Bill Text: IL SB1521 | 2017-2018 | 100th General Assembly | Introduced


Bill Title: Amends the Illinois Public Aid Code. Makes a technical change in a Section concerning the hospital rate reform payment system.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2019-01-09 - Session Sine Die [SB1521 Detail]

Download: Illinois-2017-SB1521-Introduced.html


100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB1521

Introduced 2/9/2017, by Sen. Heather A. Steans

SYNOPSIS AS INTRODUCED:
305 ILCS 5/14-12

Amends the Illinois Public Aid Code. Makes a technical change in a Section concerning the hospital rate reform payment system.
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A BILL FOR

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1 AN ACT concerning public aid.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Illinois Public Aid Code is amended by
5changing Section 14-12 as follows:
6 (305 ILCS 5/14-12)
7 Sec. 14-12. Hospital rate reform payment system. The The
8hospital payment system pursuant to Section 14-11 of this
9Article shall be as follows:
10 (a) Inpatient hospital services. Effective for discharges
11on and after July 1, 2014, reimbursement for inpatient general
12acute care services shall utilize the All Patient Refined
13Diagnosis Related Grouping (APR-DRG) software, version 30,
14distributed by 3MTM Health Information System.
15 (1) The Department shall establish Medicaid weighting
16 factors to be used in the reimbursement system established
17 under this subsection. Initial weighting factors shall be
18 the weighting factors as published by 3M Health Information
19 System, associated with Version 30.0 adjusted for the
20 Illinois experience.
21 (2) The Department shall establish a
22 statewide-standardized amount to be used in the inpatient
23 reimbursement system. The Department shall publish these

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1 amounts on its website no later than 10 calendar days prior
2 to their effective date.
3 (3) In addition to the statewide-standardized amount,
4 the Department shall develop adjusters to adjust the rate
5 of reimbursement for critical Medicaid providers or
6 services for trauma, transplantation services, perinatal
7 care, and Graduate Medical Education (GME).
8 (4) The Department shall develop add-on payments to
9 account for exceptionally costly inpatient stays,
10 consistent with Medicare outlier principles. Outlier fixed
11 loss thresholds may be updated to control for excessive
12 growth in outlier payments no more frequently than on an
13 annual basis, but at least triennially. Upon updating the
14 fixed loss thresholds, the Department shall be required to
15 update base rates within 12 months.
16 (5) The Department shall define those hospitals or
17 distinct parts of hospitals that shall be exempt from the
18 APR-DRG reimbursement system established under this
19 Section. The Department shall publish these hospitals'
20 inpatient rates on its website no later than 10 calendar
21 days prior to their effective date.
22 (6) Beginning July 1, 2014 and ending on June 30, 2018,
23 in addition to the statewide-standardized amount, the
24 Department shall develop an adjustor to adjust the rate of
25 reimbursement for safety-net hospitals defined in Section
26 5-5e.1 of this Code excluding pediatric hospitals.

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1 (7) Beginning July 1, 2014 and ending on June 30, 2018,
2 in addition to the statewide-standardized amount, the
3 Department shall develop an adjustor to adjust the rate of
4 reimbursement for Illinois freestanding inpatient
5 psychiatric hospitals that are not designated as
6 children's hospitals by the Department but are primarily
7 treating patients under the age of 21.
8 (b) Outpatient hospital services. Effective for dates of
9service on and after July 1, 2014, reimbursement for outpatient
10services shall utilize the Enhanced Ambulatory Procedure
11Grouping (E-APG) software, version 3.7 distributed by 3MTM
12Health Information System.
13 (1) The Department shall establish Medicaid weighting
14 factors to be used in the reimbursement system established
15 under this subsection. The initial weighting factors shall
16 be the weighting factors as published by 3M Health
17 Information System, associated with Version 3.7.
18 (2) The Department shall establish service specific
19 statewide-standardized amounts to be used in the
20 reimbursement system.
21 (A) The initial statewide standardized amounts,
22 with the labor portion adjusted by the Calendar Year
23 2013 Medicare Outpatient Prospective Payment System
24 wage index with reclassifications, shall be published
25 by the Department on its website no later than 10
26 calendar days prior to their effective date.

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1 (B) The Department shall establish adjustments to
2 the statewide-standardized amounts for each Critical
3 Access Hospital, as designated by the Department of
4 Public Health in accordance with 42 CFR 485, Subpart F.
5 The EAPG standardized amounts are determined
6 separately for each critical access hospital such that
7 simulated EAPG payments using outpatient base period
8 paid claim data plus payments under Section 5A-12.4 of
9 this Code net of the associated tax costs are equal to
10 the estimated costs of outpatient base period claims
11 data with a rate year cost inflation factor applied.
12 (3) In addition to the statewide-standardized amounts,
13 the Department shall develop adjusters to adjust the rate
14 of reimbursement for critical Medicaid hospital outpatient
15 providers or services, including outpatient high volume or
16 safety-net hospitals.
17 (c) In consultation with the hospital community, the
18Department is authorized to replace 89 Ill. Admin. Code 152.150
19as published in 38 Ill. Reg. 4980 through 4986 within 12 months
20of the effective date of this amendatory Act of the 98th
21General Assembly. If the Department does not replace these
22rules within 12 months of the effective date of this amendatory
23Act of the 98th General Assembly, the rules in effect for
24152.150 as published in 38 Ill. Reg. 4980 through 4986 shall
25remain in effect until modified by rule by the Department.
26Nothing in this subsection shall be construed to mandate that

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1the Department file a replacement rule.
2 (d) Transition period. There shall be a transition period
3to the reimbursement systems authorized under this Section that
4shall begin on the effective date of these systems and continue
5until June 30, 2018, unless extended by rule by the Department.
6To help provide an orderly and predictable transition to the
7new reimbursement systems and to preserve and enhance access to
8the hospital services during this transition, the Department
9shall allocate a transitional hospital access pool of at least
10$290,000,000 annually so that transitional hospital access
11payments are made to hospitals.
12 (1) After the transition period, the Department may
13 begin incorporating the transitional hospital access pool
14 into the base rate structure.
15 (2) After the transition period, if the Department
16 reduces payments from the transitional hospital access
17 pool, it shall increase base rates, develop new adjustors,
18 adjust current adjustors, develop new hospital access
19 payments based on updated information, or any combination
20 thereof by an amount equal to the decreases proposed in the
21 transitional hospital access pool payments, ensuring that
22 the entire transitional hospital access pool amount shall
23 continue to be used for hospital payments.
24 (e) Beginning 36 months after initial implementation, the
25Department shall update the reimbursement components in
26subsections (a) and (b), including standardized amounts and

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1weighting factors, and at least triennially and no more
2frequently than annually thereafter. The Department shall
3publish these updates on its website no later than 30 calendar
4days prior to their effective date.
5 (f) Continuation of supplemental payments. Any
6supplemental payments authorized under Illinois Administrative
7Code 148 effective January 1, 2014 and that continue during the
8period of July 1, 2014 through December 31, 2014 shall remain
9in effect as long as the assessment imposed by Section 5A-2 is
10in effect.
11 (g) Notwithstanding subsections (a) through (f) of this
12Section and notwithstanding the changes authorized under
13Section 5-5b.1, any updates to the system shall not result in
14any diminishment of the overall effective rates of
15reimbursement as of the implementation date of the new system
16(July 1, 2014). These updates shall not preclude variations in
17any individual component of the system or hospital rate
18variations. Nothing in this Section shall prohibit the
19Department from increasing the rates of reimbursement or
20developing payments to ensure access to hospital services.
21Nothing in this Section shall be construed to guarantee a
22minimum amount of spending in the aggregate or per hospital as
23spending may be impacted by factors including but not limited
24to the number of individuals in the medical assistance program
25and the severity of illness of the individuals.
26 (h) The Department shall have the authority to modify by

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1rulemaking any changes to the rates or methodologies in this
2Section as required by the federal government to obtain federal
3financial participation for expenditures made under this
4Section.
5 (i) Except for subsections (g) and (h) of this Section, the
6Department shall, pursuant to subsection (c) of Section 5-40 of
7the Illinois Administrative Procedure Act, provide for
8presentation at the June 2014 hearing of the Joint Committee on
9Administrative Rules (JCAR) additional written notice to JCAR
10of the following rules in order to commence the second notice
11period for the following rules: rules published in the Illinois
12Register, rule dated February 21, 2014 at 38 Ill. Reg. 4559
13(Medical Payment), 4628 (Specialized Health Care Delivery
14Systems), 4640 (Hospital Services), 4932 (Diagnostic Related
15Grouping (DRG) Prospective Payment System (PPS)), and 4977
16(Hospital Reimbursement Changes), and published in the
17Illinois Register dated March 21, 2014 at 38 Ill. Reg. 6499
18(Specialized Health Care Delivery Systems) and 6505 (Hospital
19Services).
20(Source: P.A. 98-651, eff. 6-16-14; 99-2, eff. 3-26-15.)
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