Illinois General Assembly - Full Text of HB1447
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Full Text of HB1447  94th General Assembly



State of Illinois
2005 and 2006


Introduced 2/10/2005, by Rep. Lee A. Daniels - Raymond Poe - Patricia R. Bellock - Eileen Lyons


20 ILCS 1705/54   from Ch. 91 1/2, par. 100-54

    Amends the Mental Health and Developmental Disabilities Administrative Act. Provides that the Department may perform certain acts for the development of rates for the purchase of fee-for-service care. Adds persons with mental illness and substance abuse as persons the Department may develop the rates for. Provides that in setting rates the Department should consider market factors such as those published by the United States Department of Labor, Bureau of Labor Statistics. Authorizes the Department to contract with an independent consulting firm for certain studies of reimbursement rates to service providers. Provides that the Department shall establish and promulgate a policy that precludes applicability of income offsets in rate calculation or payment processes (now, establish and promulgate a policy regarding applicability of these offsets). Makes other changes. Effective July 1, 2005.

LRB094 08802 RSP 39019 b






HB1447 LRB094 08802 RSP 39019 b

1     AN ACT concerning State government.
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4     Section 5. The Mental Health and Developmental
5 Disabilities Administrative Act is amended by changing Section
6 54 as follows:
7     (20 ILCS 1705/54)  (from Ch. 91 1/2, par. 100-54)
8     Sec. 54. Establishment of rates for purchase of services
9 including fee-for-service.
10     (a) It is the purpose of this Section to establish
11 procedures for the development, calculation, and communication
12 of rates promulgated by the Department for the purchase of
13 services including fee-for-service for persons with a
14 developmental disability, mental illness and substance abuse,
15 and persons with mental illness; to require the promulgation of
16 rules which specify the treatment of costs for purposes of
17 establishing rates for various purchase care program
18 categories including fee-for-service; to require that rates be
19 equitable, understandable, and established through an open,
20 public process; and to require the delineation of where
21 purchase care including fee-for-service, grant-in-aid, and
22 other payment mechanisms are most appropriately utilized. The
23 Department's rate-setting policy should stimulate the
24 development of cost effective, evidence based, clinically
25 appropriate, recovery oriented, community-based residential,
26 and other support services for recipients according to an
27 annual statement of purchase care goals and objectives.
28     (b) The Department shall establish rates in all instances
29 where services are purchased by the Department for a specific
30 recipient from a specific community service provider for which
31 the Department has the responsibility for establishing payment
32 rates. When determining rates, the Department shall take into



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1 consideration differences in the costs of doing business among
2 the various geographic regions of the State and shall set rates
3 that reflect those differences. In addition, the Department
4 shall consider market factors such as those published by the
5 United States Department of Labor, Bureau of Labor Statistics.
6 The Department may, for various program categories, adopt rates
7 that are set by other State agencies.
8     (c) The Department shall perform the following duties:
9         (1) Develop rate-setting methodologies for purchase
10     care program and service categories including
11     fee-for-service programs and services.
12         (2) Promulgate rules and regulations governing
13     rate-setting, treatment of costs, treatment of occupancy,
14     and payment and contracting processes for purchase care
15     including fee-for-service.
16         (3) Collect cost and performance information from care
17     providers in a form and format that is consistent with a
18     fee-for-service methodology. The Department may stipulate
19     forms, unit of service definitions, reporting procedures
20     and reporting intervals.
21         (4) Calculate purchase of care, including
22     fee-for-service, reimbursement rates for specific
23     providers based on the promulgated rate methodology for
24     that program or service category.
25         (5) Negotiate and implement purchase of care
26     contracts, including fee-for-service contracts, with
27     specific providers.
28         (6) Develop capacity grants and capacity grant
29     contracts for services that require care availability, and
30     coverage that is not correlated with volume of service and
31     for financially supporting desired provision of care
32     throughout the State. Develop an annual statement of
33     purchase care goals and objectives detailing maximum units
34     of service by program category to be purchased. The plan
35     for each fiscal year shall be completed by May 1 of the
36     previous fiscal year.



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1         (7) The Department shall contract with an independent
2     consulting firm for an annual study of the adequacy and
3     appropriateness of Title XIX and State-only reimbursement
4     rates to service providers. A complete study of
5     reimbursement rates shall be completed no less frequently
6     than once every 2 years. The Department shall report to the
7     General Assembly no later than January 30, 2007 and each
8     year thereafter. Conduct an annual review and prepare an
9     annual report of rates and units of service purchased,
10     comparing the annual purchase of care statement with actual
11     services purchased, and the actual cost of providing those
12     services. The report shall be made available by May 1.
13         (8) Establish and promulgate a process and criteria for
14     appealing rates.
15         (9) Develop and promulgate standards and criteria by
16     which provider performance shall be evaluated.
17         (10) Set rates based on published methodologies and
18     subject to the availability of funds appropriated by the
19     General Assembly.
20         (11) Establish and promulgate a policy that precludes
21     regarding applicability of income offsets in rate
22     calculation or payment processes.
23         (12) Develop criteria for selection of payment
24     mechanisms to be employed in funding community services
25     where fee-for-service is not appropriate.
26     (d) The Department may investigate and employ alternative
27 rate setting approaches such as per member or per month or case
28 rates and engage in demonstration projects. These approaches
29 must be publicly articulated by the Department, identifying the
30 purpose and scope of the alternative approach and evaluation to
31 be conducted.
32     (e) (Blank).
33 (Source: P.A. 89-58, eff. 1-1-96; 89-507, eff. 7-1-97; 90-423,
34 eff. 8-15-97.)
35     Section 99. Effective date. This Act takes effect July 1,



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1 2005.