State of Illinois
91st General Assembly

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 1        AN ACT to amend the Health Facilities Planning Act.

 2        WHEREAS, the General Assembly finds and declares that:
 3        The  regulatory  structure  for  the  State's health care
 4    delivery system put in place in the 1970's was  an  outgrowth
 5    of  federal  legislation predicated on the idea that the most
 6    satisfactory means of controlling health care costs  was  the
 7    allocation  of  health care resources by government through a
 8    highly centralized health planning mechanism; and
 9        For two decades, the State  established  strong  controls
10    over  the health care delivery system through the certificate
11    of need program, which allocated the  provision  of  services
12    among  providers, regulated hospital expansion, and regulated
13    the purchase of equipment and the use of medical  technology;
14    and
15        The evolution of market-based means of controlling costs,
16    most  notably  the  growth  of  managed  care,  and the rapid
17    development of new  medical  techniques  and  innovations  in
18    medical  technology  exposed  the  inefficiencies inherent in
19    centralized health care planning, which was unable to respond
20    quickly to the changing needs of the health care system; and
21        The certificate of need program is a relic of the  highly
22    regulated environment, and its original purpose, which was to
23    control  costs  by  limiting the proliferation of health care
24    services through State control of those  services,  has  been
25    undermined by the significant changes in the economics of the
26    health care system that have taken place since its inception;
27    and
28        Decisions  as to health care services, the acquisition of
29    medical technology, and the expansion of facilities can  best
30    be  made by the health care provider, based on his or her own
31    expertise in delivering health care services to the community
32    he or she serves; and
33        The  appropriate  role  of  the  State  with  respect  to
34    services no longer subject to certificate of need is that  of
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 1    licensure  of  facilities and services, to ensure the quality
 2    of care; and
 3        For reasons of maintaining the quality of certain  health
 4    care  services,  a  limitation  of the proliferation of those
 5    services  may  continue  to  be  essential  to  protect   the
 6    viability  of  the  services  as  well  as  the providers now
 7    rendering them, to protect the role of institutions  such  as
 8    urban  hospitals,  whose  importance  to the Statewide health
 9    care system is indisputable, and to guard against the closing
10    of important facilities and the  transfer  of  services  from
11    facilities  in  a  manner  which  is  harmful  to  the public
12    interest; and
13        It is essential, in order to promote  greater  efficiency
14    in  the State's health care delivery system, to eliminate the
15    certificate   of   need   requirement   for   many   services
16    immediately, to eliminate the requirement for other  services
17    over  a  more  extended period, and to create a commission to
18    consider  whether  certain  remaining  health  care  services
19    should continue to  be  subject  to  a  certificate  of  need
20    requirement  in  the interest of the well-being of the public
21    and  to  ensure  the  maintenance  of  quality  health   care
22    throughout the State; therefore

23        Be  it  enacted  by  the People of the State of Illinois,
24    represented in the General Assembly:

25        Section 5.  The Illinois Health Facilities  Planning  Act
26    is  amended  by  changing  Section 5 and adding Sections 5.2,
27    5.3, and 12.3 as follows:

28        (20 ILCS 3960/5) (from Ch. 111 1/2, par. 1155)
29        Sec. 5.  Construction, modification, or establishment  of
30    health  care  facilities  or  acquisition  of  major  medical
31    equipment;  permits or exemptions.  After effective dates set
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 1    by the State Board, and subject to Sections 5.2 and  5.3,  no
 2    person  shall  construct,  modify  or establish a health care
 3    facility or acquire major  medical  equipment  without  first
 4    obtaining  a  permit  or  exemption from the State Board. The
 5    State Board shall not delegate to the Executive Secretary  of
 6    the  State  Board or any other person or entity the authority
 7    to  grant  permits  or  exemptions  whenever  the   Executive
 8    Secretary  or  other  person  or  entity would be required to
 9    exercise any discretion affecting the  decision  to  grant  a
10    permit  or  exemption.   The  State Board shall set effective
11    dates applicable to all or to each classification or category
12    of health care facilities and applicable to all or each  type
13    of  transaction  for  which  a  permit  is  required. Varying
14    effective dates may be set, providing the date  or  dates  so
15    set shall apply uniformly statewide.
16        Notwithstanding  any  effective dates established by this
17    Act or by the State Board, no person  shall  be  required  to
18    obtain  a  permit  for  any  purpose under this Act until the
19    State health facilities plan referred to in paragraph (4)  of
20    Section  12  of this Act has been approved and adopted by the
21    State Board subsequent to public hearings  having  been  held
22    thereon.
23        Subject  to  Sections  5.2 and 5.3, a permit or exemption
24    shall be obtained prior to the acquisition of  major  medical
25    equipment  or to the construction or modification of a health
26    care facility which:
27             (a)  requires a total capital expenditure in  excess
28        of the capital expenditure minimum; or
29             (b)  substantially  changes the scope or changes the
30        functional operation of the facility; or
31             (c)  changes the  bed  capacity  of  a  health  care
32        facility  by  increasing  the  total number of beds or by
33        distributing beds among various categories of service  or
34        by  relocating beds from one physical facility or site to
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 1        another by more than 10 beds or more than  10%  of  total
 2        bed  capacity as defined by the State Board, whichever is
 3        less, over a 2 year period.
 4        A permit shall be valid only for the defined construction
 5    or modifications,  site,  amount  and  person  named  in  the
 6    application  for such permit and shall not be transferable or
 7    assignable. A permit shall be valid until such  time  as  the
 8    project  has  been completed, provided that (a) obligation of
 9    the project occurs within 12 months following issuance of the
10    permit except for major construction projects such obligation
11    must occur within 18 months following issuance of the permit;
12    and (b) the project commences and proceeds to completion with
13    due diligence. Major construction projects, for the  purposes
14    of  this  Act, shall include but are not limited to: projects
15    for the construction of new buildings; additions to  existing
16    facilities; modernization projects whose cost is in excess of
17    $1,000,000  or  10%  of  the  facilities'  operating revenue,
18    whichever is less; and such other projects as the State Board
19    shall define and prescribe pursuant to this  Act.  The  State
20    Board may extend the obligation period upon a showing of good
21    cause  by  the permit holder.  Permits for projects that have
22    not been obligated within the  prescribed  obligation  period
23    shall expire on the last day of that period.
24        Persons  who  otherwise  would  be  required  to obtain a
25    permit shall be exempt from such  requirement  if  the  State
26    Board  finds that with respect to establishing a new facility
27    or  construction   of   new   buildings   or   additions   or
28    modifications  to  an  existing  facility,  final  plans  and
29    specifications  for  such work have prior to October 1, 1974,
30    been submitted to and approved by the  Department  of  Public
31    Health  in  accordance  with  the  requirements of applicable
32    laws.  Such exemptions shall be null and void after  December
33    31,  1979  unless  binding construction contracts were signed
34    prior  to  December  1,  1979  and  unless  construction  has
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 1    commenced prior to December 31, 1979.  Such exemptions  shall
 2    be  valid  until  such time as the project has been completed
 3    provided that the project proceeds  to  completion  with  due
 4    diligence.
 5        The  acquisition by any person of major medical equipment
 6    that will not be  owned  by  or  located  in  a  health  care
 7    facility  and  that  will  not be used to provide services to
 8    inpatients of a health care facility  shall  be  exempt  from
 9    review  provided  that  a  notice is filed in accordance with
10    exemption requirements.
11    (Source: P.A. 88-18.)

12        (20 ILCS 3960/5.2 new)
13        Sec. 5.2.   Services  exempt  from  permit  requirements.
14    Notwithstanding  any provisions of Section 5 to the contrary,
15    the following services and facilities  are  exempt  from  any
16    permit  requirements under this Act: outpatient and inpatient
17    drug   and   alcohol   services;    hospital-based    medical
18    detoxification  for  drugs  and alcohol; acute mental illness
19    services, including inpatient mental illness services; mental
20    health  services  which  are   non-bed   related   outpatient
21    services; capital improvements and renovations to health care
22    facilities;   additions   of  medical,  surgical,  and  adult
23    intensive care beds in hospitals;  major  medical  equipment;
24    inpatient  operating  rooms; subacute care hospital services;
25    non-hospital   based   ambulatory   surgery   services    and
26    facilities; comprehensive outpatient rehabilitation services;
27    transfer  of  ownership  interests  in  licensed  health care
28    facilities; magnetic resonance imaging; and chronic or  acute
29    renal dialysis facilities and services.

30        (20 ILCS 3960/5.3 new)
31        Sec. 5.3.  Additional services and facilities exempt from
32    permit   requirements.   Notwithstanding  any  provisions  of
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 1    Section 5 to the contrary, 24 months after the effective date
 2    of this amendatory Act of  the  91st  General  Assembly,  the
 3    following  services  and  facilities shall be exempt from any
 4    permit requirements  pursuant  to  this  Act:  extracorporeal
 5    shock wave lithotripsy services; positron emission tomography
 6    scanning   services;   pediatric   and   obstetric  services,
 7    including the addition of inpatient pediatric  and  obstetric
 8    beds  in  hospitals; therapeutic radiology services; and high
 9    linear energy transfer services.

10        (20 ILCS 3960/12.3 new)
11        Sec. 12.3.  Certificate of Need Study Commission.
12        (a)  There is established a 12-member Certificate of Need
13    Study Commission.  The members shall include: the Director of
14    Public Health, who shall serve  ex  officio,  and  11  public
15    members. The public members shall be appointed as follows:
16             (1)  Two persons to be appointed by the President of
17        the  Senate,  one  of  whom  shall  be appointed upon the
18        recommendation of the Minority Leader of the  Senate,  of
19        which 2 appointments one shall be a State licensed health
20        care  professional and one shall be a representative of a
21        State licensed health care facility;
22             (2)  Two persons to be appointed by the  Speaker  of
23        the  House  of  Representatives,  one  of  whom  shall be
24        appointed upon the recommendation of the Minority  Leader
25        of  the House of Representatives, of which 2 appointments
26        one shall be a State licensed  health  care  professional
27        and  one  shall  be  a representative of a State licensed
28        health care facility; and
29             (3)  Seven persons to be appointed by the  Governor,
30        of  which  2  appointments shall be State licensed health
31        care professionals, of  which  3  appointments  shall  be
32        representatives of State licensed health care facilities,
33        of which one appointment shall be a health economist, and
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 1        of  which  one  appointment shall be a consumer of health
 2        care services who  is  knowledgeable  about  health  care
 3        financing issues and who is a resident of this State.
 4        Vacancies  in  the  membership of the Commission shall be
 5    filled  in  the  same  manner  provided  for   the   original
 6    appointments.
 7        (b)  The   Director  of  Public  Health  shall  serve  as
 8    chairman of the Commission. The  Commission  shall  select  a
 9    vice-chairman  from  among  the members. The Commission shall
10    organize as soon as practicable following the appointment  of
11    its members.
12        (c)  The  Commission  shall  be  entitled  to call to its
13    assistance and avail itself of the services of the  employees
14    of any State, county, or municipal department, board, bureau,
15    commission,  or  agency  as  it  may  require  and  as may be
16    available to it for its purposes. The  Department  of  Public
17    Health shall provide staff support for the Commission.
18        (d)  The  Commission  shall conduct a comprehensive study
19    to examine the impact that elimination of certificate of need
20    requirements would have on each of the following health  care
21    services  and  facilities:  long-term  care  facilities, both
22    general    and    specialized;    comprehensive     inpatient
23    rehabilitation  services;  new  general acute care hospitals;
24    open-heart  surgery  and   cardiac   catheterization;   organ
25    transplantation,   including   kidney  transplantation;  burn
26    services; specialized neonatal services; and any other health
27    care services and facilities subject to certificate  of  need
28    requirements that are not scheduled for exemption pursuant to
29    this  Act.  The  Commission  shall  assess  the  impact  that
30    deregulation of the services or facilities will have on:
31             (1)  urban hospitals;
32             (2)  access to care by residents in the State;
33             (3)  quality of care;
34             (4)  services  that  are delivered Statewide or on a
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 1        regional basis; and
 2             (5)  the General Revenue  Fund,  including  programs
 3        such as Medicaid.
 4        The  Commission  shall  make  recommendations about which
 5    health care services or facilities, if any,  should  continue
 6    to  be subject to certificate of need requirements or another
 7    type of State regulation, and which  services  or  facilities
 8    should be exempt from State regulation.
 9        (e)  Within  24  months  of  the  effective  date of this
10    amendatory Act of the 91st General Assembly,  the  Commission
11    shall report its findings and recommendations to the Governor
12    and General Assembly.
13        (f)  The  Commission  shall expire upon the submission of
14    its report.

15        Section 99.   Effective  date.   This  Act  takes  effect
16    January 1, 2001.

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