Public Act 0841 93RD GENERAL ASSEMBLY

SB2208 Enrolled LRB093 15827 RCE 41444 b

Public Act 093-0841

AN ACT in relation to budget implementation.

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

Section 1. Short title. This Act may be cited as the FY2005

Budget Implementation (Human Services) Act.

Section 5. Purpose. It is the purpose of this Act to make

changes in State programs that are necessary to implement the

Governor's FY2005 budget recommendations concerning human

services.

Section 7. The Illinois Administrative Procedure Act is

amended by changing Section 5-45 as follows:

(5 ILCS 100/5-45) (from Ch. 127, par. 1005-45)

Sec. 5-45. Emergency rulemaking.

(a) "Emergency" means the existence of any situation that

any agency finds reasonably constitutes a threat to the public

interest, safety, or welfare.

(b) If any agency finds that an emergency exists that

requires adoption of a rule upon fewer days than is required by

Section 5-40 and states in writing its reasons for that

finding, the agency may adopt an emergency rule without prior

notice or hearing upon filing a notice of emergency rulemaking

with the Secretary of State under Section 5-70. The notice

shall include the text of the emergency rule and shall be

published in the Illinois Register. Consent orders or other

court orders adopting settlements negotiated by an agency may

be adopted under this Section. Subject to applicable

constitutional or statutory provisions, an emergency rule

becomes effective immediately upon filing under Section 5-65 or

at a stated date less than 10 days thereafter. The agency's

finding and a statement of the specific reasons for the finding

shall be filed with the rule. The agency shall take reasonable

and appropriate measures to make emergency rules known to the

persons who may be affected by them.

(c) An emergency rule may be effective for a period of not

longer than 150 days, but the agency's authority to adopt an

identical rule under Section 5-40 is not precluded. No

emergency rule may be adopted more than once in any 24 month

period, except that this limitation on the number of emergency

rules that may be adopted in a 24 month period does not apply

to (i) emergency rules that make additions to and deletions

from the Drug Manual under Section 5-5.16 of the Illinois

Public Aid Code or the generic drug formulary under Section

3.14 of the Illinois Food, Drug and Cosmetic Act or (ii)

emergency rules adopted by the Pollution Control Board before

July 1, 1997 to implement portions of the Livestock Management

Facilities Act. Two or more emergency rules having

substantially the same purpose and effect shall be deemed to be

a single rule for purposes of this Section.

(d) In order to provide for the expeditious and timely

implementation of the State's fiscal year 1999 budget,

emergency rules to implement any provision of Public Act 90-587

or 90-588 or any other budget initiative for fiscal year 1999

may be adopted in accordance with this Section by the agency

charged with administering that provision or initiative,

except that the 24-month limitation on the adoption of

emergency rules and the provisions of Sections 5-115 and 5-125

do not apply to rules adopted under this subsection (d). The

adoption of emergency rules authorized by this subsection (d)

shall be deemed to be necessary for the public interest,

safety, and welfare.

(e) In order to provide for the expeditious and timely

implementation of the State's fiscal year 2000 budget,

emergency rules to implement any provision of this amendatory

Act of the 91st General Assembly or any other budget initiative

for fiscal year 2000 may be adopted in accordance with this

Section by the agency charged with administering that provision

or initiative, except that the 24-month limitation on the

adoption of emergency rules and the provisions of Sections

5-115 and 5-125 do not apply to rules adopted under this

subsection (e). The adoption of emergency rules authorized by

this subsection (e) shall be deemed to be necessary for the

public interest, safety, and welfare.

(f) In order to provide for the expeditious and timely

implementation of the State's fiscal year 2001 budget,

emergency rules to implement any provision of this amendatory

Act of the 91st General Assembly or any other budget initiative

for fiscal year 2001 may be adopted in accordance with this

Section by the agency charged with administering that provision

or initiative, except that the 24-month limitation on the

adoption of emergency rules and the provisions of Sections

5-115 and 5-125 do not apply to rules adopted under this

subsection (f). The adoption of emergency rules authorized by

this subsection (f) shall be deemed to be necessary for the

public interest, safety, and welfare.

(g) In order to provide for the expeditious and timely

implementation of the State's fiscal year 2002 budget,

emergency rules to implement any provision of this amendatory

Act of the 92nd General Assembly or any other budget initiative

for fiscal year 2002 may be adopted in accordance with this

Section by the agency charged with administering that provision

or initiative, except that the 24-month limitation on the

adoption of emergency rules and the provisions of Sections

5-115 and 5-125 do not apply to rules adopted under this

subsection (g). The adoption of emergency rules authorized by

this subsection (g) shall be deemed to be necessary for the

public interest, safety, and welfare.

(h) In order to provide for the expeditious and timely

implementation of the State's fiscal year 2003 budget,

emergency rules to implement any provision of this amendatory

Act of the 92nd General Assembly or any other budget initiative

for fiscal year 2003 may be adopted in accordance with this

Section by the agency charged with administering that provision

or initiative, except that the 24-month limitation on the

adoption of emergency rules and the provisions of Sections

5-115 and 5-125 do not apply to rules adopted under this

subsection (h). The adoption of emergency rules authorized by

this subsection (h) shall be deemed to be necessary for the

public interest, safety, and welfare.

(i) In order to provide for the expeditious and timely

implementation of the State's fiscal year 2004 budget,

emergency rules to implement any provision of this amendatory

Act of the 93rd General Assembly or any other budget initiative

for fiscal year 2004 may be adopted in accordance with this

Section by the agency charged with administering that provision

or initiative, except that the 24-month limitation on the

adoption of emergency rules and the provisions of Sections

5-115 and 5-125 do not apply to rules adopted under this

subsection (i). The adoption of emergency rules authorized by

this subsection (i) shall be deemed to be necessary for the

public interest, safety, and welfare.

(j) In order to provide for the expeditious and timely

implementation of the provisions of the State's fiscal year

2005 budget as provided under the Fiscal Year 2005 Budget

Implementation (Human Services) Act, emergency rules to

implement any provision of the Fiscal Year 2005 Budget

Implementation (Human Services) Act may be adopted in

accordance with this Section by the agency charged with

administering that provision, except that the 24-month

limitation on the adoption of emergency rules and the

provisions of Sections 5-115 and 5-125 do not apply to rules

adopted under this subsection (j). The Department of Public Aid

may also adopt rules under this subsection (j) necessary to

administer the Illinois Public Aid Code and the Children's

Health Insurance Program Act. The adoption of emergency rules

authorized by this subsection (j) shall be deemed to be

necessary for the public interest, safety, and welfare.

(Source: P.A. 92-10, eff. 6-11-01; 92-597, eff. 6-28-02; 93-20,

eff. 6-20-03.)

Section 10. The Mental Health and Developmental

Disabilities Administrative Act is amended by changing Section

18.4 and adding Section 18.5 as follows:

(20 ILCS 1705/18.4)

Sec. 18.4. Community Mental Health Medicaid Trust Fund;

reimbursement.

(a) The Community Mental Health Medicaid Trust Fund is

hereby created in the State Treasury.

(b) Except as otherwise provided in this Section, any Any

funds paid to the State by the federal government under Title

XIX or Title XXI of the Social Security Act for services

delivered by community mental health services providers, and

any interest earned thereon, shall be deposited directly into

the Community Mental Health Medicaid Trust Fund. Beginning with

State fiscal year 2005, the first $95,000,000 received by the

Department shall be deposited 26.3% into the General Revenue

Fund and 73.7% into the Community Mental Health Medicaid Trust

Fund. Amounts received in excess of $95,000,000 in any State

fiscal year shall be deposited 50% into the General Revenue

Fund and 50% into the Community Mental Health Medicaid Trust

Fund. The Department shall analyze the budgeting and

programmatic impact of this funding allocation and report to

the Governor and the General Assembly the results of this

analysis and any recommendations for change, no later than

December 31, 2005.

(c) The Department shall reimburse community mental health

services providers for Medicaid-reimbursed mental health

services provided to eligible individuals. Moneys in the

Community Mental Health Medicaid Trust Fund may be used for

that purpose.

(d) As used in this Section:

"Medicaid-reimbursed mental health services" means

services provided by a community mental health provider under

an agreement with the Department that is eligible for

reimbursement under the federal Title XIX program or Title XXI

program.

"Provider" means a community agency that is funded by the

Department to provide a Medicaid-reimbursed service.

"Services" means mental health services provided under one

of the following programs:

(1) Medicaid Clinic Option;

(2) Medicaid Rehabilitation Option;

(3) Targeted Case Management.

(Source: P.A. 92-597, eff. 6-28-02.)

(20 ILCS 1705/18.5 new)

Sec. 18.5. Community Developmental Disability Services

Medicaid Trust Fund; reimbursement.

(a) The Community Developmental Disability Services

Medicaid Trust Fund is hereby created in the State treasury.

(b) Any funds in excess of $16,700,000 in any fiscal year

paid to the State by the federal government under Title XIX or

Title XXI of the Social Security Act for services delivered by

community developmental disability services providers for

services relating to Developmental Training and Community

Integrated Living Arrangements as a result of the conversion of

such providers from a grant payment methodology to a

fee-for-service payment methodology, or any other funds paid to

the State for any subsequent revenue maximization initiatives

performed by such providers, and any interest earned thereon,

shall be deposited directly into the Community Developmental

Disability Services Medicaid Trust Fund. One-third of this

amount shall be used only to pay for Medicaid-reimbursed

community developmental disability services provided to

eligible individuals, and the remainder shall be transferred to

the General Revenue Fund.

(c) For purposes of this Section:

"Medicaid-reimbursed developmental disability services"

means services provided by a community developmental

disability provider under an agreement with the Department that

is eligible for reimbursement under the federal Title XIX

program or Title XXI program.

"Provider" means a qualified entity as defined in the

State's Home and Community-Based Services Waiver for Persons

with Developmental Disabilities that is funded by the

Department to provide a Medicaid-reimbursed service.

"Revenue maximization alternatives" do not include

increases in funds paid to the State as a result of growth in

spending through service expansion or rate increases.

Section 20. The State Finance Act is amended by changing

Sections 6z-58 and 25 and by adding Section 8.55 as follows:

(30 ILCS 105/6z-58)

Sec. 6z-58. The Family Care Fund.

(a) There is created in the State treasury the Family Care

Fund. Interest earned by the Fund shall be credited to the

Fund.

(b) The Fund is created solely for the purposes of

receiving, investing, and distributing moneys in accordance

with (i) an approved waiver under the Social Security Act

resulting from the Family Care waiver request submitted by the

Illinois Department of Public Aid on February 15, 2002 and (ii)

an interagency agreement between the Department of Public Aid

and another agency of State government. The Fund shall consist

of:

(1) All federal financial participation moneys

received pursuant to the approved waiver, except for moneys

received pursuant to expenditures for medical services by

the Department of Public Aid from any other fund; and

(2) All other moneys received by the Fund from any

source, including interest thereon.

(c) Subject to appropriation, the moneys in the Fund shall

be disbursed for reimbursement of medical services and other

costs associated with persons receiving such services:

(1) under programs administered by the Department of

Public Aid; and

(2) pursuant to an interagency agreement, under

programs administered by another agency of State

government. under the waiver due to their relationship with

children receiving medical services pursuant to Article V

of the Illinois Public Aid Code or the Children's Health

Insurance Program Act.

(Source: P.A. 92-600, eff. 6-28-02; 93-20, eff. 6-20-03.)

(30 ILCS 105/8.55 new)

Sec. 8.55. Interfund transfers. On or after July 1, 2004

and until June 30, 2006, in addition to any other transfers

that may be provided for by law, at the direction of and upon

notification from the Director of Public Aid, the State

Comptroller shall direct and the State Treasurer shall transfer

amounts into the General Revenue Fund from the designated funds

not exceeding the following totals:

Hospital Provider Fund............................$36,000,000

Health and Human Services Medicaid Trust Fund...$124,000,000.

Transfers of moneys under this Section may not exceed a

total of $80,000,000 in any State fiscal year.

(30 ILCS 105/25) (from Ch. 127, par. 161)

Sec. 25. Fiscal year limitations.

(a) All appropriations shall be available for expenditure

for the fiscal year or for a lesser period if the Act making

that appropriation so specifies. A deficiency or emergency

appropriation shall be available for expenditure only through

June 30 of the year when the Act making that appropriation is

enacted unless that Act otherwise provides.

(b) Outstanding liabilities as of June 30, payable from

appropriations which have otherwise expired, may be paid out of

the expiring appropriations during the 2-month period ending at

the close of business on August 31. Any service involving

professional or artistic skills or any personal services by an

employee whose compensation is subject to income tax

withholding must be performed as of June 30 of the fiscal year

in order to be considered an "outstanding liability as of June

30" that is thereby eligible for payment out of the expiring

appropriation.

However, payment of tuition reimbursement claims under

Section 14-7.03 or 18-3 of the School Code may be made by the

State Board of Education from its appropriations for those

respective purposes for any fiscal year, even though the claims

reimbursed by the payment may be claims attributable to a prior

fiscal year, and payments may be made at the direction of the

State Superintendent of Education from the fund from which the

appropriation is made without regard to any fiscal year

limitations.

Medical payments may be made by the Department of Veterans'

Affairs from its appropriations for those purposes for any

fiscal year, without regard to the fact that the medical

services being compensated for by such payment may have been

rendered in a prior fiscal year.

Medical payments may be made by the Department of Public

Aid and medical payments and child care payments may be made by

the Department of Human Services (as successor to the

Department of Public Aid) from appropriations for those

purposes for any fiscal year, without regard to the fact that

the medical or child care services being compensated for by

such payment may have been rendered in a prior fiscal year; and

payments may be made at the direction of the Department of

Central Management Services from the Health Insurance Reserve

Fund and the Local Government Health Insurance Reserve Fund

without regard to any fiscal year limitations.

Medical payments may be made by the Department of Human

Services from its appropriations relating to substance abuse

treatment services for any fiscal year, without regard to the

fact that the medical services being compensated for by such

payment may have been rendered in a prior fiscal year, provided

the payments are made on a fee-for-service basis consistent

with requirements established for Medicaid reimbursement by

the Department of Public Aid.

Additionally, payments may be made by the Department of

Human Services from its appropriations, or any other State

agency from its appropriations with the approval of the

Department of Human Services, from the Immigration Reform and

Control Fund for purposes authorized pursuant to the

Immigration Reform and Control Act of 1986, without regard to

any fiscal year limitations.

Further, with respect to costs incurred in fiscal years

2002 and 2003 only, payments may be made by the State Treasurer

from its appropriations from the Capital Litigation Trust Fund

without regard to any fiscal year limitations.

Lease payments may be made by the Department of Central

Management Services under the sale and leaseback provisions of

Section 7.4 of the State Property Control Act with respect to

the James R. Thompson Center and the Elgin Mental Health Center

and surrounding land from appropriations for that purpose

without regard to any fiscal year limitations.

Lease payments may be made under the sale and leaseback

provisions of Section 7.5 of the State Property Control Act

with respect to the Illinois State Toll Highway Authority

headquarters building and surrounding land without regard to

any fiscal year limitations.

(c) Further, payments may be made by the Department of

Public Health and the Department of Human Services (acting as

successor to the Department of Public Health under the

Department of Human Services Act) from their respective

appropriations for grants for medical care to or on behalf of

persons suffering from chronic renal disease, persons

suffering from hemophilia, rape victims, and premature and

high-mortality risk infants and their mothers and for grants

for supplemental food supplies provided under the United States

Department of Agriculture Women, Infants and Children

Nutrition Program, for any fiscal year without regard to the

fact that the services being compensated for by such payment

may have been rendered in a prior fiscal year.

(d) The Department of Public Health and the Department of

Human Services (acting as successor to the Department of Public

Health under the Department of Human Services Act) shall each

annually submit to the State Comptroller, Senate President,

Senate Minority Leader, Speaker of the House, House Minority

Leader, and the respective Chairmen and Minority Spokesmen of

the Appropriations Committees of the Senate and the House, on

or before December 31, a report of fiscal year funds used to

pay for services provided in any prior fiscal year. This report

shall document by program or service category those

expenditures from the most recently completed fiscal year used

to pay for services provided in prior fiscal years.

(e) The Department of Public Aid, and the Department of

Human Services (acting as successor to the Department of Public

Aid), and the Department of Human Services making

fee-for-service payments relating to substance abuse treatment

services provided during a previous fiscal year shall each

annually submit to the State Comptroller, Senate President,

Senate Minority Leader, Speaker of the House, House Minority

Leader, the respective Chairmen and Minority Spokesmen of the

Appropriations Committees of the Senate and the House, on or

before November 30, a report that shall document by program or

service category those expenditures from the most recently

completed fiscal year used to pay for (i) services provided in

prior fiscal years and (ii) services for which claims were

received in prior fiscal years.

(f) The Department of Human Services (as successor to the

Department of Public Aid) shall annually submit to the State

Comptroller, Senate President, Senate Minority Leader, Speaker

of the House, House Minority Leader, and the respective

Chairmen and Minority Spokesmen of the Appropriations

Committees of the Senate and the House, on or before December

31, a report of fiscal year funds used to pay for services

(other than medical care) provided in any prior fiscal year.

This report shall document by program or service category those

expenditures from the most recently completed fiscal year used

to pay for services provided in prior fiscal years.

(g) In addition, each annual report required to be

submitted by the Department of Public Aid under subsection (e)

shall include the following information with respect to the

State's Medicaid program:

(1) Explanations of the exact causes of the variance

between the previous year's estimated and actual

liabilities.

(2) Factors affecting the Department of Public Aid's

liabilities, including but not limited to numbers of aid

recipients, levels of medical service utilization by aid

recipients, and inflation in the cost of medical services.

(3) The results of the Department's efforts to combat

fraud and abuse.

(h) As provided in Section 4 of the General Assembly

Compensation Act, any utility bill for service provided to a

General Assembly member's district office for a period

including portions of 2 consecutive fiscal years may be paid

from funds appropriated for such expenditure in either fiscal

year.

(i) An agency which administers a fund classified by the

Comptroller as an internal service fund may issue rules for:

(1) billing user agencies in advance based on estimated

charges for goods or services;

(2) issuing credits during the subsequent fiscal year

for all user agency payments received during the prior

fiscal year which were in excess of the final amounts owed

by the user agency for that period; and

(3) issuing catch-up billings to user agencies during

the subsequent fiscal year for amounts remaining due when

payments received from the user agency during the prior

fiscal year were less than the total amount owed for that

period.

User agencies are authorized to reimburse internal service

funds for catch-up billings by vouchers drawn against their

respective appropriations for the fiscal year in which the

catch-up billing was issued.

(Source: P.A. 92-885, eff. 1-13-03; 93-19, eff. 6-20-03.)

Section 22. The Illinois Income Tax Act is amended by

changing Section 917 as follows:

(35 ILCS 5/917) (from Ch. 120, par. 9-917)

Sec. 917. Confidentiality and information sharing.

(a) Confidentiality. Except as provided in this Section,

all information received by the Department from returns filed

under this Act, or from any investigation conducted under the

provisions of this Act, shall be confidential, except for

official purposes within the Department or pursuant to official

procedures for collection of any State tax or pursuant to an

investigation or audit by the Illinois State Scholarship

Commission of a delinquent student loan or monetary award or

enforcement of any civil or criminal penalty or sanction

imposed by this Act or by another statute imposing a State tax,

and any person who divulges any such information in any manner,

except for such purposes and pursuant to order of the Director

or in accordance with a proper judicial order, shall be guilty

of a Class A misdemeanor. However, the provisions of this

paragraph are not applicable to information furnished to a

licensed attorney representing the taxpayer where an appeal or

a protest has been filed on behalf of the taxpayer.

(b) Public information. Nothing contained in this Act shall

prevent the Director from publishing or making available to the

public the names and addresses of persons filing returns under

this Act, or from publishing or making available reasonable

statistics concerning the operation of the tax wherein the

contents of returns are grouped into aggregates in such a way

that the information contained in any individual return shall

not be disclosed.

(c) Governmental agencies. The Director may make available

to the Secretary of the Treasury of the United States or his

delegate, or the proper officer or his delegate of any other

state imposing a tax upon or measured by income, for

exclusively official purposes, information received by the

Department in the administration of this Act, but such

permission shall be granted only if the United States or such

other state, as the case may be, grants the Department

substantially similar privileges. The Director may exchange

information with the Illinois Department of Public Aid and the

Department of Human Services (acting as successor to the

Department of Public Aid under the Department of Human Services

Act) for the purpose of verifying sources and amounts of income

and for other purposes directly connected with the

administration of this Act and the Illinois Public Aid Code.

The Director may exchange information with the Director of the

Department of Employment Security for the purpose of verifying

sources and amounts of income and for other purposes directly

connected with the administration of this Act and Acts

administered by the Department of Employment Security. The

Director may make available to the Illinois Industrial

Commission information regarding employers for the purpose of

verifying the insurance coverage required under the Workers'

Compensation Act and Workers' Occupational Diseases Act. The

Director may exchange information with the Illinois Department

on Aging for the purpose of verifying sources and amounts of

income for purposes directly related to confirming eligibility

for participation in the programs of benefits authorized by the

Senior Citizens and Disabled Persons Property Tax Relief and

Pharmaceutical Assistance Act.

The Director may make available to any State agency,

including the Illinois Supreme Court, which licenses persons to

engage in any occupation, information that a person licensed by

such agency has failed to file returns under this Act or pay

the tax, penalty and interest shown therein, or has failed to

pay any final assessment of tax, penalty or interest due under

this Act. The Director may make available to any State agency,

including the Illinois Supreme Court, information regarding

whether a bidder, contractor, or an affiliate of a bidder or

contractor has failed to file returns under this Act or pay the

tax, penalty, and interest shown therein, or has failed to pay

any final assessment of tax, penalty, or interest due under

this Act, for the limited purpose of enforcing bidder and

contractor certifications. For purposes of this Section, the

term "affiliate" means any entity that (1) directly,

indirectly, or constructively controls another entity, (2) is

directly, indirectly, or constructively controlled by another

entity, or (3) is subject to the control of a common entity.

For purposes of this subsection (a), an entity controls another

entity if it owns, directly or individually, more than 10% of

the voting securities of that entity. As used in this

subsection (a), the term "voting security" means a security

that (1) confers upon the holder the right to vote for the

election of members of the board of directors or similar

governing body of the business or (2) is convertible into, or

entitles the holder to receive upon its exercise, a security

that confers such a right to vote. A general partnership

interest is a voting security.

The Director may make available to any State agency,

including the Illinois Supreme Court, units of local

government, and school districts, information regarding

whether a bidder or contractor is an affiliate of a person who

is not collecting and remitting Illinois Use taxes, for the

limited purpose of enforcing bidder and contractor

certifications.

The Director may also make available to the Secretary of

State information that a corporation which has been issued a

certificate of incorporation by the Secretary of State has

failed to file returns under this Act or pay the tax, penalty

and interest shown therein, or has failed to pay any final

assessment of tax, penalty or interest due under this Act. An

assessment is final when all proceedings in court for review of

such assessment have terminated or the time for the taking

thereof has expired without such proceedings being instituted.

For taxable years ending on or after December 31, 1987, the

Director may make available to the Director or principal

officer of any Department of the State of Illinois, information

that a person employed by such Department has failed to file

returns under this Act or pay the tax, penalty and interest

shown therein. For purposes of this paragraph, the word

"Department" shall have the same meaning as provided in Section

3 of the State Employees Group Insurance Act of 1971.

(d) The Director shall make available for public inspection

in the Department's principal office and for publication, at

cost, administrative decisions issued on or after January 1,

1995. These decisions are to be made available in a manner so

that the following taxpayer information is not disclosed:

(1) The names, addresses, and identification numbers

of the taxpayer, related entities, and employees.

(2) At the sole discretion of the Director, trade

secrets or other confidential information identified as

such by the taxpayer, no later than 30 days after receipt

of an administrative decision, by such means as the

Department shall provide by rule.

The Director shall determine the appropriate extent of the

deletions allowed in paragraph (2). In the event the taxpayer

does not submit deletions, the Director shall make only the

deletions specified in paragraph (1).

The Director shall make available for public inspection and

publication an administrative decision within 180 days after

the issuance of the administrative decision. The term

"administrative decision" has the same meaning as defined in

Section 3-101 of Article III of the Code of Civil Procedure.

Costs collected under this Section shall be paid into the Tax

Compliance and Administration Fund.

(e) Nothing contained in this Act shall prevent the

Director from divulging information to any person pursuant to a

request or authorization made by the taxpayer, by an authorized

representative of the taxpayer, or, in the case of information

related to a joint return, by the spouse filing the joint

return with the taxpayer.

(Source: P.A. 93-25, eff. 6-20-03.)

Section 25. The Nursing Home Care Act is amended by

changing Section 3-103 as follows:

(210 ILCS 45/3-103) (from Ch. 111 1/2, par. 4153-103)

Sec. 3-103. The procedure for obtaining a valid license

shall be as follows:

(1) Application to operate a facility shall be made to the

Department on forms furnished by the Department.

(2) All license applications shall be accompanied with an

application fee. The fee for an annual license shall be $995

based on the licensed capacity of the facility and shall be

determined as follows: 0-49 licensed beds, a flat fee of $500;

50-99 licensed beds, a flat fee of $750; and for any facility

with 100 or more licensed beds, a fee of $1,000 plus $10 per

licensed bed. Facilities that pay a fee or assessment pursuant

to Article V-C of the Illinois Public Aid Code shall be exempt

from the license fee imposed under this item (2). The fee for a

2-year license shall be double the fee for the annual license

set forth in the preceding sentence. The first $600,000 of such

fees collected each fiscal year shall be deposited with the

State Treasurer into the Long Term Care Monitor/Receiver Fund,

which has been created as a special fund in the State treasury.

Any such fees in excess of $600,000 collected in a fiscal year

shall be deposited into the General Revenue Fund. This special

fund is to be used by the Department for expenses related to

the appointment of monitors and receivers as contained in

Sections 3-501 through 3-517. At the end of each fiscal year,

any funds in excess of $1,000,000 held in the Long Term Care

Monitor/Receiver Fund shall be deposited in the State's General

Revenue Fund. The application shall be under oath and the

submission of false or misleading information shall be a Class

A misdemeanor. The application shall contain the following

information:

(a) The name and address of the applicant if an

individual, and if a firm, partnership, or association, of

every member thereof, and in the case of a corporation, the

name and address thereof and of its officers and its

registered agent, and in the case of a unit of local

government, the name and address of its chief executive

officer;

(b) The name and location of the facility for which a

license is sought;

(c) The name of the person or persons under whose

management or supervision the facility will be conducted;

(d) The number and type of residents for which

maintenance, personal care, or nursing is to be provided;

and

(e) Such information relating to the number,

experience, and training of the employees of the facility,

any management agreements for the operation of the

facility, and of the moral character of the applicant and

employees as the Department may deem necessary.

(3) Each initial application shall be accompanied by a

financial statement setting forth the financial condition of

the applicant and by a statement from the unit of local

government having zoning jurisdiction over the facility's

location stating that the location of the facility is not in

violation of a zoning ordinance. An initial application for a

new facility shall be accompanied by a permit as required by

the "Illinois Health Facilities Planning Act". After the

application is approved, the applicant shall advise the

Department every 6 months of any changes in the information

originally provided in the application.

(4) Other information necessary to determine the identity

and qualifications of an applicant to operate a facility in

accordance with this Act shall be included in the application

as required by the Department in regulations.

(Source: P.A. 93-32, eff. 7-1-03.)

Section 27. The Pharmacy Practice Act of 1987 is amended by

changing Section 25 as follows:

(225 ILCS 85/25) (from Ch. 111, par. 4145)

(Section scheduled to be repealed on January 1, 2008)

Sec. 25. No person shall compound, or sell or offer for

sale, or cause to be compounded, sold or offered for sale any

medicine or preparation under or by a name recognized in the

United States Pharmacopoeia National Formulary, for internal

or external use, which differs from the standard of strength,

quality or purity as determined by the test laid down in the

United States Pharmacopoeia National Formulary official at the

time of such compounding, sale or offering for sale. Nor shall

any person compound, sell or offer for sale, or cause to be

compounded, sold, or offered for sale, any drug, medicine,

poison, chemical or pharmaceutical preparation, the strength

or purity of which shall fall below the professed standard of

strength or purity under which it is sold. If the physician or

other authorized prescriber, when transmitting an oral or

written prescription, does not prohibit drug product

selection, a different brand name or nonbrand name drug product

of the same generic name may be dispensed by the pharmacist,

provided that the selected drug has a unit price less than the

drug product specified in the prescription and provided that

the selection is permitted, is not subject to review at a

meeting of the Technical Advisory Council, is not subject to a

hearing in accordance with this Section, or is not specifically

prohibited by the current Drug Product Selection Formulary

issued by the Department of Public Health pursuant to Section

3.14 of the Illinois Food, Drug and Cosmetics Act, as amended.

A generic drug determined to be therapeutically equivalent by

the United States Food and Drug Administration (FDA) shall be

available for substitution in Illinois in accordance with this

Act and the Illinois Food, Drug and Cosmetic Act, provided that

each manufacturer submits to the Director of the Department of

Public Health a notification containing product technical

bioequivalence information as a prerequisite to product

substitution when they have completed all required testing to

support FDA product approval and, in any event, the information

shall be submitted no later than 60 days prior to product

substitution in the State. If the Technical Advisory Council

finds that a generic drug product may have issues related to

the practice of medicine or the practice of pharmacy, the

Technical Advisory Council shall review the generic drug

product at its next regularly scheduled Technical Advisory

Council meeting. Following the Technical Advisory Council's

review and initial recommendation that a generic drug product

not be included in the Illinois Formulary, a hearing shall be

conducted in accordance with the rules of the Department of

Public Health and Article 10 of the Illinois Administrative

Procedure Act if requested by the manufacturer. The Technical

Advisory Council shall make its recommendation to the

Department of Public Health within 20 business days after the

public hearing. If the Department of Public Health, on the

recommendation of the Technical Advisory Council, determines

that, based upon a preponderance of the evidence, the drug is

not bioequivalent, not therapeutically equivalent, or could

cause clinically significant harm to the health or safety of

patients receiving that generic drug, the Department of Public

Health may prohibit the generic drug from substitution in the

State. A decision by the Department of Public Health to

prohibit a drug product from substitution shall constitute a

final administrative decision within the meaning of Section

22.2 of the Illinois Food, Drug and Cosmetic Act and Section

3-101 of the Code of Civil Procedure, and shall be subject to

judicial review pursuant to the provisions of Article III of

the Administrative Review Law. A decision to prohibit a generic

drug from substitution must be accompanied by a written

detailed explanation of the basis for the decision. On the

prescription forms of prescribers, shall be placed a signature

line and the words "may substitute" and "may not substitute".

The prescriber, in his or her own handwriting, shall place a

mark beside either the "may substitute" or "may not substitute"

alternatives to guide the pharmacist in the dispensing of the

prescription. A prescriber placing a mark beside the "may

substitute" alternative or failing in his or her own

handwriting to place a mark beside either alternative

authorizes drug product selection in accordance with this Act.

Preprinted or rubber stamped marks, or other deviations from

the above prescription format shall not be permitted. The

prescriber shall sign the form in his or her own handwriting to

authorize the issuance of the prescription. When a person

presents a prescription to be dispensed, the pharmacist to whom

it is presented may inform the person if the pharmacy has

available a different brand name or nonbrand name of the same

generic drug prescribed and the price of the different brand

name or nonbrand name of the drug product. If the person

presenting the prescription is the one to whom the drug is to

be administered, the pharmacist may dispense the prescription

with the brand prescribed or a different brand name or nonbrand

name product of the same generic name that has been permitted

by the Department of Public Health, if the drug is of lesser

unit cost and the patient is informed and agrees to the

selection and the pharmacist shall enter such information into

the pharmacy record. If the person presenting the prescription

is someone other than the one to whom the drug is to be

administered the pharmacist shall not dispense the

prescription with a brand other than the one specified in the

prescription unless the pharmacist has the written or oral

authorization to select brands from the person to whom the drug

is to be administered or a parent, legal guardian or spouse of

that person.

In every case in which a selection is made as permitted by

the Illinois Food, Drug and Cosmetic Act, the pharmacist shall

indicate on the pharmacy record of the filled prescription the

name or other identification of the manufacturer of the drug

which has been dispensed.

The selection of any drug product by a pharmacist shall not

constitute evidence of negligence if the selected nonlegend

drug product was of the same dosage form and each of its active

ingredients did not vary by more than 1 percent from the active

ingredients of the prescribed, brand name, nonlegend drug

product or if the selected legend drug product was included in

the Illinois Drug Product Selection Formulary current at the

time the prescription was dispensed. Failure of a prescribing

physician to specify that drug product selection is prohibited

does not constitute evidence of negligence unless that

practitioner has reasonable cause to believe that the health

condition of the patient for whom the physician is prescribing

warrants the use of the brand name drug product and not

another.

The Department is authorized to employ an analyst or

chemist of recognized or approved standing whose duty it shall

be to examine into any claimed adulteration, illegal

substitution, improper selection, alteration, or other

violation hereof, and report the result of his investigation,

and if such report justify such action the Department shall

cause the offender to be prosecuted.

(Source: P.A. 91-766, eff. 9-1-00; 92-112, eff. 7-20-01.)

Section 30. The Illinois Public Aid Code is amended by

changing Sections 5-5, 5-5.4, 5A-2, 5A-4, 5A-5, 5A-7, and 5A-12

and adding Sections 5-5.4c and 12-10.7 as follows:

(305 ILCS 5/5-5) (from Ch. 23, par. 5-5)

Sec. 5-5. Medical services. The Illinois Department, by

rule, shall determine the quantity and quality of and the rate

of reimbursement for the medical assistance for which payment

will be authorized, and the medical services to be provided,

which may include all or part of the following: (1) inpatient

hospital services; (2) outpatient hospital services; (3) other

laboratory and X-ray services; (4) skilled nursing home

services; (5) physicians' services whether furnished in the

office, the patient's home, a hospital, a skilled nursing home,

or elsewhere; (6) medical care, or any other type of remedial

care furnished by licensed practitioners; (7) home health care

services; (8) private duty nursing service; (9) clinic

services; (10) dental services; (11) physical therapy and

related services; (12) prescribed drugs, dentures, and

prosthetic devices; and eyeglasses prescribed by a physician

skilled in the diseases of the eye, or by an optometrist,

whichever the person may select; (13) other diagnostic,

screening, preventive, and rehabilitative services; (14)

transportation and such other expenses as may be necessary;

(15) medical treatment of sexual assault survivors, as defined

in Section 1a of the Sexual Assault Survivors Emergency

Treatment Act, for injuries sustained as a result of the sexual

assault, including examinations and laboratory tests to

discover evidence which may be used in criminal proceedings

arising from the sexual assault; (16) the diagnosis and

treatment of sickle cell anemia; and (17) any other medical

care, and any other type of remedial care recognized under the

laws of this State, but not including abortions, or induced

miscarriages or premature births, unless, in the opinion of a

physician, such procedures are necessary for the preservation

of the life of the woman seeking such treatment, or except an

induced premature birth intended to produce a live viable child

and such procedure is necessary for the health of the mother or

her unborn child. The Illinois Department, by rule, shall

prohibit any physician from providing medical assistance to

anyone eligible therefor under this Code where such physician

has been found guilty of performing an abortion procedure in a

wilful and wanton manner upon a woman who was not pregnant at

the time such abortion procedure was performed. The term "any

other type of remedial care" shall include nursing care and

nursing home service for persons who rely on treatment by

spiritual means alone through prayer for healing.

Notwithstanding any other provision of this Section, a

comprehensive tobacco use cessation program that includes

purchasing prescription drugs or prescription medical devices

approved by the Food and Drug administration shall be covered

under the medical assistance program under this Article for

persons who are otherwise eligible for assistance under this

Article.

Notwithstanding any other provision of this Code, the

Illinois Department may not require, as a condition of payment

for any laboratory test authorized under this Article, that a

physician's handwritten signature appear on the laboratory

test order form. The Illinois Department may, however, impose

other appropriate requirements regarding laboratory test order

documentation.

The Illinois Department of Public Aid shall provide the

following services to persons eligible for assistance under

this Article who are participating in education, training or

employment programs operated by the Department of Human

Services as successor to the Department of Public Aid:

(1) dental services, which shall include but not be

limited to prosthodontics; and

(2) eyeglasses prescribed by a physician skilled in the

diseases of the eye, or by an optometrist, whichever the

person may select.

The Illinois Department, by rule, may distinguish and

classify the medical services to be provided only in accordance

with the classes of persons designated in Section 5-2.

The Illinois Department shall authorize the provision of,

and shall authorize payment for, screening by low-dose

mammography for the presence of occult breast cancer for women

35 years of age or older who are eligible for medical

assistance under this Article, as follows: a baseline mammogram

for women 35 to 39 years of age and an annual mammogram for

women 40 years of age or older. All screenings shall include a

physical breast exam, instruction on self-examination and

information regarding the frequency of self-examination and

its value as a preventative tool. As used in this Section,

"low-dose mammography" means the x-ray examination of the

breast using equipment dedicated specifically for mammography,

including the x-ray tube, filter, compression device, image

receptor, and cassettes, with an average radiation exposure

delivery of less than one rad mid-breast, with 2 views for each

breast.

Any medical or health care provider shall immediately

recommend, to any pregnant woman who is being provided prenatal

services and is suspected of drug abuse or is addicted as

defined in the Alcoholism and Other Drug Abuse and Dependency

Act, referral to a local substance abuse treatment provider

licensed by the Department of Human Services or to a licensed

hospital which provides substance abuse treatment services.

The Department of Public Aid shall assure coverage for the cost

of treatment of the drug abuse or addiction for pregnant

recipients in accordance with the Illinois Medicaid Program in

conjunction with the Department of Human Services.

All medical providers providing medical assistance to

pregnant women under this Code shall receive information from

the Department on the availability of services under the Drug

Free Families with a Future or any comparable program providing

case management services for addicted women, including

information on appropriate referrals for other social services

that may be needed by addicted women in addition to treatment

for addiction.

The Illinois Department, in cooperation with the

Departments of Human Services (as successor to the Department

of Alcoholism and Substance Abuse) and Public Health, through a

public awareness campaign, may provide information concerning

treatment for alcoholism and drug abuse and addiction, prenatal

health care, and other pertinent programs directed at reducing

the number of drug-affected infants born to recipients of

medical assistance.

Neither the Illinois Department of Public Aid nor the

Department of Human Services shall sanction the recipient

solely on the basis of her substance abuse.

The Illinois Department shall establish such regulations

governing the dispensing of health services under this Article

as it shall deem appropriate. The Department should seek the

advice of formal professional advisory committees appointed by

the Director of the Illinois Department for the purpose of

providing regular advice on policy and administrative matters,

information dissemination and educational activities for

medical and health care providers, and consistency in

procedures to the Illinois Department.

The Illinois Department may develop and contract with

Partnerships of medical providers to arrange medical services

for persons eligible under Section 5-2 of this Code.

Implementation of this Section may be by demonstration projects

in certain geographic areas. The Partnership shall be

represented by a sponsor organization. The Department, by rule,

shall develop qualifications for sponsors of Partnerships.

Nothing in this Section shall be construed to require that the

sponsor organization be a medical organization.

The sponsor must negotiate formal written contracts with

medical providers for physician services, inpatient and

outpatient hospital care, home health services, treatment for

alcoholism and substance abuse, and other services determined

necessary by the Illinois Department by rule for delivery by

Partnerships. Physician services must include prenatal and

obstetrical care. The Illinois Department shall reimburse

medical services delivered by Partnership providers to clients

in target areas according to provisions of this Article and the

Illinois Health Finance Reform Act, except that:

(1) Physicians participating in a Partnership and

providing certain services, which shall be determined by

the Illinois Department, to persons in areas covered by the

Partnership may receive an additional surcharge for such

services.

(2) The Department may elect to consider and negotiate

financial incentives to encourage the development of

Partnerships and the efficient delivery of medical care.

(3) Persons receiving medical services through

Partnerships may receive medical and case management

services above the level usually offered through the

medical assistance program.

Medical providers shall be required to meet certain

qualifications to participate in Partnerships to ensure the

delivery of high quality medical services. These

qualifications shall be determined by rule of the Illinois

Department and may be higher than qualifications for

participation in the medical assistance program. Partnership

sponsors may prescribe reasonable additional qualifications

for participation by medical providers, only with the prior

written approval of the Illinois Department.

Nothing in this Section shall limit the free choice of

practitioners, hospitals, and other providers of medical

services by clients. In order to ensure patient freedom of

choice, the Illinois Department shall immediately promulgate

all rules and take all other necessary actions so that provided

services may be accessed from therapeutically certified

optometrists to the full extent of the Illinois Optometric

Practice Act of 1987 without discriminating between service

providers.

The Department shall apply for a waiver from the United

States Health Care Financing Administration to allow for the

implementation of Partnerships under this Section.

The Illinois Department shall require health care

providers to maintain records that document the medical care

and services provided to recipients of Medical Assistance under

this Article. The Illinois Department shall require health care

providers to make available, when authorized by the patient, in

writing, the medical records in a timely fashion to other

health care providers who are treating or serving persons

eligible for Medical Assistance under this Article. All

dispensers of medical services shall be required to maintain

and retain business and professional records sufficient to

fully and accurately document the nature, scope, details and

receipt of the health care provided to persons eligible for

medical assistance under this Code, in accordance with

regulations promulgated by the Illinois Department. The rules

and regulations shall require that proof of the receipt of

prescription drugs, dentures, prosthetic devices and

eyeglasses by eligible persons under this Section accompany

each claim for reimbursement submitted by the dispenser of such

medical services. No such claims for reimbursement shall be

approved for payment by the Illinois Department without such

proof of receipt, unless the Illinois Department shall have put

into effect and shall be operating a system of post-payment

audit and review which shall, on a sampling basis, be deemed

adequate by the Illinois Department to assure that such drugs,

dentures, prosthetic devices and eyeglasses for which payment

is being made are actually being received by eligible

recipients. Within 90 days after the effective date of this

amendatory Act of 1984, the Illinois Department shall establish

a current list of acquisition costs for all prosthetic devices

and any other items recognized as medical equipment and

supplies reimbursable under this Article and shall update such

list on a quarterly basis, except that the acquisition costs of

all prescription drugs shall be updated no less frequently than

every 30 days as required by Section 5-5.12.

The rules and regulations of the Illinois Department shall

require that a written statement including the required opinion

of a physician shall accompany any claim for reimbursement for

abortions, or induced miscarriages or premature births. This

statement shall indicate what procedures were used in providing

such medical services.

The Illinois Department shall require all dispensers of

medical services, other than an individual practitioner or

group of practitioners, desiring to participate in the Medical

Assistance program established under this Article to disclose

all financial, beneficial, ownership, equity, surety or other

interests in any and all firms, corporations, partnerships,

associations, business enterprises, joint ventures, agencies,

institutions or other legal entities providing any form of

health care services in this State under this Article.

The Illinois Department may require that all dispensers of

medical services desiring to participate in the medical

assistance program established under this Article disclose,

under such terms and conditions as the Illinois Department may

by rule establish, all inquiries from clients and attorneys

regarding medical bills paid by the Illinois Department, which

inquiries could indicate potential existence of claims or liens

for the Illinois Department.

Enrollment of a vendor that provides non-emergency medical

transportation, defined by the Department by rule, shall be

conditional for 180 days. During that time, the Department of

Public Aid may terminate the vendor's eligibility to

participate in the medical assistance program without cause.

That termination of eligibility is not subject to the

Department's hearing process.

The Illinois Department shall establish policies,

procedures, standards and criteria by rule for the acquisition,

repair and replacement of orthotic and prosthetic devices and

durable medical equipment. Such rules shall provide, but not be

limited to, the following services: (1) immediate repair or

replacement of such devices by recipients without medical

authorization; and (2) rental, lease, purchase or

lease-purchase of durable medical equipment in a

cost-effective manner, taking into consideration the

recipient's medical prognosis, the extent of the recipient's

needs, and the requirements and costs for maintaining such

equipment. Such rules shall enable a recipient to temporarily

acquire and use alternative or substitute devices or equipment

pending repairs or replacements of any device or equipment

previously authorized for such recipient by the Department.

Rules under clause (2) above shall not provide for purchase or

lease-purchase of durable medical equipment or supplies used

for the purpose of oxygen delivery and respiratory care.

The Department shall execute, relative to the nursing home

prescreening project, written inter-agency agreements with the

Department of Human Services and the Department on Aging, to

effect the following: (i) intake procedures and common

eligibility criteria for those persons who are receiving

non-institutional services; and (ii) the establishment and

development of non-institutional services in areas of the State

where they are not currently available or are undeveloped.

The Illinois Department shall develop and operate, in

cooperation with other State Departments and agencies and in

compliance with applicable federal laws and regulations,

appropriate and effective systems of health care evaluation and

programs for monitoring of utilization of health care services

and facilities, as it affects persons eligible for medical

assistance under this Code.

The Illinois Department shall report annually to the

General Assembly, no later than the second Friday in April of

1979 and each year thereafter, in regard to:

(a) actual statistics and trends in utilization of

medical services by public aid recipients;

(b) actual statistics and trends in the provision of

the various medical services by medical vendors;

(c) current rate structures and proposed changes in

those rate structures for the various medical vendors; and

(d) efforts at utilization review and control by the

Illinois Department.

The period covered by each report shall be the 3 years

ending on the June 30 prior to the report. The report shall

include suggested legislation for consideration by the General

Assembly. The filing of one copy of the report with the

Speaker, one copy with the Minority Leader and one copy with

the Clerk of the House of Representatives, one copy with the

President, one copy with the Minority Leader and one copy with

the Secretary of the Senate, one copy with the Legislative

Research Unit, and such additional copies with the State

Government Report Distribution Center for the General Assembly

as is required under paragraph (t) of Section 7 of the State

Library Act shall be deemed sufficient to comply with this

Section.

(Source: P.A. 92-16, eff. 6-28-01; 92-651, eff. 7-11-02;

92-789, eff. 8-6-02; 93-632, eff. 2-1-04.)

(305 ILCS 5/5-5.4) (from Ch. 23, par. 5-5.4)

Sec. 5-5.4. Standards of Payment - Department of Public

Aid. The Department of Public Aid shall develop standards of

payment of skilled nursing and intermediate care services in

facilities providing such services under this Article which:

(1) Provide for the determination of a facility's payment

for skilled nursing and intermediate care services on a

prospective basis. The amount of the payment rate for all

nursing facilities certified by the Department of Public Health

under the Nursing Home Care Act as Intermediate Care for the

Developmentally Disabled facilities, Long Term Care for Under

Age 22 facilities, Skilled Nursing facilities, or Intermediate

Care facilities under the medical assistance program shall be

prospectively established annually on the basis of historical,

financial, and statistical data reflecting actual costs from

prior years, which shall be applied to the current rate year

and updated for inflation, except that the capital cost element

for newly constructed facilities shall be based upon projected

budgets. The annually established payment rate shall take

effect on July 1 in 1984 and subsequent years. No rate increase

and no update for inflation shall be provided on or after July

1, 1994 and before July 1, 2005 2004, unless specifically

provided for in this Section. The changes made by this

amendatory Act of the 93rd General Assembly extending the

duration of the prohibition against a rate increase or update

for inflation are effective retroactive to July 1, 2004.

For facilities licensed by the Department of Public Health

under the Nursing Home Care Act as Intermediate Care for the

Developmentally Disabled facilities or Long Term Care for Under

Age 22 facilities, the rates taking effect on July 1, 1998

shall include an increase of 3%. For facilities licensed by the

Department of Public Health under the Nursing Home Care Act as

Skilled Nursing facilities or Intermediate Care facilities,

the rates taking effect on July 1, 1998 shall include an

increase of 3% plus $1.10 per resident-day, as defined by the

Department.

For facilities licensed by the Department of Public Health

under the Nursing Home Care Act as Intermediate Care for the

Developmentally Disabled facilities or Long Term Care for Under

Age 22 facilities, the rates taking effect on July 1, 1999

shall include an increase of 1.6% plus $3.00 per resident-day,

as defined by the Department. For facilities licensed by the

Department of Public Health under the Nursing Home Care Act as

Skilled Nursing facilities or Intermediate Care facilities,

the rates taking effect on July 1, 1999 shall include an

increase of 1.6% and, for services provided on or after October

1, 1999, shall be increased by $4.00 per resident-day, as

defined by the Department.

For facilities licensed by the Department of Public Health

under the Nursing Home Care Act as Intermediate Care for the

Developmentally Disabled facilities or Long Term Care for Under

Age 22 facilities, the rates taking effect on July 1, 2000

shall include an increase of 2.5% per resident-day, as defined

by the Department. For facilities licensed by the Department of

Public Health under the Nursing Home Care Act as Skilled

Nursing facilities or Intermediate Care facilities, the rates

taking effect on July 1, 2000 shall include an increase of 2.5%

per resident-day, as defined by the Department.

For facilities licensed by the Department of Public Health

under the Nursing Home Care Act as skilled nursing facilities

or intermediate care facilities, a new payment methodology must

be implemented for the nursing component of the rate effective

July 1, 2003. The Department of Public Aid shall develop the

new payment methodology using the Minimum Data Set (MDS) as the

instrument to collect information concerning nursing home

resident condition necessary to compute the rate. The

Department of Public Aid shall develop the new payment

methodology to meet the unique needs of Illinois nursing home

residents while remaining subject to the appropriations

provided by the General Assembly. A transition period from the

payment methodology in effect on June 30, 2003 to the payment

methodology in effect on July 1, 2003 shall be provided for a

period not exceeding 2 years after implementation of the new

payment methodology as follows:

(A) For a facility that would receive a lower nursing

component rate per patient day under the new system than

the facility received effective on the date immediately

preceding the date that the Department implements the new

payment methodology, the nursing component rate per

patient day for the facility shall be held at the level in

effect on the date immediately preceding the date that the

Department implements the new payment methodology until a

higher nursing component rate of reimbursement is achieved

by that facility.

(B) For a facility that would receive a higher nursing

component rate per patient day under the payment

methodology in effect on July 1, 2003 than the facility

received effective on the date immediately preceding the

date that the Department implements the new payment

methodology, the nursing component rate per patient day for

the facility shall be adjusted.

(C) Notwithstanding paragraphs (A) and (B), the

nursing component rate per patient day for the facility

shall be adjusted subject to appropriations provided by the

General Assembly.

For facilities licensed by the Department of Public Health

under the Nursing Home Care Act as Intermediate Care for the

Developmentally Disabled facilities or Long Term Care for Under

Age 22 facilities, the rates taking effect on March 1, 2001

shall include a statewide increase of 7.85%, as defined by the

Department.

For facilities licensed by the Department of Public Health

under the Nursing Home Care Act as Intermediate Care for the

Developmentally Disabled facilities or Long Term Care for Under

Age 22 facilities, the rates taking effect on April 1, 2002

shall include a statewide increase of 2.0%, as defined by the

Department. This increase terminates on July 1, 2002; beginning

July 1, 2002 these rates are reduced to the level of the rates

in effect on March 31, 2002, as defined by the Department.

For facilities licensed by the Department of Public Health

under the Nursing Home Care Act as skilled nursing facilities

or intermediate care facilities, the rates taking effect on

July 1, 2001 shall be computed using the most recent cost

reports on file with the Department of Public Aid no later than

April 1, 2000, updated for inflation to January 1, 2001. For

rates effective July 1, 2001 only, rates shall be the greater

of the rate computed for July 1, 2001 or the rate effective on

June 30, 2001.

Notwithstanding any other provision of this Section, for

facilities licensed by the Department of Public Health under

the Nursing Home Care Act as skilled nursing facilities or

intermediate care facilities, the Illinois Department shall

determine by rule the rates taking effect on July 1, 2002,

which shall be 5.9% less than the rates in effect on June 30,

2002.

Notwithstanding any other provision of this Section, for

facilities licensed by the Department of Public Health under

the Nursing Home Care Act as skilled nursing facilities or

intermediate care facilities, if the payment methodologies

required under Section 5A-12 and the waiver granted under 42

CFR 433.68 are approved by the United States Centers for

Medicare and Medicaid Services, the Illinois Department shall

determine by rule the rates taking effect on July 1, 2004 2003,

which shall be 3.0% greater less than the rates in effect on

June 30, 2004 2002. These rates This rate shall take effect

only upon approval and implementation of the payment

methodologies required under Section 5A-12.

Notwithstanding any other provisions of this Section, for

facilities licensed by the Department of Public Health under

the Nursing Home Care Act as skilled nursing facilities or

intermediate care facilities, the rates taking effect on

January 1, 2005 shall be 3% more than the rates in effect on

December 31, 2004.

For facilities licensed by the Department of Public Health

under the Nursing Home Care Act as Intermediate Care for the

Developmentally Disabled facilities or as long-term care

facilities for residents under 22 years of age, the rates

taking effect on July 1, 2003 shall include a statewide

increase of 4%, as defined by the Department.

Rates established effective each July 1 shall govern

payment for services rendered throughout that fiscal year,

except that rates established on July 1, 1996 shall be

increased by 6.8% for services provided on or after January 1,

1997. Such rates will be based upon the rates calculated for

the year beginning July 1, 1990, and for subsequent years

thereafter until June 30, 2001 shall be based on the facility

cost reports for the facility fiscal year ending at any point

in time during the previous calendar year, updated to the

midpoint of the rate year. The cost report shall be on file

with the Department no later than April 1 of the current rate

year. Should the cost report not be on file by April 1, the

Department shall base the rate on the latest cost report filed

by each skilled care facility and intermediate care facility,

updated to the midpoint of the current rate year. In

determining rates for services rendered on and after July 1,

1985, fixed time shall not be computed at less than zero. The

Department shall not make any alterations of regulations which

would reduce any component of the Medicaid rate to a level

below what that component would have been utilizing in the rate

effective on July 1, 1984.

(2) Shall take into account the actual costs incurred by

facilities in providing services for recipients of skilled

nursing and intermediate care services under the medical

assistance program.

(3) Shall take into account the medical and psycho-social

characteristics and needs of the patients.

(4) Shall take into account the actual costs incurred by

facilities in meeting licensing and certification standards

imposed and prescribed by the State of Illinois, any of its

political subdivisions or municipalities and by the U.S.

Department of Health and Human Services pursuant to Title XIX

of the Social Security Act.

The Department of Public Aid shall develop precise

standards for payments to reimburse nursing facilities for any

utilization of appropriate rehabilitative personnel for the

provision of rehabilitative services which is authorized by

federal regulations, including reimbursement for services

provided by qualified therapists or qualified assistants, and

which is in accordance with accepted professional practices.

Reimbursement also may be made for utilization of other

supportive personnel under appropriate supervision.

(Source: P.A. 92-10, eff. 6-11-01; 92-31, eff. 6-28-01; 92-597,

eff. 6-28-02; 92-651, eff. 7-11-02; 92-848, eff. 1-1-03; 93-20,

eff. 6-20-03; 93-649, eff. 1-8-04; 93-659, eff. 2-3-04; revised

2-3-04.)

(305 ILCS 5/5-5.4c new)

Sec. 5-5.4c. Bed reserves; approval. The Department of

Public Aid shall approve bed reserves at a daily rate of 75% of

an individual's current Medicaid per diem, for nursing

facilities 90% or more of whose residents are Medicaid

recipients and that have occupancy levels of at least 93% for

resident bed reserves not exceeding 10 days.

(305 ILCS 5/5A-2) (from Ch. 23, par. 5A-2)

(Section scheduled to be repealed on July 1, 2005)

Sec. 5A-2. Assessment; no local authorization to tax.

(a) Subject to Sections 5A-3 and 5A-10, an annual

assessment on inpatient services is imposed on each hospital

provider in an amount equal to the hospital's occupied bed days

multiplied by $84.19 for State fiscal years 2004 and 2005, if

the payment methodologies required under 5A-12 and the waiver

granted under 42 CFR 433.68 are approved with an effective date

prior to July 1, 2004; or the assessment will be imposed for

fiscal year 2005 only, if the payment methodologies required

under Section 5A-12 and the waiver granted under 42 CFR 433.68

are approved with an effective date on or after July 1, 2004 in

an amount equal to the hospital's occupied bed days multiplied

by $84.19.

The Department of Public Aid shall use the number of

occupied bed days as reported by each hospital on the Annual

Survey of Hospitals conducted by the Department of Public

Health to calculate the hospital's annual assessment. If the

sum of a hospital's occupied bed days is not reported on the

Annual Survey of Hospitals or if there are data errors in the

reported sum of a hospital's occupied bed days as determined by

the Department of Public Aid, then the Department of Public Aid

may obtain the sum of occupied bed days from any source

available, including, but not limited to, records maintained by

the hospital provider, which may be inspected at all times

during business hours of the day by the Department of Public

Aid or its duly authorized agents and employees.

(b) Nothing in this amendatory Act of the 93rd General

Assembly shall be construed to authorize any home rule unit or

other unit of local government to license for revenue or to

impose a tax or assessment upon hospital providers or the

occupation of hospital provider, or a tax or assessment

measured by the income or earnings of a hospital provider.

(c) As provided in Section 5A-14, this Section is repealed

on July 1, 2005.

(Source: P.A. 93-659, eff. 2-3-04.)

(305 ILCS 5/5A-4) (from Ch. 23, par. 5A-4)

Sec. 5A-4. Payment of assessment; penalty.

(a) The annual assessment imposed by Section 5A-2 for State

fiscal year 2004 shall be due and payable on June 18 of the

year. The assessment imposed by Section 5A-2 for State fiscal

year 2005 shall be due and payable in quarterly installments,

each equalling one-fourth of the assessment for the year, on

July 19, October 19, January 18, and April 19 of the year. No

installment payment of an assessment imposed by Section 5A-2

shall be due and payable, however, until after: (i) the

hospital provider receives written notice from the Department

of Public Aid that the payment methodologies to hospitals

required under Section 5A-12 have been approved by the Centers

for Medicare and Medicaid Services of the U.S. Department of

Health and Human Services and the waiver under 42 CFR 433.68

for the assessment imposed by Section 5A-2 has been granted by

the Centers for Medicare and Medicaid Services of the U.S.

Department of Health and Human Services; and (ii) the hospital

has received the payments required under Section 5A-12. Upon

notification to the Department of approval of the payment

methodologies required under Section 5A-12 and the waiver

granted under 42 CFR 433.68, all quarterly installments

otherwise due under Section 5A-2 prior to the date of

notification shall be due and payable to the Department within

30 days of the date of notification.

(b) The Illinois Department is authorized to establish

delayed payment schedules for hospital providers that are

unable to make installment payments when due under this Section

due to financial difficulties, as determined by the Illinois

Department.

(c) If a hospital provider fails to pay the full amount of

an installment when due (including any extensions granted under

subsection (b)), there shall, unless waived by the Illinois

Department for reasonable cause, be added to the assessment

imposed by Section 5A-2 a penalty assessment equal to the

lesser of (i) 5% of the amount of the installment not paid on

or before the due date plus 5% of the portion thereof remaining

unpaid on the last day of each 30-day period thereafter or (ii)

100% of the installment amount not paid on or before the due

date. For purposes of this subsection, payments will be

credited first to unpaid installment amounts (rather than to

penalty or interest), beginning with the most delinquent

installments.

(Source: P.A. 93-659, eff. 2-3-04.)

(305 ILCS 5/5A-5) (from Ch. 23, par. 5A-5)

Sec. 5A-5. Notice; penalty; maintenance of records.

(a) After December 31 of each year (except as otherwise

provided in this subsection), and on or before March 31 of the

succeeding year, the The Department of Public Aid shall send a

notice of assessment to every hospital provider subject to

assessment under this Article. The notice of assessment shall

notify the hospital of its assessment and for the State fiscal

year commencing on the next July 1, except that the notice for

the State fiscal year commencing July 1, 2003 shall be sent

within 14 days of receipt by the Department of notification

from the Centers for Medicare and Medicaid Services of the U.S.

Department of Health and Human Services that the payment

methodologies required under Section 5A-12 and the waiver

granted under 42 CFR 433.68 have been approved on or before

June 1, 2004. The notice shall be on a form prepared by the

Illinois Department and shall state the following:

(1) The name of the hospital provider.

(2) The address of the hospital provider's principal

place of business from which the provider engages in the

occupation of hospital provider in this State, and the name

and address of each hospital operated, conducted, or

maintained by the provider in this State.

(3) The occupied bed days of the hospital provider, the

amount of assessment imposed under Section 5A-2 for the

State fiscal year for which the notice is sent, and the

amount of each quarterly installment to be paid during the

State fiscal year.

(4) (Blank).

(5) Other reasonable information as determined by the

Illinois Department.

(b) If a hospital provider conducts, operates, or maintains

more than one hospital licensed by the Illinois Department of

Public Health, the provider shall pay the assessment for each

hospital separately.

(c) Notwithstanding any other provision in this Article, in

the case of a person who ceases to conduct, operate, or

maintain a hospital in respect of which the person is subject

to assessment under this Article as a hospital provider, the

assessment for the State fiscal year in which the cessation

occurs shall be adjusted by multiplying the assessment computed

under Section 5A-2 by a fraction, the numerator of which is the

number of days in the year during which the provider conducts,

operates, or maintains the hospital and the denominator of

which is 365. Immediately upon ceasing to conduct, operate, or

maintain a hospital, the person shall pay the assessment for

the year as so adjusted (to the extent not previously paid).

(d) Notwithstanding any other provision in this Article, a

provider who commences conducting, operating, or maintaining a

hospital, upon notice by the Illinois Department, shall pay the

assessment computed under Section 5A-2 and subsection (e) in

installments on the due dates stated in the notice and on the

regular installment due dates for the State fiscal year

occurring after the due dates of the initial notice.

(e) Notwithstanding any other provision in this Article, in

the case of a hospital provider that did not conduct, operate,

or maintain a hospital throughout calendar year 2001, the

assessment for that State fiscal year shall be computed on the

basis of hypothetical occupied bed days for the full calendar

year as determined by the Illinois Department.

(f) (Blank).

(g) (Blank).

(h) (Blank).

(Source: P.A. 93-659, eff. 2-3-04.)

(305 ILCS 5/5A-7) (from Ch. 23, par. 5A-7)

Sec. 5A-7. Administration; enforcement provisions.

(a) The Illinois Department shall establish and maintain a

listing of all hospital providers appearing in the licensing

records of the Illinois Department of Public Health, which

shall show each provider's name and principal place of business

and the name and address of each hospital operated, conducted,

or maintained by the provider in this State. The Illinois

Department shall administer and enforce this Article and

collect the assessments and penalty assessments imposed under

this Article using procedures employed in its administration of

this Code generally. The Illinois Department, its Director, and

every hospital provider subject to assessment measured by

occupied bed days shall have the following powers, duties, and

rights:

(1) The Illinois Department may initiate either

administrative or judicial proceedings, or both, to

enforce provisions of this Article. Administrative

enforcement proceedings initiated hereunder shall be

governed by the Illinois Department's administrative

rules. Judicial enforcement proceedings initiated

hereunder shall be governed by the rules of procedure

applicable in the courts of this State.

(2) No proceedings for collection, refund, credit, or

other adjustment of an assessment amount shall be issued

more than 3 years after the due date of the assessment,

except in the case of an extended period agreed to in

writing by the Illinois Department and the hospital

provider before the expiration of this limitation period.

(3) Any unpaid assessment under this Article shall

become a lien upon the assets of the hospital upon which it

was assessed. If any hospital provider, outside the usual

course of its business, sells or transfers the major part

of any one or more of (A) the real property and

improvements, (B) the machinery and equipment, or (C) the

furniture or fixtures, of any hospital that is subject to

the provisions of this Article, the seller or transferor

shall pay the Illinois Department the amount of any

assessment, assessment penalty, and interest (if any) due

from it under this Article up to the date of the sale or

transfer. If the seller or transferor fails to pay any

assessment, assessment penalty, and interest (if any) due,

the purchaser or transferee of such asset shall be liable

for the amount of the assessment, penalties, and interest

(if any) up to the amount of the reasonable value of the

property acquired by the purchaser or transferee. The

purchaser or transferee shall continue to be liable until

the purchaser or transferee pays the full amount of the

assessment, penalties, and interest (if any) up to the

amount of the reasonable value of the property acquired by

the purchaser or transferee or until the purchaser or

transferee receives from the Illinois Department a

certificate showing that such assessment, penalty, and

interest have been paid or a certificate from the Illinois

Department showing that no assessment, penalty, or

interest is due from the seller or transferor under this

Article.

(4) Payments under this Article are not subject to the

Illinois Prompt Payment Act. Credits or refunds shall not

bear interest.

(b) In addition to any other remedy provided for and

without sending a notice of assessment liability, the Illinois

Department may collect an unpaid assessment by withholding, as

payment of the assessment, reimbursements or other amounts

otherwise payable by the Illinois Department to the hospital

provider.

(a) To the extent practicable, the Illinois Department

shall administer and enforce this Article and collect the

assessments, interest, and penalty assessments imposed under

this Article using procedures employed in its administration of

this Code generally and, as it deems appropriate, in a manner

similar to that in which the Department of Revenue administers

and collects the retailers' occupation tax under the Retailers'

Occupation Tax Act ("ROTA"). Instead of certificates of

registration, the Illinois Department shall establish and

maintain a listing of all hospital providers appearing in the

licensing records of the Department of Public Health, which

shall show each provider's name, principal place of business,

and the name and address of each hospital operated, conducted,

or maintained by the provider in this State. In addition, the

following specified provisions of the Retailers' Occupation

Tax Act are incorporated by reference into this Section except

that the Illinois Department and its Director (rather than the

Department of Revenue and its Director) and every hospital

provider subject to assessment measured by occupied bed days

(rather than persons subject to retailers' occupation tax

measured by gross receipts from the sale of tangible personal

property at retail) shall have the powers, duties, and rights

specified in these ROTA provisions, as modified in this Section

or by the Illinois Department in a manner consistent with this

Article and except as manifestly inconsistent with the other

provisions of this Article:

(1) ROTA, Section 4 (examination of return; notice of

correction; evidence; limitations; protest and hearing),

except that (i) the Illinois Department shall issue notices

of assessment liability (rather than notices of tax

liability as provided in ROTA, Section 4); (ii) in the case

of a fraudulent return or in the case of an extended period

agreed to by the Illinois Department and the hospital

provider before the expiration of the limitation period, no

notice of assessment liability shall be issued more than 3

years after the later of the due date of the return

required by Section 5A-5 or the date the return (or an

amended return) was filed (rather within the period stated

in ROTA, Section 4); and (iii) the penalty provisions of

ROTA, Section 4 shall not apply.

(2) ROTA, Sec. 5 (failure to make return; failure to

pay assessment), except that the penalty and interest

provisions of ROTA, Section 5 shall not apply.

(3) ROTA, Section 5a (lien; attachment; termination;

notice; protest; review; release of lien; status of lien).

(4) ROTA, Section 5b (State lien notices; State lien

index; duties of recorder and registrar of titles).

(5) ROTA, Section 5c (liens; certificate of release).

(6) ROTA, Section 5d (Department not required to

furnish bond; claim to property attached or levied upon).

(7) ROTA, Section 5e (foreclosure on liens;

enforcement).

(8) ROTA, Section 5f (demand for payment; levy and sale

of property; limitation).

(9) ROTA, Section 5g (sale of property; redemption).

(10) ROTA, Section 5j (sales on transfers outside usual

course of business; report; payment of assessment; rights

and duties of purchaser; penalty), except that notice shall

be provided to the Illinois Department as specified by

rule.

(11) ROTA, Section 6 (erroneous payments; credit or

refund), provided that (i) the Illinois Department may only

apply an amount otherwise subject to credit or refund to a

liability arising under this Article; (ii) except in the

case of an extended period agreed to by the Illinois

Department and the hospital provider before the expiration

of this limitation period, a claim for credit or refund

must be filed no more than 3 years after the due date of

the return required by Section 5A-5 (rather than the time

limitation stated in ROTA, Section 6); and (iii) credits or

refunds shall not bear interest.

(12) ROTA, Section 6a (claims for credit or refund).

(13) ROTA, Section 6b (tentative determination of

claim; notice; hearing; review), provided that a hospital

provider or its representative shall have 60 days (rather

than 20 days) within which to file a protest and request

for hearing in response to a tentative determination of

claim.

(14) ROTA, Section 6c (finality of tentative

determinations).

(15) ROTA, Section 8 (investigations and hearings).

(16) ROTA, Section 9 (witness; immunity).

(17) ROTA, Section 10 (issuance of subpoenas;

attendance of witnesses; production of books and records).

(18) ROTA, Section 11 (information confidential;

exceptions).

(19) ROTA, Section 12 (rules and regulations; hearing;

appeals), except that a hospital provider shall not be

required to file a bond or be subject to a lien in lieu

thereof in order to seek court review under the

Administrative Review Law of a final assessment or revised

final assessment or the equivalent thereof issued by the

Illinois Department under this Article.

(b) In addition to any other remedy provided for and

without sending a notice of assessment liability, the Illinois

Department may collect an unpaid assessment by withholding, as

payment of the assessment, reimbursements or other amounts

otherwise payable by the Illinois Department to the provider.

(Source: P.A. 93-659, eff. 2-3-04.)

(305 ILCS 5/5A-12)

(Section scheduled to be repealed on July 1, 2005)

Sec. 5A-12. Hospital access improvement payments.

(a) To improve access to hospital services, for hospital

services rendered on or after June 1, 2004, the Department of

Public Aid shall make payments to hospitals as set forth in

this Section, except for hospitals described in subsection (b)

of Section 5A-3. These payments shall be paid on a quarterly

basis. For State fiscal year 2004, if the effective date of the

approval of the payment methodology required under this Section

and the waiver granted under 42 CFR 433.68 by the Centers for

Medicare and Medicaid Services of the U.S. Department of Health

and Human Services is prior to July 1, 2004, the Department

shall pay the total amounts required for fiscal year 2004 under

this Section within 25 days of the latest notification ; these

amounts shall be paid on or before June 15 of the year. No

payment shall be made for State fiscal year 2004 if the

effective date of the approval is on or after July 1, 2004. In

State fiscal year 2005 subsequent State fiscal years, the total

amounts required under this Section shall be paid in 4 equal

installments on or before July 15, October 15, January 14, and

April 15 of the year, except that if the date of notification

of the approval of the payment methodologies required under

this Section and the waiver granted under 42 CFR 433.68 is on

or after July 1, 2004, the sum of amounts required under this

Section prior to the date of notification shall be paid within

25 days of the date of the last notification. Payments under

this Section are not due and payable, however, until (i) the

methodologies described in this Section are approved by the

federal government in an appropriate State Plan amendment, (ii)

the assessment imposed under this Article is determined to be a

permissible tax under Title XIX of the Social Security Act, and

(iii) the assessment is in effect.

(b) High volume payment. In addition to rates paid for

inpatient hospital services, the Department of Public Aid shall

pay, to each Illinois hospital that provided more than 20,000

Medicaid inpatient days of care during State fiscal year 2001

(except for hospitals that qualify for adjustment payments

under Section 5-5.02 for the 12-month period beginning on

October 1, 2002), $190 for each Medicaid inpatient day of care

provided during that fiscal year. A hospital that provided less

than 30,000 Medicaid inpatient days of care during that period,

however, is not entitled to receive more than $3,500,000 per

year in such payments.

(c) Medicaid inpatient utilization rate adjustment. In

addition to rates paid for inpatient hospital services, the

Department of Public Aid shall pay each Illinois hospital

(except for hospitals described in Section 5A-3), for each

Medicaid inpatient day of care provided during State fiscal

year 2001, an amount equal to the product of $57.25 multiplied

by the quotient of 1 divided by the greater of 1.6% or the

hospital's Medicaid inpatient utilization rate (as used to

determine eligibility for adjustment payments under Section

5-5.02 for the 12-month period beginning on October 1, 2002).

The total payments under this subsection to a hospital may not

exceed $10,500,000 annually.

(d) Psychiatric base rate adjustment.

(1) In addition to rates paid for inpatient psychiatric

services, the Department of Public Aid shall pay each

Illinois general acute care hospital with a distinct

part-psychiatric unit, for each Medicaid inpatient

psychiatric day of care provided in State fiscal year 2001,

an amount equal to $400 less the hospital's per-diem rate

for Medicaid inpatient psychiatric services as in effect on

October 1, 2003. In no event, however, shall that amount be

less than zero.

(2) For distinct part-psychiatric units of Illinois

general acute care hospitals, except for all hospitals

excluded in Section 5A-3, whose inpatient per-diem rate as

in effect on October 1, 2003 is greater than $400, the

Department shall pay, in addition to any other amounts

authorized under this Code, $25 for each Medicaid inpatient

psychiatric day of care provided in State fiscal year 2001.

(e) Supplemental tertiary care adjustment. In addition to

rates paid for inpatient services, the Department of Public Aid

shall pay to each Illinois hospital eligible for tertiary care

adjustment payments under 89 Ill. Adm. Code 148.296, as in

effect for State fiscal year 2003, a supplemental tertiary care

adjustment payment equal to the tertiary care adjustment

payment required under 89 Ill. Adm. Code 148.296, as in effect

for State fiscal year 2003.

(f) Medicaid outpatient utilization rate adjustment. In

addition to rates paid for outpatient hospital services, the

Department of Public Aid shall pay each Illinois hospital

(except for hospitals described in Section 5A-3), an amount

equal to the product of 2.45% multiplied by the hospital's

Medicaid outpatient charges multiplied by the quotient of 1

divided by the greater of 1.6% or the hospital's Medicaid

outpatient utilization rate. The total payments under this

subsection to a hospital may not exceed $6,750,000 annually.

For purposes of this subsection:

"Medicaid outpatient charges" means the charges for

outpatient services provided to Medicaid patients for State

fiscal year 2001 as submitted by the hospital on the UB-92

billing form or under the ambulatory procedure listing and

adjudicated by the Department of Public Aid on or before

September 12, 2003.

"Medicaid outpatient utilization rate" means a fraction,

the numerator of which is the hospital's Medicaid outpatient

charges and the denominator of which is the total number of the

hospital's charges for outpatient services for the hospital's

fiscal year ending in 2001.

(g) State outpatient service adjustment. In addition to

rates paid for outpatient hospital services, the Department of

Public Aid shall pay each Illinois hospital an amount equal to

the product of 75.5% multiplied by the hospital's Medicaid

outpatient services submitted to the Department on the UB-92

billing form for State fiscal year 2001 multiplied by the

hospital's outpatient access fraction.

For purposes of this subsection, "outpatient access

fraction" means a fraction, the numerator of which is the

hospital's Medicaid payments for outpatient services for

ambulatory procedure listing services submitted to the

Department on the UB-92 billing form for State fiscal year

2001, and the denominator of which is the hospital's Medicaid

outpatient services submitted to the Department on the UB-92

billing form for State fiscal year 2001.

The total payments under this subsection to a hospital may

not exceed $3,000,000 annually.

(h) Rural hospital outpatient adjustment. In addition to

rates paid for outpatient hospital services, the Department of

Public Aid shall pay each Illinois rural hospital an amount

equal to the product of $14,500,000 multiplied by the rural

hospital outpatient adjustment fraction.

For purposes of this subsection, "rural hospital

outpatient adjustment fraction" means a fraction, the

numerator of which is the hospital's Medicaid visits for

outpatient services for ambulatory procedure listing services

submitted to the Department on the UB-92 billing form for State

fiscal year 2001, and the denominator of which is the total

Medicaid visits for outpatient services for ambulatory

procedure listing services for all Illinois rural hospitals

submitted to the Department on the UB-92 billing form for State

fiscal year 2001.

For purposes of this subsection, "rural hospital" has the

same meaning as in 89 Ill. Adm. Code 148.25, as in effect on

September 30, 2003.

(i) Merged/closed hospital adjustment. If any hospital

files a combined Medicaid cost report with another hospital

after January 1, 2001, and if that hospital subsequently

closes, then except for the payments described in subsection

(e), all payments described in the various subsections of this

Section shall, before the application of the annual limitation

amount specified in each such subsection, be multiplied by a

fraction, the numerator of which is the number of occupied bed

days attributable to the open hospital and the denominator of

which is the sum of the number of occupied bed days of each

open hospital and each closed hospital. For purposes of this

subsection, "occupied bed days" has the same meaning as the

term is defined in subsection (a) of Section 5A-2.

(j) For purposes of this Section, the terms "Medicaid

days", "Medicaid charges", and "Medicaid services" do not

include any days, charges, or services for which Medicare was

liable for payment.

(k) As provided in Section 5A-14, this Section is repealed

on July 1, 2005.

(Source: P.A. 93-659, eff. 2-3-04.)

(305 ILCS 5/12-10.7 new)

Sec. 12-10.7. The Health and Human Services Medicaid Trust

Fund.

(a) The Health and Human Services Medicaid Trust Fund shall

consist of (i) moneys appropriated or transferred into the

Fund, pursuant to statute, (ii) federal financial

participation moneys received pursuant to expenditures from

the Fund, and (iii) the interest earned on moneys in the Fund.

(b) Subject to appropriation, the moneys in the Fund shall

be used by a State agency for such purposes as that agency may,

by the appropriation language, be directed.

Section 35. The Senior Citizens and Disabled Persons

Property Tax Relief and Pharmaceutical Assistance Act is

amended by changing Section 6 as follows:

(320 ILCS 25/6) (from Ch. 67 1/2, par. 406)

Sec. 6. Administration.

(a) In general. Upon receipt of a timely filed claim, the

Department shall determine whether the claimant is a person

entitled to a grant under this Act and the amount of grant to

which he is entitled under this Act. The Department may require

the claimant to furnish reasonable proof of the statements of

domicile, household income, rent paid, property taxes accrued

and other matters on which entitlement is based, and may

withhold payment of a grant until such additional proof is

furnished.

(b) Rental determination. If the Department finds that the

gross rent used in the computation by a claimant of rent

constituting property taxes accrued exceeds the fair rental

value for the right to occupy that residence, the Department

may determine the fair rental value for that residence and

recompute rent constituting property taxes accrued

accordingly.

(c) Fraudulent claims. The Department shall deny claims

which have been fraudulently prepared or when it finds that the

claimant has acquired title to his residence or has paid rent

for his residence primarily for the purpose of receiving a

grant under this Act.

(d) Pharmaceutical Assistance. The Department shall allow

all pharmacies licensed under the Pharmacy Practice Act of 1987

to participate as authorized pharmacies unless they have been

removed from that status for cause pursuant to the terms of

this Section. The Director of the Department may enter into a

written contract with any State agency, instrumentality or

political subdivision, or a fiscal intermediary for the purpose

of making payments to authorized pharmacies for covered

prescription drugs and coordinating the program of

pharmaceutical assistance established by this Act with other

programs that provide payment for covered prescription drugs.

Such agreement shall establish procedures for properly

contracting for pharmacy services, validating reimbursement

claims, validating compliance of dispensing pharmacists with

the contracts for participation required under this Section,

validating the reasonable costs of covered prescription drugs,

and otherwise providing for the effective administration of

this Act.

The Department shall promulgate rules and regulations to

implement and administer the program of pharmaceutical

assistance required by this Act, which shall include the

following:

(1) Execution of contracts with pharmacies to dispense

covered prescription drugs. Such contracts shall stipulate

terms and conditions for authorized pharmacies

participation and the rights of the State to terminate such

participation for breach of such contract or for violation

of this Act or related rules and regulations of the

Department;

(2) Establishment of maximum limits on the size of

prescriptions, new or refilled, which shall be in amounts

sufficient for 34 days, except as otherwise specified by

rule for medical or utilization control reasons;

(3) Establishment of liens upon any and all causes of

action which accrue to a beneficiary as a result of

injuries for which covered prescription drugs are directly

or indirectly required and for which the Director made

payment or became liable for under this Act;

(4) Charge or collection of payments from third parties

or private plans of assistance, or from other programs of

public assistance for any claim that is properly chargeable

under the assignment of benefits executed by beneficiaries

as a requirement of eligibility for the pharmaceutical

assistance identification card under this Act;

(4.5) Provision for automatic enrollment of

beneficiaries into a Medicare Discount Card program

authorized under the federal Medicare Modernization Act of

2003 (P.L. 108-391) to coordinate coverage including

Medicare Transitional Assistance;

(5) Inspection of appropriate records and audit of

participating authorized pharmacies to ensure contract

compliance, and to determine any fraudulent transactions

or practices under this Act;

(6) Annual determination of the reasonable costs of

covered prescription drugs for which payments are made

under this Act, as provided in Section 3.16;

(7) Payment to pharmacies under this Act in accordance

with the State Prompt Payment Act.

The Department shall annually report to the Governor and

the General Assembly by March 1st of each year on the

administration of pharmaceutical assistance under this Act. By

the effective date of this Act the Department shall determine

the reasonable costs of covered prescription drugs in

accordance with Section 3.16 of this Act.

(Source: P.A. 91-357, eff. 7-29-99; 92-651, eff. 7-11-02.)

Section 40. The Illinois Food, Drug and Cosmetic Act is

amended by changing Section 3.14 as follows:

(410 ILCS 620/3.14) (from Ch. 56 1/2, par. 503.14)

Sec. 3.14. Dispensing or causing to be dispensed a

different drug in place of the drug or brand of drug ordered or

prescribed without the express permission of the person

ordering or prescribing. However, this Section does not

prohibit the interchange of different brands of the same

generically equivalent drug product, when the drug products are

not required to bear the legend "Caution: Federal law prohibits

dispensing without prescription", provided that the same

dosage form is dispensed and there is no greater than 1%

variance in the stated amount of each active ingredient of the

drug products. Nothing in this Section shall prohibit the

selection of different brands of the same generic drug, based

upon a drug formulary listing which is developed, maintained,

and issued by the Department of Public Health under which drug

product selection is permitted, is not subject to review at a

meeting of the Technical Advisory Council, is not subject to a

hearing in accordance with this Section, or is not specifically

prohibited. A generic drug determined to be therapeutically

equivalent by the United States Food and Drug Administration

(FDA) shall be available for substitution in Illinois in

accordance with this Act and the Pharmacy Practice Act of 1987,

provided that each manufacturer submits to the Director of the

Department of Public Health a notification containing product

technical bioequivalence information as a prerequisite to

product substitution when they have completed all required

testing to support FDA product approval and, in any event, the

information shall be submitted no later than 60 days prior to

product substitution in the State. If the Technical Advisory

Council finds that a generic drug product may have issues

related to the practice of medicine or the practice of

pharmacy, the Technical Advisory Council shall review the

generic drug product at its next regularly scheduled Technical

Advisory Council meeting. Following the Technical Advisory

Council's review and initial recommendation that a generic drug

product not be included in the Illinois Formulary, a hearing

shall be conducted in accordance with the Department's Rules of

Practice and Procedure in Administrative Hearings (77 Ill.

Admin. Code 100) and Article 10 of the Illinois Administrative

Procedure Act if requested by the manufacturer. The Technical

Advisory Council shall make its recommendation to the

Department of Public Health within 20 business days after the

public hearing. If the Department of Public Health, on the

recommendation of the Technical Advisory Council, determines

that, based upon a preponderance of the evidence, the drug is

not bioequivalent, not therapeutically equivalent, or could

cause clinically significant harm to the health or safety of

patients receiving that generic drug, the Department of Public

Health may prohibit the generic drug from substitution in the

State. A decision by the Department to prohibit a drug product

from substitution shall constitute a final administrative

decision within the meaning of Section 22.2 of the Illinois

Food, Drug and Cosmetic Act and Section 3-101 of the Code of

Civil Procedure, and shall be subject to judicial review

pursuant to the provisions of Article III of the Administrative

Review Law. A decision to prohibit a generic drug from

substitution must be accompanied by a written detailed

explanation of the basis for the decision. Determination of

products which may be selected shall be recommended by a

Technical Advisory Council of the Department, selected by the

Director of Public Health, which council shall consist of 7

persons including 2 physicians, 2 pharmacists, 2

pharmacologists and one other prescriber who have special

knowledge of generic drugs and formulary. Technical Advisory

Council members shall serve without pay, and shall be appointed

for a 3 year term and until their successors are appointed and

qualified. The procedures for operation of the Drug Product

Selection Program shall be promulgated by the Director, however

the actual list of products prohibited or approved for drug

product selection need not be promulgated. The Technical

Advisory Council shall take cognizance of federal studies, the

U.S. Pharmacopoeia - National Formulary, or other recognized

authoritative sources, and shall advise the Director of any

necessary modifications. Drug products previously approved by

the Technical Advisory Council for generic interchange may be

substituted in the State of Illinois without further review

subject to the conditions of approval in the State of Illinois

prior to the effective date of this amendatory Act of the 91st

General Assembly.

Timely notice of revisions to the formulary shall be

furnished at no charge to all pharmacies by the Department.

Single copies of the drug formulary shall be made available at

no charge upon request to licensed prescribers, student

pharmacists, and pharmacists practicing pharmacy in this State

under a reciprocal license. The Department shall offer

subscriptions to the drug formulary and its revisions to other

interested parties at a reasonable charge to be established by

rule. Before the Department makes effective any additions to or

deletions from the procedures for operation of the Drug Product

Selection Program under this Section, the Department shall file

proposed rules to amend the procedures for operation of the

program under Section 5-40 of the Illinois Administrative

Procedure Act. The Department shall issue necessary rules and

regulations for the implementation of this Section.

(Source: P.A. 91-766, eff. 9-1-00; 92-112, eff. 7-20-01.)

Section 99. Effective date. This Act takes effect upon becoming law.