HB1950 EnrolledLRB102 12590 KTG 17928 b

1    AN ACT concerning public aid.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4
ARTICLE 5.

 
5    Section 5-5. The Illinois Public Aid Code is amended by
6changing Sections 5-5e.1, 5A-2, 5A-5, 5A-8, 5A-10, 5A-12.7,
7and 5A-14 as follows:
 
8    (305 ILCS 5/5-5e.1)
9    Sec. 5-5e.1. Safety-Net Hospitals.
10    (a) A Safety-Net Hospital is an Illinois hospital that:
11        (1) is licensed by the Department of Public Health as
12    a general acute care or pediatric hospital; and
13        (2) is a disproportionate share hospital, as described
14    in Section 1923 of the federal Social Security Act, as
15    determined by the Department; and
16        (3) meets one of the following:
17            (A) has a MIUR of at least 40% and a charity
18        percent of at least 4%; or
19            (B) has a MIUR of at least 50%.
20    (b) Definitions. As used in this Section:
21        (1) "Charity percent" means the ratio of (i) the
22    hospital's charity charges for services provided to

 

 

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1    individuals without health insurance or another source of
2    third party coverage to (ii) the Illinois total hospital
3    charges, each as reported on the hospital's OBRA form.
4        (2) "MIUR" means Medicaid Inpatient Utilization Rate
5    and is defined as a fraction, the numerator of which is the
6    number of a hospital's inpatient days provided in the
7    hospital's fiscal year ending 3 years prior to the rate
8    year, to patients who, for such days, were eligible for
9    Medicaid under Title XIX of the federal Social Security
10    Act, 42 USC 1396a et seq., excluding those persons
11    eligible for medical assistance pursuant to 42 U.S.C.
12    1396a(a)(10)(A)(i)(VIII) as set forth in paragraph 18 of
13    Section 5-2 of this Article, and the denominator of which
14    is the total number of the hospital's inpatient days in
15    that same period, excluding those persons eligible for
16    medical assistance pursuant to 42 U.S.C.
17    1396a(a)(10)(A)(i)(VIII) as set forth in paragraph 18 of
18    Section 5-2 of this Article.
19        (3) "OBRA form" means form HFS-3834, OBRA '93 data
20    collection form, for the rate year.
21        (4) "Rate year" means the 12-month period beginning on
22    October 1.
23    (c) Beginning July 1, 2012 and ending on December 31, 2026
242022, a hospital that would have qualified for the rate year
25beginning October 1, 2011 or October 1, 2012 shall be a
26Safety-Net Hospital.

 

 

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1    (c-5) Beginning July 1, 2020 and ending on December 31,
22026, a hospital that would have qualified for the rate year
3beginning October 1, 2020 and was designated a federal rural
4referral center under 42 CFR 412.96 as of October 1, 2020 shall
5be a Safety-Net Hospital.
6    (d) No later than August 15 preceding the rate year, each
7hospital shall submit the OBRA form to the Department. Prior
8to October 1, the Department shall notify each hospital
9whether it has qualified as a Safety-Net Hospital.
10    (e) The Department may promulgate rules in order to
11implement this Section.
12    (f) Nothing in this Section shall be construed as limiting
13the ability of the Department to include the Safety-Net
14Hospitals in the hospital rate reform mandated by Section
1514-11 of this Code and implemented under Section 14-12 of this
16Code and by administrative rulemaking.
17(Source: P.A. 100-581, eff. 3-12-18; 101-650, eff. 7-7-20;
18101-669, eff. 4-2-21.)
 
19    (305 ILCS 5/5A-2)  (from Ch. 23, par. 5A-2)
20    (Section scheduled to be repealed on December 31, 2022)
21    Sec. 5A-2. Assessment.
22    (a)(1) Subject to Sections 5A-3 and 5A-10, for State
23fiscal years 2009 through 2018, or as long as continued under
24Section 5A-16, an annual assessment on inpatient services is
25imposed on each hospital provider in an amount equal to

 

 

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1$218.38 multiplied by the difference of the hospital's
2occupied bed days less the hospital's Medicare bed days,
3provided, however, that the amount of $218.38 shall be
4increased by a uniform percentage to generate an amount equal
5to 75% of the State share of the payments authorized under
6Section 5A-12.5, with such increase only taking effect upon
7the date that a State share for such payments is required under
8federal law. For the period of April through June 2015, the
9amount of $218.38 used to calculate the assessment under this
10paragraph shall, by emergency rule under subsection (s) of
11Section 5-45 of the Illinois Administrative Procedure Act, be
12increased by a uniform percentage to generate $20,250,000 in
13the aggregate for that period from all hospitals subject to
14the annual assessment under this paragraph.
15    (2) In addition to any other assessments imposed under
16this Article, effective July 1, 2016 and semi-annually
17thereafter through June 2018, or as provided in Section 5A-16,
18in addition to any federally required State share as
19authorized under paragraph (1), the amount of $218.38 shall be
20increased by a uniform percentage to generate an amount equal
21to 75% of the ACA Assessment Adjustment, as defined in
22subsection (b-6) of this Section.
23    For State fiscal years 2009 through 2018, or as provided
24in Section 5A-16, a hospital's occupied bed days and Medicare
25bed days shall be determined using the most recent data
26available from each hospital's 2005 Medicare cost report as

 

 

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1contained in the Healthcare Cost Report Information System
2file, for the quarter ending on December 31, 2006, without
3regard to any subsequent adjustments or changes to such data.
4If a hospital's 2005 Medicare cost report is not contained in
5the Healthcare Cost Report Information System, then the
6Illinois Department may obtain the hospital provider's
7occupied bed days and Medicare bed days from any source
8available, including, but not limited to, records maintained
9by the hospital provider, which may be inspected at all times
10during business hours of the day by the Illinois Department or
11its duly authorized agents and employees.
12    (3) Subject to Sections 5A-3, 5A-10, and 5A-16, for State
13fiscal years 2019 and 2020, an annual assessment on inpatient
14services is imposed on each hospital provider in an amount
15equal to $197.19 multiplied by the difference of the
16hospital's occupied bed days less the hospital's Medicare bed
17days. For State fiscal years 2019 and 2020, a hospital's
18occupied bed days and Medicare bed days shall be determined
19using the most recent data available from each hospital's 2015
20Medicare cost report as contained in the Healthcare Cost
21Report Information System file, for the quarter ending on
22March 31, 2017, without regard to any subsequent adjustments
23or changes to such data. If a hospital's 2015 Medicare cost
24report is not contained in the Healthcare Cost Report
25Information System, then the Illinois Department may obtain
26the hospital provider's occupied bed days and Medicare bed

 

 

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1days from any source available, including, but not limited to,
2records maintained by the hospital provider, which may be
3inspected at all times during business hours of the day by the
4Illinois Department or its duly authorized agents and
5employees. Notwithstanding any other provision in this
6Article, for a hospital provider that did not have a 2015
7Medicare cost report, but paid an assessment in State fiscal
8year 2018 on the basis of hypothetical data, that assessment
9amount shall be used for State fiscal years 2019 and 2020.
10    (4) Subject to Sections 5A-3 and 5A-10 and to subsection
11(b-8), for the period of July 1, 2020 through December 31, 2020
12and calendar years 2021 through 2026 and 2022, an annual
13assessment on inpatient services is imposed on each hospital
14provider in an amount equal to $221.50 multiplied by the
15difference of the hospital's occupied bed days less the
16hospital's Medicare bed days, provided however: for the period
17of July 1, 2020 through December 31, 2020, (i) the assessment
18shall be equal to 50% of the annual amount; and (ii) the amount
19of $221.50 shall be retroactively adjusted by a uniform
20percentage to generate an amount equal to 50% of the
21Assessment Adjustment, as defined in subsection (b-7). For the
22period of July 1, 2020 through December 31, 2020 and calendar
23years 2021 through 2026 and 2022, a hospital's occupied bed
24days and Medicare bed days shall be determined using the most
25recent data available from each hospital's 2015 Medicare cost
26report as contained in the Healthcare Cost Report Information

 

 

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1System file, for the quarter ending on March 31, 2017, without
2regard to any subsequent adjustments or changes to such data.
3If a hospital's 2015 Medicare cost report is not contained in
4the Healthcare Cost Report Information System, then the
5Illinois Department may obtain the hospital provider's
6occupied bed days and Medicare bed days from any source
7available, including, but not limited to, records maintained
8by the hospital provider, which may be inspected at all times
9during business hours of the day by the Illinois Department or
10its duly authorized agents and employees. Should the change in
11the assessment methodology for fiscal years 2021 through
12December 31, 2022 not be approved on or before June 30, 2020,
13the assessment and payments under this Article in effect for
14fiscal year 2020 shall remain in place until the new
15assessment is approved. If the assessment methodology for July
161, 2020 through December 31, 2022, is approved on or after July
171, 2020, it shall be retroactive to July 1, 2020, subject to
18federal approval and provided that the payments authorized
19under Section 5A-12.7 have the same effective date as the new
20assessment methodology. In giving retroactive effect to the
21assessment approved after June 30, 2020, credit toward the new
22assessment shall be given for any payments of the previous
23assessment for periods after June 30, 2020. Notwithstanding
24any other provision of this Article, for a hospital provider
25that did not have a 2015 Medicare cost report, but paid an
26assessment in State Fiscal Year 2020 on the basis of

 

 

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1hypothetical data, the data that was the basis for the 2020
2assessment shall be used to calculate the assessment under
3this paragraph until December 31, 2023. Beginning July 1, 2022
4and through December 31, 2024, a safety-net hospital that had
5a change of ownership in calendar year 2021, and whose
6inpatient utilization had decreased by 90% from the prior year
7and prior to the change of ownership, may be eligible to pay a
8tax based on hypothetical data based on a determination of
9financial distress by the Department.
10    (b) (Blank).
11    (b-5)(1) Subject to Sections 5A-3 and 5A-10, for the
12portion of State fiscal year 2012, beginning June 10, 2012
13through June 30, 2012, and for State fiscal years 2013 through
142018, or as provided in Section 5A-16, an annual assessment on
15outpatient services is imposed on each hospital provider in an
16amount equal to .008766 multiplied by the hospital's
17outpatient gross revenue, provided, however, that the amount
18of .008766 shall be increased by a uniform percentage to
19generate an amount equal to 25% of the State share of the
20payments authorized under Section 5A-12.5, with such increase
21only taking effect upon the date that a State share for such
22payments is required under federal law. For the period
23beginning June 10, 2012 through June 30, 2012, the annual
24assessment on outpatient services shall be prorated by
25multiplying the assessment amount by a fraction, the numerator
26of which is 21 days and the denominator of which is 365 days.

 

 

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1For the period of April through June 2015, the amount of
2.008766 used to calculate the assessment under this paragraph
3shall, by emergency rule under subsection (s) of Section 5-45
4of the Illinois Administrative Procedure Act, be increased by
5a uniform percentage to generate $6,750,000 in the aggregate
6for that period from all hospitals subject to the annual
7assessment under this paragraph.
8    (2) In addition to any other assessments imposed under
9this Article, effective July 1, 2016 and semi-annually
10thereafter through June 2018, in addition to any federally
11required State share as authorized under paragraph (1), the
12amount of .008766 shall be increased by a uniform percentage
13to generate an amount equal to 25% of the ACA Assessment
14Adjustment, as defined in subsection (b-6) of this Section.
15    For the portion of State fiscal year 2012, beginning June
1610, 2012 through June 30, 2012, and State fiscal years 2013
17through 2018, or as provided in Section 5A-16, a hospital's
18outpatient gross revenue shall be determined using the most
19recent data available from each hospital's 2009 Medicare cost
20report as contained in the Healthcare Cost Report Information
21System file, for the quarter ending on June 30, 2011, without
22regard to any subsequent adjustments or changes to such data.
23If a hospital's 2009 Medicare cost report is not contained in
24the Healthcare Cost Report Information System, then the
25Department may obtain the hospital provider's outpatient gross
26revenue from any source available, including, but not limited

 

 

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1to, records maintained by the hospital provider, which may be
2inspected at all times during business hours of the day by the
3Department or its duly authorized agents and employees.
4    (3) Subject to Sections 5A-3, 5A-10, and 5A-16, for State
5fiscal years 2019 and 2020, an annual assessment on outpatient
6services is imposed on each hospital provider in an amount
7equal to .01358 multiplied by the hospital's outpatient gross
8revenue. For State fiscal years 2019 and 2020, a hospital's
9outpatient gross revenue shall be determined using the most
10recent data available from each hospital's 2015 Medicare cost
11report as contained in the Healthcare Cost Report Information
12System file, for the quarter ending on March 31, 2017, without
13regard to any subsequent adjustments or changes to such data.
14If a hospital's 2015 Medicare cost report is not contained in
15the Healthcare Cost Report Information System, then the
16Department may obtain the hospital provider's outpatient gross
17revenue from any source available, including, but not limited
18to, records maintained by the hospital provider, which may be
19inspected at all times during business hours of the day by the
20Department or its duly authorized agents and employees.
21Notwithstanding any other provision in this Article, for a
22hospital provider that did not have a 2015 Medicare cost
23report, but paid an assessment in State fiscal year 2018 on the
24basis of hypothetical data, that assessment amount shall be
25used for State fiscal years 2019 and 2020.
26    (4) Subject to Sections 5A-3 and 5A-10 and to subsection

 

 

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1(b-8), for the period of July 1, 2020 through December 31, 2020
2and calendar years 2021 through 2026 and 2022, an annual
3assessment on outpatient services is imposed on each hospital
4provider in an amount equal to .01525 multiplied by the
5hospital's outpatient gross revenue, provided however: (i) for
6the period of July 1, 2020 through December 31, 2020, the
7assessment shall be equal to 50% of the annual amount; and (ii)
8the amount of .01525 shall be retroactively adjusted by a
9uniform percentage to generate an amount equal to 50% of the
10Assessment Adjustment, as defined in subsection (b-7). For the
11period of July 1, 2020 through December 31, 2020 and calendar
12years 2021 through 2026 and 2022, a hospital's outpatient
13gross revenue shall be determined using the most recent data
14available from each hospital's 2015 Medicare cost report as
15contained in the Healthcare Cost Report Information System
16file, for the quarter ending on March 31, 2017, without regard
17to any subsequent adjustments or changes to such data. If a
18hospital's 2015 Medicare cost report is not contained in the
19Healthcare Cost Report Information System, then the Illinois
20Department may obtain the hospital provider's outpatient
21revenue data from any source available, including, but not
22limited to, records maintained by the hospital provider, which
23may be inspected at all times during business hours of the day
24by the Illinois Department or its duly authorized agents and
25employees. Should the change in the assessment methodology
26above for fiscal years 2021 through calendar year 2022 not be

 

 

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1approved prior to July 1, 2020, the assessment and payments
2under this Article in effect for fiscal year 2020 shall remain
3in place until the new assessment is approved. If the change in
4the assessment methodology above for July 1, 2020 through
5December 31, 2022, is approved after June 30, 2020, it shall
6have a retroactive effective date of July 1, 2020, subject to
7federal approval and provided that the payments authorized
8under Section 12A-7 have the same effective date as the new
9assessment methodology. In giving retroactive effect to the
10assessment approved after June 30, 2020, credit toward the new
11assessment shall be given for any payments of the previous
12assessment for periods after June 30, 2020. Notwithstanding
13any other provision of this Article, for a hospital provider
14that did not have a 2015 Medicare cost report, but paid an
15assessment in State Fiscal Year 2020 on the basis of
16hypothetical data, the data that was the basis for the 2020
17assessment shall be used to calculate the assessment under
18this paragraph until December 31, 2023. Beginning July 1, 2022
19and through December 31, 2024, a safety-net hospital that had
20a change of ownership in calendar year 2021, and whose
21inpatient utilization had decreased by 90% from the prior year
22and prior to the change of ownership, may be eligible to pay a
23tax based on hypothetical data based on a determination of
24financial distress by the Department.
25    (b-6)(1) As used in this Section, "ACA Assessment
26Adjustment" means:

 

 

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1        (A) For the period of July 1, 2016 through December
2    31, 2016, the product of .19125 multiplied by the sum of
3    the fee-for-service payments to hospitals as authorized
4    under Section 5A-12.5 and the adjustments authorized under
5    subsection (t) of Section 5A-12.2 to managed care
6    organizations for hospital services due and payable in the
7    month of April 2016 multiplied by 6.
8        (B) For the period of January 1, 2017 through June 30,
9    2017, the product of .19125 multiplied by the sum of the
10    fee-for-service payments to hospitals as authorized under
11    Section 5A-12.5 and the adjustments authorized under
12    subsection (t) of Section 5A-12.2 to managed care
13    organizations for hospital services due and payable in the
14    month of October 2016 multiplied by 6, except that the
15    amount calculated under this subparagraph (B) shall be
16    adjusted, either positively or negatively, to account for
17    the difference between the actual payments issued under
18    Section 5A-12.5 for the period beginning July 1, 2016
19    through December 31, 2016 and the estimated payments due
20    and payable in the month of April 2016 multiplied by 6 as
21    described in subparagraph (A).
22        (C) For the period of July 1, 2017 through December
23    31, 2017, the product of .19125 multiplied by the sum of
24    the fee-for-service payments to hospitals as authorized
25    under Section 5A-12.5 and the adjustments authorized under
26    subsection (t) of Section 5A-12.2 to managed care

 

 

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1    organizations for hospital services due and payable in the
2    month of April 2017 multiplied by 6, except that the
3    amount calculated under this subparagraph (C) shall be
4    adjusted, either positively or negatively, to account for
5    the difference between the actual payments issued under
6    Section 5A-12.5 for the period beginning January 1, 2017
7    through June 30, 2017 and the estimated payments due and
8    payable in the month of October 2016 multiplied by 6 as
9    described in subparagraph (B).
10        (D) For the period of January 1, 2018 through June 30,
11    2018, the product of .19125 multiplied by the sum of the
12    fee-for-service payments to hospitals as authorized under
13    Section 5A-12.5 and the adjustments authorized under
14    subsection (t) of Section 5A-12.2 to managed care
15    organizations for hospital services due and payable in the
16    month of October 2017 multiplied by 6, except that:
17            (i) the amount calculated under this subparagraph
18        (D) shall be adjusted, either positively or
19        negatively, to account for the difference between the
20        actual payments issued under Section 5A-12.5 for the
21        period of July 1, 2017 through December 31, 2017 and
22        the estimated payments due and payable in the month of
23        April 2017 multiplied by 6 as described in
24        subparagraph (C); and
25            (ii) the amount calculated under this subparagraph
26        (D) shall be adjusted to include the product of .19125

 

 

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1        multiplied by the sum of the fee-for-service payments,
2        if any, estimated to be paid to hospitals under
3        subsection (b) of Section 5A-12.5.
4    (2) The Department shall complete and apply a final
5reconciliation of the ACA Assessment Adjustment prior to June
630, 2018 to account for:
7        (A) any differences between the actual payments issued
8    or scheduled to be issued prior to June 30, 2018 as
9    authorized in Section 5A-12.5 for the period of January 1,
10    2018 through June 30, 2018 and the estimated payments due
11    and payable in the month of October 2017 multiplied by 6 as
12    described in subparagraph (D); and
13        (B) any difference between the estimated
14    fee-for-service payments under subsection (b) of Section
15    5A-12.5 and the amount of such payments that are actually
16    scheduled to be paid.
17    The Department shall notify hospitals of any additional
18amounts owed or reduction credits to be applied to the June
192018 ACA Assessment Adjustment. This is to be considered the
20final reconciliation for the ACA Assessment Adjustment.
21    (3) Notwithstanding any other provision of this Section,
22if for any reason the scheduled payments under subsection (b)
23of Section 5A-12.5 are not issued in full by the final day of
24the period authorized under subsection (b) of Section 5A-12.5,
25funds collected from each hospital pursuant to subparagraph
26(D) of paragraph (1) and pursuant to paragraph (2),

 

 

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1attributable to the scheduled payments authorized under
2subsection (b) of Section 5A-12.5 that are not issued in full
3by the final day of the period attributable to each payment
4authorized under subsection (b) of Section 5A-12.5, shall be
5refunded.
6    (4) The increases authorized under paragraph (2) of
7subsection (a) and paragraph (2) of subsection (b-5) shall be
8limited to the federally required State share of the total
9payments authorized under Section 5A-12.5 if the sum of such
10payments yields an annualized amount equal to or less than
11$450,000,000, or if the adjustments authorized under
12subsection (t) of Section 5A-12.2 are found not to be
13actuarially sound; however, this limitation shall not apply to
14the fee-for-service payments described in subsection (b) of
15Section 5A-12.5.
16    (b-7)(1) As used in this Section, "Assessment Adjustment"
17means:
18        (A) For the period of July 1, 2020 through December
19    31, 2020, the product of .3853 multiplied by the total of
20    the actual payments made under subsections (c) through (k)
21    of Section 5A-12.7 attributable to the period, less the
22    total of the assessment imposed under subsections (a) and
23    (b-5) of this Section for the period.
24        (B) For each calendar quarter beginning on and after
25    January 1, 2021 through December 31, 2022, the product of
26    .3853 multiplied by the total of the actual payments made

 

 

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1    under subsections (c) through (k) of Section 5A-12.7
2    attributable to the period, less the total of the
3    assessment imposed under subsections (a) and (b-5) of this
4    Section for the period.
5        (C) Beginning on January 1, 2023, and each subsequent
6    July 1 and January 1, the product of .3853 multiplied by
7    the total of the actual payments made under subsections
8    (c) through (j) of Section 5A-12.7 attributable to the
9    6-month period immediately preceding the period to which
10    the adjustment applies, less the total of the assessment
11    imposed under subsections (a) and (b-5) of this Section
12    for the 6-month period immediately preceding the period to
13    which the adjustment applies.
14    (2) The Department shall calculate and notify each
15hospital of the total Assessment Adjustment and any additional
16assessment owed by the hospital or refund owed to the hospital
17on either a semi-annual or annual basis. Such notice shall be
18issued at least 30 days prior to any period in which the
19assessment will be adjusted. Any additional assessment owed by
20the hospital or refund owed to the hospital shall be uniformly
21applied to the assessment owed by the hospital in monthly
22installments for the subsequent semi-annual period or calendar
23year. If no assessment is owed in the subsequent year, any
24amount owed by the hospital or refund due to the hospital,
25shall be paid in a lump sum.
26    (3) The Department shall publish all details of the

 

 

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1Assessment Adjustment calculation performed each year on its
2website within 30 days of completing the calculation, and also
3submit the details of the Assessment Adjustment calculation as
4part of the Department's annual report to the General
5Assembly.
6    (b-8) Notwithstanding any other provision of this Article,
7the Department shall reduce the assessments imposed on each
8hospital under subsections (a) and (b-5) by the uniform
9percentage necessary to reduce the total assessment imposed on
10all hospitals by an aggregate amount of $240,000,000, with
11such reduction being applied by June 30, 2022. The assessment
12reduction required for each hospital under this subsection
13shall be forever waived, forgiven, and released by the
14Department.
15    (c) (Blank).
16    (d) Notwithstanding any of the other provisions of this
17Section, the Department is authorized to adopt rules to reduce
18the rate of any annual assessment imposed under this Section,
19as authorized by Section 5-46.2 of the Illinois Administrative
20Procedure Act.
21    (e) Notwithstanding any other provision of this Section,
22any plan providing for an assessment on a hospital provider as
23a permissible tax under Title XIX of the federal Social
24Security Act and Medicaid-eligible payments to hospital
25providers from the revenues derived from that assessment shall
26be reviewed by the Illinois Department of Healthcare and

 

 

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1Family Services, as the Single State Medicaid Agency required
2by federal law, to determine whether those assessments and
3hospital provider payments meet federal Medicaid standards. If
4the Department determines that the elements of the plan may
5meet federal Medicaid standards and a related State Medicaid
6Plan Amendment is prepared in a manner and form suitable for
7submission, that State Plan Amendment shall be submitted in a
8timely manner for review by the Centers for Medicare and
9Medicaid Services of the United States Department of Health
10and Human Services and subject to approval by the Centers for
11Medicare and Medicaid Services of the United States Department
12of Health and Human Services. No such plan shall become
13effective without approval by the Illinois General Assembly by
14the enactment into law of related legislation. Notwithstanding
15any other provision of this Section, the Department is
16authorized to adopt rules to reduce the rate of any annual
17assessment imposed under this Section. Any such rules may be
18adopted by the Department under Section 5-50 of the Illinois
19Administrative Procedure Act.
20(Source: P.A. 100-581, eff. 3-12-18; 101-10, eff. 6-5-19;
21101-650, eff. 7-7-20; reenacted by P.A. 101-655, eff.
223-12-21.)
 
23    (305 ILCS 5/5A-5)  (from Ch. 23, par. 5A-5)
24    Sec. 5A-5. Notice; penalty; maintenance of records.
25    (a) The Illinois Department shall send a notice of

 

 

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1assessment to every hospital provider subject to assessment
2under this Article. The notice of assessment shall notify the
3hospital of its assessment and shall be sent after receipt by
4the Department of notification from the Centers for Medicare
5and Medicaid Services of the U.S. Department of Health and
6Human Services that the payment methodologies required under
7this Article and, if necessary, the waiver granted under 42
8CFR 433.68 have been approved. The notice shall be on a form
9prepared by the Illinois Department and shall state the
10following:
11        (1) The name of the hospital provider.
12        (2) The address of the hospital provider's principal
13    place of business from which the provider engages in the
14    occupation of hospital provider in this State, and the
15    name and address of each hospital operated, conducted, or
16    maintained by the provider in this State.
17        (3) The occupied bed days, occupied bed days less
18    Medicare days, adjusted gross hospital revenue, or
19    outpatient gross revenue of the hospital provider
20    (whichever is applicable), the amount of assessment
21    imposed under Section 5A-2 for the State fiscal year for
22    which the notice is sent, and the amount of each
23    installment to be paid during the State fiscal year.
24        (4) (Blank).
25        (5) Other reasonable information as determined by the
26    Illinois Department.

 

 

HB1950 Enrolled- 21 -LRB102 12590 KTG 17928 b

1    (b) If a hospital provider conducts, operates, or
2maintains more than one hospital licensed by the Illinois
3Department of Public Health, the provider shall pay the
4assessment for each hospital separately.
5    (c) Notwithstanding any other provision in this Article,
6in the case of a person who ceases to conduct, operate, or
7maintain a hospital in respect of which the person is subject
8to assessment under this Article as a hospital provider, the
9assessment for the State fiscal year in which the cessation
10occurs shall be adjusted by multiplying the assessment
11computed under Section 5A-2 by a fraction, the numerator of
12which is the number of days in the year during which the
13provider conducts, operates, or maintains the hospital and the
14denominator of which is 365. Immediately upon ceasing to
15conduct, operate, or maintain a hospital, the person shall pay
16the assessment for the year as so adjusted (to the extent not
17previously paid).
18    (d) Notwithstanding any other provision in this Article, a
19provider who commences conducting, operating, or maintaining a
20hospital, upon notice by the Illinois Department, shall pay
21the assessment computed under Section 5A-2 and subsection (e)
22in installments on the due dates stated in the notice and on
23the regular installment due dates for the State fiscal year
24occurring after the due dates of the initial notice.
25    (e) Notwithstanding any other provision in this Article,
26for State fiscal years 2009 through 2018, in the case of a

 

 

HB1950 Enrolled- 22 -LRB102 12590 KTG 17928 b

1hospital provider that did not conduct, operate, or maintain a
2hospital in 2005, the assessment for that State fiscal year
3shall be computed on the basis of hypothetical occupied bed
4days for the full calendar year as determined by the Illinois
5Department. Notwithstanding any other provision in this
6Article, for the portion of State fiscal year 2012 beginning
7June 10, 2012 through June 30, 2012, and for State fiscal years
82013 through 2018, in the case of a hospital provider that did
9not conduct, operate, or maintain a hospital in 2009, the
10assessment under subsection (b-5) of Section 5A-2 for that
11State fiscal year shall be computed on the basis of
12hypothetical gross outpatient revenue for the full calendar
13year as determined by the Illinois Department.
14    Notwithstanding any other provision in this Article,
15beginning July 1, 2018 through December 31, 2026 for State
16fiscal years 2019 through 2024, in the case of a hospital
17provider that did not conduct, operate, or maintain a hospital
18in the year that is the basis of the calculation of the
19assessment under this Article, the assessment under paragraph
20(3) of subsection (a) of Section 5A-2 for the State fiscal year
21shall be computed on the basis of hypothetical occupied bed
22days for the full calendar year as determined by the Illinois
23Department, except that for a hospital provider that did not
24have a 2015 Medicare cost report, but paid an assessment in
25State fiscal year 2018 on the basis of hypothetical data, that
26assessment amount shall be used for State fiscal years 2019

 

 

HB1950 Enrolled- 23 -LRB102 12590 KTG 17928 b

1and 2020; however, for State fiscal year 2020, the assessment
2amount shall be increased by the proportion that it represents
3of the total annual assessment that is generated from all
4hospitals in order to generate $6,250,000 in the aggregate for
5that period from all hospitals subject to the annual
6assessment under this paragraph.
7    Notwithstanding any other provision in this Article,
8beginning July 1, 2018 through December 31, 2026 for State
9fiscal years 2019 through 2024, in the case of a hospital
10provider that did not conduct, operate, or maintain a hospital
11in the year that is the basis of the calculation of the
12assessment under this Article, the assessment under subsection
13(b-5) of Section 5A-2 for that State fiscal year shall be
14computed on the basis of hypothetical gross outpatient revenue
15for the full calendar year as determined by the Illinois
16Department, except that for a hospital provider that did not
17have a 2015 Medicare cost report, but paid an assessment in
18State fiscal year 2018 on the basis of hypothetical data, that
19assessment amount shall be used for State fiscal years 2019
20and 2020; however, for State fiscal year 2020, the assessment
21amount shall be increased by the proportion that it represents
22of the total annual assessment that is generated from all
23hospitals in order to generate $6,250,000 in the aggregate for
24that period from all hospitals subject to the annual
25assessment under this paragraph.
26    (f) Every hospital provider subject to assessment under

 

 

HB1950 Enrolled- 24 -LRB102 12590 KTG 17928 b

1this Article shall keep sufficient records to permit the
2determination of adjusted gross hospital revenue for the
3hospital's fiscal year. All such records shall be kept in the
4English language and shall, at all times during regular
5business hours of the day, be subject to inspection by the
6Illinois Department or its duly authorized agents and
7employees.
8    (g) The Illinois Department may, by rule, provide a
9hospital provider a reasonable opportunity to request a
10clarification or correction of any clerical or computational
11errors contained in the calculation of its assessment, but
12such corrections shall not extend to updating the cost report
13information used to calculate the assessment.
14    (h) (Blank).
15(Source: P.A. 99-78, eff. 7-20-15; 100-581, eff. 3-12-18.)
 
16    (305 ILCS 5/5A-8)  (from Ch. 23, par. 5A-8)
17    Sec. 5A-8. Hospital Provider Fund.
18    (a) There is created in the State Treasury the Hospital
19Provider Fund. Interest earned by the Fund shall be credited
20to the Fund. The Fund shall not be used to replace any moneys
21appropriated to the Medicaid program by the General Assembly.
22    (b) The Fund is created for the purpose of receiving
23moneys in accordance with Section 5A-6 and disbursing moneys
24only for the following purposes, notwithstanding any other
25provision of law:

 

 

HB1950 Enrolled- 25 -LRB102 12590 KTG 17928 b

1        (1) For making payments to hospitals as required under
2    this Code, under the Children's Health Insurance Program
3    Act, under the Covering ALL KIDS Health Insurance Act, and
4    under the Long Term Acute Care Hospital Quality
5    Improvement Transfer Program Act.
6        (2) For the reimbursement of moneys collected by the
7    Illinois Department from hospitals or hospital providers
8    through error or mistake in performing the activities
9    authorized under this Code.
10        (3) For payment of administrative expenses incurred by
11    the Illinois Department or its agent in performing
12    activities under this Code, under the Children's Health
13    Insurance Program Act, under the Covering ALL KIDS Health
14    Insurance Act, and under the Long Term Acute Care Hospital
15    Quality Improvement Transfer Program Act.
16        (4) For payments of any amounts which are reimbursable
17    to the federal government for payments from this Fund
18    which are required to be paid by State warrant.
19        (5) For making transfers, as those transfers are
20    authorized in the proceedings authorizing debt under the
21    Short Term Borrowing Act, but transfers made under this
22    paragraph (5) shall not exceed the principal amount of
23    debt issued in anticipation of the receipt by the State of
24    moneys to be deposited into the Fund.
25        (6) For making transfers to any other fund in the
26    State treasury, but transfers made under this paragraph

 

 

HB1950 Enrolled- 26 -LRB102 12590 KTG 17928 b

1    (6) shall not exceed the amount transferred previously
2    from that other fund into the Hospital Provider Fund plus
3    any interest that would have been earned by that fund on
4    the monies that had been transferred.
5        (6.5) For making transfers to the Healthcare Provider
6    Relief Fund, except that transfers made under this
7    paragraph (6.5) shall not exceed $60,000,000 in the
8    aggregate.
9        (7) For making transfers not exceeding the following
10    amounts, related to State fiscal years 2013 through 2018,
11    to the following designated funds:
12            Health and Human Services Medicaid Trust
13                Fund..............................$20,000,000
14            Long-Term Care Provider Fund..........$30,000,000
15            General Revenue Fund.................$80,000,000.
16    Transfers under this paragraph shall be made within 7 days
17    after the payments have been received pursuant to the
18    schedule of payments provided in subsection (a) of Section
19    5A-4.
20        (7.1) (Blank).
21        (7.5) (Blank).
22        (7.8) (Blank).
23        (7.9) (Blank).
24        (7.10) For State fiscal year 2014, for making
25    transfers of the moneys resulting from the assessment
26    under subsection (b-5) of Section 5A-2 and received from

 

 

HB1950 Enrolled- 27 -LRB102 12590 KTG 17928 b

1    hospital providers under Section 5A-4 and transferred into
2    the Hospital Provider Fund under Section 5A-6 to the
3    designated funds not exceeding the following amounts in
4    that State fiscal year:
5            Healthcare Provider Relief Fund......$100,000,000
6        Transfers under this paragraph shall be made within 7
7    days after the payments have been received pursuant to the
8    schedule of payments provided in subsection (a) of Section
9    5A-4.
10        The additional amount of transfers in this paragraph
11    (7.10), authorized by Public Act 98-651, shall be made
12    within 10 State business days after June 16, 2014 (the
13    effective date of Public Act 98-651). That authority shall
14    remain in effect even if Public Act 98-651 does not become
15    law until State fiscal year 2015.
16        (7.10a) For State fiscal years 2015 through 2018, for
17    making transfers of the moneys resulting from the
18    assessment under subsection (b-5) of Section 5A-2 and
19    received from hospital providers under Section 5A-4 and
20    transferred into the Hospital Provider Fund under Section
21    5A-6 to the designated funds not exceeding the following
22    amounts related to each State fiscal year:
23            Healthcare Provider Relief Fund......$50,000,000
24        Transfers under this paragraph shall be made within 7
25    days after the payments have been received pursuant to the
26    schedule of payments provided in subsection (a) of Section

 

 

HB1950 Enrolled- 28 -LRB102 12590 KTG 17928 b

1    5A-4.
2        (7.11) (Blank).
3        (7.12) For State fiscal year 2013, for increasing by
4    21/365ths the transfer of the moneys resulting from the
5    assessment under subsection (b-5) of Section 5A-2 and
6    received from hospital providers under Section 5A-4 for
7    the portion of State fiscal year 2012 beginning June 10,
8    2012 through June 30, 2012 and transferred into the
9    Hospital Provider Fund under Section 5A-6 to the
10    designated funds not exceeding the following amounts in
11    that State fiscal year:
12            Healthcare Provider Relief Fund.......$2,870,000
13        Since the federal Centers for Medicare and Medicaid
14    Services approval of the assessment authorized under
15    subsection (b-5) of Section 5A-2, received from hospital
16    providers under Section 5A-4 and the payment methodologies
17    to hospitals required under Section 5A-12.4 was not
18    received by the Department until State fiscal year 2014
19    and since the Department made retroactive payments during
20    State fiscal year 2014 related to the referenced period of
21    June 2012, the transfer authority granted in this
22    paragraph (7.12) is extended through the date that is 10
23    State business days after June 16, 2014 (the effective
24    date of Public Act 98-651).
25        (7.13) In addition to any other transfers authorized
26    under this Section, for State fiscal years 2017 and 2018,

 

 

HB1950 Enrolled- 29 -LRB102 12590 KTG 17928 b

1    for making transfers to the Healthcare Provider Relief
2    Fund of moneys collected from the ACA Assessment
3    Adjustment authorized under subsections (a) and (b-5) of
4    Section 5A-2 and paid by hospital providers under Section
5    5A-4 into the Hospital Provider Fund under Section 5A-6
6    for each State fiscal year. Timing of transfers to the
7    Healthcare Provider Relief Fund under this paragraph shall
8    be at the discretion of the Department, but no less
9    frequently than quarterly.
10        (7.14) For making transfers not exceeding the
11    following amounts, related to State fiscal years 2019 and
12    2020, to the following designated funds:
13            Health and Human Services Medicaid Trust
14                Fund..............................$20,000,000
15            Long-Term Care Provider Fund..........$30,000,000
16            Healthcare Provider Relief Fund.....$325,000,000.
17        Transfers under this paragraph shall be made within 7
18    days after the payments have been received pursuant to the
19    schedule of payments provided in subsection (a) of Section
20    5A-4.
21        (7.15) For making transfers not exceeding the
22    following amounts, related to State fiscal years 2023
23    through 2026 2021 and 2022, to the following designated
24    funds:
25            Health and Human Services Medicaid Trust
26                Fund.............................$20,000,000

 

 

HB1950 Enrolled- 30 -LRB102 12590 KTG 17928 b

1            Long-Term Care Provider Fund.........$30,000,000
2            Healthcare Provider Relief Fund.....$365,000,000
3        (7.16) For making transfers not exceeding the
4    following amounts, related to July 1, 2026 2022 to
5    December 31, 2026 2022, to the following designated funds:
6            Health and Human Services Medicaid Trust
7                Fund.............................$10,000,000
8            Long-Term Care Provider Fund.........$15,000,000
9            Healthcare Provider Relief Fund.....$182,500,000
10        (8) For making refunds to hospital providers pursuant
11    to Section 5A-10.
12        (9) For making payment to capitated managed care
13    organizations as described in subsections (s) and (t) of
14    Section 5A-12.2, subsection (r) of Section 5A-12.6, and
15    Section 5A-12.7 of this Code.
16    Disbursements from the Fund, other than transfers
17authorized under paragraphs (5) and (6) of this subsection,
18shall be by warrants drawn by the State Comptroller upon
19receipt of vouchers duly executed and certified by the
20Illinois Department.
21    (c) The Fund shall consist of the following:
22        (1) All moneys collected or received by the Illinois
23    Department from the hospital provider assessment imposed
24    by this Article.
25        (2) All federal matching funds received by the
26    Illinois Department as a result of expenditures made by

 

 

HB1950 Enrolled- 31 -LRB102 12590 KTG 17928 b

1    the Illinois Department that are attributable to moneys
2    deposited in the Fund.
3        (3) Any interest or penalty levied in conjunction with
4    the administration of this Article.
5        (3.5) As applicable, proceeds from surety bond
6    payments payable to the Department as referenced in
7    subsection (s) of Section 5A-12.2 of this Code.
8        (4) Moneys transferred from another fund in the State
9    treasury.
10        (5) All other moneys received for the Fund from any
11    other source, including interest earned thereon.
12    (d) (Blank).
13(Source: P.A. 100-581, eff. 3-12-18; 100-863, eff. 8-14-19;
14101-650, eff. 7-7-20.)
 
15    (305 ILCS 5/5A-10)  (from Ch. 23, par. 5A-10)
16    Sec. 5A-10. Applicability.
17    (a) The assessment imposed by subsection (a) of Section
185A-2 shall cease to be imposed and the Department's obligation
19to make payments shall immediately cease, and any moneys
20remaining in the Fund shall be refunded to hospital providers
21in proportion to the amounts paid by them, if:
22        (1) The payments to hospitals required under this
23    Article are not eligible for federal matching funds under
24    Title XIX or XXI of the Social Security Act;
25        (2) For State fiscal years 2009 through 2018, and as

 

 

HB1950 Enrolled- 32 -LRB102 12590 KTG 17928 b

1    provided in Section 5A-16, the Department of Healthcare
2    and Family Services adopts any administrative rule change
3    to reduce payment rates or alters any payment methodology
4    that reduces any payment rates made to operating hospitals
5    under the approved Title XIX or Title XXI State plan in
6    effect January 1, 2008 except for:
7            (A) any changes for hospitals described in
8        subsection (b) of Section 5A-3;
9            (B) any rates for payments made under this Article
10        V-A;
11            (C) any changes proposed in State plan amendment
12        transmittal numbers 08-01, 08-02, 08-04, 08-06, and
13        08-07;
14            (D) in relation to any admissions on or after
15        January 1, 2011, a modification in the methodology for
16        calculating outlier payments to hospitals for
17        exceptionally costly stays, for hospitals reimbursed
18        under the diagnosis-related grouping methodology in
19        effect on July 1, 2011; provided that the Department
20        shall be limited to one such modification during the
21        36-month period after the effective date of this
22        amendatory Act of the 96th General Assembly;
23            (E) any changes affecting hospitals authorized by
24        Public Act 97-689;
25            (F) any changes authorized by Section 14-12 of
26        this Code, or for any changes authorized under Section

 

 

HB1950 Enrolled- 33 -LRB102 12590 KTG 17928 b

1        5A-15 of this Code; or
2            (G) any changes authorized under Section 5-5b.1.
3    (b) The assessment imposed by Section 5A-2 shall not take
4effect or shall cease to be imposed, and the Department's
5obligation to make payments shall immediately cease, if the
6assessment is determined to be an impermissible tax under
7Title XIX of the Social Security Act. Moneys in the Hospital
8Provider Fund derived from assessments imposed prior thereto
9shall be disbursed in accordance with Section 5A-8 to the
10extent federal financial participation is not reduced due to
11the impermissibility of the assessments, and any remaining
12moneys shall be refunded to hospital providers in proportion
13to the amounts paid by them.
14    (c) The assessments imposed by subsection (b-5) of Section
155A-2 shall not take effect or shall cease to be imposed, the
16Department's obligation to make payments shall immediately
17cease, and any moneys remaining in the Fund shall be refunded
18to hospital providers in proportion to the amounts paid by
19them, if the payments to hospitals required under Section
205A-12.4 or Section 5A-12.6 are not eligible for federal
21matching funds under Title XIX of the Social Security Act.
22    (d) The assessments imposed by Section 5A-2 shall not take
23effect or shall cease to be imposed, the Department's
24obligation to make payments shall immediately cease, and any
25moneys remaining in the Fund shall be refunded to hospital
26providers in proportion to the amounts paid by them, if:

 

 

HB1950 Enrolled- 34 -LRB102 12590 KTG 17928 b

1        (1) for State fiscal years 2013 through 2018, and as
2    provided in Section 5A-16, the Department reduces any
3    payment rates to hospitals as in effect on May 1, 2012, or
4    alters any payment methodology as in effect on May 1,
5    2012, that has the effect of reducing payment rates to
6    hospitals, except for any changes affecting hospitals
7    authorized in Public Act 97-689 and any changes authorized
8    by Section 14-12 of this Code, and except for any changes
9    authorized under Section 5A-15, and except for any changes
10    authorized under Section 5-5b.1;
11        (2) for State fiscal years 2013 through 2018, and as
12    provided in Section 5A-16, the Department reduces any
13    supplemental payments made to hospitals below the amounts
14    paid for services provided in State fiscal year 2011 as
15    implemented by administrative rules adopted and in effect
16    on or prior to June 30, 2011, except for any changes
17    affecting hospitals authorized in Public Act 97-689 and
18    any changes authorized by Section 14-12 of this Code, and
19    except for any changes authorized under Section 5A-15, and
20    except for any changes authorized under Section 5-5b.1; or
21        (3) for State fiscal years 2015 through 2018, and as
22    provided in Section 5A-16, the Department reduces the
23    overall effective rate of reimbursement to hospitals below
24    the level authorized under Section 14-12 of this Code,
25    except for any changes under Section 14-12 or Section
26    5A-15 of this Code, and except for any changes authorized

 

 

HB1950 Enrolled- 35 -LRB102 12590 KTG 17928 b

1    under Section 5-5b.1.
2    (e) In State fiscal year 2019 through State fiscal year
32020, the assessments imposed under Section 5A-2 shall not
4take effect or shall cease to be imposed, the Department's
5obligation to make payments shall immediately cease, and any
6moneys remaining in the Fund shall be refunded to hospital
7providers in proportion to the amounts paid by them, if:
8        (1) the payments to hospitals required under Section
9    5A12.6 are not eligible for federal matching funds under
10    Title XIX of the Social Security Act; or
11        (2) the Department reduces the overall effective rate
12    of reimbursement to hospitals below the level authorized
13    under Section 14-12 of this Code, as in effect on December
14    31, 2017, except for any changes authorized under Sections
15    14-12 or Section 5A-15 of this Code, and except for any
16    changes authorized under changes to Sections 5A-12.2,
17    5A-12.4, 5A-12.5, 5A-12.6, and 14-12 made by Public Act
18    100-581.
19    (f) Beginning in State Fiscal Year 2021, the assessments
20imposed under Section 5A-2 shall not take effect or shall
21cease to be imposed, the Department's obligation to make
22payments shall immediately cease, and any moneys remaining in
23the Fund shall be refunded to hospital providers in proportion
24to the amounts paid by them, if:
25        (1) the payments to hospitals required under Section
26    5A-12.7 are not eligible for federal matching funds under

 

 

HB1950 Enrolled- 36 -LRB102 12590 KTG 17928 b

1    Title XIX of the Social Security Act; or
2        (2) the Department reduces the overall effective rate
3    of reimbursement to hospitals below the level authorized
4    under Section 14-12, as in effect on December 31, 2021
5    2019, except for any changes authorized under Sections
6    14-12 or 5A-15, and except for any changes authorized
7    under changes to Sections 5A-12.7 and 14-12 made by this
8    amendatory Act of the 101st General Assembly, and except
9    for any changes to Section 5A-12.7 made by this amendatory
10    Act of the 102nd General Assembly.
11(Source: P.A. 100-581, eff. 3-12-18; 101-650, eff. 7-7-20.)
 
12    (305 ILCS 5/5A-12.7)
13    (Section scheduled to be repealed on December 31, 2022)
14    Sec. 5A-12.7. Continuation of hospital access payments on
15and after July 1, 2020.
16    (a) To preserve and improve access to hospital services,
17for hospital services rendered on and after July 1, 2020, the
18Department shall, except for hospitals described in subsection
19(b) of Section 5A-3, make payments to hospitals or require
20capitated managed care organizations to make payments as set
21forth in this Section. Payments under this Section are not due
22and payable, however, until: (i) the methodologies described
23in this Section are approved by the federal government in an
24appropriate State Plan amendment or directed payment preprint;
25and (ii) the assessment imposed under this Article is

 

 

HB1950 Enrolled- 37 -LRB102 12590 KTG 17928 b

1determined to be a permissible tax under Title XIX of the
2Social Security Act. In determining the hospital access
3payments authorized under subsection (g) of this Section, if a
4hospital ceases to qualify for payments from the pool, the
5payments for all hospitals continuing to qualify for payments
6from such pool shall be uniformly adjusted to fully expend the
7aggregate net amount of the pool, with such adjustment being
8effective on the first day of the second month following the
9date the hospital ceases to receive payments from such pool.
10    (b) Amounts moved into claims-based rates and distributed
11in accordance with Section 14-12 shall remain in those
12claims-based rates.
13    (c) Graduate medical education.
14        (1) The calculation of graduate medical education
15    payments shall be based on the hospital's Medicare cost
16    report ending in Calendar Year 2018, as reported in the
17    Healthcare Cost Report Information System file, release
18    date September 30, 2019. An Illinois hospital reporting
19    intern and resident cost on its Medicare cost report shall
20    be eligible for graduate medical education payments.
21        (2) Each hospital's annualized Medicaid Intern
22    Resident Cost is calculated using annualized intern and
23    resident total costs obtained from Worksheet B Part I,
24    Columns 21 and 22 the sum of Lines 30-43, 50-76, 90-93,
25    96-98, and 105-112 multiplied by the percentage that the
26    hospital's Medicaid days (Worksheet S3 Part I, Column 7,

 

 

HB1950 Enrolled- 38 -LRB102 12590 KTG 17928 b

1    Lines 2, 3, 4, 14, 16-18, and 32) comprise of the
2    hospital's total days (Worksheet S3 Part I, Column 8,
3    Lines 14, 16-18, and 32).
4        (3) An annualized Medicaid indirect medical education
5    (IME) payment is calculated for each hospital using its
6    IME payments (Worksheet E Part A, Line 29, Column 1)
7    multiplied by the percentage that its Medicaid days
8    (Worksheet S3 Part I, Column 7, Lines 2, 3, 4, 14, 16-18,
9    and 32) comprise of its Medicare days (Worksheet S3 Part
10    I, Column 6, Lines 2, 3, 4, 14, and 16-18).
11        (4) For each hospital, its annualized Medicaid Intern
12    Resident Cost and its annualized Medicaid IME payment are
13    summed, and, except as capped at 120% of the average cost
14    per intern and resident for all qualifying hospitals as
15    calculated under this paragraph, is multiplied by the
16    applicable reimbursement factor as described in this
17    paragraph, 22.6% to determine the hospital's final
18    graduate medical education payment. Each hospital's
19    average cost per intern and resident shall be calculated
20    by summing its total annualized Medicaid Intern Resident
21    Cost plus its annualized Medicaid IME payment and dividing
22    that amount by the hospital's total Full Time Equivalent
23    Residents and Interns. If the hospital's average per
24    intern and resident cost is greater than 120% of the same
25    calculation for all qualifying hospitals, the hospital's
26    per intern and resident cost shall be capped at 120% of the

 

 

HB1950 Enrolled- 39 -LRB102 12590 KTG 17928 b

1    average cost for all qualifying hospitals.
2            (A) For the period of July 1, 2020 through
3        December 31, 2022, the applicable reimbursement factor
4        shall be 22.6%.
5            (B) For the period of January 1, 2023 through
6        December 31, 2026, the applicable reimbursement factor
7        shall be 35% for all qualified safety-net hospitals,
8        as defined in Section 5-5e.1 of this Code, and all
9        hospitals with 100 or more Full Time Equivalent
10        Residents and Interns, as reported on the hospital's
11        Medicare cost report ending in Calendar Year 2018, and
12        for all other qualified hospitals the applicable
13        reimbursement factor shall be 30%.
14    (d) Fee-for-service supplemental payments. For the period
15of July 1, 2020 through December 31, 2022, each Each Illinois
16hospital shall receive an annual payment equal to the amounts
17below, to be paid in 12 equal installments on or before the
18seventh State business day of each month, except that no
19payment shall be due within 30 days after the later of the date
20of notification of federal approval of the payment
21methodologies required under this Section or any waiver
22required under 42 CFR 433.68, at which time the sum of amounts
23required under this Section prior to the date of notification
24is due and payable.
25        (1) For critical access hospitals, $385 per covered
26    inpatient day contained in paid fee-for-service claims and

 

 

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1    $530 per paid fee-for-service outpatient claim for dates
2    of service in Calendar Year 2019 in the Department's
3    Enterprise Data Warehouse as of May 11, 2020.
4        (2) For safety-net hospitals, $960 per covered
5    inpatient day contained in paid fee-for-service claims and
6    $625 per paid fee-for-service outpatient claim for dates
7    of service in Calendar Year 2019 in the Department's
8    Enterprise Data Warehouse as of May 11, 2020.
9        (3) For long term acute care hospitals, $295 per
10    covered inpatient day contained in paid fee-for-service
11    claims for dates of service in Calendar Year 2019 in the
12    Department's Enterprise Data Warehouse as of May 11, 2020.
13        (4) For freestanding psychiatric hospitals, $125 per
14    covered inpatient day contained in paid fee-for-service
15    claims and $130 per paid fee-for-service outpatient claim
16    for dates of service in Calendar Year 2019 in the
17    Department's Enterprise Data Warehouse as of May 11, 2020.
18        (5) For freestanding rehabilitation hospitals, $355
19    per covered inpatient day contained in paid
20    fee-for-service claims for dates of service in Calendar
21    Year 2019 in the Department's Enterprise Data Warehouse as
22    of May 11, 2020.
23        (6) For all general acute care hospitals and high
24    Medicaid hospitals as defined in subsection (f), $350 per
25    covered inpatient day for dates of service in Calendar
26    Year 2019 contained in paid fee-for-service claims and

 

 

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1    $620 per paid fee-for-service outpatient claim in the
2    Department's Enterprise Data Warehouse as of May 11, 2020.
3        (7) Alzheimer's treatment access payment. Each
4    Illinois academic medical center or teaching hospital, as
5    defined in Section 5-5e.2 of this Code, that is identified
6    as the primary hospital affiliate of one of the Regional
7    Alzheimer's Disease Assistance Centers, as designated by
8    the Alzheimer's Disease Assistance Act and identified in
9    the Department of Public Health's Alzheimer's Disease
10    State Plan dated December 2016, shall be paid an
11    Alzheimer's treatment access payment equal to the product
12    of the qualifying hospital's State Fiscal Year 2018 total
13    inpatient fee-for-service days multiplied by the
14    applicable Alzheimer's treatment rate of $226.30 for
15    hospitals located in Cook County and $116.21 for hospitals
16    located outside Cook County.
17    (d-2) Fee-for-service supplemental payments. Beginning
18January 1, 2023, each Illinois hospital shall receive an
19annual payment equal to the amounts listed below, to be paid in
2012 equal installments on or before the seventh State business
21day of each month, except that no payment shall be due within
2230 days after the later of the date of notification of federal
23approval of the payment methodologies required under this
24Section or any waiver required under 42 CFR 433.68, at which
25time the sum of amounts required under this Section prior to
26the date of notification is due and payable. The Department

 

 

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1may adjust the rates in paragraphs (1) through (7) to comply
2with the federal upper payment limits, with such adjustments
3being determined so that the total estimated spending by
4hospital class, under such adjusted rates, remains
5substantially similar to the total estimated spending under
6the original rates set forth in this subsection.
7        (1) For critical access hospitals, as defined in
8    subsection (f), $750 per covered inpatient day contained
9    in paid fee-for-service claims and $750 per paid
10    fee-for-service outpatient claim for dates of service in
11    Calendar Year 2019 in the Department's Enterprise Data
12    Warehouse as of August 6, 2021.
13        (2) For safety-net hospitals, as described in
14    subsection (f), $1,350 per inpatient day contained in paid
15    fee-for-service claims and $1,350 per paid fee-for-service
16    outpatient claim for dates of service in Calendar Year
17    2019 in the Department's Enterprise Data Warehouse as of
18    August 6, 2021.
19        (3) For long term acute care hospitals, $550 per
20    covered inpatient day contained in paid fee-for-service
21    claims for dates of service in Calendar Year 2019 in the
22    Department's Enterprise Data Warehouse as of August 6,
23    2021.
24        (4) For freestanding psychiatric hospitals, $200 per
25    covered inpatient day contained in paid fee-for-service
26    claims and $200 per paid fee-for-service outpatient claim

 

 

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1    for dates of service in Calendar Year 2019 in the
2    Department's Enterprise Data Warehouse as of August 6,
3    2021.
4        (5) For freestanding rehabilitation hospitals, $550
5    per covered inpatient day contained in paid
6    fee-for-service claims and $125 per paid fee-for-service
7    outpatient claim for dates of service in Calendar Year
8    2019 in the Department's Enterprise Data Warehouse as of
9    August 6, 2021.
10        (6) For all general acute care hospitals and high
11    Medicaid hospitals as defined in subsection (f), $500 per
12    covered inpatient day for dates of service in Calendar
13    Year 2019 contained in paid fee-for-service claims and
14    $500 per paid fee-for-service outpatient claim in the
15    Department's Enterprise Data Warehouse as of August 6,
16    2021.
17        (7) For public hospitals, as defined in subsection
18    (f), $275 per covered inpatient day contained in paid
19    fee-for-service claims and $275 per paid fee-for-service
20    outpatient claim for dates of service in Calendar Year
21    2019 in the Department's Enterprise Data Warehouse as of
22    August 6, 2021.
23        (8) Alzheimer's treatment access payment. Each
24    Illinois academic medical center or teaching hospital, as
25    defined in Section 5-5e.2 of this Code, that is identified
26    as the primary hospital affiliate of one of the Regional

 

 

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1    Alzheimer's Disease Assistance Centers, as designated by
2    the Alzheimer's Disease Assistance Act and identified in
3    the Department of Public Health's Alzheimer's Disease
4    State Plan dated December 2016, shall be paid an
5    Alzheimer's treatment access payment equal to the product
6    of the qualifying hospital's Calendar Year 2019 total
7    inpatient fee-for-service days, in the Department's
8    Enterprise Data Warehouse as of August 6, 2021, multiplied
9    by the applicable Alzheimer's treatment rate of $244.37
10    for hospitals located in Cook County and $312.03 for
11    hospitals located outside Cook County.
12    (e) The Department shall require managed care
13organizations (MCOs) to make directed payments and
14pass-through payments according to this Section. Each calendar
15year, the Department shall require MCOs to pay the maximum
16amount out of these funds as allowed as pass-through payments
17under federal regulations. The Department shall require MCOs
18to make such pass-through payments as specified in this
19Section. The Department shall require the MCOs to pay the
20remaining amounts as directed Payments as specified in this
21Section. The Department shall issue payments to the
22Comptroller by the seventh business day of each month for all
23MCOs that are sufficient for MCOs to make the directed
24payments and pass-through payments according to this Section.
25The Department shall require the MCOs to make pass-through
26payments and directed payments using electronic funds

 

 

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1transfers (EFT), if the hospital provides the information
2necessary to process such EFTs, in accordance with directions
3provided monthly by the Department, within 7 business days of
4the date the funds are paid to the MCOs, as indicated by the
5"Paid Date" on the website of the Office of the Comptroller if
6the funds are paid by EFT and the MCOs have received directed
7payment instructions. If funds are not paid through the
8Comptroller by EFT, payment must be made within 7 business
9days of the date actually received by the MCO. The MCO will be
10considered to have paid the pass-through payments when the
11payment remittance number is generated or the date the MCO
12sends the check to the hospital, if EFT information is not
13supplied. If an MCO is late in paying a pass-through payment or
14directed payment as required under this Section (including any
15extensions granted by the Department), it shall pay a penalty,
16unless waived by the Department for reasonable cause, to the
17Department equal to 5% of the amount of the pass-through
18payment or directed payment not paid on or before the due date
19plus 5% of the portion thereof remaining unpaid on the last day
20of each 30-day period thereafter. Payments to MCOs that would
21be paid consistent with actuarial certification and enrollment
22in the absence of the increased capitation payments under this
23Section shall not be reduced as a consequence of payments made
24under this subsection. The Department shall publish and
25maintain on its website for a period of no less than 8 calendar
26quarters, the quarterly calculation of directed payments and

 

 

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1pass-through payments owed to each hospital from each MCO. All
2calculations and reports shall be posted no later than the
3first day of the quarter for which the payments are to be
4issued.
5    (f)(1) For purposes of allocating the funds included in
6capitation payments to MCOs, Illinois hospitals shall be
7divided into the following classes as defined in
8administrative rules:
9        (A) Beginning July 1, 2020 through December 31, 2022,
10    critical Critical access hospitals. Beginning January 1,
11    2023, "critical access hospital" means a hospital
12    designated by the Department of Public Health as a
13    critical access hospital, excluding any hospital meeting
14    the definition of a public hospital in subparagraph (F).
15        (B) Safety-net hospitals, except that stand-alone
16    children's hospitals that are not specialty children's
17    hospitals will not be included. For the calendar year
18    beginning January 1, 2023, and each calendar year
19    thereafter, assignment to the safety-net class shall be
20    based on the annual safety-net rate year beginning 15
21    months before the beginning of the first Payout Quarter of
22    the calendar year.
23        (C) Long term acute care hospitals.
24        (D) Freestanding psychiatric hospitals.
25        (E) Freestanding rehabilitation hospitals.
26        (F) Beginning January 1, 2023, "public hospital" means

 

 

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1    a hospital that is owned or operated by an Illinois
2    Government body or municipality, excluding a hospital
3    provider that is a State agency, a State university, or a
4    county with a population of 3,000,000 or more.
5        (G) (F) High Medicaid hospitals.
6            (i) As used in this Section, "high Medicaid
7        hospital" means a general acute care hospital that:
8                (I) For the payout periods July 1, 2020
9            through December 31, 2022, is not a safety-net
10            hospital or critical access hospital and that has
11            a Medicaid Inpatient Utilization Rate above 30% or
12            a hospital that had over 35,000 inpatient Medicaid
13            days during the applicable period. For the period
14            July 1, 2020 through December 31, 2020, the
15            applicable period for the Medicaid Inpatient
16            Utilization Rate (MIUR) is the rate year 2020 MIUR
17            and for the number of inpatient days it is State
18            fiscal year 2018. Beginning in calendar year 2021,
19            the Department shall use the most recently
20            determined MIUR, as defined in subsection (h) of
21            Section 5-5.02, and for the inpatient day
22            threshold, the State fiscal year ending 18 months
23            prior to the beginning of the calendar year. For
24            purposes of calculating MIUR under this Section,
25            children's hospitals and affiliated general acute
26            care hospitals shall be considered a single

 

 

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1            hospital.
2                (II) For the calendar year beginning January
3            1, 2023, and each calendar year thereafter, is not
4            a public hospital, safety-net hospital, or
5            critical access hospital and that qualifies as a
6            regional high volume hospital or is a hospital
7            that has a Medicaid Inpatient Utilization Rate
8            (MIUR) above 30%. As used in this item, "regional
9            high volume hospital" means a hospital which ranks
10            in the top 2 quartiles based on total hospital
11            services volume, of all eligible general acute
12            care hospitals, when ranked in descending order
13            based on total hospital services volume, within
14            the same Medicaid managed care region, as
15            designated by the Department, as of January 1,
16            2022. As used in this item, "total hospital
17            services volume" means the total of all Medical
18            Assistance hospital inpatient admissions plus all
19            Medical Assistance hospital outpatient visits. For
20            purposes of determining regional high volume
21            hospital inpatient admissions and outpatient
22            visits, the Department shall use dates of service
23            provided during State Fiscal Year 2020 for the
24            Payout Quarter beginning January 1, 2023. The
25            Department shall use dates of service from the
26            State fiscal year ending 18 month before the

 

 

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1            beginning of the first Payout Quarter of the
2            subsequent annual determination period.
3            (ii) For the calendar year beginning January 1,
4        2023, the Department shall use the Rate Year 2022
5        Medicaid inpatient utilization rate (MIUR), as defined
6        in subsection (h) of Section 5-5.02. For each
7        subsequent annual determination, the Department shall
8        use the MIUR applicable to the rate year ending
9        September 30 of the year preceding the beginning of
10        the calendar year.
11        (H) (G) General acute care hospitals. As used under
12    this Section, "general acute care hospitals" means all
13    other Illinois hospitals not identified in subparagraphs
14    (A) through (G) (F).
15    (2) Hospitals' qualification for each class shall be
16assessed prior to the beginning of each calendar year and the
17new class designation shall be effective January 1 of the next
18year. The Department shall publish by rule the process for
19establishing class determination.
20    (g) Fixed pool directed payments. Beginning July 1, 2020,
21the Department shall issue payments to MCOs which shall be
22used to issue directed payments to qualified Illinois
23safety-net hospitals and critical access hospitals on a
24monthly basis in accordance with this subsection. Prior to the
25beginning of each Payout Quarter beginning July 1, 2020, the
26Department shall use encounter claims data from the

 

 

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1Determination Quarter, accepted by the Department's Medicaid
2Management Information System for inpatient and outpatient
3services rendered by safety-net hospitals and critical access
4hospitals to determine a quarterly uniform per unit add-on for
5each hospital class.
6        (1) Inpatient per unit add-on. A quarterly uniform per
7    diem add-on shall be derived by dividing the quarterly
8    Inpatient Directed Payments Pool amount allocated to the
9    applicable hospital class by the total inpatient days
10    contained on all encounter claims received during the
11    Determination Quarter, for all hospitals in the class.
12            (A) Each hospital in the class shall have a
13        quarterly inpatient directed payment calculated that
14        is equal to the product of the number of inpatient days
15        attributable to the hospital used in the calculation
16        of the quarterly uniform class per diem add-on,
17        multiplied by the calculated applicable quarterly
18        uniform class per diem add-on of the hospital class.
19            (B) Each hospital shall be paid 1/3 of its
20        quarterly inpatient directed payment in each of the 3
21        months of the Payout Quarter, in accordance with
22        directions provided to each MCO by the Department.
23        (2) Outpatient per unit add-on. A quarterly uniform
24    per claim add-on shall be derived by dividing the
25    quarterly Outpatient Directed Payments Pool amount
26    allocated to the applicable hospital class by the total

 

 

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1    outpatient encounter claims received during the
2    Determination Quarter, for all hospitals in the class.
3            (A) Each hospital in the class shall have a
4        quarterly outpatient directed payment calculated that
5        is equal to the product of the number of outpatient
6        encounter claims attributable to the hospital used in
7        the calculation of the quarterly uniform class per
8        claim add-on, multiplied by the calculated applicable
9        quarterly uniform class per claim add-on of the
10        hospital class.
11            (B) Each hospital shall be paid 1/3 of its
12        quarterly outpatient directed payment in each of the 3
13        months of the Payout Quarter, in accordance with
14        directions provided to each MCO by the Department.
15        (3) Each MCO shall pay each hospital the Monthly
16    Directed Payment as identified by the Department on its
17    quarterly determination report.
18        (4) Definitions. As used in this subsection:
19            (A) "Payout Quarter" means each 3 month calendar
20        quarter, beginning July 1, 2020.
21            (B) "Determination Quarter" means each 3 month
22        calendar quarter, which ends 3 months prior to the
23        first day of each Payout Quarter.
24        (5) For the period July 1, 2020 through December 2020,
25    the following amounts shall be allocated to the following
26    hospital class directed payment pools for the quarterly

 

 

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1    development of a uniform per unit add-on:
2            (A) $2,894,500 for hospital inpatient services for
3        critical access hospitals.
4            (B) $4,294,374 for hospital outpatient services
5        for critical access hospitals.
6            (C) $29,109,330 for hospital inpatient services
7        for safety-net hospitals.
8            (D) $35,041,218 for hospital outpatient services
9        for safety-net hospitals.
10        (6) For the period January 1, 2023 through December
11    31, 2023, the Department shall establish the amounts that
12    shall be allocated to the hospital class directed payment
13    fixed pools identified in this paragraph for the quarterly
14    development of a uniform per unit add-on. The Department
15    shall establish such amounts so that the total amount of
16    payments to each hospital under this Section in calendar
17    year 2023 is projected to be substantially similar to the
18    total amount of such payments received by the hospital
19    under this Section in calendar year 2021, adjusted for
20    increased funding provided for fixed pool directed
21    payments under subsection (g) in calendar year 2022,
22    assuming that the volume and acuity of claims are held
23    constant. The Department shall publish the directed
24    payment fixed pool amounts to be established under this
25    paragraph on its website by November 15, 2022.
26            (A) Hospital inpatient services for critical

 

 

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1        access hospitals.
2            (B) Hospital outpatient services for critical
3        access hospitals.
4            (C) Hospital inpatient services for public
5        hospitals.
6            (D) Hospital outpatient services for public
7        hospitals.
8            (E) Hospital inpatient services for safety-net
9        hospitals.
10            (F) Hospital outpatient services for safety-net
11        hospitals.
12        (7) Semi-annual rate maintenance review. The
13    Department shall ensure that hospitals assigned to the
14    fixed pools in paragraph (6) are paid no less than 95% of
15    the annual initial rate for each 6-month period of each
16    annual payout period. For each calendar year, the
17    Department shall calculate the annual initial rate per day
18    and per visit for each fixed pool hospital class listed in
19    paragraph (6), by dividing the total of all applicable
20    inpatient or outpatient directed payments issued in the
21    preceding calendar year to the hospitals in each fixed
22    pool class for the calendar year, plus any increase
23    resulting from the annual adjustments described in
24    subsection (i), by the actual applicable total service
25    units for the preceding calendar year which were the basis
26    of the total applicable inpatient or outpatient directed

 

 

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1    payments issued to the hospitals in each fixed pool class
2    in the calendar year, except that for calendar year 2023,
3    the service units from calendar year 2021 shall be used.
4            (A) The Department shall calculate the effective
5        rate, per day and per visit, for the payout periods of
6        January to June and July to December of each year, for
7        each fixed pool listed in paragraph (6), by dividing
8        50% of the annual pool by the total applicable
9        reported service units for the 2 applicable
10        determination quarters.
11            (B) If the effective rate calculated in
12        subparagraph (A) is less than 95% of the annual
13        initial rate assigned to the class for each pool under
14        paragraph (6), the Department shall adjust the payment
15        for each hospital to a level equal to no less than 95%
16        of the annual initial rate, by issuing a retroactive
17        adjustment payment for the 6-month period under review
18        as identified in subparagraph (A).
19    (h) Fixed rate directed payments. Effective July 1, 2020,
20the Department shall issue payments to MCOs which shall be
21used to issue directed payments to Illinois hospitals not
22identified in paragraph (g) on a monthly basis. Prior to the
23beginning of each Payout Quarter beginning July 1, 2020, the
24Department shall use encounter claims data from the
25Determination Quarter, accepted by the Department's Medicaid
26Management Information System for inpatient and outpatient

 

 

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1services rendered by hospitals in each hospital class
2identified in paragraph (f) and not identified in paragraph
3(g). For the period July 1, 2020 through December 2020, the
4Department shall direct MCOs to make payments as follows:
5        (1) For general acute care hospitals an amount equal
6    to $1,750 multiplied by the hospital's category of service
7    20 case mix index for the determination quarter multiplied
8    by the hospital's total number of inpatient admissions for
9    category of service 20 for the determination quarter.
10        (2) For general acute care hospitals an amount equal
11    to $160 multiplied by the hospital's category of service
12    21 case mix index for the determination quarter multiplied
13    by the hospital's total number of inpatient admissions for
14    category of service 21 for the determination quarter.
15        (3) For general acute care hospitals an amount equal
16    to $80 multiplied by the hospital's category of service 22
17    case mix index for the determination quarter multiplied by
18    the hospital's total number of inpatient admissions for
19    category of service 22 for the determination quarter.
20        (4) For general acute care hospitals an amount equal
21    to $375 multiplied by the hospital's category of service
22    24 case mix index for the determination quarter multiplied
23    by the hospital's total number of category of service 24
24    paid EAPG (EAPGs) for the determination quarter.
25        (5) For general acute care hospitals an amount equal
26    to $240 multiplied by the hospital's category of service

 

 

HB1950 Enrolled- 56 -LRB102 12590 KTG 17928 b

1    27 and 28 case mix index for the determination quarter
2    multiplied by the hospital's total number of category of
3    service 27 and 28 paid EAPGs for the determination
4    quarter.
5        (6) For general acute care hospitals an amount equal
6    to $290 multiplied by the hospital's category of service
7    29 case mix index for the determination quarter multiplied
8    by the hospital's total number of category of service 29
9    paid EAPGs for the determination quarter.
10        (7) For high Medicaid hospitals an amount equal to
11    $1,800 multiplied by the hospital's category of service 20
12    case mix index for the determination quarter multiplied by
13    the hospital's total number of inpatient admissions for
14    category of service 20 for the determination quarter.
15        (8) For high Medicaid hospitals an amount equal to
16    $160 multiplied by the hospital's category of service 21
17    case mix index for the determination quarter multiplied by
18    the hospital's total number of inpatient admissions for
19    category of service 21 for the determination quarter.
20        (9) For high Medicaid hospitals an amount equal to $80
21    multiplied by the hospital's category of service 22 case
22    mix index for the determination quarter multiplied by the
23    hospital's total number of inpatient admissions for
24    category of service 22 for the determination quarter.
25        (10) For high Medicaid hospitals an amount equal to
26    $400 multiplied by the hospital's category of service 24

 

 

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1    case mix index for the determination quarter multiplied by
2    the hospital's total number of category of service 24 paid
3    EAPG outpatient claims for the determination quarter.
4        (11) For high Medicaid hospitals an amount equal to
5    $240 multiplied by the hospital's category of service 27
6    and 28 case mix index for the determination quarter
7    multiplied by the hospital's total number of category of
8    service 27 and 28 paid EAPGs for the determination
9    quarter.
10        (12) For high Medicaid hospitals an amount equal to
11    $290 multiplied by the hospital's category of service 29
12    case mix index for the determination quarter multiplied by
13    the hospital's total number of category of service 29 paid
14    EAPGs for the determination quarter.
15        (13) For long term acute care hospitals the amount of
16    $495 multiplied by the hospital's total number of
17    inpatient days for the determination quarter.
18        (14) For psychiatric hospitals the amount of $210
19    multiplied by the hospital's total number of inpatient
20    days for category of service 21 for the determination
21    quarter.
22        (15) For psychiatric hospitals the amount of $250
23    multiplied by the hospital's total number of outpatient
24    claims for category of service 27 and 28 for the
25    determination quarter.
26        (16) For rehabilitation hospitals the amount of $410

 

 

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1    multiplied by the hospital's total number of inpatient
2    days for category of service 22 for the determination
3    quarter.
4        (17) For rehabilitation hospitals the amount of $100
5    multiplied by the hospital's total number of outpatient
6    claims for category of service 29 for the determination
7    quarter.
8        (18) Effective for the Payout Quarter beginning
9    January 1, 2023, for the directed payments to hospitals
10    required under this subsection, the Department shall
11    establish the amounts that shall be used to calculate such
12    directed payments using the methodologies specified in
13    this paragraph. The Department shall use a single, uniform
14    rate, adjusted for acuity as specified in paragraphs (1)
15    through (12), for all categories of inpatient services
16    provided by each class of hospitals and a single uniform
17    rate, adjusted for acuity as specified in paragraphs (1)
18    through (12), for all categories of outpatient services
19    provided by each class of hospitals. The Department shall
20    establish such amounts so that the total amount of
21    payments to each hospital under this Section in calendar
22    year 2023 is projected to be substantially similar to the
23    total amount of such payments received by the hospital
24    under this Section in calendar year 2021, adjusted for
25    increased funding provided for fixed pool directed
26    payments under subsection (g) in calendar year 2022,

 

 

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1    assuming that the volume and acuity of claims are held
2    constant. The Department shall publish the directed
3    payment amounts to be established under this subsection on
4    its website by November 15, 2022.
5        (19) (18) Each hospital shall be paid 1/3 of their
6    quarterly inpatient and outpatient directed payment in
7    each of the 3 months of the Payout Quarter, in accordance
8    with directions provided to each MCO by the Department.
9        20 (19) Each MCO shall pay each hospital the Monthly
10    Directed Payment amount as identified by the Department on
11    its quarterly determination report.
12    Notwithstanding any other provision of this subsection, if
13the Department determines that the actual total hospital
14utilization data that is used to calculate the fixed rate
15directed payments is substantially different than anticipated
16when the rates in this subsection were initially determined
17(for unforeseeable circumstances (such as the COVID-19
18pandemic or some other public health emergency), the
19Department may adjust the rates specified in this subsection
20so that the total directed payments approximate the total
21spending amount anticipated when the rates were initially
22established.
23    Definitions. As used in this subsection:
24            (A) "Payout Quarter" means each calendar quarter,
25        beginning July 1, 2020.
26            (B) "Determination Quarter" means each calendar

 

 

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1        quarter which ends 3 months prior to the first day of
2        each Payout Quarter.
3            (C) "Case mix index" means a hospital specific
4        calculation. For inpatient claims the case mix index
5        is calculated each quarter by summing the relative
6        weight of all inpatient Diagnosis-Related Group (DRG)
7        claims for a category of service in the applicable
8        Determination Quarter and dividing the sum by the
9        number of sum total of all inpatient DRG admissions
10        for the category of service for the associated claims.
11        The case mix index for outpatient claims is calculated
12        each quarter by summing the relative weight of all
13        paid EAPGs in the applicable Determination Quarter and
14        dividing the sum by the sum total of paid EAPGs for the
15        associated claims.
16    (i) Beginning January 1, 2021, the rates for directed
17payments shall be recalculated in order to spend the
18additional funds for directed payments that result from
19reduction in the amount of pass-through payments allowed under
20federal regulations. The additional funds for directed
21payments shall be allocated proportionally to each class of
22hospitals based on that class' proportion of services.
23        (1) Beginning January 1, 2024, the fixed pool directed
24    payment amounts and the associated annual initial rates
25    referenced in paragraph (6) of subsection (f) for each
26    hospital class shall be uniformly increased by a ratio of

 

 

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1    not less than, the ratio of the total pass-through
2    reduction amount pursuant to paragraph (4) of subsection
3    (j), for the hospitals comprising the hospital fixed pool
4    directed payment class for the next calendar year, to the
5    total inpatient and outpatient directed payments for the
6    hospitals comprising the hospital fixed pool directed
7    payment class paid during the preceding calendar year.
8        (2) Beginning January 1, 2024, the fixed rates for the
9    directed payments referenced in paragraph (18) of
10    subsection (h) for each hospital class shall be uniformly
11    increased by a ratio of not less than, the ratio of the
12    total pass-through reduction amount pursuant to paragraph
13    (4) of subsection (j), for the hospitals comprising the
14    hospital directed payment class for the next calendar
15    year, to the total inpatient and outpatient directed
16    payments for the hospitals comprising the hospital fixed
17    rate directed payment class paid during the preceding
18    calendar year.
19    (j) Pass-through payments.
20        (1) For the period July 1, 2020 through December 31,
21    2020, the Department shall assign quarterly pass-through
22    payments to each class of hospitals equal to one-fourth of
23    the following annual allocations:
24            (A) $390,487,095 to safety-net hospitals.
25            (B) $62,553,886 to critical access hospitals.
26            (C) $345,021,438 to high Medicaid hospitals.

 

 

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1            (D) $551,429,071 to general acute care hospitals.
2            (E) $27,283,870 to long term acute care hospitals.
3            (F) $40,825,444 to freestanding psychiatric
4        hospitals.
5            (G) $9,652,108 to freestanding rehabilitation
6        hospitals.
7        (2) For the period of July 1, 2020 through December
8    31, 2020, the The pass-through payments shall at a minimum
9    ensure hospitals receive a total amount of monthly
10    payments under this Section as received in calendar year
11    2019 in accordance with this Article and paragraph (1) of
12    subsection (d-5) of Section 14-12, exclusive of amounts
13    received through payments referenced in subsection (b).
14        (3) For the calendar year beginning January 1, 2023,
15    the Department shall establish the annual pass-through
16    allocation to each class of hospitals and the pass-through
17    payments to each hospital so that the total amount of
18    payments to each hospital under this Section in calendar
19    year 2023 is projected to be substantially similar to the
20    total amount of such payments received by the hospital
21    under this Section in calendar year 2021, adjusted for
22    increased funding provided for fixed pool directed
23    payments under subsection (g) in calendar year 2022,
24    assuming that the volume and acuity of claims are held
25    constant. The Department shall publish the pass-through
26    allocation to each class and the pass-through payments to

 

 

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1    each hospital to be established under this subsection on
2    its website by November 15, 2022.
3        (4) (3) For the calendar years year beginning January
4    1, 2021, January 1, 2022, and January 1, 2024, and each
5    calendar year thereafter, each hospital's pass-through
6    payment amount shall be reduced proportionally to the
7    reduction of all pass-through payments required by federal
8    regulations.
9    (k) At least 30 days prior to each calendar year, the
10Department shall notify each hospital of changes to the
11payment methodologies in this Section, including, but not
12limited to, changes in the fixed rate directed payment rates,
13the aggregate pass-through payment amount for all hospitals,
14and the hospital's pass-through payment amount for the
15upcoming calendar year.
16    (l) Notwithstanding any other provisions of this Section,
17the Department may adopt rules to change the methodology for
18directed and pass-through payments as set forth in this
19Section, but only to the extent necessary to obtain federal
20approval of a necessary State Plan amendment or Directed
21Payment Preprint or to otherwise conform to federal law or
22federal regulation.
23    (m) As used in this subsection, "managed care
24organization" or "MCO" means an entity which contracts with
25the Department to provide services where payment for medical
26services is made on a capitated basis, excluding contracted

 

 

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1entities for dual eligible or Department of Children and
2Family Services youth populations.
3    (n) In order to address the escalating infant mortality
4rates among minority communities in Illinois, the State shall,
5subject to appropriation, create a pool of funding of at least
6$50,000,000 annually to be disbursed among safety-net
7hospitals that maintain perinatal designation from the
8Department of Public Health. The funding shall be used to
9preserve or enhance OB/GYN services or other specialty
10services at the receiving hospital, with the distribution of
11funding to be established by rule and with consideration to
12perinatal hospitals with safe birthing levels and quality
13metrics for healthy mothers and babies.
14    (o) In order to address the growing challenges of
15providing stable access to healthcare in rural Illinois,
16including perinatal services, behavioral healthcare including
17substance use disorder services (SUDs) and other specialty
18services, and to expand access to telehealth services among
19rural communities in Illinois, the Department of Healthcare
20and Family Services, subject to appropriation, shall
21administer a program to provide at least $10,000,000 in
22financial support annually to critical access hospitals for
23delivery of perinatal and OB/GYN services, behavioral
24healthcare including SUDS, other specialty services and
25telehealth services. The funding shall be used to preserve or
26enhance perinatal and OB/GYN services, behavioral healthcare

 

 

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1including SUDS, other specialty services, as well as the
2explanation of telehealth services by the receiving hospital,
3with the distribution of funding to be established by rule.
4    (p) For calendar year 2023, the final amounts, rates, and
5payments under subsections (c), (d-2), (g), (h), and (j) shall
6be established by the Department, so that the sum of the total
7estimated annual payments under subsections (c), (d-2), (g),
8(h), and (j) for each hospital class for calendar year 2023, is
9no less than:
10        (1) $858,260,000 to safety-net hospitals.
11        (2) $86,200,000 to critical access hospitals.
12        (3) $1,765,000,000 to high Medicaid hospitals.
13        (4) $673,860,000 to general acute care hospitals.
14        (5) $48,330,000 to long term acute care hospitals.
15        (6) $89,110,000 to freestanding psychiatric hospitals.
16        (7) $24,300,000 to freestanding rehabilitation
17    hospitals.
18        (8) $32,570,000 to public hospitals.
19(Source: P.A. 101-650, eff. 7-7-20; 102-4, eff. 4-27-21;
20102-16, eff. 6-17-21.)
 
21    (305 ILCS 5/5A-14)
22    Sec. 5A-14. Repeal of assessments and disbursements.
23    (a) Section 5A-2 is repealed on December 31, 2026 2022.
24    (b) Section 5A-12 is repealed on July 1, 2005.
25    (c) Section 5A-12.1 is repealed on July 1, 2008.

 

 

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1    (d) Section 5A-12.2 and Section 5A-12.4 are repealed on
2July 1, 2018, subject to Section 5A-16.
3    (e) Section 5A-12.3 is repealed on July 1, 2011.
4    (f) Section 5A-12.6 is repealed on July 1, 2020.
5    (g) Section 5A-12.7 is repealed on December 31, 2026 2022.
6(Source: P.A. 100-581, eff. 3-12-18; 101-650, eff. 7-7-20.)
 
7
ARTICLE 10.

 
8    Section 10-5. The Illinois Public Aid Code is amended by
9adding Section 5-45 as follows:
 
10    (305 ILCS 5/5-45 new)
11    Sec. 5-45. General acute care hospitals. A general acute
12care hospital is authorized to file a notice with the
13Department of Public Health and the Health Facilities and
14Services Review Board to establish an acute mental illness
15category of service in accordance with the Illinois Health
16Facilities Planning Act and add authorized acute mental
17illness beds if the following conditions are met:
18        (1) the general acute care hospital qualifies as a
19    safety-net hospital, as defined in Section 5-5e.1, as
20    determined by the Department of Healthcare and Family
21    Services at the time of filing the notice or for the year
22    immediately prior to the date of filing the notice;
23        (2) the notice seeks to establish no more than 24

 

 

HB1950 Enrolled- 67 -LRB102 12590 KTG 17928 b

1    authorized acute mental illness beds; and
2        (3) the notice seeks to reduce the number of
3    authorized beds in another category of service to offset
4    the number of authorized acute mental illness beds.
 
5
ARTICLE 15.

 
6    Section 15-5. The Illinois Public Aid Code is amended by
7changing Section 12-4.105 as follows:
 
8    (305 ILCS 5/12-4.105)
9    Sec. 12-4.105. Human poison control center; payment
10program. Subject to funding availability resulting from
11transfers made from the Hospital Provider Fund to the
12Healthcare Provider Relief Fund as authorized under this Code,
13for State fiscal year 2017 and State fiscal year 2018, and for
14each State fiscal year thereafter in which the assessment
15under Section 5A-2 is imposed, the Department of Healthcare
16and Family Services shall pay to the human poison control
17center designated under the Poison Control System Act an
18amount of not less than $3,000,000 for each of State fiscal
19years 2017 through 2020, and for State fiscal years year 2021
20through 2026 and 2022 an amount of not less than $3,750,000 and
21for the period July 1, 2026 2022 through December 31, 2026 2022
22an amount of not less than $1,875,000, if the human poison
23control center is in operation.

 

 

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1(Source: P.A. 100-581, eff. 3-12-18; 101-650, eff. 7-7-20.)
 
2
ARTICLE 20.

 
3    Section 20-5. The Department of Public Health Powers and
4Duties Law is amended by adding Section 2310-710 as follows:
 
5    (20 ILCS 2310/2310-710 new)
6    Sec. 2310-710. Safety-Net Hospital Health Equity and
7Access Leadership (HEAL) Grant Program.
8    (a) Findings. The General Assembly finds that there are
9communities in Illinois that experience significant health
10care disparities, as recently emphasized by the COVID-19
11pandemic, aggravated by social determinants of health and a
12lack of sufficient access to high quality healthcare
13resources, particularly community-based services, preventive
14care, obstetric care, chronic disease management, and
15specialty care. Safety-net hospitals, as defined under the
16Illinois Public Aid Code, serve as the anchors of the health
17care system for many of these communities. Safety-net
18hospitals not only care for their patients, they also are
19rooted in their communities by providing jobs and partnering
20with local organizations to help address the social
21determinants of health, such as food, housing, and
22transportation needs.
23    However, safety-net hospitals serve a significant number

 

 

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1of Medicare, Medicaid, and uninsured patients, and therefore,
2are heavily dependent on underfunded government payers, and
3are heavily burdened by uncompensated care. At the same time,
4the overall cost of providing care has increased substantially
5in recent years, driven by increasing costs for staffing,
6prescription drugs, technology, and infrastructure.
7    For all of these reasons, the General Assembly finds that
8the long term sustainability of safety-net hospitals is
9threatened. While the General Assembly is providing funding to
10the Department to be paid to support the expenses of specific
11safety-net hospitals in State Fiscal Year 2023, such annual,
12ad hoc funding is not a reliable and stable source of funding
13that will enable safety-net hospitals to develop strategies to
14achieve long term sustainability. Such annual, ad hoc funding
15also does not provide the State with transparency and
16accountability to ensure that such funding is being used
17effectively and efficiently to maximize the benefit to members
18of the community.
19    Therefore, it is the intent of the General Assembly that
20the Department of Public Health and the Department of
21Healthcare and Family Services jointly provide options and
22recommendations to the General Assembly by February 1, 2023,
23for the establishment of a permanent Safety-Net Hospital
24Health Equity and Access Leadership (HEAL) Grant Program, in
25accordance with this Section. It is the intention of the
26General Assembly that during State fiscal years 2024 through

 

 

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12029, the Safety-Net Hospital Health Equity and Access
2Leadership (HEAL) Grant Program shall be supported by an
3annual funding pool of up to $100,000,000, subject to
4appropriation.
5    (b) By February 1, 2023, the Department of Public Health
6and the Department of Healthcare and Family Services shall
7provide a joint report to the General Assembly on options and
8recommendations for the establishment of a permanent
9Safety-Net Hospital Health Equity and Access Leadership (HEAL)
10Grant Program to be administered by the State. For this
11report, "safety-net hospital" means a hospital identified by
12the Department of Healthcare and Family Services under Section
135-5e.1 of the Illinois Public Aid Code. The Departments of
14Public Health and Healthcare and Family Services may consult
15with the statewide association representing a majority of
16hospitals and safety-net hospitals on the report. The report
17may include, but need not be limited to:
18        (1) Criteria for a safety-net hospital to be eligible
19    for the program, such as:
20            (A) The hospital is a participating provider in at
21        least one Medicaid managed care plan.
22            (B) The hospital is located in a medically
23        underserved area.
24            (C) The hospital's Medicaid utilization rate (for
25        both inpatient and outpatient services).
26            (D) The hospital's Medicare utilization rate (for

 

 

HB1950 Enrolled- 71 -LRB102 12590 KTG 17928 b

1        both inpatient and outpatient services).
2            (E) The hospital's uncompensated care percentage.
3            (F) The hospital's role in providing access to
4        services, reducing health disparities, and improving
5        health equity in its service area.
6            (G) The hospital's performance on quality
7        indicators.
8        (2) Potential projects eligible for grant funds which
9    may include projects to reduce health disparities, advance
10    health equity, or improve access to or the quality of
11    healthcare services.
12        (3) Potential policies, standards, and procedures to
13    ensure accountability for the use of grant funds.
14        (4) Potential strategies to generate federal Medicaid
15    matching funds for expenditures under the program.
16        (5) Potential policies, processes, and procedures for
17    the administration of the program.
 
18
ARTICLE 25.

 
19    Section 25-5. The Illinois Public Aid Code is amended by
20changing Section 5-5.02 as follows:
 
21    (305 ILCS 5/5-5.02)  (from Ch. 23, par. 5-5.02)
22    Sec. 5-5.02. Hospital reimbursements.
23    (a) Reimbursement to hospitals; July 1, 1992 through

 

 

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1September 30, 1992. Notwithstanding any other provisions of
2this Code or the Illinois Department's Rules promulgated under
3the Illinois Administrative Procedure Act, reimbursement to
4hospitals for services provided during the period July 1, 1992
5through September 30, 1992, shall be as follows:
6        (1) For inpatient hospital services rendered, or if
7    applicable, for inpatient hospital discharges occurring,
8    on or after July 1, 1992 and on or before September 30,
9    1992, the Illinois Department shall reimburse hospitals
10    for inpatient services under the reimbursement
11    methodologies in effect for each hospital, and at the
12    inpatient payment rate calculated for each hospital, as of
13    June 30, 1992. For purposes of this paragraph,
14    "reimbursement methodologies" means all reimbursement
15    methodologies that pertain to the provision of inpatient
16    hospital services, including, but not limited to, any
17    adjustments for disproportionate share, targeted access,
18    critical care access and uncompensated care, as defined by
19    the Illinois Department on June 30, 1992.
20        (2) For the purpose of calculating the inpatient
21    payment rate for each hospital eligible to receive
22    quarterly adjustment payments for targeted access and
23    critical care, as defined by the Illinois Department on
24    June 30, 1992, the adjustment payment for the period July
25    1, 1992 through September 30, 1992, shall be 25% of the
26    annual adjustment payments calculated for each eligible

 

 

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1    hospital, as of June 30, 1992. The Illinois Department
2    shall determine by rule the adjustment payments for
3    targeted access and critical care beginning October 1,
4    1992.
5        (3) For the purpose of calculating the inpatient
6    payment rate for each hospital eligible to receive
7    quarterly adjustment payments for uncompensated care, as
8    defined by the Illinois Department on June 30, 1992, the
9    adjustment payment for the period August 1, 1992 through
10    September 30, 1992, shall be one-sixth of the total
11    uncompensated care adjustment payments calculated for each
12    eligible hospital for the uncompensated care rate year, as
13    defined by the Illinois Department, ending on July 31,
14    1992. The Illinois Department shall determine by rule the
15    adjustment payments for uncompensated care beginning
16    October 1, 1992.
17    (b) Inpatient payments. For inpatient services provided on
18or after October 1, 1993, in addition to rates paid for
19hospital inpatient services pursuant to the Illinois Health
20Finance Reform Act, as now or hereafter amended, or the
21Illinois Department's prospective reimbursement methodology,
22or any other methodology used by the Illinois Department for
23inpatient services, the Illinois Department shall make
24adjustment payments, in an amount calculated pursuant to the
25methodology described in paragraph (c) of this Section, to
26hospitals that the Illinois Department determines satisfy any

 

 

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1one of the following requirements:
2        (1) Hospitals that are described in Section 1923 of
3    the federal Social Security Act, as now or hereafter
4    amended, except that for rate year 2015 and after a
5    hospital described in Section 1923(b)(1)(B) of the federal
6    Social Security Act and qualified for the payments
7    described in subsection (c) of this Section for rate year
8    2014 provided the hospital continues to meet the
9    description in Section 1923(b)(1)(B) in the current
10    determination year; or
11        (2) Illinois hospitals that have a Medicaid inpatient
12    utilization rate which is at least one-half a standard
13    deviation above the mean Medicaid inpatient utilization
14    rate for all hospitals in Illinois receiving Medicaid
15    payments from the Illinois Department; or
16        (3) Illinois hospitals that on July 1, 1991 had a
17    Medicaid inpatient utilization rate, as defined in
18    paragraph (h) of this Section, that was at least the mean
19    Medicaid inpatient utilization rate for all hospitals in
20    Illinois receiving Medicaid payments from the Illinois
21    Department and which were located in a planning area with
22    one-third or fewer excess beds as determined by the Health
23    Facilities and Services Review Board, and that, as of June
24    30, 1992, were located in a federally designated Health
25    Manpower Shortage Area; or
26        (4) Illinois hospitals that:

 

 

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1            (A) have a Medicaid inpatient utilization rate
2        that is at least equal to the mean Medicaid inpatient
3        utilization rate for all hospitals in Illinois
4        receiving Medicaid payments from the Department; and
5            (B) also have a Medicaid obstetrical inpatient
6        utilization rate that is at least one standard
7        deviation above the mean Medicaid obstetrical
8        inpatient utilization rate for all hospitals in
9        Illinois receiving Medicaid payments from the
10        Department for obstetrical services; or
11        (5) Any children's hospital, which means a hospital
12    devoted exclusively to caring for children. A hospital
13    which includes a facility devoted exclusively to caring
14    for children shall be considered a children's hospital to
15    the degree that the hospital's Medicaid care is provided
16    to children if either (i) the facility devoted exclusively
17    to caring for children is separately licensed as a
18    hospital by a municipality prior to February 28, 2013;
19    (ii) the hospital has been designated by the State as a
20    Level III perinatal care facility, has a Medicaid
21    Inpatient Utilization rate greater than 55% for the rate
22    year 2003 disproportionate share determination, and has
23    more than 10,000 qualified children days as defined by the
24    Department in rulemaking; (iii) the hospital has been
25    designated as a Perinatal Level III center by the State as
26    of December 1, 2017, is a Pediatric Critical Care Center

 

 

HB1950 Enrolled- 76 -LRB102 12590 KTG 17928 b

1    designated by the State as of December 1, 2017 and has a
2    2017 Medicaid inpatient utilization rate equal to or
3    greater than 45%; or (iv) the hospital has been designated
4    as a Perinatal Level II center by the State as of December
5    1, 2017, has a 2017 Medicaid Inpatient Utilization Rate
6    greater than 70%, and has at least 10 pediatric beds as
7    listed on the IDPH 2015 calendar year hospital profile; or
8        (6) A hospital that reopens a previously closed
9    hospital facility within 4 3 calendar years of the
10    hospital facility's closure, if the previously closed
11    hospital facility qualified for payments under paragraph
12    (c) at the time of closure, until utilization data for the
13    new facility is available for the Medicaid inpatient
14    utilization rate calculation. For purposes of this clause,
15    a "closed hospital facility" shall include hospitals that
16    have been terminated from participation in the medical
17    assistance program in accordance with Section 12-4.25 of
18    this Code.
19    (c) Inpatient adjustment payments. The adjustment payments
20required by paragraph (b) shall be calculated based upon the
21hospital's Medicaid inpatient utilization rate as follows:
22        (1) hospitals with a Medicaid inpatient utilization
23    rate below the mean shall receive a per day adjustment
24    payment equal to $25;
25        (2) hospitals with a Medicaid inpatient utilization
26    rate that is equal to or greater than the mean Medicaid

 

 

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1    inpatient utilization rate but less than one standard
2    deviation above the mean Medicaid inpatient utilization
3    rate shall receive a per day adjustment payment equal to
4    the sum of $25 plus $1 for each one percent that the
5    hospital's Medicaid inpatient utilization rate exceeds the
6    mean Medicaid inpatient utilization rate;
7        (3) hospitals with a Medicaid inpatient utilization
8    rate that is equal to or greater than one standard
9    deviation above the mean Medicaid inpatient utilization
10    rate but less than 1.5 standard deviations above the mean
11    Medicaid inpatient utilization rate shall receive a per
12    day adjustment payment equal to the sum of $40 plus $7 for
13    each one percent that the hospital's Medicaid inpatient
14    utilization rate exceeds one standard deviation above the
15    mean Medicaid inpatient utilization rate;
16        (4) hospitals with a Medicaid inpatient utilization
17    rate that is equal to or greater than 1.5 standard
18    deviations above the mean Medicaid inpatient utilization
19    rate shall receive a per day adjustment payment equal to
20    the sum of $90 plus $2 for each one percent that the
21    hospital's Medicaid inpatient utilization rate exceeds 1.5
22    standard deviations above the mean Medicaid inpatient
23    utilization rate; and
24        (5) hospitals qualifying under clause (6) of paragraph
25    (b) shall have the rate assigned to the previously closed
26    hospital facility at the date of closure, until

 

 

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1    utilization data for the new facility is available for the
2    Medicaid inpatient utilization rate calculation.
3    (d) Supplemental adjustment payments. In addition to the
4adjustment payments described in paragraph (c), hospitals as
5defined in clauses (1) through (6) of paragraph (b), excluding
6county hospitals (as defined in subsection (c) of Section 15-1
7of this Code) and a hospital organized under the University of
8Illinois Hospital Act, shall be paid supplemental inpatient
9adjustment payments of $60 per day. For purposes of Title XIX
10of the federal Social Security Act, these supplemental
11adjustment payments shall not be classified as adjustment
12payments to disproportionate share hospitals.
13    (e) The inpatient adjustment payments described in
14paragraphs (c) and (d) shall be increased on October 1, 1993
15and annually thereafter by a percentage equal to the lesser of
16(i) the increase in the DRI hospital cost index for the most
17recent 12 month period for which data are available, or (ii)
18the percentage increase in the statewide average hospital
19payment rate over the previous year's statewide average
20hospital payment rate. The sum of the inpatient adjustment
21payments under paragraphs (c) and (d) to a hospital, other
22than a county hospital (as defined in subsection (c) of
23Section 15-1 of this Code) or a hospital organized under the
24University of Illinois Hospital Act, however, shall not exceed
25$275 per day; that limit shall be increased on October 1, 1993
26and annually thereafter by a percentage equal to the lesser of

 

 

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1(i) the increase in the DRI hospital cost index for the most
2recent 12-month period for which data are available or (ii)
3the percentage increase in the statewide average hospital
4payment rate over the previous year's statewide average
5hospital payment rate.
6    (f) Children's hospital inpatient adjustment payments. For
7children's hospitals, as defined in clause (5) of paragraph
8(b), the adjustment payments required pursuant to paragraphs
9(c) and (d) shall be multiplied by 2.0.
10    (g) County hospital inpatient adjustment payments. For
11county hospitals, as defined in subsection (c) of Section 15-1
12of this Code, there shall be an adjustment payment as
13determined by rules issued by the Illinois Department.
14    (h) For the purposes of this Section the following terms
15shall be defined as follows:
16        (1) "Medicaid inpatient utilization rate" means a
17    fraction, the numerator of which is the number of a
18    hospital's inpatient days provided in a given 12-month
19    period to patients who, for such days, were eligible for
20    Medicaid under Title XIX of the federal Social Security
21    Act, and the denominator of which is the total number of
22    the hospital's inpatient days in that same period.
23        (2) "Mean Medicaid inpatient utilization rate" means
24    the total number of Medicaid inpatient days provided by
25    all Illinois Medicaid-participating hospitals divided by
26    the total number of inpatient days provided by those same

 

 

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1    hospitals.
2        (3) "Medicaid obstetrical inpatient utilization rate"
3    means the ratio of Medicaid obstetrical inpatient days to
4    total Medicaid inpatient days for all Illinois hospitals
5    receiving Medicaid payments from the Illinois Department.
6    (i) Inpatient adjustment payment limit. In order to meet
7the limits of Public Law 102-234 and Public Law 103-66, the
8Illinois Department shall by rule adjust disproportionate
9share adjustment payments.
10    (j) University of Illinois Hospital inpatient adjustment
11payments. For hospitals organized under the University of
12Illinois Hospital Act, there shall be an adjustment payment as
13determined by rules adopted by the Illinois Department.
14    (k) The Illinois Department may by rule establish criteria
15for and develop methodologies for adjustment payments to
16hospitals participating under this Article.
17    (l) On and after July 1, 2012, the Department shall reduce
18any rate of reimbursement for services or other payments or
19alter any methodologies authorized by this Code to reduce any
20rate of reimbursement for services or other payments in
21accordance with Section 5-5e.
22    (m) The Department shall establish a cost-based
23reimbursement methodology for determining payments to
24hospitals for approved graduate medical education (GME)
25programs for dates of service on and after July 1, 2018.
26        (1) As used in this subsection, "hospitals" means the

 

 

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1    University of Illinois Hospital as defined in the
2    University of Illinois Hospital Act and a county hospital
3    in a county of over 3,000,000 inhabitants.
4        (2) An amendment to the Illinois Title XIX State Plan
5    defining GME shall maximize reimbursement, shall not be
6    limited to the education programs or special patient care
7    payments allowed under Medicare, and shall include:
8            (A) inpatient days;
9            (B) outpatient days;
10            (C) direct costs;
11            (D) indirect costs;
12            (E) managed care days;
13            (F) all stages of medical training and education
14        including students, interns, residents, and fellows
15        with no caps on the number of persons who may qualify;
16        and
17            (G) patient care payments related to the
18        complexities of treating Medicaid enrollees including
19        clinical and social determinants of health.
20        (3) The Department shall make all GME payments
21    directly to hospitals including such costs in support of
22    clients enrolled in Medicaid managed care entities.
23        (4) The Department shall promptly take all actions
24    necessary for reimbursement to be effective for dates of
25    service on and after July 1, 2018 including publishing all
26    appropriate public notices, amendments to the Illinois

 

 

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1    Title XIX State Plan, and adoption of administrative rules
2    if necessary.
3        (5) As used in this subsection, "managed care days"
4    means costs associated with services rendered to enrollees
5    of Medicaid managed care entities. "Medicaid managed care
6    entities" means any entity which contracts with the
7    Department to provide services paid for on a capitated
8    basis. "Medicaid managed care entities" includes a managed
9    care organization and a managed care community network.
10        (6) All payments under this Section are contingent
11    upon federal approval of changes to the Illinois Title XIX
12    State Plan, if that approval is required.
13        (7) The Department may adopt rules necessary to
14    implement Public Act 100-581 through the use of emergency
15    rulemaking in accordance with subsection (aa) of Section
16    5-45 of the Illinois Administrative Procedure Act. For
17    purposes of that Act, the General Assembly finds that the
18    adoption of rules to implement Public Act 100-581 is
19    deemed an emergency and necessary for the public interest,
20    safety, and welfare.
21(Source: P.A. 101-81, eff. 7-12-19; 102-682, eff. 12-10-21.)
 
22
ARTICLE 30.

 
23    Section 30-5. The Illinois Income Tax Act is amended by
24changing Section 223 as follows:
 

 

 

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1    (35 ILCS 5/223)
2    Sec. 223. Hospital credit.
3    (a) For tax years ending on or after December 31, 2012 and
4ending on or before December 31, 2027 December 31, 2022, a
5taxpayer that is the owner of a hospital licensed under the
6Hospital Licensing Act, but not including an organization that
7is exempt from federal income taxes under the Internal Revenue
8Code, is entitled to a credit against the taxes imposed under
9subsections (a) and (b) of Section 201 of this Act in an amount
10equal to the lesser of the amount of real property taxes paid
11during the tax year on real property used for hospital
12purposes during the prior tax year or the cost of free or
13discounted services provided during the tax year pursuant to
14the hospital's charitable financial assistance policy,
15measured at cost.
16    (b) If the taxpayer is a partnership or Subchapter S
17corporation, the credit is allowed to the partners or
18shareholders in accordance with the determination of income
19and distributive share of income under Sections 702 and 704
20and Subchapter S of the Internal Revenue Code. A transfer of
21this credit may be made by the taxpayer earning the credit
22within one year after the credit is earned in accordance with
23rules adopted by the Department. The Department shall
24prescribe rules to enforce and administer provisions of this
25Section. If the amount of the credit exceeds the tax liability

 

 

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1for the year, then the excess credit may be carried forward and
2applied to the tax liability of the 5 taxable years following
3the excess credit year. The credit shall be applied to the
4earliest year for which there is a tax liability. If there are
5credits from more than one tax year that are available to
6offset a liability, the earlier credit shall be applied first.
7In no event shall a credit under this Section reduce the
8taxpayer's liability to less than zero.
9(Source: P.A. 100-587, eff. 6-4-18.)
 
10    Section 30-10. The Use Tax Act is amended by changing
11Section 3-8 as follows:
 
12    (35 ILCS 105/3-8)
13    Sec. 3-8. Hospital exemption.
14    (a) Until July 1, 2027 2022, tangible personal property
15sold to or used by a hospital owner that owns one or more
16hospitals licensed under the Hospital Licensing Act or
17operated under the University of Illinois Hospital Act, or a
18hospital affiliate that is not already exempt under another
19provision of this Act and meets the criteria for an exemption
20under this Section, is exempt from taxation under this Act.
21    (b) A hospital owner or hospital affiliate satisfies the
22conditions for an exemption under this Section if the value of
23qualified services or activities listed in subsection (c) of
24this Section for the hospital year equals or exceeds the

 

 

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1relevant hospital entity's estimated property tax liability,
2without regard to any property tax exemption granted under
3Section 15-86 of the Property Tax Code, for the calendar year
4in which exemption or renewal of exemption is sought. For
5purposes of making the calculations required by this
6subsection (b), if the relevant hospital entity is a hospital
7owner that owns more than one hospital, the value of the
8services or activities listed in subsection (c) shall be
9calculated on the basis of only those services and activities
10relating to the hospital that includes the subject property,
11and the relevant hospital entity's estimated property tax
12liability shall be calculated only with respect to the
13properties comprising that hospital. In the case of a
14multi-state hospital system or hospital affiliate, the value
15of the services or activities listed in subsection (c) shall
16be calculated on the basis of only those services and
17activities that occur in Illinois and the relevant hospital
18entity's estimated property tax liability shall be calculated
19only with respect to its property located in Illinois.
20    (c) The following services and activities shall be
21considered for purposes of making the calculations required by
22subsection (b):
23        (1) Charity care. Free or discounted services provided
24    pursuant to the relevant hospital entity's financial
25    assistance policy, measured at cost, including discounts
26    provided under the Hospital Uninsured Patient Discount

 

 

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1    Act.
2        (2) Health services to low-income and underserved
3    individuals. Other unreimbursed costs of the relevant
4    hospital entity for providing without charge, paying for,
5    or subsidizing goods, activities, or services for the
6    purpose of addressing the health of low-income or
7    underserved individuals. Those activities or services may
8    include, but are not limited to: financial or in-kind
9    support to affiliated or unaffiliated hospitals, hospital
10    affiliates, community clinics, or programs that treat
11    low-income or underserved individuals; paying for or
12    subsidizing health care professionals who care for
13    low-income or underserved individuals; providing or
14    subsidizing outreach or educational services to low-income
15    or underserved individuals for disease management and
16    prevention; free or subsidized goods, supplies, or
17    services needed by low-income or underserved individuals
18    because of their medical condition; and prenatal or
19    childbirth outreach to low-income or underserved persons.
20        (3) Subsidy of State or local governments. Direct or
21    indirect financial or in-kind subsidies of State or local
22    governments by the relevant hospital entity that pay for
23    or subsidize activities or programs related to health care
24    for low-income or underserved individuals.
25        (4) Support for State health care programs for
26    low-income individuals. At the election of the hospital

 

 

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1    applicant for each applicable year, either (A) 10% of
2    payments to the relevant hospital entity and any hospital
3    affiliate designated by the relevant hospital entity
4    (provided that such hospital affiliate's operations
5    provide financial or operational support for or receive
6    financial or operational support from the relevant
7    hospital entity) under Medicaid or other means-tested
8    programs, including, but not limited to, General
9    Assistance, the Covering ALL KIDS Health Insurance Act,
10    and the State Children's Health Insurance Program or (B)
11    the amount of subsidy provided by the relevant hospital
12    entity and any hospital affiliate designated by the
13    relevant hospital entity (provided that such hospital
14    affiliate's operations provide financial or operational
15    support for or receive financial or operational support
16    from the relevant hospital entity) to State or local
17    government in treating Medicaid recipients and recipients
18    of means-tested programs, including but not limited to
19    General Assistance, the Covering ALL KIDS Health Insurance
20    Act, and the State Children's Health Insurance Program.
21    The amount of subsidy for purpose of this item (4) is
22    calculated in the same manner as unreimbursed costs are
23    calculated for Medicaid and other means-tested government
24    programs in the Schedule H of IRS Form 990 in effect on the
25    effective date of this amendatory Act of the 97th General
26    Assembly.

 

 

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1        (5) Dual-eligible subsidy. The amount of subsidy
2    provided to government by treating dual-eligible
3    Medicare/Medicaid patients. The amount of subsidy for
4    purposes of this item (5) is calculated by multiplying the
5    relevant hospital entity's unreimbursed costs for
6    Medicare, calculated in the same manner as determined in
7    the Schedule H of IRS Form 990 in effect on the effective
8    date of this amendatory Act of the 97th General Assembly,
9    by the relevant hospital entity's ratio of dual-eligible
10    patients to total Medicare patients.
11        (6) Relief of the burden of government related to
12    health care. Except to the extent otherwise taken into
13    account in this subsection, the portion of unreimbursed
14    costs of the relevant hospital entity attributable to
15    providing, paying for, or subsidizing goods, activities,
16    or services that relieve the burden of government related
17    to health care for low-income individuals. Such activities
18    or services shall include, but are not limited to,
19    providing emergency, trauma, burn, neonatal, psychiatric,
20    rehabilitation, or other special services; providing
21    medical education; and conducting medical research or
22    training of health care professionals. The portion of
23    those unreimbursed costs attributable to benefiting
24    low-income individuals shall be determined using the ratio
25    calculated by adding the relevant hospital entity's costs
26    attributable to charity care, Medicaid, other means-tested

 

 

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1    government programs, Medicare patients with disabilities
2    under age 65, and dual-eligible Medicare/Medicaid patients
3    and dividing that total by the relevant hospital entity's
4    total costs. Such costs for the numerator and denominator
5    shall be determined by multiplying gross charges by the
6    cost to charge ratio taken from the hospital's most
7    recently filed Medicare cost report (CMS 2252-10
8    Worksheet, Part I). In the case of emergency services, the
9    ratio shall be calculated using costs (gross charges
10    multiplied by the cost to charge ratio taken from the
11    hospital's most recently filed Medicare cost report (CMS
12    2252-10 Worksheet, Part I)) of patients treated in the
13    relevant hospital entity's emergency department.
14        (7) Any other activity by the relevant hospital entity
15    that the Department determines relieves the burden of
16    government or addresses the health of low-income or
17    underserved individuals.
18    (d) The hospital applicant shall include information in
19its exemption application establishing that it satisfies the
20requirements of subsection (b). For purposes of making the
21calculations required by subsection (b), the hospital
22applicant may for each year elect to use either (1) the value
23of the services or activities listed in subsection (e) for the
24hospital year or (2) the average value of those services or
25activities for the 3 fiscal years ending with the hospital
26year. If the relevant hospital entity has been in operation

 

 

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1for less than 3 completed fiscal years, then the latter
2calculation, if elected, shall be performed on a pro rata
3basis.
4    (e) For purposes of making the calculations required by
5this Section:
6        (1) particular services or activities eligible for
7    consideration under any of the paragraphs (1) through (7)
8    of subsection (c) may not be counted under more than one of
9    those paragraphs; and
10        (2) the amount of unreimbursed costs and the amount of
11    subsidy shall not be reduced by restricted or unrestricted
12    payments received by the relevant hospital entity as
13    contributions deductible under Section 170(a) of the
14    Internal Revenue Code.
15    (f) (Blank).
16    (g) Estimation of Exempt Property Tax Liability. The
17estimated property tax liability used for the determination in
18subsection (b) shall be calculated as follows:
19        (1) "Estimated property tax liability" means the
20    estimated dollar amount of property tax that would be
21    owed, with respect to the exempt portion of each of the
22    relevant hospital entity's properties that are already
23    fully or partially exempt, or for which an exemption in
24    whole or in part is currently being sought, and then
25    aggregated as applicable, as if the exempt portion of
26    those properties were subject to tax, calculated with

 

 

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1    respect to each such property by multiplying:
2            (A) the lesser of (i) the actual assessed value,
3        if any, of the portion of the property for which an
4        exemption is sought or (ii) an estimated assessed
5        value of the exempt portion of such property as
6        determined in item (2) of this subsection (g), by
7            (B) the applicable State equalization rate
8        (yielding the equalized assessed value), by
9            (C) the applicable tax rate.
10        (2) The estimated assessed value of the exempt portion
11    of the property equals the sum of (i) the estimated fair
12    market value of buildings on the property, as determined
13    in accordance with subparagraphs (A) and (B) of this item
14    (2), multiplied by the applicable assessment factor, and
15    (ii) the estimated assessed value of the land portion of
16    the property, as determined in accordance with
17    subparagraph (C).
18            (A) The "estimated fair market value of buildings
19        on the property" means the replacement value of any
20        exempt portion of buildings on the property, minus
21        depreciation, determined utilizing the cost
22        replacement method whereby the exempt square footage
23        of all such buildings is multiplied by the replacement
24        cost per square foot for Class A Average building
25        found in the most recent edition of the Marshall &
26        Swift Valuation Services Manual, adjusted by any

 

 

HB1950 Enrolled- 92 -LRB102 12590 KTG 17928 b

1        appropriate current cost and local multipliers.
2            (B) Depreciation, for purposes of calculating the
3        estimated fair market value of buildings on the
4        property, is applied by utilizing a weighted mean life
5        for the buildings based on original construction and
6        assuming a 40-year life for hospital buildings and the
7        applicable life for other types of buildings as
8        specified in the American Hospital Association
9        publication "Estimated Useful Lives of Depreciable
10        Hospital Assets". In the case of hospital buildings,
11        the remaining life is divided by 40 and this ratio is
12        multiplied by the replacement cost of the buildings to
13        obtain an estimated fair market value of buildings. If
14        a hospital building is older than 35 years, a
15        remaining life of 5 years for residual value is
16        assumed; and if a building is less than 8 years old, a
17        remaining life of 32 years is assumed.
18            (C) The estimated assessed value of the land
19        portion of the property shall be determined by
20        multiplying (i) the per square foot average of the
21        assessed values of three parcels of land (not
22        including farm land, and excluding the assessed value
23        of the improvements thereon) reasonably comparable to
24        the property, by (ii) the number of square feet
25        comprising the exempt portion of the property's land
26        square footage.

 

 

HB1950 Enrolled- 93 -LRB102 12590 KTG 17928 b

1        (3) The assessment factor, State equalization rate,
2    and tax rate (including any special factors such as
3    Enterprise Zones) used in calculating the estimated
4    property tax liability shall be for the most recent year
5    that is publicly available from the applicable chief
6    county assessment officer or officers at least 90 days
7    before the end of the hospital year.
8        (4) The method utilized to calculate estimated
9    property tax liability for purposes of this Section 15-86
10    shall not be utilized for the actual valuation,
11    assessment, or taxation of property pursuant to the
12    Property Tax Code.
13    (h) For the purpose of this Section, the following terms
14shall have the meanings set forth below:
15        (1) "Hospital" means any institution, place, building,
16    buildings on a campus, or other health care facility
17    located in Illinois that is licensed under the Hospital
18    Licensing Act and has a hospital owner.
19        (2) "Hospital owner" means a not-for-profit
20    corporation that is the titleholder of a hospital, or the
21    owner of the beneficial interest in an Illinois land trust
22    that is the titleholder of a hospital.
23        (3) "Hospital affiliate" means any corporation,
24    partnership, limited partnership, joint venture, limited
25    liability company, association or other organization,
26    other than a hospital owner, that directly or indirectly

 

 

HB1950 Enrolled- 94 -LRB102 12590 KTG 17928 b

1    controls, is controlled by, or is under common control
2    with one or more hospital owners and that supports, is
3    supported by, or acts in furtherance of the exempt health
4    care purposes of at least one of those hospital owners'
5    hospitals.
6        (4) "Hospital system" means a hospital and one or more
7    other hospitals or hospital affiliates related by common
8    control or ownership.
9        (5) "Control" relating to hospital owners, hospital
10    affiliates, or hospital systems means possession, direct
11    or indirect, of the power to direct or cause the direction
12    of the management and policies of the entity, whether
13    through ownership of assets, membership interest, other
14    voting or governance rights, by contract or otherwise.
15        (6) "Hospital applicant" means a hospital owner or
16    hospital affiliate that files an application for an
17    exemption or renewal of exemption under this Section.
18        (7) "Relevant hospital entity" means (A) the hospital
19    owner, in the case of a hospital applicant that is a
20    hospital owner, and (B) at the election of a hospital
21    applicant that is a hospital affiliate, either (i) the
22    hospital affiliate or (ii) the hospital system to which
23    the hospital applicant belongs, including any hospitals or
24    hospital affiliates that are related by common control or
25    ownership.
26        (8) "Subject property" means property used for the

 

 

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1    calculation under subsection (b) of this Section.
2        (9) "Hospital year" means the fiscal year of the
3    relevant hospital entity, or the fiscal year of one of the
4    hospital owners in the hospital system if the relevant
5    hospital entity is a hospital system with members with
6    different fiscal years, that ends in the year for which
7    the exemption is sought.
8    (i) It is the intent of the General Assembly that any
9exemptions taken, granted, or renewed under this Section prior
10to the effective date of this amendatory Act of the 100th
11General Assembly are hereby validated.
12    (j) It is the intent of the General Assembly that the
13exemption under this Section applies on a continuous basis. If
14this amendatory Act of the 102nd General Assembly takes effect
15after July 1, 2022, any exemptions taken, granted, or renewed
16under this Section on or after July 1, 2022 and prior to the
17effective date of this amendatory Act of the 102nd General
18Assembly are hereby validated.
19(Source: P.A. 99-143, eff. 7-27-15; 100-1181, eff. 3-8-19.)
 
20    Section 30-15. The Service Use Tax Act is amended by
21changing Section 3-8 as follows:
 
22    (35 ILCS 110/3-8)
23    Sec. 3-8. Hospital exemption.
24    (a) Until July 1, 2027 2022, tangible personal property

 

 

HB1950 Enrolled- 96 -LRB102 12590 KTG 17928 b

1sold to or used by a hospital owner that owns one or more
2hospitals licensed under the Hospital Licensing Act or
3operated under the University of Illinois Hospital Act, or a
4hospital affiliate that is not already exempt under another
5provision of this Act and meets the criteria for an exemption
6under this Section, is exempt from taxation under this Act.
7    (b) A hospital owner or hospital affiliate satisfies the
8conditions for an exemption under this Section if the value of
9qualified services or activities listed in subsection (c) of
10this Section for the hospital year equals or exceeds the
11relevant hospital entity's estimated property tax liability,
12without regard to any property tax exemption granted under
13Section 15-86 of the Property Tax Code, for the calendar year
14in which exemption or renewal of exemption is sought. For
15purposes of making the calculations required by this
16subsection (b), if the relevant hospital entity is a hospital
17owner that owns more than one hospital, the value of the
18services or activities listed in subsection (c) shall be
19calculated on the basis of only those services and activities
20relating to the hospital that includes the subject property,
21and the relevant hospital entity's estimated property tax
22liability shall be calculated only with respect to the
23properties comprising that hospital. In the case of a
24multi-state hospital system or hospital affiliate, the value
25of the services or activities listed in subsection (c) shall
26be calculated on the basis of only those services and

 

 

HB1950 Enrolled- 97 -LRB102 12590 KTG 17928 b

1activities that occur in Illinois and the relevant hospital
2entity's estimated property tax liability shall be calculated
3only with respect to its property located in Illinois.
4    (c) The following services and activities shall be
5considered for purposes of making the calculations required by
6subsection (b):
7        (1) Charity care. Free or discounted services provided
8    pursuant to the relevant hospital entity's financial
9    assistance policy, measured at cost, including discounts
10    provided under the Hospital Uninsured Patient Discount
11    Act.
12        (2) Health services to low-income and underserved
13    individuals. Other unreimbursed costs of the relevant
14    hospital entity for providing without charge, paying for,
15    or subsidizing goods, activities, or services for the
16    purpose of addressing the health of low-income or
17    underserved individuals. Those activities or services may
18    include, but are not limited to: financial or in-kind
19    support to affiliated or unaffiliated hospitals, hospital
20    affiliates, community clinics, or programs that treat
21    low-income or underserved individuals; paying for or
22    subsidizing health care professionals who care for
23    low-income or underserved individuals; providing or
24    subsidizing outreach or educational services to low-income
25    or underserved individuals for disease management and
26    prevention; free or subsidized goods, supplies, or

 

 

HB1950 Enrolled- 98 -LRB102 12590 KTG 17928 b

1    services needed by low-income or underserved individuals
2    because of their medical condition; and prenatal or
3    childbirth outreach to low-income or underserved persons.
4        (3) Subsidy of State or local governments. Direct or
5    indirect financial or in-kind subsidies of State or local
6    governments by the relevant hospital entity that pay for
7    or subsidize activities or programs related to health care
8    for low-income or underserved individuals.
9        (4) Support for State health care programs for
10    low-income individuals. At the election of the hospital
11    applicant for each applicable year, either (A) 10% of
12    payments to the relevant hospital entity and any hospital
13    affiliate designated by the relevant hospital entity
14    (provided that such hospital affiliate's operations
15    provide financial or operational support for or receive
16    financial or operational support from the relevant
17    hospital entity) under Medicaid or other means-tested
18    programs, including, but not limited to, General
19    Assistance, the Covering ALL KIDS Health Insurance Act,
20    and the State Children's Health Insurance Program or (B)
21    the amount of subsidy provided by the relevant hospital
22    entity and any hospital affiliate designated by the
23    relevant hospital entity (provided that such hospital
24    affiliate's operations provide financial or operational
25    support for or receive financial or operational support
26    from the relevant hospital entity) to State or local

 

 

HB1950 Enrolled- 99 -LRB102 12590 KTG 17928 b

1    government in treating Medicaid recipients and recipients
2    of means-tested programs, including but not limited to
3    General Assistance, the Covering ALL KIDS Health Insurance
4    Act, and the State Children's Health Insurance Program.
5    The amount of subsidy for purposes of this item (4) is
6    calculated in the same manner as unreimbursed costs are
7    calculated for Medicaid and other means-tested government
8    programs in the Schedule H of IRS Form 990 in effect on the
9    effective date of this amendatory Act of the 97th General
10    Assembly.
11        (5) Dual-eligible subsidy. The amount of subsidy
12    provided to government by treating dual-eligible
13    Medicare/Medicaid patients. The amount of subsidy for
14    purposes of this item (5) is calculated by multiplying the
15    relevant hospital entity's unreimbursed costs for
16    Medicare, calculated in the same manner as determined in
17    the Schedule H of IRS Form 990 in effect on the effective
18    date of this amendatory Act of the 97th General Assembly,
19    by the relevant hospital entity's ratio of dual-eligible
20    patients to total Medicare patients.
21        (6) Relief of the burden of government related to
22    health care. Except to the extent otherwise taken into
23    account in this subsection, the portion of unreimbursed
24    costs of the relevant hospital entity attributable to
25    providing, paying for, or subsidizing goods, activities,
26    or services that relieve the burden of government related

 

 

HB1950 Enrolled- 100 -LRB102 12590 KTG 17928 b

1    to health care for low-income individuals. Such activities
2    or services shall include, but are not limited to,
3    providing emergency, trauma, burn, neonatal, psychiatric,
4    rehabilitation, or other special services; providing
5    medical education; and conducting medical research or
6    training of health care professionals. The portion of
7    those unreimbursed costs attributable to benefiting
8    low-income individuals shall be determined using the ratio
9    calculated by adding the relevant hospital entity's costs
10    attributable to charity care, Medicaid, other means-tested
11    government programs, Medicare patients with disabilities
12    under age 65, and dual-eligible Medicare/Medicaid patients
13    and dividing that total by the relevant hospital entity's
14    total costs. Such costs for the numerator and denominator
15    shall be determined by multiplying gross charges by the
16    cost to charge ratio taken from the hospital's most
17    recently filed Medicare cost report (CMS 2252-10
18    Worksheet, Part I). In the case of emergency services, the
19    ratio shall be calculated using costs (gross charges
20    multiplied by the cost to charge ratio taken from the
21    hospital's most recently filed Medicare cost report (CMS
22    2252-10 Worksheet, Part I)) of patients treated in the
23    relevant hospital entity's emergency department.
24        (7) Any other activity by the relevant hospital entity
25    that the Department determines relieves the burden of
26    government or addresses the health of low-income or

 

 

HB1950 Enrolled- 101 -LRB102 12590 KTG 17928 b

1    underserved individuals.
2    (d) The hospital applicant shall include information in
3its exemption application establishing that it satisfies the
4requirements of subsection (b). For purposes of making the
5calculations required by subsection (b), the hospital
6applicant may for each year elect to use either (1) the value
7of the services or activities listed in subsection (e) for the
8hospital year or (2) the average value of those services or
9activities for the 3 fiscal years ending with the hospital
10year. If the relevant hospital entity has been in operation
11for less than 3 completed fiscal years, then the latter
12calculation, if elected, shall be performed on a pro rata
13basis.
14    (e) For purposes of making the calculations required by
15this Section:
16        (1) particular services or activities eligible for
17    consideration under any of the paragraphs (1) through (7)
18    of subsection (c) may not be counted under more than one of
19    those paragraphs; and
20        (2) the amount of unreimbursed costs and the amount of
21    subsidy shall not be reduced by restricted or unrestricted
22    payments received by the relevant hospital entity as
23    contributions deductible under Section 170(a) of the
24    Internal Revenue Code.
25    (f) (Blank).
26    (g) Estimation of Exempt Property Tax Liability. The

 

 

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1estimated property tax liability used for the determination in
2subsection (b) shall be calculated as follows:
3        (1) "Estimated property tax liability" means the
4    estimated dollar amount of property tax that would be
5    owed, with respect to the exempt portion of each of the
6    relevant hospital entity's properties that are already
7    fully or partially exempt, or for which an exemption in
8    whole or in part is currently being sought, and then
9    aggregated as applicable, as if the exempt portion of
10    those properties were subject to tax, calculated with
11    respect to each such property by multiplying:
12            (A) the lesser of (i) the actual assessed value,
13        if any, of the portion of the property for which an
14        exemption is sought or (ii) an estimated assessed
15        value of the exempt portion of such property as
16        determined in item (2) of this subsection (g), by
17            (B) the applicable State equalization rate
18        (yielding the equalized assessed value), by
19            (C) the applicable tax rate.
20        (2) The estimated assessed value of the exempt portion
21    of the property equals the sum of (i) the estimated fair
22    market value of buildings on the property, as determined
23    in accordance with subparagraphs (A) and (B) of this item
24    (2), multiplied by the applicable assessment factor, and
25    (ii) the estimated assessed value of the land portion of
26    the property, as determined in accordance with

 

 

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1    subparagraph (C).
2            (A) The "estimated fair market value of buildings
3        on the property" means the replacement value of any
4        exempt portion of buildings on the property, minus
5        depreciation, determined utilizing the cost
6        replacement method whereby the exempt square footage
7        of all such buildings is multiplied by the replacement
8        cost per square foot for Class A Average building
9        found in the most recent edition of the Marshall &
10        Swift Valuation Services Manual, adjusted by any
11        appropriate current cost and local multipliers.
12            (B) Depreciation, for purposes of calculating the
13        estimated fair market value of buildings on the
14        property, is applied by utilizing a weighted mean life
15        for the buildings based on original construction and
16        assuming a 40-year life for hospital buildings and the
17        applicable life for other types of buildings as
18        specified in the American Hospital Association
19        publication "Estimated Useful Lives of Depreciable
20        Hospital Assets". In the case of hospital buildings,
21        the remaining life is divided by 40 and this ratio is
22        multiplied by the replacement cost of the buildings to
23        obtain an estimated fair market value of buildings. If
24        a hospital building is older than 35 years, a
25        remaining life of 5 years for residual value is
26        assumed; and if a building is less than 8 years old, a

 

 

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1        remaining life of 32 years is assumed.
2            (C) The estimated assessed value of the land
3        portion of the property shall be determined by
4        multiplying (i) the per square foot average of the
5        assessed values of three parcels of land (not
6        including farm land, and excluding the assessed value
7        of the improvements thereon) reasonably comparable to
8        the property, by (ii) the number of square feet
9        comprising the exempt portion of the property's land
10        square footage.
11        (3) The assessment factor, State equalization rate,
12    and tax rate (including any special factors such as
13    Enterprise Zones) used in calculating the estimated
14    property tax liability shall be for the most recent year
15    that is publicly available from the applicable chief
16    county assessment officer or officers at least 90 days
17    before the end of the hospital year.
18        (4) The method utilized to calculate estimated
19    property tax liability for purposes of this Section 15-86
20    shall not be utilized for the actual valuation,
21    assessment, or taxation of property pursuant to the
22    Property Tax Code.
23    (h) For the purpose of this Section, the following terms
24shall have the meanings set forth below:
25        (1) "Hospital" means any institution, place, building,
26    buildings on a campus, or other health care facility

 

 

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1    located in Illinois that is licensed under the Hospital
2    Licensing Act and has a hospital owner.
3        (2) "Hospital owner" means a not-for-profit
4    corporation that is the titleholder of a hospital, or the
5    owner of the beneficial interest in an Illinois land trust
6    that is the titleholder of a hospital.
7        (3) "Hospital affiliate" means any corporation,
8    partnership, limited partnership, joint venture, limited
9    liability company, association or other organization,
10    other than a hospital owner, that directly or indirectly
11    controls, is controlled by, or is under common control
12    with one or more hospital owners and that supports, is
13    supported by, or acts in furtherance of the exempt health
14    care purposes of at least one of those hospital owners'
15    hospitals.
16        (4) "Hospital system" means a hospital and one or more
17    other hospitals or hospital affiliates related by common
18    control or ownership.
19        (5) "Control" relating to hospital owners, hospital
20    affiliates, or hospital systems means possession, direct
21    or indirect, of the power to direct or cause the direction
22    of the management and policies of the entity, whether
23    through ownership of assets, membership interest, other
24    voting or governance rights, by contract or otherwise.
25        (6) "Hospital applicant" means a hospital owner or
26    hospital affiliate that files an application for an

 

 

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1    exemption or renewal of exemption under this Section.
2        (7) "Relevant hospital entity" means (A) the hospital
3    owner, in the case of a hospital applicant that is a
4    hospital owner, and (B) at the election of a hospital
5    applicant that is a hospital affiliate, either (i) the
6    hospital affiliate or (ii) the hospital system to which
7    the hospital applicant belongs, including any hospitals or
8    hospital affiliates that are related by common control or
9    ownership.
10        (8) "Subject property" means property used for the
11    calculation under subsection (b) of this Section.
12        (9) "Hospital year" means the fiscal year of the
13    relevant hospital entity, or the fiscal year of one of the
14    hospital owners in the hospital system if the relevant
15    hospital entity is a hospital system with members with
16    different fiscal years, that ends in the year for which
17    the exemption is sought.
18    (i) It is the intent of the General Assembly that any
19exemptions taken, granted, or renewed under this Section prior
20to the effective date of this amendatory Act of the 100th
21General Assembly are hereby validated.
22    (j) It is the intent of the General Assembly that the
23exemption under this Section applies on a continuous basis. If
24this amendatory Act of the 102nd General Assembly takes effect
25after July 1, 2022, any exemptions taken, granted, or renewed
26under this Section on or after July 1, 2022 and prior to the

 

 

HB1950 Enrolled- 107 -LRB102 12590 KTG 17928 b

1effective date of this amendatory Act of the 102nd General
2Assembly are hereby validated.
3(Source: P.A. 99-143, eff. 7-27-15; 100-1181, eff. 3-8-19.)
 
4    Section 30-20. The Service Occupation Tax Act is amended
5by changing Section 3-8 as follows:
 
6    (35 ILCS 115/3-8)
7    Sec. 3-8. Hospital exemption.
8    (a) Until July 1, 2027 2022, tangible personal property
9sold to or used by a hospital owner that owns one or more
10hospitals licensed under the Hospital Licensing Act or
11operated under the University of Illinois Hospital Act, or a
12hospital affiliate that is not already exempt under another
13provision of this Act and meets the criteria for an exemption
14under this Section, is exempt from taxation under this Act.
15    (b) A hospital owner or hospital affiliate satisfies the
16conditions for an exemption under this Section if the value of
17qualified services or activities listed in subsection (c) of
18this Section for the hospital year equals or exceeds the
19relevant hospital entity's estimated property tax liability,
20without regard to any property tax exemption granted under
21Section 15-86 of the Property Tax Code, for the calendar year
22in which exemption or renewal of exemption is sought. For
23purposes of making the calculations required by this
24subsection (b), if the relevant hospital entity is a hospital

 

 

HB1950 Enrolled- 108 -LRB102 12590 KTG 17928 b

1owner that owns more than one hospital, the value of the
2services or activities listed in subsection (c) shall be
3calculated on the basis of only those services and activities
4relating to the hospital that includes the subject property,
5and the relevant hospital entity's estimated property tax
6liability shall be calculated only with respect to the
7properties comprising that hospital. In the case of a
8multi-state hospital system or hospital affiliate, the value
9of the services or activities listed in subsection (c) shall
10be calculated on the basis of only those services and
11activities that occur in Illinois and the relevant hospital
12entity's estimated property tax liability shall be calculated
13only with respect to its property located in Illinois.
14    (c) The following services and activities shall be
15considered for purposes of making the calculations required by
16subsection (b):
17        (1) Charity care. Free or discounted services provided
18    pursuant to the relevant hospital entity's financial
19    assistance policy, measured at cost, including discounts
20    provided under the Hospital Uninsured Patient Discount
21    Act.
22        (2) Health services to low-income and underserved
23    individuals. Other unreimbursed costs of the relevant
24    hospital entity for providing without charge, paying for,
25    or subsidizing goods, activities, or services for the
26    purpose of addressing the health of low-income or

 

 

HB1950 Enrolled- 109 -LRB102 12590 KTG 17928 b

1    underserved individuals. Those activities or services may
2    include, but are not limited to: financial or in-kind
3    support to affiliated or unaffiliated hospitals, hospital
4    affiliates, community clinics, or programs that treat
5    low-income or underserved individuals; paying for or
6    subsidizing health care professionals who care for
7    low-income or underserved individuals; providing or
8    subsidizing outreach or educational services to low-income
9    or underserved individuals for disease management and
10    prevention; free or subsidized goods, supplies, or
11    services needed by low-income or underserved individuals
12    because of their medical condition; and prenatal or
13    childbirth outreach to low-income or underserved persons.
14        (3) Subsidy of State or local governments. Direct or
15    indirect financial or in-kind subsidies of State or local
16    governments by the relevant hospital entity that pay for
17    or subsidize activities or programs related to health care
18    for low-income or underserved individuals.
19        (4) Support for State health care programs for
20    low-income individuals. At the election of the hospital
21    applicant for each applicable year, either (A) 10% of
22    payments to the relevant hospital entity and any hospital
23    affiliate designated by the relevant hospital entity
24    (provided that such hospital affiliate's operations
25    provide financial or operational support for or receive
26    financial or operational support from the relevant

 

 

HB1950 Enrolled- 110 -LRB102 12590 KTG 17928 b

1    hospital entity) under Medicaid or other means-tested
2    programs, including, but not limited to, General
3    Assistance, the Covering ALL KIDS Health Insurance Act,
4    and the State Children's Health Insurance Program or (B)
5    the amount of subsidy provided by the relevant hospital
6    entity and any hospital affiliate designated by the
7    relevant hospital entity (provided that such hospital
8    affiliate's operations provide financial or operational
9    support for or receive financial or operational support
10    from the relevant hospital entity) to State or local
11    government in treating Medicaid recipients and recipients
12    of means-tested programs, including but not limited to
13    General Assistance, the Covering ALL KIDS Health Insurance
14    Act, and the State Children's Health Insurance Program.
15    The amount of subsidy for purposes of this item (4) is
16    calculated in the same manner as unreimbursed costs are
17    calculated for Medicaid and other means-tested government
18    programs in the Schedule H of IRS Form 990 in effect on the
19    effective date of this amendatory Act of the 97th General
20    Assembly.
21        (5) Dual-eligible subsidy. The amount of subsidy
22    provided to government by treating dual-eligible
23    Medicare/Medicaid patients. The amount of subsidy for
24    purposes of this item (5) is calculated by multiplying the
25    relevant hospital entity's unreimbursed costs for
26    Medicare, calculated in the same manner as determined in

 

 

HB1950 Enrolled- 111 -LRB102 12590 KTG 17928 b

1    the Schedule H of IRS Form 990 in effect on the effective
2    date of this amendatory Act of the 97th General Assembly,
3    by the relevant hospital entity's ratio of dual-eligible
4    patients to total Medicare patients.
5        (6) Relief of the burden of government related to
6    health care. Except to the extent otherwise taken into
7    account in this subsection, the portion of unreimbursed
8    costs of the relevant hospital entity attributable to
9    providing, paying for, or subsidizing goods, activities,
10    or services that relieve the burden of government related
11    to health care for low-income individuals. Such activities
12    or services shall include, but are not limited to,
13    providing emergency, trauma, burn, neonatal, psychiatric,
14    rehabilitation, or other special services; providing
15    medical education; and conducting medical research or
16    training of health care professionals. The portion of
17    those unreimbursed costs attributable to benefiting
18    low-income individuals shall be determined using the ratio
19    calculated by adding the relevant hospital entity's costs
20    attributable to charity care, Medicaid, other means-tested
21    government programs, Medicare patients with disabilities
22    under age 65, and dual-eligible Medicare/Medicaid patients
23    and dividing that total by the relevant hospital entity's
24    total costs. Such costs for the numerator and denominator
25    shall be determined by multiplying gross charges by the
26    cost to charge ratio taken from the hospital's most

 

 

HB1950 Enrolled- 112 -LRB102 12590 KTG 17928 b

1    recently filed Medicare cost report (CMS 2252-10
2    Worksheet, Part I). In the case of emergency services, the
3    ratio shall be calculated using costs (gross charges
4    multiplied by the cost to charge ratio taken from the
5    hospital's most recently filed Medicare cost report (CMS
6    2252-10 Worksheet, Part I)) of patients treated in the
7    relevant hospital entity's emergency department.
8        (7) Any other activity by the relevant hospital entity
9    that the Department determines relieves the burden of
10    government or addresses the health of low-income or
11    underserved individuals.
12    (d) The hospital applicant shall include information in
13its exemption application establishing that it satisfies the
14requirements of subsection (b). For purposes of making the
15calculations required by subsection (b), the hospital
16applicant may for each year elect to use either (1) the value
17of the services or activities listed in subsection (e) for the
18hospital year or (2) the average value of those services or
19activities for the 3 fiscal years ending with the hospital
20year. If the relevant hospital entity has been in operation
21for less than 3 completed fiscal years, then the latter
22calculation, if elected, shall be performed on a pro rata
23basis.
24    (e) For purposes of making the calculations required by
25this Section:
26        (1) particular services or activities eligible for

 

 

HB1950 Enrolled- 113 -LRB102 12590 KTG 17928 b

1    consideration under any of the paragraphs (1) through (7)
2    of subsection (c) may not be counted under more than one of
3    those paragraphs; and
4        (2) the amount of unreimbursed costs and the amount of
5    subsidy shall not be reduced by restricted or unrestricted
6    payments received by the relevant hospital entity as
7    contributions deductible under Section 170(a) of the
8    Internal Revenue Code.
9    (f) (Blank).
10    (g) Estimation of Exempt Property Tax Liability. The
11estimated property tax liability used for the determination in
12subsection (b) shall be calculated as follows:
13        (1) "Estimated property tax liability" means the
14    estimated dollar amount of property tax that would be
15    owed, with respect to the exempt portion of each of the
16    relevant hospital entity's properties that are already
17    fully or partially exempt, or for which an exemption in
18    whole or in part is currently being sought, and then
19    aggregated as applicable, as if the exempt portion of
20    those properties were subject to tax, calculated with
21    respect to each such property by multiplying:
22            (A) the lesser of (i) the actual assessed value,
23        if any, of the portion of the property for which an
24        exemption is sought or (ii) an estimated assessed
25        value of the exempt portion of such property as
26        determined in item (2) of this subsection (g), by

 

 

HB1950 Enrolled- 114 -LRB102 12590 KTG 17928 b

1            (B) the applicable State equalization rate
2        (yielding the equalized assessed value), by
3            (C) the applicable tax rate.
4        (2) The estimated assessed value of the exempt portion
5    of the property equals the sum of (i) the estimated fair
6    market value of buildings on the property, as determined
7    in accordance with subparagraphs (A) and (B) of this item
8    (2), multiplied by the applicable assessment factor, and
9    (ii) the estimated assessed value of the land portion of
10    the property, as determined in accordance with
11    subparagraph (C).
12            (A) The "estimated fair market value of buildings
13        on the property" means the replacement value of any
14        exempt portion of buildings on the property, minus
15        depreciation, determined utilizing the cost
16        replacement method whereby the exempt square footage
17        of all such buildings is multiplied by the replacement
18        cost per square foot for Class A Average building
19        found in the most recent edition of the Marshall &
20        Swift Valuation Services Manual, adjusted by any
21        appropriate current cost and local multipliers.
22            (B) Depreciation, for purposes of calculating the
23        estimated fair market value of buildings on the
24        property, is applied by utilizing a weighted mean life
25        for the buildings based on original construction and
26        assuming a 40-year life for hospital buildings and the

 

 

HB1950 Enrolled- 115 -LRB102 12590 KTG 17928 b

1        applicable life for other types of buildings as
2        specified in the American Hospital Association
3        publication "Estimated Useful Lives of Depreciable
4        Hospital Assets". In the case of hospital buildings,
5        the remaining life is divided by 40 and this ratio is
6        multiplied by the replacement cost of the buildings to
7        obtain an estimated fair market value of buildings. If
8        a hospital building is older than 35 years, a
9        remaining life of 5 years for residual value is
10        assumed; and if a building is less than 8 years old, a
11        remaining life of 32 years is assumed.
12            (C) The estimated assessed value of the land
13        portion of the property shall be determined by
14        multiplying (i) the per square foot average of the
15        assessed values of three parcels of land (not
16        including farm land, and excluding the assessed value
17        of the improvements thereon) reasonably comparable to
18        the property, by (ii) the number of square feet
19        comprising the exempt portion of the property's land
20        square footage.
21        (3) The assessment factor, State equalization rate,
22    and tax rate (including any special factors such as
23    Enterprise Zones) used in calculating the estimated
24    property tax liability shall be for the most recent year
25    that is publicly available from the applicable chief
26    county assessment officer or officers at least 90 days

 

 

HB1950 Enrolled- 116 -LRB102 12590 KTG 17928 b

1    before the end of the hospital year.
2        (4) The method utilized to calculate estimated
3    property tax liability for purposes of this Section 15-86
4    shall not be utilized for the actual valuation,
5    assessment, or taxation of property pursuant to the
6    Property Tax Code.
7    (h) For the purpose of this Section, the following terms
8shall have the meanings set forth below:
9        (1) "Hospital" means any institution, place, building,
10    buildings on a campus, or other health care facility
11    located in Illinois that is licensed under the Hospital
12    Licensing Act and has a hospital owner.
13        (2) "Hospital owner" means a not-for-profit
14    corporation that is the titleholder of a hospital, or the
15    owner of the beneficial interest in an Illinois land trust
16    that is the titleholder of a hospital.
17        (3) "Hospital affiliate" means any corporation,
18    partnership, limited partnership, joint venture, limited
19    liability company, association or other organization,
20    other than a hospital owner, that directly or indirectly
21    controls, is controlled by, or is under common control
22    with one or more hospital owners and that supports, is
23    supported by, or acts in furtherance of the exempt health
24    care purposes of at least one of those hospital owners'
25    hospitals.
26        (4) "Hospital system" means a hospital and one or more

 

 

HB1950 Enrolled- 117 -LRB102 12590 KTG 17928 b

1    other hospitals or hospital affiliates related by common
2    control or ownership.
3        (5) "Control" relating to hospital owners, hospital
4    affiliates, or hospital systems means possession, direct
5    or indirect, of the power to direct or cause the direction
6    of the management and policies of the entity, whether
7    through ownership of assets, membership interest, other
8    voting or governance rights, by contract or otherwise.
9        (6) "Hospital applicant" means a hospital owner or
10    hospital affiliate that files an application for an
11    exemption or renewal of exemption under this Section.
12        (7) "Relevant hospital entity" means (A) the hospital
13    owner, in the case of a hospital applicant that is a
14    hospital owner, and (B) at the election of a hospital
15    applicant that is a hospital affiliate, either (i) the
16    hospital affiliate or (ii) the hospital system to which
17    the hospital applicant belongs, including any hospitals or
18    hospital affiliates that are related by common control or
19    ownership.
20        (8) "Subject property" means property used for the
21    calculation under subsection (b) of this Section.
22        (9) "Hospital year" means the fiscal year of the
23    relevant hospital entity, or the fiscal year of one of the
24    hospital owners in the hospital system if the relevant
25    hospital entity is a hospital system with members with
26    different fiscal years, that ends in the year for which

 

 

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1    the exemption is sought.
2    (i) It is the intent of the General Assembly that any
3exemptions taken, granted, or renewed under this Section prior
4to the effective date of this amendatory Act of the 100th
5General Assembly are hereby validated.
6    (j) It is the intent of the General Assembly that the
7exemption under this Section applies on a continuous basis. If
8this amendatory Act of the 102nd General Assembly takes effect
9after July 1, 2022, any exemptions taken, granted, or renewed
10under this Section on or after July 1, 2022 and prior to the
11effective date of this amendatory Act of the 102nd General
12Assembly are hereby validated.
13(Source: P.A. 99-143, eff. 7-27-15; 100-1181, eff. 3-8-19.)
 
14    Section 30-25. The Retailers' Occupation Tax Act is
15amended by changing Section 2-9 as follows:
 
16    (35 ILCS 120/2-9)
17    Sec. 2-9. Hospital exemption.
18    (a) Until July 1, 2027 2022, tangible personal property
19sold to or used by a hospital owner that owns one or more
20hospitals licensed under the Hospital Licensing Act or
21operated under the University of Illinois Hospital Act, or a
22hospital affiliate that is not already exempt under another
23provision of this Act and meets the criteria for an exemption
24under this Section, is exempt from taxation under this Act.

 

 

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1    (b) A hospital owner or hospital affiliate satisfies the
2conditions for an exemption under this Section if the value of
3qualified services or activities listed in subsection (c) of
4this Section for the hospital year equals or exceeds the
5relevant hospital entity's estimated property tax liability,
6without regard to any property tax exemption granted under
7Section 15-86 of the Property Tax Code, for the calendar year
8in which exemption or renewal of exemption is sought. For
9purposes of making the calculations required by this
10subsection (b), if the relevant hospital entity is a hospital
11owner that owns more than one hospital, the value of the
12services or activities listed in subsection (c) shall be
13calculated on the basis of only those services and activities
14relating to the hospital that includes the subject property,
15and the relevant hospital entity's estimated property tax
16liability shall be calculated only with respect to the
17properties comprising that hospital. In the case of a
18multi-state hospital system or hospital affiliate, the value
19of the services or activities listed in subsection (c) shall
20be calculated on the basis of only those services and
21activities that occur in Illinois and the relevant hospital
22entity's estimated property tax liability shall be calculated
23only with respect to its property located in Illinois.
24    (c) The following services and activities shall be
25considered for purposes of making the calculations required by
26subsection (b):

 

 

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1        (1) Charity care. Free or discounted services provided
2    pursuant to the relevant hospital entity's financial
3    assistance policy, measured at cost, including discounts
4    provided under the Hospital Uninsured Patient Discount
5    Act.
6        (2) Health services to low-income and underserved
7    individuals. Other unreimbursed costs of the relevant
8    hospital entity for providing without charge, paying for,
9    or subsidizing goods, activities, or services for the
10    purpose of addressing the health of low-income or
11    underserved individuals. Those activities or services may
12    include, but are not limited to: financial or in-kind
13    support to affiliated or unaffiliated hospitals, hospital
14    affiliates, community clinics, or programs that treat
15    low-income or underserved individuals; paying for or
16    subsidizing health care professionals who care for
17    low-income or underserved individuals; providing or
18    subsidizing outreach or educational services to low-income
19    or underserved individuals for disease management and
20    prevention; free or subsidized goods, supplies, or
21    services needed by low-income or underserved individuals
22    because of their medical condition; and prenatal or
23    childbirth outreach to low-income or underserved persons.
24        (3) Subsidy of State or local governments. Direct or
25    indirect financial or in-kind subsidies of State or local
26    governments by the relevant hospital entity that pay for

 

 

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1    or subsidize activities or programs related to health care
2    for low-income or underserved individuals.
3        (4) Support for State health care programs for
4    low-income individuals. At the election of the hospital
5    applicant for each applicable year, either (A) 10% of
6    payments to the relevant hospital entity and any hospital
7    affiliate designated by the relevant hospital entity
8    (provided that such hospital affiliate's operations
9    provide financial or operational support for or receive
10    financial or operational support from the relevant
11    hospital entity) under Medicaid or other means-tested
12    programs, including, but not limited to, General
13    Assistance, the Covering ALL KIDS Health Insurance Act,
14    and the State Children's Health Insurance Program or (B)
15    the amount of subsidy provided by the relevant hospital
16    entity and any hospital affiliate designated by the
17    relevant hospital entity (provided that such hospital
18    affiliate's operations provide financial or operational
19    support for or receive financial or operational support
20    from the relevant hospital entity) to State or local
21    government in treating Medicaid recipients and recipients
22    of means-tested programs, including but not limited to
23    General Assistance, the Covering ALL KIDS Health Insurance
24    Act, and the State Children's Health Insurance Program.
25    The amount of subsidy for purposes of this item (4) is
26    calculated in the same manner as unreimbursed costs are

 

 

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1    calculated for Medicaid and other means-tested government
2    programs in the Schedule H of IRS Form 990 in effect on the
3    effective date of this amendatory Act of the 97th General
4    Assembly.
5        (5) Dual-eligible subsidy. The amount of subsidy
6    provided to government by treating dual-eligible
7    Medicare/Medicaid patients. The amount of subsidy for
8    purposes of this item (5) is calculated by multiplying the
9    relevant hospital entity's unreimbursed costs for
10    Medicare, calculated in the same manner as determined in
11    the Schedule H of IRS Form 990 in effect on the effective
12    date of this amendatory Act of the 97th General Assembly,
13    by the relevant hospital entity's ratio of dual-eligible
14    patients to total Medicare patients.
15        (6) Relief of the burden of government related to
16    health care. Except to the extent otherwise taken into
17    account in this subsection, the portion of unreimbursed
18    costs of the relevant hospital entity attributable to
19    providing, paying for, or subsidizing goods, activities,
20    or services that relieve the burden of government related
21    to health care for low-income individuals. Such activities
22    or services shall include, but are not limited to,
23    providing emergency, trauma, burn, neonatal, psychiatric,
24    rehabilitation, or other special services; providing
25    medical education; and conducting medical research or
26    training of health care professionals. The portion of

 

 

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1    those unreimbursed costs attributable to benefiting
2    low-income individuals shall be determined using the ratio
3    calculated by adding the relevant hospital entity's costs
4    attributable to charity care, Medicaid, other means-tested
5    government programs, Medicare patients with disabilities
6    under age 65, and dual-eligible Medicare/Medicaid patients
7    and dividing that total by the relevant hospital entity's
8    total costs. Such costs for the numerator and denominator
9    shall be determined by multiplying gross charges by the
10    cost to charge ratio taken from the hospital's most
11    recently filed Medicare cost report (CMS 2252-10
12    Worksheet, Part I). In the case of emergency services, the
13    ratio shall be calculated using costs (gross charges
14    multiplied by the cost to charge ratio taken from the
15    hospital's most recently filed Medicare cost report (CMS
16    2252-10 Worksheet, Part I)) of patients treated in the
17    relevant hospital entity's emergency department.
18        (7) Any other activity by the relevant hospital entity
19    that the Department determines relieves the burden of
20    government or addresses the health of low-income or
21    underserved individuals.
22    (d) The hospital applicant shall include information in
23its exemption application establishing that it satisfies the
24requirements of subsection (b). For purposes of making the
25calculations required by subsection (b), the hospital
26applicant may for each year elect to use either (1) the value

 

 

HB1950 Enrolled- 124 -LRB102 12590 KTG 17928 b

1of the services or activities listed in subsection (e) for the
2hospital year or (2) the average value of those services or
3activities for the 3 fiscal years ending with the hospital
4year. If the relevant hospital entity has been in operation
5for less than 3 completed fiscal years, then the latter
6calculation, if elected, shall be performed on a pro rata
7basis.
8    (e) For purposes of making the calculations required by
9this Section:
10        (1) particular services or activities eligible for
11    consideration under any of the paragraphs (1) through (7)
12    of subsection (c) may not be counted under more than one of
13    those paragraphs; and
14        (2) the amount of unreimbursed costs and the amount of
15    subsidy shall not be reduced by restricted or unrestricted
16    payments received by the relevant hospital entity as
17    contributions deductible under Section 170(a) of the
18    Internal Revenue Code.
19    (f) (Blank).
20    (g) Estimation of Exempt Property Tax Liability. The
21estimated property tax liability used for the determination in
22subsection (b) shall be calculated as follows:
23        (1) "Estimated property tax liability" means the
24    estimated dollar amount of property tax that would be
25    owed, with respect to the exempt portion of each of the
26    relevant hospital entity's properties that are already

 

 

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1    fully or partially exempt, or for which an exemption in
2    whole or in part is currently being sought, and then
3    aggregated as applicable, as if the exempt portion of
4    those properties were subject to tax, calculated with
5    respect to each such property by multiplying:
6            (A) the lesser of (i) the actual assessed value,
7        if any, of the portion of the property for which an
8        exemption is sought or (ii) an estimated assessed
9        value of the exempt portion of such property as
10        determined in item (2) of this subsection (g), by
11            (B) the applicable State equalization rate
12        (yielding the equalized assessed value), by
13            (C) the applicable tax rate.
14        (2) The estimated assessed value of the exempt portion
15    of the property equals the sum of (i) the estimated fair
16    market value of buildings on the property, as determined
17    in accordance with subparagraphs (A) and (B) of this item
18    (2), multiplied by the applicable assessment factor, and
19    (ii) the estimated assessed value of the land portion of
20    the property, as determined in accordance with
21    subparagraph (C).
22            (A) The "estimated fair market value of buildings
23        on the property" means the replacement value of any
24        exempt portion of buildings on the property, minus
25        depreciation, determined utilizing the cost
26        replacement method whereby the exempt square footage

 

 

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1        of all such buildings is multiplied by the replacement
2        cost per square foot for Class A Average building
3        found in the most recent edition of the Marshall &
4        Swift Valuation Services Manual, adjusted by any
5        appropriate current cost and local multipliers.
6            (B) Depreciation, for purposes of calculating the
7        estimated fair market value of buildings on the
8        property, is applied by utilizing a weighted mean life
9        for the buildings based on original construction and
10        assuming a 40-year life for hospital buildings and the
11        applicable life for other types of buildings as
12        specified in the American Hospital Association
13        publication "Estimated Useful Lives of Depreciable
14        Hospital Assets". In the case of hospital buildings,
15        the remaining life is divided by 40 and this ratio is
16        multiplied by the replacement cost of the buildings to
17        obtain an estimated fair market value of buildings. If
18        a hospital building is older than 35 years, a
19        remaining life of 5 years for residual value is
20        assumed; and if a building is less than 8 years old, a
21        remaining life of 32 years is assumed.
22            (C) The estimated assessed value of the land
23        portion of the property shall be determined by
24        multiplying (i) the per square foot average of the
25        assessed values of three parcels of land (not
26        including farm land, and excluding the assessed value

 

 

HB1950 Enrolled- 127 -LRB102 12590 KTG 17928 b

1        of the improvements thereon) reasonably comparable to
2        the property, by (ii) the number of square feet
3        comprising the exempt portion of the property's land
4        square footage.
5        (3) The assessment factor, State equalization rate,
6    and tax rate (including any special factors such as
7    Enterprise Zones) used in calculating the estimated
8    property tax liability shall be for the most recent year
9    that is publicly available from the applicable chief
10    county assessment officer or officers at least 90 days
11    before the end of the hospital year.
12        (4) The method utilized to calculate estimated
13    property tax liability for purposes of this Section 15-86
14    shall not be utilized for the actual valuation,
15    assessment, or taxation of property pursuant to the
16    Property Tax Code.
17    (h) For the purpose of this Section, the following terms
18shall have the meanings set forth below:
19        (1) "Hospital" means any institution, place, building,
20    buildings on a campus, or other health care facility
21    located in Illinois that is licensed under the Hospital
22    Licensing Act and has a hospital owner.
23        (2) "Hospital owner" means a not-for-profit
24    corporation that is the titleholder of a hospital, or the
25    owner of the beneficial interest in an Illinois land trust
26    that is the titleholder of a hospital.

 

 

HB1950 Enrolled- 128 -LRB102 12590 KTG 17928 b

1        (3) "Hospital affiliate" means any corporation,
2    partnership, limited partnership, joint venture, limited
3    liability company, association or other organization,
4    other than a hospital owner, that directly or indirectly
5    controls, is controlled by, or is under common control
6    with one or more hospital owners and that supports, is
7    supported by, or acts in furtherance of the exempt health
8    care purposes of at least one of those hospital owners'
9    hospitals.
10        (4) "Hospital system" means a hospital and one or more
11    other hospitals or hospital affiliates related by common
12    control or ownership.
13        (5) "Control" relating to hospital owners, hospital
14    affiliates, or hospital systems means possession, direct
15    or indirect, of the power to direct or cause the direction
16    of the management and policies of the entity, whether
17    through ownership of assets, membership interest, other
18    voting or governance rights, by contract or otherwise.
19        (6) "Hospital applicant" means a hospital owner or
20    hospital affiliate that files an application for an
21    exemption or renewal of exemption under this Section.
22        (7) "Relevant hospital entity" means (A) the hospital
23    owner, in the case of a hospital applicant that is a
24    hospital owner, and (B) at the election of a hospital
25    applicant that is a hospital affiliate, either (i) the
26    hospital affiliate or (ii) the hospital system to which

 

 

HB1950 Enrolled- 129 -LRB102 12590 KTG 17928 b

1    the hospital applicant belongs, including any hospitals or
2    hospital affiliates that are related by common control or
3    ownership.
4        (8) "Subject property" means property used for the
5    calculation under subsection (b) of this Section.
6        (9) "Hospital year" means the fiscal year of the
7    relevant hospital entity, or the fiscal year of one of the
8    hospital owners in the hospital system if the relevant
9    hospital entity is a hospital system with members with
10    different fiscal years, that ends in the year for which
11    the exemption is sought.
12    (i) It is the intent of the General Assembly that any
13exemptions taken, granted, or renewed under this Section prior
14to the effective date of this amendatory Act of the 100th
15General Assembly are hereby validated.
16    (j) It is the intent of the General Assembly that the
17exemption under this Section applies on a continuous basis. If
18this amendatory Act of the 102nd General Assembly takes effect
19after July 1, 2022, any exemptions taken, granted, or renewed
20under this Section on or after July 1, 2022 and prior to the
21effective date of this amendatory Act of the 102nd General
22Assembly are hereby validated.
23(Source: P.A. 99-143, eff. 7-27-15; 100-1181, eff. 3-8-19.)
 
24
ARTICLE 999.

 
25    Section 999-99. Effective date. This Act takes effect upon

 

 

HB1950 Enrolled- 130 -LRB102 12590 KTG 17928 b

1becoming law.