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91_SB0646eng SB646 Engrossed LRB9105880MWgc 1 AN ACT concerning health care providers, amending named 2 Acts. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Illinois Health Facilities Planning Act 6 is amended by adding Sections 13.5, 13.9, 13.10, 13.15, 7 13.20, 13.25, 13.30, and 13.35 as follows: 8 (20 ILCS 3960/13.5 new) 9 Sec. 13.5. Health care provider cooperative agreements. 10 The General Assembly finds that the goals of controlling 11 health care costs and improving the quality of and access to 12 health care services will be significantly enhanced by some 13 cooperative arrangements involving providers that might be 14 prohibited by State and federal antitrust laws if undertaken 15 without governmental involvement. Both currently and 16 historically Illinois, other states, and the United States 17 have determined that unrestricted marketplace competition may 18 not produce the optimum mix of cost, access, and quality that 19 can be achieved in health care. The purpose of Sections 13.5 20 through 13.35 is to create an opportunity for the State to 21 review proposed arrangements and to substitute regulation for 22 competition when an arrangement is likely to result in lower 23 costs, or greater access, or improved quality, than would 24 otherwise occur in the competitive marketplace. The General 25 Assembly intends that approval of relationships be 26 accompanied by appropriate conditions, supervision, and 27 regulation to protect against private abuses of economic 28 power, and that an arrangement or relationship approved by 29 the Attorney General and accompanied by appropriate 30 conditions, supervision, and regulation shall not be subject 31 to State or federal antitrust liability. SB646 Engrossed -2- LRB9105880MWgc 1 The General Assembly finds that the market for health 2 care services is extremely diverse in Illinois. Some parts 3 of Illinois are national destinations for tertiary health 4 care services and receive patients from throughout the United 5 States and the Western Hemisphere. Other regions of Illinois 6 have extraordinary rates of outmigration, with residents 7 traveling hundreds of miles, often out-of-state, for care. 8 Providing health care close to home is medically useful to a 9 patient's recovery, because visits of families and friends 10 can improve a patient's psycho-social capacity to cope with 11 disease. Providing incentives to increase quality care in 12 areas without it is desirable. 13 (20 ILCS 3960/13.9 new) 14 Sec. 13.9. Regional application. 15 (a) The provisions of this law shall apply to any region 16 in Illinois where the following health care conditions exist: 17 (1) in any area of at least 25 contiguous counties 18 containing at least 20 facilities licensed under the 19 Hospital Licensing Act; 20 (2) where during the calendar year preceding the 21 effective date of this amendatory Act of the 91st General 22 Assembly, no facility has been approved or received a 23 permit to establish neo-natal intensive care, open-heart 24 surgery, level-one trauma, or organ transplantation; 25 (3) where at least 50% of residents receiving 26 open-heart surgery procedures at Illinois hospitals must 27 travel at least 75 miles; and 28 (4) where no Illinois university with a medical 29 school has a primary medical school campus within 100 30 miles of the most distant point in the region. 31 (b) For purposes of this law, health care providers 32 shall include any institution or individual licensed by the 33 State under the Medical Practice Act of 1987 or the Hospital SB646 Engrossed -3- LRB9105880MWgc 1 Licensing Act. 2 (20 ILCS 3960/13.10 new) 3 Sec. 13.10. Health care provider cooperative agreements; 4 goals. Acting by their boards of directors or boards of 5 trustees or as individuals, 2 or more health care providers, 6 at least one of which must be licensed under the Hospital 7 Licensing Act, may enter into a cooperative agreement 8 concerning the allocation of health care equipment or health 9 care services among themselves for the provision of major 10 medical procedures such as open-heart surgery, neo-natal 11 intensive care, level-one trauma, or organ transplantation. 12 The agreement shall not involve price-fixing or predatory 13 pricing and shall be designed to achieve one or more of the 14 following goals: 15 (1) Reducing health care costs for Illinois 16 consumers. 17 (2) Improving access to health care services in 18 Illinois. 19 (3) Improving the quality of patient care in 20 Illinois. 21 (20 ILCS 3960/13.15 new ) 22 Sec. 13.15. Health care provider cooperative agreements; 23 approval. 24 (a) No cooperative agreement between health care 25 providers implemented without first obtaining a review by the 26 Health Facilities Planning Board and approval from the 27 Attorney General as provided in this Section shall be 28 eligible for any protection or immunity created by Section 29 13.30. 30 (b) Health care providers desiring to implement a 31 cooperative agreement authorized under Section 13.10 and to 32 obtain the antitrust exception provided by Section 13.30 SB646 Engrossed -4- LRB9105880MWgc 1 shall apply to the Attorney General for approval of the 2 agreement. Applications for approval shall be in a form 3 prescribed by the Attorney General but shall contain at least 4 the following: 5 (1) A verified copy of the proposed agreement. 6 (2) An implementation plan that states how and when 7 the cooperative action identified in the agreement will 8 meet one or more of the goals specified in Section 13.10, 9 and how the benefits will outweigh any negatives. 10 (3) A statement of any consideration received or to 11 be received under the proposed agreement. 12 (c) Each application shall be accompanied by a fee 13 determined by the Attorney General, but in an amount 14 sufficient to cover the cost of processing the application. 15 All payments made to the Attorney General pursuant to this 16 Section shall be deposited into the Attorney General Health 17 Care Cooperative Agreement and Antitrust Enforcement Fund, a 18 special fund created in the State treasury. Moneys in the 19 fund shall be used subject to appropriation for the 20 performance of any function pertaining to the exercise of the 21 duties of the Attorney General in carrying out the provisions 22 of this Act. 23 (d) The Attorney General shall adopt rules for the 24 operation of this Act under the Illinois Administrative 25 Procedure Act. The General Assembly finds that the current 26 health care situation constitutes an emergency for purposes 27 of the Illinois Administrative Procedure Act. Therefore, the 28 Attorney General may implement the provisions of Sections 29 13.5 through 13.30 by emergency rulemaking under the Illinois 30 Administrative Procedure Act. 31 (e) The rules shall require applicants to provide clear 32 and convincing evidence in the application demonstrating that 33 quality, cost, or access improvements cannot be accomplished 34 by the applicants without the agreement. SB646 Engrossed -5- LRB9105880MWgc 1 (f) A copy of an application submitted to the Attorney 2 General pursuant to subsection (b) shall simultaneously be 3 submitted to the Health Facilities Planning Board, which 4 shall hold public hearings on the application. The hearings 5 may be combined with hearings relating to the provision by 6 the State Board of a Certificate of Need, if applicable. The 7 State Board shall issue a report, including findings of fact 8 and recommendations, and provide it, together with a record 9 of proceedings, to the Attorney General as expeditiously as 10 possible. 11 (g) Upon receiving a report and recommendations from the 12 Health Facilities Planning Board, the Attorney General may 13 approve an agreement if he or she finds by clear and 14 convincing evidence that its implementation will lead to the 15 improvements in cost, access, or quality described in the 16 application, that these improvements are likely to outweigh 17 any probable negative results, that predatory pricing will 18 not occur, and that the agreement is in the public interest. 19 (h) The Attorney General may condition his approval of 20 the agreement upon terms he or she finds necessary to protect 21 consumers and to be in the public interest. 22 (20 ILCS 3960/13.20 new) 23 Sec. 13.20. Health care provider cooperative agreements; 24 annual review. The Attorney General shall require from the 25 parties to a cooperative agreement annual progress reports 26 concerning the implementation of the agreement. The reports 27 shall contain any information and be accompanied by any fees 28 that are required by rule. 29 A copy of each report shall simultaneously be filed with 30 the Health Facilities Planning Board, which shall review it 31 and make recommendations to the Attorney General. 32 (20 ILCS 3960/13.25 new) SB646 Engrossed -6- LRB9105880MWgc 1 Sec. 13.25. Health care provider cooperative agreements; 2 rescinding approval. If the Attorney General finds that any 3 of the following circumstances exist, he or she may issue a 4 decision rescinding his or her approval of a hospital 5 cooperative agreement: 6 (1) The parties to the agreement fail to submit 7 annual progress reports; 8 (2) Materially misleading information was submitted 9 in the application or in any subsequent report filed by 10 the parties with the Health Facilities Planning Board and 11 the Attorney General pursuant to this Act; 12 (3) The parties have failed to implement the 13 agreement with due diligence; 14 (4) The agreement has failed to accomplish its 15 purposes as described in the application; or 16 (5) The Attorney General has subsequently found by 17 substantial evidence that the benefits of the agreement 18 do not substantially outweigh the negative results. 19 (20 ILCS 3960/13.30 new) 20 Sec. 13.30. Health care provider cooperative agreements; 21 antitrust exception. 22 (a) Neither this subsection nor any other provision of 23 this Act is intended to confer, and does not confer, 24 authority to engage in agreements, tacit, implied, or 25 express, which are not submitted to the Attorney General for 26 approval, if those agreements are in violation of State or 27 federal antitrust laws. Conduct seemingly pursuant to the 28 provisions of this law done without the good faith intention 29 to accomplish an agreement approved by the Attorney General 30 is not entitled to the protections and immunities of this 31 Section 13.30. 32 (b) It is the intent of Sections 13.5 through this 33 Section to require the State, through the Attorney General SB646 Engrossed -7- LRB9105880MWgc 1 and the Health Facilities Planning Board, to provide 2 direction, supervision, and control over cooperative 3 agreements approved under Section 13.15. To achieve the 4 goals specified in Section 13.10, this State direction, 5 supervision, and control will provide immunity from any civil 6 or criminal liability under the Illinois Antitrust Act and 7 state-action immunity under federal antitrust laws to (i) 8 health care providers, their governing board members, and 9 their officers, agents, and employees who take authorized 10 actions to implement a cooperative agreement approved under 11 Section 13.15 and (ii) health care providers' governing board 12 members who participate in discussions or negotiations 13 concerning the allocation of health care equipment or health 14 care services as authorized under Section 13.10. 15 (20 ILCS 3960/13.35 new) 16 Sec. 13.35. Health care providers' cooperative 17 agreements; Attorney General action. Nothing in Sections 18 13.5 through 13.30 shall limit the authority of the Attorney 19 General to initiate an action to enforce the civil or 20 criminal liability provisions of the Illinois Antitrust Act, 21 or to take any other measures that he or she deems necessary, 22 if the Attorney General determines that a health care 23 provider, the members of its governing board, or its 24 officers, agents, or employees have exceeded the scope of the 25 actions authorized under those Sections, have failed to 26 comply with the terms and conditions of an agreement 27 authorized under Section 13.15, or have failed to comply 28 with the reporting requirements of Section 13.20. 29 The Attorney General is authorized to use the subpoena 30 and investigative powers available to him or her under the 31 Illinois Antitrust Act and the Consumer Fraud and Deceptive 32 Business Practices Act to facilitate his or her review of any 33 application or report submitted to him or her pursuant to SB646 Engrossed -8- LRB9105880MWgc 1 Sections 13.15 and 13.20, and to investigate possible 2 violations of Sections 13.5 through 13.30 of the Act. 3 Section 10. The State Finance Act is amended by adding 4 Section 5.490 as follows: 5 (30 ILCS 105/5.490 new) 6 Sec. 5.490. The Attorney General Health Care Cooperative 7 Agreement and Antitrust Enforcement Fund. 8 Section 15. The Illinois Antitrust Act is amended by 9 changing Section 5 as follows: 10 (740 ILCS 10/5) (from Ch. 38, par. 60-5) 11 Sec. 5. No provisions of this Act shall be construed to 12 make illegal: 13 (1) the activities of any labor organization or of 14 individual members thereof which are directed solely to labor 15 objectives which are legitimate under the laws of either the 16 State of Illinois or the United States; 17 (2) the activities of any agricultural or horticultural 18 cooperative organization, whether incorporated or 19 unincorporated, or of individual members thereof, which are 20 directed solely to objectives of such cooperative 21 organizations which are legitimate under the laws of either 22 the State of Illinois or the United States; 23 (3) the activities of any public utility, as defined in 24 Section 3-105 of the Public Utilities Act to the extent that 25 such activities are subject to a clearly articulated and 26 affirmatively expressed State policy to replace competition 27 with regulation, where the conduct to be exempted is actively 28 supervised by the State itself; 29 (4) The activities of a telecommunications carrier, as 30 defined in Section 13-202 of the Public Utilities Act, to the SB646 Engrossed -9- LRB9105880MWgc 1 extent those activities relate to the provision of 2 noncompetitive telecommunications services under the Public 3 Utilities Act and are subject to the jurisdiction of the 4 Illinois Commerce Commission or to the activities of 5 telephone mutual concerns referred to in Section 13-202 of 6 the Public Utilities Act to the extent those activities 7 relate to the provision and maintenance of telephone service 8 to owners and customers; 9 (5) the activities (including, but not limited to, the 10 making of or participating in joint underwriting or joint 11 reinsurance arrangement) of any insurer, insurance agent, 12 insurance broker, independent insurance adjuster or rating 13 organization to the extent that such activities are subject 14 to regulation by the Director of Insurance of this State 15 under, or are permitted or are authorized by, the Insurance 16 Code or any other law of this State; 17 (6) the religious and charitable activities of any 18 not-for-profit corporation, trust or organization established 19 exclusively for religious or charitable purposes, or for both 20 purposes; 21 (7) the activities of any not-for-profit corporation 22 organized to provide telephone service on a mutual or 23 co-operative basis or electrification on a co-operative 24 basis, to the extent such activities relate to the marketing 25 and distribution of telephone or electrical service to owners 26 and customers; 27 (8) the activities engaged in by securities dealers who 28 are (i) licensed by the State of Illinois or (ii) members of 29 the National Association of Securities Dealers or (iii) 30 members of any National Securities Exchange registered with 31 the Securities and Exchange Commission under the Securities 32 Exchange Act of 1934, as amended, in the course of their 33 business of offering, selling, buying and selling, or 34 otherwise trading in or underwriting securities, as agent, SB646 Engrossed -10- LRB9105880MWgc 1 broker, or principal, and activities of any National 2 Securities Exchange so registered, including the 3 establishment of commission rates and schedules of charges; 4 (9) the activities of any board of trade designated as a 5 "contract market" by the Secretary of Agriculture of the 6 United States pursuant to Section 5 of the Commodity Exchange 7 Act, as amended; 8 (10) the activities of any motor carrier, rail carrier, 9 or common carrier by pipeline, as defined in the Common 10 Carrier by Pipeline Law of the Public Utilities Act, to the 11 extent that such activities are permitted or authorized by 12 the Act or are subject to regulation by the Illinois Commerce 13 Commission; 14 (11) the activities of any state or national bank to the 15 extent that such activities are regulated or supervised by 16 officers of the state or federal government under the banking 17 laws of this State or the United States; 18 (12) the activities of any state or federal savings and 19 loan association to the extent that such activities are 20 regulated or supervised by officers of the state or federal 21 government under the savings and loan laws of this State or 22 the United States; 23 (13) the activities of any bona fide not-for-profit 24 association, society or board, of attorneys, practitioners of 25 medicine, architects, engineers, land surveyors or real 26 estate brokers licensed and regulated by an agency of the 27 State of Illinois, in recommending schedules of suggested 28 fees, rates or commissions for use solely as guidelines in 29 determining charges for professional and technical services; 30 (14) Conduct involving trade or commerce (other than 31 import trade or import commerce) with foreign nations unless: 32 (a) such conduct has a direct, substantial, and 33 reasonably foreseeable effect: 34 (i) on trade or commerce which is not trade or SB646 Engrossed -11- LRB9105880MWgc 1 commerce with foreign nations, or on import trade or 2 import commerce with foreign nations; or 3 (ii) on export trade or export commerce with 4 foreign nations of a person engaged in such trade or 5 commerce in the United States; and 6 (b) such effect gives rise to a claim under the 7 provisions of this Act, other than this subsection (14). 8 (c) If this Act applies to conduct referred to in 9 this subsection (14) only because of the provisions of 10 paragraph (a)(ii), then this Act shall apply to such 11 conduct only for injury to export business in the United 12 States which affects this State;or13 (15) the activities of a unit of local government or 14 school district and the activities of the employees, agents 15 and officers of a unit of local government or school district 16 ; or 17 (16) the activities of a health care provider and the 18 activities of its governing board members and its officers, 19 agents, and employees in discussing, negotiating, entering 20 into, or implementing a cooperative agreement concerning the 21 allocation of health care equipment or health care services 22 resulting in one or more proposals or agreements that are 23 approved by the Attorney General, or if submitted to the 24 Attorney General might reasonably have been approved, as 25 authorized under Sections 13.5 through 13.35 of the Illinois 26 Health Facilities Planning Act. 27 (Source: P.A. 90-185, eff. 7-23-97; 90-561, eff. 12-16-97.)