that require more timely payment. 25 (13) Provide integration with community-based 26 programs provided by certified local health departments 27 such as Women, Infants, and Children Supplemental Food 28 Program (WIC), childhood immunization programs, health 29 education programs, case management programs, and health 30 screening programs. 31 (14) Provide that the pharmacy formulary used by a 32 managed health care entity and its contract providers be 33 no more restrictive than the Illinois Department's 34 pharmaceutical program on the effective date of this -10- LRB9000965DJcd 1 amendatory Act of 1994 and as amended after that date. 2 (15) Provide integration with community-based 3 organizations, including, but not limited to, any 4 organization that has operated within a Medicaid 5 Partnership as defined by this Code or by rule of the 6 Illinois Department, that may continue to operate under a 7 contract with the Illinois Department or a managed health 8 care entity under this Section to provide case management 9 services to Medicaid clients in designated high-need 10 areas. 11 The Illinois Department may, by rule, determine 12 methodologies to limit financial liability for managed health 13 care entities resulting from payment for services to 14 enrollees provided under the Illinois Department's integrated 15 health care program. Any methodology so determined may be 16 considered or implemented by the Illinois Department through 17 a contract with a managed health care entity under this 18 integrated health care program. 19 The Illinois Department shall contract with an entity or 20 entities to provide external peer-based quality assurance 21 review for the integrated health care program. The entity 22 shall be representative of Illinois physicians licensed to 23 practice medicine in all its branches and have statewide 24 geographic representation in all specialties of medical care 25 that are provided within the integrated health care program. 26 The entity may not be a third party payer and shall maintain 27 offices in locations around the State in order to provide 28 service and continuing medical education to physician 29 participants within the integrated health care program. The 30 review process shall be developed and conducted by Illinois 31 physicians licensed to practice medicine in all its branches. 32 In consultation with the entity, the Illinois Department may 33 contract with other entities for professional peer-based 34 quality assurance review of individual categories of services -11- LRB9000965DJcd 1 other than services provided, supervised, or coordinated by 2 physicians licensed to practice medicine in all its branches. 3 The Illinois Department shall establish, by rule, criteria to 4 avoid conflicts of interest in the conduct of quality 5 assurance activities consistent with professional peer-review 6 standards. All quality assurance activities shall be 7 coordinated by the Illinois Department. 8 (e) All persons enrolled in the program shall be 9 provided with a full written explanation of all 10 fee-for-service and managed health care plan options and a 11 reasonable opportunity to choose among the options as 12 provided by rule. The Illinois Department shall provide to 13 enrollees, upon enrollment in the integrated health care 14 program and at least annually thereafter, notice of the 15 process for requesting an appeal under the Illinois 16 Department's administrative appeal procedures. 17 Notwithstanding any other Section of this Code, the Illinois 18 Department may provide by rule for the Illinois Department to 19 assign a person enrolled in the program to a specific 20 provider of medical services or to a specific health care 21 delivery system if an enrollee has failed to exercise choice 22 in a timely manner. An enrollee assigned by the Illinois 23 Department shall be afforded the opportunity to disenroll and 24 to select a specific provider of medical services or a 25 specific health care delivery system within the first 30 days 26 after the assignment. An enrollee who has failed to exercise 27 choice in a timely manner may be assigned only if there are 3 28 or more managed health care entities contracting with the 29 Illinois Department within the contracting area, except that, 30 outside the City of Chicago, this requirement may be waived 31 for an area by rules adopted by the Illinois Department after 32 consultation with all hospitals within the contracting area. 33 The Illinois Department shall establish by rule the procedure 34 for random assignment of enrollees who fail to exercise -12- LRB9000965DJcd 1 choice in a timely manner to a specific managed health care 2 entity in proportion to the available capacity of that 3 managed health care entity. Assignment to a specific provider 4 of medical services or to a specific managed health care 5 entity may not exceed that provider's or entity's capacity as 6 determined by the Illinois Department. Any person who has 7 chosen a specific provider of medical services or a specific 8 managed health care entity, or any person who has been 9 assigned under this subsection, shall be given the 10 opportunity to change that choice or assignment at least once 11 every 12 months, as determined by the Illinois Department by 12 rule. The Illinois Department shall maintain a toll-free 13 telephone number for program enrollees' use in reporting 14 problems with managed health care entities. 15 (f) If a person becomes eligible for participation in 16 the integrated health care program while he or she is 17 hospitalized, the Illinois Department may not enroll that 18 person in the program until after he or she has been 19 discharged from the hospital. This subsection does not apply 20 to newborn infants whose mothers are enrolled in the 21 integrated health care program. 22 (g) The Illinois Department shall, by rule, establish 23 for managed health care entities rates that (i) are certified 24 to be actuarially sound, as determined by an actuary who is 25 an associate or a fellow of the Society of Actuaries or a 26 member of the American Academy of Actuaries and who has 27 expertise and experience in medical insurance and benefit 28 programs, in accordance with the Illinois Department's 29 current fee-for-service payment system, and (ii) take into 30 account any difference of cost to provide health care to 31 different populations based on gender, age, location, and 32 eligibility category. The rates for managed health care 33 entities shall be determined on a capitated basis. 34 The Illinois Department by rule shall establish a method -13- LRB9000965DJcd 1 to adjust its payments to managed health care entities in a 2 manner intended to avoid providing any financial incentive to 3 a managed health care entity to refer patients to a county 4 provider, in an Illinois county having a population greater 5 than 3,000,000, that is paid directly by the Illinois 6 Department. The Illinois Department shall by April 1, 1997, 7 and annually thereafter, review the method to adjust 8 payments. Payments by the Illinois Department to the county 9 provider, for persons not enrolled in a managed care 10 community network owned or operated by a county provider, 11 shall be paid on a fee-for-service basis under Article XV of 12 this Code. 13 The Illinois Department by rule shall establish a method 14 to reduce its payments to managed health care entities to 15 take into consideration (i) any adjustment payments paid to 16 hospitals under subsection (h) of this Section to the extent 17 those payments, or any part of those payments, have been 18 taken into account in establishing capitated rates under this 19 subsection (g) and (ii) the implementation of methodologies 20 to limit financial liability for managed health care entities 21 under subsection (d) of this Section. 22 (h) For hospital services provided by a hospital that 23 contracts with a managed health care entity, adjustment 24 payments shall be paid directly to the hospital by the 25 Illinois Department. Adjustment payments may include but 26 need not be limited to adjustment payments to: 27 disproportionate share hospitals under Section 5-5.02 of this 28 Code; primary care access health care education payments (89 29 Ill. Adm. Code 149.140); payments for capital, direct medical 30 education, indirect medical education, certified registered 31 nurse anesthetist, and kidney acquisition costs (89 Ill. Adm. 32 Code 149.150(c)); uncompensated care payments (89 Ill. Adm. 33 Code 148.150(h)); trauma center payments (89 Ill. Adm. Code 34 148.290(c)); rehabilitation hospital payments (89 Ill. Adm. -14- LRB9000965DJcd 1 Code 148.290(d)); perinatal center payments (89 Ill. Adm. 2 Code 148.290(e)); obstetrical care payments (89 Ill. Adm. 3 Code 148.290(f)); targeted access payments (89 Ill. Adm. Code 4 148.290(g)); Medicaid high volume payments (89 Ill. Adm. Code 5 148.290(h)); and outpatient indigent volume adjustments (89 6 Ill. Adm. Code 148.140(b)(5)). 7 (i) For any hospital eligible for the adjustment 8 payments described in subsection (h), the Illinois Department 9 shall maintain, through the period ending June 30, 1995, 10 reimbursement levels in accordance with statutes and rules in 11 effect on April 1, 1994. 12 (j) Nothing contained in this Code in any way limits or 13 otherwise impairs the authority or power of the Illinois 14 Department to enter into a negotiated contract pursuant to 15 this Section with a managed health care entity, including, 16 but not limited to, a health maintenance organization, that 17 provides for termination or nonrenewal of the contract 18 without cause upon notice as provided in the contract and 19 without a hearing. 20 (k) Section 5-5.15 does not apply to the program 21 developed and implemented pursuant to this Section. 22 (l) The Illinois Department shall, by rule, define those 23 chronic or acute medical conditions of childhood that require 24 longer-term treatment and follow-up care. The Illinois 25 Department shall ensure that services required to treat these 26 conditions are available through a separate delivery system. 27 A managed health care entity that contracts with the 28 Illinois Department may refer a child with medical conditions 29 described in the rules adopted under this subsection directly 30 to a children's hospital or to a hospital, other than a 31 children's hospital, that is qualified to provide inpatient 32 and outpatient services to treat those conditions. The 33 Illinois Department shall provide fee-for-service 34 reimbursement directly to a children's hospital for those -15- LRB9000965DJcd 1 services pursuant to Title 89 of the Illinois Administrative 2 Code, Section 148.280(a), at a rate at least equal to the 3 rate in effect on March 31, 1994. For hospitals, other than 4 children's hospitals, that are qualified to provide inpatient 5 and outpatient services to treat those conditions, the 6 Illinois Department shall provide reimbursement for those 7 services on a fee-for-service basis, at a rate at least equal 8 to the rate in effect for those other hospitals on March 31, 9 1994. 10 A children's hospital shall be directly reimbursed for 11 all services provided at the children's hospital on a 12 fee-for-service basis pursuant to Title 89 of the Illinois 13 Administrative Code, Section 148.280(a), at a rate at least 14 equal to the rate in effect on March 31, 1994, until the 15 later of (i) implementation of the integrated health care 16 program under this Section and development of actuarially 17 sound capitation rates for services other than those chronic 18 or acute medical conditions of childhood that require 19 longer-term treatment and follow-up care as defined by the 20 Illinois Department in the rules adopted under this 21 subsection or (ii) March 31, 1996. 22 Notwithstanding anything in this subsection to the 23 contrary, a managed health care entity shall not consider 24 sources or methods of payment in determining the referral of 25 a child. The Illinois Department shall adopt rules to 26 establish criteria for those referrals. The Illinois 27 Department by rule shall establish a method to adjust its 28 payments to managed health care entities in a manner intended 29 to avoid providing any financial incentive to a managed 30 health care entity to refer patients to a provider who is 31 paid directly by the Illinois Department. 32 (m) Behavioral health services provided or funded by the 33 Department of Mental Health and Developmental Disabilities, 34 the Department of Alcoholism and Substance Abuse, the -16- LRB9000965DJcd 1 Department of Children and Family Services, and the Illinois 2 Department shall be excluded from a benefit package. 3 Conditions of an organic or physical origin or nature, 4 including medical detoxification, however, may not be 5 excluded. In this subsection, "behavioral health services" 6 means mental health services and subacute alcohol and 7 substance abuse treatment services, as defined in the 8 Illinois Alcoholism and Other Drug Dependency Act. In this 9 subsection, "mental health services" includes, at a minimum, 10 the following services funded by the Illinois Department, the 11 Department of Mental Health and Developmental Disabilities, 12 or the Department of Children and Family Services: (i) 13 inpatient hospital services, including related physician 14 services, related psychiatric interventions, and 15 pharmaceutical services provided to an eligible recipient 16 hospitalized with a primary diagnosis of psychiatric 17 disorder; (ii) outpatient mental health services as defined 18 and specified in Title 59 of the Illinois Administrative 19 Code, Part 132; (iii) any other outpatient mental health 20 services funded by the Illinois Department pursuant to the 21 State of Illinois Medicaid Plan; (iv) partial 22 hospitalization; and (v) follow-up stabilization related to 23 any of those services. Additional behavioral health services 24 may be excluded under this subsection as mutually agreed in 25 writing by the Illinois Department and the affected State 26 agency or agencies. The exclusion of any service does not 27 prohibit the Illinois Department from developing and 28 implementing demonstration projects for categories of persons 29 or services. The Department of Mental Health and 30 Developmental Disabilities, the Department of Children and 31 Family Services, and the Department of Alcoholism and 32 Substance Abuse shall each adopt rules governing the 33 integration of managed care in the provision of behavioral 34 health services. The State shall integrate managed care -17- LRB9000965DJcd 1 community networks and affiliated providers, to the extent 2 practicable, in any separate delivery system for mental 3 health services. 4 (n) The Illinois Department shall adopt rules to 5 establish reserve requirements for managed care community 6 networks, as required by subsection (a), and health 7 maintenance organizations to protect against liabilities in 8 the event that a managed health care entity is declared 9 insolvent or bankrupt. If a managed health care entity other 10 than a county provider is declared insolvent or bankrupt, 11 after liquidation and application of any available assets, 12 resources, and reserves, the Illinois Department shall pay a 13 portion of the amounts owed by the managed health care entity 14 to providers for services rendered to enrollees under the 15 integrated health care program under this Section based on 16 the following schedule: (i) from April 1, 1995 through June 17 30, 1998, 90% of the amounts owed; (ii) from July 1, 1998 18 through June 30, 2001, 80% of the amounts owed; and (iii) 19 from July 1, 2001 through June 30, 2005, 75% of the amounts 20 owed. The amounts paid under this subsection shall be 21 calculated based on the total amount owed by the managed 22 health care entity to providers before application of any 23 available assets, resources, and reserves. After June 30, 24 2005, the Illinois Department may not pay any amounts owed to 25 providers as a result of an insolvency or bankruptcy of a 26 managed health care entity occurring after that date. The 27 Illinois Department is not obligated, however, to pay amounts 28 owed to a provider that has an ownership or other governing 29 interest in the managed health care entity. This subsection 30 applies only to managed health care entities and the services 31 they provide under the integrated health care program under 32 this Section. 33 (o) Notwithstanding any other provision of law or 34 contractual agreement to the contrary, providers shall not be -18- LRB9000965DJcd 1 required to accept from any other third party payer the rates 2 determined or paid under this Code by the Illinois 3 Department, managed health care entity, or other health care 4 delivery system for services provided to recipients. 5 (p) The Illinois Department may seek and obtain any 6 necessary authorization provided under federal law to 7 implement the program, including the waiver of any federal 8 statutes or regulations. The Illinois Department may seek a 9 waiver of the federal requirement that the combined 10 membership of Medicare and Medicaid enrollees in a managed 11 care community network may not exceed 75% of the managed care 12 community network's total enrollment. The Illinois 13 Department shall not seek a waiver of this requirement for 14 any other category of managed health care entity. The 15 Illinois Department shall not seek a waiver of the inpatient 16 hospital reimbursement methodology in Section 1902(a)(13)(A) 17 of Title XIX of the Social Security Act even if the federal 18 agency responsible for administering Title XIX determines 19 that Section 1902(a)(13)(A) applies to managed health care 20 systems. 21 Notwithstanding any other provisions of this Code to the 22 contrary, the Illinois Department shall seek a waiver of 23 applicable federal law in order to impose a co-payment system 24 consistent with this subsection on recipients of medical 25 services under Title XIX of the Social Security Act who are 26 not enrolled in a managed health care entity. The waiver 27 request submitted by the Illinois Department shall provide 28 for co-payments of up to $0.50 for prescribed drugs and up to 29 $0.50 for x-ray services and shall provide for co-payments of 30 up to $10 for non-emergency services provided in a hospital 31 emergency room and up to $10 for non-emergency ambulance 32 services. The purpose of the co-payments shall be to deter 33 those recipients from seeking unnecessary medical care. 34 Co-payments may not be used to deter recipients from seeking -19- LRB9000965DJcd 1 necessary medical care. No recipient shall be required to 2 pay more than a total of $150 per year in co-payments under 3 the waiver request required by this subsection. A recipient 4 may not be required to pay more than $15 of any amount due 5 under this subsection in any one month. 6 Co-payments authorized under this subsection may not be 7 imposed when the care was necessitated by a true medical 8 emergency. Co-payments may not be imposed for any of the 9 following classifications of services: 10 (1) Services furnished to person under 18 years of 11 age. 12 (2) Services furnished to pregnant women. 13 (3) Services furnished to any individual who is an 14 inpatient in a hospital, nursing facility, intermediate 15 care facility, or other medical institution, if that 16 person is required to spend for costs of medical care all 17 but a minimal amount of his or her income required for 18 personal needs. 19 (4) Services furnished to a person who is receiving 20 hospice care. 21 Co-payments authorized under this subsection shall not be 22 deducted from or reduce in any way payments for medical 23 services from the Illinois Department to providers. No 24 provider may deny those services to an individual eligible 25 for services based on the individual's inability to pay the 26 co-payment. 27 Recipients who are subject to co-payments shall be 28 provided notice, in plain and clear language, of the amount 29 of the co-payments, the circumstances under which co-payments 30 are exempted, the circumstances under which co-payments may 31 be assessed, and their manner of collection. 32 The Illinois Department shall establish a Medicaid 33 Co-Payment Council to assist in the development of co-payment 34 policies for the medical assistance program. The Medicaid -20- LRB9000965DJcd 1 Co-Payment Council shall also have jurisdiction to develop a 2 program to provide financial or non-financial incentives to 3 Medicaid recipients in order to encourage recipients to seek 4 necessary health care. The Council shall be chaired by the 5 Director of the Illinois Department, and shall have 6 6 additional members. Two of the 6 additional members shall be 7 appointed by the Governor, and one each shall be appointed by 8 the President of the Senate, the Minority Leader of the 9 Senate, the Speaker of the House of Representatives, and the 10 Minority Leader of the House of Representatives. The Council 11 may be convened and make recommendations upon the appointment 12 of a majority of its members. The Council shall be appointed 13 and convened no later than September 1, 1994 and shall report 14 its recommendations to the Director of the Illinois 15 Department and the General Assembly no later than October 1, 16 1994. The chairperson of the Council shall be allowed to 17 vote only in the case of a tie vote among the appointed 18 members of the Council. 19 The Council shall be guided by the following principles 20 as it considers recommendations to be developed to implement 21 any approved waivers that the Illinois Department must seek 22 pursuant to this subsection: 23 (1) Co-payments should not be used to deter access 24 to adequate medical care. 25 (2) Co-payments should be used to reduce fraud. 26 (3) Co-payment policies should be examined in 27 consideration of other states' experience, and the 28 ability of successful co-payment plans to control 29 unnecessary or inappropriate utilization of services 30 should be promoted. 31 (4) All participants, both recipients and 32 providers, in the medical assistance program have 33 responsibilities to both the State and the program. 34 (5) Co-payments are primarily a tool to educate the -21- LRB9000965DJcd 1 participants in the responsible use of health care 2 resources. 3 (6) Co-payments should not be used to penalize 4 providers. 5 (7) A successful medical program requires the 6 elimination of improper utilization of medical resources. 7 The integrated health care program, or any part of that 8 program, established under this Section may not be 9 implemented if matching federal funds under Title XIX of the 10 Social Security Act are not available for administering the 11 program. 12 The Illinois Department shall submit for publication in 13 the Illinois Register the name, address, and telephone number 14 of the individual to whom a request may be directed for a 15 copy of the request for a waiver of provisions of Title XIX 16 of the Social Security Act that the Illinois Department 17 intends to submit to the Health Care Financing Administration 18 in order to implement this Section. The Illinois Department 19 shall mail a copy of that request for waiver to all 20 requestors at least 16 days before filing that request for 21 waiver with the Health Care Financing Administration. 22 (q) After the effective date of this Section, the 23 Illinois Department may take all planning and preparatory 24 action necessary to implement this Section, including, but 25 not limited to, seeking requests for proposals relating to 26 the integrated health care program created under this 27 Section. 28 (r) In order to (i) accelerate and facilitate the 29 development of integrated health care in contracting areas 30 outside counties with populations in excess of 3,000,000 and 31 counties adjacent to those counties and (ii) maintain and 32 sustain the high quality of education and residency programs 33 coordinated and associated with local area hospitals, the 34 Illinois Department may develop and implement a demonstration -22- LRB9000965DJcd 1 program for managed care community networks owned, operated, 2 or governed by State-funded medical schools. The Illinois 3 Department shall prescribe by rule the criteria, standards, 4 and procedures for effecting this demonstration program. 5 (s) (Blank). 6 (t) On April 1, 1995 and every 6 months thereafter, the 7 Illinois Department shall report to the Governor and General 8 Assembly on the progress of the integrated health care 9 program in enrolling clients into managed health care 10 entities. The report shall indicate the capacities of the 11 managed health care entities with which the State contracts, 12 the number of clients enrolled by each contractor, the areas 13 of the State in which managed care options do not exist, and 14 the progress toward meeting the enrollment goals of the 15 integrated health care program. 16 (u) The Illinois Department may implement this Section 17 through the use of emergency rules in accordance with Section 18 5-45 of the Illinois Administrative Procedure Act. For 19 purposes of that Act, the adoption of rules to implement this 20 Section is deemed an emergency and necessary for the public 21 interest, safety, and welfare. 22 (Source: P.A. 88-554, eff. 7-26-94; 89-21, eff. 7-1-95; 23 89-673, eff. 8-14-96; revised 8-26-96.) 24 (Text of Section after amendment by P.A. 89-507) 25 Sec. 5-16.3. System for integrated health care services. 26 (a) It shall be the public policy of the State to adopt, 27 to the extent practicable, a health care program that 28 encourages the integration of health care services and 29 manages the health care of program enrollees while preserving 30 reasonable choice within a competitive and cost-efficient 31 environment. In furtherance of this public policy, the 32 Illinois Department shall develop and implement an integrated 33 health care program consistent with the provisions of this 34 Section. The provisions of this Section apply only to the -23- LRB9000965DJcd 1 integrated health care program created under this Section. 2 Persons enrolled in the integrated health care program, as 3 determined by the Illinois Department by rule, shall be 4 afforded a choice among health care delivery systems, which 5 shall include, but are not limited to, (i) fee for service 6 care managed by a primary care physician licensed to practice 7 medicine in all its branches, (ii) managed health care 8 entities, and (iii) federally qualified health centers 9 (reimbursed according to a prospective cost-reimbursement 10 methodology) and rural health clinics (reimbursed according 11 to the Medicare methodology), where available. Persons 12 enrolled in the integrated health care program also may be 13 offered indemnity insurance plans, subject to availability. 14 For purposes of this Section, a "managed health care 15 entity" means a health maintenance organization or a managed 16 care community network as defined in this Section. A "health 17 maintenance organization" means a health maintenance 18 organization as defined in the Health Maintenance 19 Organization Act. A "managed care community network" means 20 an entity, other than a health maintenance organization, that 21 is owned, operated, or governed by providers of health care 22 services within this State and that provides or arranges 23 primary, secondary, and tertiary managed health care services 24 under contract with the Illinois Department exclusively to 25 enrollees of the integrated health care program. A managed 26 care community network may contract with the Illinois 27 Department to provide only pediatric health care services. A 28 county provider as defined in Section 15-1 of this Code may 29 contract with the Illinois Department to provide services to 30 enrollees of the integrated health care program as a managed 31 care community network without the need to establish a 32 separate entity that provides services exclusively to 33 enrollees of the integrated health care program and shall be 34 deemed a managed care community network for purposes of this -24- LRB9000965DJcd 1 Code only to the extent of the provision of services to those 2 enrollees in conjunction with the integrated health care 3 program. A county provider shall be entitled to contract 4 with the Illinois Department with respect to any contracting 5 region located in whole or in part within the county. A 6 county provider shall not be required to accept enrollees who 7 do not reside within the county. 8 Each managed care community network must demonstrate its 9 ability to bear the financial risk of serving enrollees under 10 this program. The Illinois Department shall by rule adopt 11 criteria for assessing the financial soundness of each 12 managed care community network. These rules shall consider 13 the extent to which a managed care community network is 14 comprised of providers who directly render health care and 15 are located within the community in which they seek to 16 contract rather than solely arrange or finance the delivery 17 of health care. These rules shall further consider a variety 18 of risk-bearing and management techniques, including the 19 sufficiency of quality assurance and utilization management 20 programs and whether a managed care community network has 21 sufficiently demonstrated its financial solvency and net 22 worth. The Illinois Department's criteria must be based on 23 sound actuarial, financial, and accounting principles. In 24 adopting these rules, the Illinois Department shall consult 25 with the Illinois Department of Insurance. The Illinois 26 Department is responsible for monitoring compliance with 27 these rules. 28 This Section may not be implemented before the effective 29 date of these rules, the approval of any necessary federal 30 waivers, and the completion of the review of an application 31 submitted, at least 60 days before the effective date of 32 rules adopted under this Section, to the Illinois Department 33 by a managed care community network. 34 All health care delivery systems that contract with the -25- LRB9000965DJcd 1 Illinois Department under the integrated health care program 2 shall clearly recognize a health care provider's right of 3 conscience under the Right of Conscience Act. In addition to 4 the provisions of that Act, no health care delivery system 5 that contracts with the Illinois Department under the 6 integrated health care program shall be required to provide, 7 arrange for, or pay for any health care or medical service, 8 procedure, or product if that health care delivery system is 9 owned, controlled, or sponsored by or affiliated with a 10 religious institution or religious organization that finds 11 that health care or medical service, procedure, or product to 12 violate its religious and moral teachings and beliefs. 13 (b) The Illinois Department may, by rule, provide for 14 different benefit packages for different categories of 15 persons enrolled in the program. Mental health services, 16 alcohol and substance abuse services, services related to 17 children with chronic or acute conditions requiring 18 longer-term treatment and follow-up, and rehabilitation care 19 provided by a free-standing rehabilitation hospital or a 20 hospital rehabilitation unit may be excluded from a benefit 21 package if the State ensures that those services are made 22 available through a separate delivery system. An exclusion 23 does not prohibit the Illinois Department from developing and 24 implementing demonstration projects for categories of persons 25 or services. Benefit packages for persons eligible for 26 medical assistance under Articles V, VI, and XII shall be 27 based on the requirements of those Articles and shall be 28 consistent with the Title XIX of the Social Security Act. 29 Nothing in this Act shall be construed to apply to services 30 purchased by the Department of Children and Family Services 31 and the Department of Human Services (as successor to the 32 Department of Mental Health and Developmental Disabilities) 33 under the provisions of Title 59 of the Illinois 34 Administrative Code, Part 132 ("Medicaid Community Mental -26- LRB9000965DJcd 1 Health Services Program"). 2 (c) The program established by this Section may be 3 implemented by the Illinois Department in various contracting 4 areas at various times. The health care delivery systems and 5 providers available under the program may vary throughout the 6 State. For purposes of contracting with managed health care 7 entities and providers, the Illinois Department shall 8 establish contracting areas similar to the geographic areas 9 designated by the Illinois Department for contracting 10 purposes under the Illinois Competitive Access and 11 Reimbursement Equity Program (ICARE) under the authority of 12 Section 3-4 of the Illinois Health Finance Reform Act or 13 similarly-sized or smaller geographic areas established by 14 the Illinois Department by rule. A managed health care entity 15 shall be permitted to contract in any geographic areas for 16 which it has a sufficient provider network and otherwise 17 meets the contracting terms of the State. The Illinois 18 Department is not prohibited from entering into a contract 19 with a managed health care entity at any time. 20 (d) A managed health care entity that contracts with the 21 Illinois Department for the provision of services under the 22 program shall do all of the following, solely for purposes of 23 the integrated health care program: 24 (1) Provide that any individual physician licensed 25 to practice medicine in all its branches, any pharmacy, 26 any federally qualified health center, and any 27 podiatrist, that consistently meets the reasonable terms 28 and conditions established by the managed health care 29 entity, including but not limited to credentialing 30 standards, quality assurance program requirements, 31 utilization management requirements, financial 32 responsibility standards, contracting process 33 requirements, and provider network size and accessibility 34 requirements, must be accepted by the managed health care -27- LRB9000965DJcd 1 entity for purposes of the Illinois integrated health 2 care program. Any individual who is either terminated 3 from or denied inclusion in the panel of physicians of 4 the managed health care entity shall be given, within 10 5 business days after that determination, a written 6 explanation of the reasons for his or her exclusion or 7 termination from the panel. This paragraph (1) does not 8 apply to the following: 9 (A) A managed health care entity that 10 certifies to the Illinois Department that: 11 (i) it employs on a full-time basis 125 12 or more Illinois physicians licensed to 13 practice medicine in all of its branches; and 14 (ii) it will provide medical services 15 through its employees to more than 80% of the 16 recipients enrolled with the entity in the 17 integrated health care program; or 18 (B) A domestic stock insurance company 19 licensed under clause (b) of class 1 of Section 4 of 20 the Illinois Insurance Code if (i) at least 66% of 21 the stock of the insurance company is owned by a 22 professional corporation organized under the 23 Professional Service Corporation Act that has 125 or 24 more shareholders who are Illinois physicians 25 licensed to practice medicine in all of its branches 26 and (ii) the insurance company certifies to the 27 Illinois Department that at least 80% of those 28 physician shareholders will provide services to 29 recipients enrolled with the company in the 30 integrated health care program. 31 (2) Provide for reimbursement for providers for 32 emergency care, as defined by the Illinois Department by 33 rule, that must be provided to its enrollees, including 34 an emergency room screening fee, and urgent care that it -28- LRB9000965DJcd 1 authorizes for its enrollees, regardless of the 2 provider's affiliation with the managed health care 3 entity. Providers shall be reimbursed for emergency care 4 at an amount equal to the Illinois Department's 5 fee-for-service rates for those medical services rendered 6 by providers not under contract with the managed health 7 care entity to enrollees of the entity. 8 (3) Provide that any provider affiliated with a 9 managed health care entity may also provide services on a 10 fee-for-service basis to Illinois Department clients not 11 enrolled in a managed health care entity. 12 (4) Provide client education services as determined 13 and approved by the Illinois Department, including but 14 not limited to (i) education regarding appropriate 15 utilization of health care services in a managed care 16 system, (ii) written disclosure of treatment policies and 17 any restrictions or limitations on health services, 18 including, but not limited to, physical services, 19 clinical laboratory tests, hospital and surgical 20 procedures, prescription drugs and biologics, and 21 radiological examinations, and (iii) written notice that 22 the enrollee may receive from another provider those 23 services covered under this program that are not provided 24 by the managed health care entity. 25 (4.5) Provide its enrollees with orientation 26 sufficient to ensure that all enrollees comprehend the 27 enrollment requirements and the terms and conditions of 28 coverage. The managed health care entity shall certify 29 to the Illinois Department that each enrollee within the 30 entity's system has successfully completed the 31 orientation. This paragraph applies to every enrollee in 32 a managed health care entity's system, regardless of 33 whether the enrollee has chosen the system or has been 34 assigned to the system as provided in subsection (e). -29- LRB9000965DJcd 1 (5) Provide that enrollees within its system may 2 choose the site for provision of services and the panel 3 of health care providers. 4 (6) Not discriminate in its enrollment or 5 disenrollment practices among recipients of medical 6 services or program enrollees based on health status. 7 (7) Provide a quality assurance and utilization 8 review program that (i) for health maintenance 9 organizations meets the requirements of the Health 10 Maintenance Organization Act and (ii) for managed care 11 community networks meets the requirements established by 12 the Illinois Department in rules that incorporate those 13 standards set forth in the Health Maintenance 14 Organization Act. 15 (8) Issue a managed health care entity 16 identification card to each enrollee upon enrollment. 17 The card must contain all of the following: 18 (A) The enrollee's signature. 19 (B) The enrollee's health plan. 20 (C) The name and telephone number of the 21 enrollee's primary care physician. 22 (D) A telephone number to be used for 23 emergency service 24 hours per day, 7 days per week. 24 The telephone number required to be maintained 25 pursuant to this subparagraph by each managed health 26 care entity shall, at minimum, be staffed by 27 medically trained personnel and be provided 28 directly, or under arrangement, at an office or 29 offices in locations maintained solely within the 30 State of Illinois. For purposes of this 31 subparagraph, "medically trained personnel" means 32 licensed practical nurses or registered nurses 33 located in the State of Illinois who are licensed 34 pursuant to the Illinois Nursing Act of 1987. -30- LRB9000965DJcd 1 (9) Ensure that every primary care physician and 2 pharmacy in the managed health care entity meets the 3 standards established by the Illinois Department for 4 accessibility and quality of care. The Illinois 5 Department shall arrange for and oversee an evaluation of 6 the standards established under this paragraph (9) and 7 may recommend any necessary changes to these standards. 8 The Illinois Department shall submit an annual report to 9 the Governor and the General Assembly by April 1 of each 10 year regarding the effect of the standards on ensuring 11 access and quality of care to enrollees. 12 (10) Provide a procedure for handling complaints 13 that (i) for health maintenance organizations meets the 14 requirements of the Health Maintenance Organization Act 15 and (ii) for managed care community networks meets the 16 requirements established by the Illinois Department in 17 rules that incorporate those standards set forth in the 18 Health Maintenance Organization Act. 19 (11) Maintain, retain, and make available to the 20 Illinois Department records, data, and information, in a 21 uniform manner determined by the Illinois Department, 22 sufficient for the Illinois Department to monitor 23 utilization, accessibility, and quality of care. 24 (12) Except for providers who are prepaid, pay all 25 approved claims for covered services that are completed 26 and submitted to the managed health care entity within 30 27 days after receipt of the claim or receipt of the 28 appropriate capitation payment or payments by the managed 29 health care entity from the State for the month in which 30 the services included on the claim were rendered, 31 whichever is later. If payment is not made or mailed to 32 the provider by the managed health care entity by the due 33 date under this subsection, an interest penalty of 1% of 34 any amount unpaid shall be added for each month or -31- LRB9000965DJcd 1 fraction of a month after the due date, until final 2 payment is made. Nothing in this Section shall prohibit 3 managed health care entities and providers from mutually 4 agreeing to terms that require more timely payment. 5 (13) Provide integration with community-based 6 programs provided by certified local health departments 7 such as Women, Infants, and Children Supplemental Food 8 Program (WIC), childhood immunization programs, health 9 education programs, case management programs, and health 10 screening programs. 11 (14) Provide that the pharmacy formulary used by a 12 managed health care entity and its contract providers be 13 no more restrictive than the Illinois Department's 14 pharmaceutical program on the effective date of this 15 amendatory Act of 1994 and as amended after that date. 16 (15) Provide integration with community-based 17 organizations, including, but not limited to, any 18 organization that has operated within a Medicaid 19 Partnership as defined by this Code or by rule of the 20 Illinois Department, that may continue to operate under a 21 contract with the Illinois Department or a managed health 22 care entity under this Section to provide case management 23 services to Medicaid clients in designated high-need 24 areas. 25 The Illinois Department may, by rule, determine 26 methodologies to limit financial liability for managed health 27 care entities resulting from payment for services to 28 enrollees provided under the Illinois Department's integrated 29 health care program. Any methodology so determined may be 30 considered or implemented by the Illinois Department through 31 a contract with a managed health care entity under this 32 integrated health care program. 33 The Illinois Department shall contract with an entity or 34 entities to provide external peer-based quality assurance -32- LRB9000965DJcd 1 review for the integrated health care program. The entity 2 shall be representative of Illinois physicians licensed to 3 practice medicine in all its branches and have statewide 4 geographic representation in all specialties of medical care 5 that are provided within the integrated health care program. 6 The entity may not be a third party payer and shall maintain 7 offices in locations around the State in order to provide 8 service and continuing medical education to physician 9 participants within the integrated health care program. The 10 review process shall be developed and conducted by Illinois 11 physicians licensed to practice medicine in all its branches. 12 In consultation with the entity, the Illinois Department may 13 contract with other entities for professional peer-based 14 quality assurance review of individual categories of services 15 other than services provided, supervised, or coordinated by 16 physicians licensed to practice medicine in all its branches. 17 The Illinois Department shall establish, by rule, criteria to 18 avoid conflicts of interest in the conduct of quality 19 assurance activities consistent with professional peer-review 20 standards. All quality assurance activities shall be 21 coordinated by the Illinois Department. 22 (e) All persons enrolled in the program shall be 23 provided with a full written explanation of all 24 fee-for-service and managed health care plan options and a 25 reasonable opportunity to choose among the options as 26 provided by rule. The Illinois Department shall provide to 27 enrollees, upon enrollment in the integrated health care 28 program and at least annually thereafter, notice of the 29 process for requesting an appeal under the Illinois 30 Department's administrative appeal procedures. 31 Notwithstanding any other Section of this Code, the Illinois 32 Department may provide by rule for the Illinois Department to 33 assign a person enrolled in the program to a specific 34 provider of medical services or to a specific health care -33- LRB9000965DJcd 1 delivery system if an enrollee has failed to exercise choice 2 in a timely manner. An enrollee assigned by the Illinois 3 Department shall be afforded the opportunity to disenroll and 4 to select a specific provider of medical services or a 5 specific health care delivery system within the first 30 days 6 after the assignment. An enrollee who has failed to exercise 7 choice in a timely manner may be assigned only if there are 3 8 or more managed health care entities contracting with the 9 Illinois Department within the contracting area, except that, 10 outside the City of Chicago, this requirement may be waived 11 for an area by rules adopted by the Illinois Department after 12 consultation with all hospitals within the contracting area. 13 The Illinois Department shall establish by rule the procedure 14 for random assignment of enrollees who fail to exercise 15 choice in a timely manner to a specific managed health care 16 entity in proportion to the available capacity of that 17 managed health care entity. Assignment to a specific provider 18 of medical services or to a specific managed health care 19 entity may not exceed that provider's or entity's capacity as 20 determined by the Illinois Department. Any person who has 21 chosen a specific provider of medical services or a specific 22 managed health care entity, or any person who has been 23 assigned under this subsection, shall be given the 24 opportunity to change that choice or assignment at least once 25 every 12 months, as determined by the Illinois Department by 26 rule. The Illinois Department shall maintain a toll-free 27 telephone number for program enrollees' use in reporting 28 problems with managed health care entities. 29 (f) If a person becomes eligible for participation in 30 the integrated health care program while he or she is 31 hospitalized, the Illinois Department may not enroll that 32 person in the program until after he or she has been 33 discharged from the hospital. This subsection does not apply 34 to newborn infants whose mothers are enrolled in the -34- LRB9000965DJcd 1 integrated health care program. 2 (g) The Illinois Department shall, by rule, establish 3 for managed health care entities rates that (i) are certified 4 to be actuarially sound, as determined by an actuary who is 5 an associate or a fellow of the Society of Actuaries or a 6 member of the American Academy of Actuaries and who has 7 expertise and experience in medical insurance and benefit 8 programs, in accordance with the Illinois Department's 9 current fee-for-service payment system, and (ii) take into 10 account any difference of cost to provide health care to 11 different populations based on gender, age, location, and 12 eligibility category. The rates for managed health care 13 entities shall be determined on a capitated basis. 14 The Illinois Department by rule shall establish a method 15 to adjust its payments to managed health care entities in a 16 manner intended to avoid providing any financial incentive to 17 a managed health care entity to refer patients to a county 18 provider, in an Illinois county having a population greater 19 than 3,000,000, that is paid directly by the Illinois 20 Department. The Illinois Department shall by April 1, 1997, 21 and annually thereafter, review the method to adjust 22 payments. Payments by the Illinois Department to the county 23 provider, for persons not enrolled in a managed care 24 community network owned or operated by a county provider, 25 shall be paid on a fee-for-service basis under Article XV of 26 this Code. 27 The Illinois Department by rule shall establish a method 28 to reduce its payments to managed health care entities to 29 take into consideration (i) any adjustment payments paid to 30 hospitals under subsection (h) of this Section to the extent 31 those payments, or any part of those payments, have been 32 taken into account in establishing capitated rates under this 33 subsection (g) and (ii) the implementation of methodologies 34 to limit financial liability for managed health care entities -35- LRB9000965DJcd 1 under subsection (d) of this Section. 2 (h) For hospital services provided by a hospital that 3 contracts with a managed health care entity, adjustment 4 payments shall be paid directly to the hospital by the 5 Illinois Department. Adjustment payments may include but 6 need not be limited to adjustment payments to: 7 disproportionate share hospitals under Section 5-5.02 of this 8 Code; primary care access health care education payments (89 9 Ill. Adm. Code 149.140); payments for capital, direct medical 10 education, indirect medical education, certified registered 11 nurse anesthetist, and kidney acquisition costs (89 Ill. Adm. 12 Code 149.150(c)); uncompensated care payments (89 Ill. Adm. 13 Code 148.150(h)); trauma center payments (89 Ill. Adm. Code 14 148.290(c)); rehabilitation hospital payments (89 Ill. Adm. 15 Code 148.290(d)); perinatal center payments (89 Ill. Adm. 16 Code 148.290(e)); obstetrical care payments (89 Ill. Adm. 17 Code 148.290(f)); targeted access payments (89 Ill. Adm. Code 18 148.290(g)); Medicaid high volume payments (89 Ill. Adm. Code 19 148.290(h)); and outpatient indigent volume adjustments (89 20 Ill. Adm. Code 148.140(b)(5)). 21 (i) For any hospital eligible for the adjustment 22 payments described in subsection (h), the Illinois Department 23 shall maintain, through the period ending June 30, 1995, 24 reimbursement levels in accordance with statutes and rules in 25 effect on April 1, 1994. 26 (j) Nothing contained in this Code in any way limits or 27 otherwise impairs the authority or power of the Illinois 28 Department to enter into a negotiated contract pursuant to 29 this Section with a managed health care entity, including, 30 but not limited to, a health maintenance organization, that 31 provides for termination or nonrenewal of the contract 32 without cause upon notice as provided in the contract and 33 without a hearing. 34 (k) Section 5-5.15 does not apply to the program -36- LRB9000965DJcd 1 developed and implemented pursuant to this Section. 2 (l) The Illinois Department shall, by rule, define those 3 chronic or acute medical conditions of childhood that require 4 longer-term treatment and follow-up care. The Illinois 5 Department shall ensure that services required to treat these 6 conditions are available through a separate delivery system. 7 A managed health care entity that contracts with the 8 Illinois Department may refer a child with medical conditions 9 described in the rules adopted under this subsection directly 10 to a children's hospital or to a hospital, other than a 11 children's hospital, that is qualified to provide inpatient 12 and outpatient services to treat those conditions. The 13 Illinois Department shall provide fee-for-service 14 reimbursement directly to a children's hospital for those 15 services pursuant to Title 89 of the Illinois Administrative 16 Code, Section 148.280(a), at a rate at least equal to the 17 rate in effect on March 31, 1994. For hospitals, other than 18 children's hospitals, that are qualified to provide inpatient 19 and outpatient services to treat those conditions, the 20 Illinois Department shall provide reimbursement for those 21 services on a fee-for-service basis, at a rate at least equal 22 to the rate in effect for those other hospitals on March 31, 23 1994. 24 A children's hospital shall be directly reimbursed for 25 all services provided at the children's hospital on a 26 fee-for-service basis pursuant to Title 89 of the Illinois 27 Administrative Code, Section 148.280(a), at a rate at least 28 equal to the rate in effect on March 31, 1994, until the 29 later of (i) implementation of the integrated health care 30 program under this Section and development of actuarially 31 sound capitation rates for services other than those chronic 32 or acute medical conditions of childhood that require 33 longer-term treatment and follow-up care as defined by the 34 Illinois Department in the rules adopted under this -37- LRB9000965DJcd 1 subsection or (ii) March 31, 1996. 2 Notwithstanding anything in this subsection to the 3 contrary, a managed health care entity shall not consider 4 sources or methods of payment in determining the referral of 5 a child. The Illinois Department shall adopt rules to 6 establish criteria for those referrals. The Illinois 7 Department by rule shall establish a method to adjust its 8 payments to managed health care entities in a manner intended 9 to avoid providing any financial incentive to a managed 10 health care entity to refer patients to a provider who is 11 paid directly by the Illinois Department. 12 (m) Behavioral health services provided or funded by the 13 Department of Human Services, the Department of Children and 14 Family Services, and the Illinois Department shall be 15 excluded from a benefit package. Conditions of an organic or 16 physical origin or nature, including medical detoxification, 17 however, may not be excluded. In this subsection, 18 "behavioral health services" means mental health services and 19 subacute alcohol and substance abuse treatment services, as 20 defined in the Illinois Alcoholism and Other Drug Dependency 21 Act. In this subsection, "mental health services" includes, 22 at a minimum, the following services funded by the Illinois 23 Department, the Department of Human Services (as successor to 24 the Department of Mental Health and Developmental 25 Disabilities), or the Department of Children and Family 26 Services: (i) inpatient hospital services, including related 27 physician services, related psychiatric interventions, and 28 pharmaceutical services provided to an eligible recipient 29 hospitalized with a primary diagnosis of psychiatric 30 disorder; (ii) outpatient mental health services as defined 31 and specified in Title 59 of the Illinois Administrative 32 Code, Part 132; (iii) any other outpatient mental health 33 services funded by the Illinois Department pursuant to the 34 State of Illinois Medicaid Plan; (iv) partial -38- LRB9000965DJcd 1 hospitalization; and (v) follow-up stabilization related to 2 any of those services. Additional behavioral health services 3 may be excluded under this subsection as mutually agreed in 4 writing by the Illinois Department and the affected State 5 agency or agencies. The exclusion of any service does not 6 prohibit the Illinois Department from developing and 7 implementing demonstration projects for categories of persons 8 or services. The Department of Children and Family Services 9 and the Department of Human Services shall each adopt rules 10 governing the integration of managed care in the provision of 11 behavioral health services. The State shall integrate managed 12 care community networks and affiliated providers, to the 13 extent practicable, in any separate delivery system for 14 mental health services. 15 (n) The Illinois Department shall adopt rules to 16 establish reserve requirements for managed care community 17 networks, as required by subsection (a), and health 18 maintenance organizations to protect against liabilities in 19 the event that a managed health care entity is declared 20 insolvent or bankrupt. If a managed health care entity other 21 than a county provider is declared insolvent or bankrupt, 22 after liquidation and application of any available assets, 23 resources, and reserves, the Illinois Department shall pay a 24 portion of the amounts owed by the managed health care entity 25 to providers for services rendered to enrollees under the 26 integrated health care program under this Section based on 27 the following schedule: (i) from April 1, 1995 through June 28 30, 1998, 90% of the amounts owed; (ii) from July 1, 1998 29 through June 30, 2001, 80% of the amounts owed; and (iii) 30 from July 1, 2001 through June 30, 2005, 75% of the amounts 31 owed. The amounts paid under this subsection shall be 32 calculated based on the total amount owed by the managed 33 health care entity to providers before application of any 34 available assets, resources, and reserves. After June 30, -39- LRB9000965DJcd 1 2005, the Illinois Department may not pay any amounts owed to 2 providers as a result of an insolvency or bankruptcy of a 3 managed health care entity occurring after that date. The 4 Illinois Department is not obligated, however, to pay amounts 5 owed to a provider that has an ownership or other governing 6 interest in the managed health care entity. This subsection 7 applies only to managed health care entities and the services 8 they provide under the integrated health care program under 9 this Section. 10 (o) Notwithstanding any other provision of law or 11 contractual agreement to the contrary, providers shall not be 12 required to accept from any other third party payer the rates 13 determined or paid under this Code by the Illinois 14 Department, managed health care entity, or other health care 15 delivery system for services provided to recipients. 16 (p) The Illinois Department may seek and obtain any 17 necessary authorization provided under federal law to 18 implement the program, including the waiver of any federal 19 statutes or regulations. The Illinois Department may seek a 20 waiver of the federal requirement that the combined 21 membership of Medicare and Medicaid enrollees in a managed 22 care community network may not exceed 75% of the managed care 23 community network's total enrollment. The Illinois 24 Department shall not seek a waiver of this requirement for 25 any other category of managed health care entity. The 26 Illinois Department shall not seek a waiver of the inpatient 27 hospital reimbursement methodology in Section 1902(a)(13)(A) 28 of Title XIX of the Social Security Act even if the federal 29 agency responsible for administering Title XIX determines 30 that Section 1902(a)(13)(A) applies to managed health care 31 systems. 32 Notwithstanding any other provisions of this Code to the 33 contrary, the Illinois Department shall seek a waiver of 34 applicable federal law in order to impose a co-payment system -40- LRB9000965DJcd 1 consistent with this subsection on recipients of medical 2 services under Title XIX of the Social Security Act who are 3 not enrolled in a managed health care entity. The waiver 4 request submitted by the Illinois Department shall provide 5 for co-payments of up to $0.50 for prescribed drugs and up to 6 $0.50 for x-ray services and shall provide for co-payments of 7 up to $10 for non-emergency services provided in a hospital 8 emergency room and up to $10 for non-emergency ambulance 9 services. The purpose of the co-payments shall be to deter 10 those recipients from seeking unnecessary medical care. 11 Co-payments may not be used to deter recipients from seeking 12 necessary medical care. No recipient shall be required to 13 pay more than a total of $150 per year in co-payments under 14 the waiver request required by this subsection. A recipient 15 may not be required to pay more than $15 of any amount due 16 under this subsection in any one month. 17 Co-payments authorized under this subsection may not be 18 imposed when the care was necessitated by a true medical 19 emergency. Co-payments may not be imposed for any of the 20 following classifications of services: 21 (1) Services furnished to person under 18 years of 22 age. 23 (2) Services furnished to pregnant women. 24 (3) Services furnished to any individual who is an 25 inpatient in a hospital, nursing facility, intermediate 26 care facility, or other medical institution, if that 27 person is required to spend for costs of medical care all 28 but a minimal amount of his or her income required for 29 personal needs. 30 (4) Services furnished to a person who is receiving 31 hospice care. 32 Co-payments authorized under this subsection shall not be 33 deducted from or reduce in any way payments for medical 34 services from the Illinois Department to providers. No -41- LRB9000965DJcd 1 provider may deny those services to an individual eligible 2 for services based on the individual's inability to pay the 3 co-payment. 4 Recipients who are subject to co-payments shall be 5 provided notice, in plain and clear language, of the amount 6 of the co-payments, the circumstances under which co-payments 7 are exempted, the circumstances under which co-payments may 8 be assessed, and their manner of collection. 9 The Illinois Department shall establish a Medicaid 10 Co-Payment Council to assist in the development of co-payment 11 policies for the medical assistance program. The Medicaid 12 Co-Payment Council shall also have jurisdiction to develop a 13 program to provide financial or non-financial incentives to 14 Medicaid recipients in order to encourage recipients to seek 15 necessary health care. The Council shall be chaired by the 16 Director of the Illinois Department, and shall have 6 17 additional members. Two of the 6 additional members shall be 18 appointed by the Governor, and one each shall be appointed by 19 the President of the Senate, the Minority Leader of the 20 Senate, the Speaker of the House of Representatives, and the 21 Minority Leader of the House of Representatives. The Council 22 may be convened and make recommendations upon the appointment 23 of a majority of its members. The Council shall be appointed 24 and convened no later than September 1, 1994 and shall report 25 its recommendations to the Director of the Illinois 26 Department and the General Assembly no later than October 1, 27 1994. The chairperson of the Council shall be allowed to 28 vote only in the case of a tie vote among the appointed 29 members of the Council. 30 The Council shall be guided by the following principles 31 as it considers recommendations to be developed to implement 32 any approved waivers that the Illinois Department must seek 33 pursuant to this subsection: 34 (1) Co-payments should not be used to deter access -42- LRB9000965DJcd 1 to adequate medical care. 2 (2) Co-payments should be used to reduce fraud. 3 (3) Co-payment policies should be examined in 4 consideration of other states' experience, and the 5 ability of successful co-payment plans to control 6 unnecessary or inappropriate utilization of services 7 should be promoted. 8 (4) All participants, both recipients and 9 providers, in the medical assistance program have 10 responsibilities to both the State and the program. 11 (5) Co-payments are primarily a tool to educate the 12 participants in the responsible use of health care 13 resources. 14 (6) Co-payments should not be used to penalize 15 providers. 16 (7) A successful medical program requires the 17 elimination of improper utilization of medical resources. 18 The integrated health care program, or any part of that 19 program, established under this Section may not be 20 implemented if matching federal funds under Title XIX of the 21 Social Security Act are not available for administering the 22 program. 23 The Illinois Department shall submit for publication in 24 the Illinois Register the name, address, and telephone number 25 of the individual to whom a request may be directed for a 26 copy of the request for a waiver of provisions of Title XIX 27 of the Social Security Act that the Illinois Department 28 intends to submit to the Health Care Financing Administration 29 in order to implement this Section. The Illinois Department 30 shall mail a copy of that request for waiver to all 31 requestors at least 16 days before filing that request for 32 waiver with the Health Care Financing Administration. 33 (q) After the effective date of this Section, the 34 Illinois Department may take all planning and preparatory -43- LRB9000965DJcd 1 action necessary to implement this Section, including, but 2 not limited to, seeking requests for proposals relating to 3 the integrated health care program created under this 4 Section. 5 (r) In order to (i) accelerate and facilitate the 6 development of integrated health care in contracting areas 7 outside counties with populations in excess of 3,000,000 and 8 counties adjacent to those counties and (ii) maintain and 9 sustain the high quality of education and residency programs 10 coordinated and associated with local area hospitals, the 11 Illinois Department may develop and implement a demonstration 12 program for managed care community networks owned, operated, 13 or governed by State-funded medical schools. The Illinois 14 Department shall prescribe by rule the criteria, standards, 15 and procedures for effecting this demonstration program. 16 (s) (Blank). 17 (t) On April 1, 1995 and every 6 months thereafter, the 18 Illinois Department shall report to the Governor and General 19 Assembly on the progress of the integrated health care 20 program in enrolling clients into managed health care 21 entities. The report shall indicate the capacities of the 22 managed health care entities with which the State contracts, 23 the number of clients enrolled by each contractor, the areas 24 of the State in which managed care options do not exist, and 25 the progress toward meeting the enrollment goals of the 26 integrated health care program. 27 (u) The Illinois Department may implement this Section 28 through the use of emergency rules in accordance with Section 29 5-45 of the Illinois Administrative Procedure Act. For 30 purposes of that Act, the adoption of rules to implement this 31 Section is deemed an emergency and necessary for the public 32 interest, safety, and welfare. 33 (Source: P.A. 88-554, eff. 7-26-94; 89-21, eff. 7-1-95; 34 89-507, eff. 7-1-97; 89-673, eff. 8-14-96; revised 8-26-96.) -44- LRB9000965DJcd 1 Section 95. No acceleration or delay. Where this Act 2 makes changes in a statute that is represented in this Act by 3 text that is not yet or no longer in effect (for example, a 4 Section represented by multiple versions), the use of that 5 text does not accelerate or delay the taking effect of (i) 6 the changes made by this Act or (ii) provisions derived from 7 any other Public Act. 8 Section 99. Effective date. This Act takes effect upon 9 becoming law.