Bill Text: IL HB1391 | 2017-2018 | 100th General Assembly | Introduced

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Bill Title: Amends the Health Care Worker Self-Referral Act. Makes a technical change in a Section concerning prohibited referrals and claims for payment.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Failed) 2019-01-08 - Session Sine Die [HB1391 Detail]

Download: Illinois-2017-HB1391-Introduced.html

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100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 HB1391 Introduced , by Rep. Michael J. Madigan SYNOPSIS AS INTRODUCED:
225 ILCS 47/20
Amends the Health Care Worker Self-Referral Act. Makes a technical change in a Section concerning prohibited referrals and claims for payment.
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A BILL FOR
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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Health Care Worker Self-Referral Act is
amended by changing Section 20 as follows:
(225 ILCS 47/20)
Sec. 20. Prohibited referrals and claims for payment.
(a) A health care worker shall not refer a patient for
health services to an entity outside the the health care
worker's office or group practice in which the health care
worker is an investor, unless the health care worker directly
provides health services within the entity and will be
personally involved with the provision of care to the referred
patient.
(b) Pursuant to Board determination that the following
exception is applicable, a health care worker may invest in and
refer to an entity, whether or not the health care worker
provides direct services within said entity, if there is a
demonstrated need in the community for the entity and
alternative financing is not available. For purposes of this
subsection (b), "demonstrated need" in the community for the
entity may exist if (1) there is no facility of reasonable
quality that provides medically appropriate service, (2) use of

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existing facilities is onerous or creates too great a hardship
for patients, (3) the entity is formed to own or lease medical
equipment which replaces obsolete or otherwise inadequate
equipment in or under the control of a hospital located in a
federally designated health manpower shortage area, or (4) such
other standards as established, by rule, by the Board.
"Community" shall be defined as a metropolitan area for a city,
and a county for a rural area. In addition, the following
provisions must be met to be exempt under this Section:
(1) Individuals who are not in a position to refer
patients to an entity are given a bona fide opportunity to
also invest in the entity on the same terms as those
offered a referring health care worker; and
(2) No health care worker who invests shall be required
or encouraged to make referrals to the entity or otherwise
generate business as a condition of becoming or remaining
an investor; and
(3) The entity shall market or furnish its services to
referring health care worker investors and other investors
on equal terms; and
(4) The entity shall not loan funds or guarantee any
loans for health care workers who are in a position to
refer to an entity; and
(5) The income on the health care worker's investment
shall be tied to the health care worker's equity in the
facility rather than to the volume of referrals made; and

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(6) Any investment contract between the entity and the
health care worker shall not include any covenant or
non-competition clause that prevents a health care worker
from investing in other entities; and
(7) When making a referral, a health care worker must
disclose his investment interest in an entity to the
patient being referred to such entity. If alternative
facilities are reasonably available, the health care
worker must provide the patient with a list of alternative
facilities. The health care worker shall inform the patient
that they have the option to use an alternative facility
other than one in which the health care worker has an
investment interest and the patient will not be treated
differently by the health care worker if the patient
chooses to use another entity. This shall be applicable to
all health care worker investors, including those who
provide direct care or services for their patients in
entities outside their office practices; and
(8) If a third party payor requests information with
regard to a health care worker's investment interest, the
same shall be disclosed; and
(9) The entity shall establish an internal utilization
review program to ensure that investing health care workers
provided appropriate or necessary utilization; and
(10) If a health care worker's financial interest in an
entity is incompatible with a referred patient's interest,

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the health care worker shall make alternative arrangements
for the patient's care.
The Board shall make such a determination for a health care
worker within 90 days of a completed written request. Failure
to make such a determination within the 90 day time frame shall
mean that no alternative is practical based upon the facts set
forth in the completed written request.
(c) It shall not be a violation of this Act for a health
care worker to refer a patient for health services to a
publicly traded entity in which he or she has an investment
interest provided that:
(1) the entity is listed for trading on the New York
Stock Exchange or on the American Stock Exchange, or is a
national market system security traded under an automated
inter-dealer quotation system operated by the National
Association of Securities Dealers; and
(2) the entity had, at the end of the corporation's
most recent fiscal year, total net assets of at least
$30,000,000 related to the furnishing of health services;
and
(3) any investment interest obtained after the
effective date of this Act is traded on the exchanges
listed in paragraph 1 of subsection (c) of this Section
after the entity became a publicly traded corporation; and
(4) the entity markets or furnishes its services to
referring health care worker investors and other health

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care workers on equal terms; and
(5) all stock held in such publicly traded companies,
including stock held in the predecessor privately held
company, shall be of one class without preferential
treatment as to status or remuneration; and
(6) the entity does not loan funds or guarantee any
loans for health care workers who are in a position to be
referred to an entity; and
(7) the income on the health care worker's investment
is tied to the health care worker's equity in the entity
rather than to the volume of referrals made; and
(8) the investment interest does not exceed 1/2 of 1%
of the entity's total equity.
(d) Any hospital licensed under the Hospital Licensing Act
shall not discriminate against or otherwise penalize a health
care worker for compliance with this Act.
(e) Any health care worker or other entity shall not enter
into an arrangement or scheme seeking to make referrals to
another health care worker or entity based upon the condition
that the health care worker or entity will make referrals with
an intent to evade the prohibitions of this Act by inducing
patient referrals which would be prohibited by this Section if
the health care worker or entity made the referral directly.
(f) If compliance with the need and alternative investor
criteria is not practical, the health care worker shall
identify to the patient reasonably available alternative

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facilities. The Board shall, by rule, designate when compliance
is "not practical".
(g) Health care workers may request from the Board that it
render an advisory opinion that a referral to an existing or
proposed entity under specified circumstances does or does not
violate the provisions of this Act. The Board's opinion shall
be presumptively correct. Failure to render such an advisory
opinion within 90 days of a completed written request pursuant
to this Section shall create a rebuttable presumption that a
referral described in the completed written request is not or
will not be a violation of this Act.
(h) Notwithstanding any provision of this Act to the
contrary, a health care worker may refer a patient, who is a
member of a health maintenance organization "HMO" licensed in
this State, for health services to an entity, outside the
health care worker's office or group practice, in which the
health care worker is an investor, provided that any such
referral is made pursuant to a contract with the HMO.
Furthermore, notwithstanding any provision of this Act to the
contrary, a health care worker may refer an enrollee of a
"managed care community network", as defined in subsection (b)
of Section 5-11 of the Illinois Public Aid Code, for health
services to an entity, outside the health care worker's office
or group practice, in which the health care worker is an
investor, provided that any such referral is made pursuant to a
contract with the managed care community network.

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(Source: P.A. 92-370, eff. 8-15-01.)