State of Illinois
91st General Assembly

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HB0733 Enrolled                                LRB9103765DHmg

 1        AN ACT in relation to health care.

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

 4        Section 1. Short title. This Act  may  be  cited  as  the
 5    Hospital Cooperation Act.

 6        Section  5.  Legislative  findings.  The General Assembly
 7    finds that the goals of controlling  health  care  costs  and
 8    improving  the quality of and access to open-heart surgery in
 9    Health Service Area V may  be  significantly  enhanced  by  a
10    cooperative  agreement  that would be prohibited by State and
11    federal antitrust laws  if  undertaken  without  governmental
12    involvement.   The  purpose  of  this  Act  is  to substitute
13    regulation for competition by creating an opportunity for the
14    State  to  review  proposed  agreements  and  to  approve  an
15    agreement   under   certain   prescribed    conditions    and
16    circumstances  under  which  an agreement is highly likely to
17    result in lower costs, greater access, and  improved  quality
18    for  open-heart  surgery  in Health Service Area V, and would
19    not  otherwise  occur  in   the   competitive   health   care
20    marketplace. The General Assembly intends that approval of an
21    agreement   be   accompanied   by   appropriate   conditions,
22    supervision, and regulation to protect against private abuses
23    of  economic  power,  and  that  an agreement approved by the
24    State  Board  and  accompanied  by  appropriate   conditions,
25    supervision,  and regulation shall not be subject to State or
26    federal antitrust liability. The General Assembly finds  that
27    the  market  for  open-heart  surgery is extremely diverse in
28    Illinois.    Health  Service  Area  V  is  believed  to  have
29    extraordinary  rates  of outmigration for open-heart surgery,
30    with   residents   traveling   hundreds   of   miles,   often
31    out-of-state, for care.  Providing open-heart  surgery  close
HB0733 Enrolled             -2-                LRB9103765DHmg
 1    to  home is medically useful to a patient's recovery, because
 2    visits of  families  and  friends  can  improve  a  patient's
 3    psychosocial   capacity  to  cope  with  disease.   Providing
 4    incentives to increase quality care for open-heart surgery in
 5    areas without it is desirable.

 6        Section 10.  Definitions.  In this Act:
 7        "Access" means the financial,  temporal,  and  geographic
 8    availability  of  open-heart  surgery to individuals who need
 9    it.
10        "Applicants" means the parties to a cooperative agreement
11    for which a permit from the State Board is sought under  this
12    Act.
13        "Cooperative  agreement"  means  an  agreement among 2 or
14    more health care providers for the sharing or  allocation  of
15    medical,  diagnostic,  or  laboratory  facilities or services
16    customarily  offered  by  health  care  providers   providing
17    open-heart  surgery,  including  mergers,  consolidations, or
18    other acquisitions.
19        "Cost" or "cost of health care" means the amount paid  by
20    consumers or third-party payers for open-heart surgery.
21        "Criteria"   means  the  cost,  access,  and  quality  of
22    open-heart surgery.
23        "Health care provider" or "provider"  means   any  person
24    licensed by the State under the Hospital Licensing Act.
25        "Person" means an individual, legal entity, or affiliate.
26        "State  Board"  means  the Cooperative Hospital Agreement
27    Board.
28        "Permitholder"  means  the  party   or   parties   to   a
29    cooperative agreement for which a permit from the State Board
30    has been approved under this Act.
31        "Health  Service Area V" means "HSA V" as defined by rule
32    of Illinois Health Facilities Planning Board in effect on the
33    effective date of this Act  and  consists  of  the  following
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 1    Illinois counties:  Alexander, Bond, Clay, Crawford, Edwards,
 2    Effingham,  Fayette,  Franklin,  Gallatin,  Hamilton, Hardin,
 3    Jackson,  Jasper,  Jefferson,  Johnson,   Lawrence,   Marion,
 4    Massac,  Perry,  Pope,  Pulaski,  Randolph, Richland, Saline,
 5    Union, Wabash, Washington, Wayne, White, and Williamson.
 6        "Open-heart surgery" means a category  of  service  which
 7    utilizes  any  form  of  cardiac  surgery  which requires the
 8    circulation  of  blood  outside  the  body,  as   through   a
 9    heart-lung apparatus for carbon dioxide-oxygen exchange.

10        Section   15.   Cooperative   Hospital  Agreement  Board;
11    creation; members.
12        (a)  The Cooperative Hospital Agreement Board is  created
13    in  the  Office  of  the Director of Public Health. The State
14    Board shall consist of 11 members appointed by the  Governor,
15    with the advice and consent of the Senate, from the following
16    groups and industries:
17             (1)  Two  practicing  hospital  administrators,  one
18        from a hospital with fewer than 50 beds;
19             (2)  One currently serving hospital board member;
20             (3)  One practicing licensed physician;
21             (4)  Two consumers;
22             (5)  One health care payer;
23             (6)  Two representatives from business and industry,
24        one of whom shall be an independent small business owner;
25             (7)  One  practicing  attorney  who  has  particular
26        knowledge or expertise in antitrust law; and
27             (8)  One health care economist.
28        No  more  than  6  members  of  the  State  Board  may be
29    affiliated with the same political party.
30        (b)  The initial board shall be divided into one group of
31    4 members, one group of 3 members, and 2 groups of 2 members,
32    all as designated by the Governor.  The  term  of  the  first
33    group  shall  expire on June 30, 2000, the term of the second
HB0733 Enrolled             -4-                LRB9103765DHmg
 1    group shall expire on June 30, 2001, the term  of  the  third
 2    group  shall  expire  on  June  30, 2002, and the term of the
 3    fourth group shall expire on June 30, 2003.  Thereafter, when
 4    the term of  any  member  expires,  the  successor  shall  be
 5    appointed  for  a  term  of 4 years.  Each member shall serve
 6    until the member's resignation, death, or removal during that
 7    member's term or, in the case of  a  member  whose  term  has
 8    expired,  until a successor has been appointed and qualified.
 9    The Governor shall fill any vacancy for the remainder of  the
10    term.   All  members  are  eligible for reappointment but may
11    serve no more  than  2  4-year  terms,  except  that  initial
12    appointees  may  serve  2  4-year  terms in addition to their
13    initial term. No person may serve as a member  of  the  State
14    Board or on the staff of the State Board while a member or on
15    the staff of the Illinois Health Facilities Planning Board.
16        (c)  The  nominees to membership on the State Board shall
17    disclose any potential conflicts of interest to the  Governor
18    before  accepting appointment.  The State Board shall, as one
19    of its first actions, adopt  rules  to  govern  contacts  and
20    communications  between  its members and applicants and shall
21    establish policies to require any member who has  a  conflict
22    of   interest  to  immediately  disclose  that  conflict  and
23    disqualify himself or herself from voting in  any  proceeding
24    associated with the conflict of interest.
25        (d)  One  State Board member, designated by the Governor,
26    shall call and convene the initial organizational meeting  of
27    the  State  Board  and shall serve as its temporary chair. At
28    the initial meeting the State  Board  shall  elect  from  its
29    membership  a  chair,  vice-chair,  and  secretary. All State
30    Board officers shall hold office at the pleasure of the State
31    Board. The secretary,  with  whatever  assistance  the  State
32    Board  may  prescribe, shall keep a record of the proceedings
33    of the State Board and  shall  be  custodian  of  the  minute
34    books,  the  State  Board's  official  seal,  and  all books,
HB0733 Enrolled             -5-                LRB9103765DHmg
 1    documents, and papers filed with  the  State  Board.  Regular
 2    meetings shall be held at least once every 3 months, at times
 3    fixed  by resolution of the State Board. Special meetings may
 4    be held in accordance with the bylaws. All  meetings  of  the
 5    State  Board  shall  be open to the public. A majority of the
 6    State Board shall constitute a quorum for the transaction  of
 7    its  business.  Members  shall receive reimbursement of their
 8    expenses. All State Board meetings shall be  deemed  to  have
 9    been  duly  called  and  regularly  held,  and all orders and
10    proceedings of the State Board shall be deemed to  have  been
11    duly authorized, unless proved to the contrary.
12        (e)  All  State Board members shall serve at the pleasure
13    of the Governor, except that any member shall be  removed  by
14    the  Governor if that member fails for any reason to attend 3
15    regular meetings during any 12-month  period  and  the  State
16    Board  has  not  entered  its  approval of any absence in its
17    minutes. During  their  terms  of  office,  all  State  Board
18    members  are  prohibited from being a party to a contract for
19    profit with the State Board.
20        (f)  The Director of Public Health shall provide clerical
21    and professional staff and meeting facilities  necessary  for
22    the State Board to carry out its functions.

23        Section  20.  Approval  of cooperative agreements; powers
24    of the State Board.   Approval  of  a  cooperative  agreement
25    requires  a  three-fourths  vote  of the State Board.  On and
26    after March 1, 2000, the State Board shall  not  approve  any
27    cooperative  agreement.   The  State  Board shall continue to
28    exercise all of its powers  with  respect  to  a  cooperative
29    agreement  approved  before  March 1, 2000, including without
30    limitation its power to terminate  or  modify  its  approval,
31    require  the  submission  of  reports  and other information,
32    conduct audits, and subpoena witnesses and the production  of
33    books, records, and documents.
HB0733 Enrolled             -6-                LRB9103765DHmg
 1        Section   25.  Needs   study.    The   State   Board,  in
 2    consultation with the Attorney General,  shall  commission  a
 3    needs  study  to  determine  whether the goals of controlling
 4    health care costs and improving the quality of and access  to
 5    open-heart   surgery   in  Health  Service  Area  V  will  be
 6    significantly enhanced by a cooperative agreement that  would
 7    be   prohibited   by  State  or  federal  antitrust  laws  if
 8    undertaken without governmental involvement.  The study shall
 9    be designed to determine  whether  hospital-based  open-heart
10    surgery  requires  a  cooperative agreement exempt from State
11    and federal antitrust laws and the feasibility  of  providing
12    open-heart  surgery  at  a  reasonable rate of return without
13    engaging in predatory pricing activities or any  other  abuse
14    of   power,  based  upon  reasonable  assumptions  of  market
15    conditions  in  Health  Service  Area  V.   The  study  shall
16    consider all options for  providing  open-heart  surgery  for
17    Health Service Area V.

18        Section  30.   Health  care cooperative agreement; goals.
19    Acting by their boards of directors or boards of trustees  or
20    as  individuals,  2  or  more health care providers may enter
21    into a cooperative agreement concerning sharing or allocation
22    of open-heart surgery facilities and services that  shall  be
23    designed  to  achieve  the  following goals in Health Service
24    Area V:
25             (1)  reducing   open-heart   surgery    costs    for
26        consumers;
27             (2)  improving    access   to   open-heart   surgery
28        services; and
29             (3)  improving the  quality  of  open-heart  surgery
30        patient care.

31        Section  35.   Approval  of  a  health  care  cooperative
32    agreement.
HB0733 Enrolled             -7-                LRB9103765DHmg
 1        (a)  Health   care   providers  seeking  to  implement  a
 2    cooperative  agreement  that  might  be  construed  to  be  a
 3    violation of State or federal antitrust laws but that  is  in
 4    the  best interest of the State and furthers the policies and
 5    goals of this Act may apply for a permit from the State Board
 6    as provided  in  this  Section.   This  permit  shall  be  in
 7    addition  to  any  permit  or  exemption  required  under any
 8    provisions of the Illinois Health  Facilities  Planning  Act.
 9    Nothing  in this Act shall be construed as requiring a health
10    care provider to obtain approval from the State Board of  any
11    cooperative  agreement.   The  decision  to  seek State Board
12    approval of a cooperative agreement  shall  be  in  the  sole
13    discretion  of  the parties to the cooperative agreement.  No
14    cooperative agreement  implemented  without  first  obtaining
15    approval  from  the  State  Board as provided in this Section
16    shall be eligible for any protection or immunity  created  by
17    Section 85.
18        (b)  Applications  for  a  permit  shall  be  in  a  form
19    prescribed  by the State Board but shall contain at least the
20    following:
21             (1)  a descriptive title;
22             (2)  a table of contents;
23             (3)  names of each party to the application and  the
24        address of the principal business office of each party;
25             (4)  the  names, addresses, and telephone numbers of
26        the   persons   authorized   to   receive   notices   and
27        communications with respect to the application;
28             (5)  a verified statement by a  responsible  officer
29        of  each  party  to  the  application  attesting  to  the
30        accuracy and completeness of the enclosed information;
31             (6)  background information relating to the proposed
32        agreement, including:
33                  (A)  a description of the proposed agreement;
34                  (B)  an   identification   of   any  tangential
HB0733 Enrolled             -8-                LRB9103765DHmg
 1             equipment associated with the proposed agreement;
 2                  (C)  a description of that  portion  of  Health
 3             Service Area V involved in the proposed agreement;
 4                  (D)  if  the  portion  of Health Service Area V
 5             described in item (C) is different from the  portion
 6             in  which the applicants have engaged in the type of
 7             business  at  issue  over  the  last  5   years,   a
 8             description of how and why the portion differs;
 9                  (E)  identification  of  all  services  that  a
10             substantial   share   of  consumers  would  consider
11             substitutes for open-heart surgery;
12                  (F)  identification   of   whether   open-heart
13             surgery is currently being offered or is capable  of
14             being  offered  by other providers in the portion of
15             Health Service Area V described in item (C);
16                  (G)  identification  of  the  steps  necessary,
17             under current market and regulatory conditions,  for
18             other  parties  to  enter the territory described in
19             item (C) and compete with the applicants;
20                  (H)  a description of the previous  history  of
21             dealings between the parties to the application;
22                  (I)  a  detailed  explanation  of the projected
23             effects, including expected volume, change in price,
24             and increased revenue,  of  the  agreement  on  each
25             party's  current  businesses, both generally and the
26             aspects of the business  directly  involved  in  the
27             proposed agreement;
28                  (J)  the present market share of the parties to
29             the  application  and  of  others  affected  by  the
30             proposed agreement and projected market shares after
31             implementation of the proposed agreement;
32                  (K)  a statement of why the projected levels of
33             cost,  access,  and quality could not be achieved in
34             the existing market without the proposed agreement;
HB0733 Enrolled             -9-                LRB9103765DHmg
 1                  (L)  an  explanation  of  how   the   agreement
 2             relates  to  any  Illinois  health  care  plans  for
 3             delivery of health care; and
 4                  (M)  a  statement of any consideration received
 5             or to be received by any party  under  the  proposed
 6             agreement;
 7             (7)  a  detailed  explanation or implementation plan
 8        that  states  how  and  when   the   cooperative   action
 9        identified in the agreement will meet the goals specified
10        in Section 30;
11             (8)  an  explanation  of the impact the agreement is
12        likely to have directly on the State, including the  cost
13        of  State  employee  health  care,  Medicaid  costs,  and
14        workers compensation costs;
15             (9)  a copy of the proposed agreement; and
16             (10)  a fee determined by the State Board, but in an
17        amount   sufficient  to  cover  the  cost  of  processing
18        applications, including costs of the Attorney General and
19        the State Board, and the cost  of  periodic  reviews  and
20        supervision   of  the  implementation  of  a  cooperative
21        agreement under this Act.
22        (c)  In  addition  to   the   information   required   in
23    subsection  (b),  the  application  must  contain  a  written
24    description   of  the  proposed  agreement  for  purposes  of
25    publication in the Illinois Register and in  a  newspaper  of
26    general  circulation  in the area affected by the cooperative
27    agreement. The notice must include sufficient information  to
28    advise the public of the nature of the proposed agreement and
29    to   enable   the   public  to  provide  meaningful  comments
30    concerning the expected results of the agreement.  The notice
31    must also state that any person may provide written  comments
32    to  the State Board, with copies to the applicants and to the
33    Attorney  General,  within  60  days   after   the   notice's
34    publication.  The State Board shall approve the notice before
HB0733 Enrolled             -10-               LRB9103765DHmg
 1    publication.    If   the  State  Board  determines  that  the
 2    submitted notice does not provide sufficient information, the
 3    State Board may amend the notice before publication  and  may
 4    consult  with the applicants in preparing the amended notice.
 5    The State Board shall not publish an amended  notice  without
 6    the applicants' approval.
 7        (d)  For a proposed agreement involving multiple parties,
 8    one  joint  application  must  be  submitted on behalf of all
 9    parties to the agreement.
10        (e)  Trade secret information, as defined in the  Freedom
11    of Information Act, shall be protected to the extent required
12    under that Act.
13        (f)  If   the   Attorney   General  or  the  State  Board
14    determines that an application  is  unclear,  incomplete,  or
15    provides  an  insufficient basis on which to base a decision,
16    the State Board shall return the application.  The applicants
17    may complete or revise the application and resubmit it.
18        (g)  The Attorney General or the State Board may  decline
19    to  review  any application relating to agreements already in
20    effect before the submission of  the  application.   However,
21    the  State  Board shall  review any application if the review
22    is expressly provided for in a settlement agreement   entered
23    into  before  the enactment of this Section by the applicants
24    and the Attorney General.
25        (h)  Upon the showing of good cause, the State Board  may
26    extend  any  of  the  time  limits  stated in this Act at the
27    request of the applicants or  the  Attorney  General,  except
28    that  no  application  for  permit to implement a cooperative
29    agreement shall be accepted by the State Board after  October
30    31, 1999 or approved by the State Board after March 1, 2000.

31        Section 40.  Notice and comment.
32        (a)  The  State Board shall cause the notice described in
33    subsection (c) of Section 35 to be published in the  Illinois
HB0733 Enrolled             -11-               LRB9103765DHmg
 1    Register  and  in  a  newspaper of general circulation in the
 2    area affected by the cooperative agreement.   The State Board
 3    shall also cause the notice to  be  delivered,  by  certified
 4    mail,  to  persons  affected  by  the  proposed agreement and
 5    identified in subparagraph (J) of paragraph (6) of subsection
 6    (b) of Section 35.   The State Board may send a copy  of  the
 7    notice  to any person together with a request that the person
 8    comment as provided under  subsection  (b).   Copies  of  the
 9    request must be provided to the applicants.
10        (b)  Within  30  days  after the notice is published, any
11    person may mail to the  State  Board  written  comments  with
12    respect  to  the  application.   Persons  submitting comments
13    shall provide a copy of the comments to the applicants.   The
14    applicants  may  mail to the State Board written responses to
15    any comments within 10 days after the  deadline  for  mailing
16    comments.   The  applicants shall send a copy of the response
17    to the person submitting the comment.
18        (c)  When  an  application  for  permit  to  implement  a
19    cooperative agreement is made to the State Board,  the  State
20    Board  shall  commence  a  public hearing within a reasonable
21    period after receipt of the application,  not  to  exceed  90
22    days.    Notice  of the hearing shall be made promptly to the
23    applicants, to the Attorney General, to any persons  affected
24    by  the proposed agreement and identified in subparagraph (J)
25    of paragraph (6) of subsection (b)  of  Section  35,  and  by
26    publication in a newspaper of general circulation in the area
27    affected by the cooperative agreement.

28        Section 45.  Attorney General; review; recommendation.
29        (a)   Upon  receipt  of  an  application  for  permit  to
30    implement a cooperative  agreement,  the  State  Board  shall
31    submit  the  application  to the Attorney General for review.
32    The Attorney General shall review the application  and  shall
33    recommend  to  the  State  Board, in writing, the approval or
HB0733 Enrolled             -12-               LRB9103765DHmg
 1    denial of the application, provided  the  Attorney  General's
 2    review  shall not include determinations under subsection (d)
 3    or (e) of Section 50.  If the Attorney General recommends  to
 4    the  State  Board  the denial of an application, the Attorney
 5    General shall state the reasons for that recommendation.  The
 6    State Board shall not approve any application if the Attorney
 7    General  recommends  denial  of  the  application, unless the
 8    State Board determines there is a compelling  State  interest
 9    in approving the application and there is a unanimous vote of
10    its members.

11        Section 50.  Criteria for issuance of permit.
12        (a)  The  State  Board  may issue a permit to implement a
13    cooperative agreement if the Attorney General and  the  State
14    Board  determine  that  the  applicants  have demonstrated by
15    clear and convincing evidence that:
16             (1)  the goals specified in Section  30  are  highly
17        likely to be met by implementing the proposed cooperative
18        agreement  and  would  not otherwise occur under existing
19        market conditions or conditions likely to develop without
20        an  exemption  or  immunity  from   State   and   federal
21        antitrust law; and
22             (2)  the  benefits  resulting from the agreement are
23        highly likely to  outweigh  the  disadvantages  that  may
24        result  from the agreement, and that predatory pricing or
25        any other abuse of power will not occur. In  making  that
26        determination,  the  Attorney General and the State Board
27        shall employ a cost-benefit analysis and the needs study.
28        (b)  In making a determination about  cost,  access,  and
29    quality,  the  Attorney  General  and  the  State Board shall
30    consider the following factors, among others:
31             (1)  whether the proposal is  compatible  with  cost
32        containment  or  plans  of the Illinois Health Facilities
33        Planning Board.
HB0733 Enrolled             -13-               LRB9103765DHmg
 1             (2)  market structure:
 2                  (A)  actual and potential sellers and buyers or
 3             providers and purchasers;
 4                  (B)  actual and potential consumers;
 5                  (C)  geographic market area;
 6                  (D)  new delivery mechanisms; and
 7                  (E)  entry conditions;
 8             (3)  current market conditions;
 9             (4)  the historical behavior of the market;
10             (5)  performance of other similar agreements;
11             (6)  whether the  proposal  unnecessarily  restrains
12        competition   or   restrains   competition  in  ways  not
13        reasonably related to the purposes of this Act;
14             (7)  whether competition as it currently  exists  in
15        the  market  is likely to produce better results in terms
16        of cost, access and quality; and
17             (8)  the financial condition of the applicants.
18        (c)  The analysis of cost must focus  on  the  individual
19    consumer  of  health  care.  Cost  savings  to be realized by
20    providers,  health  carriers,  group  purchasers,  or   other
21    participants  in the health care system, are relevant only to
22    the extent that the savings are highly likely to be passed on
23    to the  consumer.   Where  an  application  is  submitted  by
24    providers  who  are  paid  primarily  by  third  party payers
25    unaffiliated with the providers, however,  it  is  sufficient
26    for the providers to show that cost savings are highly likely
27    to  be  passed  on to the unaffiliated third party payers and
28    the providers do not have the burden of  proving  that  third
29    party  payers with whom the providers are not affiliated will
30    pass  on  cost  savings  to  individuals  receiving  coverage
31    through the third party payers.  In making determinations  as
32    to  costs,  the  Attorney  General  and the State Board shall
33    consider, among other matters:
34             (1)  the  cost  savings  likely  to  result  to  the
HB0733 Enrolled             -14-               LRB9103765DHmg
 1        applicants;
 2             (2) the extent to which the cost savings are  likely
 3        to be passed on to the consumer and in what form;
 4             (3)  the  extent  to which the proposed agreement is
 5        likely to result in cost shifting by the applicants  onto
 6        other payers or purchasers of other products or services;
 7             (4)  the  extent  to  which the cost shifting by the
 8        applicants is likely to be followed by other  persons  in
 9        the market;
10             (5)  the  current  and anticipated supply and demand
11        for any products or services at issue;
12             (6)  the  representations  and  guarantees  of   the
13        applicants and their enforceability;
14             (7)  likely effectiveness of regulation by the State
15        Board;
16             (8) inferences to be drawn from market structure;
17             (9) the cost of regulation, both for the  State  and
18        for the applicants; and
19             (10)  any  other  factors  tending  to show that the
20        proposed agreement is or is not highly likely  to  reduce
21        cost.
22        (d)  In  making  determinations  as  to access, the State
23    Board shall consider, among other matters:
24             (1) the  extent  to  which  the  use  of  open-heart
25        surgery  by  the  intended  targeted population is highly
26        likely to increase or decrease; when a proposed agreement
27        is highly likely to increase  access  in  one  geographic
28        area,  by  lowering prices or otherwise expanding supply,
29        but limits access in another geographic area by  removing
30        service  capabilities  from  that  second area, the State
31        Board shall articulate the criteria employed  to  balance
32        these effects;
33             (2)  the  extent  to which the proposed agreement is
34        highly likely to make available a new and needed  service
HB0733 Enrolled             -15-               LRB9103765DHmg
 1        or product to a certain geographic area; and
 2             (3)  the  extent  to which the proposed agreement is
 3        highly likely to otherwise make open-heart  surgery  more
 4        financially  or  geographically  available to persons who
 5        need  them.  If  the  State  Board  determines  that  the
 6        proposed agreement is highly likely  to  increase  access
 7        and  bases  that determination on a projected increase in
 8        utilization, the State Board  shall  also  determine  and
 9        make  a specific finding that the increase in utilization
10        does not reflect overutilization.
11        (e) In making determinations as  to  quality,  the  State
12    Board  shall  consider, among others, the extent to which the
13    proposed agreement is highly likely to:
14             (1) decrease morbidity and mortality;
15             (2) result in faster convalescence;
16             (3) result in fewer hospital days;
17             (4) permit providers to attain needed experience  or
18        frequency  of  treatment, highly likely to lead to better
19        outcomes;
20             (5) increase patient satisfaction;
21             (6) results in modern health care facilities; and
22             (7) have any other features  likely  to  improve  or
23        reduce the quality of health care.

24        Section 55.  Decision.
25        (a)  The  State  Board  shall  issue  a  written decision
26    approving or denying the application for permit.   The  State
27    Board may condition approval on a modification of all or part
28    of  the  proposed  agreement  to eliminate any restriction on
29    competition that is not reasonably related to  the  goals  of
30    reducing  cost  or  improving  access  or quality.  The State
31    Board shall, independently  or  upon  recommendation  of  the
32    Attorney General, also establish conditions for approval that
33    are   reasonably   necessary  to  protect  consumers  against
HB0733 Enrolled             -16-               LRB9103765DHmg
 1    predatory pricing, insufficient competition, or other  abuses
 2    of private economic power and to ensure that the agreement is
 3    appropriately supervised and regulated by the State.
 4        (b)  The  State  Board's  decision  shall  make  specific
 5    findings  of  fact  concerning  the cost, access, and quality
 6    criteria.
 7        (c) A decision approving an application for permit  shall
 8    require   the   submission   of  specific  data  and  reports
 9    concerning the implementation of the agreement, including how
10    the agreement is accomplishing its goals,  data  relating  to
11    cost,  access,  and  quality,  and  to  the  extent feasible,
12    identify objective standards of cost, access, and quality  by
13    which  the  success  of  the  agreement will be measured. The
14    submission of the data and reports shall be required at least
15    annually.  The Attorney General shall receive copies  of  any
16    reports received by the State Board.

17        Section  60.  Appeal.  The decision of the State Board to
18    approve or deny a permit to implement a cooperative agreement
19    is subject to the provisions  of  the  Administrative  Review
20    Law.    Any person who is adversely affected by a decision of
21    the State Board to approve or deny a permit  to  implement  a
22    cooperative  agreement  may  have  that  decision  judicially
23    reviewed.

24        Section 65.  Supervision after approval.
25        (a)  The  State  Board, in consultation with the Attorney
26    General, shall  supervise,  monitor,  and  regulate  approved
27    agreements.
28        (b) The Attorney General and the State Board shall review
29    data  submitted periodically by the permitholder.  The permit
30    issued by the State Board shall set forth the  time  schedule
31    for  the  submission  of  data  to the State Board and to the
32    Attorney General, which shall be at least once a  year.   The
HB0733 Enrolled             -17-               LRB9103765DHmg
 1    permit  shall  identify  the  data  that  must  be submitted,
 2    including all data relevant  to  the  pricing  and  costs  of
 3    health  care services, and the Attorney General and the State
 4    Board may subsequently require the submission  of  additional
 5    data  or  alter  the  time schedule.  Upon review of the data
 6    submitted, the State Board shall notify the  permitholder  of
 7    whether  the agreement or its implementation is in compliance
 8    with the permit.  Implementation of the agreement  shall  not
 9    be in compliance if, at any time, the permitholder has either
10    (i)  raised  any prices in excess of the consumer price index
11    or (ii) lowered any prices in  an  amount  greater  than  any
12    reduction  in  costs  for  the  relevant  services.    If the
13    agreement or its implementation is not in compliance with the
14    permit,  the  Attorney  General  or  the  State  Board  shall
15    identify  those  respects  in  which  the  agreement  or  its
16    implementation does not conform to the permit.  The  Attorney
17    General  or  the  State  Board  may require the submission of
18    information from any other market participant. A permitholder
19    receiving   notification   that   an   agreement    or    its
20    implementation  is  not in compliance has 30 days in which to
21    respond with additional data.  The  response  may  include  a
22    proposal  and  a time schedule by which the permitholder will
23    bring the agreement or  its  implementation  into  compliance
24    with  the  permit.  If the agreement or its implementation is
25    not in compliance and the State Board  and  the  permitholder
26    cannot  agree  to the terms for bringing the agreement or its
27    implementation into compliance, the matter shall be set for a
28    hearing before a  hearing  officer  appointed  by  the  State
29    Board.  The  State Board shall publish notice in the Illinois
30    Register and in a newspaper of  general  circulation  in  the
31    area affected by the cooperative agreement one year after the
32    date of issuance of a permit approving an application, and at
33    2  year  intervals  thereafter,  soliciting comments from the
34    public concerning  the  impact  that  the  agreement  or  its
HB0733 Enrolled             -18-               LRB9103765DHmg
 1    implementation  has  had  on  cost, access, and quality.  The
 2    Attorney General and the State Board may  request  additional
 3    oral or written information from the permitholder or from any
 4    other source.

 5        Section  70.  Administrative  fine.    In addition to any
 6    remedies available under  Section  75,  if  the  State  Board
 7    determines  that a party to a cooperative agreement is not in
 8    compliance  with  the  terms  of   the   agreement   or   its
 9    implementation,  the State Board may impose an administrative
10    fine of up to $10,000 for  each  day  the  party  is  not  in
11    compliance.

12        Section 75.  Revocation.
13        (a)  The  State  Board may revoke a permit to implement a
14    cooperative agreement if it finds  by  clear  and  convincing
15    evidence that:
16             (1) Any of the following circumstances exist:
17                  (A)  the agreement or its implementation is not
18             in substantial compliance  with  the  terms  of  the
19             application;
20                  (B)  the agreement or its implementation is not
21             in substantial compliance  with  the  conditions  of
22             approval;
23                  (C)  the agreement has not and is not likely to
24             substantially  achieve  the  improvements  in  cost,
25             access, or quality identified in the permit  as  the
26             basis   for   the  State  Board's  approval  of  the
27             agreement;
28                  (D) the benefits resulting from  the  agreement
29             do  not  outweigh  the disadvantages attributable to
30             any reduction in competition;
31                  (E) the conditions in  the  market  place  have
32             changed  to  such  an  extent that competition would
HB0733 Enrolled             -19-               LRB9103765DHmg
 1             promote  reductions  in  cost  and  improvements  in
 2             access and quality better than does the agreement at
 3             issue;  in  order  to  revoke  on  the  basis   that
 4             conditions  in  the  marketplace  have  changed, the
 5             State Board shall identify specific changes  in  the
 6             marketplace and articulate why those changes warrant
 7             revocation;
 8                  (F) the parties to the agreement fail to submit
 9             periodic  progress  reports  requested  by the State
10             Board;
11                  (G)  materially  misleading   information   was
12             submitted in the application; or
13                  (H)  the  parties  have failed to implement the
14             agreement with due diligence; and
15             (2) The parties to  the  agreement  have  failed  to
16        provide   reasonable   proposals   for   alternatives  to
17        revocation  and  have  rejected   modifications   to   or
18        restructuring  of  the  agreement identified by the State
19        Board pursuant to subsection (d) of this Section.
20        (b) If a party to an agreement that is the subject  of  a
21    permit seeks to terminate its participation in the agreement,
22    the  party  shall file a notice of termination with the State
23    Board at least 30 days prior to the proposed  effective  date
24    of the termination.  Upon receipt of a notice of termination,
25    the State Board may institute revocation proceedings.  If any
26    parties  seek  to  terminate the agreement, the parties shall
27    file a notice of termination at least 30 days  prior  to  the
28    proposed effective date of the termination.
29        (c)  The State Board shall begin a proceeding to revoke a
30    permit to implement  a  cooperative  agreement  by  providing
31    written  notice  to the permitholder describing in detail the
32    basis for the proposed revocation.  Notice of the  proceeding
33    must  be published in the Illinois Register.  The notice must
34    invite the submission of comments to the State Board.
HB0733 Enrolled             -20-               LRB9103765DHmg
 1        (d) In deciding whether to revoke a permit to implement a
 2    cooperative  agreement,  the  State  Board  shall  take  into
 3    account the hardship that the revocation may  impose  on  the
 4    applicants  and  any  potential disruption of the market as a
 5    whole.  The State Board shall not revoke an approval  if  the
 6    agreement  can  be modified, restructured, or regulated so as
 7    to remedy the problem upon which the revocation proceeding is
 8    based. The permitholder may submit proposals for alternatives
 9    to revocation.  Before approving an alternative to revocation
10    that involves modifying or restructuring  an  agreement,  the
11    State  Board  shall  publish  notice in the Illinois Register
12    that any person may comment on the proposed  modification  or
13    restructuring within 20 days after publication of the notice.
14    The  State  Board  shall  not  approve  the  modification  or
15    restructuring  until  the  comment  period has concluded.  An
16    approved modified or restructured  agreement  is  subject  to
17    supervision under Section 65.
18        (e) The permitholder cannot be held liable under State or
19    federal  antitrust  law  for unintentional acts that occurred
20    while the permit was in effect, except to the extent that the
21    permitholder failed to comply with the terms of  the  permit.
22    The  permitholder  is  fully  subject  to  State  and federal
23    antitrust law after the revocation becomes effective and  may
24    be held liable for acts that occur after the revocation.

25        Section   80.   Recordkeeping.   The  State  Board  shall
26    maintain a file of all agreements for which  approval  orders
27    are issued and that remain in effect.

28        Section 85.  Health care provider cooperative agreements;
29    antitrust exemption.
30        (a)  This  Act  does  not  confer  authority to engage in
31    agreements,  tacit,  implied,  or  express,  which  are   not
32    submitted to the State Board for approval if those agreements
HB0733 Enrolled             -21-               LRB9103765DHmg
 1    are in violation of State or federal antitrust laws.  Conduct
 2    seemingly pursuant to provisions of this law done without the
 3    good  faith  intention to accomplish an agreement approved by
 4    the State Board  is  not  entitled  to  the  protections  and
 5    immunities of this Section.
 6        (b)  It  is  the intent of this Act to require the State,
 7    through the State Board, to provide  direction,  supervision,
 8    and  control  over  a cooperative agreement.   To achieve the
 9    goals  specified  in  Section  30,  this   State   direction,
10    supervision, and control will provide immunity from any civil
11    or  criminal  liability  under the Illinois Antitrust Act and
12    State-action immunity under federal  antitrust  laws  to  (i)
13    health  care  providers,  their  governing board members, and
14    their officers, agents, and  employees  who  take  authorized
15    actions  to  implement a cooperative agreement approved under
16    this Act and (ii) persons representing health care  providers
17    who participate in discussions or negotiations concerning the
18    allocation  of  open-heart  surgery  as authorized under this
19    Act.

20        Section 90.  Health care cooperative agreement;  Attorney
21    General  action.     The  Attorney General shall have all the
22    powers necessary or convenient  for  the  representation  and
23    protection  of  the  public interest in all proceedings under
24    this  Act,  including,  without  limitation,  the  right   to
25    intervene   as  a  party  or  otherwise  participate  in  any
26    proceeding under this Act. Nothing in this  Act  shall  limit
27    the  authority  of the Attorney General to initiate an action
28    to enforce the civil or criminal liability provisions of  the
29    Illinois  Antitrust  Act  if  the Attorney General determines
30    that a health care provider, the  members  of  its  governing
31    board,  or  its  officers, agents, or employees have exceeded
32    the scope of the actions authorized under this Act.
HB0733 Enrolled             -22-               LRB9103765DHmg
 1        Section 95.  Rulemaking. If necessary to meet  the  March
 2    1,  2000 approval deadline, the State Board shall adopt rules
 3    for the operation of this Act under the emergency  rulemaking
 4    provisions  of  Section  5-45  of the Illinois Administrative
 5    Procedure Act.  Within 150 days  of  the  adoption  of  rules
 6    under  Section 5-45, the State Board shall adopt identical or
 7    different rules under the general  rulemaking  provisions  of
 8    Section 5-40 of that Act.

 9        Section  100.   Investigations.   The Attorney General or
10    the State Board, at any time after an application is filed or
11    approved  under  this  Act,  may  require  by  subpoena   the
12    attendance  and  testimony of witnesses and the production of
13    documents  for  the  purpose  of  investigating  whether  the
14    cooperative agreement satisfies the standards  set  forth  in
15    this  Act. The Attorney General or the State Board may seek a
16    court order compelling  compliance  with  a  subpoena  issued
17    under this Section.

18        Section  200.  The  Illinois  Antitrust Act is amended by
19    changing Section 5 as follows:

20        (740 ILCS 10/5) (from Ch. 38, par. 60-5)
21        Sec. 5.  Exceptions.  No provisions of this Act shall  be
22    construed to make illegal:
23        (1)  the  activities  of  any  labor  organization  or of
24    individual members thereof which are directed solely to labor
25    objectives which are legitimate under the laws of either  the
26    State of Illinois or the United States;
27        (2)  the  activities of any agricultural or horticultural
28    cooperative    organization,    whether    incorporated    or
29    unincorporated, or of individual members thereof,  which  are
30    directed   solely   to   objectives   of   such   cooperative
31    organizations  which  are legitimate under the laws of either
HB0733 Enrolled             -23-               LRB9103765DHmg
 1    the State of Illinois or the United States;
 2        (3)  the activities of any public utility, as defined  in
 3    Section  3-105 of the Public Utilities Act to the extent that
 4    such activities are subject  to  a  clearly  articulated  and
 5    affirmatively  expressed  State policy to replace competition
 6    with regulation, where the conduct to be exempted is actively
 7    supervised by the State itself;
 8        (4)  The activities of a telecommunications  carrier,  as
 9    defined in Section 13-202 of the Public Utilities Act, to the
10    extent   those   activities   relate   to  the  provision  of
11    noncompetitive telecommunications services under  the  Public
12    Utilities  Act  and  are  subject  to the jurisdiction of the
13    Illinois  Commerce  Commission  or  to  the   activities   of
14    telephone  mutual  concerns  referred to in Section 13-202 of
15    the Public Utilities  Act  to  the  extent  those  activities
16    relate  to the provision and maintenance of telephone service
17    to owners and customers;
18        (5)  the activities (including, but not limited  to,  the
19    making  of  or  participating  in joint underwriting or joint
20    reinsurance arrangement) of  any  insurer,  insurance  agent,
21    insurance  broker,  independent  insurance adjuster or rating
22    organization to the extent that such activities  are  subject
23    to  regulation  by  the  Director  of Insurance of this State
24    under, or are permitted or are authorized by,  the  Insurance
25    Code or any other law of this State;
26        (6)  the  religious  and  charitable  activities  of  any
27    not-for-profit corporation, trust or organization established
28    exclusively for religious or charitable purposes, or for both
29    purposes;
30        (7)  the  activities  of  any  not-for-profit corporation
31    organized  to  provide  telephone  service  on  a  mutual  or
32    co-operative  basis  or  electrification  on  a  co-operative
33    basis, to the extent such activities relate to the  marketing
34    and distribution of telephone or electrical service to owners
HB0733 Enrolled             -24-               LRB9103765DHmg
 1    and customers;
 2        (8)  the  activities engaged in by securities dealers who
 3    are (i) licensed by the State of Illinois or (ii) members  of
 4    the  National  Association  of  Securities  Dealers  or (iii)
 5    members of any National Securities Exchange  registered  with
 6    the  Securities  and Exchange Commission under the Securities
 7    Exchange Act of 1934, as amended,  in  the  course  of  their
 8    business   of  offering,  selling,  buying  and  selling,  or
 9    otherwise trading in or underwriting  securities,  as  agent,
10    broker,   or   principal,  and  activities  of  any  National
11    Securities   Exchange   so    registered,    including    the
12    establishment of commission rates and schedules of charges;
13        (9)  the activities of any board of trade designated as a
14    "contract  market"  by  the  Secretary  of Agriculture of the
15    United States pursuant to Section 5 of the Commodity Exchange
16    Act, as amended;
17        (10)  the activities of any motor carrier, rail  carrier,
18    or  common  carrier  by  pipeline,  as  defined in the Common
19    Carrier by Pipeline Law of the Public Utilities Act,  to  the
20    extent  that  such  activities are permitted or authorized by
21    the Act or are subject to regulation by the Illinois Commerce
22    Commission;
23        (11)  the activities of any State or national bank to the
24    extent that such activities are regulated  or  supervised  by
25    officers of the State or federal government under the banking
26    laws of this State or the United States;
27        (12)  the  activities of any State or federal savings and
28    loan association to  the  extent  that  such  activities  are
29    regulated  or  supervised by officers of the state or federal
30    government under the savings and loan laws of this  State  or
31    the United States;
32        (13)  the  activities  of  any  bona  fide not-for-profit
33    association, society or board, of attorneys, practitioners of
34    medicine,  architects,  engineers,  land  surveyors  or  real
HB0733 Enrolled             -25-               LRB9103765DHmg
 1    estate brokers licensed and regulated by  an  agency  of  the
 2    State  of  Illinois,  in  recommending schedules of suggested
 3    fees, rates or commissions for use solely  as  guidelines  in
 4    determining charges for professional and technical services;
 5        (14)  Conduct  involving  trade  or  commerce (other than
 6    import trade or import commerce) with foreign nations unless:
 7             (a)  such conduct has  a  direct,  substantial,  and
 8        reasonably foreseeable effect:
 9                  (i)  on trade or commerce which is not trade or
10             commerce with foreign nations, or on import trade or
11             import commerce with foreign nations; or
12                  (ii)  on  export  trade or export commerce with
13             foreign nations of a person engaged in such trade or
14             commerce in the United States; and
15             (b)  such effect gives rise to  a  claim  under  the
16        provisions of this Act, other than this subsection (14).
17             (c)  If  this  Act applies to conduct referred to in
18        this subsection (14) only because of  the  provisions  of
19        paragraph  (a)(ii),  then  this  Act  shall apply to such
20        conduct only for injury to export business in the  United
21        States which affects this State; or
22        (15)  the  activities  of  a  unit of local government or
23    school district and the activities of the  employees,  agents
24    and officers of a unit of local government or school district
25    ; or
26        (16)  the  activities of any person licensed by the State
27    of Illinois under  the  Hospital  Licensing  Act  or  such  a
28    licensee's   governing   board   members   and  officers,  in
29    discussing, negotiating,  and  entering  into  a  cooperative
30    agreement   or   in   implementing  an  approved  cooperative
31    agreement with  another  licensed  hospital  to  develop  and
32    jointly   operate   under  State  supervision  hospital-based
33    open-heart  surgery  as   authorized   under   the   Hospital
34    Cooperation Act.
HB0733 Enrolled             -26-               LRB9103765DHmg
 1    (Source: P.A. 90-185, eff. 7-23-97; 90-561, eff. 12-16-97.)

 2        Section 999.  Effective date.  This Act takes effect upon
 3    becoming law.

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