Replaces everything after the enacting clause. Amends the Covering ALL KIDS Health Insurance Act and the Illinois Public Aid Code. Provides that beginning January 1, 2009, the physician fee schedule for the Covering ALL KIDS Health Insurance Program and for pediatric physician specialists under the medical assistance program must increase to become competitive with those of non-governmental, third party health insurance programs. Provides that by January 1, 2011, the payment for a pediatric specialty physician service must not be lower than Medicare reimbursement in accordance with the Medicare payment localities for Illinois. Provides that reimbursement rules and policies shall not be more restrictive than Medicare physician payment rules and policies except as specifically required by federal Medicaid and SCHIP laws. Provides for transition period payments. Provides that neither the Governor nor any agency or agency head under the jurisdiction of the Governor has any rulemaking authority under the amendatory Act, but that the Governor may suggest rules by filing them with the General Assembly and requesting that the General Assembly authorize such rulemaking by law, enact the suggested rules into law, or take other appropriate action in the General Assembly's discretion.