Sen. Ann Gillespie

Filed: 4/8/2022

 

 


 

 


 
10200HB1950sam002LRB102 12590 KTG 38983 a

1
AMENDMENT TO HOUSE BILL 1950

2    AMENDMENT NO. ______. Amend House Bill 1950, AS AMENDED,
3by replacing everything after the enacting clause with the
4following:
 
5
"ARTICLE 5.

 
6    Section 5-5. The Illinois Public Aid Code is amended by
7changing Sections 5-5e.1, 5A-2, 5A-5, 5A-8, 5A-10, 5A-12.7,
8and 5A-14 as follows:
 
9    (305 ILCS 5/5-5e.1)
10    Sec. 5-5e.1. Safety-Net Hospitals.
11    (a) A Safety-Net Hospital is an Illinois hospital that:
12        (1) is licensed by the Department of Public Health as
13    a general acute care or pediatric hospital; and
14        (2) is a disproportionate share hospital, as described
15    in Section 1923 of the federal Social Security Act, as

 

 

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1    determined by the Department; and
2        (3) meets one of the following:
3            (A) has a MIUR of at least 40% and a charity
4        percent of at least 4%; or
5            (B) has a MIUR of at least 50%.
6    (b) Definitions. As used in this Section:
7        (1) "Charity percent" means the ratio of (i) the
8    hospital's charity charges for services provided to
9    individuals without health insurance or another source of
10    third party coverage to (ii) the Illinois total hospital
11    charges, each as reported on the hospital's OBRA form.
12        (2) "MIUR" means Medicaid Inpatient Utilization Rate
13    and is defined as a fraction, the numerator of which is the
14    number of a hospital's inpatient days provided in the
15    hospital's fiscal year ending 3 years prior to the rate
16    year, to patients who, for such days, were eligible for
17    Medicaid under Title XIX of the federal Social Security
18    Act, 42 USC 1396a et seq., excluding those persons
19    eligible for medical assistance pursuant to 42 U.S.C.
20    1396a(a)(10)(A)(i)(VIII) as set forth in paragraph 18 of
21    Section 5-2 of this Article, and the denominator of which
22    is the total number of the hospital's inpatient days in
23    that same period, excluding those persons eligible for
24    medical assistance pursuant to 42 U.S.C.
25    1396a(a)(10)(A)(i)(VIII) as set forth in paragraph 18 of
26    Section 5-2 of this Article.

 

 

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1        (3) "OBRA form" means form HFS-3834, OBRA '93 data
2    collection form, for the rate year.
3        (4) "Rate year" means the 12-month period beginning on
4    October 1.
5    (c) Beginning July 1, 2012 and ending on December 31, 2026
62022, a hospital that would have qualified for the rate year
7beginning October 1, 2011 or October 1, 2012 shall be a
8Safety-Net Hospital.
9    (c-5) Beginning July 1, 2020 and ending on December 31,
102026, a hospital that would have qualified for the rate year
11beginning October 1, 2020 and was designated a federal rural
12referral center under 42 CFR 412.96 as of October 1, 2020 shall
13be a Safety-Net Hospital.
14    (d) No later than August 15 preceding the rate year, each
15hospital shall submit the OBRA form to the Department. Prior
16to October 1, the Department shall notify each hospital
17whether it has qualified as a Safety-Net Hospital.
18    (e) The Department may promulgate rules in order to
19implement this Section.
20    (f) Nothing in this Section shall be construed as limiting
21the ability of the Department to include the Safety-Net
22Hospitals in the hospital rate reform mandated by Section
2314-11 of this Code and implemented under Section 14-12 of this
24Code and by administrative rulemaking.
25(Source: P.A. 100-581, eff. 3-12-18; 101-650, eff. 7-7-20;
26101-669, eff. 4-2-21.)
 

 

 

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1    (305 ILCS 5/5A-2)  (from Ch. 23, par. 5A-2)
2    (Section scheduled to be repealed on December 31, 2022)
3    Sec. 5A-2. Assessment.
4    (a)(1) Subject to Sections 5A-3 and 5A-10, for State
5fiscal years 2009 through 2018, or as long as continued under
6Section 5A-16, an annual assessment on inpatient services is
7imposed on each hospital provider in an amount equal to
8$218.38 multiplied by the difference of the hospital's
9occupied bed days less the hospital's Medicare bed days,
10provided, however, that the amount of $218.38 shall be
11increased by a uniform percentage to generate an amount equal
12to 75% of the State share of the payments authorized under
13Section 5A-12.5, with such increase only taking effect upon
14the date that a State share for such payments is required under
15federal law. For the period of April through June 2015, the
16amount of $218.38 used to calculate the assessment under this
17paragraph shall, by emergency rule under subsection (s) of
18Section 5-45 of the Illinois Administrative Procedure Act, be
19increased by a uniform percentage to generate $20,250,000 in
20the aggregate for that period from all hospitals subject to
21the annual assessment under this paragraph.
22    (2) In addition to any other assessments imposed under
23this Article, effective July 1, 2016 and semi-annually
24thereafter through June 2018, or as provided in Section 5A-16,
25in addition to any federally required State share as

 

 

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1authorized under paragraph (1), the amount of $218.38 shall be
2increased by a uniform percentage to generate an amount equal
3to 75% of the ACA Assessment Adjustment, as defined in
4subsection (b-6) of this Section.
5    For State fiscal years 2009 through 2018, or as provided
6in Section 5A-16, a hospital's occupied bed days and Medicare
7bed days shall be determined using the most recent data
8available from each hospital's 2005 Medicare cost report as
9contained in the Healthcare Cost Report Information System
10file, for the quarter ending on December 31, 2006, without
11regard to any subsequent adjustments or changes to such data.
12If a hospital's 2005 Medicare cost report is not contained in
13the Healthcare Cost Report Information System, then the
14Illinois Department may obtain the hospital provider's
15occupied bed days and Medicare bed days from any source
16available, including, but not limited to, records maintained
17by the hospital provider, which may be inspected at all times
18during business hours of the day by the Illinois Department or
19its duly authorized agents and employees.
20    (3) Subject to Sections 5A-3, 5A-10, and 5A-16, for State
21fiscal years 2019 and 2020, an annual assessment on inpatient
22services is imposed on each hospital provider in an amount
23equal to $197.19 multiplied by the difference of the
24hospital's occupied bed days less the hospital's Medicare bed
25days. For State fiscal years 2019 and 2020, a hospital's
26occupied bed days and Medicare bed days shall be determined

 

 

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1using the most recent data available from each hospital's 2015
2Medicare cost report as contained in the Healthcare Cost
3Report Information System file, for the quarter ending on
4March 31, 2017, without regard to any subsequent adjustments
5or changes to such data. If a hospital's 2015 Medicare cost
6report is not contained in the Healthcare Cost Report
7Information System, then the Illinois Department may obtain
8the hospital provider's occupied bed days and Medicare bed
9days from any source available, including, but not limited to,
10records maintained by the hospital provider, which may be
11inspected at all times during business hours of the day by the
12Illinois Department or its duly authorized agents and
13employees. Notwithstanding any other provision in this
14Article, for a hospital provider that did not have a 2015
15Medicare cost report, but paid an assessment in State fiscal
16year 2018 on the basis of hypothetical data, that assessment
17amount shall be used for State fiscal years 2019 and 2020.
18    (4) Subject to Sections 5A-3 and 5A-10 and to subsection
19(b-8), for the period of July 1, 2020 through December 31, 2020
20and calendar years 2021 through 2026 and 2022, an annual
21assessment on inpatient services is imposed on each hospital
22provider in an amount equal to $221.50 multiplied by the
23difference of the hospital's occupied bed days less the
24hospital's Medicare bed days, provided however: for the period
25of July 1, 2020 through December 31, 2020, (i) the assessment
26shall be equal to 50% of the annual amount; and (ii) the amount

 

 

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1of $221.50 shall be retroactively adjusted by a uniform
2percentage to generate an amount equal to 50% of the
3Assessment Adjustment, as defined in subsection (b-7). For the
4period of July 1, 2020 through December 31, 2020 and calendar
5years 2021 through 2026 and 2022, a hospital's occupied bed
6days and Medicare bed days shall be determined using the most
7recent data available from each hospital's 2015 Medicare cost
8report as contained in the Healthcare Cost Report Information
9System file, for the quarter ending on March 31, 2017, without
10regard to any subsequent adjustments or changes to such data.
11If a hospital's 2015 Medicare cost report is not contained in
12the Healthcare Cost Report Information System, then the
13Illinois Department may obtain the hospital provider's
14occupied bed days and Medicare bed days from any source
15available, including, but not limited to, records maintained
16by the hospital provider, which may be inspected at all times
17during business hours of the day by the Illinois Department or
18its duly authorized agents and employees. Should the change in
19the assessment methodology for fiscal years 2021 through
20December 31, 2022 not be approved on or before June 30, 2020,
21the assessment and payments under this Article in effect for
22fiscal year 2020 shall remain in place until the new
23assessment is approved. If the assessment methodology for July
241, 2020 through December 31, 2022, is approved on or after July
251, 2020, it shall be retroactive to July 1, 2020, subject to
26federal approval and provided that the payments authorized

 

 

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1under Section 5A-12.7 have the same effective date as the new
2assessment methodology. In giving retroactive effect to the
3assessment approved after June 30, 2020, credit toward the new
4assessment shall be given for any payments of the previous
5assessment for periods after June 30, 2020. Notwithstanding
6any other provision of this Article, for a hospital provider
7that did not have a 2015 Medicare cost report, but paid an
8assessment in State Fiscal Year 2020 on the basis of
9hypothetical data, the data that was the basis for the 2020
10assessment shall be used to calculate the assessment under
11this paragraph until December 31, 2023. Beginning July 1, 2022
12and through December 31, 2024, a safety-net hospital that had
13a change of ownership in calendar year 2021, and whose
14inpatient utilization had decreased by 90% from the prior year
15and prior to the change of ownership, may be eligible to pay a
16tax based on hypothetical data based on a determination of
17financial distress by the Department.
18    (b) (Blank).
19    (b-5)(1) Subject to Sections 5A-3 and 5A-10, for the
20portion of State fiscal year 2012, beginning June 10, 2012
21through June 30, 2012, and for State fiscal years 2013 through
222018, or as provided in Section 5A-16, an annual assessment on
23outpatient services is imposed on each hospital provider in an
24amount equal to .008766 multiplied by the hospital's
25outpatient gross revenue, provided, however, that the amount
26of .008766 shall be increased by a uniform percentage to

 

 

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1generate an amount equal to 25% of the State share of the
2payments authorized under Section 5A-12.5, with such increase
3only taking effect upon the date that a State share for such
4payments is required under federal law. For the period
5beginning June 10, 2012 through June 30, 2012, the annual
6assessment on outpatient services shall be prorated by
7multiplying the assessment amount by a fraction, the numerator
8of which is 21 days and the denominator of which is 365 days.
9For the period of April through June 2015, the amount of
10.008766 used to calculate the assessment under this paragraph
11shall, by emergency rule under subsection (s) of Section 5-45
12of the Illinois Administrative Procedure Act, be increased by
13a uniform percentage to generate $6,750,000 in the aggregate
14for that period from all hospitals subject to the annual
15assessment under this paragraph.
16    (2) In addition to any other assessments imposed under
17this Article, effective July 1, 2016 and semi-annually
18thereafter through June 2018, in addition to any federally
19required State share as authorized under paragraph (1), the
20amount of .008766 shall be increased by a uniform percentage
21to generate an amount equal to 25% of the ACA Assessment
22Adjustment, as defined in subsection (b-6) of this Section.
23    For the portion of State fiscal year 2012, beginning June
2410, 2012 through June 30, 2012, and State fiscal years 2013
25through 2018, or as provided in Section 5A-16, a hospital's
26outpatient gross revenue shall be determined using the most

 

 

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1recent data available from each hospital's 2009 Medicare cost
2report as contained in the Healthcare Cost Report Information
3System file, for the quarter ending on June 30, 2011, without
4regard to any subsequent adjustments or changes to such data.
5If a hospital's 2009 Medicare cost report is not contained in
6the Healthcare Cost Report Information System, then the
7Department may obtain the hospital provider's outpatient gross
8revenue from any source available, including, but not limited
9to, records maintained by the hospital provider, which may be
10inspected at all times during business hours of the day by the
11Department or its 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 outpatient
14services is imposed on each hospital provider in an amount
15equal to .01358 multiplied by the hospital's outpatient gross
16revenue. For State fiscal years 2019 and 2020, a hospital's
17outpatient gross revenue shall be determined using the most
18recent data available from each hospital's 2015 Medicare cost
19report as contained in the Healthcare Cost Report Information
20System file, for the quarter ending on March 31, 2017, without
21regard to any subsequent adjustments or changes to such data.
22If a hospital's 2015 Medicare cost report is not contained in
23the Healthcare Cost Report Information System, then the
24Department may obtain the hospital provider's outpatient gross
25revenue from any source available, including, but not limited
26to, records maintained by the hospital provider, which may be

 

 

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1inspected at all times during business hours of the day by the
2Department or its duly authorized agents and employees.
3Notwithstanding any other provision in this Article, for a
4hospital provider that did not have a 2015 Medicare cost
5report, but paid an assessment in State fiscal year 2018 on the
6basis of hypothetical data, that assessment amount shall be
7used for State fiscal years 2019 and 2020.
8    (4) Subject to Sections 5A-3 and 5A-10 and to subsection
9(b-8), for the period of July 1, 2020 through December 31, 2020
10and calendar years 2021 through 2026 and 2022, an annual
11assessment on outpatient services is imposed on each hospital
12provider in an amount equal to .01525 multiplied by the
13hospital's outpatient gross revenue, provided however: (i) for
14the period of July 1, 2020 through December 31, 2020, the
15assessment shall be equal to 50% of the annual amount; and (ii)
16the amount of .01525 shall be retroactively adjusted by a
17uniform percentage to generate an amount equal to 50% of the
18Assessment Adjustment, as defined in subsection (b-7). For the
19period of July 1, 2020 through December 31, 2020 and calendar
20years 2021 through 2026 and 2022, a hospital's outpatient
21gross revenue shall be determined using the most recent data
22available from each hospital's 2015 Medicare cost report as
23contained in the Healthcare Cost Report Information System
24file, for the quarter ending on March 31, 2017, without regard
25to any subsequent adjustments or changes to such data. If a
26hospital's 2015 Medicare cost report is not contained in the

 

 

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1Healthcare Cost Report Information System, then the Illinois
2Department may obtain the hospital provider's outpatient
3revenue data from any source available, including, but not
4limited to, records maintained by the hospital provider, which
5may be inspected at all times during business hours of the day
6by the Illinois Department or its duly authorized agents and
7employees. Should the change in the assessment methodology
8above for fiscal years 2021 through calendar year 2022 not be
9approved prior to July 1, 2020, the assessment and payments
10under this Article in effect for fiscal year 2020 shall remain
11in place until the new assessment is approved. If the change in
12the assessment methodology above for July 1, 2020 through
13December 31, 2022, is approved after June 30, 2020, it shall
14have a retroactive effective date of July 1, 2020, subject to
15federal approval and provided that the payments authorized
16under Section 12A-7 have the same effective date as the new
17assessment methodology. In giving retroactive effect to the
18assessment approved after June 30, 2020, credit toward the new
19assessment shall be given for any payments of the previous
20assessment for periods after June 30, 2020. Notwithstanding
21any other provision of this Article, for a hospital provider
22that did not have a 2015 Medicare cost report, but paid an
23assessment in State Fiscal Year 2020 on the basis of
24hypothetical data, the data that was the basis for the 2020
25assessment shall be used to calculate the assessment under
26this paragraph until December 31, 2023. Beginning July 1, 2022

 

 

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1and through December 31, 2024, a safety-net hospital that had
2a change of ownership in calendar year 2021, and whose
3inpatient utilization had decreased by 90% from the prior year
4and prior to the change of ownership, may be eligible to pay a
5tax based on hypothetical data based on a determination of
6financial distress by the Department.
7    (b-6)(1) As used in this Section, "ACA Assessment
8Adjustment" means:
9        (A) For the period of July 1, 2016 through December
10    31, 2016, the product of .19125 multiplied by the sum of
11    the fee-for-service payments to hospitals as authorized
12    under Section 5A-12.5 and the adjustments authorized under
13    subsection (t) of Section 5A-12.2 to managed care
14    organizations for hospital services due and payable in the
15    month of April 2016 multiplied by 6.
16        (B) For the period of January 1, 2017 through June 30,
17    2017, the product of .19125 multiplied by the sum of the
18    fee-for-service payments to hospitals as authorized under
19    Section 5A-12.5 and the adjustments authorized under
20    subsection (t) of Section 5A-12.2 to managed care
21    organizations for hospital services due and payable in the
22    month of October 2016 multiplied by 6, except that the
23    amount calculated under this subparagraph (B) shall be
24    adjusted, either positively or negatively, to account for
25    the difference between the actual payments issued under
26    Section 5A-12.5 for the period beginning July 1, 2016

 

 

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

 

 

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1        negatively, to account for the difference between the
2        actual payments issued under Section 5A-12.5 for the
3        period of July 1, 2017 through December 31, 2017 and
4        the estimated payments due and payable in the month of
5        April 2017 multiplied by 6 as described in
6        subparagraph (C); and
7            (ii) the amount calculated under this subparagraph
8        (D) shall be adjusted to include the product of .19125
9        multiplied by the sum of the fee-for-service payments,
10        if any, estimated to be paid to hospitals under
11        subsection (b) of Section 5A-12.5.
12    (2) The Department shall complete and apply a final
13reconciliation of the ACA Assessment Adjustment prior to June
1430, 2018 to account for:
15        (A) any differences between the actual payments issued
16    or scheduled to be issued prior to June 30, 2018 as
17    authorized in Section 5A-12.5 for the period of January 1,
18    2018 through June 30, 2018 and the estimated payments due
19    and payable in the month of October 2017 multiplied by 6 as
20    described in subparagraph (D); and
21        (B) any difference between the estimated
22    fee-for-service payments under subsection (b) of Section
23    5A-12.5 and the amount of such payments that are actually
24    scheduled to be paid.
25    The Department shall notify hospitals of any additional
26amounts owed or reduction credits to be applied to the June

 

 

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12018 ACA Assessment Adjustment. This is to be considered the
2final reconciliation for the ACA Assessment Adjustment.
3    (3) Notwithstanding any other provision of this Section,
4if for any reason the scheduled payments under subsection (b)
5of Section 5A-12.5 are not issued in full by the final day of
6the period authorized under subsection (b) of Section 5A-12.5,
7funds collected from each hospital pursuant to subparagraph
8(D) of paragraph (1) and pursuant to paragraph (2),
9attributable to the scheduled payments authorized under
10subsection (b) of Section 5A-12.5 that are not issued in full
11by the final day of the period attributable to each payment
12authorized under subsection (b) of Section 5A-12.5, shall be
13refunded.
14    (4) The increases authorized under paragraph (2) of
15subsection (a) and paragraph (2) of subsection (b-5) shall be
16limited to the federally required State share of the total
17payments authorized under Section 5A-12.5 if the sum of such
18payments yields an annualized amount equal to or less than
19$450,000,000, or if the adjustments authorized under
20subsection (t) of Section 5A-12.2 are found not to be
21actuarially sound; however, this limitation shall not apply to
22the fee-for-service payments described in subsection (b) of
23Section 5A-12.5.
24    (b-7)(1) As used in this Section, "Assessment Adjustment"
25means:
26        (A) For the period of July 1, 2020 through December

 

 

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1    31, 2020, the product of .3853 multiplied by the total of
2    the actual payments made under subsections (c) through (k)
3    of Section 5A-12.7 attributable to the period, less the
4    total of the assessment imposed under subsections (a) and
5    (b-5) of this Section for the period.
6        (B) For each calendar quarter beginning on and after
7    January 1, 2021 through December 31, 2022, the product of
8    .3853 multiplied by the total of the actual payments made
9    under subsections (c) through (k) of Section 5A-12.7
10    attributable to the period, less the total of the
11    assessment imposed under subsections (a) and (b-5) of this
12    Section for the period.
13        (C) Beginning on January 1, 2023, and each subsequent
14    July 1 and January 1, the product of .3853 multiplied by
15    the total of the actual payments made under subsections
16    (c) through (j) of Section 5A-12.7 attributable to the
17    6-month period immediately preceding the period to which
18    the adjustment applies, less the total of the assessment
19    imposed under subsections (a) and (b-5) of this Section
20    for the 6-month period immediately preceding the period to
21    which the adjustment applies.
22    (2) The Department shall calculate and notify each
23hospital of the total Assessment Adjustment and any additional
24assessment owed by the hospital or refund owed to the hospital
25on either a semi-annual or annual basis. Such notice shall be
26issued at least 30 days prior to any period in which the

 

 

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1assessment will be adjusted. Any additional assessment owed by
2the hospital or refund owed to the hospital shall be uniformly
3applied to the assessment owed by the hospital in monthly
4installments for the subsequent semi-annual period or calendar
5year. If no assessment is owed in the subsequent year, any
6amount owed by the hospital or refund due to the hospital,
7shall be paid in a lump sum.
8    (3) The Department shall publish all details of the
9Assessment Adjustment calculation performed each year on its
10website within 30 days of completing the calculation, and also
11submit the details of the Assessment Adjustment calculation as
12part of the Department's annual report to the General
13Assembly.
14    (b-8) Notwithstanding any other provision of this Article,
15the Department shall reduce the assessments imposed on each
16hospital under subsections (a) and (b-5) by the uniform
17percentage necessary to reduce the total assessment imposed on
18all hospitals by an aggregate amount of $240,000,000, with
19such reduction being applied by June 30, 2022. The assessment
20reduction required for each hospital under this subsection
21shall be forever waived, forgiven, and released by the
22Department.
23    (c) (Blank).
24    (d) Notwithstanding any of the other provisions of this
25Section, the Department is authorized to adopt rules to reduce
26the rate of any annual assessment imposed under this Section,

 

 

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1as authorized by Section 5-46.2 of the Illinois Administrative
2Procedure Act.
3    (e) Notwithstanding any other provision of this Section,
4any plan providing for an assessment on a hospital provider as
5a permissible tax under Title XIX of the federal Social
6Security Act and Medicaid-eligible payments to hospital
7providers from the revenues derived from that assessment shall
8be reviewed by the Illinois Department of Healthcare and
9Family Services, as the Single State Medicaid Agency required
10by federal law, to determine whether those assessments and
11hospital provider payments meet federal Medicaid standards. If
12the Department determines that the elements of the plan may
13meet federal Medicaid standards and a related State Medicaid
14Plan Amendment is prepared in a manner and form suitable for
15submission, that State Plan Amendment shall be submitted in a
16timely manner for review by the Centers for Medicare and
17Medicaid Services of the United States Department of Health
18and Human Services and subject to approval by the Centers for
19Medicare and Medicaid Services of the United States Department
20of Health and Human Services. No such plan shall become
21effective without approval by the Illinois General Assembly by
22the enactment into law of related legislation. Notwithstanding
23any other provision of this Section, the Department is
24authorized to adopt rules to reduce the rate of any annual
25assessment imposed under this Section. Any such rules may be
26adopted by the Department under Section 5-50 of the Illinois

 

 

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1Administrative Procedure Act.
2(Source: P.A. 100-581, eff. 3-12-18; 101-10, eff. 6-5-19;
3101-650, eff. 7-7-20; reenacted by P.A. 101-655, eff.
43-12-21.)
 
5    (305 ILCS 5/5A-5)  (from Ch. 23, par. 5A-5)
6    Sec. 5A-5. Notice; penalty; maintenance of records.
7    (a) The Illinois Department shall send a notice of
8assessment to every hospital provider subject to assessment
9under this Article. The notice of assessment shall notify the
10hospital of its assessment and shall be sent after receipt by
11the Department of notification from the Centers for Medicare
12and Medicaid Services of the U.S. Department of Health and
13Human Services that the payment methodologies required under
14this Article and, if necessary, the waiver granted under 42
15CFR 433.68 have been approved. The notice shall be on a form
16prepared by the Illinois Department and shall state the
17following:
18        (1) The name of the hospital provider.
19        (2) The address of the hospital provider's principal
20    place of business from which the provider engages in the
21    occupation of hospital provider in this State, and the
22    name and address of each hospital operated, conducted, or
23    maintained by the provider in this State.
24        (3) The occupied bed days, occupied bed days less
25    Medicare days, adjusted gross hospital revenue, or

 

 

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1    outpatient gross revenue of the hospital provider
2    (whichever is applicable), the amount of assessment
3    imposed under Section 5A-2 for the State fiscal year for
4    which the notice is sent, and the amount of each
5    installment to be paid during the State fiscal year.
6        (4) (Blank).
7        (5) Other reasonable information as determined by the
8    Illinois Department.
9    (b) If a hospital provider conducts, operates, or
10maintains more than one hospital licensed by the Illinois
11Department of Public Health, the provider shall pay the
12assessment for each hospital separately.
13    (c) Notwithstanding any other provision in this Article,
14in the case of a person who ceases to conduct, operate, or
15maintain a hospital in respect of which the person is subject
16to assessment under this Article as a hospital provider, the
17assessment for the State fiscal year in which the cessation
18occurs shall be adjusted by multiplying the assessment
19computed under Section 5A-2 by a fraction, the numerator of
20which is the number of days in the year during which the
21provider conducts, operates, or maintains the hospital and the
22denominator of which is 365. Immediately upon ceasing to
23conduct, operate, or maintain a hospital, the person shall pay
24the assessment for the year as so adjusted (to the extent not
25previously paid).
26    (d) Notwithstanding any other provision in this Article, a

 

 

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1provider who commences conducting, operating, or maintaining a
2hospital, upon notice by the Illinois Department, shall pay
3the assessment computed under Section 5A-2 and subsection (e)
4in installments on the due dates stated in the notice and on
5the regular installment due dates for the State fiscal year
6occurring after the due dates of the initial notice.
7    (e) Notwithstanding any other provision in this Article,
8for State fiscal years 2009 through 2018, in the case of a
9hospital provider that did not conduct, operate, or maintain a
10hospital in 2005, the assessment for that State fiscal year
11shall be computed on the basis of hypothetical occupied bed
12days for the full calendar year as determined by the Illinois
13Department. Notwithstanding any other provision in this
14Article, for the portion of State fiscal year 2012 beginning
15June 10, 2012 through June 30, 2012, and for State fiscal years
162013 through 2018, in the case of a hospital provider that did
17not conduct, operate, or maintain a hospital in 2009, the
18assessment under subsection (b-5) of Section 5A-2 for that
19State fiscal year shall be computed on the basis of
20hypothetical gross outpatient revenue for the full calendar
21year as determined by the Illinois Department.
22    Notwithstanding any other provision in this Article,
23beginning July 1, 2018 through December 31, 2026 for State
24fiscal years 2019 through 2024, in the case of a hospital
25provider that did not conduct, operate, or maintain a hospital
26in the year that is the basis of the calculation of the

 

 

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

 

 

10200HB1950sam002- 24 -LRB102 12590 KTG 38983 a

1assessment amount shall be used for State fiscal years 2019
2and 2020; however, for State fiscal year 2020, the assessment
3amount shall be increased by the proportion that it represents
4of the total annual assessment that is generated from all
5hospitals in order to generate $6,250,000 in the aggregate for
6that period from all hospitals subject to the annual
7assessment under this paragraph.
8    (f) Every hospital provider subject to assessment under
9this Article shall keep sufficient records to permit the
10determination of adjusted gross hospital revenue for the
11hospital's fiscal year. All such records shall be kept in the
12English language and shall, at all times during regular
13business hours of the day, be subject to inspection by the
14Illinois Department or its duly authorized agents and
15employees.
16    (g) The Illinois Department may, by rule, provide a
17hospital provider a reasonable opportunity to request a
18clarification or correction of any clerical or computational
19errors contained in the calculation of its assessment, but
20such corrections shall not extend to updating the cost report
21information used to calculate the assessment.
22    (h) (Blank).
23(Source: P.A. 99-78, eff. 7-20-15; 100-581, eff. 3-12-18.)
 
24    (305 ILCS 5/5A-8)  (from Ch. 23, par. 5A-8)
25    Sec. 5A-8. Hospital Provider Fund.

 

 

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1    (a) There is created in the State Treasury the Hospital
2Provider Fund. Interest earned by the Fund shall be credited
3to the Fund. The Fund shall not be used to replace any moneys
4appropriated to the Medicaid program by the General Assembly.
5    (b) The Fund is created for the purpose of receiving
6moneys in accordance with Section 5A-6 and disbursing moneys
7only for the following purposes, notwithstanding any other
8provision of law:
9        (1) For making payments to hospitals as required under
10    this Code, under the Children's Health Insurance Program
11    Act, under the Covering ALL KIDS Health Insurance Act, and
12    under the Long Term Acute Care Hospital Quality
13    Improvement Transfer Program Act.
14        (2) For the reimbursement of moneys collected by the
15    Illinois Department from hospitals or hospital providers
16    through error or mistake in performing the activities
17    authorized under this Code.
18        (3) For payment of administrative expenses incurred by
19    the Illinois Department or its agent in performing
20    activities under this Code, under the Children's Health
21    Insurance Program Act, under the Covering ALL KIDS Health
22    Insurance Act, and under the Long Term Acute Care Hospital
23    Quality Improvement Transfer Program Act.
24        (4) For payments of any amounts which are reimbursable
25    to the federal government for payments from this Fund
26    which are required to be paid by State warrant.

 

 

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1        (5) For making transfers, as those transfers are
2    authorized in the proceedings authorizing debt under the
3    Short Term Borrowing Act, but transfers made under this
4    paragraph (5) shall not exceed the principal amount of
5    debt issued in anticipation of the receipt by the State of
6    moneys to be deposited into the Fund.
7        (6) For making transfers to any other fund in the
8    State treasury, but transfers made under this paragraph
9    (6) shall not exceed the amount transferred previously
10    from that other fund into the Hospital Provider Fund plus
11    any interest that would have been earned by that fund on
12    the monies that had been transferred.
13        (6.5) For making transfers to the Healthcare Provider
14    Relief Fund, except that transfers made under this
15    paragraph (6.5) shall not exceed $60,000,000 in the
16    aggregate.
17        (7) For making transfers not exceeding the following
18    amounts, related to State fiscal years 2013 through 2018,
19    to the following designated funds:
20            Health and Human Services Medicaid Trust
21                Fund..............................$20,000,000
22            Long-Term Care Provider Fund..........$30,000,000
23            General Revenue Fund.................$80,000,000.
24    Transfers under this paragraph shall be made within 7 days
25    after the payments have been received pursuant to the
26    schedule of payments provided in subsection (a) of Section

 

 

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1    5A-4.
2        (7.1) (Blank).
3        (7.5) (Blank).
4        (7.8) (Blank).
5        (7.9) (Blank).
6        (7.10) For State fiscal year 2014, for making
7    transfers of the moneys resulting from the assessment
8    under subsection (b-5) of Section 5A-2 and received from
9    hospital providers under Section 5A-4 and transferred into
10    the Hospital Provider Fund under Section 5A-6 to the
11    designated funds not exceeding the following amounts in
12    that State fiscal year:
13            Healthcare Provider Relief Fund......$100,000,000
14        Transfers under this paragraph shall be made within 7
15    days after the payments have been received pursuant to the
16    schedule of payments provided in subsection (a) of Section
17    5A-4.
18        The additional amount of transfers in this paragraph
19    (7.10), authorized by Public Act 98-651, shall be made
20    within 10 State business days after June 16, 2014 (the
21    effective date of Public Act 98-651). That authority shall
22    remain in effect even if Public Act 98-651 does not become
23    law until State fiscal year 2015.
24        (7.10a) For State fiscal years 2015 through 2018, for
25    making transfers of the moneys resulting from the
26    assessment under subsection (b-5) of Section 5A-2 and

 

 

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1    received from hospital providers under Section 5A-4 and
2    transferred into the Hospital Provider Fund under Section
3    5A-6 to the designated funds not exceeding the following
4    amounts related to each State fiscal year:
5            Healthcare Provider Relief Fund......$50,000,000
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        (7.11) (Blank).
11        (7.12) For State fiscal year 2013, for increasing by
12    21/365ths the transfer of the moneys resulting from the
13    assessment under subsection (b-5) of Section 5A-2 and
14    received from hospital providers under Section 5A-4 for
15    the portion of State fiscal year 2012 beginning June 10,
16    2012 through June 30, 2012 and transferred into the
17    Hospital Provider Fund under Section 5A-6 to the
18    designated funds not exceeding the following amounts in
19    that State fiscal year:
20            Healthcare Provider Relief Fund.......$2,870,000
21        Since the federal Centers for Medicare and Medicaid
22    Services approval of the assessment authorized under
23    subsection (b-5) of Section 5A-2, received from hospital
24    providers under Section 5A-4 and the payment methodologies
25    to hospitals required under Section 5A-12.4 was not
26    received by the Department until State fiscal year 2014

 

 

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1    and since the Department made retroactive payments during
2    State fiscal year 2014 related to the referenced period of
3    June 2012, the transfer authority granted in this
4    paragraph (7.12) is extended through the date that is 10
5    State business days after June 16, 2014 (the effective
6    date of Public Act 98-651).
7        (7.13) In addition to any other transfers authorized
8    under this Section, for State fiscal years 2017 and 2018,
9    for making transfers to the Healthcare Provider Relief
10    Fund of moneys collected from the ACA Assessment
11    Adjustment authorized under subsections (a) and (b-5) of
12    Section 5A-2 and paid by hospital providers under Section
13    5A-4 into the Hospital Provider Fund under Section 5A-6
14    for each State fiscal year. Timing of transfers to the
15    Healthcare Provider Relief Fund under this paragraph shall
16    be at the discretion of the Department, but no less
17    frequently than quarterly.
18        (7.14) For making transfers not exceeding the
19    following amounts, related to State fiscal years 2019 and
20    2020, to the following designated funds:
21            Health and Human Services Medicaid Trust
22                Fund..............................$20,000,000
23            Long-Term Care Provider Fund..........$30,000,000
24            Healthcare Provider Relief Fund.....$325,000,000.
25        Transfers under this paragraph shall be made within 7
26    days after the payments have been received pursuant to the

 

 

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1    schedule of payments provided in subsection (a) of Section
2    5A-4.
3        (7.15) For making transfers not exceeding the
4    following amounts, related to State fiscal years 2023
5    through 2026 2021 and 2022, to the following designated
6    funds:
7            Health and Human Services Medicaid Trust
8                Fund.............................$20,000,000
9            Long-Term Care Provider Fund.........$30,000,000
10            Healthcare Provider Relief Fund.....$365,000,000
11        (7.16) For making transfers not exceeding the
12    following amounts, related to July 1, 2026 2022 to
13    December 31, 2026 2022, to the following designated funds:
14            Health and Human Services Medicaid Trust
15                Fund.............................$10,000,000
16            Long-Term Care Provider Fund.........$15,000,000
17            Healthcare Provider Relief Fund.....$182,500,000
18        (8) For making refunds to hospital providers pursuant
19    to Section 5A-10.
20        (9) For making payment to capitated managed care
21    organizations as described in subsections (s) and (t) of
22    Section 5A-12.2, subsection (r) of Section 5A-12.6, and
23    Section 5A-12.7 of this Code.
24    Disbursements from the Fund, other than transfers
25authorized under paragraphs (5) and (6) of this subsection,
26shall be by warrants drawn by the State Comptroller upon

 

 

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1receipt of vouchers duly executed and certified by the
2Illinois Department.
3    (c) The Fund shall consist of the following:
4        (1) All moneys collected or received by the Illinois
5    Department from the hospital provider assessment imposed
6    by this Article.
7        (2) All federal matching funds received by the
8    Illinois Department as a result of expenditures made by
9    the Illinois Department that are attributable to moneys
10    deposited in the Fund.
11        (3) Any interest or penalty levied in conjunction with
12    the administration of this Article.
13        (3.5) As applicable, proceeds from surety bond
14    payments payable to the Department as referenced in
15    subsection (s) of Section 5A-12.2 of this Code.
16        (4) Moneys transferred from another fund in the State
17    treasury.
18        (5) All other moneys received for the Fund from any
19    other source, including interest earned thereon.
20    (d) (Blank).
21(Source: P.A. 100-581, eff. 3-12-18; 100-863, eff. 8-14-19;
22101-650, eff. 7-7-20.)
 
23    (305 ILCS 5/5A-10)  (from Ch. 23, par. 5A-10)
24    Sec. 5A-10. Applicability.
25    (a) The assessment imposed by subsection (a) of Section

 

 

10200HB1950sam002- 32 -LRB102 12590 KTG 38983 a

15A-2 shall cease to be imposed and the Department's obligation
2to make payments shall immediately cease, and any moneys
3remaining in the Fund shall be refunded to hospital providers
4in proportion to the amounts paid by them, if:
5        (1) The payments to hospitals required under this
6    Article are not eligible for federal matching funds under
7    Title XIX or XXI of the Social Security Act;
8        (2) For State fiscal years 2009 through 2018, and as
9    provided in Section 5A-16, the Department of Healthcare
10    and Family Services adopts any administrative rule change
11    to reduce payment rates or alters any payment methodology
12    that reduces any payment rates made to operating hospitals
13    under the approved Title XIX or Title XXI State plan in
14    effect January 1, 2008 except for:
15            (A) any changes for hospitals described in
16        subsection (b) of Section 5A-3;
17            (B) any rates for payments made under this Article
18        V-A;
19            (C) any changes proposed in State plan amendment
20        transmittal numbers 08-01, 08-02, 08-04, 08-06, and
21        08-07;
22            (D) in relation to any admissions on or after
23        January 1, 2011, a modification in the methodology for
24        calculating outlier payments to hospitals for
25        exceptionally costly stays, for hospitals reimbursed
26        under the diagnosis-related grouping methodology in

 

 

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1        effect on July 1, 2011; provided that the Department
2        shall be limited to one such modification during the
3        36-month period after the effective date of this
4        amendatory Act of the 96th General Assembly;
5            (E) any changes affecting hospitals authorized by
6        Public Act 97-689;
7            (F) any changes authorized by Section 14-12 of
8        this Code, or for any changes authorized under Section
9        5A-15 of this Code; or
10            (G) any changes authorized under Section 5-5b.1.
11    (b) The assessment imposed by Section 5A-2 shall not take
12effect or shall cease to be imposed, and the Department's
13obligation to make payments shall immediately cease, if the
14assessment is determined to be an impermissible tax under
15Title XIX of the Social Security Act. Moneys in the Hospital
16Provider Fund derived from assessments imposed prior thereto
17shall be disbursed in accordance with Section 5A-8 to the
18extent federal financial participation is not reduced due to
19the impermissibility of the assessments, and any remaining
20moneys shall be refunded to hospital providers in proportion
21to the amounts paid by them.
22    (c) The assessments imposed by subsection (b-5) of Section
235A-2 shall not take effect or shall cease to be imposed, the
24Department's obligation to make payments shall immediately
25cease, and any moneys remaining in the Fund shall be refunded
26to hospital providers in proportion to the amounts paid by

 

 

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1them, if the payments to hospitals required under Section
25A-12.4 or Section 5A-12.6 are not eligible for federal
3matching funds under Title XIX of the Social Security Act.
4    (d) The assessments imposed by Section 5A-2 shall not take
5effect or shall cease to be imposed, the Department's
6obligation to make payments shall immediately cease, and any
7moneys remaining in the Fund shall be refunded to hospital
8providers in proportion to the amounts paid by them, if:
9        (1) for State fiscal years 2013 through 2018, and as
10    provided in Section 5A-16, the Department reduces any
11    payment rates to hospitals as in effect on May 1, 2012, or
12    alters any payment methodology as in effect on May 1,
13    2012, that has the effect of reducing payment rates to
14    hospitals, except for any changes affecting hospitals
15    authorized in Public Act 97-689 and any changes authorized
16    by Section 14-12 of this Code, and except for any changes
17    authorized under Section 5A-15, and except for any changes
18    authorized under Section 5-5b.1;
19        (2) for State fiscal years 2013 through 2018, and as
20    provided in Section 5A-16, the Department reduces any
21    supplemental payments made to hospitals below the amounts
22    paid for services provided in State fiscal year 2011 as
23    implemented by administrative rules adopted and in effect
24    on or prior to June 30, 2011, except for any changes
25    affecting hospitals authorized in Public Act 97-689 and
26    any changes authorized by Section 14-12 of this Code, and

 

 

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1    except for any changes authorized under Section 5A-15, and
2    except for any changes authorized under Section 5-5b.1; or
3        (3) for State fiscal years 2015 through 2018, and as
4    provided in Section 5A-16, the Department reduces the
5    overall effective rate of reimbursement to hospitals below
6    the level authorized under Section 14-12 of this Code,
7    except for any changes under Section 14-12 or Section
8    5A-15 of this Code, and except for any changes authorized
9    under Section 5-5b.1.
10    (e) In State fiscal year 2019 through State fiscal year
112020, the assessments imposed under Section 5A-2 shall not
12take effect or shall cease to be imposed, the Department's
13obligation to make payments shall immediately cease, and any
14moneys remaining in the Fund shall be refunded to hospital
15providers in proportion to the amounts paid by them, if:
16        (1) the payments to hospitals required under Section
17    5A12.6 are not eligible for federal matching funds under
18    Title XIX of the Social Security Act; or
19        (2) the Department reduces the overall effective rate
20    of reimbursement to hospitals below the level authorized
21    under Section 14-12 of this Code, as in effect on December
22    31, 2017, except for any changes authorized under Sections
23    14-12 or Section 5A-15 of this Code, and except for any
24    changes authorized under changes to Sections 5A-12.2,
25    5A-12.4, 5A-12.5, 5A-12.6, and 14-12 made by Public Act
26    100-581.

 

 

10200HB1950sam002- 36 -LRB102 12590 KTG 38983 a

1    (f) Beginning in State Fiscal Year 2021, the assessments
2imposed under Section 5A-2 shall not take effect or shall
3cease to be imposed, the Department's obligation to make
4payments shall immediately cease, and any moneys remaining in
5the Fund shall be refunded to hospital providers in proportion
6to the amounts paid by them, if:
7        (1) the payments to hospitals required under Section
8    5A-12.7 are not eligible for federal matching funds under
9    Title XIX of the Social Security Act; or
10        (2) the Department reduces the overall effective rate
11    of reimbursement to hospitals below the level authorized
12    under Section 14-12, as in effect on December 31, 2021
13    2019, except for any changes authorized under Sections
14    14-12 or 5A-15, and except for any changes authorized
15    under changes to Sections 5A-12.7 and 14-12 made by this
16    amendatory Act of the 101st General Assembly, and except
17    for any changes to Section 5A-12.7 made by this amendatory
18    Act of the 102nd General Assembly.
19(Source: P.A. 100-581, eff. 3-12-18; 101-650, eff. 7-7-20.)
 
20    (305 ILCS 5/5A-12.7)
21    (Section scheduled to be repealed on December 31, 2022)
22    Sec. 5A-12.7. Continuation of hospital access payments on
23and after July 1, 2020.
24    (a) To preserve and improve access to hospital services,
25for hospital services rendered on and after July 1, 2020, the

 

 

10200HB1950sam002- 37 -LRB102 12590 KTG 38983 a

1Department shall, except for hospitals described in subsection
2(b) of Section 5A-3, make payments to hospitals or require
3capitated managed care organizations to make payments as set
4forth in this Section. Payments under this Section are not due
5and payable, however, until: (i) the methodologies described
6in this Section are approved by the federal government in an
7appropriate State Plan amendment or directed payment preprint;
8and (ii) the assessment imposed under this Article is
9determined to be a permissible tax under Title XIX of the
10Social Security Act. In determining the hospital access
11payments authorized under subsection (g) of this Section, if a
12hospital ceases to qualify for payments from the pool, the
13payments for all hospitals continuing to qualify for payments
14from such pool shall be uniformly adjusted to fully expend the
15aggregate net amount of the pool, with such adjustment being
16effective on the first day of the second month following the
17date the hospital ceases to receive payments from such pool.
18    (b) Amounts moved into claims-based rates and distributed
19in accordance with Section 14-12 shall remain in those
20claims-based rates.
21    (c) Graduate medical education.
22        (1) The calculation of graduate medical education
23    payments shall be based on the hospital's Medicare cost
24    report ending in Calendar Year 2018, as reported in the
25    Healthcare Cost Report Information System file, release
26    date September 30, 2019. An Illinois hospital reporting

 

 

10200HB1950sam002- 38 -LRB102 12590 KTG 38983 a

1    intern and resident cost on its Medicare cost report shall
2    be eligible for graduate medical education payments.
3        (2) Each hospital's annualized Medicaid Intern
4    Resident Cost is calculated using annualized intern and
5    resident total costs obtained from Worksheet B Part I,
6    Columns 21 and 22 the sum of Lines 30-43, 50-76, 90-93,
7    96-98, and 105-112 multiplied by the percentage that the
8    hospital's Medicaid days (Worksheet S3 Part I, Column 7,
9    Lines 2, 3, 4, 14, 16-18, and 32) comprise of the
10    hospital's total days (Worksheet S3 Part I, Column 8,
11    Lines 14, 16-18, and 32).
12        (3) An annualized Medicaid indirect medical education
13    (IME) payment is calculated for each hospital using its
14    IME payments (Worksheet E Part A, Line 29, Column 1)
15    multiplied by the percentage that its Medicaid days
16    (Worksheet S3 Part I, Column 7, Lines 2, 3, 4, 14, 16-18,
17    and 32) comprise of its Medicare days (Worksheet S3 Part
18    I, Column 6, Lines 2, 3, 4, 14, and 16-18).
19        (4) For each hospital, its annualized Medicaid Intern
20    Resident Cost and its annualized Medicaid IME payment are
21    summed, and, except as capped at 120% of the average cost
22    per intern and resident for all qualifying hospitals as
23    calculated under this paragraph, is multiplied by the
24    applicable reimbursement factor as described in this
25    paragraph, 22.6% to determine the hospital's final
26    graduate medical education payment. Each hospital's

 

 

10200HB1950sam002- 39 -LRB102 12590 KTG 38983 a

1    average cost per intern and resident shall be calculated
2    by summing its total annualized Medicaid Intern Resident
3    Cost plus its annualized Medicaid IME payment and dividing
4    that amount by the hospital's total Full Time Equivalent
5    Residents and Interns. If the hospital's average per
6    intern and resident cost is greater than 120% of the same
7    calculation for all qualifying hospitals, the hospital's
8    per intern and resident cost shall be capped at 120% of the
9    average cost for all qualifying hospitals.
10            (A) For the period of July 1, 2020 through
11        December 31, 2022, the applicable reimbursement factor
12        shall be 22.6%.
13            (B) For the period of January 1, 2023 through
14        December 31, 2026, the applicable reimbursement factor
15        shall be 35% for all qualified safety-net hospitals,
16        as defined in Section 5-5e.1 of this Code, and all
17        hospitals with 100 or more Full Time Equivalent
18        Residents and Interns, as reported on the hospital's
19        Medicare cost report ending in Calendar Year 2018, and
20        for all other qualified hospitals the applicable
21        reimbursement factor shall be 30%.
22    (d) Fee-for-service supplemental payments. For the period
23of July 1, 2020 through December 31, 2022, each Each Illinois
24hospital shall receive an annual payment equal to the amounts
25below, to be paid in 12 equal installments on or before the
26seventh State business day of each month, except that no

 

 

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1payment shall be due within 30 days after the later of the date
2of notification of federal approval of the payment
3methodologies required under this Section or any waiver
4required under 42 CFR 433.68, at which time the sum of amounts
5required under this Section prior to the date of notification
6is due and payable.
7        (1) For critical access hospitals, $385 per covered
8    inpatient day contained in paid fee-for-service claims and
9    $530 per paid fee-for-service outpatient claim for dates
10    of service in Calendar Year 2019 in the Department's
11    Enterprise Data Warehouse as of May 11, 2020.
12        (2) For safety-net hospitals, $960 per covered
13    inpatient day contained in paid fee-for-service claims and
14    $625 per paid fee-for-service outpatient claim for dates
15    of service in Calendar Year 2019 in the Department's
16    Enterprise Data Warehouse as of May 11, 2020.
17        (3) For long term acute care hospitals, $295 per
18    covered inpatient day contained in paid fee-for-service
19    claims for dates of service in Calendar Year 2019 in the
20    Department's Enterprise Data Warehouse as of May 11, 2020.
21        (4) For freestanding psychiatric hospitals, $125 per
22    covered inpatient day contained in paid fee-for-service
23    claims and $130 per paid fee-for-service outpatient claim
24    for dates of service in Calendar Year 2019 in the
25    Department's Enterprise Data Warehouse as of May 11, 2020.
26        (5) For freestanding rehabilitation hospitals, $355

 

 

10200HB1950sam002- 41 -LRB102 12590 KTG 38983 a

1    per covered inpatient day contained in paid
2    fee-for-service claims for dates of service in Calendar
3    Year 2019 in the Department's Enterprise Data Warehouse as
4    of May 11, 2020.
5    (d-2) Fee-for-service supplemental payments. Beginning
6January 1, 2023, each Illinois hospital shall receive an
7annual payment equal to the amounts listed below, to be paid in
812 equal installments on or before the seventh State business
9day of each month, except that no payment shall be due within
1030 days after the later of the date of notification of federal
11approval of the payment methodologies required under this
12Section or any waiver required under 42 CFR 433.68, at which
13time the sum of amounts required under this Section prior to
14the date of notification is due and payable. The Department
15may adjust the rates in paragraphs (1) through (7) to comply
16with the federal upper payment limits, with such adjustments
17being determined so that the total estimated spending by
18hospital class, under such adjusted rates, remains
19substantially similar to the total estimated spending under
20the original rates set forth in this subsection.
21        (1) For critical access hospitals, as defined in
22    subsection (f), $750 per covered inpatient day contained
23    in paid fee-for-service claims and $750 per paid
24    fee-for-service outpatient claim for dates of service in
25    Calendar Year 2019 in the Department's Enterprise Data
26    Warehouse as of August 6, 2021.

 

 

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1        (2) For safety-net hospitals, as described in
2    subsection (f), $1,350 per inpatient day contained in paid
3    fee-for-service claims and $1,350 per paid fee-for-service
4    outpatient claim for dates of service in Calendar Year
5    2019 in the Department's Enterprise Data Warehouse as of
6    August 6, 2021.
7        (3) For long term acute care hospitals, $550 per
8    covered inpatient day contained in paid fee-for-service
9    claims for dates of service in Calendar Year 2019 in the
10    Department's Enterprise Data Warehouse as of August 6,
11    2021.
12        (4) For freestanding psychiatric hospitals, $200 per
13    covered inpatient day contained in paid fee-for-service
14    claims and $200 per paid fee-for-service outpatient claim
15    for dates of service in Calendar Year 2019 in the
16    Department's Enterprise Data Warehouse as of August 6,
17    2021.
18        (5) For freestanding rehabilitation hospitals, $550
19    per covered inpatient day contained in paid
20    fee-for-service claims and $125 per paid fee-for-service
21    outpatient claim for dates of service in Calendar Year
22    2019 in the Department's Enterprise Data Warehouse as of
23    August 6, 2021.
24        (6) For all general acute care hospitals and high
25    Medicaid hospitals as defined in subsection (f), $500 per
26    covered inpatient day for dates of service in Calendar

 

 

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1    Year 2019 contained in paid fee-for-service claims and
2    $500 per paid fee-for-service outpatient claim in the
3    Department's Enterprise Data Warehouse as of August 6,
4    2021.
5        (7) For public hospitals, as defined in subsection
6    (f), $275 per covered inpatient day contained in paid
7    fee-for-service claims and $275 per paid fee-for-service
8    outpatient claim for dates of service in Calendar Year
9    2019 in the Department's Enterprise Data Warehouse as of
10    August 6, 2021.
11        (8) Alzheimer's treatment access payment. Each
12    Illinois academic medical center or teaching hospital, as
13    defined in Section 5-5e.2 of this Code, that is identified
14    as the primary hospital affiliate of one of the Regional
15    Alzheimer's Disease Assistance Centers, as designated by
16    the Alzheimer's Disease Assistance Act and identified in
17    the Department of Public Health's Alzheimer's Disease
18    State Plan dated December 2016, shall be paid an
19    Alzheimer's treatment access payment equal to the product
20    of the qualifying hospital's Calendar Year 2019 total
21    inpatient fee-for-service days, in the Department's
22    Enterprise Data Warehouse as of August 6, 2021, multiplied
23    by the applicable Alzheimer's treatment rate of $244.37
24    for hospitals located in Cook County and $312.03 for
25    hospitals located outside Cook County.
26        (6) For all general acute care hospitals and high

 

 

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1    Medicaid hospitals as defined in subsection (f), $350 per
2    covered inpatient day for dates of service in Calendar
3    Year 2019 contained in paid fee-for-service claims and
4    $620 per paid fee-for-service outpatient claim in the
5    Department's Enterprise Data Warehouse as of May 11, 2020.
6        (7) Alzheimer's treatment access payment. Each
7    Illinois academic medical center or teaching hospital, as
8    defined in Section 5-5e.2 of this Code, that is identified
9    as the primary hospital affiliate of one of the Regional
10    Alzheimer's Disease Assistance Centers, as designated by
11    the Alzheimer's Disease Assistance Act and identified in
12    the Department of Public Health's Alzheimer's Disease
13    State Plan dated December 2016, shall be paid an
14    Alzheimer's treatment access payment equal to the product
15    of the qualifying hospital's State Fiscal Year 2018 total
16    inpatient fee-for-service days multiplied by the
17    applicable Alzheimer's treatment rate of $226.30 for
18    hospitals located in Cook County and $116.21 for hospitals
19    located outside Cook County.
20    (e) The Department shall require managed care
21organizations (MCOs) to make directed payments and
22pass-through payments according to this Section. Each calendar
23year, the Department shall require MCOs to pay the maximum
24amount out of these funds as allowed as pass-through payments
25under federal regulations. The Department shall require MCOs
26to make such pass-through payments as specified in this

 

 

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1Section. The Department shall require the MCOs to pay the
2remaining amounts as directed Payments as specified in this
3Section. The Department shall issue payments to the
4Comptroller by the seventh business day of each month for all
5MCOs that are sufficient for MCOs to make the directed
6payments and pass-through payments according to this Section.
7The Department shall require the MCOs to make pass-through
8payments and directed payments using electronic funds
9transfers (EFT), if the hospital provides the information
10necessary to process such EFTs, in accordance with directions
11provided monthly by the Department, within 7 business days of
12the date the funds are paid to the MCOs, as indicated by the
13"Paid Date" on the website of the Office of the Comptroller if
14the funds are paid by EFT and the MCOs have received directed
15payment instructions. If funds are not paid through the
16Comptroller by EFT, payment must be made within 7 business
17days of the date actually received by the MCO. The MCO will be
18considered to have paid the pass-through payments when the
19payment remittance number is generated or the date the MCO
20sends the check to the hospital, if EFT information is not
21supplied. If an MCO is late in paying a pass-through payment or
22directed payment as required under this Section (including any
23extensions granted by the Department), it shall pay a penalty,
24unless waived by the Department for reasonable cause, to the
25Department equal to 5% of the amount of the pass-through
26payment or directed payment not paid on or before the due date

 

 

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1plus 5% of the portion thereof remaining unpaid on the last day
2of each 30-day period thereafter. Payments to MCOs that would
3be paid consistent with actuarial certification and enrollment
4in the absence of the increased capitation payments under this
5Section shall not be reduced as a consequence of payments made
6under this subsection. The Department shall publish and
7maintain on its website for a period of no less than 8 calendar
8quarters, the quarterly calculation of directed payments and
9pass-through payments owed to each hospital from each MCO. All
10calculations and reports shall be posted no later than the
11first day of the quarter for which the payments are to be
12issued.
13    (f)(1) For purposes of allocating the funds included in
14capitation payments to MCOs, Illinois hospitals shall be
15divided into the following classes as defined in
16administrative rules:
17        (A) Beginning July 1, 2020 through December 31, 2022,
18    critical Critical access hospitals. Beginning January 1,
19    2023, "critical access hospital" means a hospital
20    designated by the Department of Public Health as a
21    critical access hospital, excluding any hospital meeting
22    the definition of a public hospital in subparagraph (F).
23        (B) Safety-net hospitals, except that stand-alone
24    children's hospitals that are not specialty children's
25    hospitals will not be included. For the calendar year
26    beginning January 1, 2023, and each calendar year

 

 

10200HB1950sam002- 47 -LRB102 12590 KTG 38983 a

1    thereafter, assignment to the safety-net class shall be
2    based on the annual safety-net rate year beginning 15
3    months before the beginning of the first Payout Quarter of
4    the calendar year.
5        (C) Long term acute care hospitals.
6        (D) Freestanding psychiatric hospitals.
7        (E) Freestanding rehabilitation hospitals.
8        (F) Beginning January 1, 2023, "public hospital" means
9    a hospital that is owned or operated by an Illinois
10    Government body or municipality, excluding a hospital
11    provider that is a State agency, a State university, or a
12    county with a population of 3,000,000 or more.
13        (G) (F) High Medicaid hospitals.
14            (i) As used in this Section, "high Medicaid
15        hospital" means a general acute care hospital that:
16                (I) For the payout periods July 1, 2020
17            through December 31, 2022, is not a safety-net
18            hospital or critical access hospital and that has
19            a Medicaid Inpatient Utilization Rate above 30% or
20            a hospital that had over 35,000 inpatient Medicaid
21            days during the applicable period. For the period
22            July 1, 2020 through December 31, 2020, the
23            applicable period for the Medicaid Inpatient
24            Utilization Rate (MIUR) is the rate year 2020 MIUR
25            and for the number of inpatient days it is State
26            fiscal year 2018. Beginning in calendar year 2021,

 

 

10200HB1950sam002- 48 -LRB102 12590 KTG 38983 a

1            the Department shall use the most recently
2            determined MIUR, as defined in subsection (h) of
3            Section 5-5.02, and for the inpatient day
4            threshold, the State fiscal year ending 18 months
5            prior to the beginning of the calendar year. For
6            purposes of calculating MIUR under this Section,
7            children's hospitals and affiliated general acute
8            care hospitals shall be considered a single
9            hospital.
10                (II) For the calendar year beginning January
11            1, 2023, and each calendar year thereafter, is not
12            a public hospital, safety-net hospital, or
13            critical access hospital and that qualifies as a
14            regional high volume hospital or is a hospital
15            that has a Medicaid Inpatient Utilization Rate
16            (MIUR) above 30%. As used in this item, "regional
17            high volume hospital" means a hospital which ranks
18            in the top 2 quartiles based on total hospital
19            services volume, of all eligible general acute
20            care hospitals, when ranked in descending order
21            based on total hospital services volume, within
22            the same Medicaid managed care region, as
23            designated by the Department, as of January 1,
24            2022. As used in this item, "total hospital
25            services volume" means the total of all Medical
26            Assistance hospital inpatient admissions plus all

 

 

10200HB1950sam002- 49 -LRB102 12590 KTG 38983 a

1            Medical Assistance hospital outpatient visits. For
2            purposes of determining regional high volume
3            hospital inpatient admissions and outpatient
4            visits, the Department shall use dates of service
5            provided during State Fiscal Year 2020 for the
6            Payout Quarter beginning January 1, 2023. The
7            Department shall use dates of service from the
8            State fiscal year ending 18 month before the
9            beginning of the first Payout Quarter of the
10            subsequent annual determination period.
11            (ii) For the calendar year beginning January 1,
12        2023, the Department shall use the Rate Year 2022
13        Medicaid inpatient utilization rate (MIUR), as defined
14        in subsection (h) of Section 5-5.02. For each
15        subsequent annual determination, the Department shall
16        use the MIUR applicable to the rate year ending
17        September 30 of the year preceding the beginning of
18        the calendar year.
19        (H) (G) General acute care hospitals. As used under
20    this Section, "general acute care hospitals" means all
21    other Illinois hospitals not identified in subparagraphs
22    (A) through (G) (F).
23    (2) Hospitals' qualification for each class shall be
24assessed prior to the beginning of each calendar year and the
25new class designation shall be effective January 1 of the next
26year. The Department shall publish by rule the process for

 

 

10200HB1950sam002- 50 -LRB102 12590 KTG 38983 a

1establishing class determination.
2    (g) Fixed pool directed payments. Beginning July 1, 2020,
3the Department shall issue payments to MCOs which shall be
4used to issue directed payments to qualified Illinois
5safety-net hospitals and critical access hospitals on a
6monthly basis in accordance with this subsection. Prior to the
7beginning of each Payout Quarter beginning July 1, 2020, the
8Department shall use encounter claims data from the
9Determination Quarter, accepted by the Department's Medicaid
10Management Information System for inpatient and outpatient
11services rendered by safety-net hospitals and critical access
12hospitals to determine a quarterly uniform per unit add-on for
13each hospital class.
14        (1) Inpatient per unit add-on. A quarterly uniform per
15    diem add-on shall be derived by dividing the quarterly
16    Inpatient Directed Payments Pool amount allocated to the
17    applicable hospital class by the total inpatient days
18    contained on all encounter claims received during the
19    Determination Quarter, for all hospitals in the class.
20            (A) Each hospital in the class shall have a
21        quarterly inpatient directed payment calculated that
22        is equal to the product of the number of inpatient days
23        attributable to the hospital used in the calculation
24        of the quarterly uniform class per diem add-on,
25        multiplied by the calculated applicable quarterly
26        uniform class per diem add-on of the hospital class.

 

 

10200HB1950sam002- 51 -LRB102 12590 KTG 38983 a

1            (B) Each hospital shall be paid 1/3 of its
2        quarterly inpatient directed payment in each of the 3
3        months of the Payout Quarter, in accordance with
4        directions provided to each MCO by the Department.
5        (2) Outpatient per unit add-on. A quarterly uniform
6    per claim add-on shall be derived by dividing the
7    quarterly Outpatient Directed Payments Pool amount
8    allocated to the applicable hospital class by the total
9    outpatient encounter claims received during the
10    Determination Quarter, for all hospitals in the class.
11            (A) Each hospital in the class shall have a
12        quarterly outpatient directed payment calculated that
13        is equal to the product of the number of outpatient
14        encounter claims attributable to the hospital used in
15        the calculation of the quarterly uniform class per
16        claim add-on, multiplied by the calculated applicable
17        quarterly uniform class per claim add-on of the
18        hospital class.
19            (B) Each hospital shall be paid 1/3 of its
20        quarterly outpatient 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        (3) Each MCO shall pay each hospital the Monthly
24    Directed Payment as identified by the Department on its
25    quarterly determination report.
26        (4) Definitions. As used in this subsection:

 

 

10200HB1950sam002- 52 -LRB102 12590 KTG 38983 a

1            (A) "Payout Quarter" means each 3 month calendar
2        quarter, beginning July 1, 2020.
3            (B) "Determination Quarter" means each 3 month
4        calendar quarter, which ends 3 months prior to the
5        first day of each Payout Quarter.
6        (5) For the period July 1, 2020 through December 2020,
7    the following amounts shall be allocated to the following
8    hospital class directed payment pools for the quarterly
9    development of a uniform per unit add-on:
10            (A) $2,894,500 for hospital inpatient services for
11        critical access hospitals.
12            (B) $4,294,374 for hospital outpatient services
13        for critical access hospitals.
14            (C) $29,109,330 for hospital inpatient services
15        for safety-net hospitals.
16            (D) $35,041,218 for hospital outpatient services
17        for safety-net hospitals.
18        (6) For the period January 1, 2023 through December
19    31, 2023, the Department shall establish the amounts that
20    shall be allocated to the hospital class directed payment
21    fixed pools identified in this paragraph for the quarterly
22    development of a uniform per unit add-on. The Department
23    shall establish such amounts so that the total amount of
24    payments to each hospital under this Section in calendar
25    year 2023 is projected to be substantially similar to the
26    total amount of such payments received by the hospital

 

 

10200HB1950sam002- 53 -LRB102 12590 KTG 38983 a

1    under this Section in calendar year 2021, adjusted for
2    increased funding provided for fixed pool directed
3    payments under subsection (g) in calendar year 2022,
4    assuming that the volume and acuity of claims are held
5    constant. The Department shall publish the directed
6    payment fixed pool amounts to be established under this
7    paragraph on its website by November 15, 2022.
8            (A) Hospital inpatient services for critical
9        access hospitals.
10            (B) Hospital outpatient services for critical
11        access hospitals.
12            (C) Hospital inpatient services for public
13        hospitals.
14            (D) Hospital outpatient services for public
15        hospitals.
16            (E) Hospital inpatient services for safety-net
17        hospitals.
18            (F) Hospital outpatient services for safety-net
19        hospitals.
20        (7) Semi-annual rate maintenance review. The
21    Department shall ensure that hospitals assigned to the
22    fixed pools in paragraph (6) are paid no less than 95% of
23    the annual initial rate for each 6-month period of each
24    annual payout period. For each calendar year, the
25    Department shall calculate the annual initial rate per day
26    and per visit for each fixed pool hospital class listed in

 

 

10200HB1950sam002- 54 -LRB102 12590 KTG 38983 a

1    paragraph (6), by dividing the total of all applicable
2    inpatient or outpatient directed payments issued in the
3    preceding calendar year to the hospitals in each fixed
4    pool class for the calendar year, plus any increase
5    resulting from the annual adjustments described in
6    subsection (i), by the actual applicable total service
7    units for the preceding calendar year which were the basis
8    of the total applicable inpatient or outpatient directed
9    payments issued to the hospitals in each fixed pool class
10    in the calendar year, except that for calendar year 2023,
11    the service units from calendar year 2021 shall be used.
12            (A) The Department shall calculate the effective
13        rate, per day and per visit, for the payout periods of
14        January to June and July to December of each year, for
15        each fixed pool listed in paragraph (6), by dividing
16        50% of the annual pool by the total applicable
17        reported service units for the 2 applicable
18        determination quarters.
19            (B) If the effective rate calculated in
20        subparagraph (A) is less than 95% of the annual
21        initial rate assigned to the class for each pool under
22        paragraph (6), the Department shall adjust the payment
23        for each hospital to a level equal to no less than 95%
24        of the annual initial rate, by issuing a retroactive
25        adjustment payment for the 6-month period under review
26        as identified in subparagraph (A).

 

 

10200HB1950sam002- 55 -LRB102 12590 KTG 38983 a

1    (h) Fixed rate directed payments. Effective July 1, 2020,
2the Department shall issue payments to MCOs which shall be
3used to issue directed payments to Illinois hospitals not
4identified in paragraph (g) on a monthly basis. Prior to the
5beginning of each Payout Quarter beginning July 1, 2020, the
6Department shall use encounter claims data from the
7Determination Quarter, accepted by the Department's Medicaid
8Management Information System for inpatient and outpatient
9services rendered by hospitals in each hospital class
10identified in paragraph (f) and not identified in paragraph
11(g). For the period July 1, 2020 through December 2020, the
12Department shall direct MCOs to make payments as follows:
13        (1) For general acute care hospitals an amount equal
14    to $1,750 multiplied by the hospital's category of service
15    20 case mix index for the determination quarter multiplied
16    by the hospital's total number of inpatient admissions for
17    category of service 20 for the determination quarter.
18        (2) For general acute care hospitals an amount equal
19    to $160 multiplied by the hospital's category of service
20    21 case mix index for the determination quarter multiplied
21    by the hospital's total number of inpatient admissions for
22    category of service 21 for the determination quarter.
23        (3) For general acute care hospitals an amount equal
24    to $80 multiplied by the hospital's category of service 22
25    case mix index for the determination quarter multiplied by
26    the hospital's total number of inpatient admissions for

 

 

10200HB1950sam002- 56 -LRB102 12590 KTG 38983 a

1    category of service 22 for the determination quarter.
2        (4) For general acute care hospitals an amount equal
3    to $375 multiplied by the hospital's category of service
4    24 case mix index for the determination quarter multiplied
5    by the hospital's total number of category of service 24
6    paid EAPG (EAPGs) for the determination quarter.
7        (5) For general acute care hospitals an amount equal
8    to $240 multiplied by the hospital's category of service
9    27 and 28 case mix index for the determination quarter
10    multiplied by the hospital's total number of category of
11    service 27 and 28 paid EAPGs for the determination
12    quarter.
13        (6) For general acute care hospitals an amount equal
14    to $290 multiplied by the hospital's category of service
15    29 case mix index for the determination quarter multiplied
16    by the hospital's total number of category of service 29
17    paid EAPGs for the determination quarter.
18        (7) For high Medicaid hospitals an amount equal to
19    $1,800 multiplied by the hospital's category of service 20
20    case mix index for the determination quarter multiplied by
21    the hospital's total number of inpatient admissions for
22    category of service 20 for the determination quarter.
23        (8) For high Medicaid hospitals an amount equal to
24    $160 multiplied by the hospital's category of service 21
25    case mix index for the determination quarter multiplied by
26    the hospital's total number of inpatient admissions for

 

 

10200HB1950sam002- 57 -LRB102 12590 KTG 38983 a

1    category of service 21 for the determination quarter.
2        (9) For high Medicaid hospitals an amount equal to $80
3    multiplied by the hospital's category of service 22 case
4    mix index for the determination quarter multiplied by the
5    hospital's total number of inpatient admissions for
6    category of service 22 for the determination quarter.
7        (10) For high Medicaid hospitals an amount equal to
8    $400 multiplied by the hospital's category of service 24
9    case mix index for the determination quarter multiplied by
10    the hospital's total number of category of service 24 paid
11    EAPG outpatient claims for the determination quarter.
12        (11) For high Medicaid hospitals an amount equal to
13    $240 multiplied by the hospital's category of service 27
14    and 28 case mix index for the determination quarter
15    multiplied by the hospital's total number of category of
16    service 27 and 28 paid EAPGs for the determination
17    quarter.
18        (12) For high Medicaid hospitals an amount equal to
19    $290 multiplied by the hospital's category of service 29
20    case mix index for the determination quarter multiplied by
21    the hospital's total number of category of service 29 paid
22    EAPGs for the determination quarter.
23        (13) For long term acute care hospitals the amount of
24    $495 multiplied by the hospital's total number of
25    inpatient days for the determination quarter.
26        (14) For psychiatric hospitals the amount of $210

 

 

10200HB1950sam002- 58 -LRB102 12590 KTG 38983 a

1    multiplied by the hospital's total number of inpatient
2    days for category of service 21 for the determination
3    quarter.
4        (15) For psychiatric hospitals the amount of $250
5    multiplied by the hospital's total number of outpatient
6    claims for category of service 27 and 28 for the
7    determination quarter.
8        (16) For rehabilitation hospitals the amount of $410
9    multiplied by the hospital's total number of inpatient
10    days for category of service 22 for the determination
11    quarter.
12        (17) For rehabilitation hospitals the amount of $100
13    multiplied by the hospital's total number of outpatient
14    claims for category of service 29 for the determination
15    quarter.
16        (18) Effective for the Payout Quarter beginning
17    January 1, 2023, for the directed payments to hospitals
18    required under this subsection, the Department shall
19    establish the amounts that shall be used to calculate such
20    directed payments using the methodologies specified in
21    this paragraph. The Department shall use a single, uniform
22    rate, adjusted for acuity as specified in paragraphs (1)
23    through (12), for all categories of inpatient services
24    provided by each class of hospitals and a single uniform
25    rate, adjusted for acuity as specified in paragraphs (1)
26    through (12), for all categories of outpatient services

 

 

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1    provided by each class of hospitals. The Department shall
2    establish such amounts so that the total amount of
3    payments to each hospital under this Section in calendar
4    year 2023 is projected to be substantially similar to the
5    total amount of such payments received by the hospital
6    under this Section in calendar year 2021, adjusted for
7    increased funding provided for fixed pool directed
8    payments under subsection (g) in calendar year 2022,
9    assuming that the volume and acuity of claims are held
10    constant. The Department shall publish the directed
11    payment amounts to be established under this subsection on
12    its website by November 15, 2022.
13        (19) (18) Each hospital shall be paid 1/3 of their
14    quarterly inpatient and outpatient directed payment in
15    each of the 3 months of the Payout Quarter, in accordance
16    with directions provided to each MCO by the Department.
17        20 (19) Each MCO shall pay each hospital the Monthly
18    Directed Payment amount as identified by the Department on
19    its quarterly determination report.
20    Notwithstanding any other provision of this subsection, if
21the Department determines that the actual total hospital
22utilization data that is used to calculate the fixed rate
23directed payments is substantially different than anticipated
24when the rates in this subsection were initially determined
25(for unforeseeable circumstances (such as the COVID-19
26pandemic or some other public health emergency), the

 

 

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1Department may adjust the rates specified in this subsection
2so that the total directed payments approximate the total
3spending amount anticipated when the rates were initially
4established.
5    Definitions. As used in this subsection:
6            (A) "Payout Quarter" means each calendar quarter,
7        beginning July 1, 2020.
8            (B) "Determination Quarter" means each calendar
9        quarter which ends 3 months prior to the first day of
10        each Payout Quarter.
11            (C) "Case mix index" means a hospital specific
12        calculation. For inpatient claims the case mix index
13        is calculated each quarter by summing the relative
14        weight of all inpatient Diagnosis-Related Group (DRG)
15        claims for a category of service in the applicable
16        Determination Quarter and dividing the sum by the
17        number of sum total of all inpatient DRG admissions
18        for the category of service for the associated claims.
19        The case mix index for outpatient claims is calculated
20        each quarter by summing the relative weight of all
21        paid EAPGs in the applicable Determination Quarter and
22        dividing the sum by the sum total of paid EAPGs for the
23        associated claims.
24    (i) Beginning January 1, 2021, the rates for directed
25payments shall be recalculated in order to spend the
26additional funds for directed payments that result from

 

 

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1reduction in the amount of pass-through payments allowed under
2federal regulations. The additional funds for directed
3payments shall be allocated proportionally to each class of
4hospitals based on that class' proportion of services.
5        (1) Beginning January 1, 2024, the fixed pool directed
6    payment amounts and the associated annual initial rates
7    referenced in paragraph (6) of subsection (f) for each
8    hospital class shall be uniformly increased by a ratio of
9    not less than, the ratio of the total pass-through
10    reduction amount pursuant to paragraph (4) of subsection
11    (j), for the hospitals comprising the hospital fixed pool
12    directed payment class for the next calendar year, to the
13    total inpatient and outpatient directed payments for the
14    hospitals comprising the hospital fixed pool directed
15    payment class paid during the preceding calendar year.
16        (2) Beginning January 1, 2024, the fixed rates for the
17    directed payments referenced in paragraph (18) of
18    subsection (h) for each hospital class shall be uniformly
19    increased by a ratio of not less than, the ratio of the
20    total pass-through reduction amount pursuant to paragraph
21    (4) of subsection (j), for the hospitals comprising the
22    hospital directed payment class for the next calendar
23    year, to the total inpatient and outpatient directed
24    payments for the hospitals comprising the hospital fixed
25    rate directed payment class paid during the preceding
26    calendar year.

 

 

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1    (j) Pass-through payments.
2        (1) For the period July 1, 2020 through December 31,
3    2020, the Department shall assign quarterly pass-through
4    payments to each class of hospitals equal to one-fourth of
5    the following annual allocations:
6            (A) $390,487,095 to safety-net hospitals.
7            (B) $62,553,886 to critical access hospitals.
8            (C) $345,021,438 to high Medicaid hospitals.
9            (D) $551,429,071 to general acute care hospitals.
10            (E) $27,283,870 to long term acute care hospitals.
11            (F) $40,825,444 to freestanding psychiatric
12        hospitals.
13            (G) $9,652,108 to freestanding rehabilitation
14        hospitals.
15        (2) For the period of July 1, 2020 through December
16    31, 2020, the The pass-through payments shall at a minimum
17    ensure hospitals receive a total amount of monthly
18    payments under this Section as received in calendar year
19    2019 in accordance with this Article and paragraph (1) of
20    subsection (d-5) of Section 14-12, exclusive of amounts
21    received through payments referenced in subsection (b).
22        (3) For the calendar year beginning January 1, 2023,
23    the Department shall establish the annual pass-through
24    allocation to each class of hospitals and the pass-through
25    payments to each hospital so that the total amount of
26    payments to each hospital under this Section in calendar

 

 

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1    year 2023 is projected to be substantially similar to the
2    total amount of such payments received by the hospital
3    under this Section in calendar year 2021, adjusted for
4    increased funding provided for fixed pool directed
5    payments under subsection (g) in calendar year 2022,
6    assuming that the volume and acuity of claims are held
7    constant. The Department shall publish the pass-through
8    allocation to each class and the pass-through payments to
9    each hospital to be established under this subsection on
10    its website by November 15, 2022.
11        (4) (3) For the calendar years year beginning January
12    1, 2021, January 1, 2022, and January 1, 2024, and each
13    calendar year thereafter, each hospital's pass-through
14    payment amount shall be reduced proportionally to the
15    reduction of all pass-through payments required by federal
16    regulations.
17    (k) At least 30 days prior to each calendar year, the
18Department shall notify each hospital of changes to the
19payment methodologies in this Section, including, but not
20limited to, changes in the fixed rate directed payment rates,
21the aggregate pass-through payment amount for all hospitals,
22and the hospital's pass-through payment amount for the
23upcoming calendar year.
24    (l) Notwithstanding any other provisions of this Section,
25the Department may adopt rules to change the methodology for
26directed and pass-through payments as set forth in this

 

 

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1Section, but only to the extent necessary to obtain federal
2approval of a necessary State Plan amendment or Directed
3Payment Preprint or to otherwise conform to federal law or
4federal regulation.
5    (m) As used in this subsection, "managed care
6organization" or "MCO" means an entity which contracts with
7the Department to provide services where payment for medical
8services is made on a capitated basis, excluding contracted
9entities for dual eligible or Department of Children and
10Family Services youth populations.
11    (n) In order to address the escalating infant mortality
12rates among minority communities in Illinois, the State shall,
13subject to appropriation, create a pool of funding of at least
14$50,000,000 annually to be disbursed among safety-net
15hospitals that maintain perinatal designation from the
16Department of Public Health. The funding shall be used to
17preserve or enhance OB/GYN services or other specialty
18services at the receiving hospital, with the distribution of
19funding to be established by rule and with consideration to
20perinatal hospitals with safe birthing levels and quality
21metrics for healthy mothers and babies.
22    (o) In order to address the growing challenges of
23providing stable access to healthcare in rural Illinois,
24including perinatal services, behavioral healthcare including
25substance use disorder services (SUDs) and other specialty
26services, and to expand access to telehealth services among

 

 

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1rural communities in Illinois, the Department of Healthcare
2and Family Services, subject to appropriation, shall
3administer a program to provide at least $10,000,000 in
4financial support annually to critical access hospitals for
5delivery of perinatal and OB/GYN services, behavioral
6healthcare including SUDS, other specialty services and
7telehealth services. The funding shall be used to preserve or
8enhance perinatal and OB/GYN services, behavioral healthcare
9including SUDS, other specialty services, as well as the
10explanation of telehealth services by the receiving hospital,
11with the distribution of funding to be established by rule.
12    (p) For calendar year 2023, the final amounts, rates, and
13payments under subsections (c), (d-2), (g), (h), and (j) shall
14be established by the Department, so that the sum of the total
15estimated annual payments under subsections (c), (d-2), (g),
16(h), and (j) for each hospital class for calendar year 2023, is
17no less than:
18        (1) $858,260,000 to safety-net hospitals.
19        (2) $86,200,000 to critical access hospitals.
20        (3) $1,765,000,000 to high Medicaid hospitals.
21        (4) $673,860,000 to general acute care hospitals.
22        (5) $48,330,000 to long term acute care hospitals.
23        (6) $89,110,000 to freestanding psychiatric hospitals.
24        (7) $24,300,000 to freestanding rehabilitation
25    hospitals.
26        (8) $32,570,000 to public hospitals.

 

 

10200HB1950sam002- 66 -LRB102 12590 KTG 38983 a

1(Source: P.A. 101-650, eff. 7-7-20; 102-4, eff. 4-27-21;
2102-16, eff. 6-17-21.)
 
3    (305 ILCS 5/5A-14)
4    Sec. 5A-14. Repeal of assessments and disbursements.
5    (a) Section 5A-2 is repealed on December 31, 2026 2022.
6    (b) Section 5A-12 is repealed on July 1, 2005.
7    (c) Section 5A-12.1 is repealed on July 1, 2008.
8    (d) Section 5A-12.2 and Section 5A-12.4 are repealed on
9July 1, 2018, subject to Section 5A-16.
10    (e) Section 5A-12.3 is repealed on July 1, 2011.
11    (f) Section 5A-12.6 is repealed on July 1, 2020.
12    (g) Section 5A-12.7 is repealed on December 31, 2026 2022.
13(Source: P.A. 100-581, eff. 3-12-18; 101-650, eff. 7-7-20.)
 
14
ARTICLE 10.

 
15    Section 10-5. The Illinois Public Aid Code is amended by
16adding Section 5-45 as follows:
 
17    (305 ILCS 5/5-45 new)
18    Sec. 5-45. General acute care hospitals. A general acute
19care hospital is authorized to file a notice with the
20Department of Public Health and the Health Facilities and
21Services Review Board to establish an acute mental illness
22category of service in accordance with the Illinois Health

 

 

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1Facilities Planning Act and add authorized acute mental
2illness beds if the following conditions are met:
3        (1) the general acute care hospital qualifies as a
4    safety-net hospital, as defined in Section 5-5e.1, as
5    determined by the Department of Healthcare and Family
6    Services at the time of filing the notice or for the year
7    immediately prior to the date of filing the notice;
8        (2) the notice seeks to establish no more than 24
9    authorized acute mental illness beds; and
10        (3) the notice seeks to reduce the number of
11    authorized beds in another category of service to offset
12    the number of authorized acute mental illness beds.
 
13
ARTICLE 15.

 
14    Section 15-5. The Illinois Public Aid Code is amended by
15changing Section 12-4.105 as follows:
 
16    (305 ILCS 5/12-4.105)
17    Sec. 12-4.105. Human poison control center; payment
18program. Subject to funding availability resulting from
19transfers made from the Hospital Provider Fund to the
20Healthcare Provider Relief Fund as authorized under this Code,
21for State fiscal year 2017 and State fiscal year 2018, and for
22each State fiscal year thereafter in which the assessment
23under Section 5A-2 is imposed, the Department of Healthcare

 

 

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1and Family Services shall pay to the human poison control
2center designated under the Poison Control System Act an
3amount of not less than $3,000,000 for each of State fiscal
4years 2017 through 2020, and for State fiscal years year 2021
5through 2026 and 2022 an amount of not less than $3,750,000 and
6for the period July 1, 2026 2022 through December 31, 2026 2022
7an amount of not less than $1,875,000, if the human poison
8control center is in operation.
9(Source: P.A. 100-581, eff. 3-12-18; 101-650, eff. 7-7-20.)
 
10
ARTICLE 20.

 
11    Section 20-5. The Department of Public Health Powers and
12Duties Law is amended by adding Section 2310-710 as follows:
 
13    (20 ILCS 2310/2310-710 new)
14    Sec. 2310-710. Safety-Net Hospital Health Equity and
15Access Leadership (HEAL) Grant Program.
16    (a) Findings. The General Assembly finds that there are
17communities in Illinois that experience significant health
18care disparities, as recently emphasized by the COVID-19
19pandemic, aggravated by social determinants of health and a
20lack of sufficient access to high quality healthcare
21resources, particularly community-based services, preventive
22care, obstetric care, chronic disease management, and
23specialty care. Safety-net hospitals, as defined under the

 

 

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1Illinois Public Aid Code, serve as the anchors of the health
2care system for many of these communities. Safety-net
3hospitals not only care for their patients, they also are
4rooted in their communities by providing jobs and partnering
5with local organizations to help address the social
6determinants of health, such as food, housing, and
7transportation needs.
8    However, safety-net hospitals serve a significant number
9of Medicare, Medicaid, and uninsured patients, and therefore,
10are heavily dependent on underfunded government payers, and
11are heavily burdened by uncompensated care. At the same time,
12the overall cost of providing care has increased substantially
13in recent years, driven by increasing costs for staffing,
14prescription drugs, technology, and infrastructure.
15    For all of these reasons, the General Assembly finds that
16the long term sustainability of safety-net hospitals is
17threatened. While the General Assembly is providing funding to
18the Department to be paid to support the expenses of specific
19safety-net hospitals in State Fiscal Year 2023, such annual,
20ad hoc funding is not a reliable and stable source of funding
21that will enable safety-net hospitals to develop strategies to
22achieve long term sustainability. Such annual, ad hoc funding
23also does not provide the State with transparency and
24accountability to ensure that such funding is being used
25effectively and efficiently to maximize the benefit to members
26of the community.

 

 

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1    Therefore, it is the intent of the General Assembly that
2the Department of Public Health and the Department of
3Healthcare and Family Services jointly provide options and
4recommendations to the General Assembly by February 1, 2023,
5for the establishment of a permanent Safety-Net Hospital
6Health Equity and Access Leadership (HEAL) Grant Program, in
7accordance with this Section. It is the intention of the
8General Assembly that during State fiscal years 2024 through
92029, the Safety-Net Hospital Health Equity and Access
10Leadership (HEAL) Grant Program shall be supported by an
11annual funding pool of up to $100,000,000, subject to
12appropriation.
13    (b) By February 1, 2023, the Department of Public Health
14and the Department of Healthcare and Family Services shall
15provide a joint report to the General Assembly on options and
16recommendations for the establishment of a permanent
17Safety-Net Hospital Health Equity and Access Leadership (HEAL)
18Grant Program to be administered by the State. For this
19report, "safety-net hospital" means a hospital identified by
20the Department of Healthcare and Family Services under Section
215-5e.1 of the Illinois Public Aid Code. The Departments of
22Public Health and Healthcare and Family Services may consult
23with the statewide association representing a majority of
24hospitals and safety-net hospitals on the report. The report
25may include, but need not be limited to:
26        (1) Criteria for a safety-net hospital to be eligible

 

 

10200HB1950sam002- 71 -LRB102 12590 KTG 38983 a

1    for the program, such as:
2            (A) The hospital is a participating provider in at
3        least one Medicaid managed care plan.
4            (B) The hospital is located in a medically
5        underserved area.
6            (C) The hospital's Medicaid utilization rate (for
7        both inpatient and outpatient services).
8            (D) The hospital's Medicare utilization rate (for
9        both inpatient and outpatient services).
10            (E) The hospital's uncompensated care percentage.
11            (F) The hospital's role in providing access to
12        services, reducing health disparities, and improving
13        health equity in its service area.
14            (G) The hospital's performance on quality
15        indicators.
16        (2) Potential projects eligible for grant funds which
17    may include projects to reduce health disparities, advance
18    health equity, or improve access to or the quality of
19    healthcare services.
20        (3) Potential policies, standards, and procedures to
21    ensure accountability for the use of grant funds.
22        (4) Potential strategies to generate federal Medicaid
23    matching funds for expenditures under the program.
24        (5) Potential policies, processes, and procedures for
25    the administration of the program.
 

 

 

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1
ARTICLE 25.

 
2    Section 25-5. The Illinois Public Aid Code is amended by
3changing Section 5-5.02 as follows:
 
4    (305 ILCS 5/5-5.02)  (from Ch. 23, par. 5-5.02)
5    Sec. 5-5.02. Hospital reimbursements.
6    (a) Reimbursement to hospitals; July 1, 1992 through
7September 30, 1992. Notwithstanding any other provisions of
8this Code or the Illinois Department's Rules promulgated under
9the Illinois Administrative Procedure Act, reimbursement to
10hospitals for services provided during the period July 1, 1992
11through September 30, 1992, shall be as follows:
12        (1) For inpatient hospital services rendered, or if
13    applicable, for inpatient hospital discharges occurring,
14    on or after July 1, 1992 and on or before September 30,
15    1992, the Illinois Department shall reimburse hospitals
16    for inpatient services under the reimbursement
17    methodologies in effect for each hospital, and at the
18    inpatient payment rate calculated for each hospital, as of
19    June 30, 1992. For purposes of this paragraph,
20    "reimbursement methodologies" means all reimbursement
21    methodologies that pertain to the provision of inpatient
22    hospital services, including, but not limited to, any
23    adjustments for disproportionate share, targeted access,
24    critical care access and uncompensated care, as defined by

 

 

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1    the Illinois Department on June 30, 1992.
2        (2) For the purpose of calculating the inpatient
3    payment rate for each hospital eligible to receive
4    quarterly adjustment payments for targeted access and
5    critical care, as defined by the Illinois Department on
6    June 30, 1992, the adjustment payment for the period July
7    1, 1992 through September 30, 1992, shall be 25% of the
8    annual adjustment payments calculated for each eligible
9    hospital, as of June 30, 1992. The Illinois Department
10    shall determine by rule the adjustment payments for
11    targeted access and critical care beginning October 1,
12    1992.
13        (3) For the purpose of calculating the inpatient
14    payment rate for each hospital eligible to receive
15    quarterly adjustment payments for uncompensated care, as
16    defined by the Illinois Department on June 30, 1992, the
17    adjustment payment for the period August 1, 1992 through
18    September 30, 1992, shall be one-sixth of the total
19    uncompensated care adjustment payments calculated for each
20    eligible hospital for the uncompensated care rate year, as
21    defined by the Illinois Department, ending on July 31,
22    1992. The Illinois Department shall determine by rule the
23    adjustment payments for uncompensated care beginning
24    October 1, 1992.
25    (b) Inpatient payments. For inpatient services provided on
26or after October 1, 1993, in addition to rates paid for

 

 

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1hospital inpatient services pursuant to the Illinois Health
2Finance Reform Act, as now or hereafter amended, or the
3Illinois Department's prospective reimbursement methodology,
4or any other methodology used by the Illinois Department for
5inpatient services, the Illinois Department shall make
6adjustment payments, in an amount calculated pursuant to the
7methodology described in paragraph (c) of this Section, to
8hospitals that the Illinois Department determines satisfy any
9one of the following requirements:
10        (1) Hospitals that are described in Section 1923 of
11    the federal Social Security Act, as now or hereafter
12    amended, except that for rate year 2015 and after a
13    hospital described in Section 1923(b)(1)(B) of the federal
14    Social Security Act and qualified for the payments
15    described in subsection (c) of this Section for rate year
16    2014 provided the hospital continues to meet the
17    description in Section 1923(b)(1)(B) in the current
18    determination year; or
19        (2) Illinois hospitals that have a Medicaid inpatient
20    utilization rate which is at least one-half a standard
21    deviation above the mean Medicaid inpatient utilization
22    rate for all hospitals in Illinois receiving Medicaid
23    payments from the Illinois Department; or
24        (3) Illinois hospitals that on July 1, 1991 had a
25    Medicaid inpatient utilization rate, as defined in
26    paragraph (h) of this Section, that was at least the mean

 

 

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1    Medicaid inpatient utilization rate for all hospitals in
2    Illinois receiving Medicaid payments from the Illinois
3    Department and which were located in a planning area with
4    one-third or fewer excess beds as determined by the Health
5    Facilities and Services Review Board, and that, as of June
6    30, 1992, were located in a federally designated Health
7    Manpower Shortage Area; or
8        (4) Illinois hospitals that:
9            (A) have a Medicaid inpatient utilization rate
10        that is at least equal to the mean Medicaid inpatient
11        utilization rate for all hospitals in Illinois
12        receiving Medicaid payments from the Department; and
13            (B) also have a Medicaid obstetrical inpatient
14        utilization rate that is at least one standard
15        deviation above the mean Medicaid obstetrical
16        inpatient utilization rate for all hospitals in
17        Illinois receiving Medicaid payments from the
18        Department for obstetrical services; or
19        (5) Any children's hospital, which means a hospital
20    devoted exclusively to caring for children. A hospital
21    which includes a facility devoted exclusively to caring
22    for children shall be considered a children's hospital to
23    the degree that the hospital's Medicaid care is provided
24    to children if either (i) the facility devoted exclusively
25    to caring for children is separately licensed as a
26    hospital by a municipality prior to February 28, 2013;

 

 

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1    (ii) the hospital has been designated by the State as a
2    Level III perinatal care facility, has a Medicaid
3    Inpatient Utilization rate greater than 55% for the rate
4    year 2003 disproportionate share determination, and has
5    more than 10,000 qualified children days as defined by the
6    Department in rulemaking; (iii) the hospital has been
7    designated as a Perinatal Level III center by the State as
8    of December 1, 2017, is a Pediatric Critical Care Center
9    designated by the State as of December 1, 2017 and has a
10    2017 Medicaid inpatient utilization rate equal to or
11    greater than 45%; or (iv) the hospital has been designated
12    as a Perinatal Level II center by the State as of December
13    1, 2017, has a 2017 Medicaid Inpatient Utilization Rate
14    greater than 70%, and has at least 10 pediatric beds as
15    listed on the IDPH 2015 calendar year hospital profile; or
16        (6) A hospital that reopens a previously closed
17    hospital facility within 4 3 calendar years of the
18    hospital facility's closure, if the previously closed
19    hospital facility qualified for payments under paragraph
20    (c) at the time of closure, until utilization data for the
21    new facility is available for the Medicaid inpatient
22    utilization rate calculation. For purposes of this clause,
23    a "closed hospital facility" shall include hospitals that
24    have been terminated from participation in the medical
25    assistance program in accordance with Section 12-4.25 of
26    this Code.

 

 

10200HB1950sam002- 77 -LRB102 12590 KTG 38983 a

1    (c) Inpatient adjustment payments. The adjustment payments
2required by paragraph (b) shall be calculated based upon the
3hospital's Medicaid inpatient utilization rate as follows:
4        (1) hospitals with a Medicaid inpatient utilization
5    rate below the mean shall receive a per day adjustment
6    payment equal to $25;
7        (2) hospitals with a Medicaid inpatient utilization
8    rate that is equal to or greater than the mean Medicaid
9    inpatient utilization rate but less than one standard
10    deviation above the mean Medicaid inpatient utilization
11    rate shall receive a per day adjustment payment equal to
12    the sum of $25 plus $1 for each one percent that the
13    hospital's Medicaid inpatient utilization rate exceeds the
14    mean Medicaid inpatient utilization rate;
15        (3) hospitals with a Medicaid inpatient utilization
16    rate that is equal to or greater than one standard
17    deviation above the mean Medicaid inpatient utilization
18    rate but less than 1.5 standard deviations above the mean
19    Medicaid inpatient utilization rate shall receive a per
20    day adjustment payment equal to the sum of $40 plus $7 for
21    each one percent that the hospital's Medicaid inpatient
22    utilization rate exceeds one standard deviation above the
23    mean Medicaid inpatient utilization rate;
24        (4) hospitals with a Medicaid inpatient utilization
25    rate that is equal to or greater than 1.5 standard
26    deviations above the mean Medicaid inpatient utilization

 

 

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1    rate shall receive a per day adjustment payment equal to
2    the sum of $90 plus $2 for each one percent that the
3    hospital's Medicaid inpatient utilization rate exceeds 1.5
4    standard deviations above the mean Medicaid inpatient
5    utilization rate; and
6        (5) hospitals qualifying under clause (6) of paragraph
7    (b) shall have the rate assigned to the previously closed
8    hospital facility at the date of closure, until
9    utilization data for the new facility is available for the
10    Medicaid inpatient utilization rate calculation.
11    (d) Supplemental adjustment payments. In addition to the
12adjustment payments described in paragraph (c), hospitals as
13defined in clauses (1) through (6) of paragraph (b), excluding
14county hospitals (as defined in subsection (c) of Section 15-1
15of this Code) and a hospital organized under the University of
16Illinois Hospital Act, shall be paid supplemental inpatient
17adjustment payments of $60 per day. For purposes of Title XIX
18of the federal Social Security Act, these supplemental
19adjustment payments shall not be classified as adjustment
20payments to disproportionate share hospitals.
21    (e) The inpatient adjustment payments described in
22paragraphs (c) and (d) shall be increased on October 1, 1993
23and annually thereafter by a percentage equal to the lesser of
24(i) the increase in the DRI hospital cost index for the most
25recent 12 month period for which data are available, or (ii)
26the percentage increase in the statewide average hospital

 

 

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1payment rate over the previous year's statewide average
2hospital payment rate. The sum of the inpatient adjustment
3payments under paragraphs (c) and (d) to a hospital, other
4than a county hospital (as defined in subsection (c) of
5Section 15-1 of this Code) or a hospital organized under the
6University of Illinois Hospital Act, however, shall not exceed
7$275 per day; that limit shall be increased on October 1, 1993
8and annually thereafter by a percentage equal to the lesser of
9(i) the increase in the DRI hospital cost index for the most
10recent 12-month period for which data are available or (ii)
11the percentage increase in the statewide average hospital
12payment rate over the previous year's statewide average
13hospital payment rate.
14    (f) Children's hospital inpatient adjustment payments. For
15children's hospitals, as defined in clause (5) of paragraph
16(b), the adjustment payments required pursuant to paragraphs
17(c) and (d) shall be multiplied by 2.0.
18    (g) County hospital inpatient adjustment payments. For
19county hospitals, as defined in subsection (c) of Section 15-1
20of this Code, there shall be an adjustment payment as
21determined by rules issued by the Illinois Department.
22    (h) For the purposes of this Section the following terms
23shall be defined as follows:
24        (1) "Medicaid inpatient utilization rate" means a
25    fraction, the numerator of which is the number of a
26    hospital's inpatient days provided in a given 12-month

 

 

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1    period to patients who, for such days, were eligible for
2    Medicaid under Title XIX of the federal Social Security
3    Act, and the denominator of which is the total number of
4    the hospital's inpatient days in that same period.
5        (2) "Mean Medicaid inpatient utilization rate" means
6    the total number of Medicaid inpatient days provided by
7    all Illinois Medicaid-participating hospitals divided by
8    the total number of inpatient days provided by those same
9    hospitals.
10        (3) "Medicaid obstetrical inpatient utilization rate"
11    means the ratio of Medicaid obstetrical inpatient days to
12    total Medicaid inpatient days for all Illinois hospitals
13    receiving Medicaid payments from the Illinois Department.
14    (i) Inpatient adjustment payment limit. In order to meet
15the limits of Public Law 102-234 and Public Law 103-66, the
16Illinois Department shall by rule adjust disproportionate
17share adjustment payments.
18    (j) University of Illinois Hospital inpatient adjustment
19payments. For hospitals organized under the University of
20Illinois Hospital Act, there shall be an adjustment payment as
21determined by rules adopted by the Illinois Department.
22    (k) The Illinois Department may by rule establish criteria
23for and develop methodologies for adjustment payments to
24hospitals participating under this Article.
25    (l) On and after July 1, 2012, the Department shall reduce
26any rate of reimbursement for services or other payments or

 

 

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1alter any methodologies authorized by this Code to reduce any
2rate of reimbursement for services or other payments in
3accordance with Section 5-5e.
4    (m) The Department shall establish a cost-based
5reimbursement methodology for determining payments to
6hospitals for approved graduate medical education (GME)
7programs for dates of service on and after July 1, 2018.
8        (1) As used in this subsection, "hospitals" means the
9    University of Illinois Hospital as defined in the
10    University of Illinois Hospital Act and a county hospital
11    in a county of over 3,000,000 inhabitants.
12        (2) An amendment to the Illinois Title XIX State Plan
13    defining GME shall maximize reimbursement, shall not be
14    limited to the education programs or special patient care
15    payments allowed under Medicare, and shall include:
16            (A) inpatient days;
17            (B) outpatient days;
18            (C) direct costs;
19            (D) indirect costs;
20            (E) managed care days;
21            (F) all stages of medical training and education
22        including students, interns, residents, and fellows
23        with no caps on the number of persons who may qualify;
24        and
25            (G) patient care payments related to the
26        complexities of treating Medicaid enrollees including

 

 

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1        clinical and social determinants of health.
2        (3) The Department shall make all GME payments
3    directly to hospitals including such costs in support of
4    clients enrolled in Medicaid managed care entities.
5        (4) The Department shall promptly take all actions
6    necessary for reimbursement to be effective for dates of
7    service on and after July 1, 2018 including publishing all
8    appropriate public notices, amendments to the Illinois
9    Title XIX State Plan, and adoption of administrative rules
10    if necessary.
11        (5) As used in this subsection, "managed care days"
12    means costs associated with services rendered to enrollees
13    of Medicaid managed care entities. "Medicaid managed care
14    entities" means any entity which contracts with the
15    Department to provide services paid for on a capitated
16    basis. "Medicaid managed care entities" includes a managed
17    care organization and a managed care community network.
18        (6) All payments under this Section are contingent
19    upon federal approval of changes to the Illinois Title XIX
20    State Plan, if that approval is required.
21        (7) The Department may adopt rules necessary to
22    implement Public Act 100-581 through the use of emergency
23    rulemaking in accordance with subsection (aa) of Section
24    5-45 of the Illinois Administrative Procedure Act. For
25    purposes of that Act, the General Assembly finds that the
26    adoption of rules to implement Public Act 100-581 is

 

 

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1    deemed an emergency and necessary for the public interest,
2    safety, and welfare.
3(Source: P.A. 101-81, eff. 7-12-19; 102-682, eff. 12-10-21.)
 
4
ARTICLE 30.

 
5    Section 30-5. The Illinois Income Tax Act is amended by
6changing Section 223 as follows:
 
7    (35 ILCS 5/223)
8    Sec. 223. Hospital credit.
9    (a) For tax years ending on or after December 31, 2012 and
10ending on or before December 31, 2027 December 31, 2022, a
11taxpayer that is the owner of a hospital licensed under the
12Hospital Licensing Act, but not including an organization that
13is exempt from federal income taxes under the Internal Revenue
14Code, is entitled to a credit against the taxes imposed under
15subsections (a) and (b) of Section 201 of this Act in an amount
16equal to the lesser of the amount of real property taxes paid
17during the tax year on real property used for hospital
18purposes during the prior tax year or the cost of free or
19discounted services provided during the tax year pursuant to
20the hospital's charitable financial assistance policy,
21measured at cost.
22    (b) If the taxpayer is a partnership or Subchapter S
23corporation, the credit is allowed to the partners or

 

 

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1shareholders in accordance with the determination of income
2and distributive share of income under Sections 702 and 704
3and Subchapter S of the Internal Revenue Code. A transfer of
4this credit may be made by the taxpayer earning the credit
5within one year after the credit is earned in accordance with
6rules adopted by the Department. The Department shall
7prescribe rules to enforce and administer provisions of this
8Section. If the amount of the credit exceeds the tax liability
9for the year, then the excess credit may be carried forward and
10applied to the tax liability of the 5 taxable years following
11the excess credit year. The credit shall be applied to the
12earliest year for which there is a tax liability. If there are
13credits from more than one tax year that are available to
14offset a liability, the earlier credit shall be applied first.
15In no event shall a credit under this Section reduce the
16taxpayer's liability to less than zero.
17(Source: P.A. 100-587, eff. 6-4-18.)
 
18    Section 30-10. The Use Tax Act is amended by changing
19Section 3-8 as follows:
 
20    (35 ILCS 105/3-8)
21    Sec. 3-8. Hospital exemption.
22    (a) Tangible Until July 1, 2022, tangible personal
23property sold to or used by a hospital owner that owns one or
24more hospitals licensed under the Hospital Licensing Act or

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    providing emergency, trauma, burn, neonatal, psychiatric,
2    rehabilitation, or other special services; providing
3    medical education; and conducting medical research or
4    training of health care professionals. The portion of
5    those unreimbursed costs attributable to benefiting
6    low-income individuals shall be determined using the ratio
7    calculated by adding the relevant hospital entity's costs
8    attributable to charity care, Medicaid, other means-tested
9    government programs, Medicare patients with disabilities
10    under age 65, and dual-eligible Medicare/Medicaid patients
11    and dividing that total by the relevant hospital entity's
12    total costs. Such costs for the numerator and denominator
13    shall be determined by multiplying gross charges by the
14    cost to charge ratio taken from the hospital's most
15    recently filed Medicare cost report (CMS 2252-10
16    Worksheet, Part I). In the case of emergency services, the
17    ratio shall be calculated using costs (gross charges
18    multiplied by the cost to charge ratio taken from the
19    hospital's most recently filed Medicare cost report (CMS
20    2252-10 Worksheet, Part I)) of patients treated in the
21    relevant hospital entity's emergency department.
22        (7) Any other activity by the relevant hospital entity
23    that the Department determines relieves the burden of
24    government or addresses the health of low-income or
25    underserved individuals.
26    (d) The hospital applicant shall include information in

 

 

10200HB1950sam002- 90 -LRB102 12590 KTG 38983 a

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

 

 

10200HB1950sam002- 91 -LRB102 12590 KTG 38983 a

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

 

 

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1        on the property" means the replacement value of any
2        exempt portion of buildings on the property, minus
3        depreciation, determined utilizing the cost
4        replacement method whereby the exempt square footage
5        of all such buildings is multiplied by the replacement
6        cost per square foot for Class A Average building
7        found in the most recent edition of the Marshall &
8        Swift Valuation Services Manual, adjusted by any
9        appropriate current cost and local multipliers.
10            (B) Depreciation, for purposes of calculating the
11        estimated fair market value of buildings on the
12        property, is applied by utilizing a weighted mean life
13        for the buildings based on original construction and
14        assuming a 40-year life for hospital buildings and the
15        applicable life for other types of buildings as
16        specified in the American Hospital Association
17        publication "Estimated Useful Lives of Depreciable
18        Hospital Assets". In the case of hospital buildings,
19        the remaining life is divided by 40 and this ratio is
20        multiplied by the replacement cost of the buildings to
21        obtain an estimated fair market value of buildings. If
22        a hospital building is older than 35 years, a
23        remaining life of 5 years for residual value is
24        assumed; and if a building is less than 8 years old, a
25        remaining life of 32 years is assumed.
26            (C) The estimated assessed value of the land

 

 

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

 

 

10200HB1950sam002- 94 -LRB102 12590 KTG 38983 a

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

 

 

10200HB1950sam002- 95 -LRB102 12590 KTG 38983 a

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

 

 

10200HB1950sam002- 96 -LRB102 12590 KTG 38983 a

1    (k) This Section is exempt from the provisions of Section
23-90.
3(Source: P.A. 99-143, eff. 7-27-15; 100-1181, eff. 3-8-19.)
 
4    Section 30-15. The Service Use Tax Act is amended by
5changing Section 3-8 as follows:
 
6    (35 ILCS 110/3-8)
7    Sec. 3-8. Hospital exemption.
8    (a) Tangible Until July 1, 2022, tangible personal
9property sold to or used by a hospital owner that owns one or
10more hospitals 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

 

 

10200HB1950sam002- 97 -LRB102 12590 KTG 38983 a

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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

10200HB1950sam002- 107 -LRB102 12590 KTG 38983 a

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    (k) This Section is exempt from the provisions of Section
143-75.
15(Source: P.A. 99-143, eff. 7-27-15; 100-1181, eff. 3-8-19.)
 
16    Section 30-20. The Service Occupation Tax Act is amended
17by changing Section 3-8 as follows:
 
18    (35 ILCS 115/3-8)
19    Sec. 3-8. Hospital exemption.
20    (a) Tangible Until July 1, 2022, tangible personal
21property sold to or used by a hospital owner that owns one or
22more hospitals licensed under the Hospital Licensing Act or
23operated under the University of Illinois Hospital Act, or a
24hospital affiliate that is not already exempt under another

 

 

10200HB1950sam002- 108 -LRB102 12590 KTG 38983 a

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

 

 

10200HB1950sam002- 109 -LRB102 12590 KTG 38983 a

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

 

 

10200HB1950sam002- 110 -LRB102 12590 KTG 38983 a

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

 

 

10200HB1950sam002- 111 -LRB102 12590 KTG 38983 a

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

 

 

10200HB1950sam002- 112 -LRB102 12590 KTG 38983 a

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

 

 

10200HB1950sam002- 113 -LRB102 12590 KTG 38983 a

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

 

 

10200HB1950sam002- 114 -LRB102 12590 KTG 38983 a

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

 

 

10200HB1950sam002- 115 -LRB102 12590 KTG 38983 a

1        depreciation, determined utilizing the cost
2        replacement method whereby the exempt square footage
3        of all such buildings is multiplied by the replacement
4        cost per square foot for Class A Average building
5        found in the most recent edition of the Marshall &
6        Swift Valuation Services Manual, adjusted by any
7        appropriate current cost and local multipliers.
8            (B) Depreciation, for purposes of calculating the
9        estimated fair market value of buildings on the
10        property, is applied by utilizing a weighted mean life
11        for the buildings based on original construction and
12        assuming a 40-year life for hospital buildings and the
13        applicable life for other types of buildings as
14        specified in the American Hospital Association
15        publication "Estimated Useful Lives of Depreciable
16        Hospital Assets". In the case of hospital buildings,
17        the remaining life is divided by 40 and this ratio is
18        multiplied by the replacement cost of the buildings to
19        obtain an estimated fair market value of buildings. If
20        a hospital building is older than 35 years, a
21        remaining life of 5 years for residual value is
22        assumed; and if a building is less than 8 years old, a
23        remaining life of 32 years is assumed.
24            (C) The estimated assessed value of the land
25        portion of the property shall be determined by
26        multiplying (i) the per square foot average of the

 

 

10200HB1950sam002- 116 -LRB102 12590 KTG 38983 a

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

 

 

10200HB1950sam002- 117 -LRB102 12590 KTG 38983 a

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

 

 

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1    applicant that is a hospital affiliate, either (i) the
2    hospital affiliate or (ii) the hospital system to which
3    the hospital applicant belongs, including any hospitals or
4    hospital affiliates that are related by common control or
5    ownership.
6        (8) "Subject property" means property used for the
7    calculation under subsection (b) of this Section.
8        (9) "Hospital year" means the fiscal year of the
9    relevant hospital entity, or the fiscal year of one of the
10    hospital owners in the hospital system if the relevant
11    hospital entity is a hospital system with members with
12    different fiscal years, that ends in the year for which
13    the exemption is sought.
14    (i) It is the intent of the General Assembly that any
15exemptions taken, granted, or renewed under this Section prior
16to the effective date of this amendatory Act of the 100th
17General Assembly are hereby validated.
18    (j) It is the intent of the General Assembly that the
19exemption under this Section applies on a continuous basis. If
20this amendatory Act of the 102nd General Assembly takes effect
21after July 1, 2022, any exemptions taken, granted, or renewed
22under this Section on or after July 1, 2022 and prior to the
23effective date of this amendatory Act of the 102nd General
24Assembly are hereby validated.
25    (k) This Section is exempt from the provisions of Section
263-55.

 

 

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1(Source: P.A. 99-143, eff. 7-27-15; 100-1181, eff. 3-8-19.)
 
2    Section 30-25. The Retailers' Occupation Tax Act is
3amended by changing Section 2-9 as follows:
 
4    (35 ILCS 120/2-9)
5    Sec. 2-9. Hospital exemption.
6    (a) Tangible Until July 1, 2022, tangible personal
7property sold to or used by a hospital owner that owns one or
8more hospitals licensed under the Hospital Licensing Act or
9operated under the University of Illinois Hospital Act, or a
10hospital affiliate that is not already exempt under another
11provision of this Act and meets the criteria for an exemption
12under this Section, is exempt from taxation under this Act.
13    (b) A hospital owner or hospital affiliate satisfies the
14conditions for an exemption under this Section if the value of
15qualified services or activities listed in subsection (c) of
16this Section for the hospital year equals or exceeds the
17relevant hospital entity's estimated property tax liability,
18without regard to any property tax exemption granted under
19Section 15-86 of the Property Tax Code, for the calendar year
20in which exemption or renewal of exemption is sought. For
21purposes of making the calculations required by this
22subsection (b), if the relevant hospital entity is a hospital
23owner that owns more than one hospital, the value of the
24services or activities listed in subsection (c) shall be

 

 

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1calculated on the basis of only those services and activities
2relating to the hospital that includes the subject property,
3and the relevant hospital entity's estimated property tax
4liability shall be calculated only with respect to the
5properties comprising that hospital. In the case of a
6multi-state hospital system or hospital affiliate, the value
7of the services or activities listed in subsection (c) shall
8be calculated on the basis of only those services and
9activities that occur in Illinois and the relevant hospital
10entity's estimated property tax liability shall be calculated
11only with respect to its property located in Illinois.
12    (c) The following services and activities shall be
13considered for purposes of making the calculations required by
14subsection (b):
15        (1) Charity care. Free or discounted services provided
16    pursuant to the relevant hospital entity's financial
17    assistance policy, measured at cost, including discounts
18    provided under the Hospital Uninsured Patient Discount
19    Act.
20        (2) Health services to low-income and underserved
21    individuals. Other unreimbursed costs of the relevant
22    hospital entity for providing without charge, paying for,
23    or subsidizing goods, activities, or services for the
24    purpose of addressing the health of low-income or
25    underserved individuals. Those activities or services may
26    include, but are not limited to: financial or in-kind

 

 

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

 

 

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

 

 

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

 

 

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1    ratio shall be calculated using costs (gross charges
2    multiplied by the cost to charge ratio taken from the
3    hospital's most recently filed Medicare cost report (CMS
4    2252-10 Worksheet, Part I)) of patients treated in the
5    relevant hospital entity's emergency department.
6        (7) Any other activity by the relevant hospital entity
7    that the Department determines relieves the burden of
8    government or addresses the health of low-income or
9    underserved individuals.
10    (d) The hospital applicant shall include information in
11its exemption application establishing that it satisfies the
12requirements of subsection (b). For purposes of making the
13calculations required by subsection (b), the hospital
14applicant may for each year elect to use either (1) the value
15of the services or activities listed in subsection (e) for the
16hospital year or (2) the average value of those services or
17activities for the 3 fiscal years ending with the hospital
18year. If the relevant hospital entity has been in operation
19for less than 3 completed fiscal years, then the latter
20calculation, if elected, shall be performed on a pro rata
21basis.
22    (e) For purposes of making the calculations required by
23this Section:
24        (1) particular services or activities eligible for
25    consideration under any of the paragraphs (1) through (7)
26    of subsection (c) may not be counted under more than one of

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1exemptions taken, granted, or renewed under this Section prior
2to the effective date of this amendatory Act of the 100th
3General Assembly are hereby validated.
4    (j) It is the intent of the General Assembly that the
5exemption under this Section applies on a continuous basis. If
6this amendatory Act of the 102nd General Assembly takes effect
7after July 1, 2022, any exemptions taken, granted, or renewed
8under this Section on or after July 1, 2022 and prior to the
9effective date of this amendatory Act of the 102nd General
10Assembly are hereby validated.
11    (k) This Section is exempt from the provisions of Section
122-70.
13(Source: P.A. 99-143, eff. 7-27-15; 100-1181, eff. 3-8-19.)
 
14
ARTICLE 999.

 
15    Section 999-99. Effective date. This Act takes effect upon
16becoming law.".