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90_SB0317ham001
LRB9001503SMksam
1 AMENDMENT TO SENATE BILL 317
2 AMENDMENT NO. . Amend Senate Bill 317, on page 1, by
3 replacing line 2 with the following:
4 "Sections 4-19 and 5-16.3."; and
5 on page 1, by replacing line 6 with the following:
6 "changing Sections 4-19 and 5-16.3 as follows:"; and
7 on page 1, below line 24, by inserting the following:
8 "(305 ILCS 5/5-16.3)
9 (Text of Section before amendment by P.A. 89-507)
10 Sec. 5-16.3. System for integrated health care services.
11 (a) It shall be the public policy of the State to adopt,
12 to the extent practicable, a health care program that
13 encourages the integration of health care services and
14 manages the health care of program enrollees while preserving
15 reasonable choice within a competitive and cost-efficient
16 environment. In furtherance of this public policy, the
17 Illinois Department shall develop and implement an integrated
18 health care program consistent with the provisions of this
19 Section. The provisions of this Section apply only to the
20 integrated health care program created under this Section.
21 Persons enrolled in the integrated health care program, as
22 determined by the Illinois Department by rule, shall be
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1 afforded a choice among health care delivery systems, which
2 shall include, but are not limited to, (i) fee for service
3 care managed by a primary care physician licensed to practice
4 medicine in all its branches, (ii) managed health care
5 entities, and (iii) federally qualified health centers
6 (reimbursed according to a prospective cost-reimbursement
7 methodology) and rural health clinics (reimbursed according
8 to the Medicare methodology), where available. Persons
9 enrolled in the integrated health care program also may be
10 offered indemnity insurance plans, subject to availability.
11 For purposes of this Section, a "managed health care
12 entity" means a health maintenance organization or a managed
13 care community network as defined in this Section. A "health
14 maintenance organization" means a health maintenance
15 organization as defined in the Health Maintenance
16 Organization Act. A "managed care community network" means
17 an entity, other than a health maintenance organization, that
18 is owned, operated, or governed by providers of health care
19 services within this State and that provides or arranges
20 primary, secondary, and tertiary managed health care services
21 under contract with the Illinois Department exclusively to
22 enrollees of the integrated health care program. A managed
23 care community network may contract with the Illinois
24 Department to provide only pediatric health care services. A
25 county provider as defined in Section 15-1 of this Code may
26 contract with the Illinois Department to provide services to
27 enrollees of the integrated health care program as a managed
28 care community network without the need to establish a
29 separate entity that provides services exclusively to
30 enrollees of the integrated health care program and shall be
31 deemed a managed care community network for purposes of this
32 Code only to the extent of the provision of services to those
33 enrollees in conjunction with the integrated health care
34 program. A county provider shall be entitled to contract
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1 with the Illinois Department with respect to any contracting
2 region located in whole or in part within the county. A
3 county provider shall not be required to accept enrollees who
4 do not reside within the county.
5 Each managed care community network must demonstrate its
6 ability to bear the financial risk of serving enrollees under
7 this program. The Illinois Department shall by rule adopt
8 criteria for assessing the financial soundness of each
9 managed care community network. These rules shall consider
10 the extent to which a managed care community network is
11 comprised of providers who directly render health care and
12 are located within the community in which they seek to
13 contract rather than solely arrange or finance the delivery
14 of health care. These rules shall further consider a variety
15 of risk-bearing and management techniques, including the
16 sufficiency of quality assurance and utilization management
17 programs and whether a managed care community network has
18 sufficiently demonstrated its financial solvency and net
19 worth. The Illinois Department's criteria must be based on
20 sound actuarial, financial, and accounting principles. In
21 adopting these rules, the Illinois Department shall consult
22 with the Illinois Department of Insurance. The Illinois
23 Department is responsible for monitoring compliance with
24 these rules.
25 This Section may not be implemented before the effective
26 date of these rules, the approval of any necessary federal
27 waivers, and the completion of the review of an application
28 submitted, at least 60 days before the effective date of
29 rules adopted under this Section, to the Illinois Department
30 by a managed care community network.
31 All health care delivery systems that contract with the
32 Illinois Department under the integrated health care program
33 shall clearly recognize a health care provider's right of
34 conscience under the Right of Conscience Act. In addition to
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1 the provisions of that Act, no health care delivery system
2 that contracts with the Illinois Department under the
3 integrated health care program shall be required to provide,
4 arrange for, or pay for any health care or medical service,
5 procedure, or product if that health care delivery system is
6 owned, controlled, or sponsored by or affiliated with a
7 religious institution or religious organization that finds
8 that health care or medical service, procedure, or product to
9 violate its religious and moral teachings and beliefs.
10 (b) The Illinois Department may, by rule, provide for
11 different benefit packages for different categories of
12 persons enrolled in the program. Mental health services,
13 alcohol and substance abuse services, services related to
14 children with chronic or acute conditions requiring
15 longer-term treatment and follow-up, and rehabilitation care
16 provided by a free-standing rehabilitation hospital or a
17 hospital rehabilitation unit may be excluded from a benefit
18 package if the State ensures that those services are made
19 available through a separate delivery system. An exclusion
20 does not prohibit the Illinois Department from developing and
21 implementing demonstration projects for categories of persons
22 or services. Benefit packages for persons eligible for
23 medical assistance under Articles V, VI, and XII shall be
24 based on the requirements of those Articles and shall be
25 consistent with the Title XIX of the Social Security Act.
26 Nothing in this Act shall be construed to apply to services
27 purchased by the Department of Children and Family Services
28 and the Department of Mental Health and Developmental
29 Disabilities under the provisions of Title 59 of the Illinois
30 Administrative Code, Part 132 ("Medicaid Community Mental
31 Health Services Program").
32 (c) The program established by this Section may be
33 implemented by the Illinois Department in various contracting
34 areas at various times. The health care delivery systems and
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1 providers available under the program may vary throughout the
2 State. For purposes of contracting with managed health care
3 entities and providers, the Illinois Department shall
4 establish contracting areas similar to the geographic areas
5 designated by the Illinois Department for contracting
6 purposes under the Illinois Competitive Access and
7 Reimbursement Equity Program (ICARE) under the authority of
8 Section 3-4 of the Illinois Health Finance Reform Act or
9 similarly-sized or smaller geographic areas established by
10 the Illinois Department by rule. A managed health care entity
11 shall be permitted to contract in any geographic areas for
12 which it has a sufficient provider network and otherwise
13 meets the contracting terms of the State. The Illinois
14 Department is not prohibited from entering into a contract
15 with a managed health care entity at any time.
16 (d) A managed health care entity that contracts with the
17 Illinois Department for the provision of services under the
18 program shall do all of the following, solely for purposes of
19 the integrated health care program:
20 (1) Provide that any individual physician licensed
21 under the Medical Practice Act of 1987 to practice
22 medicine in all its branches, any pharmacy, any federally
23 qualified health center, and any podiatrist, that
24 consistently meets the reasonable terms and conditions
25 established by the managed health care entity, including
26 but not limited to credentialing standards, quality
27 assurance program requirements, utilization management
28 requirements, financial responsibility standards,
29 contracting process requirements, and provider network
30 size and accessibility requirements, must be accepted by
31 the managed health care entity for purposes of the
32 Illinois integrated health care program. Any individual
33 who is either terminated from or denied inclusion in the
34 panel of physicians of the managed health care entity
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1 shall be given, within 10 business days after that
2 determination, a written explanation of the reasons for
3 his or her exclusion or termination from the panel. This
4 paragraph (1) does not apply to the following:
5 (A) A managed health care entity that
6 certifies to the Illinois Department that:
7 (i) it employs on a full-time basis 125
8 or more Illinois physicians licensed to
9 practice medicine in all of its branches; and
10 (ii) it will provide medical services
11 through its employees to more than 80% of the
12 recipients enrolled with the entity in the
13 integrated health care program; or
14 (B) A domestic stock insurance company
15 licensed under clause (b) of class 1 of Section 4 of
16 the Illinois Insurance Code if (i) at least 66% of
17 the stock of the insurance company is owned by a
18 professional corporation organized under the
19 Professional Service Corporation Act that has 125 or
20 more shareholders who are Illinois physicians
21 licensed to practice medicine in all of its branches
22 and (ii) the insurance company certifies to the
23 Illinois Department that at least 80% of those
24 physician shareholders will provide services to
25 recipients enrolled with the company in the
26 integrated health care program.
27 (2) Provide for reimbursement for providers for
28 emergency care, as defined by the Illinois Department by
29 rule, that must be provided to its enrollees, including
30 an emergency room screening fee, and urgent care that it
31 authorizes for its enrollees, regardless of the
32 provider's affiliation with the managed health care
33 entity. Providers shall be reimbursed for emergency care
34 at an amount equal to the Illinois Department's
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1 fee-for-service rates for those medical services rendered
2 by providers not under contract with the managed health
3 care entity to enrollees of the entity.
4 (3) Provide that any provider affiliated with a
5 managed health care entity may also provide services on a
6 fee-for-service basis to Illinois Department clients not
7 enrolled in a managed health care entity.
8 (4) Provide client education services as determined
9 and approved by the Illinois Department, including but
10 not limited to (i) education regarding appropriate
11 utilization of health care services in a managed care
12 system, (ii) written disclosure of treatment policies and
13 any restrictions or limitations on health services,
14 including, but not limited to, physical services,
15 clinical laboratory tests, hospital and surgical
16 procedures, prescription drugs and biologics, and
17 radiological examinations, and (iii) written notice that
18 the enrollee may receive from another provider those
19 services covered under this program that are not provided
20 by the managed health care entity.
21 (5) Provide that enrollees within its system may
22 choose the site for provision of services and the panel
23 of health care providers.
24 (6) Not discriminate in its enrollment or
25 disenrollment practices among recipients of medical
26 services or program enrollees based on health status.
27 (7) Provide a quality assurance and utilization
28 review program that (i) for health maintenance
29 organizations meets the requirements of the Health
30 Maintenance Organization Act and (ii) for managed care
31 community networks meets the requirements established by
32 the Illinois Department in rules that incorporate those
33 standards set forth in the Health Maintenance
34 Organization Act.
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1 (8) Issue a managed health care entity
2 identification card to each enrollee upon enrollment.
3 The card must contain all of the following:
4 (A) The enrollee's signature.
5 (B) The enrollee's health plan.
6 (C) The name and telephone number of the
7 enrollee's primary care physician.
8 (D) A telephone number to be used for
9 emergency service 24 hours per day, 7 days per week.
10 The telephone number required to be maintained
11 pursuant to this subparagraph by each managed health
12 care entity shall, at minimum, be staffed by
13 medically trained personnel and be provided
14 directly, or under arrangement, at an office or
15 offices in locations maintained solely within the
16 State of Illinois. For purposes of this
17 subparagraph, "medically trained personnel" means
18 licensed practical nurses or registered nurses
19 located in the State of Illinois who are licensed
20 pursuant to the Illinois Nursing Act of 1987.
21 (9) Ensure that every primary care physician and
22 pharmacy in the managed health care entity meets the
23 standards established by the Illinois Department for
24 accessibility and quality of care. The Illinois
25 Department shall arrange for and oversee an evaluation of
26 the standards established under this paragraph (9) and
27 may recommend any necessary changes to these standards.
28 The Illinois Department shall submit an annual report to
29 the Governor and the General Assembly by April 1 of each
30 year regarding the effect of the standards on ensuring
31 access and quality of care to enrollees.
32 (10) Provide a procedure for handling complaints
33 that (i) for health maintenance organizations meets the
34 requirements of the Health Maintenance Organization Act
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1 and (ii) for managed care community networks meets the
2 requirements established by the Illinois Department in
3 rules that incorporate those standards set forth in the
4 Health Maintenance Organization Act.
5 (11) Maintain, retain, and make available to the
6 Illinois Department records, data, and information, in a
7 uniform manner determined by the Illinois Department,
8 sufficient for the Illinois Department to monitor
9 utilization, accessibility, and quality of care.
10 (12) Except for providers who are prepaid, pay all
11 approved claims for covered services that are completed
12 and submitted to the managed health care entity within 30
13 days after receipt of the claim or receipt of the
14 appropriate capitation payment or payments by the managed
15 health care entity from the State for the month in which
16 the services included on the claim were rendered,
17 whichever is later. If payment is not made or mailed to
18 the provider by the managed health care entity by the due
19 date under this subsection, an interest penalty of 1% of
20 any amount unpaid shall be added for each month or
21 fraction of a month after the due date, until final
22 payment is made. Nothing in this Section shall prohibit
23 managed health care entities and providers from mutually
24 agreeing to terms that require more timely payment.
25 (13) Provide integration with community-based
26 programs provided by certified local health departments
27 such as Women, Infants, and Children Supplemental Food
28 Program (WIC), childhood immunization programs, health
29 education programs, case management programs, and health
30 screening programs.
31 (14) Provide that the pharmacy formulary used by a
32 managed health care entity and its contract providers be
33 no more restrictive than the Illinois Department's
34 pharmaceutical program on the effective date of this
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1 amendatory Act of 1994 and as amended after that date.
2 (15) Provide integration with community-based
3 organizations, including, but not limited to, any
4 organization that has operated within a Medicaid
5 Partnership as defined by this Code or by rule of the
6 Illinois Department, that may continue to operate under a
7 contract with the Illinois Department or a managed health
8 care entity under this Section to provide case management
9 services to Medicaid clients in designated high-need
10 areas.
11 The Illinois Department may, by rule, determine
12 methodologies to limit financial liability for managed health
13 care entities resulting from payment for services to
14 enrollees provided under the Illinois Department's integrated
15 health care program. Any methodology so determined may be
16 considered or implemented by the Illinois Department through
17 a contract with a managed health care entity under this
18 integrated health care program.
19 The Illinois Department shall contract with an entity or
20 entities to provide external peer-based quality assurance
21 review for the integrated health care program. The entity
22 shall be representative of Illinois physicians licensed to
23 practice medicine in all its branches and have statewide
24 geographic representation in all specialties of medical care
25 that are provided within the integrated health care program.
26 The entity may not be a third party payer and shall maintain
27 offices in locations around the State in order to provide
28 service and continuing medical education to physician
29 participants within the integrated health care program. The
30 review process shall be developed and conducted by Illinois
31 physicians licensed to practice medicine in all its branches.
32 In consultation with the entity, the Illinois Department may
33 contract with other entities for professional peer-based
34 quality assurance review of individual categories of services
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1 other than services provided, supervised, or coordinated by
2 physicians licensed to practice medicine in all its branches.
3 The Illinois Department shall establish, by rule, criteria to
4 avoid conflicts of interest in the conduct of quality
5 assurance activities consistent with professional peer-review
6 standards. All quality assurance activities shall be
7 coordinated by the Illinois Department.
8 (e) All persons enrolled in the program shall be
9 provided with a full written explanation of all
10 fee-for-service and managed health care plan options and a
11 reasonable opportunity to choose among the options as
12 provided by rule. The Illinois Department shall provide to
13 enrollees, upon enrollment in the integrated health care
14 program and at least annually thereafter, notice of the
15 process for requesting an appeal under the Illinois
16 Department's administrative appeal procedures.
17 Notwithstanding any other Section of this Code, the Illinois
18 Department may provide by rule for the Illinois Department to
19 assign a person enrolled in the program to a specific
20 provider of medical services or to a specific health care
21 delivery system if an enrollee has failed to exercise choice
22 in a timely manner. An enrollee assigned by the Illinois
23 Department shall be afforded the opportunity to disenroll and
24 to select a specific provider of medical services or a
25 specific health care delivery system within the first 30 days
26 after the assignment. An enrollee who has failed to exercise
27 choice in a timely manner may be assigned only if there are 3
28 or more managed health care entities contracting with the
29 Illinois Department within the contracting area, except that,
30 outside the City of Chicago, this requirement may be waived
31 for an area by rules adopted by the Illinois Department after
32 consultation with all hospitals within the contracting area.
33 The Illinois Department shall establish by rule the procedure
34 for random assignment of enrollees who fail to exercise
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1 choice in a timely manner to a specific managed health care
2 entity in proportion to the available capacity of that
3 managed health care entity. Assignment to a specific provider
4 of medical services or to a specific managed health care
5 entity may not exceed that provider's or entity's capacity as
6 determined by the Illinois Department. Any person who has
7 chosen a specific provider of medical services or a specific
8 managed health care entity, or any person who has been
9 assigned under this subsection, shall be given the
10 opportunity to change that choice or assignment at least once
11 every 12 months, as determined by the Illinois Department by
12 rule. The Illinois Department shall maintain a toll-free
13 telephone number for program enrollees' use in reporting
14 problems with managed health care entities.
15 (f) If a person becomes eligible for participation in
16 the integrated health care program while he or she is
17 hospitalized, the Illinois Department may not enroll that
18 person in the program until after he or she has been
19 discharged from the hospital. This subsection does not apply
20 to newborn infants whose mothers are enrolled in the
21 integrated health care program.
22 (g) The Illinois Department shall, by rule, establish
23 for managed health care entities rates that (i) are certified
24 to be actuarially sound, as determined by an actuary who is
25 an associate or a fellow of the Society of Actuaries or a
26 member of the American Academy of Actuaries and who has
27 expertise and experience in medical insurance and benefit
28 programs, in accordance with the Illinois Department's
29 current fee-for-service payment system, and (ii) take into
30 account any difference of cost to provide health care to
31 different populations based on gender, age, location, and
32 eligibility category. The rates for managed health care
33 entities shall be determined on a capitated basis.
34 The Illinois Department by rule shall establish a method
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1 to adjust its payments to managed health care entities in a
2 manner intended to avoid providing any financial incentive to
3 a managed health care entity to refer patients to a county
4 provider, in an Illinois county having a population greater
5 than 3,000,000, that is paid directly by the Illinois
6 Department. The Illinois Department shall by April 1, 1997,
7 and annually thereafter, review the method to adjust
8 payments. Payments by the Illinois Department to the county
9 provider, for persons not enrolled in a managed care
10 community network owned or operated by a county provider,
11 shall be paid on a fee-for-service basis under Article XV of
12 this Code.
13 The Illinois Department by rule shall establish a method
14 to reduce its payments to managed health care entities to
15 take into consideration (i) any adjustment payments paid to
16 hospitals under subsection (h) of this Section to the extent
17 those payments, or any part of those payments, have been
18 taken into account in establishing capitated rates under this
19 subsection (g) and (ii) the implementation of methodologies
20 to limit financial liability for managed health care entities
21 under subsection (d) of this Section.
22 (h) For hospital services provided by a hospital that
23 contracts with a managed health care entity, adjustment
24 payments shall be paid directly to the hospital by the
25 Illinois Department. Adjustment payments may include but
26 need not be limited to adjustment payments to:
27 disproportionate share hospitals under Section 5-5.02 of this
28 Code; primary care access health care education payments (89
29 Ill. Adm. Code 149.140); payments for capital, direct medical
30 education, indirect medical education, certified registered
31 nurse anesthetist, and kidney acquisition costs (89 Ill. Adm.
32 Code 149.150(c)); uncompensated care payments (89 Ill. Adm.
33 Code 148.150(h)); trauma center payments (89 Ill. Adm. Code
34 148.290(c)); rehabilitation hospital payments (89 Ill. Adm.
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1 Code 148.290(d)); perinatal center payments (89 Ill. Adm.
2 Code 148.290(e)); obstetrical care payments (89 Ill. Adm.
3 Code 148.290(f)); targeted access payments (89 Ill. Adm. Code
4 148.290(g)); Medicaid high volume payments (89 Ill. Adm. Code
5 148.290(h)); and outpatient indigent volume adjustments (89
6 Ill. Adm. Code 148.140(b)(5)).
7 (i) For any hospital eligible for the adjustment
8 payments described in subsection (h), the Illinois Department
9 shall maintain, through the period ending June 30, 1995,
10 reimbursement levels in accordance with statutes and rules in
11 effect on April 1, 1994.
12 (j) Nothing contained in this Code in any way limits or
13 otherwise impairs the authority or power of the Illinois
14 Department to enter into a negotiated contract pursuant to
15 this Section with a managed health care entity, including,
16 but not limited to, a health maintenance organization, that
17 provides for termination or nonrenewal of the contract
18 without cause upon notice as provided in the contract and
19 without a hearing.
20 (k) Section 5-5.15 does not apply to the program
21 developed and implemented pursuant to this Section.
22 (l) The Illinois Department shall, by rule, define those
23 chronic or acute medical conditions of childhood that require
24 longer-term treatment and follow-up care. The Illinois
25 Department shall ensure that services required to treat these
26 conditions are available through a separate delivery system.
27 A managed health care entity that contracts with the
28 Illinois Department may refer a child with medical conditions
29 described in the rules adopted under this subsection directly
30 to a children's hospital or to a hospital, other than a
31 children's hospital, that is qualified to provide inpatient
32 and outpatient services to treat those conditions. The
33 Illinois Department shall provide fee-for-service
34 reimbursement directly to a children's hospital for those
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1 services pursuant to Title 89 of the Illinois Administrative
2 Code, Section 148.280(a), at a rate at least equal to the
3 rate in effect on March 31, 1994. For hospitals, other than
4 children's hospitals, that are qualified to provide inpatient
5 and outpatient services to treat those conditions, the
6 Illinois Department shall provide reimbursement for those
7 services on a fee-for-service basis, at a rate at least equal
8 to the rate in effect for those other hospitals on March 31,
9 1994.
10 A children's hospital shall be directly reimbursed for
11 all services provided at the children's hospital on a
12 fee-for-service basis pursuant to Title 89 of the Illinois
13 Administrative Code, Section 148.280(a), at a rate at least
14 equal to the rate in effect on March 31, 1994, until the
15 later of (i) implementation of the integrated health care
16 program under this Section and development of actuarially
17 sound capitation rates for services other than those chronic
18 or acute medical conditions of childhood that require
19 longer-term treatment and follow-up care as defined by the
20 Illinois Department in the rules adopted under this
21 subsection or (ii) March 31, 1996.
22 Notwithstanding anything in this subsection to the
23 contrary, a managed health care entity shall not consider
24 sources or methods of payment in determining the referral of
25 a child. The Illinois Department shall adopt rules to
26 establish criteria for those referrals. The Illinois
27 Department by rule shall establish a method to adjust its
28 payments to managed health care entities in a manner intended
29 to avoid providing any financial incentive to a managed
30 health care entity to refer patients to a provider who is
31 paid directly by the Illinois Department.
32 (m) Behavioral health services provided or funded by the
33 Department of Mental Health and Developmental Disabilities,
34 the Department of Alcoholism and Substance Abuse, the
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1 Department of Children and Family Services, and the Illinois
2 Department shall be excluded from a benefit package.
3 Conditions of an organic or physical origin or nature,
4 including medical detoxification, however, may not be
5 excluded. In this subsection, "behavioral health services"
6 means mental health services and subacute alcohol and
7 substance abuse treatment services, as defined in the
8 Illinois Alcoholism and Other Drug Dependency Act. In this
9 subsection, "mental health services" includes, at a minimum,
10 the following services funded by the Illinois Department, the
11 Department of Mental Health and Developmental Disabilities,
12 or the Department of Children and Family Services: (i)
13 inpatient hospital services, including related physician
14 services, related psychiatric interventions, and
15 pharmaceutical services provided to an eligible recipient
16 hospitalized with a primary diagnosis of psychiatric
17 disorder; (ii) outpatient mental health services as defined
18 and specified in Title 59 of the Illinois Administrative
19 Code, Part 132; (iii) any other outpatient mental health
20 services funded by the Illinois Department pursuant to the
21 State of Illinois Medicaid Plan; (iv) partial
22 hospitalization; and (v) follow-up stabilization related to
23 any of those services. Additional behavioral health services
24 may be excluded under this subsection as mutually agreed in
25 writing by the Illinois Department and the affected State
26 agency or agencies. The exclusion of any service does not
27 prohibit the Illinois Department from developing and
28 implementing demonstration projects for categories of persons
29 or services. The Department of Mental Health and
30 Developmental Disabilities, the Department of Children and
31 Family Services, and the Department of Alcoholism and
32 Substance Abuse shall each adopt rules governing the
33 integration of managed care in the provision of behavioral
34 health services. The State shall integrate managed care
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1 community networks and affiliated providers, to the extent
2 practicable, in any separate delivery system for mental
3 health services.
4 (n) The Illinois Department shall adopt rules to
5 establish reserve requirements for managed care community
6 networks, as required by subsection (a), and health
7 maintenance organizations to protect against liabilities in
8 the event that a managed health care entity is declared
9 insolvent or bankrupt. If a managed health care entity other
10 than a county provider is declared insolvent or bankrupt,
11 after liquidation and application of any available assets,
12 resources, and reserves, the Illinois Department shall pay a
13 portion of the amounts owed by the managed health care entity
14 to providers for services rendered to enrollees under the
15 integrated health care program under this Section based on
16 the following schedule: (i) from April 1, 1995 through June
17 30, 1998, 90% of the amounts owed; (ii) from July 1, 1998
18 through June 30, 2001, 80% of the amounts owed; and (iii)
19 from July 1, 2001 through June 30, 2005, 75% of the amounts
20 owed. The amounts paid under this subsection shall be
21 calculated based on the total amount owed by the managed
22 health care entity to providers before application of any
23 available assets, resources, and reserves. After June 30,
24 2005, the Illinois Department may not pay any amounts owed to
25 providers as a result of an insolvency or bankruptcy of a
26 managed health care entity occurring after that date. The
27 Illinois Department is not obligated, however, to pay amounts
28 owed to a provider that has an ownership or other governing
29 interest in the managed health care entity. This subsection
30 applies only to managed health care entities and the services
31 they provide under the integrated health care program under
32 this Section.
33 (o) Notwithstanding any other provision of law or
34 contractual agreement to the contrary, providers shall not be
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1 required to accept from any other third party payer the rates
2 determined or paid under this Code by the Illinois
3 Department, managed health care entity, or other health care
4 delivery system for services provided to recipients.
5 (p) The Illinois Department may seek and obtain any
6 necessary authorization provided under federal law to
7 implement the program, including the waiver of any federal
8 statutes or regulations. The Illinois Department may seek a
9 waiver of the federal requirement that the combined
10 membership of Medicare and Medicaid enrollees in a managed
11 care community network may not exceed 75% of the managed care
12 community network's total enrollment. The Illinois
13 Department shall not seek a waiver of this requirement for
14 any other category of managed health care entity. The
15 Illinois Department shall not seek a waiver of the inpatient
16 hospital reimbursement methodology in Section 1902(a)(13)(A)
17 of Title XIX of the Social Security Act even if the federal
18 agency responsible for administering Title XIX determines
19 that Section 1902(a)(13)(A) applies to managed health care
20 systems.
21 Notwithstanding any other provisions of this Code to the
22 contrary, the Illinois Department shall seek a waiver of
23 applicable federal law in order to impose a co-payment system
24 consistent with this subsection on recipients of medical
25 services under Title XIX of the Social Security Act who are
26 not enrolled in a managed health care entity. The waiver
27 request submitted by the Illinois Department shall provide
28 for co-payments of up to $0.50 for prescribed drugs and up to
29 $0.50 for x-ray services and shall provide for co-payments of
30 up to $10 for non-emergency services provided in a hospital
31 emergency room and up to $10 for non-emergency ambulance
32 services. The purpose of the co-payments shall be to deter
33 those recipients from seeking unnecessary medical care.
34 Co-payments may not be used to deter recipients from seeking
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1 necessary medical care. No recipient shall be required to
2 pay more than a total of $150 per year in co-payments under
3 the waiver request required by this subsection. A recipient
4 may not be required to pay more than $15 of any amount due
5 under this subsection in any one month.
6 Co-payments authorized under this subsection may not be
7 imposed when the care was necessitated by a true medical
8 emergency. Co-payments may not be imposed for any of the
9 following classifications of services:
10 (1) Services furnished to person under 18 years of
11 age.
12 (2) Services furnished to pregnant women.
13 (3) Services furnished to any individual who is an
14 inpatient in a hospital, nursing facility, intermediate
15 care facility, or other medical institution, if that
16 person is required to spend for costs of medical care all
17 but a minimal amount of his or her income required for
18 personal needs.
19 (4) Services furnished to a person who is receiving
20 hospice care.
21 Co-payments authorized under this subsection shall not be
22 deducted from or reduce in any way payments for medical
23 services from the Illinois Department to providers. No
24 provider may deny those services to an individual eligible
25 for services based on the individual's inability to pay the
26 co-payment.
27 Recipients who are subject to co-payments shall be
28 provided notice, in plain and clear language, of the amount
29 of the co-payments, the circumstances under which co-payments
30 are exempted, the circumstances under which co-payments may
31 be assessed, and their manner of collection.
32 The Illinois Department shall establish a Medicaid
33 Co-Payment Council to assist in the development of co-payment
34 policies for the medical assistance program. The Medicaid
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1 Co-Payment Council shall also have jurisdiction to develop a
2 program to provide financial or non-financial incentives to
3 Medicaid recipients in order to encourage recipients to seek
4 necessary health care. The Council shall be chaired by the
5 Director of the Illinois Department, and shall have 6
6 additional members. Two of the 6 additional members shall be
7 appointed by the Governor, and one each shall be appointed by
8 the President of the Senate, the Minority Leader of the
9 Senate, the Speaker of the House of Representatives, and the
10 Minority Leader of the House of Representatives. The Council
11 may be convened and make recommendations upon the appointment
12 of a majority of its members. The Council shall be appointed
13 and convened no later than September 1, 1994 and shall report
14 its recommendations to the Director of the Illinois
15 Department and the General Assembly no later than October 1,
16 1994. The chairperson of the Council shall be allowed to
17 vote only in the case of a tie vote among the appointed
18 members of the Council.
19 The Council shall be guided by the following principles
20 as it considers recommendations to be developed to implement
21 any approved waivers that the Illinois Department must seek
22 pursuant to this subsection:
23 (1) Co-payments should not be used to deter access
24 to adequate medical care.
25 (2) Co-payments should be used to reduce fraud.
26 (3) Co-payment policies should be examined in
27 consideration of other states' experience, and the
28 ability of successful co-payment plans to control
29 unnecessary or inappropriate utilization of services
30 should be promoted.
31 (4) All participants, both recipients and
32 providers, in the medical assistance program have
33 responsibilities to both the State and the program.
34 (5) Co-payments are primarily a tool to educate the
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1 participants in the responsible use of health care
2 resources.
3 (6) Co-payments should not be used to penalize
4 providers.
5 (7) A successful medical program requires the
6 elimination of improper utilization of medical resources.
7 The integrated health care program, or any part of that
8 program, established under this Section may not be
9 implemented if matching federal funds under Title XIX of the
10 Social Security Act are not available for administering the
11 program.
12 The Illinois Department shall submit for publication in
13 the Illinois Register the name, address, and telephone number
14 of the individual to whom a request may be directed for a
15 copy of the request for a waiver of provisions of Title XIX
16 of the Social Security Act that the Illinois Department
17 intends to submit to the Health Care Financing Administration
18 in order to implement this Section. The Illinois Department
19 shall mail a copy of that request for waiver to all
20 requestors at least 16 days before filing that request for
21 waiver with the Health Care Financing Administration.
22 (q) After the effective date of this Section, the
23 Illinois Department may take all planning and preparatory
24 action necessary to implement this Section, including, but
25 not limited to, seeking requests for proposals relating to
26 the integrated health care program created under this
27 Section.
28 (r) In order to (i) accelerate and facilitate the
29 development of integrated health care in contracting areas
30 outside counties with populations in excess of 3,000,000 and
31 counties adjacent to those counties and (ii) maintain and
32 sustain the high quality of education and residency programs
33 coordinated and associated with local area hospitals, the
34 Illinois Department may develop and implement a demonstration
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1 program for managed care community networks owned, operated,
2 or governed by State-funded medical schools. The Illinois
3 Department shall prescribe by rule the criteria, standards,
4 and procedures for effecting this demonstration program.
5 (s) (Blank).
6 (t) On April 1, 1995 and every 6 months thereafter, the
7 Illinois Department shall report to the Governor and General
8 Assembly on the progress of the integrated health care
9 program in enrolling clients into managed health care
10 entities. The report shall indicate the capacities of the
11 managed health care entities with which the State contracts,
12 the number of clients enrolled by each contractor, the areas
13 of the State in which managed care options do not exist, and
14 the progress toward meeting the enrollment goals of the
15 integrated health care program.
16 (u) The Illinois Department may implement this Section
17 through the use of emergency rules in accordance with Section
18 5-45 of the Illinois Administrative Procedure Act. For
19 purposes of that Act, the adoption of rules to implement this
20 Section is deemed an emergency and necessary for the public
21 interest, safety, and welfare.
22 (Source: P.A. 88-554, eff. 7-26-94; 89-21, eff. 7-1-95;
23 89-673, eff. 8-14-96; revised 8-26-96.)
24 (Text of Section after amendment by P.A. 89-507)
25 Sec. 5-16.3. System for integrated health care services.
26 (a) It shall be the public policy of the State to adopt,
27 to the extent practicable, a health care program that
28 encourages the integration of health care services and
29 manages the health care of program enrollees while preserving
30 reasonable choice within a competitive and cost-efficient
31 environment. In furtherance of this public policy, the
32 Illinois Department shall develop and implement an integrated
33 health care program consistent with the provisions of this
34 Section. The provisions of this Section apply only to the
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1 integrated health care program created under this Section.
2 Persons enrolled in the integrated health care program, as
3 determined by the Illinois Department by rule, shall be
4 afforded a choice among health care delivery systems, which
5 shall include, but are not limited to, (i) fee for service
6 care managed by a primary care physician licensed to practice
7 medicine in all its branches, (ii) managed health care
8 entities, and (iii) federally qualified health centers
9 (reimbursed according to a prospective cost-reimbursement
10 methodology) and rural health clinics (reimbursed according
11 to the Medicare methodology), where available. Persons
12 enrolled in the integrated health care program also may be
13 offered indemnity insurance plans, subject to availability.
14 For purposes of this Section, a "managed health care
15 entity" means a health maintenance organization or a managed
16 care community network as defined in this Section. A "health
17 maintenance organization" means a health maintenance
18 organization as defined in the Health Maintenance
19 Organization Act. A "managed care community network" means
20 an entity, other than a health maintenance organization, that
21 is owned, operated, or governed by providers of health care
22 services within this State and that provides or arranges
23 primary, secondary, and tertiary managed health care services
24 under contract with the Illinois Department exclusively to
25 enrollees of the integrated health care program. A managed
26 care community network may contract with the Illinois
27 Department to provide only pediatric health care services. A
28 county provider as defined in Section 15-1 of this Code may
29 contract with the Illinois Department to provide services to
30 enrollees of the integrated health care program as a managed
31 care community network without the need to establish a
32 separate entity that provides services exclusively to
33 enrollees of the integrated health care program and shall be
34 deemed a managed care community network for purposes of this
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1 Code only to the extent of the provision of services to those
2 enrollees in conjunction with the integrated health care
3 program. A county provider shall be entitled to contract
4 with the Illinois Department with respect to any contracting
5 region located in whole or in part within the county. A
6 county provider shall not be required to accept enrollees who
7 do not reside within the county.
8 Each managed care community network must demonstrate its
9 ability to bear the financial risk of serving enrollees under
10 this program. The Illinois Department shall by rule adopt
11 criteria for assessing the financial soundness of each
12 managed care community network. These rules shall consider
13 the extent to which a managed care community network is
14 comprised of providers who directly render health care and
15 are located within the community in which they seek to
16 contract rather than solely arrange or finance the delivery
17 of health care. These rules shall further consider a variety
18 of risk-bearing and management techniques, including the
19 sufficiency of quality assurance and utilization management
20 programs and whether a managed care community network has
21 sufficiently demonstrated its financial solvency and net
22 worth. The Illinois Department's criteria must be based on
23 sound actuarial, financial, and accounting principles. In
24 adopting these rules, the Illinois Department shall consult
25 with the Illinois Department of Insurance. The Illinois
26 Department is responsible for monitoring compliance with
27 these rules.
28 This Section may not be implemented before the effective
29 date of these rules, the approval of any necessary federal
30 waivers, and the completion of the review of an application
31 submitted, at least 60 days before the effective date of
32 rules adopted under this Section, to the Illinois Department
33 by a managed care community network.
34 All health care delivery systems that contract with the
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1 Illinois Department under the integrated health care program
2 shall clearly recognize a health care provider's right of
3 conscience under the Right of Conscience Act. In addition to
4 the provisions of that Act, no health care delivery system
5 that contracts with the Illinois Department under the
6 integrated health care program shall be required to provide,
7 arrange for, or pay for any health care or medical service,
8 procedure, or product if that health care delivery system is
9 owned, controlled, or sponsored by or affiliated with a
10 religious institution or religious organization that finds
11 that health care or medical service, procedure, or product to
12 violate its religious and moral teachings and beliefs.
13 (b) The Illinois Department may, by rule, provide for
14 different benefit packages for different categories of
15 persons enrolled in the program. Mental health services,
16 alcohol and substance abuse services, services related to
17 children with chronic or acute conditions requiring
18 longer-term treatment and follow-up, and rehabilitation care
19 provided by a free-standing rehabilitation hospital or a
20 hospital rehabilitation unit may be excluded from a benefit
21 package if the State ensures that those services are made
22 available through a separate delivery system. An exclusion
23 does not prohibit the Illinois Department from developing and
24 implementing demonstration projects for categories of persons
25 or services. Benefit packages for persons eligible for
26 medical assistance under Articles V, VI, and XII shall be
27 based on the requirements of those Articles and shall be
28 consistent with the Title XIX of the Social Security Act.
29 Nothing in this Act shall be construed to apply to services
30 purchased by the Department of Children and Family Services
31 and the Department of Human Services (as successor to the
32 Department of Mental Health and Developmental Disabilities)
33 under the provisions of Title 59 of the Illinois
34 Administrative Code, Part 132 ("Medicaid Community Mental
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1 Health Services Program").
2 (c) The program established by this Section may be
3 implemented by the Illinois Department in various contracting
4 areas at various times. The health care delivery systems and
5 providers available under the program may vary throughout the
6 State. For purposes of contracting with managed health care
7 entities and providers, the Illinois Department shall
8 establish contracting areas similar to the geographic areas
9 designated by the Illinois Department for contracting
10 purposes under the Illinois Competitive Access and
11 Reimbursement Equity Program (ICARE) under the authority of
12 Section 3-4 of the Illinois Health Finance Reform Act or
13 similarly-sized or smaller geographic areas established by
14 the Illinois Department by rule. A managed health care entity
15 shall be permitted to contract in any geographic areas for
16 which it has a sufficient provider network and otherwise
17 meets the contracting terms of the State. The Illinois
18 Department is not prohibited from entering into a contract
19 with a managed health care entity at any time.
20 (d) A managed health care entity that contracts with the
21 Illinois Department for the provision of services under the
22 program shall do all of the following, solely for purposes of
23 the integrated health care program:
24 (1) Provide that any individual physician licensed
25 under the Medical Practice Act of 1987 to practice
26 medicine in all its branches, any pharmacy, any federally
27 qualified health center, and any podiatrist, that
28 consistently meets the reasonable terms and conditions
29 established by the managed health care entity, including
30 but not limited to credentialing standards, quality
31 assurance program requirements, utilization management
32 requirements, financial responsibility standards,
33 contracting process requirements, and provider network
34 size and accessibility requirements, must be accepted by
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1 the managed health care entity for purposes of the
2 Illinois integrated health care program. Any individual
3 who is either terminated from or denied inclusion in the
4 panel of physicians of the managed health care entity
5 shall be given, within 10 business days after that
6 determination, a written explanation of the reasons for
7 his or her exclusion or termination from the panel. This
8 paragraph (1) does not apply to the following:
9 (A) A managed health care entity that
10 certifies to the Illinois Department that:
11 (i) it employs on a full-time basis 125
12 or more Illinois physicians licensed to
13 practice medicine in all of its branches; and
14 (ii) it will provide medical services
15 through its employees to more than 80% of the
16 recipients enrolled with the entity in the
17 integrated health care program; or
18 (B) A domestic stock insurance company
19 licensed under clause (b) of class 1 of Section 4 of
20 the Illinois Insurance Code if (i) at least 66% of
21 the stock of the insurance company is owned by a
22 professional corporation organized under the
23 Professional Service Corporation Act that has 125 or
24 more shareholders who are Illinois physicians
25 licensed to practice medicine in all of its branches
26 and (ii) the insurance company certifies to the
27 Illinois Department that at least 80% of those
28 physician shareholders will provide services to
29 recipients enrolled with the company in the
30 integrated health care program.
31 (2) Provide for reimbursement for providers for
32 emergency care, as defined by the Illinois Department by
33 rule, that must be provided to its enrollees, including
34 an emergency room screening fee, and urgent care that it
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1 authorizes for its enrollees, regardless of the
2 provider's affiliation with the managed health care
3 entity. Providers shall be reimbursed for emergency care
4 at an amount equal to the Illinois Department's
5 fee-for-service rates for those medical services rendered
6 by providers not under contract with the managed health
7 care entity to enrollees of the entity.
8 (3) Provide that any provider affiliated with a
9 managed health care entity may also provide services on a
10 fee-for-service basis to Illinois Department clients not
11 enrolled in a managed health care entity.
12 (4) Provide client education services as determined
13 and approved by the Illinois Department, including but
14 not limited to (i) education regarding appropriate
15 utilization of health care services in a managed care
16 system, (ii) written disclosure of treatment policies and
17 any restrictions or limitations on health services,
18 including, but not limited to, physical services,
19 clinical laboratory tests, hospital and surgical
20 procedures, prescription drugs and biologics, and
21 radiological examinations, and (iii) written notice that
22 the enrollee may receive from another provider those
23 services covered under this program that are not provided
24 by the managed health care entity.
25 (5) Provide that enrollees within its system may
26 choose the site for provision of services and the panel
27 of health care providers.
28 (6) Not discriminate in its enrollment or
29 disenrollment practices among recipients of medical
30 services or program enrollees based on health status.
31 (7) Provide a quality assurance and utilization
32 review program that (i) for health maintenance
33 organizations meets the requirements of the Health
34 Maintenance Organization Act and (ii) for managed care
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1 community networks meets the requirements established by
2 the Illinois Department in rules that incorporate those
3 standards set forth in the Health Maintenance
4 Organization Act.
5 (8) Issue a managed health care entity
6 identification card to each enrollee upon enrollment.
7 The card must contain all of the following:
8 (A) The enrollee's signature.
9 (B) The enrollee's health plan.
10 (C) The name and telephone number of the
11 enrollee's primary care physician.
12 (D) A telephone number to be used for
13 emergency service 24 hours per day, 7 days per week.
14 The telephone number required to be maintained
15 pursuant to this subparagraph by each managed health
16 care entity shall, at minimum, be staffed by
17 medically trained personnel and be provided
18 directly, or under arrangement, at an office or
19 offices in locations maintained solely within the
20 State of Illinois. For purposes of this
21 subparagraph, "medically trained personnel" means
22 licensed practical nurses or registered nurses
23 located in the State of Illinois who are licensed
24 pursuant to the Illinois Nursing Act of 1987.
25 (9) Ensure that every primary care physician and
26 pharmacy in the managed health care entity meets the
27 standards established by the Illinois Department for
28 accessibility and quality of care. The Illinois
29 Department shall arrange for and oversee an evaluation of
30 the standards established under this paragraph (9) and
31 may recommend any necessary changes to these standards.
32 The Illinois Department shall submit an annual report to
33 the Governor and the General Assembly by April 1 of each
34 year regarding the effect of the standards on ensuring
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1 access and quality of care to enrollees.
2 (10) Provide a procedure for handling complaints
3 that (i) for health maintenance organizations meets the
4 requirements of the Health Maintenance Organization Act
5 and (ii) for managed care community networks meets the
6 requirements established by the Illinois Department in
7 rules that incorporate those standards set forth in the
8 Health Maintenance Organization Act.
9 (11) Maintain, retain, and make available to the
10 Illinois Department records, data, and information, in a
11 uniform manner determined by the Illinois Department,
12 sufficient for the Illinois Department to monitor
13 utilization, accessibility, and quality of care.
14 (12) Except for providers who are prepaid, pay all
15 approved claims for covered services that are completed
16 and submitted to the managed health care entity within 30
17 days after receipt of the claim or receipt of the
18 appropriate capitation payment or payments by the managed
19 health care entity from the State for the month in which
20 the services included on the claim were rendered,
21 whichever is later. If payment is not made or mailed to
22 the provider by the managed health care entity by the due
23 date under this subsection, an interest penalty of 1% of
24 any amount unpaid shall be added for each month or
25 fraction of a month after the due date, until final
26 payment is made. Nothing in this Section shall prohibit
27 managed health care entities and providers from mutually
28 agreeing to terms that require more timely payment.
29 (13) Provide integration with community-based
30 programs provided by certified local health departments
31 such as Women, Infants, and Children Supplemental Food
32 Program (WIC), childhood immunization programs, health
33 education programs, case management programs, and health
34 screening programs.
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1 (14) Provide that the pharmacy formulary used by a
2 managed health care entity and its contract providers be
3 no more restrictive than the Illinois Department's
4 pharmaceutical program on the effective date of this
5 amendatory Act of 1994 and as amended after that date.
6 (15) Provide integration with community-based
7 organizations, including, but not limited to, any
8 organization that has operated within a Medicaid
9 Partnership as defined by this Code or by rule of the
10 Illinois Department, that may continue to operate under a
11 contract with the Illinois Department or a managed health
12 care entity under this Section to provide case management
13 services to Medicaid clients in designated high-need
14 areas.
15 The Illinois Department may, by rule, determine
16 methodologies to limit financial liability for managed health
17 care entities resulting from payment for services to
18 enrollees provided under the Illinois Department's integrated
19 health care program. Any methodology so determined may be
20 considered or implemented by the Illinois Department through
21 a contract with a managed health care entity under this
22 integrated health care program.
23 The Illinois Department shall contract with an entity or
24 entities to provide external peer-based quality assurance
25 review for the integrated health care program. The entity
26 shall be representative of Illinois physicians licensed to
27 practice medicine in all its branches and have statewide
28 geographic representation in all specialties of medical care
29 that are provided within the integrated health care program.
30 The entity may not be a third party payer and shall maintain
31 offices in locations around the State in order to provide
32 service and continuing medical education to physician
33 participants within the integrated health care program. The
34 review process shall be developed and conducted by Illinois
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1 physicians licensed to practice medicine in all its branches.
2 In consultation with the entity, the Illinois Department may
3 contract with other entities for professional peer-based
4 quality assurance review of individual categories of services
5 other than services provided, supervised, or coordinated by
6 physicians licensed to practice medicine in all its branches.
7 The Illinois Department shall establish, by rule, criteria to
8 avoid conflicts of interest in the conduct of quality
9 assurance activities consistent with professional peer-review
10 standards. All quality assurance activities shall be
11 coordinated by the Illinois Department.
12 (e) All persons enrolled in the program shall be
13 provided with a full written explanation of all
14 fee-for-service and managed health care plan options and a
15 reasonable opportunity to choose among the options as
16 provided by rule. The Illinois Department shall provide to
17 enrollees, upon enrollment in the integrated health care
18 program and at least annually thereafter, notice of the
19 process for requesting an appeal under the Illinois
20 Department's administrative appeal procedures.
21 Notwithstanding any other Section of this Code, the Illinois
22 Department may provide by rule for the Illinois Department to
23 assign a person enrolled in the program to a specific
24 provider of medical services or to a specific health care
25 delivery system if an enrollee has failed to exercise choice
26 in a timely manner. An enrollee assigned by the Illinois
27 Department shall be afforded the opportunity to disenroll and
28 to select a specific provider of medical services or a
29 specific health care delivery system within the first 30 days
30 after the assignment. An enrollee who has failed to exercise
31 choice in a timely manner may be assigned only if there are 3
32 or more managed health care entities contracting with the
33 Illinois Department within the contracting area, except that,
34 outside the City of Chicago, this requirement may be waived
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1 for an area by rules adopted by the Illinois Department after
2 consultation with all hospitals within the contracting area.
3 The Illinois Department shall establish by rule the procedure
4 for random assignment of enrollees who fail to exercise
5 choice in a timely manner to a specific managed health care
6 entity in proportion to the available capacity of that
7 managed health care entity. Assignment to a specific provider
8 of medical services or to a specific managed health care
9 entity may not exceed that provider's or entity's capacity as
10 determined by the Illinois Department. Any person who has
11 chosen a specific provider of medical services or a specific
12 managed health care entity, or any person who has been
13 assigned under this subsection, shall be given the
14 opportunity to change that choice or assignment at least once
15 every 12 months, as determined by the Illinois Department by
16 rule. The Illinois Department shall maintain a toll-free
17 telephone number for program enrollees' use in reporting
18 problems with managed health care entities.
19 (f) If a person becomes eligible for participation in
20 the integrated health care program while he or she is
21 hospitalized, the Illinois Department may not enroll that
22 person in the program until after he or she has been
23 discharged from the hospital. This subsection does not apply
24 to newborn infants whose mothers are enrolled in the
25 integrated health care program.
26 (g) The Illinois Department shall, by rule, establish
27 for managed health care entities rates that (i) are certified
28 to be actuarially sound, as determined by an actuary who is
29 an associate or a fellow of the Society of Actuaries or a
30 member of the American Academy of Actuaries and who has
31 expertise and experience in medical insurance and benefit
32 programs, in accordance with the Illinois Department's
33 current fee-for-service payment system, and (ii) take into
34 account any difference of cost to provide health care to
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1 different populations based on gender, age, location, and
2 eligibility category. The rates for managed health care
3 entities shall be determined on a capitated basis.
4 The Illinois Department by rule shall establish a method
5 to adjust its payments to managed health care entities in a
6 manner intended to avoid providing any financial incentive to
7 a managed health care entity to refer patients to a county
8 provider, in an Illinois county having a population greater
9 than 3,000,000, that is paid directly by the Illinois
10 Department. The Illinois Department shall by April 1, 1997,
11 and annually thereafter, review the method to adjust
12 payments. Payments by the Illinois Department to the county
13 provider, for persons not enrolled in a managed care
14 community network owned or operated by a county provider,
15 shall be paid on a fee-for-service basis under Article XV of
16 this Code.
17 The Illinois Department by rule shall establish a method
18 to reduce its payments to managed health care entities to
19 take into consideration (i) any adjustment payments paid to
20 hospitals under subsection (h) of this Section to the extent
21 those payments, or any part of those payments, have been
22 taken into account in establishing capitated rates under this
23 subsection (g) and (ii) the implementation of methodologies
24 to limit financial liability for managed health care entities
25 under subsection (d) of this Section.
26 (h) For hospital services provided by a hospital that
27 contracts with a managed health care entity, adjustment
28 payments shall be paid directly to the hospital by the
29 Illinois Department. Adjustment payments may include but
30 need not be limited to adjustment payments to:
31 disproportionate share hospitals under Section 5-5.02 of this
32 Code; primary care access health care education payments (89
33 Ill. Adm. Code 149.140); payments for capital, direct medical
34 education, indirect medical education, certified registered
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1 nurse anesthetist, and kidney acquisition costs (89 Ill. Adm.
2 Code 149.150(c)); uncompensated care payments (89 Ill. Adm.
3 Code 148.150(h)); trauma center payments (89 Ill. Adm. Code
4 148.290(c)); rehabilitation hospital payments (89 Ill. Adm.
5 Code 148.290(d)); perinatal center payments (89 Ill. Adm.
6 Code 148.290(e)); obstetrical care payments (89 Ill. Adm.
7 Code 148.290(f)); targeted access payments (89 Ill. Adm. Code
8 148.290(g)); Medicaid high volume payments (89 Ill. Adm. Code
9 148.290(h)); and outpatient indigent volume adjustments (89
10 Ill. Adm. Code 148.140(b)(5)).
11 (i) For any hospital eligible for the adjustment
12 payments described in subsection (h), the Illinois Department
13 shall maintain, through the period ending June 30, 1995,
14 reimbursement levels in accordance with statutes and rules in
15 effect on April 1, 1994.
16 (j) Nothing contained in this Code in any way limits or
17 otherwise impairs the authority or power of the Illinois
18 Department to enter into a negotiated contract pursuant to
19 this Section with a managed health care entity, including,
20 but not limited to, a health maintenance organization, that
21 provides for termination or nonrenewal of the contract
22 without cause upon notice as provided in the contract and
23 without a hearing.
24 (k) Section 5-5.15 does not apply to the program
25 developed and implemented pursuant to this Section.
26 (l) The Illinois Department shall, by rule, define those
27 chronic or acute medical conditions of childhood that require
28 longer-term treatment and follow-up care. The Illinois
29 Department shall ensure that services required to treat these
30 conditions are available through a separate delivery system.
31 A managed health care entity that contracts with the
32 Illinois Department may refer a child with medical conditions
33 described in the rules adopted under this subsection directly
34 to a children's hospital or to a hospital, other than a
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1 children's hospital, that is qualified to provide inpatient
2 and outpatient services to treat those conditions. The
3 Illinois Department shall provide fee-for-service
4 reimbursement directly to a children's hospital for those
5 services pursuant to Title 89 of the Illinois Administrative
6 Code, Section 148.280(a), at a rate at least equal to the
7 rate in effect on March 31, 1994. For hospitals, other than
8 children's hospitals, that are qualified to provide inpatient
9 and outpatient services to treat those conditions, the
10 Illinois Department shall provide reimbursement for those
11 services on a fee-for-service basis, at a rate at least equal
12 to the rate in effect for those other hospitals on March 31,
13 1994.
14 A children's hospital shall be directly reimbursed for
15 all services provided at the children's hospital on a
16 fee-for-service basis pursuant to Title 89 of the Illinois
17 Administrative Code, Section 148.280(a), at a rate at least
18 equal to the rate in effect on March 31, 1994, until the
19 later of (i) implementation of the integrated health care
20 program under this Section and development of actuarially
21 sound capitation rates for services other than those chronic
22 or acute medical conditions of childhood that require
23 longer-term treatment and follow-up care as defined by the
24 Illinois Department in the rules adopted under this
25 subsection or (ii) March 31, 1996.
26 Notwithstanding anything in this subsection to the
27 contrary, a managed health care entity shall not consider
28 sources or methods of payment in determining the referral of
29 a child. The Illinois Department shall adopt rules to
30 establish criteria for those referrals. The Illinois
31 Department by rule shall establish a method to adjust its
32 payments to managed health care entities in a manner intended
33 to avoid providing any financial incentive to a managed
34 health care entity to refer patients to a provider who is
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1 paid directly by the Illinois Department.
2 (m) Behavioral health services provided or funded by the
3 Department of Human Services, the Department of Children and
4 Family Services, and the Illinois Department shall be
5 excluded from a benefit package. Conditions of an organic or
6 physical origin or nature, including medical detoxification,
7 however, may not be excluded. In this subsection,
8 "behavioral health services" means mental health services and
9 subacute alcohol and substance abuse treatment services, as
10 defined in the Illinois Alcoholism and Other Drug Dependency
11 Act. In this subsection, "mental health services" includes,
12 at a minimum, the following services funded by the Illinois
13 Department, the Department of Human Services (as successor to
14 the Department of Mental Health and Developmental
15 Disabilities), or the Department of Children and Family
16 Services: (i) inpatient hospital services, including related
17 physician services, related psychiatric interventions, and
18 pharmaceutical services provided to an eligible recipient
19 hospitalized with a primary diagnosis of psychiatric
20 disorder; (ii) outpatient mental health services as defined
21 and specified in Title 59 of the Illinois Administrative
22 Code, Part 132; (iii) any other outpatient mental health
23 services funded by the Illinois Department pursuant to the
24 State of Illinois Medicaid Plan; (iv) partial
25 hospitalization; and (v) follow-up stabilization related to
26 any of those services. Additional behavioral health services
27 may be excluded under this subsection as mutually agreed in
28 writing by the Illinois Department and the affected State
29 agency or agencies. The exclusion of any service does not
30 prohibit the Illinois Department from developing and
31 implementing demonstration projects for categories of persons
32 or services. The Department of Children and Family Services
33 and the Department of Human Services shall each adopt rules
34 governing the integration of managed care in the provision of
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1 behavioral health services. The State shall integrate managed
2 care community networks and affiliated providers, to the
3 extent practicable, in any separate delivery system for
4 mental health services.
5 (n) The Illinois Department shall adopt rules to
6 establish reserve requirements for managed care community
7 networks, as required by subsection (a), and health
8 maintenance organizations to protect against liabilities in
9 the event that a managed health care entity is declared
10 insolvent or bankrupt. If a managed health care entity other
11 than a county provider is declared insolvent or bankrupt,
12 after liquidation and application of any available assets,
13 resources, and reserves, the Illinois Department shall pay a
14 portion of the amounts owed by the managed health care entity
15 to providers for services rendered to enrollees under the
16 integrated health care program under this Section based on
17 the following schedule: (i) from April 1, 1995 through June
18 30, 1998, 90% of the amounts owed; (ii) from July 1, 1998
19 through June 30, 2001, 80% of the amounts owed; and (iii)
20 from July 1, 2001 through June 30, 2005, 75% of the amounts
21 owed. The amounts paid under this subsection shall be
22 calculated based on the total amount owed by the managed
23 health care entity to providers before application of any
24 available assets, resources, and reserves. After June 30,
25 2005, the Illinois Department may not pay any amounts owed to
26 providers as a result of an insolvency or bankruptcy of a
27 managed health care entity occurring after that date. The
28 Illinois Department is not obligated, however, to pay amounts
29 owed to a provider that has an ownership or other governing
30 interest in the managed health care entity. This subsection
31 applies only to managed health care entities and the services
32 they provide under the integrated health care program under
33 this Section.
34 (o) Notwithstanding any other provision of law or
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1 contractual agreement to the contrary, providers shall not be
2 required to accept from any other third party payer the rates
3 determined or paid under this Code by the Illinois
4 Department, managed health care entity, or other health care
5 delivery system for services provided to recipients.
6 (p) The Illinois Department may seek and obtain any
7 necessary authorization provided under federal law to
8 implement the program, including the waiver of any federal
9 statutes or regulations. The Illinois Department may seek a
10 waiver of the federal requirement that the combined
11 membership of Medicare and Medicaid enrollees in a managed
12 care community network may not exceed 75% of the managed care
13 community network's total enrollment. The Illinois
14 Department shall not seek a waiver of this requirement for
15 any other category of managed health care entity. The
16 Illinois Department shall not seek a waiver of the inpatient
17 hospital reimbursement methodology in Section 1902(a)(13)(A)
18 of Title XIX of the Social Security Act even if the federal
19 agency responsible for administering Title XIX determines
20 that Section 1902(a)(13)(A) applies to managed health care
21 systems.
22 Notwithstanding any other provisions of this Code to the
23 contrary, the Illinois Department shall seek a waiver of
24 applicable federal law in order to impose a co-payment system
25 consistent with this subsection on recipients of medical
26 services under Title XIX of the Social Security Act who are
27 not enrolled in a managed health care entity. The waiver
28 request submitted by the Illinois Department shall provide
29 for co-payments of up to $0.50 for prescribed drugs and up to
30 $0.50 for x-ray services and shall provide for co-payments of
31 up to $10 for non-emergency services provided in a hospital
32 emergency room and up to $10 for non-emergency ambulance
33 services. The purpose of the co-payments shall be to deter
34 those recipients from seeking unnecessary medical care.
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1 Co-payments may not be used to deter recipients from seeking
2 necessary medical care. No recipient shall be required to
3 pay more than a total of $150 per year in co-payments under
4 the waiver request required by this subsection. A recipient
5 may not be required to pay more than $15 of any amount due
6 under this subsection in any one month.
7 Co-payments authorized under this subsection may not be
8 imposed when the care was necessitated by a true medical
9 emergency. Co-payments may not be imposed for any of the
10 following classifications of services:
11 (1) Services furnished to person under 18 years of
12 age.
13 (2) Services furnished to pregnant women.
14 (3) Services furnished to any individual who is an
15 inpatient in a hospital, nursing facility, intermediate
16 care facility, or other medical institution, if that
17 person is required to spend for costs of medical care all
18 but a minimal amount of his or her income required for
19 personal needs.
20 (4) Services furnished to a person who is receiving
21 hospice care.
22 Co-payments authorized under this subsection shall not be
23 deducted from or reduce in any way payments for medical
24 services from the Illinois Department to providers. No
25 provider may deny those services to an individual eligible
26 for services based on the individual's inability to pay the
27 co-payment.
28 Recipients who are subject to co-payments shall be
29 provided notice, in plain and clear language, of the amount
30 of the co-payments, the circumstances under which co-payments
31 are exempted, the circumstances under which co-payments may
32 be assessed, and their manner of collection.
33 The Illinois Department shall establish a Medicaid
34 Co-Payment Council to assist in the development of co-payment
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1 policies for the medical assistance program. The Medicaid
2 Co-Payment Council shall also have jurisdiction to develop a
3 program to provide financial or non-financial incentives to
4 Medicaid recipients in order to encourage recipients to seek
5 necessary health care. The Council shall be chaired by the
6 Director of the Illinois Department, and shall have 6
7 additional members. Two of the 6 additional members shall be
8 appointed by the Governor, and one each shall be appointed by
9 the President of the Senate, the Minority Leader of the
10 Senate, the Speaker of the House of Representatives, and the
11 Minority Leader of the House of Representatives. The Council
12 may be convened and make recommendations upon the appointment
13 of a majority of its members. The Council shall be appointed
14 and convened no later than September 1, 1994 and shall report
15 its recommendations to the Director of the Illinois
16 Department and the General Assembly no later than October 1,
17 1994. The chairperson of the Council shall be allowed to
18 vote only in the case of a tie vote among the appointed
19 members of the Council.
20 The Council shall be guided by the following principles
21 as it considers recommendations to be developed to implement
22 any approved waivers that the Illinois Department must seek
23 pursuant to this subsection:
24 (1) Co-payments should not be used to deter access
25 to adequate medical care.
26 (2) Co-payments should be used to reduce fraud.
27 (3) Co-payment policies should be examined in
28 consideration of other states' experience, and the
29 ability of successful co-payment plans to control
30 unnecessary or inappropriate utilization of services
31 should be promoted.
32 (4) All participants, both recipients and
33 providers, in the medical assistance program have
34 responsibilities to both the State and the program.
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1 (5) Co-payments are primarily a tool to educate the
2 participants in the responsible use of health care
3 resources.
4 (6) Co-payments should not be used to penalize
5 providers.
6 (7) A successful medical program requires the
7 elimination of improper utilization of medical resources.
8 The integrated health care program, or any part of that
9 program, established under this Section may not be
10 implemented if matching federal funds under Title XIX of the
11 Social Security Act are not available for administering the
12 program.
13 The Illinois Department shall submit for publication in
14 the Illinois Register the name, address, and telephone number
15 of the individual to whom a request may be directed for a
16 copy of the request for a waiver of provisions of Title XIX
17 of the Social Security Act that the Illinois Department
18 intends to submit to the Health Care Financing Administration
19 in order to implement this Section. The Illinois Department
20 shall mail a copy of that request for waiver to all
21 requestors at least 16 days before filing that request for
22 waiver with the Health Care Financing Administration.
23 (q) After the effective date of this Section, the
24 Illinois Department may take all planning and preparatory
25 action necessary to implement this Section, including, but
26 not limited to, seeking requests for proposals relating to
27 the integrated health care program created under this
28 Section.
29 (r) In order to (i) accelerate and facilitate the
30 development of integrated health care in contracting areas
31 outside counties with populations in excess of 3,000,000 and
32 counties adjacent to those counties and (ii) maintain and
33 sustain the high quality of education and residency programs
34 coordinated and associated with local area hospitals, the
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1 Illinois Department may develop and implement a demonstration
2 program for managed care community networks owned, operated,
3 or governed by State-funded medical schools. The Illinois
4 Department shall prescribe by rule the criteria, standards,
5 and procedures for effecting this demonstration program.
6 (s) (Blank).
7 (t) On April 1, 1995 and every 6 months thereafter, the
8 Illinois Department shall report to the Governor and General
9 Assembly on the progress of the integrated health care
10 program in enrolling clients into managed health care
11 entities. The report shall indicate the capacities of the
12 managed health care entities with which the State contracts,
13 the number of clients enrolled by each contractor, the areas
14 of the State in which managed care options do not exist, and
15 the progress toward meeting the enrollment goals of the
16 integrated health care program.
17 (u) The Illinois Department may implement this Section
18 through the use of emergency rules in accordance with Section
19 5-45 of the Illinois Administrative Procedure Act. For
20 purposes of that Act, the adoption of rules to implement this
21 Section is deemed an emergency and necessary for the public
22 interest, safety, and welfare.
23 (Source: P.A. 88-554, eff. 7-26-94; 89-21, eff. 7-1-95;
24 89-507, eff. 7-1-97; 89-673, eff. 8-14-96; revised
25 8-26-96.)".