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91_HB0733enr 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 HB0733 Enrolled -3- LRB9103765DHmg 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;
or22 (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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