SB2169sam001 96TH GENERAL ASSEMBLY

Sen. Dale A. Righter

Filed: 5/27/2009

09600SB2169sam001 LRB096 11458 DRJ 27501 a

AMENDMENT TO SENATE BILL 2169

AMENDMENT NO. ______. Amend Senate Bill 2169 by replacing everything after the enacting clause with the following:

"Section 1. Short title. This Act may be cited as the Medicaid Program Rescue Act.

Section 5. Legislative findings and intent. The General Assembly finds that, for the economic and social benefit of all residents of the State, it is important to ensure that all eligible Medicaid recipients have access to quality medical care. It is vital to the financial health of the State and to the State's Medicaid program that the dramatically increasing liabilities of the State-funded healthcare system be brought under control.

The legislature finds that the state of the current Medicaid program is unacceptable. Program liabilities are growing at an unsustainable rate, providers are forced to wait months for chronically late reimbursements, reimbursement levels in some areas are inadequate, hospital emergency rooms are utilized too often for non-emergency treatment, and Medicaid patients in many areas suffer from a lack of adequate access to services.

Costs associated with the Illinois Medicaid program have grown by over 50% in the last 7 years. The State's taxpayers cannot sustain 7% annual growth to a program that is reaching $10,000,000,000 in costs annually. This dramatic increase has led to unprecedented delays in bill payments, causing much hardship to medical service providers and those they serve. As a result, access to quality healthcare has been compromised for low-income individuals and families, making it increasingly difficult in many areas of the State for patients to access Medicaid services.

This Act requires the Department of Healthcare and Family Services to implement reforms and practices designed to make the program more efficient, improve the quality of care provided to enrollees, mandate that providers are paid in a timely fashion, and generate significant savings to ensure the program is affordable to the taxpayers of Illinois.

To achieve savings, it is directed that the Medicaid program shall experience no growth in gross liabilities for fiscal year 2010, and no more than 3% annual gross liability growth in fiscal year 2011 or 2012. This growth rate is approximately equal to the average growth in gross liability for the 10-year period prior to fiscal year 2004.

The Department is directed to begin implementation of cost saving reforms as soon as possible upon implementation of this Act. However, no reforms that will cause the loss of federal stimulus funding under the American Recovery and Reinvestment Act of 2009 shall be implemented prior to January 1, 2011.

The legislature finds that the current administration of the Department has focused primarily on expansion of programs, with less emphasis on managing the Medicaid program to keep costs down and to prevent payment delays to providers. Further, the Department has clearly shown a disregard in certain instances in the past for the will of the legislature, namely, in expanding the FamilyCare program without legislative approval. For that reason, the administration of the Department is viewed as a potential impediment to the successful implementation of this Act.

Section 10. Definitions. In this Act:

"Department" means the Department of Healthcare and Family Services.

"Medicaid program" or "Medicaid" means the program of medical assistance under Article V of the Illinois Public Aid Code.

Section 15. Savings achievement. In order to achieve savings and reduce the growth in the Medicaid program, the Department, among other measures:

(1) May implement a broad risk-based managed care program.

(2) May employ other strategies to reduce the frequency of costly emergency room visits, especially for minor health issues.

(3) May reevaluate the policy of providing "presumptive eligibility" to Medicaid applicants whose eligibility status has not been verified.

(4) May utilize income verification processes designed to more accurately identify annual income in order to ensure that those recipients receiving Medicaid benefits are qualified to receive those benefits under the eligibility guidelines.

(5) May apply asset tests to any Medicaid programs to which asset tests do not currently apply.

(6) May increase the frequency of the process of re-determining eligibility status for program participants and may contract with a private entity for this purpose.

(7) May increase cost-sharing requirements of participants.

(8) May pursue a comprehensive drug purchasing agreement with all other State, county, and local agencies.

(9) May pursue a global federal waiver.

(10) May enhance efforts to reduce fraud and abuse through the Office of the Inspector General.

(11) May reduce benefits for any participants in any Medicaid program not covered by federal matching dollars. Reducing benefits for any participants in the program should be considered as a last resort after other savings options have been implemented.

Section 20. Liability growth. Savings measures, including some measures from Section 10 of this Act, shall be taken to achieve no growth in gross Medicaid liabilities for fiscal year 2010 and a maximum gross Medicaid liability growth of 3% annually for fiscal years 2011 and 2012.

Section 25. Appropriations limitations. Appropriations for the fiscal year 2010 Medicaid program shall be limited to no increase over the enacted FY09 appropriation as included in Public Act 95-734, Article 10, Section 10. Any FY09 supplemental appropriations shall be excluded in calculating the FY2010 appropriation. Appropriations for the fiscal year 2011 Medicaid program shall be limited to a maximum increase of 3% over the fiscal year 2010 enacted appropriation for the Medicaid program. Appropriations for the fiscal year 2012 Medicaid program shall be limited to a maximum increase of 3% over the fiscal year 2011 enacted appropriation for the Medicaid Program.

Section 30. Liability cap. The amount of Medicaid liabilities carried from one fiscal year to the next under Section 25 of the State Finance Act is capped at $650,000,000. The Department shall not exceed a maximum $650,000,000 in Medicaid liabilities under Section 25 of the State Finance Act at the end of any fiscal year beginning June 30, 2009.

Section 35. Prohibitions. The Department is expressly prohibited from implementing rate reductions for long term care facilities to achieve savings. The Department is prohibited, until January 1, 2011, from implementing measures that would result in the loss of federal stimulus funding.

Section 40. Expansion moratorium. From the effective date of this Act until June 30, 2012, the Department is prohibited (i) from expanding eligibility for any existing Medicaid program, including FamilyCare, or from creating any new Medicaid program and (ii) from expanding eligibility for the Covering ALL KIDS Health Insurance Program.

Section 45. Director termination. The Director of Healthcare and Family Services holding that position on May 14, 2009 is terminated on July 1, 2009, by operation of law, and shall thereafter no longer hold that position or any other employment position with the State of Illinois. The Governor is directed to take whatever action is necessary to effectuate this termination.

Section 50. Rulemaking. Rules to implement this Act in its entirety shall be promulgated and adopted by the Department. This rulemaking authority is conditioned on the rules being promulgated and adopted in accordance with all provisions of the Illinois Administrative Procedure Act and all rules and procedures of the Joint Committee on Administrative Rules; any purported rule not so promulgated or adopted, for whatever reason, is unauthorized.

Section 55. Reports to General Assembly. On June 30, 2009 or 30 days after the effective date of this Act, whichever is later, and on every April 15th thereafter, the Department shall provide the General Assembly with a report on liability projections for the next fiscal year. The Department shall report to the General Assembly by July 31 of each calendar year on the measures implemented and the savings achieved from each measure in the fiscal year just concluded.

Section 60. Federal funding. No reforms implemented by the Department shall be enacted if those reforms cause a loss in funding under the federal American Recovery and Reinvestment Act of 2009. Any cost saving measures delayed as a result of the federal Act may be enacted upon expiration of that Act.

Section 90. The State Finance Act is amended by changing Section 25 as follows:

(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 Healthcare and Family Services 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. Notwithstanding any other provision of this Section, the amount of liabilities for medical payments by the Department of Healthcare and Family Services carried from one fiscal year to the next under this Section may not exceed $650,000,000. Beginning June 30, 2009, the amount of liabilities for medical payments by the Department of Healthcare and Family Services at the end of any fiscal year may not exceed $650,000,000.

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 Healthcare and Family Services.

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 Healthcare and Family Services, 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 Healthcare and Family Services 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 Healthcare and Family Services' 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 for payments or authorized inter-fund transfers based on estimated charges for goods or services;

(2) issuing credits, refunding through inter-fund transfers, or reducing future inter-fund transfers during the subsequent fiscal year for all user agency payments or authorized inter-fund transfers 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 or authorized inter-fund transfers 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 or by increasing an authorized inter-fund transfer during the current fiscal year. For the purposes of this Act, "inter-fund transfers" means transfers without the use of the voucher-warrant process, as authorized by Section 9.01 of the State Comptroller Act.

(Source: P.A. 95-331, eff. 8-21-07.)

Section 92. The Covering ALL KIDS Health Insurance Act is amended by changing Section 20 as follows:

(215 ILCS 170/20)

(Section scheduled to be repealed on July 1, 2011)

Sec. 20. Eligibility.

(a) To be eligible for the Program, a person must be a child:

(1) who is a resident of the State of Illinois; and

(2) who is ineligible for medical assistance under the Illinois Public Aid Code or benefits under the Children's Health Insurance Program Act; and

(3) either (i) who has been without health insurance coverage for a period set forth by the Department in rules, but not less than 6 months during the first month of operation of the Program, 7 months during the second month of operation, 8 months during the third month of operation, 9 months during the fourth month of operation, 10 months during the fifth month of operation, 11 months during the sixth month of operation, and 12 months thereafter, (ii) whose parent has lost employment that made available affordable dependent health insurance coverage, until such time as affordable employer-sponsored dependent health insurance coverage is again available for the child as set forth by the Department in rules, (iii) who is a newborn whose responsible relative does not have available affordable private or employer-sponsored health insurance, or (iv) who, within one year of applying for coverage under this Act, lost medical benefits under the Illinois Public Aid Code or the Children's Health Insurance Program Act.

An entity that provides health insurance coverage (as defined in Section 2 of the Comprehensive Health Insurance Plan Act) to Illinois residents shall provide health insurance data match to the Department of Healthcare and Family Services for the purpose of determining eligibility for the Program under this Act.

The Department of Healthcare and Family Services, in collaboration with the Department of Financial and Professional Regulation, Division of Insurance, shall adopt rules governing the exchange of information under this Section. The rules shall be consistent with all laws relating to the confidentiality or privacy of personal information or medical records, including provisions under the Federal Health Insurance Portability and Accountability Act (HIPAA).

(b) The Department shall monitor the availability and retention of employer-sponsored dependent health insurance coverage and shall modify the period described in subdivision (a)(3) if necessary to promote retention of private or employer-sponsored health insurance and timely access to healthcare services, but at no time shall the period described in subdivision (a)(3) be less than 6 months.

(c) The Department, at its discretion, may take into account the affordability of dependent health insurance when determining whether employer-sponsored dependent health insurance coverage is available upon reemployment of a child's parent as provided in subdivision (a)(3).

(d) A child who is determined to be eligible for the Program shall remain eligible for 12 months, provided that the child maintains his or her residence in this State, has not yet attained 19 years of age, and is not excluded under subsection (e).

(e) A child is not eligible for coverage under the Program if:

(1) the premium required under Section 40 has not been timely paid; if the required premiums are not paid, the liability of the Program shall be limited to benefits incurred under the Program for the time period for which premiums have been paid; if the required monthly premium is not paid, the child is ineligible for re-enrollment for a minimum period of 3 months; re-enrollment shall be completed before the next covered medical visit, and the first month's required premium shall be paid in advance of the next covered medical visit; or

(2) the child is an inmate of a public institution or an institution for mental diseases.

(e-5) The Department may not expand eligibility for the Program before July 1, 2012.

(f) The Department shall adopt eligibility rules, including, but not limited to: rules regarding annual renewals of eligibility for the Program; rules providing for re-enrollment, grace periods, notice requirements, and hearing procedures under subdivision (e)(1) of this Section; and rules regarding what constitutes availability and affordability of private or employer-sponsored health insurance, with consideration of such factors as the percentage of income needed to purchase children or family health insurance, the availability of employer subsidies, and other relevant factors.

(Source: P.A. 94-693, eff. 7-1-06.)

Section 94. The Illinois Public Aid Code is amended by adding Section 5-1.05 as follows:

(305 ILCS 5/5-1.05 new)

Sec. 5-1.05. No expansion of eligibility or new programs. The Department of Healthcare and Family Services may not expand eligibility for medical assistance under this Article, including eligibility for FamilyCare under paragraph 15 of Section 5-2, before July 1, 2012, nor may the Department create any new program of medical assistance under this Article before that date.

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