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90_HB0785
305 ILCS 5/5-16.3
Amends the Medicaid integrated health care program
provisions of the Public Aid Code. Requires the Auditor
General to conduct annual performance audits of the program,
beginning with the fiscal year ending June 30, 1997.
Effective immediately.
LRB9000913DJcd
LRB9000913DJcd
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.
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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
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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
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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
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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
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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
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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 (5) Provide that enrollees within its system may
12 choose the site for provision of services and the panel
13 of health care providers.
14 (6) Not discriminate in its enrollment or
15 disenrollment practices among recipients of medical
16 services or program enrollees based on health status.
17 (7) Provide a quality assurance and utilization
18 review program that (i) for health maintenance
19 organizations meets the requirements of the Health
20 Maintenance Organization Act and (ii) for managed care
21 community networks meets the requirements established by
22 the Illinois Department in rules that incorporate those
23 standards set forth in the Health Maintenance
24 Organization Act.
25 (8) Issue a managed health care entity
26 identification card to each enrollee upon enrollment.
27 The card must contain all of the following:
28 (A) The enrollee's signature.
29 (B) The enrollee's health plan.
30 (C) The name and telephone number of the
31 enrollee's primary care physician.
32 (D) A telephone number to be used for
33 emergency service 24 hours per day, 7 days per week.
34 The telephone number required to be maintained
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1 pursuant to this subparagraph by each managed health
2 care entity shall, at minimum, be staffed by
3 medically trained personnel and be provided
4 directly, or under arrangement, at an office or
5 offices in locations maintained solely within the
6 State of Illinois. For purposes of this
7 subparagraph, "medically trained personnel" means
8 licensed practical nurses or registered nurses
9 located in the State of Illinois who are licensed
10 pursuant to the Illinois Nursing Act of 1987.
11 (9) Ensure that every primary care physician and
12 pharmacy in the managed health care entity meets the
13 standards established by the Illinois Department for
14 accessibility and quality of care. The Illinois
15 Department shall arrange for and oversee an evaluation of
16 the standards established under this paragraph (9) and
17 may recommend any necessary changes to these standards.
18 The Illinois Department shall submit an annual report to
19 the Governor and the General Assembly by April 1 of each
20 year regarding the effect of the standards on ensuring
21 access and quality of care to enrollees.
22 (10) Provide a procedure for handling complaints
23 that (i) for health maintenance organizations meets the
24 requirements of the Health Maintenance Organization Act
25 and (ii) for managed care community networks meets the
26 requirements established by the Illinois Department in
27 rules that incorporate those standards set forth in the
28 Health Maintenance Organization Act.
29 (11) Maintain, retain, and make available to the
30 Illinois Department records, data, and information, in a
31 uniform manner determined by the Illinois Department,
32 sufficient for the Illinois Department to monitor
33 utilization, accessibility, and quality of care.
34 (12) Except for providers who are prepaid, pay all
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1 approved claims for covered services that are completed
2 and submitted to the managed health care entity within 30
3 days after receipt of the claim or receipt of the
4 appropriate capitation payment or payments by the managed
5 health care entity from the State for the month in which
6 the services included on the claim were rendered,
7 whichever is later. If payment is not made or mailed to
8 the provider by the managed health care entity by the due
9 date under this subsection, an interest penalty of 1% of
10 any amount unpaid shall be added for each month or
11 fraction of a month after the due date, until final
12 payment is made. Nothing in this Section shall prohibit
13 managed health care entities and providers from mutually
14 agreeing to terms that require more timely payment.
15 (13) Provide integration with community-based
16 programs provided by certified local health departments
17 such as Women, Infants, and Children Supplemental Food
18 Program (WIC), childhood immunization programs, health
19 education programs, case management programs, and health
20 screening programs.
21 (14) Provide that the pharmacy formulary used by a
22 managed health care entity and its contract providers be
23 no more restrictive than the Illinois Department's
24 pharmaceutical program on the effective date of this
25 amendatory Act of 1994 and as amended after that date.
26 (15) Provide integration with community-based
27 organizations, including, but not limited to, any
28 organization that has operated within a Medicaid
29 Partnership as defined by this Code or by rule of the
30 Illinois Department, that may continue to operate under a
31 contract with the Illinois Department or a managed health
32 care entity under this Section to provide case management
33 services to Medicaid clients in designated high-need
34 areas.
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1 The Illinois Department may, by rule, determine
2 methodologies to limit financial liability for managed health
3 care entities resulting from payment for services to
4 enrollees provided under the Illinois Department's integrated
5 health care program. Any methodology so determined may be
6 considered or implemented by the Illinois Department through
7 a contract with a managed health care entity under this
8 integrated health care program.
9 The Illinois Department shall contract with an entity or
10 entities to provide external peer-based quality assurance
11 review for the integrated health care program. The entity
12 shall be representative of Illinois physicians licensed to
13 practice medicine in all its branches and have statewide
14 geographic representation in all specialties of medical care
15 that are provided within the integrated health care program.
16 The entity may not be a third party payer and shall maintain
17 offices in locations around the State in order to provide
18 service and continuing medical education to physician
19 participants within the integrated health care program. The
20 review process shall be developed and conducted by Illinois
21 physicians licensed to practice medicine in all its branches.
22 In consultation with the entity, the Illinois Department may
23 contract with other entities for professional peer-based
24 quality assurance review of individual categories of services
25 other than services provided, supervised, or coordinated by
26 physicians licensed to practice medicine in all its branches.
27 The Illinois Department shall establish, by rule, criteria to
28 avoid conflicts of interest in the conduct of quality
29 assurance activities consistent with professional peer-review
30 standards. All quality assurance activities shall be
31 coordinated by the Illinois Department.
32 (e) All persons enrolled in the program shall be
33 provided with a full written explanation of all
34 fee-for-service and managed health care plan options and a
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1 reasonable opportunity to choose among the options as
2 provided by rule. The Illinois Department shall provide to
3 enrollees, upon enrollment in the integrated health care
4 program and at least annually thereafter, notice of the
5 process for requesting an appeal under the Illinois
6 Department's administrative appeal procedures.
7 Notwithstanding any other Section of this Code, the Illinois
8 Department may provide by rule for the Illinois Department to
9 assign a person enrolled in the program to a specific
10 provider of medical services or to a specific health care
11 delivery system if an enrollee has failed to exercise choice
12 in a timely manner. An enrollee assigned by the Illinois
13 Department shall be afforded the opportunity to disenroll and
14 to select a specific provider of medical services or a
15 specific health care delivery system within the first 30 days
16 after the assignment. An enrollee who has failed to exercise
17 choice in a timely manner may be assigned only if there are 3
18 or more managed health care entities contracting with the
19 Illinois Department within the contracting area, except that,
20 outside the City of Chicago, this requirement may be waived
21 for an area by rules adopted by the Illinois Department after
22 consultation with all hospitals within the contracting area.
23 The Illinois Department shall establish by rule the procedure
24 for random assignment of enrollees who fail to exercise
25 choice in a timely manner to a specific managed health care
26 entity in proportion to the available capacity of that
27 managed health care entity. Assignment to a specific provider
28 of medical services or to a specific managed health care
29 entity may not exceed that provider's or entity's capacity as
30 determined by the Illinois Department. Any person who has
31 chosen a specific provider of medical services or a specific
32 managed health care entity, or any person who has been
33 assigned under this subsection, shall be given the
34 opportunity to change that choice or assignment at least once
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1 every 12 months, as determined by the Illinois Department by
2 rule. The Illinois Department shall maintain a toll-free
3 telephone number for program enrollees' use in reporting
4 problems with managed health care entities.
5 (f) If a person becomes eligible for participation in
6 the integrated health care program while he or she is
7 hospitalized, the Illinois Department may not enroll that
8 person in the program until after he or she has been
9 discharged from the hospital. This subsection does not apply
10 to newborn infants whose mothers are enrolled in the
11 integrated health care program.
12 (g) The Illinois Department shall, by rule, establish
13 for managed health care entities rates that (i) are certified
14 to be actuarially sound, as determined by an actuary who is
15 an associate or a fellow of the Society of Actuaries or a
16 member of the American Academy of Actuaries and who has
17 expertise and experience in medical insurance and benefit
18 programs, in accordance with the Illinois Department's
19 current fee-for-service payment system, and (ii) take into
20 account any difference of cost to provide health care to
21 different populations based on gender, age, location, and
22 eligibility category. The rates for managed health care
23 entities shall be determined on a capitated basis.
24 The Illinois Department by rule shall establish a method
25 to adjust its payments to managed health care entities in a
26 manner intended to avoid providing any financial incentive to
27 a managed health care entity to refer patients to a county
28 provider, in an Illinois county having a population greater
29 than 3,000,000, that is paid directly by the Illinois
30 Department. The Illinois Department shall by April 1, 1997,
31 and annually thereafter, review the method to adjust
32 payments. Payments by the Illinois Department to the county
33 provider, for persons not enrolled in a managed care
34 community network owned or operated by a county provider,
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1 shall be paid on a fee-for-service basis under Article XV of
2 this Code.
3 The Illinois Department by rule shall establish a method
4 to reduce its payments to managed health care entities to
5 take into consideration (i) any adjustment payments paid to
6 hospitals under subsection (h) of this Section to the extent
7 those payments, or any part of those payments, have been
8 taken into account in establishing capitated rates under this
9 subsection (g) and (ii) the implementation of methodologies
10 to limit financial liability for managed health care entities
11 under subsection (d) of this Section.
12 (h) For hospital services provided by a hospital that
13 contracts with a managed health care entity, adjustment
14 payments shall be paid directly to the hospital by the
15 Illinois Department. Adjustment payments may include but
16 need not be limited to adjustment payments to:
17 disproportionate share hospitals under Section 5-5.02 of this
18 Code; primary care access health care education payments (89
19 Ill. Adm. Code 149.140); payments for capital, direct medical
20 education, indirect medical education, certified registered
21 nurse anesthetist, and kidney acquisition costs (89 Ill. Adm.
22 Code 149.150(c)); uncompensated care payments (89 Ill. Adm.
23 Code 148.150(h)); trauma center payments (89 Ill. Adm. Code
24 148.290(c)); rehabilitation hospital payments (89 Ill. Adm.
25 Code 148.290(d)); perinatal center payments (89 Ill. Adm.
26 Code 148.290(e)); obstetrical care payments (89 Ill. Adm.
27 Code 148.290(f)); targeted access payments (89 Ill. Adm. Code
28 148.290(g)); Medicaid high volume payments (89 Ill. Adm. Code
29 148.290(h)); and outpatient indigent volume adjustments (89
30 Ill. Adm. Code 148.140(b)(5)).
31 (i) For any hospital eligible for the adjustment
32 payments described in subsection (h), the Illinois Department
33 shall maintain, through the period ending June 30, 1995,
34 reimbursement levels in accordance with statutes and rules in
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1 effect on April 1, 1994.
2 (j) Nothing contained in this Code in any way limits or
3 otherwise impairs the authority or power of the Illinois
4 Department to enter into a negotiated contract pursuant to
5 this Section with a managed health care entity, including,
6 but not limited to, a health maintenance organization, that
7 provides for termination or nonrenewal of the contract
8 without cause upon notice as provided in the contract and
9 without a hearing.
10 (k) Section 5-5.15 does not apply to the program
11 developed and implemented pursuant to this Section.
12 (l) The Illinois Department shall, by rule, define those
13 chronic or acute medical conditions of childhood that require
14 longer-term treatment and follow-up care. The Illinois
15 Department shall ensure that services required to treat these
16 conditions are available through a separate delivery system.
17 A managed health care entity that contracts with the
18 Illinois Department may refer a child with medical conditions
19 described in the rules adopted under this subsection directly
20 to a children's hospital or to a hospital, other than a
21 children's hospital, that is qualified to provide inpatient
22 and outpatient services to treat those conditions. The
23 Illinois Department shall provide fee-for-service
24 reimbursement directly to a children's hospital for those
25 services pursuant to Title 89 of the Illinois Administrative
26 Code, Section 148.280(a), at a rate at least equal to the
27 rate in effect on March 31, 1994. For hospitals, other than
28 children's hospitals, that are qualified to provide inpatient
29 and outpatient services to treat those conditions, the
30 Illinois Department shall provide reimbursement for those
31 services on a fee-for-service basis, at a rate at least equal
32 to the rate in effect for those other hospitals on March 31,
33 1994.
34 A children's hospital shall be directly reimbursed for
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1 all services provided at the children's hospital on a
2 fee-for-service basis pursuant to Title 89 of the Illinois
3 Administrative Code, Section 148.280(a), at a rate at least
4 equal to the rate in effect on March 31, 1994, until the
5 later of (i) implementation of the integrated health care
6 program under this Section and development of actuarially
7 sound capitation rates for services other than those chronic
8 or acute medical conditions of childhood that require
9 longer-term treatment and follow-up care as defined by the
10 Illinois Department in the rules adopted under this
11 subsection or (ii) March 31, 1996.
12 Notwithstanding anything in this subsection to the
13 contrary, a managed health care entity shall not consider
14 sources or methods of payment in determining the referral of
15 a child. The Illinois Department shall adopt rules to
16 establish criteria for those referrals. The Illinois
17 Department by rule shall establish a method to adjust its
18 payments to managed health care entities in a manner intended
19 to avoid providing any financial incentive to a managed
20 health care entity to refer patients to a provider who is
21 paid directly by the Illinois Department.
22 (m) Behavioral health services provided or funded by the
23 Department of Mental Health and Developmental Disabilities,
24 the Department of Alcoholism and Substance Abuse, the
25 Department of Children and Family Services, and the Illinois
26 Department shall be excluded from a benefit package.
27 Conditions of an organic or physical origin or nature,
28 including medical detoxification, however, may not be
29 excluded. In this subsection, "behavioral health services"
30 means mental health services and subacute alcohol and
31 substance abuse treatment services, as defined in the
32 Illinois Alcoholism and Other Drug Dependency Act. In this
33 subsection, "mental health services" includes, at a minimum,
34 the following services funded by the Illinois Department, the
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1 Department of Mental Health and Developmental Disabilities,
2 or the Department of Children and Family Services: (i)
3 inpatient hospital services, including related physician
4 services, related psychiatric interventions, and
5 pharmaceutical services provided to an eligible recipient
6 hospitalized with a primary diagnosis of psychiatric
7 disorder; (ii) outpatient mental health services as defined
8 and specified in Title 59 of the Illinois Administrative
9 Code, Part 132; (iii) any other outpatient mental health
10 services funded by the Illinois Department pursuant to the
11 State of Illinois Medicaid Plan; (iv) partial
12 hospitalization; and (v) follow-up stabilization related to
13 any of those services. Additional behavioral health services
14 may be excluded under this subsection as mutually agreed in
15 writing by the Illinois Department and the affected State
16 agency or agencies. The exclusion of any service does not
17 prohibit the Illinois Department from developing and
18 implementing demonstration projects for categories of persons
19 or services. The Department of Mental Health and
20 Developmental Disabilities, the Department of Children and
21 Family Services, and the Department of Alcoholism and
22 Substance Abuse shall each adopt rules governing the
23 integration of managed care in the provision of behavioral
24 health services. The State shall integrate managed care
25 community networks and affiliated providers, to the extent
26 practicable, in any separate delivery system for mental
27 health services.
28 (n) The Illinois Department shall adopt rules to
29 establish reserve requirements for managed care community
30 networks, as required by subsection (a), and health
31 maintenance organizations to protect against liabilities in
32 the event that a managed health care entity is declared
33 insolvent or bankrupt. If a managed health care entity other
34 than a county provider is declared insolvent or bankrupt,
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1 after liquidation and application of any available assets,
2 resources, and reserves, the Illinois Department shall pay a
3 portion of the amounts owed by the managed health care entity
4 to providers for services rendered to enrollees under the
5 integrated health care program under this Section based on
6 the following schedule: (i) from April 1, 1995 through June
7 30, 1998, 90% of the amounts owed; (ii) from July 1, 1998
8 through June 30, 2001, 80% of the amounts owed; and (iii)
9 from July 1, 2001 through June 30, 2005, 75% of the amounts
10 owed. The amounts paid under this subsection shall be
11 calculated based on the total amount owed by the managed
12 health care entity to providers before application of any
13 available assets, resources, and reserves. After June 30,
14 2005, the Illinois Department may not pay any amounts owed to
15 providers as a result of an insolvency or bankruptcy of a
16 managed health care entity occurring after that date. The
17 Illinois Department is not obligated, however, to pay amounts
18 owed to a provider that has an ownership or other governing
19 interest in the managed health care entity. This subsection
20 applies only to managed health care entities and the services
21 they provide under the integrated health care program under
22 this Section.
23 (o) Notwithstanding any other provision of law or
24 contractual agreement to the contrary, providers shall not be
25 required to accept from any other third party payer the rates
26 determined or paid under this Code by the Illinois
27 Department, managed health care entity, or other health care
28 delivery system for services provided to recipients.
29 (p) The Illinois Department may seek and obtain any
30 necessary authorization provided under federal law to
31 implement the program, including the waiver of any federal
32 statutes or regulations. The Illinois Department may seek a
33 waiver of the federal requirement that the combined
34 membership of Medicare and Medicaid enrollees in a managed
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1 care community network may not exceed 75% of the managed care
2 community network's total enrollment. The Illinois
3 Department shall not seek a waiver of this requirement for
4 any other category of managed health care entity. The
5 Illinois Department shall not seek a waiver of the inpatient
6 hospital reimbursement methodology in Section 1902(a)(13)(A)
7 of Title XIX of the Social Security Act even if the federal
8 agency responsible for administering Title XIX determines
9 that Section 1902(a)(13)(A) applies to managed health care
10 systems.
11 Notwithstanding any other provisions of this Code to the
12 contrary, the Illinois Department shall seek a waiver of
13 applicable federal law in order to impose a co-payment system
14 consistent with this subsection on recipients of medical
15 services under Title XIX of the Social Security Act who are
16 not enrolled in a managed health care entity. The waiver
17 request submitted by the Illinois Department shall provide
18 for co-payments of up to $0.50 for prescribed drugs and up to
19 $0.50 for x-ray services and shall provide for co-payments of
20 up to $10 for non-emergency services provided in a hospital
21 emergency room and up to $10 for non-emergency ambulance
22 services. The purpose of the co-payments shall be to deter
23 those recipients from seeking unnecessary medical care.
24 Co-payments may not be used to deter recipients from seeking
25 necessary medical care. No recipient shall be required to
26 pay more than a total of $150 per year in co-payments under
27 the waiver request required by this subsection. A recipient
28 may not be required to pay more than $15 of any amount due
29 under this subsection in any one month.
30 Co-payments authorized under this subsection may not be
31 imposed when the care was necessitated by a true medical
32 emergency. Co-payments may not be imposed for any of the
33 following classifications of services:
34 (1) Services furnished to person under 18 years of
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1 age.
2 (2) Services furnished to pregnant women.
3 (3) Services furnished to any individual who is an
4 inpatient in a hospital, nursing facility, intermediate
5 care facility, or other medical institution, if that
6 person is required to spend for costs of medical care all
7 but a minimal amount of his or her income required for
8 personal needs.
9 (4) Services furnished to a person who is receiving
10 hospice care.
11 Co-payments authorized under this subsection shall not be
12 deducted from or reduce in any way payments for medical
13 services from the Illinois Department to providers. No
14 provider may deny those services to an individual eligible
15 for services based on the individual's inability to pay the
16 co-payment.
17 Recipients who are subject to co-payments shall be
18 provided notice, in plain and clear language, of the amount
19 of the co-payments, the circumstances under which co-payments
20 are exempted, the circumstances under which co-payments may
21 be assessed, and their manner of collection.
22 The Illinois Department shall establish a Medicaid
23 Co-Payment Council to assist in the development of co-payment
24 policies for the medical assistance program. The Medicaid
25 Co-Payment Council shall also have jurisdiction to develop a
26 program to provide financial or non-financial incentives to
27 Medicaid recipients in order to encourage recipients to seek
28 necessary health care. The Council shall be chaired by the
29 Director of the Illinois Department, and shall have 6
30 additional members. Two of the 6 additional members shall be
31 appointed by the Governor, and one each shall be appointed by
32 the President of the Senate, the Minority Leader of the
33 Senate, the Speaker of the House of Representatives, and the
34 Minority Leader of the House of Representatives. The Council
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1 may be convened and make recommendations upon the appointment
2 of a majority of its members. The Council shall be appointed
3 and convened no later than September 1, 1994 and shall report
4 its recommendations to the Director of the Illinois
5 Department and the General Assembly no later than October 1,
6 1994. The chairperson of the Council shall be allowed to
7 vote only in the case of a tie vote among the appointed
8 members of the Council.
9 The Council shall be guided by the following principles
10 as it considers recommendations to be developed to implement
11 any approved waivers that the Illinois Department must seek
12 pursuant to this subsection:
13 (1) Co-payments should not be used to deter access
14 to adequate medical care.
15 (2) Co-payments should be used to reduce fraud.
16 (3) Co-payment policies should be examined in
17 consideration of other states' experience, and the
18 ability of successful co-payment plans to control
19 unnecessary or inappropriate utilization of services
20 should be promoted.
21 (4) All participants, both recipients and
22 providers, in the medical assistance program have
23 responsibilities to both the State and the program.
24 (5) Co-payments are primarily a tool to educate the
25 participants in the responsible use of health care
26 resources.
27 (6) Co-payments should not be used to penalize
28 providers.
29 (7) A successful medical program requires the
30 elimination of improper utilization of medical resources.
31 The integrated health care program, or any part of that
32 program, established under this Section may not be
33 implemented if matching federal funds under Title XIX of the
34 Social Security Act are not available for administering the
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1 program.
2 The Illinois Department shall submit for publication in
3 the Illinois Register the name, address, and telephone number
4 of the individual to whom a request may be directed for a
5 copy of the request for a waiver of provisions of Title XIX
6 of the Social Security Act that the Illinois Department
7 intends to submit to the Health Care Financing Administration
8 in order to implement this Section. The Illinois Department
9 shall mail a copy of that request for waiver to all
10 requestors at least 16 days before filing that request for
11 waiver with the Health Care Financing Administration.
12 (q) After the effective date of this Section, the
13 Illinois Department may take all planning and preparatory
14 action necessary to implement this Section, including, but
15 not limited to, seeking requests for proposals relating to
16 the integrated health care program created under this
17 Section.
18 (r) In order to (i) accelerate and facilitate the
19 development of integrated health care in contracting areas
20 outside counties with populations in excess of 3,000,000 and
21 counties adjacent to those counties and (ii) maintain and
22 sustain the high quality of education and residency programs
23 coordinated and associated with local area hospitals, the
24 Illinois Department may develop and implement a demonstration
25 program for managed care community networks owned, operated,
26 or governed by State-funded medical schools. The Illinois
27 Department shall prescribe by rule the criteria, standards,
28 and procedures for effecting this demonstration program.
29 (s) (Blank).
30 (t) On April 1, 1995 and every 6 months thereafter, the
31 Illinois Department shall report to the Governor and General
32 Assembly on the progress of the integrated health care
33 program in enrolling clients into managed health care
34 entities. The report shall indicate the capacities of the
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1 managed health care entities with which the State contracts,
2 the number of clients enrolled by each contractor, the areas
3 of the State in which managed care options do not exist, and
4 the progress toward meeting the enrollment goals of the
5 integrated health care program.
6 (u) The Illinois Department may implement this Section
7 through the use of emergency rules in accordance with Section
8 5-45 of the Illinois Administrative Procedure Act. For
9 purposes of that Act, the adoption of rules to implement this
10 Section is deemed an emergency and necessary for the public
11 interest, safety, and welfare.
12 (v) The Auditor General shall conduct an annual
13 performance audit of the integrated health care program
14 created under this Section and, before that program is fully
15 operational, the Illinois Department's implementation of this
16 Section. The initial audit shall cover the fiscal year
17 ending June 30, 1997, and subsequent audits shall cover each
18 fiscal year thereafter. The Auditor General shall issue
19 reports of the audits on or before December 31 of 1997 and
20 each year thereafter.
21 (Source: P.A. 88-554, eff. 7-26-94; 89-21, eff. 7-1-95;
22 89-673, eff. 8-14-96; revised 8-26-96.)
23 (Text of Section after amendment by P.A. 89-507)
24 Sec. 5-16.3. System for integrated health care services.
25 (a) It shall be the public policy of the State to adopt,
26 to the extent practicable, a health care program that
27 encourages the integration of health care services and
28 manages the health care of program enrollees while preserving
29 reasonable choice within a competitive and cost-efficient
30 environment. In furtherance of this public policy, the
31 Illinois Department shall develop and implement an integrated
32 health care program consistent with the provisions of this
33 Section. The provisions of this Section apply only to the
34 integrated health care program created under this Section.
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1 Persons enrolled in the integrated health care program, as
2 determined by the Illinois Department by rule, shall be
3 afforded a choice among health care delivery systems, which
4 shall include, but are not limited to, (i) fee for service
5 care managed by a primary care physician licensed to practice
6 medicine in all its branches, (ii) managed health care
7 entities, and (iii) federally qualified health centers
8 (reimbursed according to a prospective cost-reimbursement
9 methodology) and rural health clinics (reimbursed according
10 to the Medicare methodology), where available. Persons
11 enrolled in the integrated health care program also may be
12 offered indemnity insurance plans, subject to availability.
13 For purposes of this Section, a "managed health care
14 entity" means a health maintenance organization or a managed
15 care community network as defined in this Section. A "health
16 maintenance organization" means a health maintenance
17 organization as defined in the Health Maintenance
18 Organization Act. A "managed care community network" means
19 an entity, other than a health maintenance organization, that
20 is owned, operated, or governed by providers of health care
21 services within this State and that provides or arranges
22 primary, secondary, and tertiary managed health care services
23 under contract with the Illinois Department exclusively to
24 enrollees of the integrated health care program. A managed
25 care community network may contract with the Illinois
26 Department to provide only pediatric health care services. A
27 county provider as defined in Section 15-1 of this Code may
28 contract with the Illinois Department to provide services to
29 enrollees of the integrated health care program as a managed
30 care community network without the need to establish a
31 separate entity that provides services exclusively to
32 enrollees of the integrated health care program and shall be
33 deemed a managed care community network for purposes of this
34 Code only to the extent of the provision of services to those
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1 enrollees in conjunction with the integrated health care
2 program. A county provider shall be entitled to contract
3 with the Illinois Department with respect to any contracting
4 region located in whole or in part within the county. A
5 county provider shall not be required to accept enrollees who
6 do not reside within the county.
7 Each managed care community network must demonstrate its
8 ability to bear the financial risk of serving enrollees under
9 this program. The Illinois Department shall by rule adopt
10 criteria for assessing the financial soundness of each
11 managed care community network. These rules shall consider
12 the extent to which a managed care community network is
13 comprised of providers who directly render health care and
14 are located within the community in which they seek to
15 contract rather than solely arrange or finance the delivery
16 of health care. These rules shall further consider a variety
17 of risk-bearing and management techniques, including the
18 sufficiency of quality assurance and utilization management
19 programs and whether a managed care community network has
20 sufficiently demonstrated its financial solvency and net
21 worth. The Illinois Department's criteria must be based on
22 sound actuarial, financial, and accounting principles. In
23 adopting these rules, the Illinois Department shall consult
24 with the Illinois Department of Insurance. The Illinois
25 Department is responsible for monitoring compliance with
26 these rules.
27 This Section may not be implemented before the effective
28 date of these rules, the approval of any necessary federal
29 waivers, and the completion of the review of an application
30 submitted, at least 60 days before the effective date of
31 rules adopted under this Section, to the Illinois Department
32 by a managed care community network.
33 All health care delivery systems that contract with the
34 Illinois Department under the integrated health care program
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1 shall clearly recognize a health care provider's right of
2 conscience under the Right of Conscience Act. In addition to
3 the provisions of that Act, no health care delivery system
4 that contracts with the Illinois Department under the
5 integrated health care program shall be required to provide,
6 arrange for, or pay for any health care or medical service,
7 procedure, or product if that health care delivery system is
8 owned, controlled, or sponsored by or affiliated with a
9 religious institution or religious organization that finds
10 that health care or medical service, procedure, or product to
11 violate its religious and moral teachings and beliefs.
12 (b) The Illinois Department may, by rule, provide for
13 different benefit packages for different categories of
14 persons enrolled in the program. Mental health services,
15 alcohol and substance abuse services, services related to
16 children with chronic or acute conditions requiring
17 longer-term treatment and follow-up, and rehabilitation care
18 provided by a free-standing rehabilitation hospital or a
19 hospital rehabilitation unit may be excluded from a benefit
20 package if the State ensures that those services are made
21 available through a separate delivery system. An exclusion
22 does not prohibit the Illinois Department from developing and
23 implementing demonstration projects for categories of persons
24 or services. Benefit packages for persons eligible for
25 medical assistance under Articles V, VI, and XII shall be
26 based on the requirements of those Articles and shall be
27 consistent with the Title XIX of the Social Security Act.
28 Nothing in this Act shall be construed to apply to services
29 purchased by the Department of Children and Family Services
30 and the Department of Human Services (as successor to the
31 Department of Mental Health and Developmental Disabilities)
32 under the provisions of Title 59 of the Illinois
33 Administrative Code, Part 132 ("Medicaid Community Mental
34 Health Services Program").
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1 (c) The program established by this Section may be
2 implemented by the Illinois Department in various contracting
3 areas at various times. The health care delivery systems and
4 providers available under the program may vary throughout the
5 State. For purposes of contracting with managed health care
6 entities and providers, the Illinois Department shall
7 establish contracting areas similar to the geographic areas
8 designated by the Illinois Department for contracting
9 purposes under the Illinois Competitive Access and
10 Reimbursement Equity Program (ICARE) under the authority of
11 Section 3-4 of the Illinois Health Finance Reform Act or
12 similarly-sized or smaller geographic areas established by
13 the Illinois Department by rule. A managed health care entity
14 shall be permitted to contract in any geographic areas for
15 which it has a sufficient provider network and otherwise
16 meets the contracting terms of the State. The Illinois
17 Department is not prohibited from entering into a contract
18 with a managed health care entity at any time.
19 (d) A managed health care entity that contracts with the
20 Illinois Department for the provision of services under the
21 program shall do all of the following, solely for purposes of
22 the integrated health care program:
23 (1) Provide that any individual physician licensed
24 to practice medicine in all its branches, any pharmacy,
25 any federally qualified health center, and any
26 podiatrist, that consistently meets the reasonable terms
27 and conditions established by the managed health care
28 entity, including but not limited to credentialing
29 standards, quality assurance program requirements,
30 utilization management requirements, financial
31 responsibility standards, contracting process
32 requirements, and provider network size and accessibility
33 requirements, must be accepted by the managed health care
34 entity for purposes of the Illinois integrated health
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1 care program. Any individual who is either terminated
2 from or denied inclusion in the panel of physicians of
3 the managed health care entity shall be given, within 10
4 business days after that determination, a written
5 explanation of the reasons for his or her exclusion or
6 termination from the panel. This paragraph (1) does not
7 apply to the following:
8 (A) A managed health care entity that
9 certifies to the Illinois Department that:
10 (i) it employs on a full-time basis 125
11 or more Illinois physicians licensed to
12 practice medicine in all of its branches; and
13 (ii) it will provide medical services
14 through its employees to more than 80% of the
15 recipients enrolled with the entity in the
16 integrated health care program; or
17 (B) A domestic stock insurance company
18 licensed under clause (b) of class 1 of Section 4 of
19 the Illinois Insurance Code if (i) at least 66% of
20 the stock of the insurance company is owned by a
21 professional corporation organized under the
22 Professional Service Corporation Act that has 125 or
23 more shareholders who are Illinois physicians
24 licensed to practice medicine in all of its branches
25 and (ii) the insurance company certifies to the
26 Illinois Department that at least 80% of those
27 physician shareholders will provide services to
28 recipients enrolled with the company in the
29 integrated health care program.
30 (2) Provide for reimbursement for providers for
31 emergency care, as defined by the Illinois Department by
32 rule, that must be provided to its enrollees, including
33 an emergency room screening fee, and urgent care that it
34 authorizes for its enrollees, regardless of the
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1 provider's affiliation with the managed health care
2 entity. Providers shall be reimbursed for emergency care
3 at an amount equal to the Illinois Department's
4 fee-for-service rates for those medical services rendered
5 by providers not under contract with the managed health
6 care entity to enrollees of the entity.
7 (3) Provide that any provider affiliated with a
8 managed health care entity may also provide services on a
9 fee-for-service basis to Illinois Department clients not
10 enrolled in a managed health care entity.
11 (4) Provide client education services as determined
12 and approved by the Illinois Department, including but
13 not limited to (i) education regarding appropriate
14 utilization of health care services in a managed care
15 system, (ii) written disclosure of treatment policies and
16 any restrictions or limitations on health services,
17 including, but not limited to, physical services,
18 clinical laboratory tests, hospital and surgical
19 procedures, prescription drugs and biologics, and
20 radiological examinations, and (iii) written notice that
21 the enrollee may receive from another provider those
22 services covered under this program that are not provided
23 by the managed health care entity.
24 (5) Provide that enrollees within its system may
25 choose the site for provision of services and the panel
26 of health care providers.
27 (6) Not discriminate in its enrollment or
28 disenrollment practices among recipients of medical
29 services or program enrollees based on health status.
30 (7) Provide a quality assurance and utilization
31 review program that (i) for health maintenance
32 organizations meets the requirements of the Health
33 Maintenance Organization Act and (ii) for managed care
34 community networks meets the requirements established by
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1 the Illinois Department in rules that incorporate those
2 standards set forth in the Health Maintenance
3 Organization Act.
4 (8) Issue a managed health care entity
5 identification card to each enrollee upon enrollment.
6 The card must contain all of the following:
7 (A) The enrollee's signature.
8 (B) The enrollee's health plan.
9 (C) The name and telephone number of the
10 enrollee's primary care physician.
11 (D) A telephone number to be used for
12 emergency service 24 hours per day, 7 days per week.
13 The telephone number required to be maintained
14 pursuant to this subparagraph by each managed health
15 care entity shall, at minimum, be staffed by
16 medically trained personnel and be provided
17 directly, or under arrangement, at an office or
18 offices in locations maintained solely within the
19 State of Illinois. For purposes of this
20 subparagraph, "medically trained personnel" means
21 licensed practical nurses or registered nurses
22 located in the State of Illinois who are licensed
23 pursuant to the Illinois Nursing Act of 1987.
24 (9) Ensure that every primary care physician and
25 pharmacy in the managed health care entity meets the
26 standards established by the Illinois Department for
27 accessibility and quality of care. The Illinois
28 Department shall arrange for and oversee an evaluation of
29 the standards established under this paragraph (9) and
30 may recommend any necessary changes to these standards.
31 The Illinois Department shall submit an annual report to
32 the Governor and the General Assembly by April 1 of each
33 year regarding the effect of the standards on ensuring
34 access and quality of care to enrollees.
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1 (10) Provide a procedure for handling complaints
2 that (i) for health maintenance organizations meets the
3 requirements of the Health Maintenance Organization Act
4 and (ii) for managed care community networks meets the
5 requirements established by the Illinois Department in
6 rules that incorporate those standards set forth in the
7 Health Maintenance Organization Act.
8 (11) Maintain, retain, and make available to the
9 Illinois Department records, data, and information, in a
10 uniform manner determined by the Illinois Department,
11 sufficient for the Illinois Department to monitor
12 utilization, accessibility, and quality of care.
13 (12) Except for providers who are prepaid, pay all
14 approved claims for covered services that are completed
15 and submitted to the managed health care entity within 30
16 days after receipt of the claim or receipt of the
17 appropriate capitation payment or payments by the managed
18 health care entity from the State for the month in which
19 the services included on the claim were rendered,
20 whichever is later. If payment is not made or mailed to
21 the provider by the managed health care entity by the due
22 date under this subsection, an interest penalty of 1% of
23 any amount unpaid shall be added for each month or
24 fraction of a month after the due date, until final
25 payment is made. Nothing in this Section shall prohibit
26 managed health care entities and providers from mutually
27 agreeing to terms that require more timely payment.
28 (13) Provide integration with community-based
29 programs provided by certified local health departments
30 such as Women, Infants, and Children Supplemental Food
31 Program (WIC), childhood immunization programs, health
32 education programs, case management programs, and health
33 screening programs.
34 (14) Provide that the pharmacy formulary used by a
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1 managed health care entity and its contract providers be
2 no more restrictive than the Illinois Department's
3 pharmaceutical program on the effective date of this
4 amendatory Act of 1994 and as amended after that date.
5 (15) Provide integration with community-based
6 organizations, including, but not limited to, any
7 organization that has operated within a Medicaid
8 Partnership as defined by this Code or by rule of the
9 Illinois Department, that may continue to operate under a
10 contract with the Illinois Department or a managed health
11 care entity under this Section to provide case management
12 services to Medicaid clients in designated high-need
13 areas.
14 The Illinois Department may, by rule, determine
15 methodologies to limit financial liability for managed health
16 care entities resulting from payment for services to
17 enrollees provided under the Illinois Department's integrated
18 health care program. Any methodology so determined may be
19 considered or implemented by the Illinois Department through
20 a contract with a managed health care entity under this
21 integrated health care program.
22 The Illinois Department shall contract with an entity or
23 entities to provide external peer-based quality assurance
24 review for the integrated health care program. The entity
25 shall be representative of Illinois physicians licensed to
26 practice medicine in all its branches and have statewide
27 geographic representation in all specialties of medical care
28 that are provided within the integrated health care program.
29 The entity may not be a third party payer and shall maintain
30 offices in locations around the State in order to provide
31 service and continuing medical education to physician
32 participants within the integrated health care program. The
33 review process shall be developed and conducted by Illinois
34 physicians licensed to practice medicine in all its branches.
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1 In consultation with the entity, the Illinois Department may
2 contract with other entities for professional peer-based
3 quality assurance review of individual categories of services
4 other than services provided, supervised, or coordinated by
5 physicians licensed to practice medicine in all its branches.
6 The Illinois Department shall establish, by rule, criteria to
7 avoid conflicts of interest in the conduct of quality
8 assurance activities consistent with professional peer-review
9 standards. All quality assurance activities shall be
10 coordinated by the Illinois Department.
11 (e) All persons enrolled in the program shall be
12 provided with a full written explanation of all
13 fee-for-service and managed health care plan options and a
14 reasonable opportunity to choose among the options as
15 provided by rule. The Illinois Department shall provide to
16 enrollees, upon enrollment in the integrated health care
17 program and at least annually thereafter, notice of the
18 process for requesting an appeal under the Illinois
19 Department's administrative appeal procedures.
20 Notwithstanding any other Section of this Code, the Illinois
21 Department may provide by rule for the Illinois Department to
22 assign a person enrolled in the program to a specific
23 provider of medical services or to a specific health care
24 delivery system if an enrollee has failed to exercise choice
25 in a timely manner. An enrollee assigned by the Illinois
26 Department shall be afforded the opportunity to disenroll and
27 to select a specific provider of medical services or a
28 specific health care delivery system within the first 30 days
29 after the assignment. An enrollee who has failed to exercise
30 choice in a timely manner may be assigned only if there are 3
31 or more managed health care entities contracting with the
32 Illinois Department within the contracting area, except that,
33 outside the City of Chicago, this requirement may be waived
34 for an area by rules adopted by the Illinois Department after
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1 consultation with all hospitals within the contracting area.
2 The Illinois Department shall establish by rule the procedure
3 for random assignment of enrollees who fail to exercise
4 choice in a timely manner to a specific managed health care
5 entity in proportion to the available capacity of that
6 managed health care entity. Assignment to a specific provider
7 of medical services or to a specific managed health care
8 entity may not exceed that provider's or entity's capacity as
9 determined by the Illinois Department. Any person who has
10 chosen a specific provider of medical services or a specific
11 managed health care entity, or any person who has been
12 assigned under this subsection, shall be given the
13 opportunity to change that choice or assignment at least once
14 every 12 months, as determined by the Illinois Department by
15 rule. The Illinois Department shall maintain a toll-free
16 telephone number for program enrollees' use in reporting
17 problems with managed health care entities.
18 (f) If a person becomes eligible for participation in
19 the integrated health care program while he or she is
20 hospitalized, the Illinois Department may not enroll that
21 person in the program until after he or she has been
22 discharged from the hospital. This subsection does not apply
23 to newborn infants whose mothers are enrolled in the
24 integrated health care program.
25 (g) The Illinois Department shall, by rule, establish
26 for managed health care entities rates that (i) are certified
27 to be actuarially sound, as determined by an actuary who is
28 an associate or a fellow of the Society of Actuaries or a
29 member of the American Academy of Actuaries and who has
30 expertise and experience in medical insurance and benefit
31 programs, in accordance with the Illinois Department's
32 current fee-for-service payment system, and (ii) take into
33 account any difference of cost to provide health care to
34 different populations based on gender, age, location, and
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1 eligibility category. The rates for managed health care
2 entities shall be determined on a capitated basis.
3 The Illinois Department by rule shall establish a method
4 to adjust its payments to managed health care entities in a
5 manner intended to avoid providing any financial incentive to
6 a managed health care entity to refer patients to a county
7 provider, in an Illinois county having a population greater
8 than 3,000,000, that is paid directly by the Illinois
9 Department. The Illinois Department shall by April 1, 1997,
10 and annually thereafter, review the method to adjust
11 payments. Payments by the Illinois Department to the county
12 provider, for persons not enrolled in a managed care
13 community network owned or operated by a county provider,
14 shall be paid on a fee-for-service basis under Article XV of
15 this Code.
16 The Illinois Department by rule shall establish a method
17 to reduce its payments to managed health care entities to
18 take into consideration (i) any adjustment payments paid to
19 hospitals under subsection (h) of this Section to the extent
20 those payments, or any part of those payments, have been
21 taken into account in establishing capitated rates under this
22 subsection (g) and (ii) the implementation of methodologies
23 to limit financial liability for managed health care entities
24 under subsection (d) of this Section.
25 (h) For hospital services provided by a hospital that
26 contracts with a managed health care entity, adjustment
27 payments shall be paid directly to the hospital by the
28 Illinois Department. Adjustment payments may include but
29 need not be limited to adjustment payments to:
30 disproportionate share hospitals under Section 5-5.02 of this
31 Code; primary care access health care education payments (89
32 Ill. Adm. Code 149.140); payments for capital, direct medical
33 education, indirect medical education, certified registered
34 nurse anesthetist, and kidney acquisition costs (89 Ill. Adm.
-35- LRB9000913DJcd
1 Code 149.150(c)); uncompensated care payments (89 Ill. Adm.
2 Code 148.150(h)); trauma center payments (89 Ill. Adm. Code
3 148.290(c)); rehabilitation hospital payments (89 Ill. Adm.
4 Code 148.290(d)); perinatal center payments (89 Ill. Adm.
5 Code 148.290(e)); obstetrical care payments (89 Ill. Adm.
6 Code 148.290(f)); targeted access payments (89 Ill. Adm. Code
7 148.290(g)); Medicaid high volume payments (89 Ill. Adm. Code
8 148.290(h)); and outpatient indigent volume adjustments (89
9 Ill. Adm. Code 148.140(b)(5)).
10 (i) For any hospital eligible for the adjustment
11 payments described in subsection (h), the Illinois Department
12 shall maintain, through the period ending June 30, 1995,
13 reimbursement levels in accordance with statutes and rules in
14 effect on April 1, 1994.
15 (j) Nothing contained in this Code in any way limits or
16 otherwise impairs the authority or power of the Illinois
17 Department to enter into a negotiated contract pursuant to
18 this Section with a managed health care entity, including,
19 but not limited to, a health maintenance organization, that
20 provides for termination or nonrenewal of the contract
21 without cause upon notice as provided in the contract and
22 without a hearing.
23 (k) Section 5-5.15 does not apply to the program
24 developed and implemented pursuant to this Section.
25 (l) The Illinois Department shall, by rule, define those
26 chronic or acute medical conditions of childhood that require
27 longer-term treatment and follow-up care. The Illinois
28 Department shall ensure that services required to treat these
29 conditions are available through a separate delivery system.
30 A managed health care entity that contracts with the
31 Illinois Department may refer a child with medical conditions
32 described in the rules adopted under this subsection directly
33 to a children's hospital or to a hospital, other than a
34 children's hospital, that is qualified to provide inpatient
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1 and outpatient services to treat those conditions. The
2 Illinois Department shall provide fee-for-service
3 reimbursement directly to a children's hospital for those
4 services pursuant to Title 89 of the Illinois Administrative
5 Code, Section 148.280(a), at a rate at least equal to the
6 rate in effect on March 31, 1994. For hospitals, other than
7 children's hospitals, that are qualified to provide inpatient
8 and outpatient services to treat those conditions, the
9 Illinois Department shall provide reimbursement for those
10 services on a fee-for-service basis, at a rate at least equal
11 to the rate in effect for those other hospitals on March 31,
12 1994.
13 A children's hospital shall be directly reimbursed for
14 all services provided at the children's hospital on a
15 fee-for-service basis pursuant to Title 89 of the Illinois
16 Administrative Code, Section 148.280(a), at a rate at least
17 equal to the rate in effect on March 31, 1994, until the
18 later of (i) implementation of the integrated health care
19 program under this Section and development of actuarially
20 sound capitation rates for services other than those chronic
21 or acute medical conditions of childhood that require
22 longer-term treatment and follow-up care as defined by the
23 Illinois Department in the rules adopted under this
24 subsection or (ii) March 31, 1996.
25 Notwithstanding anything in this subsection to the
26 contrary, a managed health care entity shall not consider
27 sources or methods of payment in determining the referral of
28 a child. The Illinois Department shall adopt rules to
29 establish criteria for those referrals. The Illinois
30 Department by rule shall establish a method to adjust its
31 payments to managed health care entities in a manner intended
32 to avoid providing any financial incentive to a managed
33 health care entity to refer patients to a provider who is
34 paid directly by the Illinois Department.
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1 (m) Behavioral health services provided or funded by the
2 Department of Human Services, the Department of Children and
3 Family Services, and the Illinois Department shall be
4 excluded from a benefit package. Conditions of an organic or
5 physical origin or nature, including medical detoxification,
6 however, may not be excluded. In this subsection,
7 "behavioral health services" means mental health services and
8 subacute alcohol and substance abuse treatment services, as
9 defined in the Illinois Alcoholism and Other Drug Dependency
10 Act. In this subsection, "mental health services" includes,
11 at a minimum, the following services funded by the Illinois
12 Department, the Department of Human Services (as successor to
13 the Department of Mental Health and Developmental
14 Disabilities), or the Department of Children and Family
15 Services: (i) inpatient hospital services, including related
16 physician services, related psychiatric interventions, and
17 pharmaceutical services provided to an eligible recipient
18 hospitalized with a primary diagnosis of psychiatric
19 disorder; (ii) outpatient mental health services as defined
20 and specified in Title 59 of the Illinois Administrative
21 Code, Part 132; (iii) any other outpatient mental health
22 services funded by the Illinois Department pursuant to the
23 State of Illinois Medicaid Plan; (iv) partial
24 hospitalization; and (v) follow-up stabilization related to
25 any of those services. Additional behavioral health services
26 may be excluded under this subsection as mutually agreed in
27 writing by the Illinois Department and the affected State
28 agency or agencies. The exclusion of any service does not
29 prohibit the Illinois Department from developing and
30 implementing demonstration projects for categories of persons
31 or services. The Department of Children and Family Services
32 and the Department of Human Services shall each adopt rules
33 governing the integration of managed care in the provision of
34 behavioral health services. The State shall integrate managed
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1 care community networks and affiliated providers, to the
2 extent practicable, in any separate delivery system for
3 mental 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
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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
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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
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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
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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
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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 (v) The Auditor General shall conduct an annual
23 performance audit of the integrated health care program
24 created under this Section and, before that program is fully
25 operational, the Illinois Department's implementation of this
26 Section. The initial audit shall cover the fiscal year
27 ending June 30, 1997, and subsequent audits shall cover each
28 fiscal year thereafter. The Auditor General shall issue
29 reports of the audits on or before December 31 of 1997 and
30 each year thereafter.
31 (Source: P.A. 88-554, eff. 7-26-94; 89-21, eff. 7-1-95;
32 89-507, eff. 7-1-97; 89-673, eff. 8-14-96; revised 8-26-96.)
33 Section 95. No acceleration or delay. Where this Act
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1 makes changes in a statute that is represented in this Act by
2 text that is not yet or no longer in effect (for example, a
3 Section represented by multiple versions), the use of that
4 text does not accelerate or delay the taking effect of (i)
5 the changes made by this Act or (ii) provisions derived from
6 any other Public Act.
7 Section 99. Effective date. This Act takes effect upon
8 becoming law.