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92nd General Assembly

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Public Act 92-0370

SB873 Enrolled                                 LRB9201523DJgc

    AN ACT in relation to public aid.

    Be it enacted by the People of  the  State  of  Illinois,
represented in the General Assembly:

    Section  5.  The University of Illinois Act is amended by
changing Section 7 as follows:

    (110 ILCS 305/7) (from Ch. 144, par. 28)
    Sec. 7.  Powers of trustees.
    (a)  The trustees shall have power  to  provide  for  the
requisite  buildings, apparatus, and conveniences; to fix the
rates  for  tuition;   to   appoint   such   professors   and
instructors,  and to establish and provide for the management
of such model farms, model art,  and  other  departments  and
professorships,  as  may  be  required  to teach, in the most
thorough manner, such branches of learning as are related  to
agriculture  and  the  mechanic  arts,  and military tactics,
without excluding other scientific and classical studies. The
trustees shall, upon  the  written  request  of  an  employee
withhold  from  the  compensation  of that employee any dues,
payments or contributions payable by  such  employee  to  any
labor  organization  as  defined  in the Illinois Educational
Labor Relations Act.  Under such arrangement, an amount shall
be withheld from each regular payroll period which  is  equal
to the pro rata share of the annual dues plus any payments or
contributions,   and   the   trustees   shall  transmit  such
withholdings to the specified labor  organization  within  10
working  days  from  the  time  of the withholding.  They may
accept  the  endowments  and  voluntary   professorships   or
departments  in the University, from any person or persons or
corporations who may offer the  same,  and,  at  any  regular
meeting  of the board, may prescribe rules and regulations in
relation to such  endowments  and  declare  on  what  general
principles  they may be admitted: Provided, that such special
voluntary  endowments  or   professorships   shall   not   be
incompatible  with  the  true  design and scope of the act of
congress, or of this Act: Provided, that no student shall  at
any  time  be allowed to remain in or about the University in
idleness, or without full mental  or  industrial  occupation:
And  provided  further, that the trustees, in the exercise of
any of the powers conferred by this Act, shall not create any
liability or indebtedness in excess of the funds in the hands
of the treasurer of the University at the  time  of  creating
such  liability  or  indebtedness, and which may be specially
and properly applied to the payment of the same. Any lease to
the trustees of lands, buildings  or  facilities  which  will
support  scientific research and development in such areas as
high   technology,   super    computing,    microelectronics,
biotechnology, robotics, physics and engineering shall be for
a  term not to exceed 18 years, and may grant to the trustees
the option to purchase the lands,  buildings  or  facilities.
The  lease shall recite that it is subject to termination and
cancellation in any year for which the General Assembly fails
to make an appropriation to pay the rent  payable  under  the
terms of the lease.
    Leases  for  the  purposes  described  herein exceeding 5
years shall have the approval of the Illinois Board of Higher
Education.
    The Board of Trustees may,  directly  or  in  cooperation
with  other  institutions  of  higher  education,  acquire by
purchase or  lease  or  otherwise,  and  construct,  enlarge,
improve, equip, complete, operate, control and manage medical
research   and  high  technology  parks,  together  with  the
necessary  lands,  buildings,   facilities,   equipment   and
personal  property  therefor, to encourage and facilitate (a)
the location and development of business and industry in  the
State  of  Illinois,  and  (b)  the increased application and
development  of  technology  and  (c)  the  improvement   and
development of the State's economy. The Board of Trustees may
lease  to nonprofit corporations all or any part of the land,
buildings, facilities, equipment or other  property  included
in  a  medical  research  and  high technology park upon such
terms and conditions as the University of Illinois  may  deem
advisable  and enter into any contract or agreement with such
nonprofit corporations as may be necessary  or  suitable  for
the  construction,  financing,  operation and maintenance and
management of any such park; and may  lease  to  any  person,
firm,  partnership  or corporation, either public or private,
any part or all of the land, building, facilities,  equipment
or  other  property  of  such park for such purposes and upon
such rentals, terms and conditions as the University may deem
advisable; and may finance all or part of  the  cost  of  any
such  park,  including  the  purchase,  lease,  construction,
reconstruction,  improvement,  remodeling,  addition  to, and
extension and  maintenance  of  all  or  part  of  such  high
technology  park,  and  all  equipment  and  furnishings,  by
legislative  appropriations,  government  grants,  contracts,
private  gifts,  loans,  receipts  from the operation of such
high technology park, rentals and similar receipts;  and  may
make  its  other facilities and services available to tenants
or other occupants of  any  such  park  at  rates  which  are
reasonable and appropriate.
    The  Trustees  shall  have  power  (a)  to  purchase real
property and easements, and (b) to acquire real property  and
easements  in  the manner provided by law for the exercise of
the right of eminent domain, and in  the  event  negotiations
for  the acquisition of real property or easements for making
any improvement which the Trustees  are  authorized  to  make
shall have proven unsuccessful and the Trustees shall have by
resolution  adopted  a  schedule or plan of operation for the
execution of the project and therein made a finding  that  it
is  necessary  to take such property or easements immediately
or at some specified later date in order to comply  with  the
schedule, the Trustees may acquire such property or easements
in  the  same manner provided in Sections 7-103 through 7-112
of the Code of Civil Procedure.
    The Board of Trustees also shall have power to agree with
the State's Attorney of the county in which any properties of
the Board are located to pay for  services  rendered  by  the
various  taxing districts for the years 1944 through 1949 and
to pay annually for  services  rendered  thereafter  by  such
district  such  sums  as  may be determined by the Board upon
properties used solely for income producing  purposes,  title
to  which  is held by said Board of Trustees, upon properties
leased to members of the staff of the University of Illinois,
title to which is held in trust for said  Board  of  Trustees
and  upon  properties leased to for-profit entities the title
to which properties is held  by  the  Board  of  Trustees.  A
certified  copy  of  any such agreement made with the State's
Attorney shall be filed with the County Clerk and  such  sums
shall  be  distributed  to the respective taxing districts by
the County Collector in such  proportions  that  each  taxing
district  will  receive  therefrom such proportion as the tax
rate of such taxing district bears to the total tax rate that
would be levied against such  properties  if  they  were  not
exempt from taxation under the Property Tax Code.
    The  Board  of  Trustees  of  the University of Illinois,
subject to the applicable  civil  service  law,  may  appoint
persons  to  be  members of the University of Illinois Police
Department. Members of the Police Department shall  be  peace
officers  and  as such have all powers possessed by policemen
in cities, and sheriffs, including the power to make  arrests
on  view or warrants of violations of state statutes and city
or county ordinances, except  that  they  may  exercise  such
powers only in counties wherein the University and any of its
branches  or properties are located when such is required for
the protection of university properties  and  interests,  and
its  students  and  personnel,  and  otherwise,  within  such
counties,  when  requested  by appropriate state or local law
enforcement officials; provided, however, that  such  officer
shall have no power to serve and execute civil processes.
    The  Board  of  Trustees must authorize to each member of
the University of Illinois Police Department and to any other
employee of the University of Illinois exercising the  powers
of  a  peace  officer a distinct badge that, on its face, (i)
clearly states that the badge is authorized by the University
of Illinois and (ii) contains a unique identifying number. No
other  badge  shall  be  authorized  by  the  University   of
Illinois.
    The  Board of Trustees may own, operate, or govern, by or
through the College of Medicine at  Peoria,  a  managed  care
community  network  established  under  subsection (b) (r) of
Section 5-11 5-16.3 of the Illinois Public Aid Code.
    The powers of  the  trustees  as  herein  designated  are
subject  to  the  provisions  of  "An Act creating a Board of
Higher Education, defining its powers and duties,  making  an
appropriation  therefor,  and repealing an Act herein named",
approved August 22, 1961, as amended.
    The Board of Trustees shall have the authority  to  adopt
all  administrative  rules  which  may  be  necessary for the
effective administration, enforcement and regulation  of  all
matters   for   which   the   Board   has   jurisdiction   or
responsibility.
    (b)  To   assist   in  the  provision  of  buildings  and
facilities  beneficial  to,  useful  for,  or  supportive  of
University purposes, the Board of Trustees of the  University
of  Illinois may exercise the following powers with regard to
the area located on or adjacent to the University of Illinois
at Chicago campus and bounded as  follows:  on  the  West  by
Morgan Street; on the North by Roosevelt Road; on the East by
Union Street; and on the South by 16th Street, in the City of
Chicago:
         (1)  Acquire  any  interests  in land, buildings, or
    facilities by purchase,  including  installments  payable
    over  a  period  allowed  by law, by lease over a term of
    such duration as the Board of Trustees  shall  determine,
    or by exercise of the power of eminent domain;
         (2)  Sub-lease   or  contract  to  purchase  through
    installments  all  or  any  portion   of   buildings   or
    facilities  for  such  duration  and on such terms as the
    Board of Trustees shall determine, including a term  that
    exceeds  5  years,  provided  that  each  such  lease  or
    purchase  contract  shall  be and shall recite that it is
    subject to termination and cancellation in any  year  for
    which the General Assembly fails to make an appropriation
    to  pay  the  rent or purchase installments payable under
    the terms of such lease or purchase contract; and
         (3)  Sell property without compliance with the State
    Property  Control  Act  and  retain   proceeds   in   the
    University  Treasury  in  a special, separate development
    fund account which the Auditor General shall  examine  to
    assure compliance with this Act.
Any buildings or facilities to be developed on the land shall
be  buildings or facilities that, in the determination of the
Board of Trustees, in whole or in part: (i) are  for  use  by
the  University;  or  (ii) otherwise advance the interests of
the University, including, by  way  of  example,  residential
facilities  for  University staff and students and commercial
facilities which provide services needed  by  the  University
community.  Revenues from the development fund account may be
withdrawn by the University for the purpose of demolition and
the  processes  associated  with demolition; routine land and
property acquisition;  extension  of  utilities;  streetscape
work;   landscape   work;   surface  and  structure  parking;
sidewalks, recreational paths, and street  construction;  and
lease  and  lease  purchase arrangements and the professional
services associated with the planning and development of  the
area.   Moneys from the development fund account used for any
other purpose must be deposited into  and  appropriated  from
the  General Revenue Fund.  Buildings or facilities leased to
an entity or person other than the University  shall  not  be
subject  to  any  limitations applicable to a State supported
college or university under any law.  All development on  the
land  and  all  use  of  any buildings or facilities shall be
subject to the control and approval of the Board of Trustees.
(Source: P.A. 90-730, eff. 8-10-98; 91-883, eff. 1-1-01.)

    Section 10.  The Southern Illinois University  Management
Act is amended by changing Section 8 as follows:

    (110 ILCS 520/8) (from Ch. 144, par. 658)
    Sec. 8.  Powers and Duties of the Board.  The Board shall
have power and it shall be its duty:
         1.  To  make  rules,  regulations  and  by-laws, not
    inconsistent with law, for the government and  management
    of Southern Illinois University and its branches;
         2.  To  employ,  and,  for  good  cause, to remove a
    president  of  Southern  Illinois  University,  and   all
    necessary   deans,   professors,   associate  professors,
    assistant professors, instructors, and other  educational
    and  administrative  assistants,  and all other necessary
    employees, and contract with them upon  matters  relating
    to tenure, salaries and retirement benefits in accordance
    with  the State Universities Civil Service Act; the Board
    shall,  upon  the  written  request  of  an  employee  of
    Southern   Illinois   University,   withhold   from   the
    compensation of  that  employee  any  dues,  payments  or
    contributions  payable  by  such  employee  to  any labor
    organization as defined in the Illinois Educational Labor
    Relations Act. Under such arrangement, an amount shall be
    withheld from each regular payroll period which is  equal
    to  the  pro  rata  share  of  the  annual  dues plus any
    payments or contributions, and the Board  shall  transmit
    such  withholdings  to  the  specified labor organization
    within 10 working days from the time of the  withholding.
    Whenever the Board establishes a search committee to fill
    the   position   of   president   of   Southern  Illinois
    University,  there  shall  be  minority   representation,
    including women, on that search committee;
         3.  To prescribe the course of study to be followed,
    and  textbooks  and  apparatus  to  be  used  at Southern
    Illinois University;
         4.  To issue upon the recommendation of the faculty,
    diplomas to such persons as have satisfactorily completed
    the required studies of Southern Illinois University, and
    confer such professional  and  literary  degrees  as  are
    usually conferred by other institutions of like character
    for  similar  or  equivalent courses of study, or such as
    the Board may deem appropriate;
         5.  To examine into the conditions, management,  and
    administration   of   Southern  Illinois  University,  to
    provide the requisite buildings, apparatus, equipment and
    auxiliary   enterprises,   and   to   fix   and   collect
    matriculation  fees;  tuition  fees;  fees  for   student
    activities;  fees  for student facilities such as student
    union buildings or  field  houses  or  stadium  or  other
    recreational facilities; student welfare fees; laboratory
    fees and similar fees for supplies and material;
         6.  To  succeed  to  and  to  administer all trusts,
    trust property, and gifts now or hereafter  belonging  or
    pertaining to Southern Illinois University;
         7.  To   accept   endowments  of  professorships  or
    departments in the University from  any  person  who  may
    proffer them and, at regular meetings, to prescribe rules
    and  regulations in relation to endowments and declare on
    what general principles they may be accepted;
         8.  To  enter  into  contracts  with   the   Federal
    government for providing courses of instruction and other
    services  at  Southern  Illinois  University  for persons
    serving in or with the military or naval  forces  of  the
    United States, and to provide such courses of instruction
    and other services;
         9.  To  provide  for the receipt and expenditures of
    Federal funds, paid to the Southern  Illinois  University
    by  the  Federal  government  for  instruction  and other
    services for persons serving in or with the  military  or
    naval  forces  of  the  United  States and to provide for
    audits of such funds;
         10.  To appoint, subject  to  the  applicable  civil
    service  law,  persons  to  be  members  of  the Southern
    Illinois University Police  Department.  Members  of  the
    Police  Department shall be conservators of the peace and
    as such have all powers possessed by policemen in cities,
    and sheriffs, including the power to make arrests on view
    or warrants of violations of state  statutes,  university
    rules  and  regulations  and  city  or county ordinances,
    except that they may exercise  such  powers  only  within
    counties  wherein  the university and any of its branches
    or properties are located when such is required  for  the
    protection  of  university  properties and interests, and
    its students and personnel, and  otherwise,  within  such
    counties,  when  requested  by appropriate State or local
    law enforcement officials. However, such  officers  shall
    have no power to serve and execute civil processes.
         The  Board  must  authorize  to  each  member of the
    Southern Illinois University Police Department and to any
    other employee of Southern Illinois University exercising
    the powers of a peace officer a distinct badge  that,  on
    its face, (i) clearly states that the badge is authorized
    by  Southern  Illinois  University  and  (ii)  contains a
    unique identifying  number.   No  other  badge  shall  be
    authorized by Southern Illinois University.
         11.  To  administer  a  plan or plans established by
    the clinical faculty of the School of  Medicine  for  the
    billing,  collection  and disbursement of charges made by
    individual  faculty  members  for  professional  services
    performed by them in the course of or in support of their
    academic responsibilities, provided that  such  plan  has
    been first approved by Board action. All such collections
    shall   be   deposited  into  a  special  fund  or  funds
    administered by the Board from which disbursements may be
    made according  to  the  provisions  of  said  plan.  The
    reasonable    costs    incurred,   by   the   University,
    administering the billing,  collection  and  disbursement
    provisions  of  a  plan  shall  have  first  priority for
    payment before distribution or disbursement for any other
    purpose. Charges established pursuant to this  plan  must
    be  itemized  in  any  billing  and any amounts collected
    which are not used to off-set the cost  of  operating  or
    maintaining   the  activity  which  generated  the  funds
    collected,  must  be  accounted  for   separately.   This
    accounting must clearly show the use and application made
    of  the funds and the Board shall report such accountings
    for the previous fiscal year  to  the  Legislative  Audit
    Commission annually by December 31 of each fiscal year.
         The  Board  of Trustees may own, operate, or govern,
    by or through the School  of  Medicine,  a  managed  care
    community network established under subsection (b) (r) of
    Section 5-11 5-16.3 of the Illinois Public Aid Code.
         12.  The  Board  of  Trustees  may,  directly  or in
    cooperation with other institutions of higher  education,
    acquire by purchase or lease or otherwise, and construct,
    enlarge,  improve,  equip, complete, operate, control and
    manage  medical  research  and  high  technology   parks,
    together with the necessary lands, buildings, facilities,
    equipment,  and  personal property therefor, to encourage
    and  facilitate  (a)  the  location  and  development  of
    business and industry in the State of Illinois,  and  (b)
    the  increased  application and development of technology
    and (c) the improvement and development  of  the  State's
    economy.   The  Board  of Trustees may lease to nonprofit
    corporations all or any  part  of  the  land,  buildings,
    facilities,  equipment  or  other  property included in a
    medical research and high technology park upon such terms
    and  conditions  as  the  Board  of  Trustees  may   deem
    advisable  and  enter into any contract or agreement with
    such  nonprofit  corporations  as  may  be  necessary  or
    suitable for the construction, financing,  operation  and
    maintenance  and  management  of  any  such park; and may
    lease to any person, firm,  partnership  or  corporation,
    either  public  or  private, any part or all of the land,
    building, facilities, equipment or other property of such
    park for such purposes and upon such rentals,  terms  and
    conditions  as  the Board of Trustees may deem advisable;
    and may finance all or part of the cost of any such park,
    including    the    purchase,    lease,     construction,
    reconstruction, improvement, remodeling, addition to, and
    extension  and  maintenance  of  all or part of such high
    technology park, and all equipment  and  furnishings,  by
    legislative appropriations, government grants, contracts,
    private gifts, loans, receipts from the operation of such
    high  technology  park, rentals and similar receipts; and
    may make its other facilities and services  available  to
    tenants  or  other  occupants  of  any such park at rates
    which are reasonable and appropriate.
    The powers of the Board as herein designated are  subject
to the  Board of Higher Education Act.
(Source: P.A. 91-883, eff. 1-1-01.)

    Section  15.  The  Illinois  Insurance Code is amended by
changing Section 352 as follows:

    (215 ILCS 5/352) (from Ch. 73, par. 964)
    Sec. 352.  Scope of Article.
    (a)  Except as provided in subsections (b), (c), (d), and
(e), this Article shall apply to all companies transacting in
this State the kinds of business enumerated in clause (b)  of
Class  1  and  clause (a) of Class 2 of section 4. Nothing in
this Article shall apply to, or in any way affect policies or
contracts described in clause (a) of Class 1  of  Section  4;
however,  this  Article shall apply to policies and contracts
which  contain  benefits  providing  reimbursement  for   the
expenses  of  long  term  health  care which are certified or
ordered  by  a  physician  including  but  not   limited   to
professional   nursing  care,  custodial  nursing  care,  and
non-nursing custodial care provided in a nursing home or at a
residence of the insured.
    (b)  This Article does not apply to policies of  accident
and  health  insurance issued in compliance with Article XIXB
of this Code.
    (c)  A policy issued and delivered  in  this  State  that
provides  coverage  under that policy for certificate holders
who are neither residents of nor employed in this State  does
not  need to provide to those nonresident certificate holders
who  are not employed in this State the coverages or services
mandated by this Article.
    (d)  Stop-loss insurance is exempt from all  Sections  of
this  Article,  except  this  Section and Sections 353a, 354,
357.30, and 370.  For purposes of this  exemption,  stop-loss
insurance is further defined as follows:
         (1)  The  policy  must  be  issued  to and insure an
    employer, trustee, or other sponsor of the plan,  or  the
    plan itself, but not employees, members, or participants.
         (2)  Payments  by  the  insurer  must be made to the
    employer, trustee, or other sponsors of the plan, or  the
    plan   itself,   but   not  to  the  employees,  members,
    participants, or health care providers.
    (e)  A policy issued or delivered in this  State  to  the
Illinois  Department  of  Public  Aid and providing coverage,
under clause (b) of Class 1 or  clause  (a)  of  Class  2  as
described  in  Section  4, to persons who are enrolled in the
integrated health care program established  under  Article  V
Section  5-16.3  of the Illinois Public Aid Code or under the
Children's Health Insurance Program Act is  exempt  from  all
restrictions,  limitations,  standards, rules, or regulations
respecting benefits imposed by or  under  authority  of  this
Code,  except  those  specified  by subsection (1) of Section
143.  Nothing in this subsection, however, affects the  total
medical  services  available  to persons eligible for medical
assistance under the Illinois Public Aid Code.
(Source: P.A. 87-435; 87-757; 87-938; 87-956; 88-364; 88-554,
eff. 7-26-94.)

    Section 20.  The Health Maintenance Organization  Act  is
amended by changing Sections 1-2, 2-1, and 6-3 as follows:

    (215 ILCS 125/1-2) (from Ch. 111 1/2, par. 1402)
    Sec.  1-2.  Definitions.  As used in this Act, unless the
context otherwise requires, the following  terms  shall  have
the meanings ascribed to them:
    (1)  "Advertisement"   means  any  printed  or  published
material, audiovisual material and descriptive literature  of
the  health  care  plan  used  in  direct  mail,  newspapers,
magazines,  radio scripts, television scripts, billboards and
similar displays; and any  descriptive  literature  or  sales
aids  of  all  kinds  disseminated by a representative of the
health care plan for presentation to  the  public  including,
but   not   limited   to,   circulars,   leaflets,  booklets,
depictions, illustrations, form letters  and  prepared  sales
presentations.
    (2)  "Director" means the Director of Insurance.
    (3)  "Basic  health  care services" means emergency care,
and inpatient hospital and physician care, outpatient medical
services, mental health services and  care  for  alcohol  and
drug   abuse,   including   any  reasonable  deductibles  and
co-payments, all of which are subject to such limitations  as
are determined by the Director pursuant to rule.
    (4)  "Enrollee" means an individual who has been enrolled
in a health care plan.
    (5)  "Evidence   of   coverage"  means  any  certificate,
agreement, or contract issued to an enrollee setting out  the
coverage to which he is entitled in exchange for a per capita
prepaid sum.
    (6)  "Group  contract"  means  a contract for health care
services which by its terms limits eligibility to members  of
a specified group.
    (7)  "Health care plan" means any arrangement whereby any
organization undertakes to provide or arrange for and pay for
or  reimburse  the  cost  of  basic health care services from
providers selected by the Health Maintenance Organization and
such arrangement consists of arranging for or  the  provision
of  such  health  care  services,  as distinguished from mere
indemnification against the cost of such services, except  as
otherwise  authorized  by  Section  2-3 of this Act, on a per
capita prepaid basis,  through  insurance  or  otherwise.   A
"health  care  plan" also includes any arrangement whereby an
organization undertakes to provide or arrange for or pay  for
or  reimburse the cost of any health care service for persons
who are  enrolled  in  the  integrated  health  care  program
established  under  Article  V Section 5-16.3 of the Illinois
Public Aid Code or  under  the  Children's  Health  Insurance
Program  Act  through  providers selected by the organization
and the arrangement consists  of  making  provision  for  the
delivery  of health care services, as distinguished from mere
indemnification.  A "health  care  plan"  also  includes  any
arrangement  pursuant  to  Section  4-17.   Nothing  in  this
definition,  however,  affects  the  total  medical  services
available  to  persons  eligible for medical assistance under
the Illinois Public Aid Code.
    (8)  "Health care services" means any  services  included
in  the  furnishing  to  any  individual of medical or dental
care, or the hospitalization or incident to the furnishing of
such care or hospitalization as well as the furnishing to any
person of any and all  other  services  for  the  purpose  of
preventing,  alleviating,  curing or healing human illness or
injury.
    (9)  "Health   Maintenance   Organization"   means    any
organization  formed  under the laws of this or another state
to provide or arrange for one or more health care plans under
a system which causes any part of the  risk  of  health  care
delivery to be borne by the organization or its providers.
    (10)  "Net  worth"  means  admitted assets, as defined in
Section 1-3 of this Act, minus liabilities.
    (11)  "Organization"  means  any  insurance  company,   a
nonprofit  corporation  authorized  under  the Dental Service
Plan Act or the Voluntary Health Services  Plans  Act,  or  a
corporation organized under the laws of this or another state
for  the  purpose  of operating one or more health care plans
and doing no business other than that of a Health Maintenance
Organization or an insurance company.   "Organization"  shall
also  mean  the University of Illinois Hospital as defined in
the University of Illinois Hospital Act.
    (12)  "Provider" means any physician, hospital  facility,
or  other person which is licensed or otherwise authorized to
furnish health care services  and  also  includes  any  other
entity that arranges for the delivery or furnishing of health
care service.
    (13)  "Producer"  means  a  person directly or indirectly
associated  with  a  health  care   plan   who   engages   in
solicitation or enrollment.
    (14)  "Per capita prepaid" means a basis of prepayment by
which  a  fixed  amount of money is prepaid per individual or
any  other  enrollment  unit  to   the   Health   Maintenance
Organization  or  for health care services which are provided
during a definite time period regardless of the frequency  or
extent  of  the  services  rendered by the Health Maintenance
Organization,  except  for  copayments  and  deductibles  and
except as provided in subsection (f) of Section 5-3  of  this
Act.
    (15)  "Subscriber"  means a person who has entered into a
contractual  relationship   with   the   Health   Maintenance
Organization  for the provision of or arrangement of at least
basic health care  services  to  the  beneficiaries  of  such
contract.
(Source:  P.A.  89-90,  eff.  6-30-95;  90-177, eff. 7-23-97;
90-372, eff.  7-1-98;  90-376,  eff.  8-14-97;  90-655,  eff.
7-30-98.)

    (215 ILCS 125/2-1) (from Ch. 111 1/2, par. 1403)
    Sec.  2-1.   Certificate  of  authority  -  Exception for
corporate  employee  programs  -  Applications   -   Material
modification of operation.
    (a)  No  organization shall establish or operate a Health
Maintenance Organization in this State  without  obtaining  a
certificate  of  authority  under  this Act.  No person other
than an organization may  lawfully  establish  or  operate  a
Health  Maintenance  Organization  in  this  State.  This Act
shall not apply to  the  establishment  and  operation  of  a
Health  Maintenance  Organization  exclusively  providing  or
arranging   for  health  care  services  to  employees  of  a
corporate affiliate of such Health Maintenance  Organization.
This  exclusion  shall  be  available  only  to  those Health
Maintenance    Organizations    which    require     employee
contributions  which equal less than 50% of the total cost of
the health care plan, with the remainder of  the  cost  being
paid  by the corporate affiliate which is the employer of the
participants in the  plan. This Act shall not  apply  to  the
establishment   and   operation   of   a  Health  Maintenance
Organization exclusively providing or arranging  health  care
services  under  contract with the State to persons committed
to the custody of the  Illinois  Department  of  Corrections.
This Act does not apply to the establishment and operation of
(i)  a  managed care community network providing or arranging
health  care  services  under   contract   with   the   State
exclusively  to  persons  who  are enrolled in the integrated
health care program established under Section 5-16.3  of  the
Illinois  Public  Aid  Code  or (ii) a managed care community
network owned, operated, or governed by a county provider  as
defined in Section 15-1 of that Code.
    This   Act  does  not  apply  to  the  establishment  and
operation  of  managed  care  community  networks  that   are
certified  as risk-bearing entities under Section 5-11 of the
Illinois Public Aid Code and that contract with the  Illinois
Department of Public Aid pursuant to that Section.
    (b)  Any  organization  may apply to the Director for and
obtain a certificate of authority to establish and operate  a
Health  Maintenance Organization in compliance with this Act.
A foreign corporation may qualify under this Act, subject  to
its  registration  to  do business in this State as a foreign
corporation.
    (c)  Each application  for  a  certificate  of  authority
shall  be  filed  in triplicate and verified by an officer or
authorized representative of the applicant,  shall  be  in  a
form prescribed by the Director, and shall set forth, without
limiting what may be required by the Director, the following:
         (1)  A copy of the organizational document;
         (2)  A copy of the bylaws, rules and regulations, or
    similar  document  regulating the conduct of the internal
    affairs of the applicant, which shall include a mechanism
    to afford the enrollees an opportunity to participate  in
    an advisory capacity in matters of policy and operations;
         (3)  A  list  of  the names, addresses, and official
    positions of the persons who are to  be  responsible  for
    the  conduct  of the affairs of the applicant; including,
    but  not  limited  to,  all  members  of  the  board   of
    directors,  executive  committee, the principal officers,
    and any person or entity owning or having  the  right  to
    acquire   10%   or  more  of  the  voting  securities  or
    subordinated debt of the applicant;
         (4)  A statement generally describing the applicant,
    geographic area to be served, its  facilities,  personnel
    and the health care services to be offered;
         (5)  A  copy  of the form of any contract made or to
    be made between the applicant and any providers regarding
    the provision of health care services to enrollees;
         (6)  A copy of the form of any contract made  or  to
    be  made  between  the applicant and any person listed in
    paragraph (3) of this subsection;
         (7)  A copy of the form of any contract made  or  to
    be   made   between   the   applicant   and  any  person,
    corporation,  partnership  or  other   entity   for   the
    performance  on  the  applicant's behalf of any functions
    including, but not limited to, marketing, administration,
    enrollment, investment management and subcontracting  for
    the provision of health services to enrollees;
         (8)  A  copy of the form of any group contract which
    is to be issued to employers, unions, trustees, or  other
    organizations  and  a  copy  of  any  form of evidence of
    coverage to be issued to any enrollee or  subscriber  and
    any advertising material;
         (9)  Descriptions  of the applicant's procedures for
    resolving  enrollee   grievances   which   must   include
    procedures  providing  for enrollees participation in the
    resolution of grievances;
         (10)  A  copy  of  the   applicant's   most   recent
    financial  statements audited by an independent certified
    public accountant.   If  the  financial  affairs  of  the
    applicant's  parent company are audited by an independent
    certified public accountant but those  of  the  applicant
    are not, then a copy of the most recent audited financial
    statement  of  the  applicant's parent, attached to which
    shall be consolidating financial statements of the parent
    including separate unaudited financial statements of  the
    applicant, unless the Director determines that additional
    or  more recent financial information is required for the
    proper administration of this Act;
         (11)  A copy  of  the  applicant's  financial  plan,
    including   a   three-year   projection   of  anticipated
    operating results, a statement of the sources of  working
    capital,  and any other sources of funding and provisions
    for contingencies;
         (12)  A description of rate methodology;
         (13)  A  description  of  the  proposed  method   of
    marketing;
         (14)  A  copy of every filing made with the Illinois
    Secretary of  State  which  relates  to  the  applicant's
    registered agent or registered office;
         (15)  A  description  of the complaint procedures to
    be established and maintained as required  under  Section
    4-6 of this Act;
         (16)  A  description, in accordance with regulations
    promulgated by the Illinois Department of Public  Health,
    of   the   quality   assessment  and  utilization  review
    procedures to be utilized by the applicant;
         (17)  The fee for filing an application for issuance
    of a certificate of authority provided in Section 408  of
    the Illinois Insurance Code, as now or hereafter amended;
    and
         (18)  Such  other  information  as  the Director may
    reasonably require to make the determinations required by
    this Act.
(Source: P.A. 90-618, eff. 7-10-98.)

    (215 ILCS 125/6-3) (from Ch. 111 1/2, par. 1418.3)
    Sec.  6-3.   Scope.   This  Article  applies  to   direct
individual contracts, group contracts and certificates issued
thereunder,  or any other evidence of coverage, each of which
provides for coverage under a health care plan, and has  been
issued   by   organizations   licensed   to  transact  health
maintenance organization business in  this  State  under  the
Health  Maintenance Organization Act, but not to any business
of  such  organization  not  transacted  under   its   health
maintenance  organization  certificate  of  authority.   This
Article  does  not  apply  to  (i)  a  managed care community
network providing or arranging  health  care  services  under
contract  with  the  State  exclusively  to  persons  who are
enrolled in the integrated health  care  program  established
under  Section 5-16.3 of the Illinois Public Aid Code or (ii)
a managed care community network owned, operated, or governed
by a county provider as defined in Section 15-1 of that Code.
(Source: P.A. 88-554, eff. 7-26-94.)

    Section 25.  The Health Care Worker Self-Referral Act  is
amended by changing Section 20 as follows:

    (225 ILCS 47/20)
    Sec. 20.  Prohibited referrals and claims for payment.
    (a)  A  health  care worker shall not refer a patient for
health services to an entity outside the health care worker's
office or group practice in which the health care  worker  is
an  investor, unless the health care worker directly provides
health services within the  entity  and  will  be  personally
involved with the provision of care to the referred patient.
    (b)  Pursuant  to  Board determination that the following
exception is applicable, a health care worker may  invest  in
and refer to an entity, whether or not the health care worker
provides  direct  services  within said entity, if there is a
demonstrated  need  in  the  community  for  the  entity  and
alternative financing is not available.  For purposes of this
subsection (b), "demonstrated need" in the community for  the
entity  may  exist  if (1) there is no facility of reasonable
quality that provides medically appropriate service, (2)  use
of  existing  facilities  is  onerous  or creates too great a
hardship for patients, (3) the entity is  formed  to  own  or
lease  medical equipment which replaces obsolete or otherwise
inadequate equipment in or under the control  of  a  hospital
located  in  a  federally designated health manpower shortage
area, or (4) such other standards as established, by rule, by
the Board.  "Community" shall be defined  as  a  metropolitan
area for a city, and a county for a rural area.  In addition,
the  following provisions must be met to be exempt under this
Section:
         (1)  Individuals who are not in a position to  refer
    patients  to  an entity are given a bona fide opportunity
    to also invest in the entity on the same terms  as  those
    offered a referring health care worker; and
         (2)  No  health  care  worker  who  invests shall be
    required or encouraged to make referrals to the entity or
    otherwise generate business as a condition of becoming or
    remaining an investor; and
         (3)  The entity shall market or furnish its services
    to referring  health  care  worker  investors  and  other
    investors on equal terms; and
         (4)  The  entity  shall  not loan funds or guarantee
    any loans for health care workers who are in  a  position
    to refer to an entity; and
         (5)  The   income   on   the  health  care  worker's
    investment shall be tied  to  the  health  care  worker's
    equity  in  the  facility  rather  than  to the volume of
    referrals made; and
         (6)  Any investment contract between the entity  and
    the  health care worker shall not include any covenant or
    non-competition clause that prevents a health care worker
    from investing in other entities; and
         (7)  When making a referral, a  health  care  worker
    must disclose his investment interest in an entity to the
    patient  being  referred  to  such entity. If alternative
    facilities are  reasonably  available,  the  health  care
    worker   must   provide   the  patient  with  a  list  of
    alternative facilities.  The  health  care  worker  shall
    inform  the  patient  that they have the option to use an
    alternative facility other than one in which  the  health
    care  worker  has  an investment interest and the patient
    will not be treated differently by the health care worker
    if the patient chooses to use another entity. This  shall
    be  applicable  to  all  health  care  worker  investors,
    including  those  who provide direct care or services for
    their  patients  in   entities   outside   their   office
    practices; and
         (8)  If  a  third  party  payor requests information
    with  regard  to  a  health  care   worker's   investment
    interest, the same shall be disclosed; and
         (9)  The   entity   shall   establish   an  internal
    utilization  review  program  to  ensure  that  investing
    health care workers  provided  appropriate  or  necessary
    utilization; and
         (10)  If  a  health care worker's financial interest
    in an entity is incompatible with  a  referred  patient's
    interest,  the  health care worker shall make alternative
    arrangements for the patient's care.
    The Board shall make such a determination  for  a  health
care  worker  within  90 days of a completed written request.
Failure to make such a determination within the 90  day  time
frame  shall mean that no alternative is practical based upon
the facts set forth in the completed written request.
    (c)  It shall not be a violation of this Act for a health
care worker to refer a  patient  for  health  services  to  a
publicly  traded  entity in which he or she has an investment
interest provided that:
         (1)  the entity is listed for  trading  on  the  New
    York Stock Exchange or on the American Stock Exchange, or
    is  a  national  market  system  security traded under an
    automated inter-dealer quotation system operated  by  the
    National Association of Securities Dealers; and
         (2)  the entity had, at the end of the corporation's
    most  recent  fiscal  year,  total net assets of at least
    $30,000,000 related to the furnishing of health services;
    and
         (3)  any  investment  interest  obtained  after  the
    effective date of this Act is  traded  on  the  exchanges
    listed  in  paragraph 1 of subsection (c) of this Section
    after the entity became a  publicly  traded  corporation;
    and
         (4)  the entity markets or furnishes its services to
    referring  health  care worker investors and other health
    care workers on equal terms; and
         (5)  all  stock  held  in   such   publicly   traded
    companies,   including  stock  held  in  the  predecessor
    privately held company, shall be  of  one  class  without
    preferential treatment as to status or remuneration; and
         (6)  the entity does not loan funds or guarantee any
    loans for health care workers who are in a position to be
    referred to an entity; and
         (7)  the   income   on   the  health  care  worker's
    investment is tied to the health care worker's equity  in
    the  entity  rather than to the volume of referrals made;
    and
         (8)  the investment interest does not exceed 1/2  of
    1% of the entity's total equity.
    (d)  Any  hospital  licensed under the Hospital Licensing
Act shall not discriminate against or  otherwise  penalize  a
health care worker for compliance with this Act.
    (e)  Any  health  care  worker  or other entity shall not
enter into an arrangement or scheme seeking to make referrals
to another health  care  worker  or  entity  based  upon  the
condition  that  the  health  care worker or entity will make
referrals with an intent to evade the  prohibitions  of  this
Act  by  inducing patient referrals which would be prohibited
by this Section if the health care worker or entity made  the
referral directly.
    (f)  If compliance with the need and alternative investor
criteria  is  not  practical,  the  health  care worker shall
identify to  the  patient  reasonably  available  alternative
facilities.   The   Board  shall,  by  rule,  designate  when
compliance is "not practical".
    (g)  Health care workers may request from the Board  that
it  render an advisory opinion that a referral to an existing
or proposed entity under specified circumstances does or does
not violate the provisions of this Act.  The Board's  opinion
shall  be  presumptively  correct.  Failure to render such an
advisory opinion  within  90  days  of  a  completed  written
request  pursuant  to  this Section shall create a rebuttable
presumption  that  a  referral  described  in  the  completed
written request is not or will not be  a  violation  of  this
Act.
    (h)  Notwithstanding  any  provision  of  this Act to the
contrary, a health care worker may refer  a patient, who is a
member of a health maintenance organization "HMO" licensed in
this State, for health services to  an  entity,  outside  the
health  care  worker's office or group practice, in which the
health care worker is an investor,  provided  that  any  such
referral  is  made  pursuant  to  a  contract  with  the HMO.
Furthermore, notwithstanding any provision of this Act to the
contrary, a health care worker may refer  an  enrollee  of  a
"managed  care  community  network", as defined in subsection
(b) of Section 5-11 5-16.3 of the Illinois Public  Aid  Code,
for  health  services  to  an entity, outside the health care
worker's office or group practice, in which the  health  care
worker  is  an  investor,  provided that any such referral is
made pursuant to a contract with the managed  care  community
network.
(Source: P.A. 87-1207; 88-554, eff. 7-26-94.)

    Section  30.  The  Illinois Public Aid Code is amended by
changing Sections 5-11, 5-16.9, 5-16.11,  15-2,  15-3,  15-4,
and 15-5 as follows:

    (305 ILCS 5/5-11) (from Ch. 23, par. 5-11)
    Sec.  5-11.  Co-operative  arrangements;  contracts  with
other   State   agencies,   health  care  and  rehabilitation
organizations, and fiscal intermediaries.
    (a)  The Illinois Department may enter into  co-operative
arrangements    with    State    agencies   responsible   for
administering or supervising  the  administration  of  health
services  and  vocational  rehabilitation services to the end
that there may be maximum utilization of such services in the
provision of medical assistance.
    The Illinois Department shall, not later  than  June  30,
1993,  enter  into one or more co-operative arrangements with
the   Department   of   Mental   Health   and   Developmental
Disabilities providing that the Department of  Mental  Health
and   Developmental  Disabilities  will  be  responsible  for
administering or supervising all  programs  for  services  to
persons   in  community  care  facilities  for  persons  with
developmental disabilities,  including  but  not  limited  to
intermediate  care  facilities,  that  are supported by State
funds or by funding under Title XIX  of  the  federal  Social
Security  Act.   The  responsibilities  of  the Department of
Mental Health  and  Developmental  Disabilities  under  these
agreements   are  transferred  to  the  Department  of  Human
Services as provided in the Department of Human Services Act.
    The Department may also contract with such  State  health
and  rehabilitation  agencies  and  other  public  or private
health care and rehabilitation organizations to act for it in
supplying designated medical  services  to  persons  eligible
therefor  under  this  Article.  Any  contracts  with  health
services   or   health  maintenance  organizations  shall  be
restricted to organizations  which  have  been  certified  as
being  in  compliance  with standards promulgated pursuant to
the laws  of  this  State  governing  the  establishment  and
operation   of   health   services   or   health  maintenance
organizations.  The  Department  may   also   contract   with
insurance  companies  or  other corporate entities serving as
fiscal  intermediaries  in  this  State   for   the   Federal
Government  in respect to Medicare payments under Title XVIII
of the Federal Social Security Act to act for the  Department
in  paying medical care suppliers.  The provisions of Section
9 of "An Act in relation to State finance", approved June 10,
1919, as amended, notwithstanding, such contracts with  State
agencies, other health care and rehabilitation organizations,
or fiscal intermediaries may provide for advance payments.
    (b)  For  purposes  of this subsection (b), "managed care
community network" means  an  entity,  other  than  a  health
maintenance   organization,   that  is  owned,  operated,  or
governed by providers of health  care  services  within  this
State  and  that provides or arranges primary, secondary, and
tertiary managed health care services under contract with the
Illinois Department exclusively to persons  participating  in
programs administered by the Illinois Department.
    The   Illinois   Department   may  certify  managed  care
community networks, including managed care community networks
owned, operated, managed, or governed by State-funded medical
schools, as risk-bearing entities eligible to  contract  with
the    Illinois   Department   as   Medicaid   managed   care
organizations.  The Illinois  Department  may  contract  with
those  managed care community networks to furnish health care
services  to  or  arrange  those  services  for   individuals
participating   in  programs  administered  by  the  Illinois
Department.    The   rates   for   those   provider-sponsored
organizations may  be  determined  on  a  prepaid,  capitated
basis.   A  managed  care  community  network  may  choose to
contract  with  the  Illinois  Department  to  provide   only
pediatric health care services. The Illinois Department shall
by  rule  adopt  the  criteria,  standards, and procedures by
which a managed care community network may  be  permitted  to
contract  with the Illinois Department and shall consult with
the Department of Insurance in adopting these rules.
    A county provider as defined in Section 15-1 of this Code
may contract with the Illinois Department to provide primary,
secondary, or tertiary managed  health  care  services  as  a
managed  care community network without the need to establish
a  separate  entity  and  shall  be  deemed  a  managed  care
community network for purposes  of  this  Code  only  to  the
extent  it provides services to participating individuals.  A
county provider is entitled to  contract  with  the  Illinois
Department  with respect to any contracting region located in
whole or in part within the county.  A county provider is not
required to accept enrollees who do  not  reside  within  the
county.
    In order to (i) accelerate and facilitate the development
of  integrated  health  care  in  contracting  areas  outside
counties with populations in excess of 3,000,000 and counties
adjacent  to those counties and (ii) maintain and sustain the
high quality of education and residency programs  coordinated
and  associated  with  local  area  hospitals,  the  Illinois
Department  may develop and implement a demonstration program
from  managed  care  community  networks   owned,   operated,
managed,  or  governed  by State-funded medical schools.  The
Illinois Department shall prescribe  by  rule  the  criteria,
standards,  and  procedures  for effecting this demonstration
program.
    A managed care community network that contracts with  the
Illinois  Department  to  furnish  health care services to or
arrange  those  services  for  enrollees   participating   in
programs administered by the Illinois Department shall do all
of the following:
         (1)  Provide  that  any provider affiliated with the
    managed care community network may also provide  services
    on a fee-for-service basis to Illinois Department clients
    not enrolled in such managed care entities.
         (2)  Provide client education services as determined
    and  approved  by  the Illinois Department, including but
    not  limited  to  (i)  education  regarding   appropriate
    utilization  of  health  care  services in a managed care
    system, (ii) written disclosure of treatment policies and
    restrictions   or   limitations   on   health   services,
    including,  but  not  limited  to,   physical   services,
    clinical   laboratory   tests,   hospital   and  surgical
    procedures,  prescription  drugs   and   biologics,   and
    radiological  examinations, and (iii) written notice that
    the enrollee may  receive  from  another  provider  those
    covered  services  that  are  not provided by the managed
    care community network.
         (3)  Provide that enrollees within  the  system  may
    choose  the  site for provision of services and the panel
    of health care providers.
         (4)  Not discriminate in enrollment or disenrollment
    practices  among  recipients  of  medical   services   or
    enrollees based on health status.
         (5)  Provide  a  quality  assurance  and utilization
    review program that meets the requirements established by
    the Illinois Department in rules that  incorporate  those
    standards   set   forth   in   the   Health   Maintenance
    Organization Act.
         (6)  Issue   a   managed   care   community  network
    identification card to  each  enrollee  upon  enrollment.
    The card must contain all of the following:
              (A)  The enrollee's health plan.
              (B)  The  name  and  telephone  number  of  the
         enrollee's  primary  care  physician or the site for
         receiving primary care services.
              (C)  A telephone number to be used  to  confirm
         eligibility   for  benefits  and  authorization  for
         services that is available 24 hours per day, 7  days
         per week.
         (7)  Ensure  that  every  primary care physician and
    pharmacy in the managed care community network meets  the
    standards  established  by  the  Illinois  Department for
    accessibility  and  quality  of  care.     The   Illinois
    Department shall arrange for and oversee an evaluation of
    the  standards  established  under this paragraph (7) and
    may recommend any necessary changes to these standards.
         (8)  Provide a  procedure  for  handling  complaints
    that  meets  the requirements established by the Illinois
    Department in rules that incorporate those standards  set
    forth in the Health Maintenance Organization Act.
         (9)  Maintain,  retain,  and  make  available to the
    Illinois Department records, data, and information, in  a
    uniform  manner  determined  by  the Illinois Department,
    sufficient  for  the  Illinois  Department   to   monitor
    utilization, accessibility, and quality of care.
         (10)  Provide  that  the  pharmacy formulary used by
    the managed  care  community  network  and  its  contract
    providers  be  no  more  restrictive  than  the  Illinois
    Department's pharmaceutical program on the effective date
    of  this amendatory Act of 1998 and as amended after that
    date.
    The Illinois Department shall contract with an entity  or
entities  to  provide  external  peer-based quality assurance
review for the managed health care programs  administered  by
the  Illinois Department.  The entity shall be representative
of Illinois physicians licensed to practice medicine  in  all
its  branches and have statewide geographic representation in
all specialities of medical care that are provided in managed
health care programs administered by the Illinois Department.
The entity may not be a third party payer and shall  maintain
offices  in  locations  around  the State in order to provide
service  and  continuing  medical  education   to   physician
participants   within  those  managed  health  care  programs
administered by the Illinois Department.  The review  process
shall  be  developed  and  conducted  by  Illinois physicians
licensed to  practice  medicine  in  all  its  branches.   In
consultation  with  the  entity,  the Illinois Department may
contract with  other  entities  for  professional  peer-based
quality assurance review of individual categories of services
other  than  services provided, supervised, or coordinated by
physicians licensed to practice medicine in all its branches.
The Illinois Department shall establish, by rule, criteria to
avoid  conflicts  of  interest  in  the  conduct  of  quality
assurance activities consistent with professional peer-review
standards.   All  quality  assurance  activities   shall   be
coordinated by the Illinois Department.
    Each  managed care community network must demonstrate its
ability to bear the financial  risk  of  serving  individuals
under  this  program.  The  Illinois Department shall by rule
adopt standards for  assessing  the  solvency  and  financial
soundness   of  each  managed  care  community  network.  Any
solvency and financial standards  adopted  for  managed  care
community  networks  shall  be  no  more restrictive than the
solvency  and  financial  standards  adopted  under   Section
1856(a)  of  the  Social  Security Act for provider-sponsored
organizations under Part C  of  Title  XVIII  of  the  Social
Security Act.
    The  Illinois  Department  may  implement  the amendatory
changes to this Code made by  this  amendatory  Act  of  1998
through the use of emergency rules in accordance with Section
5-45  of  the  Illinois  Administrative  Procedure  Act.  For
purposes of that Act, the  adoption  of  rules  to  implement
these  changes  is  deemed an emergency and necessary for the
public interest, safety, and welfare.
    (c)  Not  later  than  June  30,   1996,   the   Illinois
Department   shall   enter   into  one  or  more  cooperative
arrangements with the Department of  Public  Health  for  the
purpose of developing a single survey for nursing facilities,
including  but  not  limited to facilities funded under Title
XVIII or Title XIX of the  federal  Social  Security  Act  or
both, which shall be administered and conducted solely by the
Department  of  Public Health. The Departments shall test the
single survey  process  on  a  pilot  basis,  with  both  the
Departments  of  Public  Aid and Public Health represented on
the consolidated survey team.  The pilot will sunset June 30,
1997.  After June 30, 1997, unless  otherwise  determined  by
the  Governor,  a  single  survey shall be implemented by the
Department of Public Health which would  not  preclude  staff
from  the  Department  of  Public  Aid  from going on-site to
nursing facilities to perform necessary  audits  and  reviews
which  shall  not  replicate  the  single State agency survey
required by this  Act.   This  Section  shall  not  apply  to
community  or  intermediate  care facilities for persons with
developmental disabilities.
    (d)  Nothing in this Code in any way limits or  otherwise
impairs  the authority or power of the Illinois Department to
enter into a negotiated contract  pursuant  to  this  Section
with a managed care community network or a health maintenance
organization,   as   defined   in   the   Health  Maintenance
Organization Act, that provides for termination or nonrenewal
of the contract without cause, upon notice as provided in the
contract, and without a hearing.
(Source: P.A.  89-415,  eff.  1-1-96;  89-507,  eff.  7-1-97;
90-618, eff. 7-10-98.)

    (305 ILCS 5/5-16.9)
    Sec. 5-16.9.  Woman's health care provider.  The  medical
assistance  program  is  subject to the provisions of Section
356r of the Illinois Insurance Code.  The Illinois Department
shall adopt rules to implement the  requirements  of  Section
356r of the Illinois Insurance Code in the medical assistance
program  including managed care components defined in Section
5-16.3.
(Source: P.A. 89-514, eff. 7-17-96.)

    (305 ILCS 5/5-16.11)
    Sec. 5-16.11.  Uniform standards applied to managed  care
entities.   Any  managed care entity providing services under
this Code shall use a pharmacy  formulary  that  is  no  more
restrictive  than  the  Illinois  Department's pharmaceutical
program comply with the criteria, standards,  and  procedures
imposed  on  managed  care  entities  under paragraph (14) of
subsection (d) of Section 5-16.3 of this Code.
(Source: P.A. 90-538, eff. 12-1-97.)

    (305 ILCS 5/15-2) (from Ch. 23, par. 15-2)
    Sec. 15-2. County Provider Trust Fund.
    (a)  There is created in the State  Treasury  the  County
Provider  Trust  Fund.   Interest earned by the Fund shall be
credited to the Fund.  The Fund shall not be used to  replace
any funds appropriated to the Medicaid program by the General
Assembly.
    (b)  The  Fund  is  created  solely  for  the purposes of
receiving, investing, and distributing monies  in  accordance
with this Article XV.  The Fund shall consist of:
         (1)  All   monies   collected  or  received  by  the
    Illinois Department under Section 15-3 of this Code;
         (2)  All  federal  financial  participation   monies
    received by the Illinois Department pursuant to Title XIX
    of   the   Social   Security   Act,  42  U.S.C.  1396(b),
    attributable  to  eligible  expenditures  made   by   the
    Illinois  Department  pursuant  to  Section  15-5 of this
    Code;
         (3)  All federal moneys  received  by  the  Illinois
    Department  pursuant  to Title XXI of the Social Security
    Act attributable to eligible  expenditures  made  by  the
    Illinois  Department  pursuant  to  Section  15-5 of this
    Code; and
         (4)  All other monies received by the Fund from  any
    source, including interest thereon.
    (c)  Disbursements  from  the  Fund  shall be by warrants
drawn by the State Comptroller upon receipt of vouchers  duly
executed  and  certified by the Illinois Department and shall
be made only:
         (1)  For   hospital   inpatient    care,    hospital
    outpatient   care,  care  provided  by  other  outpatient
    facilities operated by  a  county,  and  disproportionate
    share  hospital  payments  made  under  Title  XIX of the
    Social Security  Act  and  Article  V  of  this  Code  as
    required by Section 15-5 of this Code;
         (1.5)  For  services  provided  by  county providers
    pursuant to Section 5-11 or 5-16.3 of this Code;
         (2)  For   the   reimbursement   of   administrative
    expenses incurred by county providers on  behalf  of  the
    Illinois  Department as permitted by Section 15-4 of this
    Code;
         (3)  For the reimbursement of monies received by the
    Fund through error or mistake;
         (4)  For  the  payment  of  administrative  expenses
    necessarily incurred by the Illinois  Department  or  its
    agent  in  performing  the  activities  required  by this
    Article XV;
         (5)  For  the  payment  of  any  amounts  that   are
    reimbursable  to  the  federal  government,  attributable
    solely  to  the  Fund,  and  required to be paid by State
    warrant; and
         (6)  For   hospital   inpatient    care,    hospital
    outpatient   care,  care  provided  by  other  outpatient
    facilities operated by  a  county,  and  disproportionate
    share  hospital  payments  made  under  Title  XXI of the
    Social Security Act, pursuant to  Section  15-5  of  this
    Code.
(Source: P.A. 90-618, eff. 7-10-98; 91-24, eff. 7-1-99.)

    (305 ILCS 5/15-3) (from Ch. 23, par. 15-3)
    Sec. 15-3.  Intergovernmental Transfers.
    (a)  Each   qualifying   county   shall  make  an  annual
intergovernmental transfer to the Illinois Department  in  an
amount  equal  to  71.7%  of the difference between the total
payments made by  the  Illinois  Department  to  such  county
provider  for  hospital  services under Titles XIX and XXI of
the Social Security Act or pursuant to Section 5-11 or 5-16.3
of this Code in each fiscal year ending June 30 (or  fraction
thereof  during  the  fiscal  year  ending June 30, 1993) and
$108,800,000 (or fraction thereof), except  that  the  annual
intergovernmental   transfer   shall  not  exceed  the  total
payments made by  the  Illinois  Department  to  such  county
provider for hospital services under this Code or pursuant to
Section  5-16.3  of  this  Code,  less  the sum of (i) 50% of
payments reimbursable under the Social Security Act at a rate
of 50% and (ii) 65% of payments reimbursable under the Social
Security Act at a rate of 65%, in  each  fiscal  year  ending
June 30 (or fraction thereof).
    (b)  The   payment  schedule  for  the  intergovernmental
transfer   made   hereunder   shall   be    established    by
intergovernmental  agreement  between the Illinois Department
and the applicable county, which agreement shall at a minimum
provide:
         (1)  For periodic payments no less  frequently  than
    monthly   to   the  county  provider  for  inpatient  and
    outpatient  approved  or  adjudicated  claims   and   for
    disproportionate  share  payments under Section 5-5.02 of
    this Code (in the initial year, for services  after  July
    1,  1991, or such other date as an approved State Medical
    Assistance Plan shall provide) and to the county provider
    pursuant to Section 5-16.3 of this Code.
         (2)  For periodic payments no less  frequently  than
    monthly   to   the   county   provider  for  supplemental
    disproportionate share  payments  hereunder  based  on  a
    federally approved State Medical Assistance Plan.
         (3)  For   calculation   of   the  intergovernmental
    transfer payment to be made by the county equal to  71.7%
    of  the  difference  between  the  amount of the periodic
    payment and the base amount; provided, however,  that  if
    the periodic payment for any period is less than the base
    amount   for   such  period,  the  base  amount  for  the
    succeeding  period  (and   any   successive   period   if
    necessary)  shall  be  increased  by  the  amount of such
    shortfall.
         (4)  For an intergovernmental  transfer  methodology
    which  obligates  the  Illinois  Department to notify the
    county and county provider in writing of  each  impending
    periodic   payment  and  the  intergovernmental  transfer
    payment attributable  thereto  and  which  obligates  the
    Comptroller to release the periodic payment to the county
    provider  within  one  working  day  of  receipt  of  the
    intergovernmental transfer payment from the county.
(Source: P.A. 90-618, eff. 7-10-98; 91-24, eff. 7-1-99.)

    (305 ILCS 5/15-4) (from Ch. 23, par. 15-4)
    Sec.  15-4.  Contractual  assumption of certain expenses.
Hospitals  may,  at  their  election,  by  written  agreement
between the counties owning and operating the  hospitals  and
the  Illinois  Department,  assume  specified expenses of the
operation of the  Illinois  Department  associated  with  the
determination   of   eligibility,  direct  payment  of  which
expenses by the Illinois Department would qualify  as  public
funds  expended  by  the Illinois Department for the Illinois
Medical Assistance Program  or  other  health  care  programs
administered   by  the  Illinois  Department.   The  Illinois
Department shall open an adequately staffed  special  on-site
office  or offices at facilities designated by the county for
the purpose of assisting the  county  in  ensuring  that  all
eligible  individuals  are  enrolled  in the Illinois Medical
Assistance Program and, to the extent  that  enrollment  into
the  integrated health care program established under Section
5-16.3 of this Code is conducted at local  public  assistance
offices  in  the  county,  for  the  purpose of enrollment of
persons into any managed health care entity operated  by  the
county.   The  enrollment process shall meet the requirements
of subsection (e) of Section 5-16.3.   Each  such  agreement,
executed    in    accordance    with   Section   3   of   the
Intergovernmental  Cooperation  Act,   shall   describe   the
operational  expenses  to  be assumed in sufficient detail to
permit the Illinois Department to certify upon  such  written
obligation  or  performance  thereunder  that  the hospital's
compliance with the terms of the agreement will amount to the
commitment of public funds eligible for the federal financial
participation or other federal funding called  for  in  Title
XIX or Title XXI of the Social Security Act.
(Source: P.A. 91-24, eff. 7-1-99.)

    (305 ILCS 5/15-5) (from Ch. 23, par. 15-5)
    Sec. 15-5. Disbursements from the Fund.
    (a)  The  monies  in  the Fund shall be disbursed only as
provided in Section 15-2 of this Code and as follows:
         (1)  To  pay   the   county   hospitals'   inpatient
    reimbursement rate based on actual costs, trended forward
    annually  by  an  inflation  index  and  supplemented  by
    teaching,  capital,  and other direct and indirect costs,
    according  to  a  State  plan  approved  by  the  federal
    government.  Effective October  1,  1992,  the  inpatient
    reimbursement  rate  (including  any  disproportionate or
    supplemental   disproportionate   share   payments)   for
    hospital services provided by county operated  facilities
    within the County shall be no less than the reimbursement
    rates in effect on June 1, 1992, except that this minimum
    shall  be  adjusted  as  of  July 1, 1992 and each July 1
    thereafter by the annual percentage  change  in  the  per
    diem  cost  of inpatient hospital services as reported in
    the most recent annual Medicaid cost report.
         (2)  To pay county  hospitals  and  county  operated
    outpatient  facilities for outpatient services based on a
    federally  approved  methodology  to  cover  the  maximum
    allowable costs per patient visit.  Effective October  1,
    1992,  the  outpatient  reimbursement rate for outpatient
    services provided by county hospitals and county operated
    outpatient  facilities  shall  be  no   less   than   the
    reimbursement  rates  in  effect  on June 1, 1992, except
    that this minimum shall be adjusted as of  July  1,  1992
    and  each  July  1  thereafter  by  the annual percentage
    change  in  the  per  diem  cost  of  inpatient  hospital
    services as reported in the most recent  annual  Medicaid
    cost report.
         (3)  To  pay  the county hospitals' disproportionate
    share payments as established by the Illinois  Department
    under  Section 5-5.02 of this Code.  Effective October 1,
    1992, the disproportionate share  payments  for  hospital
    services  provided  by  county operated facilities within
    the County shall be no less than the reimbursement  rates
    in effect on June 1, 1992, except that this minimum shall
    be adjusted as of July 1, 1992 and each July 1 thereafter
    by  the  annual percentage change in the per diem cost of
    inpatient hospital  services  as  reported  in  the  most
    recent annual Medicaid cost report.
         (3.5)  To pay county providers for services provided
    pursuant to Section 5-11 or 5-16.3 of this Code.
         (4)  To  reimburse the county providers for expenses
    contractually assumed pursuant to Section  15-4  of  this
    Code.
         (5)  To  pay  the  Illinois Department its necessary
    administrative expenses relative to the  Fund  and  other
    amounts agreed to, if any, by the county providers in the
    agreement provided for in subsection (c).
         (6)  To   pay  the  county  hospitals'  supplemental
    disproportionate share payments,  hereby  authorized,  as
    specified in the agreement provided for in subsection (c)
    and   according  to  a  federally  approved  State  plan.
    Effective   October    1,    1992,    the    supplemental
    disproportionate  share  payments  for  hospital services
    provided by county operated facilities within the  County
    shall  be  no less than the reimbursement rates in effect
    on June 1,  1992,  except  that  this  minimum  shall  be
    adjusted as of July 1, 1992 and each July 1 thereafter by
    the  annual  percentage  change  in  the per diem cost of
    inpatient hospital  services  as  reported  in  the  most
    recent annual Medicaid cost report.
    (b)  The  Illinois  Department  shall  promptly  seek all
appropriate amendments to the Illinois State Plan  to  effect
the foregoing payment methodology.
    (c)  The  Illinois Department shall implement the changes
made by Article 3 of this amendatory Act  of  1992  beginning
October   1,   1992.    All   terms  and  conditions  of  the
disbursement of monies from the Fund not set forth  expressly
in  this Article shall be set forth in the agreement executed
under the Intergovernmental Cooperation Act so long as  those
terms  and  conditions are not inconsistent with this Article
or applicable federal law.   The  Illinois  Department  shall
report   in  writing  to  the  Hospital  Service  Procurement
Advisory Board and the Health Care Cost  Containment  Council
by  October  15,  1992,  the terms and conditions of all such
initial agreements and, where no such initial  agreement  has
yet  been  executed  with  a  qualifying county, the Illinois
Department's reasons that each such initial agreement has not
been executed.  Copies  and  reports  of  amended  agreements
following  the  initial agreements shall likewise be filed by
the Illinois Department with the Hospital Service Procurement
Advisory Board and the Health Care Cost  Containment  Council
within  30  days  following  their  execution.  The foregoing
filing   obligations   of   the   Illinois   Department   are
informational  only,  to  allow  the   Board   and   Council,
respectively,  to  better  perform their public roles, except
that the Board or Council may, at its discretion, advise  the
Illinois  Department  in  the  case  of  the  failure  of the
Illinois Department to reach agreement  with  any  qualifying
county by the required date.
    (d)  The  payments  provided  for  herein are intended to
cover services rendered on and after July 1,  1991,  and  any
agreement  executed  between  a  qualifying  county  and  the
Illinois  Department pursuant to this Section may relate back
to  that  date,  provided  the  Illinois  Department  obtains
federal approval.  Any changes  in  payment  rates  resulting
from  the  provisions  of Article 3 of this amendatory Act of
1992 are intended to apply to services rendered on  or  after
October  1,  1992,  and  any  agreement  executed  between  a
qualifying  county  and  the  Illinois Department pursuant to
this Section may be effective as of that date.
    (e)  If one or more hospitals  file  suit  in  any  court
challenging   any  part  of  this  Article  XV,  payments  to
hospitals from the Fund under this Article XV shall  be  made
only  to  the  extent that sufficient monies are available in
the Fund and only to the extent that any monies in  the  Fund
are  not  prohibited  from  disbursement and may be disbursed
under any order of the court.
    (f)  All payments under this Section are contingent  upon
federal  approval  of  changes  to  the  State  plan, if that
approval is required.
(Source: P.A. 90-618, eff. 7-10-98.)

    (305 ILCS 5/5-16.3 rep.)
    Section 31.  The Illinois Public Aid Code is  amended  by
repealing Section 5-16.3.

    Section  99.  Effective date.  This Act takes effect upon
becoming law.
    Passed in the General Assembly May 23, 2001.
    Approved August 15, 2001.

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