Bill Amendment: IL SB3916 | 2025-2026 | 104th General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

---

Bill Title: HOSPITAL FINANCIAL RESOLUTION

Status: 2026-05-22 - Senate Committee Amendment No. 2 Rule 3-9(a) / Re-referred to Assignments [SB3916 Detail]

Download: Illinois-2025-SB3916-Senate_Amendment_002.html

---

Sen. Laura Fine

Filed: 5/12/2026

 

 

 

10400SB3916sam002 LRB104 20228 KTG 37634 a
AMENDMENT TO SENATE BILL 3916
AMENDMENT NO. ______. Amend Senate Bill 3916 by replacing
everything after the enacting clause with the following:
"Section 5. The Illinois Public Aid Code is amended by
adding Article V-J as follows:
(305 ILCS 5/Art. V-J heading new)
ARTICLE V-J. DISTRESSED HOSPITAL LOAN PROGRAM
(305 ILCS 5/5J-1 new)
Sec. 5J-1. References to Article. This Article may be
referred to as the Distressed Hospital Loan Program Law.
(305 ILCS 5/5J-5 new)
Sec. 5J-5. Distressed Hospital Loan Program. The
Distressed Hospital Loan Program is created. The purpose of
the Program is to provide interest-free cash flow loans to

10400SB3916sam002 - 2 - LRB104 20228 KTG 37634 a
public hospitals and not-for-profit hospitals in significant
financial distress to prevent the closure of or to facilitate
the reopening of those hospitals.
(305 ILCS 5/5J-10 new)
Sec. 5J-10. Definitions. As used in this Article:
"Closed hospital" means a hospital that closed after
January 1, 2019.
"Department" means the Department of Healthcare and Family
Services.
"Program" means the Distressed Hospital Loan Program.
"Public hospital" means a hospital that is licensed by the
Hospital Licensing Act and is either owned or operated by a
governmental body in Illinois, excluding a State agency, a
State university, or a county with a population of 3,000,000
or more.
(305 ILCS 5/5J-15 new)
Sec. 5J-15. Administration. The Department shall
administer the Distressed Hospital Loan Program in
coordination with the Department of Public Health and the
Governor's Office of Management and Budget. The Department
shall adopt rules to implement this Program.
(305 ILCS 5/5J-18 new)
Sec. 5J-18. Application requirements. A hospital applying

10400SB3916sam002 - 3 - LRB104 20228 KTG 37634 a
for aid under this Program shall provide the Department with
financial information, in a format determined by the
Department, demonstrating the hospital's need for bridge
financing due to financial hardship.
(1) Before receiving bridge financing under this
Program, an eligible hospital shall submit a plan to the
Department, with projections detailing the uses of the
proposed loan and a structured plan proposed by the
hospital's governing body to regain financial viability
and continue operations.
(2) Before issuing a loan under this Section, the
Department shall review the plan submitted by an eligible
hospital and make a determination both that the plan is
viable and that there is a reasonable likelihood that the
hospital will be able to regain financial viability,
continue to operate as a hospital, and be able to repay the
loan. The Department shall not issue a loan award if the
Department is unable to make these determinations.
(3) All funds loaned in accordance with this Article
shall be used as described in the application approved by
the Department, which shall be incorporated into any
resulting loan agreement. Any misused funds shall be
recouped by the Department. In addition to any other
remedies provided for by law and without sending a notice
of liability, the Department may withhold, as payment of
any amounts due and owing as repayment of loans issued in

10400SB3916sam002 - 4 - LRB104 20228 KTG 37634 a
accordance with this Article, reimbursements or other
amounts otherwise payable by the Department to the loan
recipient, including, but not limited to, amounts
otherwise payable from a managed care organization
performing duties under contract with the Department.
(305 ILCS 5/5J-20 new)
Sec. 5J-20. Application evaluation methodology.
(a) In collaboration with the Governor's Office of
Management and Budget and the Department of Public Health, the
Department shall develop a methodology to evaluate an at-risk
hospital's application for a loan through the Program.
(b) The methodology shall consider factors including, but
not limited to, whether the hospital is in financial distress
as solely determined by the State; whether the hospital is
small, rural, a safety-net hospital, a critical access
hospital, a trauma center, an urban hospital providing access
for an underserved area, a hospital that serves a
disproportionate share of Medicaid patients, or serving a
rural catchment area; and whether closure of the hospital or
service line reduction as a result of the financial distress
would significantly impact access to services in the region.
(c) The methodology for determining financial distress may
consider such factors as the hospital's prior and projected
performance on financial metrics, including the amount of cash
on hand, and whether the hospital has experienced, or is

10400SB3916sam002 - 5 - LRB104 20228 KTG 37634 a
projected to experience, negative operating margins.
(d) Subject to appropriation and the availability of
funds, the Department shall issue the loan to a qualifying
hospital with an approved loan application as soon as
reasonably practicable following its eligibility
determination.
(e) Hospitals ineligible for State assistance under the
Program include:
(1) Not-for-profit hospitals that belong to integrated
health care systems with more than 3 separately licensed
hospital facilities.
(2) A hospital that maintains unpaid assessment
liability owed to the State and either does not have a
negotiated tax repayment agreement with the State or is
delinquent under an existing negotiated tax repayment
agreement.
(3) A hospital not current on a repayment schedule for
a prior advance issued in accordance with 89 Ill. Adm.
Code 140.71.
(4) A hospital that has not provided quarterly
reporting on its finances as mandated by State law or
administrative rule.
(5) A hospital that is subject to a stop payment
order, as defined by the Grant Accountability and
Transparency Act, with the State for any reason.
(6) A hospital that has been under investigation or

10400SB3916sam002 - 6 - LRB104 20228 KTG 37634 a
been issued an immediate jeopardy by the Centers for
Medicare and Medicaid Services in the prior 12 months from
the time of loan application.
(7) A hospital that is owned or operated by a
for-profit entity.
(f) The Department shall determine the application
process, underwriting review, and methodology for approval and
distribution of the loans under the Program.
(g) The Department shall have the authority to determine
service provision requirements in approving, and for the
duration of, loans to eligible hospitals. In making its
determination, the Department shall consider the impact of any
changes to the hospital's service delivery or access to
necessary medical care, particularly for beneficiaries of the
State's medical assistance Program.
(h) The application process shall allow for at least 30
days for the Department to issue an initial response to any
loan application.
(305 ILCS 5/5J-25 new)
Sec. 5J-25. Repayment agreement.
(a) A hospital shall be required to enter into a repayment
agreement with the Department to execute the approved loan.
Terms must include, but are not limited to, monthly repayments
of the loan beginning no later than 18 months after receipt of
the loan and discharge of the loan within 36 months of the date

10400SB3916sam002 - 7 - LRB104 20228 KTG 37634 a
of the loan.
(b) Notwithstanding any other law and to the extent
permissible under federal rules, security for the cash flow
loans in this Article shall be reimbursements due to the
hospital from the Department, including, but not limited to,
any reimbursements under the Illinois Public Aid Code. If the
provider fails to comply with the recoupment terms of the
repayment agreement, the remaining balance of the loan shall
be immediately recouped from claims being processed by the
Department. If such claims are insufficient for complete
recovery, the remaining balance shall become immediately due
and payable by check to the Department of Healthcare and
Family Services. Failure by the provider to remit such check
shall result in the Department pursuing other collection
methods.
(c) If a hospital provider fails to pay any monthly
installment repayments, there shall, unless waived by the
Department for reasonable cause, be added to the loan
repayment obligation a penalty 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.
(305 ILCS 5/5J-30 new)
Sec. 5J-30. Distressed Hospital Loan Program Fund.

10400SB3916sam002 - 8 - LRB104 20228 KTG 37634 a
(a) The Distressed Hospital Loan Program Fund is created
as a special fund in the State treasury.
(b) Subject to appropriation, the Department may make
secured loans from amounts in the Distressed Hospital Loan
Program Fund to a public or not-for-profit hospital for
purposes of preventing the hospital's closure in accordance
with the provisions of this Article.
(c) On January 1, 2027, or as soon thereafter as
practical, the State Comptroller shall direct and the State
Treasurer shall transfer, at the direction of the Director of
the Department, an amount not to exceed $85,000,000 from the
Healthcare Provider Relief Fund to the Distressed Hospital
Loan Program Fund.
(d) All moneys accruing to the Department under this
Article from any source, including, but not limited to, all
amounts repaid under the terms of any loan agreements, shall
be deposited into the Fund.
(e) On June 30, 2033, or as soon thereafter as practical,
the State Comptroller shall direct and the State Treasurer
shall transfer the remaining balance in the Distressed
Hospital Loan Program Fund to the Healthcare Provider Relief
Fund. Upon completion of the transfers, the Distressed
Hospital Loan Program Fund is dissolved and any outstanding
obligations or liabilities of the Fund pass to the Healthcare
Provider Relief Fund. The Department shall deposit all
subsequent loan repayments or medical assistance program or

10400SB3916sam002 - 9 - LRB104 20228 KTG 37634 a
other reimbursements withheld for due cause in accordance with
this Article into the Healthcare Provider Relief Fund.
(f) The Department may require any hospital receiving a
loan under this Article to provide the Department with an
independent financial audit of the hospital's operations for
any fiscal year in which a loan is outstanding.
(305 ILCS 5/5J-35 new)
Sec. 5J-35. Repealer. This Article is repealed on June 30,
2033.
Section 70. The State Finance Act is amended by adding
Section 5.1038 as follows:
(30 ILCS 105/5.1038 new)
Sec. 5.1038. The Distressed Hospital Loan Program Fund.
This Section is repealed June 30, 2033.
Section 75. The Illinois Administrative Procedure Act is
amended by adding Section 5-45.71 as follows:
(5 ILCS 100/5-45.71 new)
Sec. 5-45.71. Emergency rulemaking; financial reporting of
nonexempt hospitals. To provide for the expeditious and timely
implementation of Section 5A-3.1 of the Illinois Public Aid
Code, emergency rules implementing Section 5A-3.1 of the

10400SB3916sam002 - 10 - LRB104 20228 KTG 37634 a
Illinois Public Aid Code may be adopted in accordance with
Section 5-45 by the Department of Healthcare and Family
Services. The adoption of emergency rules authorized by
Section 5-45 and this Section is deemed necessary for the
public interest, safety, and welfare.
This Section is repealed one year after the effective date
of this amendatory Act of the 104th General Assembly.
Section 80. The Hospital Licensing Act is amended by
adding Section 4.8 as follows:
(210 ILCS 85/4.8 new)
Sec. 4.8. Additional licensing requirements.
(a) Hospital emergency and financial contingency plan. Any
hospital licensed under this Act that has outstanding debts to
the State in the form of tax arrears or that maintains debt
through the Distressed Hospital Loan Program or other Medicaid
advance payments shall submit to the Department a hospital
emergency and financial contingency plan for the rapid and
orderly resolution of finances and operations in the event of
material financial distress. The plan shall be submitted on an
annual basis until any outstanding assessment or advance
balances have been fully paid. The plan shall include, but not
be limited to, procedures for the safe and orderly transfer
and continuity of care for patients if closure of at least one
category of service, or a temporary suspension of such service

10400SB3916sam002 - 11 - LRB104 20228 KTG 37634 a
for any reason, were to occur. Potential events precipitating
closure or suspended services that shall be addressed in the
plan, include, but are not limited to: financial distress,
regulatory and compliance issues, operational or workforce
challenges, infrastructure and facility issues, emergency or
disaster related causes, and strategic organizational
decisions. The plan shall contemplate (i) the identification
of potential service area gaps created due to emergency
closure and suspension of services and (ii) the orderly
preservation and transfer of medical records in accordance
with the Medical Patient Rights Act, the Health Insurance
Portability and Accountability Act of 1996, and other
applicable medical privacy laws.
(b) Hospital emergency and financial contingency plans for
hospitals with multiple locations operating under a single
license. Any hospital licensed by the Department under Section
4.5 of this Act shall submit a hospital emergency and
financial contingency plan as outlined in subsection (a) for
each location, campus, or facility administered under the
license.
(c) Annual filing. Hospital emergency and financial
contingency plans shall be filed with the Department no later
than 6 months after the effective date of this amendatory Act
of the 104th General Assembly. Hospital emergency and
financial contingency plans, or annual affirmations of
previously filed hospital emergency and financial contingency

10400SB3916sam002 - 12 - LRB104 20228 KTG 37634 a
plans, as outlined in this Section shall be submitted on an
annual basis as determined by the Department through
administrative rule.
(d) Penalties for noncompliance. The Department may impose
fines of not more than $500 per week for failure to comply with
the provisions of this Section.
Section 85. The Illinois Public Aid Code is amended by
adding Section 5A-3.1 as follows:
(305 ILCS 5/5A-3.1 new)
Sec. 5A-3.1. Financial reporting of hospitals.
(a) The following summary financial and utilization data
shall be reported to the Department of Healthcare and Family
Services annually by a hospital subject to the assessment
imposed under this Article beginning January 1, 2027.
Financial reporting shall be due within 45 days after the
effective date of this amendatory Act of the 104th General
Assembly. The annual summary financial and utilization data
shall include all of the following:
(1) The most recent audited financial statements.
(2) The most recent month-end balance sheet detailing
the assets, liabilities, and net worth at the end of the
month immediately preceding the annual reporting cycle.
(3) The most recent income statement for the month
immediately preceding the annual reporting cycle

10400SB3916sam002 - 13 - LRB104 20228 KTG 37634 a
summarizing the revenues, expenses, and net income.
(4) The total number of inpatient days, outpatient
visits, and discharges by payer, including, but not
limited to, Medicare, Medicaid fee-for-service, Medicaid
managed care, commercial coverage, and other payers.
(5) The total inpatient gross revenues by payer,
including, but not limited to, Medicare, Medicaid
fee-for-service, Medicaid managed care, commercial
coverage, and other payers.
(6) The total outpatient gross revenues by payer,
including, but not limited to, Medicare, Medicaid
fee-for-service, Medicaid managed care, commercial
coverage, and other payers.
(b) The Department of Healthcare and Family Services, in
coordination with the Department of Public Health, shall
administer the collection of required reports. The Department
of Healthcare and Family Services may adopt any administrative
rules, including emergency rules, necessary to implement this
Section, including requesting additional information or
removing information from the reporting requirements.
(c) If a hospital has not filed the required information
within 45 days after the close of the annual reporting period,
the Department of Healthcare and Family Services shall impose
fines of not more than $5,000 per week for failure to comply
with the provisions of this Section.

10400SB3916sam002 - 14 - LRB104 20228 KTG 37634 a
Section 99. Effective date. This Section and Sections 75
and 85 take effect upon becoming law. Section 5 takes effect
July 1, 2026.".