[ Search ] [ Legislation ]
[ Home ] [ Back ] [ Bottom ]
91_HB4590
LRB9111762DJcdB
1 AN ACT in relation to health.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 1. Short title. The Act may be cited as the Local
5 Public Health Accountability Act.
6 Section 5. Findings. The General Assembly finds that:
7 (1) Access to health care services is of vital concern
8 to the people of this State. Notwithstanding public and
9 private efforts to increase access to health care, the people
10 of this State continue to have tremendous unmet health needs.
11 (2) The State has a substantial interest in assuring
12 that the unmet health needs of its residents are addressed.
13 Health care institutions can help address needs by providing
14 community benefits to the uninsured and underinsured members
15 of their communities. Health care services providers play an
16 important role in providing essential health care services in
17 the communities they serve.
18 (3) Illinois has a proud history of non-profit health
19 care facilities and philanthropic support of medical
20 services, education and research.
21 (4) Health care facilities in Illinois provide overall
22 high quality care at a reasonable cost. Health care
23 facilities in Illinois have experienced during the 1990s
24 substantial declines in occupancy as the health care system
25 has changed. Health care facilities require capital to
26 maintain operations and to modernize facilities and services.
27 (5) Nationally and regionally, private investment is
28 being made that results in the conversion of not-for-profit
29 and public health care facilities into for-profit health care
30 facilities. There are health care facilities in Illinois
31 that have provided and continue to provide important services
-2- LRB9111762DJcdB
1 to communities that submit that their survival may depend on
2 the ability to enter into agreements that result in the
3 investment of private capital and their conversion to
4 for-profit status.
5 (6) Health care facilities, both for-profit and
6 not-for-profit, are merging and forming networks to achieve
7 integration, stability and efficiency and the presence of
8 such networks affects competition.
9 (7) There are concerns that health care facility
10 networks may engage in practices that affect the quality of
11 medical services in the community as a whole and for the
12 vulnerable members of society in particular.
13 In order to protect public health and welfare and public
14 and charitable assets, it is necessary to establish standards
15 and procedures for health care facility conversions.
16 The legislature further concludes that licensing
17 privileges conveyed by this state to health care institutions
18 for the right to conduct intrastate business should be
19 accompanied by concomitant obligations to address unmet
20 health care needs. These obligations should be clearly
21 delineated. Community benefits should become a recognized
22 and accepted obligation of all health care institutions in
23 this State. Accordingly, every licensed health care services
24 provider must provide community benefits in a manner set
25 forth in this Act.
26 Section 10. Purpose. The purpose of this Act is:
27 (a) To assure the viability of a safe, accessible and
28 affordable healthcare system that is available to all
29 residents of Illinois;
30 (b) To establish a process to evaluate, monitor and
31 review whether the trend of for-profit corporations gaining
32 an interest in health care facilities will maintain, enhance,
33 or disrupt the delivery of health care in this State and to
-3- LRB9111762DJcdB
1 monitor health care facility performance to assure that
2 standards for community benefits continue to be met;
3 (c) To establish a review process and criteria for
4 review of conversions which involve for-profit corporations;
5 (d) To establish a review process and criteria for
6 review of conversions which involve only not-for-profit
7 corporations;
8 (e) To clarify the jurisdiction and authority of the
9 Illinois Health Facilities Planning Board and the Illinois
10 Department of Public Health to protect public health and
11 welfare and the Illinois Attorney General to preserve and
12 protect public and charitable assets in reviewing both
13 conversions which involve for-profit corporations and
14 conversions which involve only not-for-profit corporations;
15 and
16 (f) To provide for independent foundations to hold and
17 distribute proceeds of conversions consistent with the
18 acquiree's original purpose or for the support and promotion
19 of health care and social needs in the affected community.
20 Section 15. Definitions. For purposes of this Act:
21 (a) "Acquiree" means the person or persons which lose
22 any ownership or control in the new health care facility.
23 (b) "Acquiror" means the person or persons which gain an
24 ownership or control in the new health care facility.
25 (c) "Affected community" means any county, township,
26 municipality or otherwise identifiable geographic region
27 wherein an existing health care facility is physically
28 located or whose inhabitants are regularly served by the
29 existing health care facility.
30 (d) "Board" means the Illinois Health Facilities
31 Planning Board.
32 (e) "Charity care" means health care services provided
33 by a health care facility without charge to a patient and for
-4- LRB9111762DJcdB
1 which the health care facility does not and has not expected
2 payment.
3 (f) "Conversion" means any transfer by a person or
4 persons of an ownership or membership interest or authority
5 in a health care facility, or the assets thereof, whether by
6 purchase, merger, consolidation, lease, gift, joint venture,
7 sale, or other disposition which results in a change of
8 ownership, control or possession of twenty percent (20%) or
9 greater of the membership or voting rights or interests of
10 the health care facility, or the removal, addition or
11 substitution of a partner which results in a new partner
12 gaining or acquiring a controlling interest in the hospital,
13 or any change in membership which results in a new person
14 gaining or acquiring a controlling vote in the hospital.
15 (g) "Department" means the Illinois Department of Public
16 Health.
17 (h) "Director" means the Director of the Illinois
18 Department of Public Health.
19 (i) "Existing Health Care Facility" means the health
20 care facility as it exists prior to the acquisition.
21 (j) "For-profit corporation" means a legal entity formed
22 for the purpose or transacting business which has as one of
23 its purposes pecuniary profit.
24 (k) "Health care facility" means: ambulatory surgical
25 treatment centers licensed pursuant to the Ambulatory
26 Surgical Treatment Center Act; institutions, places,
27 buildings, or agencies licensed under the Hospital Licensing
28 Act any institution licensed under the Nursing Home Care
29 Act; kidney disease treatment centers licensed by the State.
30 (l) "New health care facility" means the health care
31 facility as it exists after the completion of a conversion.
32 (m) "Not-for-profit corporation" means a legal entity
33 formed for some charitable or benevolent purpose and not for
34 profit which has been exempted from taxation pursuant to the
-5- LRB9111762DJcdB
1 Internal Revenue Code section 501(c)(3).
2 (n) "Transacting parties" means any person or persons
3 who seek either to transfer or acquire ownership or a
4 controlling interest or controlling authority in a health
5 care facility which would result in a change of ownership,
6 control or authority of twenty percent (20%) or greater.
7 (o) "Uncompensated care" means a combination of free
8 care, which the health care facility provides at no cost to
9 the patient, bad debt which the health care facility bills
10 for but does not collect, and less than full Medicaid
11 reimbursement amounts.
12 (p) "Bad debt" means the unpaid accounts of any
13 individual who has received medical care or is financially
14 responsible for the cost of care rendered to another, where
15 such individual has the ability to pay, and has refused to
16 pay.
17 (q) "Community" means the geographic service area(s) and
18 patient population(s) that the health care institution
19 serves.
20 (r) "Community benefits" means the unreimbursed goods,
21 services and resources provided by health care institutions
22 that address community-identified health needs and concerns,
23 particularly of those who are uninsured or underserved.
24 Community benefits include but are not limited to the
25 following:
26 (1) Free Care;
27 (2) Public education and other programs relating to
28 preventive medicine or the public health of the
29 community;
30 (3) Health or disease screening programs;
31 (4) Transportation services;
32 (5) Poison control centers;
33 (6) Donated medical supplies and equipment;
34 (7) Unreimbursed costs of providing services to
-6- LRB9111762DJcdB
1 persons participating in any government subsidized health
2 care program;
3 (8) Free or below-cost blood banking services;
4 (9) Free or below-cost assistance, material,
5 equipment, and training to emergency medical services and
6 ambulance services;
7 (10) The costs to implement a basic enrollment
8 program that provides a package of primary care services
9 to uninsured members of the community; and
10 11) Health research, education and training
11 programs, provided that they are related to identified
12 health needs.
13 (s) "Free Care" means care provided by a health care
14 services provider to patients unable to pay and for which the
15 provider has no expectation of payment from the patient or
16 from any third-party payer.
17 (t) "Taxing Body" means a public body that has the legal
18 authority to levy real estate taxes on all or any portion of
19 the real estate or leaseholds owned or leased by any
20 for-profit corporation or for-profit entity seeking approval
21 for a conversion under this Act.
22 (u) "Payment in lieu of taxes" means an agreement with
23 the taxing body that, in the last year immediately prior to a
24 conversion under this act levied real estate taxes on all or
25 any portion of the real estate or leaseholds owned or leased
26 by the for-profit entity seeking a conversion with a
27 not-for-profit entity under this Act.
28 Section 20. Prior approval. Prior to the completion of a
29 conversion approval must be granted first by the Attorney
30 General and second by the Department in accordance with the
31 provisions of this Act.
32 Section 25. Conversions involving for-profit corporations
-7- LRB9111762DJcdB
1 or not-for-profit corporations as acquirors. Initial
2 application.
3 (a) No person shall engage in a conversion with a
4 for-profit corporation as the acquiror and a not-for-profit
5 corporation as the acquiree involving the establishment,
6 maintenance or operation of a health care facility without
7 prior approval of both the Attorney General and the Illinois
8 Health Facilities Planning Board. The transacting parties
9 shall file an initial application in accordance with
10 subsection (b) of this section which shall, at a minimum,
11 include the following information with respect to each
12 transacting party and to the proposed new health care
13 facility:
14 (1) a detailed summary of the proposed conversion;
15 (2) the names, addresses and telephone numbers of
16 the transacting parties;
17 (3) the names, addresses, telephone numbers and
18 occupations of all officers, members of the board of
19 directors, trustees, executive and senior level
20 management personnel including, for each position the
21 person currently holding the position and persons holding
22 the position for the past three years from the date of
23 the application;
24 (4) articles of incorporation and certificate of
25 incorporation; bylaws and organizational charts;
26 (5) organizational structure for existing
27 transacting parties and each partner, affiliate, parent,
28 subsidiary or related corporate entity in which the
29 acquiror has a twenty percent (20%) or greater ownership
30 interest;
31 (6) conflict of interest statements, policies and
32 procedures;
33 (7) names, addresses and telephone numbers of
34 professional consultants engaged in connection with the
-8- LRB9111762DJcdB
1 proposed conversion;
2 (8) copies of audited income statements, balance
3 sheets, and other financial statements for the three
4 years immediately prior to the year in which the
5 application is filed to the extent they have been made
6 public, audited interim financial statements and income
7 statements together with a detailed description of the
8 financing structure of the proposed conversion including
9 equity contribution, debt restructuring, stock issuance,
10 partnership interests, stock offerings and the like;
11 (9) a detailed description of real estate issues
12 including title reports for land owned and lease
13 agreements concerning the proposed conversion;
14 (10) a detailed description, as each relates to the
15 proposed transaction, for: equipment leases, insurance,
16 regulatory compliance, tax status, pending litigation or
17 regulatory proceedings, pension plan descriptions and
18 employee benefits, environmental reports, assessments and
19 organizational goals;
20 (11) copies of reports analyzing the proposed
21 conversion during the past three years including, but not
22 necessarily limited to, reports by appraisers,
23 accountants, investment bankers, actuaries and other
24 experts;
25 (12) a description of the manner in which the price
26 was determined, including methods of valuation and data
27 used, and the names and addresses of persons preparing
28 said documents, and this information is deemed to be
29 proprietary;
30 (13) patient statistics for the past three years
31 and patient projections for the next year including
32 patient visits, admissions, emergency room visits,
33 clinical visits, and visits to each department of the
34 hospital, admissions to nursing care or visits by
-9- LRB9111762DJcdB
1 affiliated home health care providers;
2 (14) the name and mailing address of all licensed
3 facilities in which the for-profit corporation maintains
4 an ownership interests or controlling interest or
5 operating authority;
6 (15) a list of pending or adjudicated citations,
7 violations or charges against the facilities brought by
8 any governmental agency or accrediting agency within the
9 past three years and the status or disposition of each
10 matter with regard to patient care and charitable asset
11 matters;
12 (16) a list of uncompensated care provided over the
13 past three years by each facility, including detail as to
14 how that amount was calculated;
15 (17) copies of all documents related to
16 identification of all charitable assets, accounting of
17 all charitable assets for the past three years, and
18 distribution of the charitable assets including, but not
19 limited to, endowments, restricted, unrestricted and
20 specific purpose funds as each relates to the proposed
21 transaction;
22 (18) a description of charity care and
23 uncompensated care provided by the existing health care
24 facility for the previous five years up to the present,
25 including a the cash value of such services and a
26 description of services provided;
27 (19) a description of bad debt incurred by the
28 existing health care facility for the previous five years
29 for which payment was anticipated but not received;
30 (20) a plan as to how the new health care facility
31 will provide community benefit, as defined by this Act,
32 and charity care during the first five years of
33 operation;
34 (21) a description of how the new health care
-10- LRB9111762DJcdB
1 facility will monitor and value charity care services and
2 community benefit;
3 (22) the names of persons currently serving as
4 officers, directors, board members or senior level
5 managers of the existing health care facility who will or
6 will not maintain any position with the new health care
7 facility and whether any such person will receive a
8 salary, severance stock offering or current or deferred
9 compensation as a result of or in relation to the
10 proposed conversion;
11 (23) a plan as to how the new health care facility
12 will be staffed during the first three years of
13 operation;
14 (24) a list of all medical services, departments,
15 clinical services and administrative services which will
16 be maintained at the new health care facility;
17 (25) a description of criteria established by the
18 board of directors of the existing health care facility
19 for pursuing a proposed conversion with one or more
20 health care providers;
21 (26) all requests for proposal issued by the
22 existing health care facility relating to the pursuit of
23 a proposed conversion;
24 (27) a copy of all proposed contracts or
25 arrangements with management, board members, officers, or
26 directors of the existing health care facility for
27 post-conversion consulting services or covenants not to
28 compete following the completion of the conversion;
29 (28) copies of documents or description of any
30 proposed plan for any entity to be created for charitable
31 assets including, but not limited to, endowments,
32 restricted, unrestricted and specific purpose funds, the
33 proposed articles of incorporation, by-laws, mission
34 statement, program agenda, method of appointment of board
-11- LRB9111762DJcdB
1 members, qualifications of board members, duties of board
2 members and conflict of interest policies;
3 (29) a description of all departments, clinical,
4 social or other services or medical services that will be
5 eliminated or significantly reduced at the new health
6 care facility;
7 (30) a description of staffing levels of all
8 categories of employees, including full-time, part-time,
9 and contractual employees currently employed at or
10 providing services at the existing health care facility
11 and a description of any anticipated or proposed changes
12 in the current staffing levels;
13 (31) signed conflict of interest forms from all
14 officers, directors, trustees, senior level managers,
15 chairpersons or department chairpersons and medical
16 directors on a form acceptable to the Attorney General;
17 (32) if the acquiror is a for-profit corporation
18 that has acquired a not-for-profit health care facility
19 under this Act, the application shall also include a
20 complete statement of performance during the preceding
21 year with regard to the terms and conditions of approval
22 of conversion and each projection, plan or description
23 submitted as part of the application for any conversion
24 completed pursuant to an application submitted under this
25 Act and made a part of an approval for such conversion;
26 (b) Two copies of the initial application shall be
27 provided each to the Illinois Health Facilities Planning
28 Board and the Attorney General simultaneously by certified
29 United States mail, return receipt requested.
30 (c) Except for the information determined by the
31 Attorney General in accordance with 5 ILCS 140/7(g) to be
32 confidential and/or proprietary, the initial application and
33 supporting documentation shall be considered public records
34 and shall be available to the public for inspection upon
-12- LRB9111762DJcdB
1 request. The Attorney General shall provide access to these
2 records at no cost to the public.
3 d) The Attorney General may charge the parties to the
4 conversion for the cost of providing the public with notice
5 and reasonable access to records relating to the proposed
6 conversion.
7 Section 30. Review process and review criteria by
8 Attorney General; Conversions involving for-profit
9 corporation as acquiror.
10 (a) The Attorney General shall review all conversions
11 involving a health care facility in which one or more of the
12 transacting parties involves a for-profit corporation as the
13 acquiror and a not-for-profit corporation as the acquiree.
14 (b) In reviewing proposed conversions under this Act,
15 the Attorney General must do the following:
16 (1) Within ten business days after receipt of two
17 copies of an initial application the Attorney General
18 shall publish notice of the application in a newspaper of
19 general circulation in the State and shall notify by
20 United States mail any person who has requested notice of
21 the filing of such application. The notice shall state
22 that an initial application has been received, the names
23 of the transacting parties, the date by which a person
24 may submit written comments to the Attorney General and
25 the date time and place of the public hearings on the
26 application;
27 (2) No later than forty five days after the
28 Attorney General has received notice from the nonprofit
29 corporation of its intent to enter an agreement or
30 transaction, the Attorney General shall hold at least one
31 public hearing in the service area of the converting
32 health care facility. The number of public hearings that
33 the Attorney General must hold shall correspond to the
-13- LRB9111762DJcdB
1 size of the community in the health care facility's
2 business area and the nature and value of the agreement
3 or transaction to ensure that the community affected by
4 the conversion has an opportunity to contribute in a
5 hearing process. Any person may file written comments or
6 exhibits for the hearing or may appear and make a
7 statement at the hearing.
8 (3) Each party to the conversion must assure that
9 at least one person representing the party is present at
10 any public hearing that the Attorney General convenes.
11 (4) At least twenty-one days prior to the public
12 hearing, the Attorney General shall provide written
13 notice of the time and place of the hearing through
14 publication in one or more newspapers of general
15 circulation in the affected communities, to the board of
16 supervisors of the county in which the facility is
17 located, and to all those who requested notice of such
18 transactions.
19 (5) The Attorney General shall establish and
20 maintain a summary of written and oral comments made in
21 preparation for and at the public hearing, including all
22 questions posed, and shall require answers of the
23 appropriate parties. The summary and answers shall be
24 filed in the office of the Attorney General and in the
25 public library of the public library system for the
26 community served by the health care facility and a copy
27 shall be made available upon request to the Attorney
28 General.
29 (6) As part of the public hearing process, the
30 Attorney General shall solicit comments and input
31 regarding the criteria outlined in Section 30(c).
32 (7) The Attorney General shall have the power to
33 subpoena additional information or witnesses, require and
34 administer oaths, and require sworn statements at any
-14- LRB9111762DJcdB
1 time prior to making a decision on an application.
2 (8) Within thirty days after receipt of an initial
3 application the Attorney General must advise the
4 applicant in writing whether the application is complete
5 and, if not, must specify the additional information that
6 is required;
7 (9) The Attorney General must, upon receipt of the
8 additional information requested, notify the applicant in
9 writing of the date of the completed application;
10 (10) The Attorney General shall approve, approve
11 with conditions directly related to the proposed
12 conversion, or disapprove the application with one
13 hundred twenty days of the date of the completed
14 application;
15 (11) Immediately upon making a determination on the
16 application, the Attorney General shall transmit a copy
17 of its final determination to the Department.
18 (c) In reviewing an application pursuant to this
19 section, the Attorney General shall consider the following
20 criteria:
21 (1) whether the proposed conversion will harm the
22 public interest in trust property given, devised, or
23 bequeathed to the existing health care facility for
24 charitable, educational or religious purposes located or
25 administered in this State;
26 (2) whether a trustee or trustees of any charitable
27 trust located or administered in this State will be
28 deemed to have exercised reasonable care, diligence and
29 prudence in performing as a fiduciary in connection with
30 the proposed conversion;
31 (3) whether the board established appropriate
32 criteria in deciding to pursue a conversion in relation
33 to carrying out its mission and purposes;
34 (4) whether the board formulated and issued
-15- LRB9111762DJcdB
1 appropriate requests for proposals in pursuing a
2 conversion;
3 (5) whether the board considered the proposed
4 conversion as the only alternative or as the best
5 alternative in carrying out its mission and purposes;
6 (6) whether any conflict of interest exists
7 concerning the proposed conversion relative to members of
8 the board, officers, directors, senior level managers, or
9 experts or consultants engaged in connection with the
10 proposed conversion including, but not limited to
11 attorneys, accountants, investment bankers, actuaries,
12 health care experts or industry analysts;
13 (7) whether individuals were provided with
14 contracts or consulting agreements or arrangements that
15 included pecuniary rewards based in whole or in part on
16 the contingency of the completion of the conversion;
17 (8) whether the board exercised due care in
18 engaging consultants with the appropriate level of
19 independence, education, and experience in similar
20 conversions;
21 (9) whether the board exercised due care in
22 accepting assumptions and conclusions provided by
23 consultants engaged to assist in the proposed conversion;
24 (10) whether the board exercised due care in
25 assigning a value to the existing health care facility
26 and its charitable assets in proceeding to negotiate the
27 proposed conversion;
28 (11) whether the board exposed an inappropriate
29 amount of assets by accepting, in exchange for the
30 proposed conversion, future or contingent value based
31 upon success of the new health care facility;
32 (12) whether officers, directors, board members or
33 senior level managers will receive future contracts in
34 existing, new or affiliated health care facilities or
-16- LRB9111762DJcdB
1 foundations;
2 (13) whether any members of the board will retain
3 any authority in the new health care facility;
4 (14) whether the board accepted fair consideration
5 and value for any management contracts made part of the
6 proposed conversion;
7 (15) whether individual officers, directors, board
8 members, or senior level managers engaged legal counsel
9 to consider their individual rights or duties in acting
10 in their capacity as a fiduciary in connection with the
11 proposed conversion;
12 (16) whether the proposed conversion results in an
13 abandonment of the original purposes of the existing
14 health care facility or whether a resulting entity will
15 depart from the traditional purposes and mission of the
16 existing hospital such that a cy pres proceeding would be
17 necessary;
18 (17) whether the proposed conversion contemplates
19 the appropriate and reasonable fair market value;
20 (18) whether the proposed conversion was based upon
21 appropriate valuation methods including, but not limited
22 to, market approach, third party report or fairness
23 opinion;
24 (19) whether the conversion is proper under the
25 General Not-for-Profit Corporation Act of 1986;
26 (20) whether the conversion is proper under the
27 applicable State revenue acts;
28 (21) whether the proposed conversion jeopardizes
29 the tax status of the existing health care facility;
30 (22) whether the individuals who represented the
31 existing health care facility in negotiations avoided
32 conflicts of interest;
33 (23) whether officers, board members, directors, or
34 senior level managers deliberately acted or failed to act
-17- LRB9111762DJcdB
1 in a manner which impacted negatively on the value or
2 purchase price;
3 (24) whether the formula used in determining the
4 value of the existing health care facility was
5 appropriate and reasonable which may include, but not be
6 limited to: factors such as the multiple factors applied
7 to earnings before interest, taxes, depreciation, and
8 amortization; the time period of the evaluation;
9 price/earnings multiples; the projected efficiency
10 differences between the existing health care facility and
11 the new health care facility; and the historic value of
12 any tax exemptions granted to the existing health care
13 facility;
14 (25) whether the proposed conversion appropriately
15 provides for the disposition of proceeds of the
16 conversion which may include, but not be limited to the
17 following:
18 (i) whether an existing entity or a new entity
19 will receive the proceeds;
20 (ii) whether appropriate tax status
21 implications of the entity receiving the proceeds
22 have been considered;
23 (iii) whether the mission statement and program
24 agenda will be or should be closely related with the
25 purpose of the mission of the existing health care
26 facility;
27 (iv) whether any conflicts of interest arise
28 in the proposed handling of the conversion proceeds;
29 (v) whether the bylaws and articles of
30 incorporation have been prepared for the new entity;
31 (vi) whether the board of any new or
32 continuing entity will be independent from the new
33 health care facility;
34 (vii) whether the method for selecting board
-18- LRB9111762DJcdB
1 members, staff and consultants is appropriate;
2 (viii) whether the board will comprise an
3 appropriate number of individuals with experience in
4 pertinent areas such as foundations, health care,
5 business, labor, community programs, financial
6 management, legal, accounting, grant making, and
7 public members representing diverse ethnic
8 populations of the affected community;
9 (ix) whether the size of the board and
10 proposed length of board members' terms are
11 sufficient;
12 (26) whether the transacting parties are in
13 compliance with the Charitable Trust Act, 760 ILCS 55 et.
14 seq.;
15 (27) whether a right of first refusal to repurchase
16 the assets has been retained;
17 (28) whether the character, commitment, competence
18 and standing in the community or other communities served
19 by the transacting parties are satisfactory;
20 (29) whether a control premium is an appropriate
21 component of the proposed conversion; and
22 (30) whether the value of the assets factored in
23 the conversion is based on past performance or future
24 potential performance.
25 Section 35. Review process and criteria by the Illinois
26 Health Facilities Planning Board-Conversions involving
27 for-profit corporation as acquiror.
28 (a) The Illinois Health Facilities Planning Board shall
29 review all proposed conversions involving a health care
30 facility in which a for-profit corporation is the acquiror
31 and a not-for-profit corporation is the acquiree.
32 (b) In reviewing proposed conversions under this Section
33 the Board shall conform to the following process:
-19- LRB9111762DJcdB
1 (1) upon receipt of a determination by the Attorney
2 General of the proposed conversion, the Board shall,
3 within ten (10) business days, publish notice of the
4 application in a newspaper of general circulation in the
5 State stating that an initial application for conversion
6 has been submitted, the names of the parties to the
7 transaction, the date by which a person may submit
8 written comments to the Board and the date, time and
9 location of a public hearing regarding the application
10 for conversion;
11 (2) No later than forty five (45) days after receipt
12 of a determination by the Attorney General of the
13 proposed conversion, the Board shall hold at least
14 one public hearing in the service area of the
15 converting health care facility. The number of
16 public hearings that the Board must hold shall
17 correspond to the size of the community in the
18 health care facility's business area and the nature
19 and value of the agreement or transaction to ensure
20 that the community affected by the conversion has an
21 opportunity to contribute in a hearing process. Any
22 person may file written comments or exhibits for the
23 hearing or may appear and make a statement at the
24 hearing. Each party to the conversion must assure
25 that at least one person representing the party is
26 present at any public hearing that the Board
27 convenes.
28 (3) At least twenty-one (21) days prior to the
29 public hearing, the Board shall provide written notice of
30 the time and place of the hearing through publication in
31 one or more newspapers of general circulation in the
32 affected communities, to the board of supervisors of the
33 county in which the facility is located, and to all those
34 who requested notice of such transactions.
-20- LRB9111762DJcdB
1 (4) The Board shall establish and maintain a summary
2 of written and oral comments made in preparation for and
3 at the public hearing, including all questions posed, and
4 shall require answers of the appropriate parties. The
5 summary and answers shall be filed in the office of the
6 Board and in the public library of the public library
7 system for the community served by the health care
8 facility and a copy shall be made available upon request
9 to the Board.
10 (5) As part of the public hearing process, the Board
11 shall solicit comments and input regarding the potential
12 risks and benefits of the conversion on health access and
13 services, as outlined in Section 35(c).
14 (6) The Board shall have the power to subpoena
15 additional information or witnesses, require and
16 administer oaths, and require sworn statements at any
17 time prior to making a decision on an application.
18 (7) Within twenty days following the receipt of a
19 written determination of approval of a proposed
20 conversion by the Attorney General, the Board shall
21 advise the applicant in writing whether the initial
22 application for conversion is complete and, if not, shall
23 specify the additional information required;
24 (8) The Board shall, upon receipt of the information
25 requested, notify the applicant in writing of the
26 official date of completion of the initial application;
27 (9) The Board shall approve, approve with conditions
28 directly related to the proposed conversion or disapprove
29 the initial application for conversion within ninety days
30 of the date the completed application for conversion was
31 submitted.
32 (c) In reviewing an application for conversion under this
33 Section the Board shall consider the following criteria:
34 (1) whether the character, commitment, competence
-21- LRB9111762DJcdB
1 and standing in the community, or any other communities
2 served by the proposed parties to the transaction are
3 satisfactory;
4 (2) whether sufficient safeguards are included to
5 assure the affected community continued access to
6 affordable health care;
7 (3) whether the parties to the transaction have
8 provided clear and convincing evidence that the new
9 hospital will provide health care and appropriate access
10 with respect to traditionally underserved populations in
11 the affected community;
12 (4) whether procedures are in place to ensure that
13 ownership interests will not be used as incentives for
14 patient referrals to the health care facility by
15 physicians and other employees of the health care
16 facility;
17 (5) whether the parties to the transaction have made
18 a commitment to ensure the continuation of collective
19 bargaining rights, if applicable, and retention of the
20 workforce;
21 (6) whether the parties to the transaction have
22 appropriately accounted for employment needs at the
23 health care facility and addressed workforce retraining
24 needed as a consequence of any proposed restructuring;
25 (7) whether the proposed conversion demonstrates
26 that the public interest will be served considering the
27 essential medical services needed to provide safe and
28 adequate treatment, appropriate access and balanced
29 health care delivery to the residents of the State;
30 (8) whether the acquiror has demonstrated that it
31 has satisfactorily met the terms and conditions of
32 approval for any previous conversion pursuant to an
33 application submitted under this Act.
-22- LRB9111762DJcdB
1 Section 40. Conversions limited to not-for-profit
2 corporations -- Initial application. No person shall engage
3 in a conversion with not-for-profit corporations as both
4 acquiror and acquiree involving the establishment,
5 maintenance, or operation of a health care facility without
6 prior approval of both the Attorney General and the Illinois
7 Health Facilities Planning Board. The parties to the
8 transaction shall file an initial application pursuant to the
9 provisions of Section 25 of this Act.
10 Section 45. Review process and review criteria by
11 Attorney General-Conversions limited to not-for-profit
12 corporations.
13 (a) The Attorney General shall review all conversions
14 involving a health care facility in which the parties to the
15 transaction are limited to not-for-profit corporations.
16 (b) In reviewing proposed conversions in accordance with
17 Section 40 of this Act, the Attorney General shall apply the
18 procedural requirements of Section 30(b) of this Act.
19 (c) In reviewing an application pursuant to Section 40 of
20 this Act, the Attorney General shall consider the following
21 criteria:
22 (1) whether the proposed conversion will harm the
23 public interest in trust property given, devised, or
24 bequeathed to the existing health care facility for
25 charitable, educational, or religious purposes located or
26 administered in this State;
27 (2) whether a trustee or trustees of any charitable
28 trust located or administered in this State will be
29 deemed to have exercised reasonable care, diligence, and
30 prudence in performing as a fiduciary in connection with
31 the proposed conversion;
32 (3) whether the board established appropriate
33 criteria in deciding to pursue a conversion in relation
-23- LRB9111762DJcdB
1 to carrying out its mission and purposes;
2 (4) whether the board formulated and issued
3 appropriate requests for proposals in pursuing a
4 conversion;
5 (5) whether the board considered the proposed
6 conversion as the only alternative or as the best
7 alternative in carrying out its mission and purposes;
8 (6) whether any conflict of interest exists
9 concerning the proposed conversion relative to members of
10 the board, officers, directors, senior level managers, or
11 experts or consultants engaged in connection with the
12 proposed conversion including, but not limited to
13 attorneys, accountants, investment bankers, actuaries,
14 health care experts or industry analysts;
15 (7) whether individuals described in subsection (5)
16 above were provided with contracts or consulting
17 agreements or arrangements which included pecuniary
18 rewards based in whole or in part on the contingency of
19 the completion of the conversion;
20 (8) whether the board exercised due care in engaging
21 consultants with the appropriate level of independence,
22 education and experience in similar conversions;
23 (9) whether the board exercised due care in
24 accepting assumptions and conclusions provided by
25 consultants engaged to assist in the proposed conversion;
26 (10) whether the board exercised due care in
27 assigning a value to the existing health care facility
28 and its charitable assets in proceeding to negotiate the
29 proposed conversion;
30 (11) whether the board exposed an inappropriate
31 amount of assets by accepting, in exchange for the
32 proposed conversion, future or contingent value based
33 upon success of the new health care facility ;
34 (12) whether officers, directors, board members or
-24- LRB9111762DJcdB
1 senior level managers will receive future contracts in
2 existing, new or affiliated health care facilities;
3 (13) whether any members of the board will retain
4 any authority in the new health care facility;
5 (14) whether the board accepted fair consideration
6 and value for any management contracts made part of the
7 proposed conversion;
8 (15) whether individual officers, directors, board
9 members or senior level managers engaged legal counsel to
10 consider their individual rights or duties in acting in
11 their capacity as a fiduciary in connection with the
12 proposed conversion;
13 (16) whether the proposed conversion results in an
14 abandonment of the original purposes of the existing
15 health care facility or whether a resulting entity will
16 depart from the traditional purposes and mission of the
17 existing hospital such that a cy pres proceeding would be
18 necessary;
19 (17) whether the proposed conversion contemplates
20 the appropriate and reasonable fair market value;
21 (18) whether the proposed conversion was based upon
22 appropriate valuation methods including, but not limited
23 to, market approach, third party report or fairness
24 opinion;
25 (19) whether the conversion is proper under the
26 General Not-for-Profit Corporation Act of 1986;
27 (20) whether the conversion is proper under the
28 applicable State revenue acts;
29 (21) whether the proposed conversion jeopardizes the
30 tax status of the existing health care facility;
31 (22) whether the individuals who represented the
32 existing health care facility in negotiations avoided
33 conflicts of interest;
34 (23) whether officers, board members, directors or
-25- LRB9111762DJcdB
1 senior level managers deliberately acted or failed to act
2 in a manner which impacted negatively on the value or
3 purchase price;
4 (24) whether the transacting parties are in
5 compliance with the Charitable Trust Act [60 ILCS 55 et
6 seq.];
7 (25) whether the formula used in determining the
8 value of the existing health care facility was
9 appropriate and reasonable which may include, but not be
10 limited to: factors such as the multiple factors applied
11 to earnings before interest, taxes, depreciation, and
12 amortization; the time period of the evaluation;
13 price/earnings multiples; the projected efficiency
14 differences between the existing health care facility and
15 the new health care facility; and the historic value of
16 any tax exemptions granted to the existing health care
17 facility.
18 Section 50. Review process and review criteria for the
19 Illinois Health Facilities Planning Board-Conversions limited
20 to not-for-profit corporations.
21 (a) In reviewing an application of for a conversion
22 involving a health care facility in which the parties to the
23 transaction are limited to not-for-profit corporations, the
24 Illinois Health Facilities Planning Board shall conform to
25 the process described in Section 35(b) of this Act.
26 (b) In reviewing an application for a conversion
27 involving a health care facility in which the parties to the
28 transaction are limited to not-for-profit corporations, the
29 Board shall consider the following criteria:
30 (1) whether the character, commitment, competence
31 and standing in the community, or any other communities
32 served by the proposed transacting parties are
33 satisfactory;
-26- LRB9111762DJcdB
1 (2) whether sufficient safeguards are included to
2 assure the affected community continued access to
3 affordable care;
4 (3) whether the transacting parties have provided
5 clear and convincing evidence that the new health care
6 facility will provide health care and appropriate access
7 with respect to traditionally underserved populations in
8 the affected community;
9 (4) whether procedures are in place to ensure that
10 ownership interests will not be used as incentives for
11 patient referrals to the health care facility by
12 physicians and other employees of the health care
13 facility;
14 (5) whether the parties to the transaction have made
15 a commitment to assure the continuation of collective
16 bargaining rights, if applicable, and retention of the
17 workforce;
18 (6) whether the parties to the transaction have
19 appropriately accounted for employment needs at the
20 facility and addressed workforce retraining needed as a
21 consequence of any proposed restructuring;
22 (7) whether the conversion demonstrates that the
23 public interest will be served considering the essential
24 medical services needed to provide safe and adequate
25 treatment, appropriate access and balanced health care
26 delivery to the residents of the State.
27 (8) whether the acquiror has demonstrated that it
28 has satisfactorily met the terms and conditions of
29 approval for any previous conversion pursuant to an
30 application submitted under this Act.
31 Section 55. Any conversion under this Act shall require
32 the not-for-profit corporation to have a payment in lieu of
33 taxes agreement with each taxing body requiring the
-27- LRB9111762DJcdB
1 not-for-profit corporation to pay to such taxing bodies in
2 each year subsequent to the effective date of the conversion,
3 such sums of money as were paid as real estate taxes in the
4 year immediately preceding the conversion by the for-profit
5 entity which was acquired.
6 Section 60. Conversions involving for-profit
7 corporations as acquirees and not-for-profit corporations as
8 acquirors -- Initial application. No person shall engage in
9 a conversion with a for-profit corporation as acquiree and a
10 not-for-profit corporation as acquiror involving the
11 establishment, maintenance, or operation of a health care
12 facility without prior approval of both the Attorney General
13 and the Illinois Health Facilities Planning Board. The
14 parties to the transaction shall file an initial application
15 pursuant to the provisions of Section 25 of this Act.
16 Section 65. Review process and review criteria by the
17 Attorney General -- Conversions involving a for-profit
18 corporation as the acquiree and a not-for-profit corporation
19 as the acquiror. The Attorney General shall review all
20 proposed conversions involving a for-profit corporation as
21 the acquiree and a not-for-profit corporation as the acquiror
22 in accordance with the procedural requirements of Section
23 30(b) of this Act.
24 In reviewing an application pursuant to this section, the
25 Attorney General shall consider the following criteria:
26 (1) whether the proposed conversion will harm the
27 public interest in trust property given, devised, or
28 bequeathed to the acquiror for charitable, educational or
29 religious purposes located or administered in this State;
30 (2) whether a trustee or trustees of any charitable
31 trust located or administered in this State will be
32 deemed to have exercised reasonable care, diligence and
-28- LRB9111762DJcdB
1 prudence in performing as a fiduciary in connection with
2 the proposed conversion;
3 (3) whether the acquiror's board established
4 appropriate criteria in deciding to pursue a conversion
5 in relation to carrying out its mission and purposes;
6 (4) whether any conflict of interest exists
7 concerning the proposed conversion relative to members of
8 the acquiror's board, officers, directors, senior level
9 managers, or experts or consultants engaged in connection
10 with the proposed conversion including, but not limited
11 to attorneys, accountants, investment bankers, actuaries,
12 health care experts or industry analysts;
13 (5) whether individuals described in subsection (4)
14 above were provided with contracts or consulting
15 agreements or arrangements that included pecuniary
16 rewards based in whole or in part on the contingency of
17 the completion of the conversion;
18 (6) whether the acquiror's board exercised due care
19 in engaging consultants with the appropriate level of
20 independence, education, and experience in similar
21 conversions;
22 (7) whether the board exercised due care in
23 accepting assumptions and conclusions provided by
24 consultants engaged to assist in the proposed conversion;
25 (8) whether the board exercised due care in
26 assigning a value to the existing health care facility
27 and its charitable assets in proceeding to negotiate the
28 proposed conversion;
29 (9) whether the acquiror's individual officers,
30 directors, board members, or senior level managers
31 engaged legal counsel to consider their individual rights
32 or duties in acting in their capacity as a fiduciary in
33 connection with the proposed conversion;
34 (10) whether the proposed conversion results in an
-29- LRB9111762DJcdB
1 abandonment of the original purposes of the acquiror;
2 (11) whether the proposed conversion contemplates
3 the appropriate and reasonable fair market value;
4 (12) whether the proposed conversion was based upon
5 appropriate valuation methods including, but not limited
6 to, market approach, third party report or fairness
7 opinion;
8 (13) whether the conversion is proper under the
9 General Not-for-Profit Corporation Act of 1986;
10 (14) whether the conversion is proper under the
11 applicable State revenue acts;
12 (15) whether the proposed conversion jeopardizes the
13 tax status of the acquiror;
14 (16) whether the individuals who represented the
15 acquiror in negotiations avoided conflicts of interest;
16 (17) whether the formula used in determining the
17 value of the existing health care facility was
18 appropriate and reasonable which may include, but not be
19 limited to: factors such as the multiple factors applied
20 to earnings before interest, taxes, depreciation, and
21 amortization; the time period of the evaluation;
22 price/earnings multiples; the projected efficiency
23 differences between the existing health care facility and
24 the new health care facility; and the historic value of
25 any tax exemptions granted to the existing health care
26 facility;
27 (18) whether the transacting parties are in
28 compliance with the Charitable Trust Act;
29 (19) whether the character, commitment, competence
30 and standing in the community or other communities served
31 by the transacting parties are satisfactory.
32 Section 70. Review process and review criteria by the
33 Illinois Health Facilities Planning Board - Conversions
-30- LRB9111762DJcdB
1 involving a for-profit corporation as the acquiree and a
2 not-for-profit corporation as the acquiror. The Board shall
3 review all proposed conversions involving a for-profit
4 corporation as the acquiree and a not-for-profit corporation
5 as the acquiror in accordance with the provisions for change
6 of effective control under this Act.
7 Section 75. Review process and review criteria by the
8 Illinois Health Facilities Planning Board - Conversions
9 limited to for-profit corporations. The Board shall review
10 all proposed conversions limited to for-profit corporations
11 in accordance with the provisions for change of effective
12 control under of this Act.
13 Section 80. Reports, use of experts, costs. The Illinois
14 Health Facilities Planning Board or the Attorney General may,
15 in carrying out their responsibilities under this Act, engage
16 experts or consultants including, but not limited to,
17 actuaries, investment bankers, accountants, attorneys and
18 industry analysts. All copies of reports prepared by experts
19 and consultants, and the costs associated therewith, shall be
20 made available to the parties to the conversion and the
21 public. All costs incurred under this Section shall be the
22 responsibility of one or more of the parties to the
23 conversion in an amount to be determined by the Attorney
24 General or the Director as he or she deems appropriate. No
25 application for a conversion made under this Act shall be
26 considered complete unless an agreement has been executed
27 with the Attorney General or the Director for the payment of
28 costs in accordance with this Section.
29 Section 85. Investigations-Notice to Attend-Court Order
30 to Appear-Contempt.
31 (a) The Director or the Attorney General may conduct
-31- LRB9111762DJcdB
1 investigations in discharging the duties required under this
2 Act. For purposes of any such investigation, the Director or
3 the Attorney General may require any person, agent, trustee,
4 fiduciary, consultant, institution, association, or
5 corporation directly related to the proposed conversion to
6 appear at such time and place as the Director or the Attorney
7 General may designate, and then and there under oath to
8 produce for the use of the Director and/or the Attorney
9 General any and all documents and other information relating
10 directly to the proposed conversion as the Director or the
11 Attorney General may require.
12 (b) Whenever the Director or the Attorney General deems
13 it necessary to require the attendance of any person as
14 provided in subsection (a) of this Section, the Director
15 and/or the Attorney General shall issue a notice to appear
16 setting forth the time and place when attendance is required
17 and shall cause the notice to be delivered or sent by
18 registered or certified mail to the person at least fourteen
19 (14) days prior to the date stated in the notice for the
20 appearance.
21 (c) If any person receiving notice pursuant to this
22 Section fails to appear or fails to produce documents or
23 information as requested, the Director or the Attorney
24 General may issue a notice to show cause and may commence
25 contempt proceedings in the circuit court of the county in
26 which the person was requested to appear or produce documents
27 or information. The court may order the person to comply with
28 the request of the Director and/or the Attorney General. Any
29 failure or refusal to comply with the order of the court may
30 be punished by the exercise of the court's contempt powers.
31 Section 90. Gag Rules Prohibited. A health care facility
32 shall not refuse to contract with or compensate for covered
33 services an otherwise eligible provider solely because that
-32- LRB9111762DJcdB
1 provider has in good faith communicated with one or more of
2 his or her patients regarding the provisions, terms, or
3 requirements for services of the health care provider's
4 products as they relate to the needs of that provider's
5 patients.
6 Section 95. Prior approval-Closings or significant
7 reduction of medical services.
8 (a) No health care facility emergency department or
9 primary care service which has been in existence for at least
10 one (1) year and which significantly serve uninsured or
11 underinsured individuals and families shall be eliminated or
12 significantly reduced without the prior approval of the
13 Director in accordance with this Section.
14 (b) Prior to the elimination or significant reduction of
15 an emergency room department or primary care service which
16 has been in existence for at least one (1) year and which
17 significantly serve uninsured or underinsured individuals and
18 families, the health care facility shall provide a written
19 plan to the Director describing the impact of such a proposal
20 on access to health care services for traditionally
21 underserved populations, the delivery of such services to the
22 affected community and other licensed health care facilities
23 and providers in the affected community or in the State;
24 (c) Notwithstanding any other provision of Illinois law,
25 the Director shall have the sole authority to review all
26 plans submitted under this Section and to issue a
27 determination within ninety (90) days, or the request shall
28 be deemed to have been approved. The Director may, if he or
29 she deems it appropriate, issue public notice and receive
30 written public comment for sixty (60) days following the date
31 of receipt of the proposal.
32 Section 100. Limits to Acquisitions-Community Benefits
-33- LRB9111762DJcdB
1 Requirements-Filings Prohibited.
2 (a) No for-profit corporation, or its subsidiaries or
3 affiliates, that applies for and receives approval for a
4 conversion of a health care facility in accordance with this
5 Act shall be permitted to apply for approval for a conversion
6 of a second health care facility in this State for a period
7 of three (3) years after the initial conversion is approved
8 and implemented.
9 (b) Notwithstanding subsection (a) of this Section a
10 for-profit corporation, together with its subsidiaries and
11 affiliates, may apply for and receive approval for a
12 conversion of two affiliated health care facilities in this
13 State provided that (i) one of the two health care
14 facilities' licenses was issued prior to the effective date
15 of this Act and (ii) that license involves a specialty
16 rehabilitation hospital that has a maximum of ninety beds. A
17 conversion undertaken under this subsection shall be
18 considered one conversion for purposes of this Section.
19 (c) If a for-profit corporation applies to hold, own, or
20 acquire an ownership or controlling interest greater than
21 twenty per cent (20%) in more than one health care facility
22 one year subsequent to the approval and implementation of a
23 prior license, all provisions of this Act must be met and, in
24 addition to the review process and criteria set forth herein,
25 the Department shall have the sole authority to determine, in
26 its sound discretion:
27 (1) whether the for-profit corporation provided
28 community benefits as required or promised in connection
29 with obtaining and holding a license or interest therein
30 during the previous license period;
31 (2) whether all terms and conditions of the prior
32 license have been met;
33 (3) whether all federal, state and local laws,
34 ordinances and regulations have been complied with
-34- LRB9111762DJcdB
1 relative to any prior license;
2 (4) whether the for-profit corporation planned,
3 implemented, monitored and reviewed a community benefit
4 program during the prior license period;
5 (5) whether the for-profit corporation provided an
6 appropriate amount of charity care necessary to maintain
7 or enhance a safe and accessible health care delivery
8 system in the affected community and the State;
9 (6) whether the for-profit corporation maintained,
10 enhanced or disrupted the essential medical services in
11 the affected community and the State; and
12 (7) whether the for-profit corporation demonstrated
13 a substantial linkage between the health care facility
14 and the affected community by providing one or more of
15 the following benefits: uncompensated care, charity care,
16 cash or in-kind donations to community programs,
17 education and training of professionals in community
18 health issues, relevant research initiatives or essential
19 but unprofitable medical services if needed in the
20 affected community.
21 (d) The Director may hold a public hearing to solicit
22 input to assess the performance of a for-profit corporation
23 or its affiliates or subsidiaries in providing community
24 benefits in the affected community or the State.
25 (e) The Director shall have the sole authority to deny a
26 for-profit corporation, its affiliates, subsidiaries, or
27 successors, permission to hold one or more than one license
28 and, for good cause, may prohibit a for-profit corporation or
29 its affiliates, subsidiaries or successors from filing an
30 application pursuant to this Act for a period not to exceed
31 ten years.
32 Section 105. Licensing Fees. Nothing contained in this
33 Act shall be deemed to affect any licensing fees set forth in
-35- LRB9111762DJcdB
1 the Ambulatory Surgical Treatment Center Act, the Hospital
2 Licensing Act, or the Nursing Home Care Act.
3 Section 110. No derogation of the Attorney General.
4 (a) No provision of this Act shall derogate from or limit
5 the common law or statutory authority of the Attorney
6 General, including the authority to investigate at any time
7 charitable trusts for the purpose of determining and
8 ascertaining whether they are being administered in
9 accordance with law and the terms and purposes thereof.
10 (b) No provision of this Act shall be construed as a
11 limitation on the application of the doctrine of cy pres or
12 any other legal doctrine applicable to charitable assets
13 and/or charitable trusts.
14 Section 115. Distribution of Proceeds from
15 Acquisition-Selection and establishment of an independent
16 foundation.
17 (a) In the event of the approval of a conversion
18 involving a not-for-profit corporation and a for-profit
19 corporation that results in a new entity as provided in
20 Section 30(c)(25)(i), it shall be required that the proceeds
21 from the sale and any endowments, restricted, unrestricted
22 and specific purpose funds be transferred to a charitable
23 foundation operated by a Board of Directors;
24 (b) The Governor shall appoint the initial Board of
25 Directors, approve, modify or reject proposed by-laws and/or
26 articles of incorporation provided by the parties to the
27 transaction and/or the initial Board of Directors;
28 (c) The Board of Directors shall consist of no fewer than
29 seven (7) and no more than eleven (11) members and the
30 Executive Director of the foundation, who shall serve
31 ex-officio. The Board may include one or more members with
32 experience in matters of finance, law, business, labor,
-36- LRB9111762DJcdB
1 investments, community purpose, charitable giving and health
2 care, and shall be representative of the diversity of the
3 population of the affected community. Not more than three (3)
4 members of the Board may be prior Board members of the
5 existing health care facility;
6 (d) The terms of Board members shall be four (4) years,
7 but the initial terms shall be two (2), three (3) and four
8 (4) years so that terms are staggered. Board members shall be
9 limited to serving two (2) full terms. The Board shall elect
10 a chairperson from among its members and other officers it
11 deems necessary. The Board members shall serve without
12 compensation;
13 (e) Control of the distribution of the proceeds of the
14 fund is vested solely in the Board of the foundation;
15 (f) Vacancies occurring on the Board shall be filled by a
16 majority vote of the remaining Board members.
17 Section 120. Powers and duties of the Board. The Board is
18 vested with full power, authority and jurisdiction over the
19 foundation and may perform all acts necessary or convenient
20 in the exercise of any power, authority or jurisdiction over
21 the foundation.
22 Section 125. Immunity of Board Members, Officers and
23 Employees. Members of the Board and officers and employees of
24 the foundation are immune from personal liability, either
25 jointly or severally, for any debt or obligation created or
26 incurred by the foundation unless such conduct is deemed to
27 be gross negligence or wanton, willful or reckless.
28 Section 130. Implementation.
29 (a) The Governor may take all steps necessary to
30 effectuate the purposes of this Act and the Board shall be
31 appointed no more than sixty (60) days after the completion
-37- LRB9111762DJcdB
1 of the conversion. The Board shall act promptly to appoint an
2 executive director, hire such staff as deemed necessary,
3 acquire necessary facilities and supplies to begin the
4 operation of the foundation;
5 (b) The Board shall conduct a public hearing to solicit
6 comments on the proposed mission statement, program agenda,
7 corporate structure and strategic planning. The Board shall
8 hold a public hearing within one hundred eighty (180) days of
9 establishment of the Board and on an annual basis thereafter.
10 Section 135. Annual Report. The Board shall submit an
11 annual report and a copy of Internal Revenue Service form 990
12 to the Governor, the Attorney General and the General
13 Assembly.
14 Section 140. General Powers and Limitations. For the
15 purpose of exercising the specific powers granted in this
16 chapter and effectuating the other purposes of this Act, the
17 foundation:
18 (a) may sue and be sued;
19 (b) may have a corporate seal and alter it at will;
20 (c) may make, amend, and repeal rules relating to the
21 conduct of the business of the foundation;
22 (d) may enter into contracts relating to the
23 administration of the foundation;
24 (e) may rent, lease, buy or sell property in its own name
25 and may construct or repair buildings necessary to provide
26 space for it operations;
27 (f) may hire personnel, consultants, and experts and set
28 salaries;
29 (g) may perform all other functions and exercise all
30 other powers that are necessary, appropriate or convenient to
31 administer the foundation.
-38- LRB9111762DJcdB
1 Section 145. Whistleblower Protections.
2 (a) No person subject to the provisions of this Act may
3 discharge, demote, threaten or otherwise discriminate against
4 any person or employee with respect to compensation, terms,
5 conditions, or privileges of employment as a reprisal because
6 the person or employer (or any person acting pursuant to the
7 request of the employee) provided or attempted to provide
8 information to the Director or his or her designee or to the
9 Attorney General or his or her designee regarding possible
10 violations of this Act.
11 (b) Any person or employee or former employee subject to
12 the provisions of this Act who believes that he or she has
13 been discharged or discriminated against in violation of
14 subsection (a) of this Section may file a civil action within
15 three (3) years of the date of such discharge or
16 discrimination.
17 (c) If a court of competent jurisdiction finds by a
18 preponderance of the evidence that a violation of this
19 Section has occurred, the court may grant such relief as it
20 may deem appropriate, including:
21 (1) Reinstatement to the employee's former position;
22 (2) Compensatory damages, costs and reasonable
23 attorneys fees;
24 (3) Other relief to remedy past discrimination.
25 (d) The protections of this Section shall not apply to
26 any employee or person who:
27 (1) Deliberately causes or participates in the
28 alleged violation of law or regulation; or
29 (2) Knowingly or recklessly provides substantially
30 false information to the Director or his or her designee.
31 Section 150. Failure to Comply-Penalties. If any person
32 knowingly violates or fails to comply with any provision of
33 this Act or willingly or knowingly gives false or incorrect
-39- LRB9111762DJcdB
1 information, the Director or the Attorney General may, after
2 notice and an opportunity for a fair and prompt hearing,
3 deny, suspend or revoke a license or, in lieu of suspension
4 or revocation of a license, may order the licensee to admit
5 no additional persons to the health care facility, to provide
6 health services to no additional persons through the health
7 care facility or to take corrective action necessary to
8 secure compliance under this Act. Nothing in this Section
9 shall be construed as precluding the prosecution of any
10 person who violates this Act under applicable State, County
11 or Municipal statutes, laws or ordinances.
12 Section 155. Powers of the Department. The Department may
13 adopt administrative rules consistent with this Act,
14 including measurable standards, as may be necessary to
15 accomplish the purposes of this Act.
16 Section 160. Powers of the Attorney General. The Attorney
17 General shall have the power to decide whether any
18 information required by this Act is confidential and/or
19 proprietary under 5 ILCS 140/7(g). Such determinations shall
20 be made prior to any public notice of an initial application
21 or any public availability of such information.
22 Section 165. Severability. If any provision of this Act
23 or the application thereof to any person or circumstances is
24 held invalid, such invalidity shall not affect other
25 provisions or applications of the chapter, which can be given
26 effect without the invalid provision or application, and to
27 this end the provisions of this Act are declared to be
28 severable.
29 Section 170. Community Benefits; Basic Requirements
30 (a) Each health care services provider that receives a
-40- LRB9111762DJcdB
1 license from this State shall provide community benefits to
2 the community or communities it serves.
3 (b) Within eighteen months from the day this Act is
4 signed into law, each health care institution shall develop
5 in collaboration with the community:
6 (1) An organizational mission statement that
7 identifies the institution's commitment to developing,
8 adopting, and implementing a community benefits program;
9 (2) A description of the process for approval of the
10 mission statement by the health care institution's
11 governing board;
12 (3) A declaration that senior management of the
13 health care institution will be responsible for oversight
14 and implementation of the community benefits plan;
15 (4) A community health assessment that evaluates the
16 health needs and resources of the community it serves;
17 (5) A community benefits plan designed to achieve
18 the following outcomes:
19 (a) increase access to health care for members of the
20 target community or communities;
21 (b) address critical health care needs of members of the
22 target community or communities; and
23 (c) foster measurable improvements in health for members
24 of the target community or communities.
25 Section 175. The Community Health Assessment
26 (a) Prior to adopting a community benefits plan every
27 health care institution subject to this Act shall identify
28 and prioritize the health needs of the community it serves.
29 It shall also identify health resources within the community.
30 As part of the assessment, the health care institution shall
31 solicit comment from and meet with community groups, local
32 government officials, health related organizations, and
33 health care providers, with particular attention given to
-41- LRB9111762DJcdB
1 those persons who are themselves underserved and those who
2 work with underserved populations.
3 (b) The Department shall compile available public health
4 data, including statistics on the /state's unmet health care
5 needs. In preparing its community health assessment, a health
6 care institution shall use available public health data.
7 (c) Health care institutions are encouraged to
8 collaborate with other health care institutions in conducting
9 community health assessments and may make use of existing
10 studies and plans in completing their own community health
11 assessments.
12 (d) Prior to finalizing the community health assessment,
13 each health care institution shall make available to the
14 public a copy of the community health assessment for review
15 and comment.
16 (e) Once finalized, the community health assessment shall
17 be updated at least every three years.
18 Section 180. The Community Benefits Plan.
19 (a) Every health care institution shall adopt, annually,
20 a plan for providing community benefits.
21 (b) The community benefits plan shall be drafted with
22 input from the community.
23 (c) The community benefits plan shall include, at a
24 minimum:
25 (1) a list of the services the health care
26 institution intends to provide in the following year to
27 address community health needs identified in the
28 community health assessment. The list of services shall
29 be categorized under:
30 (a) Free care;
31 (b) Other services for vulnerable populations;
32 (c) Health research, education and training programs;
33 (d) Community benefits that address public health needs;
-42- LRB9111762DJcdB
1 and
2 (e) Non-quantifiable services, such as local governance
3 and preferential hiring policies that benefit those who are
4 uninsured or underserved.
5 (2) a description of the target community or
6 communities that the plan is intended to benefit;
7 (3) an estimate of the economic value of the
8 community benefits that the health care entity intends to
9 provide under the plan;
10 (4) a report summarizing the process used to elicit
11 community participation in the community health
12 assessment and community benefits plan design, and
13 ongoing implementation and oversight;
14 (5) a list of individuals, organizations, and
15 government officials consulted during development of the
16 plan and a description of any provisions made for the
17 promotion of ongoing participation by community members
18 in the implementation of the plan;
19 (6) a statement identifying the health care needs
20 of the communities that were considered in developing the
21 plan;
22 (7) a statement describing the intended impact on
23 health outcomes attributable to the plan, including short
24 and long-term measurable goals and objectives;
25 (8) mechanisms to evaluate the plan's
26 effectiveness, including a method for soliciting comments
27 by community members; and
28 (9) the name and title of the person who shall be
29 responsible for implementing the community benefits plan.
30 (d) Each health care services provider shall submit its
31 community benefits plan to the Department prior to
32 implementation.
33 (e) Each health care services provider shall make its
34 community benefits plan available to the public for review
-43- LRB9111762DJcdB
1 and comment prior to implementation.
2 (f) Each insurer shall submit its community benefits
3 plan to the Administration prior to implementation.
4 (g) Each insurer shall make its community benefits plan
5 available to the public for review and comment prior to
6 implementation.
7 Section 185. Annual Report. Within 120 days of the end
8 of the health care services provider's fiscal year, each
9 health care services provider shall submit to the Department
10 an annual report detailing its community benefits efforts in
11 the preceding calendar year. The annual report shall include:
12 (a) the health care services provider's mission
13 statement;
14 (b) the amounts and types of community benefits provided
15 on a form to be developed by the Department;
16 (c) a statement of the health care services provider's
17 impact on health outcomes attributable to the plan, including
18 a description of the health care services provider's progress
19 toward meeting its short and long- term goals and objectives;
20 (d) an evaluation of the plan's effectiveness, including
21 a description of the method by which community members'
22 comments have been solicited; and
23 (e) the health care services provider's audited
24 financial statement.
25 Each health care services provider shall prepare a
26 statement announcing that its annual community benefits
27 report is available to the public. The statement shall be
28 posted in prominent locations throughout the health care
29 services provider, including the emergency room waiting area,
30 the admissions waiting area, and the business office. The
31 statement shall also be included in any written material that
32 discusses the admissions or free care criteria of the health
33 care services provider. A copy of the report shall be given
-44- LRB9111762DJcdB
1 free of charge to anyone who requests it.
2 Information provided shall be calculated in accordance
3 with generally accepted accounting standards. This
4 information shall be calculated for each individual health
5 care services provider within a system and not on an
6 aggregate basis, though both calculations may be submitted.
7 Each health services provider shall also file a calculation
8 of its cost-to-charge ratio with its annual report.
9 Any person who disagrees with a community benefits report
10 may file a dissenting report with the Department. Dissenting
11 reports shall be filed within sixty (60) days of the filing
12 of the community benefits report and shall become public
13 records.
14 Section 190. Free Care. Every health care services
15 provider that provides free care in full or partial
16 fulfillment of its community benefits obligation shall
17 develop a written notice describing its free care program and
18 explaining how to apply for free care. The notice shall be in
19 appropriate languages and conspicuously posted throughout the
20 health care services provider facility, including the general
21 waiting area, the emergency room waiting area, and the
22 business office. Every health care services provider that
23 provides free care in full or partial fulfillment of its
24 community benefits obligation shall report the value of such
25 care, provided that the value of such care does not include
26 any bad debt costs.
27 Section 195. Subsidized Care; Sliding Scale Fees. In
28 determining sliding scale fees or other payment schedules for
29 uninsured persons, health care services providers should base
30 such fees on the income of the uninsured person. Where the
31 sliding scale fee is below actual costs, the health care
32 services provider may include the difference in its community
-45- LRB9111762DJcdB
1 benefits computation.
2 Section 200. Monitoring and Enforcement of Health Care
3 Services Provider Community Benefits.
4 The Department shall assess a penalty of not less than
5 $1000/day against any health care services provider that
6 fails to file a community benefits plan or a timely annual
7 community benefits report.
8 The Department shall revoke or decline to renew the
9 license of any health care services provider that fails to
10 provide community benefits as required by this Act. The
11 Department may issue a provisional license for a period of up
12 to one year to any health care services provider that has had
13 its license revoked or not renewed.
14 Before taking any punitive action, the Department must
15 hold an adjudicative hearing, giving the affected parties at
16 least fourteen (14) days notice. Any person who filed a
17 dissenting report has standing to testify at the hearing. *
18 Any punitive measures taken by the Department following the
19 hearing shall be considered final action for purposes of
20 appeal.
21 Any final action by the Department shall be subject to
22 judicial review.
23 Section 205. The Department shall submit a report to the
24 Legislature on September 1 of each year that contains the
25 following:
26 (a) The name of each health care services provider, if
27 any, that did not file a community benefits report in the
28 preceding year;
29 (b) The name of each person who filed a dissenting
30 report, and the substance of the complaint;
31 (c) A list of the most common activities performed by
32 health care services providers in fulfillment of their
-46- LRB9111762DJcdB
1 community benefits obligation;
2 (d) The dollar value of the community benefits
3 activities performed by health care services providers,
4 expressed in both aggregate and individual terms; and
5 (e) The amount of net patient revenue for each health
6 care services provider. The report shall be available to the
7 public.
8 Section 210. The Department shall promulgate rules and
9 regulations necessary to effectuate this Act.
10 Section 999. Effective Date. This Act takes effect upon
11 becoming law.