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90_HB0778
305 ILCS 5/5-16.3
Amends the Medicaid Article of the Public Aid Code. In
the Section concerning the integrated health care program,
authorizes the Department of Public Aid to impose
administrative penalties for violations of the Section.
Effective immediately.
LRB9000969DJcd
LRB9000969DJcd
1 AN ACT to amend the Illinois Public Aid Code by changing
2 Section 5-16.3.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Public Aid Code is amended by
6 changing Section 5-16.3 as follows:
7 (305 ILCS 5/5-16.3)
8 (Text of Section before amendment by P.A. 89-507)
9 Sec. 5-16.3. System for integrated health care services.
10 (a) It shall be the public policy of the State to adopt,
11 to the extent practicable, a health care program that
12 encourages the integration of health care services and
13 manages the health care of program enrollees while preserving
14 reasonable choice within a competitive and cost-efficient
15 environment. In furtherance of this public policy, the
16 Illinois Department shall develop and implement an integrated
17 health care program consistent with the provisions of this
18 Section. The provisions of this Section apply only to the
19 integrated health care program created under this Section.
20 Persons enrolled in the integrated health care program, as
21 determined by the Illinois Department by rule, shall be
22 afforded a choice among health care delivery systems, which
23 shall include, but are not limited to, (i) fee for service
24 care managed by a primary care physician licensed to practice
25 medicine in all its branches, (ii) managed health care
26 entities, and (iii) federally qualified health centers
27 (reimbursed according to a prospective cost-reimbursement
28 methodology) and rural health clinics (reimbursed according
29 to the Medicare methodology), where available. Persons
30 enrolled in the integrated health care program also may be
31 offered indemnity insurance plans, subject to availability.
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1 For purposes of this Section, a "managed health care
2 entity" means a health maintenance organization or a managed
3 care community network as defined in this Section. A "health
4 maintenance organization" means a health maintenance
5 organization as defined in the Health Maintenance
6 Organization Act. A "managed care community network" means
7 an entity, other than a health maintenance organization, that
8 is owned, operated, or governed by providers of health care
9 services within this State and that provides or arranges
10 primary, secondary, and tertiary managed health care services
11 under contract with the Illinois Department exclusively to
12 enrollees of the integrated health care program. A managed
13 care community network may contract with the Illinois
14 Department to provide only pediatric health care services. A
15 county provider as defined in Section 15-1 of this Code may
16 contract with the Illinois Department to provide services to
17 enrollees of the integrated health care program as a managed
18 care community network without the need to establish a
19 separate entity that provides services exclusively to
20 enrollees of the integrated health care program and shall be
21 deemed a managed care community network for purposes of this
22 Code only to the extent of the provision of services to those
23 enrollees in conjunction with the integrated health care
24 program. A county provider shall be entitled to contract
25 with the Illinois Department with respect to any contracting
26 region located in whole or in part within the county. A
27 county provider shall not be required to accept enrollees who
28 do not reside within the county.
29 Each managed care community network must demonstrate its
30 ability to bear the financial risk of serving enrollees under
31 this program. The Illinois Department shall by rule adopt
32 criteria for assessing the financial soundness of each
33 managed care community network. These rules shall consider
34 the extent to which a managed care community network is
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1 comprised of providers who directly render health care and
2 are located within the community in which they seek to
3 contract rather than solely arrange or finance the delivery
4 of health care. These rules shall further consider a variety
5 of risk-bearing and management techniques, including the
6 sufficiency of quality assurance and utilization management
7 programs and whether a managed care community network has
8 sufficiently demonstrated its financial solvency and net
9 worth. The Illinois Department's criteria must be based on
10 sound actuarial, financial, and accounting principles. In
11 adopting these rules, the Illinois Department shall consult
12 with the Illinois Department of Insurance. The Illinois
13 Department is responsible for monitoring compliance with
14 these rules.
15 This Section may not be implemented before the effective
16 date of these rules, the approval of any necessary federal
17 waivers, and the completion of the review of an application
18 submitted, at least 60 days before the effective date of
19 rules adopted under this Section, to the Illinois Department
20 by a managed care community network.
21 All health care delivery systems that contract with the
22 Illinois Department under the integrated health care program
23 shall clearly recognize a health care provider's right of
24 conscience under the Right of Conscience Act. In addition to
25 the provisions of that Act, no health care delivery system
26 that contracts with the Illinois Department under the
27 integrated health care program shall be required to provide,
28 arrange for, or pay for any health care or medical service,
29 procedure, or product if that health care delivery system is
30 owned, controlled, or sponsored by or affiliated with a
31 religious institution or religious organization that finds
32 that health care or medical service, procedure, or product to
33 violate its religious and moral teachings and beliefs.
34 (b) The Illinois Department may, by rule, provide for
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1 different benefit packages for different categories of
2 persons enrolled in the program. Mental health services,
3 alcohol and substance abuse services, services related to
4 children with chronic or acute conditions requiring
5 longer-term treatment and follow-up, and rehabilitation care
6 provided by a free-standing rehabilitation hospital or a
7 hospital rehabilitation unit may be excluded from a benefit
8 package if the State ensures that those services are made
9 available through a separate delivery system. An exclusion
10 does not prohibit the Illinois Department from developing and
11 implementing demonstration projects for categories of persons
12 or services. Benefit packages for persons eligible for
13 medical assistance under Articles V, VI, and XII shall be
14 based on the requirements of those Articles and shall be
15 consistent with the Title XIX of the Social Security Act.
16 Nothing in this Act shall be construed to apply to services
17 purchased by the Department of Children and Family Services
18 and the Department of Mental Health and Developmental
19 Disabilities under the provisions of Title 59 of the Illinois
20 Administrative Code, Part 132 ("Medicaid Community Mental
21 Health Services Program").
22 (c) The program established by this Section may be
23 implemented by the Illinois Department in various contracting
24 areas at various times. The health care delivery systems and
25 providers available under the program may vary throughout the
26 State. For purposes of contracting with managed health care
27 entities and providers, the Illinois Department shall
28 establish contracting areas similar to the geographic areas
29 designated by the Illinois Department for contracting
30 purposes under the Illinois Competitive Access and
31 Reimbursement Equity Program (ICARE) under the authority of
32 Section 3-4 of the Illinois Health Finance Reform Act or
33 similarly-sized or smaller geographic areas established by
34 the Illinois Department by rule. A managed health care entity
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1 shall be permitted to contract in any geographic areas for
2 which it has a sufficient provider network and otherwise
3 meets the contracting terms of the State. The Illinois
4 Department is not prohibited from entering into a contract
5 with a managed health care entity at any time.
6 (d) A managed health care entity that contracts with the
7 Illinois Department for the provision of services under the
8 program shall do all of the following, solely for purposes of
9 the integrated health care program:
10 (1) Provide that any individual physician licensed
11 to practice medicine in all its branches, any pharmacy,
12 any federally qualified health center, and any
13 podiatrist, that consistently meets the reasonable terms
14 and conditions established by the managed health care
15 entity, including but not limited to credentialing
16 standards, quality assurance program requirements,
17 utilization management requirements, financial
18 responsibility standards, contracting process
19 requirements, and provider network size and accessibility
20 requirements, must be accepted by the managed health care
21 entity for purposes of the Illinois integrated health
22 care program. Any individual who is either terminated
23 from or denied inclusion in the panel of physicians of
24 the managed health care entity shall be given, within 10
25 business days after that determination, a written
26 explanation of the reasons for his or her exclusion or
27 termination from the panel. This paragraph (1) does not
28 apply to the following:
29 (A) A managed health care entity that
30 certifies to the Illinois Department that:
31 (i) it employs on a full-time basis 125
32 or more Illinois physicians licensed to
33 practice medicine in all of its branches; and
34 (ii) it will provide medical services
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1 through its employees to more than 80% of the
2 recipients enrolled with the entity in the
3 integrated health care program; or
4 (B) A domestic stock insurance company
5 licensed under clause (b) of class 1 of Section 4 of
6 the Illinois Insurance Code if (i) at least 66% of
7 the stock of the insurance company is owned by a
8 professional corporation organized under the
9 Professional Service Corporation Act that has 125 or
10 more shareholders who are Illinois physicians
11 licensed to practice medicine in all of its branches
12 and (ii) the insurance company certifies to the
13 Illinois Department that at least 80% of those
14 physician shareholders will provide services to
15 recipients enrolled with the company in the
16 integrated health care program.
17 (2) Provide for reimbursement for providers for
18 emergency care, as defined by the Illinois Department by
19 rule, that must be provided to its enrollees, including
20 an emergency room screening fee, and urgent care that it
21 authorizes for its enrollees, regardless of the
22 provider's affiliation with the managed health care
23 entity. Providers shall be reimbursed for emergency care
24 at an amount equal to the Illinois Department's
25 fee-for-service rates for those medical services rendered
26 by providers not under contract with the managed health
27 care entity to enrollees of the entity.
28 (3) Provide that any provider affiliated with a
29 managed health care entity may also provide services on a
30 fee-for-service basis to Illinois Department clients not
31 enrolled in a managed health care entity.
32 (4) Provide client education services as determined
33 and approved by the Illinois Department, including but
34 not limited to (i) education regarding appropriate
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1 utilization of health care services in a managed care
2 system, (ii) written disclosure of treatment policies and
3 any restrictions or limitations on health services,
4 including, but not limited to, physical services,
5 clinical laboratory tests, hospital and surgical
6 procedures, prescription drugs and biologics, and
7 radiological examinations, and (iii) written notice that
8 the enrollee may receive from another provider those
9 services covered under this program that are not provided
10 by the managed health care entity.
11 (5) Provide that enrollees within its system may
12 choose the site for provision of services and the panel
13 of health care providers.
14 (6) Not discriminate in its enrollment or
15 disenrollment practices among recipients of medical
16 services or program enrollees based on health status.
17 (7) Provide a quality assurance and utilization
18 review program that (i) for health maintenance
19 organizations meets the requirements of the Health
20 Maintenance Organization Act and (ii) for managed care
21 community networks meets the requirements established by
22 the Illinois Department in rules that incorporate those
23 standards set forth in the Health Maintenance
24 Organization Act.
25 (8) Issue a managed health care entity
26 identification card to each enrollee upon enrollment.
27 The card must contain all of the following:
28 (A) The enrollee's signature.
29 (B) The enrollee's health plan.
30 (C) The name and telephone number of the
31 enrollee's primary care physician.
32 (D) A telephone number to be used for
33 emergency service 24 hours per day, 7 days per week.
34 The telephone number required to be maintained
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1 pursuant to this subparagraph by each managed health
2 care entity shall, at minimum, be staffed by
3 medically trained personnel and be provided
4 directly, or under arrangement, at an office or
5 offices in locations maintained solely within the
6 State of Illinois. For purposes of this
7 subparagraph, "medically trained personnel" means
8 licensed practical nurses or registered nurses
9 located in the State of Illinois who are licensed
10 pursuant to the Illinois Nursing Act of 1987.
11 (9) Ensure that every primary care physician and
12 pharmacy in the managed health care entity meets the
13 standards established by the Illinois Department for
14 accessibility and quality of care. The Illinois
15 Department shall arrange for and oversee an evaluation of
16 the standards established under this paragraph (9) and
17 may recommend any necessary changes to these standards.
18 The Illinois Department shall submit an annual report to
19 the Governor and the General Assembly by April 1 of each
20 year regarding the effect of the standards on ensuring
21 access and quality of care to enrollees.
22 (10) Provide a procedure for handling complaints
23 that (i) for health maintenance organizations meets the
24 requirements of the Health Maintenance Organization Act
25 and (ii) for managed care community networks meets the
26 requirements established by the Illinois Department in
27 rules that incorporate those standards set forth in the
28 Health Maintenance Organization Act.
29 (11) Maintain, retain, and make available to the
30 Illinois Department records, data, and information, in a
31 uniform manner determined by the Illinois Department,
32 sufficient for the Illinois Department to monitor
33 utilization, accessibility, and quality of care.
34 (12) Except for providers who are prepaid, pay all
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1 approved claims for covered services that are completed
2 and submitted to the managed health care entity within 30
3 days after receipt of the claim or receipt of the
4 appropriate capitation payment or payments by the managed
5 health care entity from the State for the month in which
6 the services included on the claim were rendered,
7 whichever is later. If payment is not made or mailed to
8 the provider by the managed health care entity by the due
9 date under this subsection, an interest penalty of 1% of
10 any amount unpaid shall be added for each month or
11 fraction of a month after the due date, until final
12 payment is made. Nothing in this Section shall prohibit
13 managed health care entities and providers from mutually
14 agreeing to terms that require more timely payment.
15 (13) Provide integration with community-based
16 programs provided by certified local health departments
17 such as Women, Infants, and Children Supplemental Food
18 Program (WIC), childhood immunization programs, health
19 education programs, case management programs, and health
20 screening programs.
21 (14) Provide that the pharmacy formulary used by a
22 managed health care entity and its contract providers be
23 no more restrictive than the Illinois Department's
24 pharmaceutical program on the effective date of this
25 amendatory Act of 1994 and as amended after that date.
26 (15) Provide integration with community-based
27 organizations, including, but not limited to, any
28 organization that has operated within a Medicaid
29 Partnership as defined by this Code or by rule of the
30 Illinois Department, that may continue to operate under a
31 contract with the Illinois Department or a managed health
32 care entity under this Section to provide case management
33 services to Medicaid clients in designated high-need
34 areas.
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1 The Illinois Department may, by rule, determine
2 methodologies to limit financial liability for managed health
3 care entities resulting from payment for services to
4 enrollees provided under the Illinois Department's integrated
5 health care program. Any methodology so determined may be
6 considered or implemented by the Illinois Department through
7 a contract with a managed health care entity under this
8 integrated health care program.
9 The Illinois Department shall contract with an entity or
10 entities to provide external peer-based quality assurance
11 review for the integrated health care program. The entity
12 shall be representative of Illinois physicians licensed to
13 practice medicine in all its branches and have statewide
14 geographic representation in all specialties of medical care
15 that are provided within the integrated health care program.
16 The entity may not be a third party payer and shall maintain
17 offices in locations around the State in order to provide
18 service and continuing medical education to physician
19 participants within the integrated health care program. The
20 review process shall be developed and conducted by Illinois
21 physicians licensed to practice medicine in all its branches.
22 In consultation with the entity, the Illinois Department may
23 contract with other entities for professional peer-based
24 quality assurance review of individual categories of services
25 other than services provided, supervised, or coordinated by
26 physicians licensed to practice medicine in all its branches.
27 The Illinois Department shall establish, by rule, criteria to
28 avoid conflicts of interest in the conduct of quality
29 assurance activities consistent with professional peer-review
30 standards. All quality assurance activities shall be
31 coordinated by the Illinois Department.
32 (e) All persons enrolled in the program shall be
33 provided with a full written explanation of all
34 fee-for-service and managed health care plan options and a
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1 reasonable opportunity to choose among the options as
2 provided by rule. The Illinois Department shall provide to
3 enrollees, upon enrollment in the integrated health care
4 program and at least annually thereafter, notice of the
5 process for requesting an appeal under the Illinois
6 Department's administrative appeal procedures.
7 Notwithstanding any other Section of this Code, the Illinois
8 Department may provide by rule for the Illinois Department to
9 assign a person enrolled in the program to a specific
10 provider of medical services or to a specific health care
11 delivery system if an enrollee has failed to exercise choice
12 in a timely manner. An enrollee assigned by the Illinois
13 Department shall be afforded the opportunity to disenroll and
14 to select a specific provider of medical services or a
15 specific health care delivery system within the first 30 days
16 after the assignment. An enrollee who has failed to exercise
17 choice in a timely manner may be assigned only if there are 3
18 or more managed health care entities contracting with the
19 Illinois Department within the contracting area, except that,
20 outside the City of Chicago, this requirement may be waived
21 for an area by rules adopted by the Illinois Department after
22 consultation with all hospitals within the contracting area.
23 The Illinois Department shall establish by rule the procedure
24 for random assignment of enrollees who fail to exercise
25 choice in a timely manner to a specific managed health care
26 entity in proportion to the available capacity of that
27 managed health care entity. Assignment to a specific provider
28 of medical services or to a specific managed health care
29 entity may not exceed that provider's or entity's capacity as
30 determined by the Illinois Department. Any person who has
31 chosen a specific provider of medical services or a specific
32 managed health care entity, or any person who has been
33 assigned under this subsection, shall be given the
34 opportunity to change that choice or assignment at least once
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1 every 12 months, as determined by the Illinois Department by
2 rule. The Illinois Department shall maintain a toll-free
3 telephone number for program enrollees' use in reporting
4 problems with managed health care entities.
5 (f) If a person becomes eligible for participation in
6 the integrated health care program while he or she is
7 hospitalized, the Illinois Department may not enroll that
8 person in the program until after he or she has been
9 discharged from the hospital. This subsection does not apply
10 to newborn infants whose mothers are enrolled in the
11 integrated health care program.
12 (g) The Illinois Department shall, by rule, establish
13 for managed health care entities rates that (i) are certified
14 to be actuarially sound, as determined by an actuary who is
15 an associate or a fellow of the Society of Actuaries or a
16 member of the American Academy of Actuaries and who has
17 expertise and experience in medical insurance and benefit
18 programs, in accordance with the Illinois Department's
19 current fee-for-service payment system, and (ii) take into
20 account any difference of cost to provide health care to
21 different populations based on gender, age, location, and
22 eligibility category. The rates for managed health care
23 entities shall be determined on a capitated basis.
24 The Illinois Department by rule shall establish a method
25 to adjust its payments to managed health care entities in a
26 manner intended to avoid providing any financial incentive to
27 a managed health care entity to refer patients to a county
28 provider, in an Illinois county having a population greater
29 than 3,000,000, that is paid directly by the Illinois
30 Department. The Illinois Department shall by April 1, 1997,
31 and annually thereafter, review the method to adjust
32 payments. Payments by the Illinois Department to the county
33 provider, for persons not enrolled in a managed care
34 community network owned or operated by a county provider,
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1 shall be paid on a fee-for-service basis under Article XV of
2 this Code.
3 The Illinois Department by rule shall establish a method
4 to reduce its payments to managed health care entities to
5 take into consideration (i) any adjustment payments paid to
6 hospitals under subsection (h) of this Section to the extent
7 those payments, or any part of those payments, have been
8 taken into account in establishing capitated rates under this
9 subsection (g) and (ii) the implementation of methodologies
10 to limit financial liability for managed health care entities
11 under subsection (d) of this Section.
12 (h) For hospital services provided by a hospital that
13 contracts with a managed health care entity, adjustment
14 payments shall be paid directly to the hospital by the
15 Illinois Department. Adjustment payments may include but
16 need not be limited to adjustment payments to:
17 disproportionate share hospitals under Section 5-5.02 of this
18 Code; primary care access health care education payments (89
19 Ill. Adm. Code 149.140); payments for capital, direct medical
20 education, indirect medical education, certified registered
21 nurse anesthetist, and kidney acquisition costs (89 Ill. Adm.
22 Code 149.150(c)); uncompensated care payments (89 Ill. Adm.
23 Code 148.150(h)); trauma center payments (89 Ill. Adm. Code
24 148.290(c)); rehabilitation hospital payments (89 Ill. Adm.
25 Code 148.290(d)); perinatal center payments (89 Ill. Adm.
26 Code 148.290(e)); obstetrical care payments (89 Ill. Adm.
27 Code 148.290(f)); targeted access payments (89 Ill. Adm. Code
28 148.290(g)); Medicaid high volume payments (89 Ill. Adm. Code
29 148.290(h)); and outpatient indigent volume adjustments (89
30 Ill. Adm. Code 148.140(b)(5)).
31 (i) For any hospital eligible for the adjustment
32 payments described in subsection (h), the Illinois Department
33 shall maintain, through the period ending June 30, 1995,
34 reimbursement levels in accordance with statutes and rules in
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1 effect on April 1, 1994.
2 (j) Nothing contained in this Code in any way limits or
3 otherwise impairs the authority or power of the Illinois
4 Department to enter into a negotiated contract pursuant to
5 this Section with a managed health care entity, including,
6 but not limited to, a health maintenance organization, that
7 provides for termination or nonrenewal of the contract
8 without cause upon notice as provided in the contract and
9 without a hearing.
10 (k) Section 5-5.15 does not apply to the program
11 developed and implemented pursuant to this Section.
12 (l) The Illinois Department shall, by rule, define those
13 chronic or acute medical conditions of childhood that require
14 longer-term treatment and follow-up care. The Illinois
15 Department shall ensure that services required to treat these
16 conditions are available through a separate delivery system.
17 A managed health care entity that contracts with the
18 Illinois Department may refer a child with medical conditions
19 described in the rules adopted under this subsection directly
20 to a children's hospital or to a hospital, other than a
21 children's hospital, that is qualified to provide inpatient
22 and outpatient services to treat those conditions. The
23 Illinois Department shall provide fee-for-service
24 reimbursement directly to a children's hospital for those
25 services pursuant to Title 89 of the Illinois Administrative
26 Code, Section 148.280(a), at a rate at least equal to the
27 rate in effect on March 31, 1994. For hospitals, other than
28 children's hospitals, that are qualified to provide inpatient
29 and outpatient services to treat those conditions, the
30 Illinois Department shall provide reimbursement for those
31 services on a fee-for-service basis, at a rate at least equal
32 to the rate in effect for those other hospitals on March 31,
33 1994.
34 A children's hospital shall be directly reimbursed for
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1 all services provided at the children's hospital on a
2 fee-for-service basis pursuant to Title 89 of the Illinois
3 Administrative Code, Section 148.280(a), at a rate at least
4 equal to the rate in effect on March 31, 1994, until the
5 later of (i) implementation of the integrated health care
6 program under this Section and development of actuarially
7 sound capitation rates for services other than those chronic
8 or acute medical conditions of childhood that require
9 longer-term treatment and follow-up care as defined by the
10 Illinois Department in the rules adopted under this
11 subsection or (ii) March 31, 1996.
12 Notwithstanding anything in this subsection to the
13 contrary, a managed health care entity shall not consider
14 sources or methods of payment in determining the referral of
15 a child. The Illinois Department shall adopt rules to
16 establish criteria for those referrals. The Illinois
17 Department by rule shall establish a method to adjust its
18 payments to managed health care entities in a manner intended
19 to avoid providing any financial incentive to a managed
20 health care entity to refer patients to a provider who is
21 paid directly by the Illinois Department.
22 (m) Behavioral health services provided or funded by the
23 Department of Mental Health and Developmental Disabilities,
24 the Department of Alcoholism and Substance Abuse, the
25 Department of Children and Family Services, and the Illinois
26 Department shall be excluded from a benefit package.
27 Conditions of an organic or physical origin or nature,
28 including medical detoxification, however, may not be
29 excluded. In this subsection, "behavioral health services"
30 means mental health services and subacute alcohol and
31 substance abuse treatment services, as defined in the
32 Illinois Alcoholism and Other Drug Dependency Act. In this
33 subsection, "mental health services" includes, at a minimum,
34 the following services funded by the Illinois Department, the
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1 Department of Mental Health and Developmental Disabilities,
2 or the Department of Children and Family Services: (i)
3 inpatient hospital services, including related physician
4 services, related psychiatric interventions, and
5 pharmaceutical services provided to an eligible recipient
6 hospitalized with a primary diagnosis of psychiatric
7 disorder; (ii) outpatient mental health services as defined
8 and specified in Title 59 of the Illinois Administrative
9 Code, Part 132; (iii) any other outpatient mental health
10 services funded by the Illinois Department pursuant to the
11 State of Illinois Medicaid Plan; (iv) partial
12 hospitalization; and (v) follow-up stabilization related to
13 any of those services. Additional behavioral health services
14 may be excluded under this subsection as mutually agreed in
15 writing by the Illinois Department and the affected State
16 agency or agencies. The exclusion of any service does not
17 prohibit the Illinois Department from developing and
18 implementing demonstration projects for categories of persons
19 or services. The Department of Mental Health and
20 Developmental Disabilities, the Department of Children and
21 Family Services, and the Department of Alcoholism and
22 Substance Abuse shall each adopt rules governing the
23 integration of managed care in the provision of behavioral
24 health services. The State shall integrate managed care
25 community networks and affiliated providers, to the extent
26 practicable, in any separate delivery system for mental
27 health services.
28 (n) The Illinois Department shall adopt rules to
29 establish reserve requirements for managed care community
30 networks, as required by subsection (a), and health
31 maintenance organizations to protect against liabilities in
32 the event that a managed health care entity is declared
33 insolvent or bankrupt. If a managed health care entity other
34 than a county provider is declared insolvent or bankrupt,
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1 after liquidation and application of any available assets,
2 resources, and reserves, the Illinois Department shall pay a
3 portion of the amounts owed by the managed health care entity
4 to providers for services rendered to enrollees under the
5 integrated health care program under this Section based on
6 the following schedule: (i) from April 1, 1995 through June
7 30, 1998, 90% of the amounts owed; (ii) from July 1, 1998
8 through June 30, 2001, 80% of the amounts owed; and (iii)
9 from July 1, 2001 through June 30, 2005, 75% of the amounts
10 owed. The amounts paid under this subsection shall be
11 calculated based on the total amount owed by the managed
12 health care entity to providers before application of any
13 available assets, resources, and reserves. After June 30,
14 2005, the Illinois Department may not pay any amounts owed to
15 providers as a result of an insolvency or bankruptcy of a
16 managed health care entity occurring after that date. The
17 Illinois Department is not obligated, however, to pay amounts
18 owed to a provider that has an ownership or other governing
19 interest in the managed health care entity. This subsection
20 applies only to managed health care entities and the services
21 they provide under the integrated health care program under
22 this Section.
23 (o) Notwithstanding any other provision of law or
24 contractual agreement to the contrary, providers shall not be
25 required to accept from any other third party payer the rates
26 determined or paid under this Code by the Illinois
27 Department, managed health care entity, or other health care
28 delivery system for services provided to recipients.
29 (p) The Illinois Department may seek and obtain any
30 necessary authorization provided under federal law to
31 implement the program, including the waiver of any federal
32 statutes or regulations. The Illinois Department may seek a
33 waiver of the federal requirement that the combined
34 membership of Medicare and Medicaid enrollees in a managed
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1 care community network may not exceed 75% of the managed care
2 community network's total enrollment. The Illinois
3 Department shall not seek a waiver of this requirement for
4 any other category of managed health care entity. The
5 Illinois Department shall not seek a waiver of the inpatient
6 hospital reimbursement methodology in Section 1902(a)(13)(A)
7 of Title XIX of the Social Security Act even if the federal
8 agency responsible for administering Title XIX determines
9 that Section 1902(a)(13)(A) applies to managed health care
10 systems.
11 Notwithstanding any other provisions of this Code to the
12 contrary, the Illinois Department shall seek a waiver of
13 applicable federal law in order to impose a co-payment system
14 consistent with this subsection on recipients of medical
15 services under Title XIX of the Social Security Act who are
16 not enrolled in a managed health care entity. The waiver
17 request submitted by the Illinois Department shall provide
18 for co-payments of up to $0.50 for prescribed drugs and up to
19 $0.50 for x-ray services and shall provide for co-payments of
20 up to $10 for non-emergency services provided in a hospital
21 emergency room and up to $10 for non-emergency ambulance
22 services. The purpose of the co-payments shall be to deter
23 those recipients from seeking unnecessary medical care.
24 Co-payments may not be used to deter recipients from seeking
25 necessary medical care. No recipient shall be required to
26 pay more than a total of $150 per year in co-payments under
27 the waiver request required by this subsection. A recipient
28 may not be required to pay more than $15 of any amount due
29 under this subsection in any one month.
30 Co-payments authorized under this subsection may not be
31 imposed when the care was necessitated by a true medical
32 emergency. Co-payments may not be imposed for any of the
33 following classifications of services:
34 (1) Services furnished to person under 18 years of
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1 age.
2 (2) Services furnished to pregnant women.
3 (3) Services furnished to any individual who is an
4 inpatient in a hospital, nursing facility, intermediate
5 care facility, or other medical institution, if that
6 person is required to spend for costs of medical care all
7 but a minimal amount of his or her income required for
8 personal needs.
9 (4) Services furnished to a person who is receiving
10 hospice care.
11 Co-payments authorized under this subsection shall not be
12 deducted from or reduce in any way payments for medical
13 services from the Illinois Department to providers. No
14 provider may deny those services to an individual eligible
15 for services based on the individual's inability to pay the
16 co-payment.
17 Recipients who are subject to co-payments shall be
18 provided notice, in plain and clear language, of the amount
19 of the co-payments, the circumstances under which co-payments
20 are exempted, the circumstances under which co-payments may
21 be assessed, and their manner of collection.
22 The Illinois Department shall establish a Medicaid
23 Co-Payment Council to assist in the development of co-payment
24 policies for the medical assistance program. The Medicaid
25 Co-Payment Council shall also have jurisdiction to develop a
26 program to provide financial or non-financial incentives to
27 Medicaid recipients in order to encourage recipients to seek
28 necessary health care. The Council shall be chaired by the
29 Director of the Illinois Department, and shall have 6
30 additional members. Two of the 6 additional members shall be
31 appointed by the Governor, and one each shall be appointed by
32 the President of the Senate, the Minority Leader of the
33 Senate, the Speaker of the House of Representatives, and the
34 Minority Leader of the House of Representatives. The Council
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1 may be convened and make recommendations upon the appointment
2 of a majority of its members. The Council shall be appointed
3 and convened no later than September 1, 1994 and shall report
4 its recommendations to the Director of the Illinois
5 Department and the General Assembly no later than October 1,
6 1994. The chairperson of the Council shall be allowed to
7 vote only in the case of a tie vote among the appointed
8 members of the Council.
9 The Council shall be guided by the following principles
10 as it considers recommendations to be developed to implement
11 any approved waivers that the Illinois Department must seek
12 pursuant to this subsection:
13 (1) Co-payments should not be used to deter access
14 to adequate medical care.
15 (2) Co-payments should be used to reduce fraud.
16 (3) Co-payment policies should be examined in
17 consideration of other states' experience, and the
18 ability of successful co-payment plans to control
19 unnecessary or inappropriate utilization of services
20 should be promoted.
21 (4) All participants, both recipients and
22 providers, in the medical assistance program have
23 responsibilities to both the State and the program.
24 (5) Co-payments are primarily a tool to educate the
25 participants in the responsible use of health care
26 resources.
27 (6) Co-payments should not be used to penalize
28 providers.
29 (7) A successful medical program requires the
30 elimination of improper utilization of medical resources.
31 The integrated health care program, or any part of that
32 program, established under this Section may not be
33 implemented if matching federal funds under Title XIX of the
34 Social Security Act are not available for administering the
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1 program.
2 The Illinois Department shall submit for publication in
3 the Illinois Register the name, address, and telephone number
4 of the individual to whom a request may be directed for a
5 copy of the request for a waiver of provisions of Title XIX
6 of the Social Security Act that the Illinois Department
7 intends to submit to the Health Care Financing Administration
8 in order to implement this Section. The Illinois Department
9 shall mail a copy of that request for waiver to all
10 requestors at least 16 days before filing that request for
11 waiver with the Health Care Financing Administration.
12 (q) After the effective date of this Section, the
13 Illinois Department may take all planning and preparatory
14 action necessary to implement this Section, including, but
15 not limited to, seeking requests for proposals relating to
16 the integrated health care program created under this
17 Section.
18 (r) In order to (i) accelerate and facilitate the
19 development of integrated health care in contracting areas
20 outside counties with populations in excess of 3,000,000 and
21 counties adjacent to those counties and (ii) maintain and
22 sustain the high quality of education and residency programs
23 coordinated and associated with local area hospitals, the
24 Illinois Department may develop and implement a demonstration
25 program for managed care community networks owned, operated,
26 or governed by State-funded medical schools. The Illinois
27 Department shall prescribe by rule the criteria, standards,
28 and procedures for effecting this demonstration program.
29 (s) (Blank).
30 (s-5) The Illinois Department may impose administrative
31 penalties for violations of this Section.
32 (t) On April 1, 1995 and every 6 months thereafter, the
33 Illinois Department shall report to the Governor and General
34 Assembly on the progress of the integrated health care
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1 program in enrolling clients into managed health care
2 entities. The report shall indicate the capacities of the
3 managed health care entities with which the State contracts,
4 the number of clients enrolled by each contractor, the areas
5 of the State in which managed care options do not exist, and
6 the progress toward meeting the enrollment goals of the
7 integrated health care program.
8 (u) The Illinois Department may implement this Section
9 through the use of emergency rules in accordance with Section
10 5-45 of the Illinois Administrative Procedure Act. For
11 purposes of that Act, the adoption of rules to implement this
12 Section is deemed an emergency and necessary for the public
13 interest, safety, and welfare.
14 (Source: P.A. 88-554, eff. 7-26-94; 89-21, eff. 7-1-95;
15 89-673, eff. 8-14-96; revised 8-26-96.)
16 (Text of Section after amendment by P.A. 89-507)
17 Sec. 5-16.3. System for integrated health care services.
18 (a) It shall be the public policy of the State to adopt,
19 to the extent practicable, a health care program that
20 encourages the integration of health care services and
21 manages the health care of program enrollees while preserving
22 reasonable choice within a competitive and cost-efficient
23 environment. In furtherance of this public policy, the
24 Illinois Department shall develop and implement an integrated
25 health care program consistent with the provisions of this
26 Section. The provisions of this Section apply only to the
27 integrated health care program created under this Section.
28 Persons enrolled in the integrated health care program, as
29 determined by the Illinois Department by rule, shall be
30 afforded a choice among health care delivery systems, which
31 shall include, but are not limited to, (i) fee for service
32 care managed by a primary care physician licensed to practice
33 medicine in all its branches, (ii) managed health care
34 entities, and (iii) federally qualified health centers
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1 (reimbursed according to a prospective cost-reimbursement
2 methodology) and rural health clinics (reimbursed according
3 to the Medicare methodology), where available. Persons
4 enrolled in the integrated health care program also may be
5 offered indemnity insurance plans, subject to availability.
6 For purposes of this Section, a "managed health care
7 entity" means a health maintenance organization or a managed
8 care community network as defined in this Section. A "health
9 maintenance organization" means a health maintenance
10 organization as defined in the Health Maintenance
11 Organization Act. A "managed care community network" means
12 an entity, other than a health maintenance organization, that
13 is owned, operated, or governed by providers of health care
14 services within this State and that provides or arranges
15 primary, secondary, and tertiary managed health care services
16 under contract with the Illinois Department exclusively to
17 enrollees of the integrated health care program. A managed
18 care community network may contract with the Illinois
19 Department to provide only pediatric health care services. A
20 county provider as defined in Section 15-1 of this Code may
21 contract with the Illinois Department to provide services to
22 enrollees of the integrated health care program as a managed
23 care community network without the need to establish a
24 separate entity that provides services exclusively to
25 enrollees of the integrated health care program and shall be
26 deemed a managed care community network for purposes of this
27 Code only to the extent of the provision of services to those
28 enrollees in conjunction with the integrated health care
29 program. A county provider shall be entitled to contract
30 with the Illinois Department with respect to any contracting
31 region located in whole or in part within the county. A
32 county provider shall not be required to accept enrollees who
33 do not reside within the county.
34 Each managed care community network must demonstrate its
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1 ability to bear the financial risk of serving enrollees under
2 this program. The Illinois Department shall by rule adopt
3 criteria for assessing the financial soundness of each
4 managed care community network. These rules shall consider
5 the extent to which a managed care community network is
6 comprised of providers who directly render health care and
7 are located within the community in which they seek to
8 contract rather than solely arrange or finance the delivery
9 of health care. These rules shall further consider a variety
10 of risk-bearing and management techniques, including the
11 sufficiency of quality assurance and utilization management
12 programs and whether a managed care community network has
13 sufficiently demonstrated its financial solvency and net
14 worth. The Illinois Department's criteria must be based on
15 sound actuarial, financial, and accounting principles. In
16 adopting these rules, the Illinois Department shall consult
17 with the Illinois Department of Insurance. The Illinois
18 Department is responsible for monitoring compliance with
19 these rules.
20 This Section may not be implemented before the effective
21 date of these rules, the approval of any necessary federal
22 waivers, and the completion of the review of an application
23 submitted, at least 60 days before the effective date of
24 rules adopted under this Section, to the Illinois Department
25 by a managed care community network.
26 All health care delivery systems that contract with the
27 Illinois Department under the integrated health care program
28 shall clearly recognize a health care provider's right of
29 conscience under the Right of Conscience Act. In addition to
30 the provisions of that Act, no health care delivery system
31 that contracts with the Illinois Department under the
32 integrated health care program shall be required to provide,
33 arrange for, or pay for any health care or medical service,
34 procedure, or product if that health care delivery system is
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1 owned, controlled, or sponsored by or affiliated with a
2 religious institution or religious organization that finds
3 that health care or medical service, procedure, or product to
4 violate its religious and moral teachings and beliefs.
5 (b) The Illinois Department may, by rule, provide for
6 different benefit packages for different categories of
7 persons enrolled in the program. Mental health services,
8 alcohol and substance abuse services, services related to
9 children with chronic or acute conditions requiring
10 longer-term treatment and follow-up, and rehabilitation care
11 provided by a free-standing rehabilitation hospital or a
12 hospital rehabilitation unit may be excluded from a benefit
13 package if the State ensures that those services are made
14 available through a separate delivery system. An exclusion
15 does not prohibit the Illinois Department from developing and
16 implementing demonstration projects for categories of persons
17 or services. Benefit packages for persons eligible for
18 medical assistance under Articles V, VI, and XII shall be
19 based on the requirements of those Articles and shall be
20 consistent with the Title XIX of the Social Security Act.
21 Nothing in this Act shall be construed to apply to services
22 purchased by the Department of Children and Family Services
23 and the Department of Human Services (as successor to the
24 Department of Mental Health and Developmental Disabilities)
25 under the provisions of Title 59 of the Illinois
26 Administrative Code, Part 132 ("Medicaid Community Mental
27 Health Services Program").
28 (c) The program established by this Section may be
29 implemented by the Illinois Department in various contracting
30 areas at various times. The health care delivery systems and
31 providers available under the program may vary throughout the
32 State. For purposes of contracting with managed health care
33 entities and providers, the Illinois Department shall
34 establish contracting areas similar to the geographic areas
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1 designated by the Illinois Department for contracting
2 purposes under the Illinois Competitive Access and
3 Reimbursement Equity Program (ICARE) under the authority of
4 Section 3-4 of the Illinois Health Finance Reform Act or
5 similarly-sized or smaller geographic areas established by
6 the Illinois Department by rule. A managed health care entity
7 shall be permitted to contract in any geographic areas for
8 which it has a sufficient provider network and otherwise
9 meets the contracting terms of the State. The Illinois
10 Department is not prohibited from entering into a contract
11 with a managed health care entity at any time.
12 (d) A managed health care entity that contracts with the
13 Illinois Department for the provision of services under the
14 program shall do all of the following, solely for purposes of
15 the integrated health care program:
16 (1) Provide that any individual physician licensed
17 to practice medicine in all its branches, any pharmacy,
18 any federally qualified health center, and any
19 podiatrist, that consistently meets the reasonable terms
20 and conditions established by the managed health care
21 entity, including but not limited to credentialing
22 standards, quality assurance program requirements,
23 utilization management requirements, financial
24 responsibility standards, contracting process
25 requirements, and provider network size and accessibility
26 requirements, must be accepted by the managed health care
27 entity for purposes of the Illinois integrated health
28 care program. Any individual who is either terminated
29 from or denied inclusion in the panel of physicians of
30 the managed health care entity shall be given, within 10
31 business days after that determination, a written
32 explanation of the reasons for his or her exclusion or
33 termination from the panel. This paragraph (1) does not
34 apply to the following:
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1 (A) A managed health care entity that
2 certifies to the Illinois Department that:
3 (i) it employs on a full-time basis 125
4 or more Illinois physicians licensed to
5 practice medicine in all of its branches; and
6 (ii) it will provide medical services
7 through its employees to more than 80% of the
8 recipients enrolled with the entity in the
9 integrated health care program; or
10 (B) A domestic stock insurance company
11 licensed under clause (b) of class 1 of Section 4 of
12 the Illinois Insurance Code if (i) at least 66% of
13 the stock of the insurance company is owned by a
14 professional corporation organized under the
15 Professional Service Corporation Act that has 125 or
16 more shareholders who are Illinois physicians
17 licensed to practice medicine in all of its branches
18 and (ii) the insurance company certifies to the
19 Illinois Department that at least 80% of those
20 physician shareholders will provide services to
21 recipients enrolled with the company in the
22 integrated health care program.
23 (2) Provide for reimbursement for providers for
24 emergency care, as defined by the Illinois Department by
25 rule, that must be provided to its enrollees, including
26 an emergency room screening fee, and urgent care that it
27 authorizes for its enrollees, regardless of the
28 provider's affiliation with the managed health care
29 entity. Providers shall be reimbursed for emergency care
30 at an amount equal to the Illinois Department's
31 fee-for-service rates for those medical services rendered
32 by providers not under contract with the managed health
33 care entity to enrollees of the entity.
34 (3) Provide that any provider affiliated with a
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1 managed health care entity may also provide services on a
2 fee-for-service basis to Illinois Department clients not
3 enrolled in a managed health care entity.
4 (4) Provide client education services as determined
5 and approved by the Illinois Department, including but
6 not limited to (i) education regarding appropriate
7 utilization of health care services in a managed care
8 system, (ii) written disclosure of treatment policies and
9 any restrictions or limitations on health services,
10 including, but not limited to, physical services,
11 clinical laboratory tests, hospital and surgical
12 procedures, prescription drugs and biologics, and
13 radiological examinations, and (iii) written notice that
14 the enrollee may receive from another provider those
15 services covered under this program that are not provided
16 by the managed health care entity.
17 (5) Provide that enrollees within its system may
18 choose the site for provision of services and the panel
19 of health care providers.
20 (6) Not discriminate in its enrollment or
21 disenrollment practices among recipients of medical
22 services or program enrollees based on health status.
23 (7) Provide a quality assurance and utilization
24 review program that (i) for health maintenance
25 organizations meets the requirements of the Health
26 Maintenance Organization Act and (ii) for managed care
27 community networks meets the requirements established by
28 the Illinois Department in rules that incorporate those
29 standards set forth in the Health Maintenance
30 Organization Act.
31 (8) Issue a managed health care entity
32 identification card to each enrollee upon enrollment.
33 The card must contain all of the following:
34 (A) The enrollee's signature.
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1 (B) The enrollee's health plan.
2 (C) The name and telephone number of the
3 enrollee's primary care physician.
4 (D) A telephone number to be used for
5 emergency service 24 hours per day, 7 days per week.
6 The telephone number required to be maintained
7 pursuant to this subparagraph by each managed health
8 care entity shall, at minimum, be staffed by
9 medically trained personnel and be provided
10 directly, or under arrangement, at an office or
11 offices in locations maintained solely within the
12 State of Illinois. For purposes of this
13 subparagraph, "medically trained personnel" means
14 licensed practical nurses or registered nurses
15 located in the State of Illinois who are licensed
16 pursuant to the Illinois Nursing Act of 1987.
17 (9) Ensure that every primary care physician and
18 pharmacy in the managed health care entity meets the
19 standards established by the Illinois Department for
20 accessibility and quality of care. The Illinois
21 Department shall arrange for and oversee an evaluation of
22 the standards established under this paragraph (9) and
23 may recommend any necessary changes to these standards.
24 The Illinois Department shall submit an annual report to
25 the Governor and the General Assembly by April 1 of each
26 year regarding the effect of the standards on ensuring
27 access and quality of care to enrollees.
28 (10) Provide a procedure for handling complaints
29 that (i) for health maintenance organizations meets the
30 requirements of the Health Maintenance Organization Act
31 and (ii) for managed care community networks meets the
32 requirements established by the Illinois Department in
33 rules that incorporate those standards set forth in the
34 Health Maintenance Organization Act.
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1 (11) Maintain, retain, and make available to the
2 Illinois Department records, data, and information, in a
3 uniform manner determined by the Illinois Department,
4 sufficient for the Illinois Department to monitor
5 utilization, accessibility, and quality of care.
6 (12) Except for providers who are prepaid, pay all
7 approved claims for covered services that are completed
8 and submitted to the managed health care entity within 30
9 days after receipt of the claim or receipt of the
10 appropriate capitation payment or payments by the managed
11 health care entity from the State for the month in which
12 the services included on the claim were rendered,
13 whichever is later. If payment is not made or mailed to
14 the provider by the managed health care entity by the due
15 date under this subsection, an interest penalty of 1% of
16 any amount unpaid shall be added for each month or
17 fraction of a month after the due date, until final
18 payment is made. Nothing in this Section shall prohibit
19 managed health care entities and providers from mutually
20 agreeing to terms that require more timely payment.
21 (13) Provide integration with community-based
22 programs provided by certified local health departments
23 such as Women, Infants, and Children Supplemental Food
24 Program (WIC), childhood immunization programs, health
25 education programs, case management programs, and health
26 screening programs.
27 (14) Provide that the pharmacy formulary used by a
28 managed health care entity and its contract providers be
29 no more restrictive than the Illinois Department's
30 pharmaceutical program on the effective date of this
31 amendatory Act of 1994 and as amended after that date.
32 (15) Provide integration with community-based
33 organizations, including, but not limited to, any
34 organization that has operated within a Medicaid
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1 Partnership as defined by this Code or by rule of the
2 Illinois Department, that may continue to operate under a
3 contract with the Illinois Department or a managed health
4 care entity under this Section to provide case management
5 services to Medicaid clients in designated high-need
6 areas.
7 The Illinois Department may, by rule, determine
8 methodologies to limit financial liability for managed health
9 care entities resulting from payment for services to
10 enrollees provided under the Illinois Department's integrated
11 health care program. Any methodology so determined may be
12 considered or implemented by the Illinois Department through
13 a contract with a managed health care entity under this
14 integrated health care program.
15 The Illinois Department shall contract with an entity or
16 entities to provide external peer-based quality assurance
17 review for the integrated health care program. The entity
18 shall be representative of Illinois physicians licensed to
19 practice medicine in all its branches and have statewide
20 geographic representation in all specialties of medical care
21 that are provided within the integrated health care program.
22 The entity may not be a third party payer and shall maintain
23 offices in locations around the State in order to provide
24 service and continuing medical education to physician
25 participants within the integrated health care program. The
26 review process shall be developed and conducted by Illinois
27 physicians licensed to practice medicine in all its branches.
28 In consultation with the entity, the Illinois Department may
29 contract with other entities for professional peer-based
30 quality assurance review of individual categories of services
31 other than services provided, supervised, or coordinated by
32 physicians licensed to practice medicine in all its branches.
33 The Illinois Department shall establish, by rule, criteria to
34 avoid conflicts of interest in the conduct of quality
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1 assurance activities consistent with professional peer-review
2 standards. All quality assurance activities shall be
3 coordinated by the Illinois Department.
4 (e) All persons enrolled in the program shall be
5 provided with a full written explanation of all
6 fee-for-service and managed health care plan options and a
7 reasonable opportunity to choose among the options as
8 provided by rule. The Illinois Department shall provide to
9 enrollees, upon enrollment in the integrated health care
10 program and at least annually thereafter, notice of the
11 process for requesting an appeal under the Illinois
12 Department's administrative appeal procedures.
13 Notwithstanding any other Section of this Code, the Illinois
14 Department may provide by rule for the Illinois Department to
15 assign a person enrolled in the program to a specific
16 provider of medical services or to a specific health care
17 delivery system if an enrollee has failed to exercise choice
18 in a timely manner. An enrollee assigned by the Illinois
19 Department shall be afforded the opportunity to disenroll and
20 to select a specific provider of medical services or a
21 specific health care delivery system within the first 30 days
22 after the assignment. An enrollee who has failed to exercise
23 choice in a timely manner may be assigned only if there are 3
24 or more managed health care entities contracting with the
25 Illinois Department within the contracting area, except that,
26 outside the City of Chicago, this requirement may be waived
27 for an area by rules adopted by the Illinois Department after
28 consultation with all hospitals within the contracting area.
29 The Illinois Department shall establish by rule the procedure
30 for random assignment of enrollees who fail to exercise
31 choice in a timely manner to a specific managed health care
32 entity in proportion to the available capacity of that
33 managed health care entity. Assignment to a specific provider
34 of medical services or to a specific managed health care
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1 entity may not exceed that provider's or entity's capacity as
2 determined by the Illinois Department. Any person who has
3 chosen a specific provider of medical services or a specific
4 managed health care entity, or any person who has been
5 assigned under this subsection, shall be given the
6 opportunity to change that choice or assignment at least once
7 every 12 months, as determined by the Illinois Department by
8 rule. The Illinois Department shall maintain a toll-free
9 telephone number for program enrollees' use in reporting
10 problems with managed health care entities.
11 (f) If a person becomes eligible for participation in
12 the integrated health care program while he or she is
13 hospitalized, the Illinois Department may not enroll that
14 person in the program until after he or she has been
15 discharged from the hospital. This subsection does not apply
16 to newborn infants whose mothers are enrolled in the
17 integrated health care program.
18 (g) The Illinois Department shall, by rule, establish
19 for managed health care entities rates that (i) are certified
20 to be actuarially sound, as determined by an actuary who is
21 an associate or a fellow of the Society of Actuaries or a
22 member of the American Academy of Actuaries and who has
23 expertise and experience in medical insurance and benefit
24 programs, in accordance with the Illinois Department's
25 current fee-for-service payment system, and (ii) take into
26 account any difference of cost to provide health care to
27 different populations based on gender, age, location, and
28 eligibility category. The rates for managed health care
29 entities shall be determined on a capitated basis.
30 The Illinois Department by rule shall establish a method
31 to adjust its payments to managed health care entities in a
32 manner intended to avoid providing any financial incentive to
33 a managed health care entity to refer patients to a county
34 provider, in an Illinois county having a population greater
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1 than 3,000,000, that is paid directly by the Illinois
2 Department. The Illinois Department shall by April 1, 1997,
3 and annually thereafter, review the method to adjust
4 payments. Payments by the Illinois Department to the county
5 provider, for persons not enrolled in a managed care
6 community network owned or operated by a county provider,
7 shall be paid on a fee-for-service basis under Article XV of
8 this Code.
9 The Illinois Department by rule shall establish a method
10 to reduce its payments to managed health care entities to
11 take into consideration (i) any adjustment payments paid to
12 hospitals under subsection (h) of this Section to the extent
13 those payments, or any part of those payments, have been
14 taken into account in establishing capitated rates under this
15 subsection (g) and (ii) the implementation of methodologies
16 to limit financial liability for managed health care entities
17 under subsection (d) of this Section.
18 (h) For hospital services provided by a hospital that
19 contracts with a managed health care entity, adjustment
20 payments shall be paid directly to the hospital by the
21 Illinois Department. Adjustment payments may include but
22 need not be limited to adjustment payments to:
23 disproportionate share hospitals under Section 5-5.02 of this
24 Code; primary care access health care education payments (89
25 Ill. Adm. Code 149.140); payments for capital, direct medical
26 education, indirect medical education, certified registered
27 nurse anesthetist, and kidney acquisition costs (89 Ill. Adm.
28 Code 149.150(c)); uncompensated care payments (89 Ill. Adm.
29 Code 148.150(h)); trauma center payments (89 Ill. Adm. Code
30 148.290(c)); rehabilitation hospital payments (89 Ill. Adm.
31 Code 148.290(d)); perinatal center payments (89 Ill. Adm.
32 Code 148.290(e)); obstetrical care payments (89 Ill. Adm.
33 Code 148.290(f)); targeted access payments (89 Ill. Adm. Code
34 148.290(g)); Medicaid high volume payments (89 Ill. Adm. Code
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1 148.290(h)); and outpatient indigent volume adjustments (89
2 Ill. Adm. Code 148.140(b)(5)).
3 (i) For any hospital eligible for the adjustment
4 payments described in subsection (h), the Illinois Department
5 shall maintain, through the period ending June 30, 1995,
6 reimbursement levels in accordance with statutes and rules in
7 effect on April 1, 1994.
8 (j) Nothing contained in this Code in any way limits or
9 otherwise impairs the authority or power of the Illinois
10 Department to enter into a negotiated contract pursuant to
11 this Section with a managed health care entity, including,
12 but not limited to, a health maintenance organization, that
13 provides for termination or nonrenewal of the contract
14 without cause upon notice as provided in the contract and
15 without a hearing.
16 (k) Section 5-5.15 does not apply to the program
17 developed and implemented pursuant to this Section.
18 (l) The Illinois Department shall, by rule, define those
19 chronic or acute medical conditions of childhood that require
20 longer-term treatment and follow-up care. The Illinois
21 Department shall ensure that services required to treat these
22 conditions are available through a separate delivery system.
23 A managed health care entity that contracts with the
24 Illinois Department may refer a child with medical conditions
25 described in the rules adopted under this subsection directly
26 to a children's hospital or to a hospital, other than a
27 children's hospital, that is qualified to provide inpatient
28 and outpatient services to treat those conditions. The
29 Illinois Department shall provide fee-for-service
30 reimbursement directly to a children's hospital for those
31 services pursuant to Title 89 of the Illinois Administrative
32 Code, Section 148.280(a), at a rate at least equal to the
33 rate in effect on March 31, 1994. For hospitals, other than
34 children's hospitals, that are qualified to provide inpatient
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1 and outpatient services to treat those conditions, the
2 Illinois Department shall provide reimbursement for those
3 services on a fee-for-service basis, at a rate at least equal
4 to the rate in effect for those other hospitals on March 31,
5 1994.
6 A children's hospital shall be directly reimbursed for
7 all services provided at the children's hospital on a
8 fee-for-service basis pursuant to Title 89 of the Illinois
9 Administrative Code, Section 148.280(a), at a rate at least
10 equal to the rate in effect on March 31, 1994, until the
11 later of (i) implementation of the integrated health care
12 program under this Section and development of actuarially
13 sound capitation rates for services other than those chronic
14 or acute medical conditions of childhood that require
15 longer-term treatment and follow-up care as defined by the
16 Illinois Department in the rules adopted under this
17 subsection or (ii) March 31, 1996.
18 Notwithstanding anything in this subsection to the
19 contrary, a managed health care entity shall not consider
20 sources or methods of payment in determining the referral of
21 a child. The Illinois Department shall adopt rules to
22 establish criteria for those referrals. The Illinois
23 Department by rule shall establish a method to adjust its
24 payments to managed health care entities in a manner intended
25 to avoid providing any financial incentive to a managed
26 health care entity to refer patients to a provider who is
27 paid directly by the Illinois Department.
28 (m) Behavioral health services provided or funded by the
29 Department of Human Services, the Department of Children and
30 Family Services, and the Illinois Department shall be
31 excluded from a benefit package. Conditions of an organic or
32 physical origin or nature, including medical detoxification,
33 however, may not be excluded. In this subsection,
34 "behavioral health services" means mental health services and
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1 subacute alcohol and substance abuse treatment services, as
2 defined in the Illinois Alcoholism and Other Drug Dependency
3 Act. In this subsection, "mental health services" includes,
4 at a minimum, the following services funded by the Illinois
5 Department, the Department of Human Services (as successor to
6 the Department of Mental Health and Developmental
7 Disabilities), or the Department of Children and Family
8 Services: (i) inpatient hospital services, including related
9 physician services, related psychiatric interventions, and
10 pharmaceutical services provided to an eligible recipient
11 hospitalized with a primary diagnosis of psychiatric
12 disorder; (ii) outpatient mental health services as defined
13 and specified in Title 59 of the Illinois Administrative
14 Code, Part 132; (iii) any other outpatient mental health
15 services funded by the Illinois Department pursuant to the
16 State of Illinois Medicaid Plan; (iv) partial
17 hospitalization; and (v) follow-up stabilization related to
18 any of those services. Additional behavioral health services
19 may be excluded under this subsection as mutually agreed in
20 writing by the Illinois Department and the affected State
21 agency or agencies. The exclusion of any service does not
22 prohibit the Illinois Department from developing and
23 implementing demonstration projects for categories of persons
24 or services. The Department of Children and Family Services
25 and the Department of Human Services shall each adopt rules
26 governing the integration of managed care in the provision of
27 behavioral health services. The State shall integrate managed
28 care community networks and affiliated providers, to the
29 extent practicable, in any separate delivery system for
30 mental health services.
31 (n) The Illinois Department shall adopt rules to
32 establish reserve requirements for managed care community
33 networks, as required by subsection (a), and health
34 maintenance organizations to protect against liabilities in
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1 the event that a managed health care entity is declared
2 insolvent or bankrupt. If a managed health care entity other
3 than a county provider is declared insolvent or bankrupt,
4 after liquidation and application of any available assets,
5 resources, and reserves, the Illinois Department shall pay a
6 portion of the amounts owed by the managed health care entity
7 to providers for services rendered to enrollees under the
8 integrated health care program under this Section based on
9 the following schedule: (i) from April 1, 1995 through June
10 30, 1998, 90% of the amounts owed; (ii) from July 1, 1998
11 through June 30, 2001, 80% of the amounts owed; and (iii)
12 from July 1, 2001 through June 30, 2005, 75% of the amounts
13 owed. The amounts paid under this subsection shall be
14 calculated based on the total amount owed by the managed
15 health care entity to providers before application of any
16 available assets, resources, and reserves. After June 30,
17 2005, the Illinois Department may not pay any amounts owed to
18 providers as a result of an insolvency or bankruptcy of a
19 managed health care entity occurring after that date. The
20 Illinois Department is not obligated, however, to pay amounts
21 owed to a provider that has an ownership or other governing
22 interest in the managed health care entity. This subsection
23 applies only to managed health care entities and the services
24 they provide under the integrated health care program under
25 this Section.
26 (o) Notwithstanding any other provision of law or
27 contractual agreement to the contrary, providers shall not be
28 required to accept from any other third party payer the rates
29 determined or paid under this Code by the Illinois
30 Department, managed health care entity, or other health care
31 delivery system for services provided to recipients.
32 (p) The Illinois Department may seek and obtain any
33 necessary authorization provided under federal law to
34 implement the program, including the waiver of any federal
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1 statutes or regulations. The Illinois Department may seek a
2 waiver of the federal requirement that the combined
3 membership of Medicare and Medicaid enrollees in a managed
4 care community network may not exceed 75% of the managed care
5 community network's total enrollment. The Illinois
6 Department shall not seek a waiver of this requirement for
7 any other category of managed health care entity. The
8 Illinois Department shall not seek a waiver of the inpatient
9 hospital reimbursement methodology in Section 1902(a)(13)(A)
10 of Title XIX of the Social Security Act even if the federal
11 agency responsible for administering Title XIX determines
12 that Section 1902(a)(13)(A) applies to managed health care
13 systems.
14 Notwithstanding any other provisions of this Code to the
15 contrary, the Illinois Department shall seek a waiver of
16 applicable federal law in order to impose a co-payment system
17 consistent with this subsection on recipients of medical
18 services under Title XIX of the Social Security Act who are
19 not enrolled in a managed health care entity. The waiver
20 request submitted by the Illinois Department shall provide
21 for co-payments of up to $0.50 for prescribed drugs and up to
22 $0.50 for x-ray services and shall provide for co-payments of
23 up to $10 for non-emergency services provided in a hospital
24 emergency room and up to $10 for non-emergency ambulance
25 services. The purpose of the co-payments shall be to deter
26 those recipients from seeking unnecessary medical care.
27 Co-payments may not be used to deter recipients from seeking
28 necessary medical care. No recipient shall be required to
29 pay more than a total of $150 per year in co-payments under
30 the waiver request required by this subsection. A recipient
31 may not be required to pay more than $15 of any amount due
32 under this subsection in any one month.
33 Co-payments authorized under this subsection may not be
34 imposed when the care was necessitated by a true medical
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1 emergency. Co-payments may not be imposed for any of the
2 following classifications of services:
3 (1) Services furnished to person under 18 years of
4 age.
5 (2) Services furnished to pregnant women.
6 (3) Services furnished to any individual who is an
7 inpatient in a hospital, nursing facility, intermediate
8 care facility, or other medical institution, if that
9 person is required to spend for costs of medical care all
10 but a minimal amount of his or her income required for
11 personal needs.
12 (4) Services furnished to a person who is receiving
13 hospice care.
14 Co-payments authorized under this subsection shall not be
15 deducted from or reduce in any way payments for medical
16 services from the Illinois Department to providers. No
17 provider may deny those services to an individual eligible
18 for services based on the individual's inability to pay the
19 co-payment.
20 Recipients who are subject to co-payments shall be
21 provided notice, in plain and clear language, of the amount
22 of the co-payments, the circumstances under which co-payments
23 are exempted, the circumstances under which co-payments may
24 be assessed, and their manner of collection.
25 The Illinois Department shall establish a Medicaid
26 Co-Payment Council to assist in the development of co-payment
27 policies for the medical assistance program. The Medicaid
28 Co-Payment Council shall also have jurisdiction to develop a
29 program to provide financial or non-financial incentives to
30 Medicaid recipients in order to encourage recipients to seek
31 necessary health care. The Council shall be chaired by the
32 Director of the Illinois Department, and shall have 6
33 additional members. Two of the 6 additional members shall be
34 appointed by the Governor, and one each shall be appointed by
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1 the President of the Senate, the Minority Leader of the
2 Senate, the Speaker of the House of Representatives, and the
3 Minority Leader of the House of Representatives. The Council
4 may be convened and make recommendations upon the appointment
5 of a majority of its members. The Council shall be appointed
6 and convened no later than September 1, 1994 and shall report
7 its recommendations to the Director of the Illinois
8 Department and the General Assembly no later than October 1,
9 1994. The chairperson of the Council shall be allowed to
10 vote only in the case of a tie vote among the appointed
11 members of the Council.
12 The Council shall be guided by the following principles
13 as it considers recommendations to be developed to implement
14 any approved waivers that the Illinois Department must seek
15 pursuant to this subsection:
16 (1) Co-payments should not be used to deter access
17 to adequate medical care.
18 (2) Co-payments should be used to reduce fraud.
19 (3) Co-payment policies should be examined in
20 consideration of other states' experience, and the
21 ability of successful co-payment plans to control
22 unnecessary or inappropriate utilization of services
23 should be promoted.
24 (4) All participants, both recipients and
25 providers, in the medical assistance program have
26 responsibilities to both the State and the program.
27 (5) Co-payments are primarily a tool to educate the
28 participants in the responsible use of health care
29 resources.
30 (6) Co-payments should not be used to penalize
31 providers.
32 (7) A successful medical program requires the
33 elimination of improper utilization of medical resources.
34 The integrated health care program, or any part of that
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1 program, established under this Section may not be
2 implemented if matching federal funds under Title XIX of the
3 Social Security Act are not available for administering the
4 program.
5 The Illinois Department shall submit for publication in
6 the Illinois Register the name, address, and telephone number
7 of the individual to whom a request may be directed for a
8 copy of the request for a waiver of provisions of Title XIX
9 of the Social Security Act that the Illinois Department
10 intends to submit to the Health Care Financing Administration
11 in order to implement this Section. The Illinois Department
12 shall mail a copy of that request for waiver to all
13 requestors at least 16 days before filing that request for
14 waiver with the Health Care Financing Administration.
15 (q) After the effective date of this Section, the
16 Illinois Department may take all planning and preparatory
17 action necessary to implement this Section, including, but
18 not limited to, seeking requests for proposals relating to
19 the integrated health care program created under this
20 Section.
21 (r) In order to (i) accelerate and facilitate the
22 development of integrated health care in contracting areas
23 outside counties with populations in excess of 3,000,000 and
24 counties adjacent to those counties and (ii) maintain and
25 sustain the high quality of education and residency programs
26 coordinated and associated with local area hospitals, the
27 Illinois Department may develop and implement a demonstration
28 program for managed care community networks owned, operated,
29 or governed by State-funded medical schools. The Illinois
30 Department shall prescribe by rule the criteria, standards,
31 and procedures for effecting this demonstration program.
32 (s) (Blank).
33 (s-5) The Illinois Department may impose administrative
34 penalties for violations of this Section.
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1 (t) On April 1, 1995 and every 6 months thereafter, the
2 Illinois Department shall report to the Governor and General
3 Assembly on the progress of the integrated health care
4 program in enrolling clients into managed health care
5 entities. The report shall indicate the capacities of the
6 managed health care entities with which the State contracts,
7 the number of clients enrolled by each contractor, the areas
8 of the State in which managed care options do not exist, and
9 the progress toward meeting the enrollment goals of the
10 integrated health care program.
11 (u) The Illinois Department may implement this Section
12 through the use of emergency rules in accordance with Section
13 5-45 of the Illinois Administrative Procedure Act. For
14 purposes of that Act, the adoption of rules to implement this
15 Section is deemed an emergency and necessary for the public
16 interest, safety, and welfare.
17 (Source: P.A. 88-554, eff. 7-26-94; 89-21, eff. 7-1-95;
18 89-507, eff. 7-1-97; 89-673, eff. 8-14-96; revised 8-26-96.)
19 Section 95. No acceleration or delay. Where this Act
20 makes changes in a statute that is represented in this Act by
21 text that is not yet or no longer in effect (for example, a
22 Section represented by multiple versions), the use of that
23 text does not accelerate or delay the taking effect of (i)
24 the changes made by this Act or (ii) provisions derived from
25 any other Public Act.
26 Section 99. Effective date. This Act takes effect upon
27 becoming law.