96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB3276

 

Introduced 2/24/2009, by Rep. Tom Cross

 

SYNOPSIS AS INTRODUCED:
 
225 ILCS 47/20

    Amends the Health Care Worker Self-Referral Act. Makes a technical change in a Section concerning prohibited referrals and claims for payment.


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A BILL FOR

 

HB3276 LRB096 08066 ASK 18172 b

1     AN ACT concerning regulation.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Health Care Worker Self-Referral Act is
5 amended by changing Section 20 as follows:
 
6     (225 ILCS 47/20)
7     Sec. 20. Prohibited referrals and claims for payment.
8     (a) A health care worker shall not refer a patient for
9 health services to an entity outside the the health care
10 worker's office or group practice in which the health care
11 worker is an investor, unless the health care worker directly
12 provides health services within the entity and will be
13 personally involved with the provision of care to the referred
14 patient.
15     (b) Pursuant to Board determination that the following
16 exception is applicable, a health care worker may invest in and
17 refer to an entity, whether or not the health care worker
18 provides direct services within said entity, if there is a
19 demonstrated need in the community for the entity and
20 alternative financing is not available. For purposes of this
21 subsection (b), "demonstrated need" in the community for the
22 entity may exist if (1) there is no facility of reasonable
23 quality that provides medically appropriate service, (2) use of

 

 

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1 existing facilities is onerous or creates too great a hardship
2 for patients, (3) the entity is formed to own or lease medical
3 equipment which replaces obsolete or otherwise inadequate
4 equipment in or under the control of a hospital located in a
5 federally designated health manpower shortage area, or (4) such
6 other standards as established, by rule, by the Board.
7 "Community" shall be defined as a metropolitan area for a city,
8 and a county for a rural area. In addition, the following
9 provisions must be met to be exempt under this Section:
10         (1) Individuals who are not in a position to refer
11     patients to an entity are given a bona fide opportunity to
12     also invest in the entity on the same terms as those
13     offered a referring health care worker; and
14         (2) No health care worker who invests shall be required
15     or encouraged to make referrals to the entity or otherwise
16     generate business as a condition of becoming or remaining
17     an investor; and
18         (3) The entity shall market or furnish its services to
19     referring health care worker investors and other investors
20     on equal terms; and
21         (4) The entity shall not loan funds or guarantee any
22     loans for health care workers who are in a position to
23     refer to an entity; and
24         (5) The income on the health care worker's investment
25     shall be tied to the health care worker's equity in the
26     facility rather than to the volume of referrals made; and

 

 

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1         (6) Any investment contract between the entity and the
2     health care worker shall not include any covenant or
3     non-competition clause that prevents a health care worker
4     from investing in other entities; and
5         (7) When making a referral, a health care worker must
6     disclose his investment interest in an entity to the
7     patient being referred to such entity. If alternative
8     facilities are reasonably available, the health care
9     worker must provide the patient with a list of alternative
10     facilities. The health care worker shall inform the patient
11     that they have the option to use an alternative facility
12     other than one in which the health care worker has an
13     investment interest and the patient will not be treated
14     differently by the health care worker if the patient
15     chooses to use another entity. This shall be applicable to
16     all health care worker investors, including those who
17     provide direct care or services for their patients in
18     entities outside their office practices; and
19         (8) If a third party payor requests information with
20     regard to a health care worker's investment interest, the
21     same shall be disclosed; and
22         (9) The entity shall establish an internal utilization
23     review program to ensure that investing health care workers
24     provided appropriate or necessary utilization; and
25         (10) If a health care worker's financial interest in an
26     entity is incompatible with a referred patient's interest,

 

 

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1     the health care worker shall make alternative arrangements
2     for the patient's care.
3     The Board shall make such a determination for a health care
4 worker within 90 days of a completed written request. Failure
5 to make such a determination within the 90 day time frame shall
6 mean that no alternative is practical based upon the facts set
7 forth in the completed written request.
8     (c) It shall not be a violation of this Act for a health
9 care worker to refer a patient for health services to a
10 publicly traded entity in which he or she has an investment
11 interest provided that:
12         (1) the entity is listed for trading on the New York
13     Stock Exchange or on the American Stock Exchange, or is a
14     national market system security traded under an automated
15     inter-dealer quotation system operated by the National
16     Association of Securities Dealers; and
17         (2) the entity had, at the end of the corporation's
18     most recent fiscal year, total net assets of at least
19     $30,000,000 related to the furnishing of health services;
20     and
21         (3) any investment interest obtained after the
22     effective date of this Act is traded on the exchanges
23     listed in paragraph 1 of subsection (c) of this Section
24     after the entity became a publicly traded corporation; and
25         (4) the entity markets or furnishes its services to
26     referring health care worker investors and other health

 

 

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1     care workers on equal terms; and
2         (5) all stock held in such publicly traded companies,
3     including stock held in the predecessor privately held
4     company, shall be of one class without preferential
5     treatment as to status or remuneration; and
6         (6) the entity does not loan funds or guarantee any
7     loans for health care workers who are in a position to be
8     referred to an entity; and
9         (7) the income on the health care worker's investment
10     is tied to the health care worker's equity in the entity
11     rather than to the volume of referrals made; and
12         (8) the investment interest does not exceed 1/2 of 1%
13     of the entity's total equity.
14     (d) Any hospital licensed under the Hospital Licensing Act
15 shall not discriminate against or otherwise penalize a health
16 care worker for compliance with this Act.
17     (e) Any health care worker or other entity shall not enter
18 into an arrangement or scheme seeking to make referrals to
19 another health care worker or entity based upon the condition
20 that the health care worker or entity will make referrals with
21 an intent to evade the prohibitions of this Act by inducing
22 patient referrals which would be prohibited by this Section if
23 the health care worker or entity made the referral directly.
24     (f) If compliance with the need and alternative investor
25 criteria is not practical, the health care worker shall
26 identify to the patient reasonably available alternative

 

 

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1 facilities. The Board shall, by rule, designate when compliance
2 is "not practical".
3     (g) Health care workers may request from the Board that it
4 render an advisory opinion that a referral to an existing or
5 proposed entity under specified circumstances does or does not
6 violate the provisions of this Act. The Board's opinion shall
7 be presumptively correct. Failure to render such an advisory
8 opinion within 90 days of a completed written request pursuant
9 to this Section shall create a rebuttable presumption that a
10 referral described in the completed written request is not or
11 will not be a violation of this Act.
12     (h) Notwithstanding any provision of this Act to the
13 contrary, a health care worker may refer a patient, who is a
14 member of a health maintenance organization "HMO" licensed in
15 this State, for health services to an entity, outside the
16 health care worker's office or group practice, in which the
17 health care worker is an investor, provided that any such
18 referral is made pursuant to a contract with the HMO.
19 Furthermore, notwithstanding any provision of this Act to the
20 contrary, a health care worker may refer an enrollee of a
21 "managed care community network", as defined in subsection (b)
22 of Section 5-11 of the Illinois Public Aid Code, for health
23 services to an entity, outside the health care worker's office
24 or group practice, in which the health care worker is an
25 investor, provided that any such referral is made pursuant to a
26 contract with the managed care community network.

 

 

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1 (Source: P.A. 92-370, eff. 8-15-01.)