[ Search ] [ Legislation ]
[ Home ] [ Back ] [ Bottom ]
| [ Introduced ] | [ Engrossed ] | [ Enrolled ] |
| [ House Amendment 001 ] | [ House Amendment 003 ] | [ Senate Amendment 001 ] |
91_HB0733ccr001
LRB9103765DHpkccr
1 91ST GENERAL ASSEMBLY
2 CONFERENCE COMMITTEE REPORT
3 ON HOUSE BILL 733
4 -------------------------------------------------------------
5 -------------------------------------------------------------
6 To the President of the Senate and the Speaker of the
7 House of Representatives:
8 We, the conference committee appointed to consider the
9 differences between the houses in relation to Senate
10 Amendment No. 1 to House Bill 733, recommend the following:
11 (1) that the Senate recede from Senate Amendment No. 1;
12 and
13 (2) that House Bill 733 be amended by replacing the
14 title with the following:
15 "AN ACT in relation to health care."; and
16 by replacing everything after the enacting clause with the
17 following:
18 "Section 1. Short title. This Act may be cited as the
19 Hospital Cooperation Act.
20 Section 5. Legislative findings. The General Assembly
21 finds that the goals of controlling health care costs and
22 improving the quality of and access to open-heart surgery in
23 Health Service Area V may be significantly enhanced by a
24 cooperative agreement that would be prohibited by State and
25 federal antitrust laws if undertaken without governmental
26 involvement. The purpose of this Act is to substitute
27 regulation for competition by creating an opportunity for the
28 State to review proposed agreements and to approve an
29 agreement under certain prescribed conditions and
30 circumstances under which an agreement is highly likely to
31 result in lower costs, greater access, and improved quality
32 for open-heart surgery in Health Service Area V, and would
-2- LRB9103765DHpkccr
1 not otherwise occur in the competitive health care
2 marketplace. The General Assembly intends that approval of an
3 agreement be accompanied by appropriate conditions,
4 supervision, and regulation to protect against private abuses
5 of economic power, and that an agreement approved by the
6 State Board and accompanied by appropriate conditions,
7 supervision, and regulation shall not be subject to State or
8 federal antitrust liability. The General Assembly finds that
9 the market for open-heart surgery is extremely diverse in
10 Illinois. Health Service Area V is believed to have
11 extraordinary rates of outmigration for open-heart surgery,
12 with residents traveling hundreds of miles, often
13 out-of-state, for care. Providing open-heart surgery close
14 to home is medically useful to a patient's recovery, because
15 visits of families and friends can improve a patient's
16 psycho-social capacity to cope with disease. Providing
17 incentives to increase quality care for open-heart surgery in
18 areas without it is desirable.
19 Section 10. Definitions. In this Act:
20 "Access" means the financial, temporal, and geographic
21 availability of open-heart surgery to individuals who need
22 it.
23 "Applicants" means the parties to a cooperative agreement
24 for which a permit from the State Board is sought under this
25 Act.
26 "Cooperative agreement" means an agreement among 2 or
27 more health care providers for the sharing or allocation of
28 medical, diagnostic, or laboratory facilities or services
29 customarily offered by health care providers providing
30 open-heart surgery, including mergers, consolidations, or
31 other acquisitions.
32 "Cost" or "cost of health care" means the amount paid by
33 consumers or third-party payers for open-heart surgery.
34 "Criteria" means the cost, access, and quality of
-3- LRB9103765DHpkccr
1 open-heart surgery.
2 "Health care provider" or "provider" means any person
3 licensed by the State under the Hospital Licensing Act.
4 "Person" means an individual, legal entity, or affiliate.
5 "State Board" means the Cooperative Hospital Agreement
6 Board.
7 "Permitholder" means the party or parties to a
8 cooperative agreement for which a permit from the State Board
9 has been approved under this Act.
10 "Health Service Area V" means "HSA V" as defined by rule
11 of Illinois Health Facilities Planning Board in effect on the
12 effective date of this Act and consists of the following
13 Illinois counties: Alexander, Bond, Clay, Crawford, Edwards,
14 Effingham, Fayette, Franklin, Gallatin, Hamilton, Hardin,
15 Jackson, Jasper, Jefferson, Johnson, Lawrence, Marion,
16 Massac, Perry, Pope, Pulaski, Randolph, Richland, Saline,
17 Union, Wabash, Washington, Wayne, White, and Williamson.
18 "Open-heart surgery" means a category of service which
19 utilizes any form of cardiac surgery which requires the
20 circulation of blood outside the body, as through a
21 heart-lung apparatus for carbon dioxide-oxygen exchange.
22 Section 15. Cooperative Hospital Agreement Board;
23 creation; members.
24 (a) The Cooperative Hospital Agreement Board is created
25 in the Office of the Director of Public Health. The State
26 Board shall consist of 11 members appointed by the Governor,
27 with the advice and consent of the Senate, from the following
28 groups and industries:
29 (1) Two practicing hospital administrators, one
30 from a hospital with fewer than 50 beds;
31 (2) One currently serving hospital board member;
32 (3) One practicing licensed physician;
33 (4) Two consumers;
34 (5) One health care payer;
-4- LRB9103765DHpkccr
1 (6) Two representatives from business and industry,
2 one of whom shall be an independent small business owner;
3 (7) One practicing attorney who has particular
4 knowledge or expertise in antitrust law; and
5 (8) One health care economist.
6 No more than 6 members of the State Board may be
7 affiliated with the same political party.
8 (b) The initial board shall be divided into one group of
9 4 members, one group of 3 members, and 2 groups of 2 members,
10 all as designated by the Governor. The term of the first
11 group shall expire on June 30, 2000, the term of the second
12 group shall expire on June 30, 2001, the term of the third
13 group shall expire on June 30, 2002, and the term of the
14 fourth group shall expire on June 30, 2003. Thereafter, when
15 the term of any member expires, the successor shall be
16 appointed for a term of 4 years. Each member shall serve
17 until the member's resignation, death, or removal during that
18 member's term or, in the case of a member whose term has
19 expired, until a successor has been appointed and qualified.
20 The Governor shall fill any vacancy for the remainder of the
21 term. All members are eligible for reappointment but may
22 serve no more than 2 4-year terms, except that initial
23 appointees may serve 2 4-year terms in addition to their
24 initial term. No person may serve as a member of the State
25 Board or on the staff of the State Board while a member or on
26 the staff of the Illinois Health Facilities Planning Board.
27 (c) The nominees to membership on the State Board shall
28 disclose any potential conflicts of interest to the Governor
29 before accepting appointment. The State Board shall, as one
30 of its first actions, adopt rules to govern contacts and
31 communications between its members and applicants and shall
32 establish policies to require any member who has a conflict
33 of interest to immediately disclose that conflict and
34 disqualify himself or herself from voting in any proceeding
35 associated with the conflict of interest.
-5- LRB9103765DHpkccr
1 (d) One State Board member, designated by the Governor,
2 shall call and convene the initial organizational meeting of
3 the State Board and shall serve as its temporary chair. At
4 the initial meeting the State Board shall elect from its
5 membership a chair, vice-chair, and secretary. All State
6 Board officers shall hold office at the pleasure of the State
7 Board. The secretary, with whatever assistance the State
8 Board may prescribe, shall keep a record of the proceedings
9 of the State Board and shall be custodian of the minute
10 books, the State Board's official seal, and all books,
11 documents, and papers filed with the State Board. Regular
12 meetings shall be held at least once every 3 months, at times
13 fixed by resolution of the State Board. Special meetings may
14 be held in accordance with the bylaws. All meetings of the
15 State Board shall be open to the public. A majority of the
16 State Board shall constitute a quorum for the transaction of
17 its business. Members shall receive reimbursement of their
18 expenses. All State Board meetings shall be deemed to have
19 been duly called and regularly held, and all orders and
20 proceedings of the State Board shall be deemed to have been
21 duly authorized, unless proved to the contrary.
22 (e) All State Board members shall serve at the pleasure
23 of the Governor, except that any member shall be removed by
24 the Governor if that member fails for any reason to attend 3
25 regular meetings during any 12-month period and the State
26 Board has not entered its approval of any absence in its
27 minutes. During their terms of office, all State Board
28 members are prohibited from being a party to a contract for
29 profit with the State Board.
30 (f) The Director of Public Health shall provide clerical
31 and professional staff and meeting facilities necessary for
32 the State Board to carry out its functions.
33 Section 20. Approval of cooperative agreements; powers
34 of the State Board. Approval of a cooperative agreement
-6- LRB9103765DHpkccr
1 requires a three-fourths vote of the State Board. On and
2 after March 1, 2000, the State Board shall not approve any
3 cooperative agreement. The State Board shall continue to
4 exercise all of its powers with respect to a cooperative
5 agreement approved before March 1, 2000, including without
6 limitation its power to terminate or modify its approval,
7 require the submission of reports and other information,
8 conduct audits, and subpoena witnesses and the production of
9 books, records, and documents.
10 Section 25. Needs study. The State Board, in
11 consultation with the Attorney General, shall commission a
12 needs study to determine whether the goals of controlling
13 health care costs and improving the quality of and access to
14 open-heart surgery in Health Service Area V will be
15 significantly enhanced by a cooperative agreement that would
16 be prohibited by State or federal antitrust laws if
17 undertaken without governmental involvement. The study shall
18 be designed to determine whether hospital-based open-heart
19 surgery requires a cooperative agreement exempt from State
20 and federal antitrust laws and the feasibility of providing
21 open-heart surgery at a reasonable rate of return without
22 engaging in predatory pricing activities or any other abuse
23 of power, based upon reasonable assumptions of market
24 conditions in Health Service Area V. The study shall
25 consider all options for providing open-heart surgery for
26 Health Service Area V.
27 Section 30. Health care cooperative agreement; goals.
28 Acting by their boards of directors or boards of trustees or
29 as individuals, 2 or more health care providers may enter
30 into a cooperative agreement concerning sharing or allocation
31 of open-heart surgery facilities and services that shall be
32 designed to achieve the following goals in Health Service
33 Area V:
-7- LRB9103765DHpkccr
1 (1) reducing open-heart surgery costs for
2 consumers;
3 (2) improving access to open-heart surgery
4 services; and
5 (3) improving the quality of open-heart surgery
6 patient care.
7 Section 35. Approval of a health care cooperative
8 agreement.
9 (a) Health care providers seeking to implement a
10 cooperative agreement that might be construed to be a
11 violation of State or federal antitrust laws but that is in
12 the best interest of the State and furthers the policies and
13 goals of this Act may apply for a permit from the State Board
14 as provided in this Section. This permit shall be in
15 addition to any permit or exemption required under any
16 provisions of the Illinois Health Facilities Planning Act.
17 Nothing in this Act shall be construed as requiring a health
18 care provider to obtain approval from the State Board of any
19 cooperative agreement. The decision to seek State Board
20 approval of a cooperative agreement shall be in the sole
21 discretion of the parties to the cooperative agreement. No
22 cooperative agreement implemented without first obtaining
23 approval from the State Board as provided in this Section
24 shall be eligible for any protection or immunity created by
25 Section 85.
26 (b) Applications for a permit shall be in a form
27 prescribed by the State Board but shall contain at least the
28 following:
29 (1) a descriptive title;
30 (2) a table of contents;
31 (3) names of each party to the application and the
32 address of the principal business office of each party;
33 (4) the names, addresses, and telephone numbers of
34 the persons authorized to receive notices and
-8- LRB9103765DHpkccr
1 communications with respect to the application;
2 (5) a verified statement by a responsible officer
3 of each party to the application attesting to the
4 accuracy and completeness of the enclosed information;
5 (6) background information relating to the proposed
6 agreement, including:
7 (A) a description of the proposed agreement;
8 (B) an identification of any tangential
9 equipment associated with the proposed agreement;
10 (C) a description of that portion of Health
11 Service Area V involved in the proposed agreement;
12 (D) if the portion of Health Service Area V
13 described in item (C) is different from the portion
14 in which the applicants have engaged in the type of
15 business at issue over the last 5 years, a
16 description of how and why the portion differs;
17 (E) identification of all services that a
18 substantial share of consumers would consider
19 substitutes for open-heart surgery;
20 (F) identification of whether open-heart
21 surgery is currently being offered or is capable of
22 being offered by other providers in the portion of
23 Health Service Area V described in item (C);
24 (G) identification of the steps necessary,
25 under current market and regulatory conditions, for
26 other parties to enter the territory described in
27 item (C) and compete with the applicants;
28 (H) a description of the previous history of
29 dealings between the parties to the application;
30 (I) a detailed explanation of the projected
31 effects, including expected volume, change in price,
32 and increased revenue, of the agreement on each
33 party's current businesses, both generally and the
34 aspects of the business directly involved in the
35 proposed agreement;
-9- LRB9103765DHpkccr
1 (J) the present market share of the parties to
2 the application and of others affected by the
3 proposed agreement and projected market shares after
4 implementation of the proposed agreement;
5 (K) a statement of why the projected levels of
6 cost, access, and quality could not be achieved in
7 the existing market without the proposed agreement;
8 (L) an explanation of how the agreement
9 relates to any Illinois health care plans for
10 delivery of health care; and
11 (M) a statement of any consideration received
12 or to be received by any party under the proposed
13 agreement;
14 (7) a detailed explanation or implementation plan
15 that states how and when the cooperative action
16 identified in the agreement will meet the goals specified
17 in Section 30;
18 (8) an explanation of the impact the agreement is
19 likely to have directly on the State, including the cost
20 of State employee health care, Medicaid costs, and
21 workers compensation costs;
22 (9) a copy of the proposed agreement; and
23 (10) a fee determined by the State Board, but in an
24 amount sufficient to cover the cost of processing
25 applications, including costs of the Attorney General and
26 the State Board, and the cost of periodic reviews and
27 supervision of the implementation of a cooperative
28 agreement under this Act.
29 (c) In addition to the information required in
30 subsection (b), the application must contain a written
31 description of the proposed agreement for purposes of
32 publication in the Illinois Register and in a newspaper of
33 general circulation in the area affected by the cooperative
34 agreement. The notice must include sufficient information to
35 advise the public of the nature of the proposed agreement and
-10- LRB9103765DHpkccr
1 to enable the public to provide meaningful comments
2 concerning the expected results of the agreement. The notice
3 must also state that any person may provide written comments
4 to the State Board, with copies to the applicants and to the
5 Attorney General, within 60 days after the notice's
6 publication. The State Board shall approve the notice before
7 publication. If the State Board determines that the
8 submitted notice does not provide sufficient information, the
9 State Board may amend the notice before publication and may
10 consult with the applicants in preparing the amended notice.
11 The State Board shall not publish an amended notice without
12 the applicants' approval.
13 (d) For a proposed agreement involving multiple parties,
14 one joint application must be submitted on behalf of all
15 parties to the agreement.
16 (e) Trade secret information, as defined in the Freedom
17 of Information Act, shall be protected to the extent required
18 under that Act.
19 (f) If the Attorney General or the State Board
20 determines that an application is unclear, incomplete, or
21 provides an insufficient basis on which to base a decision,
22 the State Board shall return the application. The applicants
23 may complete or revise the application and resubmit it.
24 (g) The Attorney General or the State Board may decline
25 to review any application relating to agreements already in
26 effect before the submission of the application. However,
27 the State Board shall review any application if the review
28 is expressly provided for in a settlement agreement entered
29 into before the enactment of this Section by the applicants
30 and the Attorney General.
31 (h) Upon the showing of good cause, the State Board may
32 extend any of the time limits stated in this Act at the
33 request of the applicants or the Attorney General, except
34 that no application for permit to implement a cooperative
35 agreement shall be accepted by the State Board after October
-11- LRB9103765DHpkccr
1 31, 1999 or approved by the State Board after March 1, 2000.
2 Section 40. Notice and comment.
3 (a) The State Board shall cause the notice described in
4 subsection (c) of Section 35 to be published in the Illinois
5 Register and in a newspaper of general circulation in the
6 area affected by the cooperative agreement. The State Board
7 shall also cause the notice to be delivered, by certified
8 mail, to persons affected by the proposed agreement and
9 identified in subparagraph (J) of paragraph (6) of subsection
10 (b) of Section 35. The State Board may send a copy of the
11 notice to any person together with a request that the person
12 comment as provided under subsection (b). Copies of the
13 request must be provided to the applicants.
14 (b) Within 30 days after the notice is published, any
15 person may mail to the State Board written comments with
16 respect to the application. Persons submitting comments
17 shall provide a copy of the comments to the applicants. The
18 applicants may mail to the State Board written responses to
19 any comments within 10 days after the deadline for mailing
20 comments. The applicants shall send a copy of the response
21 to the person submitting the comment.
22 (c) When an application for permit to implement a
23 cooperative agreement is made to the State Board, the State
24 Board shall commence a public hearing within a reasonable
25 period after receipt of the application, not to exceed 90
26 days. Notice of the hearing shall be made promptly to the
27 applicants, to the Attorney General, to any persons affected
28 by the proposed agreement and identified in subparagraph (J)
29 of paragraph (6) of subsection (b) of Section 35, and by
30 publication in a newspaper of general circulation in the area
31 affected by the cooperative agreement.
32 Section 45. Attorney General; review; recommendation.
33 (a) Upon receipt of an application for permit to
-12- LRB9103765DHpkccr
1 implement a cooperative agreement, the State Board shall
2 submit the application to the Attorney General for review.
3 The Attorney General shall review the application and shall
4 recommend to the State Board, in writing, the approval or
5 denial of the application, provided the Attorney General's
6 review shall not include determinations under subsection (d)
7 or (e) of Section 50. If the Attorney General recommends to
8 the State Board the denial of an application, the Attorney
9 General shall state the reasons for that recommendation. The
10 State Board shall not approve any application if the Attorney
11 General recommends denial of the application, unless the
12 State Board determines there is a compelling State interest
13 in approving the application and there is a unanimous vote of
14 its members.
15 Section 50. Criteria for issuance of permit.
16 (a) The State Board may issue a permit to implement a
17 cooperative agreement if the Attorney General and the State
18 Board determine that the applicants have demonstrated by
19 clear and convincing evidence that:
20 (1) the goals specified in Section 30 are highly
21 likely to be met by implementing the proposed cooperative
22 agreement and would not otherwise occur under existing
23 market conditions or conditions likely to develop without
24 an exemption or immunity from State and federal
25 antitrust law; and
26 (2) the benefits resulting from the agreement are
27 highly likely to outweigh the disadvantages that may
28 result from the agreement, and that predatory pricing or
29 any other abuse of power will not occur. In making that
30 determination, the Attorney General and the State Board
31 shall employ a cost-benefit analysis and the needs study.
32 (b) In making a determination about cost, access, and
33 quality, the Attorney General and the State Board shall
34 consider the following factors, among others:
-13- LRB9103765DHpkccr
1 (1) whether the proposal is compatible with cost
2 containment or plans of the Illinois Health Facilities
3 Planning Board.
4 (2) market structure:
5 (A) actual and potential sellers and buyers or
6 providers and purchasers;
7 (B) actual and potential consumers;
8 (C) geographic market area;
9 (D) new delivery mechanisms; and
10 (E) entry conditions;
11 (3) current market conditions;
12 (4) the historical behavior of the market;
13 (5) performance of other similar agreements;
14 (6) whether the proposal unnecessarily restrains
15 competition or restrains competition in ways not
16 reasonably related to the purposes of this Act;
17 (7) whether competition as it currently exists in
18 the market is likely to produce better results in terms
19 of cost, access and quality; and
20 (8) the financial condition of the applicants.
21 (c) The analysis of cost must focus on the individual
22 consumer of health care. Cost savings to be realized by
23 providers, health carriers, group purchasers, or other
24 participants in the health care system, are relevant only to
25 the extent that the savings are highly likely to be passed on
26 to the consumer. Where an application is submitted by
27 providers who are paid primarily by third party payers
28 unaffiliated with the providers, however, it is sufficient
29 for the providers to show that cost savings are highly likely
30 to be passed on to the unaffiliated third party payers and
31 the providers do not have the burden of proving that third
32 party payers with whom the providers are not affiliated will
33 pass on cost savings to individuals receiving coverage
34 through the third party payers. In making determinations as
35 to costs, the Attorney General and the State Board shall
-14- LRB9103765DHpkccr
1 consider, among other matters:
2 (1) the cost savings likely to result to the
3 applicants;
4 (2) the extent to which the cost savings are likely
5 to be passed on to the consumer and in what form;
6 (3) the extent to which the proposed agreement is
7 likely to result in cost shifting by the applicants onto
8 other payers or purchasers of other products or services;
9 (4) the extent to which the cost shifting by the
10 applicants is likely to be followed by other persons in
11 the market;
12 (5) the current and anticipated supply and demand
13 for any products or services at issue;
14 (6) the representations and guarantees of the
15 applicants and their enforceability;
16 (7) likely effectiveness of regulation by the State
17 Board;
18 (8) inferences to be drawn from market structure;
19 (9) the cost of regulation, both for the State and
20 for the applicants; and
21 (10) any other factors tending to show that the
22 proposed agreement is or is not highly likely to reduce
23 cost.
24 (d) In making determinations as to access, the State
25 Board shall consider, among other matters:
26 (1) the extent to which the use of open-heart
27 surgery by the intended targeted population is highly
28 likely to increase or decrease; when a proposed agreement
29 is highly likely to increase access in one geographic
30 area, by lowering prices or otherwise expanding supply,
31 but limits access in another geographic area by removing
32 service capabilities from that second area, the State
33 Board shall articulate the criteria employed to balance
34 these effects;
35 (2) the extent to which the proposed agreement is
-15- LRB9103765DHpkccr
1 highly likely to make available a new and needed service
2 or product to a certain geographic area; and
3 (3) the extent to which the proposed agreement is
4 highly likely to otherwise make open-heart surgery more
5 financially or geographically available to persons who
6 need them. If the State Board determines that the
7 proposed agreement is highly likely to increase access
8 and bases that determination on a projected increase in
9 utilization, the State Board shall also determine and
10 make a specific finding that the increase in utilization
11 does not reflect overutilization.
12 (e) In making determinations as to quality, the State
13 Board shall consider, among others, the extent to which the
14 proposed agreement is highly likely to:
15 (1) decrease morbidity and mortality;
16 (2) result in faster convalescence;
17 (3) result in fewer hospital days;
18 (4) permit providers to attain needed experience or
19 frequency of treatment, highly likely to lead to better
20 outcomes;
21 (5) increase patient satisfaction;
22 (6) results in modern health care facilities; and
23 (7) have any other features likely to improve or
24 reduce the quality of health care.
25 Section 55. Decision.
26 (a) The State Board shall issue a written decision
27 approving or denying the application for permit. The State
28 Board may condition approval on a modification of all or part
29 of the proposed agreement to eliminate any restriction on
30 competition that is not reasonably related to the goals of
31 reducing cost or improving access or quality. The State
32 Board shall, independently or upon recommendation of the
33 Attorney General, also establish conditions for approval that
34 are reasonably necessary to protect consumers against
-16- LRB9103765DHpkccr
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
33 permit shall identify the data that must be submitted,
-17- LRB9103765DHpkccr
1 including all data relevant to the pricing and costs of
2 health care services, and the Attorney General and the State
3 Board may subsequently require the submission of additional
4 data or alter the time schedule. Upon review of the data
5 submitted, the State Board shall notify the permitholder of
6 whether the agreement or its implementation is in compliance
7 with the permit. Implementation of the agreement shall not
8 be in compliance if, at any time, the permitholder has either
9 (i) raised any prices in excess of the consumer price index
10 or (ii) lowered any prices in an amount greater than any
11 reduction in costs for the relevant services. If the
12 agreement or its implementation is not in compliance with the
13 permit, the Attorney General or the State Board shall
14 identify those respects in which the agreement or its
15 implementation does not conform to the permit. The Attorney
16 General or the State Board may require the submission of
17 information from any other market participant. A permit
18 holder receiving notification that an agreement or its
19 implementation is not in compliance has 30 days in which to
20 respond with additional data. The response may include a
21 proposal and a time schedule by which the permitholder will
22 bring the agreement or its implementation into compliance
23 with the permit. If the agreement or its implementation is
24 not in compliance and the State Board and the permitholder
25 cannot agree to the terms for bringing the agreement or its
26 implementation into compliance, the matter shall be set for a
27 hearing before a hearing officer appointed by the State
28 Board. The State Board shall publish notice in the Illinois
29 Register and in a newspaper of general circulation in the
30 area affected by the cooperative agreement one year after the
31 date of issuance of a permit approving an application, and at
32 2 year intervals thereafter, soliciting comments from the
33 public concerning the impact that the agreement or its
34 implementation has had on cost, access, and quality. The
35 Attorney General and the State Board may request additional
-18- LRB9103765DHpkccr
1 oral or written information from the permitholder or from any
2 other source.
3 Section 70. Administrative fine. In addition to any
4 remedies available under Section 75, if the State Board
5 determines that a party to a cooperative agreement is not in
6 compliance with the terms of the agreement or its
7 implementation, the State Board may impose an administrative
8 fine of up to $10,000 for each day the party is not in
9 compliance.
10 Section 75. Revocation.
11 (a) The State Board may revoke a permit to implement a
12 cooperative agreement if it finds by clear and convincing
13 evidence that:
14 (1) Any of the following circumstances exist:
15 (A) the agreement or its implementation is not
16 in substantial compliance with the terms of the
17 application;
18 (B) the agreement or its implementation is not
19 in substantial compliance with the conditions of
20 approval;
21 (C) the agreement has not and is not likely to
22 substantially achieve the improvements in cost,
23 access, or quality identified in the permit as the
24 basis for the State Board's approval of the
25 agreement;
26 (D) the benefits resulting from the agreement
27 do not outweigh the disadvantages attributable to
28 any reduction in competition;
29 (E) the conditions in the market place have
30 changed to such an extent that competition would
31 promote reductions in cost and improvements in
32 access and quality better than does the agreement at
33 issue; in order to revoke on the basis that
-19- LRB9103765DHpkccr
1 conditions in the marketplace have changed, the
2 State Board shall identify specific changes in the
3 marketplace and articulate why those changes warrant
4 revocation;
5 (F) the parties to the agreement fail to submit
6 periodic progress reports requested by the State
7 Board;
8 (G) materially misleading information was
9 submitted in the application; or
10 (H) the parties have failed to implement the
11 agreement with due diligence; and
12 (2) The parties to the agreement have failed to
13 provide reasonable proposals for alternatives to
14 revocation and have rejected modifications to or
15 restructuring of the agreement identified by the State
16 Board pursuant to subsection (d) of this Section.
17 (b) If a party to an agreement that is the subject of a
18 permit seeks to terminate its participation in the agreement,
19 the party shall file a notice of termination with the State
20 Board at least 30 days prior to the proposed effective date
21 of the termination. Upon receipt of a notice of termination,
22 the State Board may institute revocation proceedings. If any
23 parties seek to terminate the agreement, the parties shall
24 file a notice of termination at least 30 days prior to the
25 proposed effective date of the termination.
26 (c) The State Board shall begin a proceeding to revoke a
27 permit to implement a cooperative agreement by providing
28 written notice to the permitholder describing in detail the
29 basis for the proposed revocation. Notice of the proceeding
30 must be published in the Illinois Register. The notice must
31 invite the submission of comments to the State Board.
32 (d) In deciding whether to revoke a permit to implement a
33 cooperative agreement, the State Board shall take into
34 account the hardship that the revocation may impose on the
35 applicants and any potential disruption of the market as a
-20- LRB9103765DHpkccr
1 whole. The State Board shall not revoke an approval if the
2 agreement can be modified, restructured, or regulated so as
3 to remedy the problem upon which the revocation proceeding is
4 based. The permitholder may submit proposals for alternatives
5 to revocation. Before approving an alternative to revocation
6 that involves modifying or restructuring an agreement, the
7 State Board shall publish notice in the Illinois Register
8 that any person may comment on the proposed modification or
9 restructuring within 20 days after publication of the notice.
10 The State Board shall not approve the modification or
11 restructuring until the comment period has concluded. An
12 approved modified or restructured agreement is subject to
13 supervision under Section 65.
14 (e) The permitholder cannot be held liable under State or
15 federal antitrust law for unintentional acts that occurred
16 while the permit was in effect, except to the extent that the
17 permitholder failed to comply with the terms of the permit.
18 The permitholder is fully subject to State and federal
19 antitrust law after the revocation becomes effective and may
20 be held liable for acts that occur after the revocation.
21 Section 80. Recordkeeping. The State Board shall
22 maintain a file of all agreements for which approval orders
23 are issued and that remain in effect.
24 Section 85. Health care provider cooperative agreements;
25 antitrust exemption.
26 (a) This Act does not confer authority to engage in
27 agreements, tacit, implied, or express, which are not
28 submitted to the State Board for approval if those agreements
29 are in violation of State or federal antitrust laws. Conduct
30 seemingly pursuant to provisions of this law done without the
31 good faith intention to accomplish an agreement approved by
32 the State Board is not entitled to the protections and
33 immunities of this Section.
-21- LRB9103765DHpkccr
1 (b) It is the intent of this Act to require the State,
2 through the State Board, to provide direction, supervision,
3 and control over a cooperative agreement. To achieve the
4 goals specified in Section 30, this State direction,
5 supervision, and control will provide immunity from any civil
6 or criminal liability under the Illinois Antitrust Act and
7 State-action immunity under federal antitrust laws to (i)
8 health care providers, their governing board members, and
9 their officers, agents, and employees who take authorized
10 actions to implement a cooperative agreement approved under
11 this Act and (ii) persons representing health care providers
12 who participate in discussions or negotiations concerning the
13 allocation of open-heart surgery as authorized under this
14 Act.
15 Section 90. Health care cooperative agreement; Attorney
16 General action. The Attorney General shall have all the
17 powers necessary or convenient for the representation and
18 protection of the public interest in all proceedings under
19 this Act, including, without limitation, the right to
20 intervene as a party or otherwise participate in any
21 proceeding under this Act. Nothing in this Act shall limit
22 the authority of the Attorney General to initiate an action
23 to enforce the civil or criminal liability provisions of the
24 Illinois Antitrust Act if the Attorney General determines
25 that a health care provider, the members of its governing
26 board, or its officers, agents, or employees have exceeded
27 the scope of the actions authorized under this Act.
28 Section 95. Rulemaking. If necessary to meet the March
29 1, 2000 approval deadline, the State Board shall adopt rules
30 for the operation of this Act under the emergency rulemaking
31 provisions of Section 5-45 of the Illinois Administrative
32 Procedure Act. Within 150 days of the adoption of rules
33 under Section 5-45, the State Board shall adopt identical or
-22- LRB9103765DHpkccr
1 different rules under the general rulemaking provisions of
2 Section 5-40 of that Act.
3 Section 100. Investigations. The Attorney General or
4 the State Board, at any time after an application is filed or
5 approved under this Act, may require by subpoena the
6 attendance and testimony of witnesses and the production of
7 documents for the purpose of investigating whether the
8 cooperative agreement satisfies the standards set forth in
9 this Act. The Attorney General or the State Board may seek a
10 court order compelling compliance with a subpoena issued
11 under this Section.
12 Section 200. The Illinois Antitrust Act is amended by
13 changing Section 5 as follows:
14 (740 ILCS 10/5) (from Ch. 38, par. 60-5)
15 Sec. 5. Exceptions. No provisions of this Act shall be
16 construed to make illegal:
17 (1) the activities of any labor organization or of
18 individual members thereof which are directed solely to labor
19 objectives which are legitimate under the laws of either the
20 State of Illinois or the United States;
21 (2) the activities of any agricultural or horticultural
22 cooperative organization, whether incorporated or
23 unincorporated, or of individual members thereof, which are
24 directed solely to objectives of such cooperative
25 organizations which are legitimate under the laws of either
26 the State of Illinois or the United States;
27 (3) the activities of any public utility, as defined in
28 Section 3-105 of the Public Utilities Act to the extent that
29 such activities are subject to a clearly articulated and
30 affirmatively expressed State policy to replace competition
31 with regulation, where the conduct to be exempted is actively
32 supervised by the State itself;
-23- LRB9103765DHpkccr
1 (4) The activities of a telecommunications carrier, as
2 defined in Section 13-202 of the Public Utilities Act, to the
3 extent those activities relate to the provision of
4 noncompetitive telecommunications services under the Public
5 Utilities Act and are subject to the jurisdiction of the
6 Illinois Commerce Commission or to the activities of
7 telephone mutual concerns referred to in Section 13-202 of
8 the Public Utilities Act to the extent those activities
9 relate to the provision and maintenance of telephone service
10 to owners and customers;
11 (5) the activities (including, but not limited to, the
12 making of or participating in joint underwriting or joint
13 reinsurance arrangement) of any insurer, insurance agent,
14 insurance broker, independent insurance adjuster or rating
15 organization to the extent that such activities are subject
16 to regulation by the Director of Insurance of this State
17 under, or are permitted or are authorized by, the Insurance
18 Code or any other law of this State;
19 (6) the religious and charitable activities of any
20 not-for-profit corporation, trust or organization established
21 exclusively for religious or charitable purposes, or for both
22 purposes;
23 (7) the activities of any not-for-profit corporation
24 organized to provide telephone service on a mutual or
25 co-operative basis or electrification on a co-operative
26 basis, to the extent such activities relate to the marketing
27 and distribution of telephone or electrical service to owners
28 and customers;
29 (8) the activities engaged in by securities dealers who
30 are (i) licensed by the State of Illinois or (ii) members of
31 the National Association of Securities Dealers or (iii)
32 members of any National Securities Exchange registered with
33 the Securities and Exchange Commission under the Securities
34 Exchange Act of 1934, as amended, in the course of their
35 business of offering, selling, buying and selling, or
-24- LRB9103765DHpkccr
1 otherwise trading in or underwriting securities, as agent,
2 broker, or principal, and activities of any National
3 Securities Exchange so registered, including the
4 establishment of commission rates and schedules of charges;
5 (9) the activities of any board of trade designated as a
6 "contract market" by the Secretary of Agriculture of the
7 United States pursuant to Section 5 of the Commodity Exchange
8 Act, as amended;
9 (10) the activities of any motor carrier, rail carrier,
10 or common carrier by pipeline, as defined in the Common
11 Carrier by Pipeline Law of the Public Utilities Act, to the
12 extent that such activities are permitted or authorized by
13 the Act or are subject to regulation by the Illinois Commerce
14 Commission;
15 (11) the activities of any State or national bank to the
16 extent that such activities are regulated or supervised by
17 officers of the State or federal government under the banking
18 laws of this State or the United States;
19 (12) the activities of any State or federal savings and
20 loan association to the extent that such activities are
21 regulated or supervised by officers of the state or federal
22 government under the savings and loan laws of this State or
23 the United States;
24 (13) the activities of any bona fide not-for-profit
25 association, society or board, of attorneys, practitioners of
26 medicine, architects, engineers, land surveyors or real
27 estate brokers licensed and regulated by an agency of the
28 State of Illinois, in recommending schedules of suggested
29 fees, rates or commissions for use solely as guidelines in
30 determining charges for professional and technical services;
31 (14) Conduct involving trade or commerce (other than
32 import trade or import commerce) with foreign nations unless:
33 (a) such conduct has a direct, substantial, and
34 reasonably foreseeable effect:
35 (i) on trade or commerce which is not trade or
-25- LRB9103765DHpkccr
1 commerce with foreign nations, or on import trade or
2 import commerce with foreign nations; or
3 (ii) on export trade or export commerce with
4 foreign nations of a person engaged in such trade or
5 commerce in the United States; and
6 (b) such effect gives rise to a claim under the
7 provisions of this Act, other than this subsection (14).
8 (c) If this Act applies to conduct referred to in
9 this subsection (14) only because of the provisions of
10 paragraph (a)(ii), then this Act shall apply to such
11 conduct only for injury to export business in the United
12 States which affects this State; or
13 (15) the activities of a unit of local government or
14 school district and the activities of the employees, agents
15 and officers of a unit of local government or school district
16 ; or
17 (16) the activities of any person licensed by the State
18 of Illinois under the Hospital Licensing Act or such a
19 licensee's governing board members and officers, in
20 discussing, negotiating, and entering into a cooperative
21 agreement or in implementing an approved cooperative
22 agreement with another licensed hospital to develop and
23 jointly operate under State supervision hospital-based
24 open-heart surgery as authorized under the Hospital
25 Cooperation Act.
26 (Source: P.A. 90-185, eff. 7-23-97; 90-561, eff. 12-16-97.)
27 Section 999. Effective date. This Act takes effect upon
28 becoming law.".
29 Submitted on May 27, 1999
30 s/Sen. Frank Watson s/Rep. Larry Woolard
31 s/Sen. Dave Syverson s/Rep. Barbara Flynn Currie
32 s/Sen. Laura Kent Donahue s/Rep. Gary Hannig
33 s/Sen. Barack Obama s/Rep. Art Tenhouse
-26- LRB9103765DHpkccr
1 s/Sen. Margaret Smith s/Rep. Richard Winkel
2 Committee for the Senate Committee for the House