Bill Text: IL SB2787 | 2013-2014 | 98th General Assembly | Introduced

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Bill Title: Amends the Medical Practice Act of 1987. In a provision concerning the confidentiality of medical reports and committee reports, provides that the Department of Financial and Professional Regulation may disclose information and documents to a federal, state (rather than State), or local law enforcement agency pursuant to a subpoena in an ongoing criminal investigation, to a health care licensing body, to a medical licensing authority of this State or another state or jurisdiction, or to the Department of Healthcare and Family Services' Office of the Medicaid Inspector General pursuant to an official request made by that licensing body, by a medical licensing authority, or by the Office of the Medicaid Inspector General. Amends the Illinois Public Aid Code. Replaces all references to "Inspector General" with "Medicaid Inspector General". Requires the Medicaid Inspector General to oversee the program integrity functions of the Department of Healthcare and Family Services and the Medicaid funded programs of the Department on Aging and the Department of Human Services (rather than oversee the Department of Healthcare and Family Services' and the Department on Aging's integrity functions). Requires the Medicaid Inspector General to report his or her findings to certain persons. Requires State agencies and departments to provide the Office of the Medicaid Inspector General access to certain confidential and other information and data.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2015-01-13 - Session Sine Die [SB2787 Detail]

Download: Illinois-2013-SB2787-Introduced.html

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98TH GENERAL ASSEMBLY State of Illinois 2013 and 2014 SB2787 Introduced 1/30/2014, by Sen. William R. Haine SYNOPSIS AS INTRODUCED:
See Index
Amends the Medical Practice Act of 1987. In a provision concerning the confidentiality of medical reports and committee reports, provides that the Department of Financial and Professional Regulation may disclose information and documents to a federal, state (rather than State), or local law enforcement agency pursuant to a subpoena in an ongoing criminal investigation, to a health care licensing body, to a medical licensing authority of this State or another state or jurisdiction, or to the Department of Healthcare and Family Services' Office of the Medicaid Inspector General pursuant to an official request made by that licensing body, by a medical licensing authority, or by the Office of the Medicaid Inspector General. Amends the Illinois Public Aid Code. Replaces all references to "Inspector General" with "Medicaid Inspector General". Requires the Medicaid Inspector General to oversee the program integrity functions of the Department of Healthcare and Family Services and the Medicaid funded programs of the Department on Aging and the Department of Human Services (rather than oversee the Department of Healthcare and Family Services' and the Department on Aging's integrity functions). Requires the Medicaid Inspector General to report his or her findings to certain persons. Requires State agencies and departments to provide the Office of the Medicaid Inspector General access to certain confidential and other information and data.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning public aid.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Medical Practice Act of 1987 is amended by
changing Section 23 as follows:
(225 ILCS 60/23) (from Ch. 111, par. 4400-23)
(Section scheduled to be repealed on December 31, 2014)
Sec. 23. Reports relating to professional conduct and
capacity.
(A) Entities required to report.
(1) Health care institutions. The chief administrator
or executive officer of any health care institution
licensed by the Illinois Department of Public Health shall
report to the Disciplinary Board when any person's clinical
privileges are terminated or are restricted based on a
final determination made in accordance with that
institution's by-laws or rules and regulations that a
person has either committed an act or acts which may
directly threaten patient care or that a person may be
mentally or physically disabled in such a manner as to
endanger patients under that person's care. Such officer
also shall report if a person accepts voluntary termination
or restriction of clinical privileges in lieu of formal

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action based upon conduct related directly to patient care
or in lieu of formal action seeking to determine whether a
person may be mentally or physically disabled in such a
manner as to endanger patients under that person's care.
The Disciplinary Board shall, by rule, provide for the
reporting to it by health care institutions of all
instances in which a person, licensed under this Act, who
is impaired by reason of age, drug or alcohol abuse or
physical or mental impairment, is under supervision and,
where appropriate, is in a program of rehabilitation. Such
reports shall be strictly confidential and may be reviewed
and considered only by the members of the Disciplinary
Board, or by authorized staff as provided by rules of the
Disciplinary Board. Provisions shall be made for the
periodic report of the status of any such person not less
than twice annually in order that the Disciplinary Board
shall have current information upon which to determine the
status of any such person. Such initial and periodic
reports of impaired physicians shall not be considered
records within the meaning of The State Records Act and
shall be disposed of, following a determination by the
Disciplinary Board that such reports are no longer
required, in a manner and at such time as the Disciplinary
Board shall determine by rule. The filing of such reports
shall be construed as the filing of a report for purposes
of subsection (C) of this Section.

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(1.5) Clinical training programs. The program director
of any post-graduate clinical training program shall
report to the Disciplinary Board if a person engaged in a
post-graduate clinical training program at the
institution, including, but not limited to, a residency or
fellowship, separates from the program for any reason prior
to its conclusion. The program director shall provide all
documentation relating to the separation if, after review
of the report, the Disciplinary Board determines that a
review of those documents is necessary to determine whether
a violation of this Act occurred.
(2) Professional associations. The President or chief
executive officer of any association or society, of persons
licensed under this Act, operating within this State shall
report to the Disciplinary Board when the association or
society renders a final determination that a person has
committed unprofessional conduct related directly to
patient care or that a person may be mentally or physically
disabled in such a manner as to endanger patients under
that person's care.
(3) Professional liability insurers. Every insurance
company which offers policies of professional liability
insurance to persons licensed under this Act, or any other
entity which seeks to indemnify the professional liability
of a person licensed under this Act, shall report to the
Disciplinary Board the settlement of any claim or cause of

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action, or final judgment rendered in any cause of action,
which alleged negligence in the furnishing of medical care
by such licensed person when such settlement or final
judgment is in favor of the plaintiff.
(4) State's Attorneys. The State's Attorney of each
county shall report to the Disciplinary Board, within 5
days, any instances in which a person licensed under this
Act is convicted of any felony or Class A misdemeanor. The
State's Attorney of each county may report to the
Disciplinary Board through a verified complaint any
instance in which the State's Attorney believes that a
physician has willfully violated the notice requirements
of the Parental Notice of Abortion Act of 1995.
(5) State agencies. All agencies, boards, commissions,
departments, or other instrumentalities of the government
of the State of Illinois shall report to the Disciplinary
Board any instance arising in connection with the
operations of such agency, including the administration of
any law by such agency, in which a person licensed under
this Act has either committed an act or acts which may be a
violation of this Act or which may constitute
unprofessional conduct related directly to patient care or
which indicates that a person licensed under this Act may
be mentally or physically disabled in such a manner as to
endanger patients under that person's care.
(B) Mandatory reporting. All reports required by items

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(34), (35), and (36) of subsection (A) of Section 22 and by
Section 23 shall be submitted to the Disciplinary Board in a
timely fashion. Unless otherwise provided in this Section, the
reports shall be filed in writing within 60 days after a
determination that a report is required under this Act. All
reports shall contain the following information:
(1) The name, address and telephone number of the
person making the report.
(2) The name, address and telephone number of the
person who is the subject of the report.
(3) The name and date of birth of any patient or
patients whose treatment is a subject of the report, if
available, or other means of identification if such
information is not available, identification of the
hospital or other healthcare facility where the care at
issue in the report was rendered, provided, however, no
medical records may be revealed.
(4) A brief description of the facts which gave rise to
the issuance of the report, including the dates of any
occurrences deemed to necessitate the filing of the report.
(5) If court action is involved, the identity of the
court in which the action is filed, along with the docket
number and date of filing of the action.
(6) Any further pertinent information which the
reporting party deems to be an aid in the evaluation of the
report.

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The Disciplinary Board or Department may also exercise the
power under Section 38 of this Act to subpoena copies of
hospital or medical records in mandatory report cases alleging
death or permanent bodily injury. Appropriate rules shall be
adopted by the Department with the approval of the Disciplinary
Board.
When the Department has received written reports
concerning incidents required to be reported in items (34),
(35), and (36) of subsection (A) of Section 22, the licensee's
failure to report the incident to the Department under those
items shall not be the sole grounds for disciplinary action.
Nothing contained in this Section shall act to in any way,
waive or modify the confidentiality of medical reports and
committee reports to the extent provided by law. Any
information reported or disclosed shall be kept for the
confidential use of the Disciplinary Board, the Medical
Coordinators, the Disciplinary Board's attorneys, the medical
investigative staff, and authorized clerical staff, as
provided in this Act, and shall be afforded the same status as
is provided information concerning medical studies in Part 21
of Article VIII of the Code of Civil Procedure, except that the
Department may disclose information and documents to a federal,
state State, or local law enforcement agency pursuant to a
subpoena in an ongoing criminal investigation, or to a health
care licensing body, to a or medical licensing authority of
this State or another state or jurisdiction, or to the

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Department of Healthcare and Family Services' Office of the
Medicaid Inspector General of this State or another state or
jurisdiction pursuant to an official request made by that
licensing body, by a or medical licensing authority, or by the
Office of the Medicaid Inspector General. Furthermore,
information and documents disclosed to a federal, state State,
or local law enforcement agency may be used by that agency only
for the investigation and prosecution of a criminal offense,
or, in the case of disclosure to a health care licensing body
or medical licensing authority, only for investigations and
disciplinary action proceedings with regard to a license, or,
in the case of disclosure to the Department of Healthcare and
Family Services' Office of the Medicaid Inspector General, only
for the investigations, quality care reviews, or sanction
action proceedings. Information and documents disclosed to the
Department of Public Health may be used by that Department only
for investigation and disciplinary action regarding the
license of a health care institution licensed by the Department
of Public Health.
(C) Immunity from prosecution. Any individual or
organization acting in good faith, and not in a wilful and
wanton manner, in complying with this Act by providing any
report or other information to the Disciplinary Board or a peer
review committee, or assisting in the investigation or
preparation of such information, or by voluntarily reporting to
the Disciplinary Board or a peer review committee information

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regarding alleged errors or negligence by a person licensed
under this Act, or by participating in proceedings of the
Disciplinary Board or a peer review committee, or by serving as
a member of the Disciplinary Board or a peer review committee,
shall not, as a result of such actions, be subject to criminal
prosecution or civil damages.
(D) Indemnification. Members of the Disciplinary Board,
the Licensing Board, the Medical Coordinators, the
Disciplinary Board's attorneys, the medical investigative
staff, physicians retained under contract to assist and advise
the medical coordinators in the investigation, and authorized
clerical staff shall be indemnified by the State for any
actions occurring within the scope of services on the
Disciplinary Board or Licensing Board, done in good faith and
not wilful and wanton in nature. The Attorney General shall
defend all such actions unless he or she determines either that
there would be a conflict of interest in such representation or
that the actions complained of were not in good faith or were
wilful and wanton.
Should the Attorney General decline representation, the
member shall have the right to employ counsel of his or her
choice, whose fees shall be provided by the State, after
approval by the Attorney General, unless there is a
determination by a court that the member's actions were not in
good faith or were wilful and wanton.
The member must notify the Attorney General within 7 days

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of receipt of notice of the initiation of any action involving
services of the Disciplinary Board. Failure to so notify the
Attorney General shall constitute an absolute waiver of the
right to a defense and indemnification.
The Attorney General shall determine within 7 days after
receiving such notice, whether he or she will undertake to
represent the member.
(E) Deliberations of Disciplinary Board. Upon the receipt
of any report called for by this Act, other than those reports
of impaired persons licensed under this Act required pursuant
to the rules of the Disciplinary Board, the Disciplinary Board
shall notify in writing, by certified mail, the person who is
the subject of the report. Such notification shall be made
within 30 days of receipt by the Disciplinary Board of the
report.
The notification shall include a written notice setting
forth the person's right to examine the report. Included in
such notification shall be the address at which the file is
maintained, the name of the custodian of the reports, and the
telephone number at which the custodian may be reached. The
person who is the subject of the report shall submit a written
statement responding, clarifying, adding to, or proposing the
amending of the report previously filed. The person who is the
subject of the report shall also submit with the written
statement any medical records related to the report. The
statement and accompanying medical records shall become a

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permanent part of the file and must be received by the
Disciplinary Board no more than 30 days after the date on which
the person was notified by the Disciplinary Board of the
existence of the original report.
The Disciplinary Board shall review all reports received by
it, together with any supporting information and responding
statements submitted by persons who are the subject of reports.
The review by the Disciplinary Board shall be in a timely
manner but in no event, shall the Disciplinary Board's initial
review of the material contained in each disciplinary file be
less than 61 days nor more than 180 days after the receipt of
the initial report by the Disciplinary Board.
When the Disciplinary Board makes its initial review of the
materials contained within its disciplinary files, the
Disciplinary Board shall, in writing, make a determination as
to whether there are sufficient facts to warrant further
investigation or action. Failure to make such determination
within the time provided shall be deemed to be a determination
that there are not sufficient facts to warrant further
investigation or action.
Should the Disciplinary Board find that there are not
sufficient facts to warrant further investigation, or action,
the report shall be accepted for filing and the matter shall be
deemed closed and so reported to the Secretary. The Secretary
shall then have 30 days to accept the Disciplinary Board's
decision or request further investigation. The Secretary shall

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inform the Board of the decision to request further
investigation, including the specific reasons for the
decision. The individual or entity filing the original report
or complaint and the person who is the subject of the report or
complaint shall be notified in writing by the Secretary of any
final action on their report or complaint. The Department shall
disclose to the individual or entity who filed the original
report or complaint, on request, the status of the Disciplinary
Board's review of a specific report or complaint. Such request
may be made at any time, including prior to the Disciplinary
Board's determination as to whether there are sufficient facts
to warrant further investigation or action.
(F) Summary reports. The Disciplinary Board shall prepare,
on a timely basis, but in no event less than once every other
month, a summary report of final disciplinary actions taken
upon disciplinary files maintained by the Disciplinary Board.
The summary reports shall be made available to the public upon
request and payment of the fees set by the Department. This
publication may be made available to the public on the
Department's website. Information or documentation relating to
any disciplinary file that is closed without disciplinary
action taken shall not be disclosed and shall be afforded the
same status as is provided by Part 21 of Article VIII of the
Code of Civil Procedure.
(G) Any violation of this Section shall be a Class A
misdemeanor.

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(H) If any such person violates the provisions of this
Section an action may be brought in the name of the People of
the State of Illinois, through the Attorney General of the
State of Illinois, for an order enjoining such violation or for
an order enforcing compliance with this Section. Upon filing of
a verified petition in such court, the court may issue a
temporary restraining order without notice or bond and may
preliminarily or permanently enjoin such violation, and if it
is established that such person has violated or is violating
the injunction, the court may punish the offender for contempt
of court. Proceedings under this paragraph shall be in addition
to, and not in lieu of, all other remedies and penalties
provided for by this Section.
(Source: P.A. 97-449, eff. 1-1-12; 97-622, eff. 11-23-11;
98-601, eff. 12-30-13.)
Section 10. The Illinois Public Aid Code is amended by
changing Sections 5-16.10, 8A-12, 11-5.2, 11-5.4, 12-4.25,
12-4.25b, 12-4.40 and 12-13.1 as follows:
(305 ILCS 5/5-16.10)
Sec. 5-16.10. Managed care entities; marketing. A managed
health care entity providing services under this Article V may
not engage in door-to-door marketing activities or marketing
activities at an office of the Illinois Department or a county
department in order to enroll recipients in the entity's health

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care delivery system. The Department shall adopt rules defining
"marketing activities" prohibited by this Section.
Before a managed health care entity providing services
under this Article V may market its health care delivery system
to recipients, the Illinois Department must approve a marketing
plan submitted by the entity to the Illinois Department. The
Illinois Department shall adopt guidelines for approving
marketing plans submitted by managed health care entities under
this Section. Besides prohibiting door-to-door marketing
activities and marketing activities at public aid offices, the
guidelines shall include at least the following:
(1) A managed health care entity may not offer or
provide any gift, favor, or other inducement in marketing
its health care delivery system to integrated health care
program enrollees. A managed health care entity may provide
health care related items that are of nominal value and
pre-approved by the Department to prospective enrollees. A
managed health care entity may also provide to enrollees
health care related items that have been pre-approved by
the Department as an incentive to manage their health care
appropriately.
(2) All persons employed or otherwise engaged by a
managed health care entity to market the entity's health
care delivery system to recipients or to supervise that
marketing shall register with the Illinois Department.
The Medicaid Inspector General appointed under Section

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12-13.1 may conduct investigations to determine whether the
marketing practices of managed health care entities providing
services under this Article V comply with the guidelines.
(Source: P.A. 90-538, eff. 12-1-97.)
(305 ILCS 5/8A-12)
Sec. 8A-12. Early fraud prevention and detection program.
The Illinois Department may conduct an early fraud prevention
and detection program as provided in this Section. If
conducted, the program shall apply to all categories of
assistance and all applicants for aid. The program may be
conducted in appropriate counties as determined by the
Department. The program shall have the following features:
(1) No intimidation of applicants or recipients may
occur, either by referral or threat of referral for a fraud
prevention investigation.
(2) An applicant may not be referred for a fraud
prevention investigation until an application for aid is
completed and signed by the applicant or any authorized
representative.
(3) An applicant may be referred to the Medicaid
Inspector General for a fraud prevention investigation if
there are reasonable grounds to question the accuracy of
any information, statements, documents, or other
representations by the applicant or any authorized
representative. Referrals for fraud prevention

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investigations shall be made in accordance with guidelines
to be jointly determined by the Medicaid Inspector General
and the Department.
(Source: P.A. 89-118, eff. 7-7-95.)
(305 ILCS 5/11-5.2)
Sec. 11-5.2. Income, Residency, and Identity Verification
System.
(a) The Department shall ensure that its proposed
integrated eligibility system shall include the computerized
functions of income, residency, and identity eligibility
verification to verify eligibility, eliminate duplication of
medical assistance, and deter fraud. Until the integrated
eligibility system is operational, the Department may enter
into a contract with the vendor selected pursuant to Section
11-5.3 as necessary to obtain the electronic data matching
described in this Section. This contract shall be exempt from
the Illinois Procurement Code pursuant to subsection (h) of
Section 1-10 of that Code.
(b) Prior to awarding medical assistance at application
under Article V of this Code, the Department shall, to the
extent such databases are available to the Department, conduct
data matches using the name, date of birth, address, and Social
Security Number of each applicant or recipient or responsible
relative of an applicant or recipient against the following:
(1) Income tax information.

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(2) Employer reports of income and unemployment
insurance payment information maintained by the Department
of Employment Security.
(3) Earned and unearned income, citizenship and death,
and other relevant information maintained by the Social
Security Administration.
(4) Immigration status information maintained by the
United States Citizenship and Immigration Services.
(5) Wage reporting and similar information maintained
by states contiguous to this State.
(6) Employment information maintained by the
Department of Employment Security in its New Hire Directory
database.
(7) Employment information maintained by the United
States Department of Health and Human Services in its
National Directory of New Hires database.
(8) Veterans' benefits information maintained by the
United States Department of Health and Human Services, in
coordination with the Department of Health and Human
Services and the Department of Veterans' Affairs, in the
federal Public Assistance Reporting Information System
(PARIS) database.
(9) Residency information maintained by the Illinois
Secretary of State.
(10) A database which is substantially similar to or a
successor of a database described in this Section that

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contains information relevant for verifying eligibility
for medical assistance.
(c) (Blank).
(d) If a discrepancy results between information provided
by an applicant, recipient, or responsible relative and
information contained in one or more of the databases or
information tools listed under subsection (b) or (c) of this
Section or subsection (c) of Section 11-5.3 and that
discrepancy calls into question the accuracy of information
relevant to a condition of eligibility provided by the
applicant, recipient, or responsible relative, the Department
or its contractor shall review the applicant's or recipient's
case using the following procedures:
(1) If the information discovered under subsection (b)
(c) of this Section or subsection (c) of Section 11-5.3
does not result in the Department finding the applicant or
recipient ineligible for assistance under Article V of this
Code, the Department shall finalize the determination or
redetermination of eligibility.
(2) If the information discovered results in the
Department finding the applicant or recipient ineligible
for assistance, the Department shall provide notice as set
forth in Section 11-7 of this Article.
(3) If the information discovered is insufficient to
determine that the applicant or recipient is eligible or
ineligible, the Department shall provide written notice to

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the applicant or recipient which shall describe in
sufficient detail the circumstances of the discrepancy,
the information or documentation required, the manner in
which the applicant or recipient may respond, and the
consequences of failing to take action. The applicant or
recipient shall have 10 business days to respond.
(4) If the applicant or recipient does not respond to
the notice, the Department shall deny assistance for
failure to cooperate, in which case the Department shall
provide notice as set forth in Section 11-7. Eligibility
for assistance shall not be established until the
discrepancy has been resolved.
(5) If an applicant or recipient responds to the
notice, the Department shall determine the effect of the
information or documentation provided on the applicant's
or recipient's case and shall take appropriate action.
Written notice of the Department's action shall be provided
as set forth in Section 11-7 of this Article.
(6) Suspected cases of fraud shall be referred to the
Department's Medicaid Inspector General.
(e) The Department shall adopt any rules necessary to
implement this Section.
(Source: P.A. 97-689, eff. 6-14-12; revised 11-12-13.)
(305 ILCS 5/11-5.4)
Sec. 11-5.4. Expedited long-term care eligibility

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determination and enrollment.
(a) An expedited long-term care eligibility determination
and enrollment system shall be established to reduce long-term
care determinations to 90 days or fewer by July 1, 2014 and
streamline the long-term care enrollment process.
Establishment of the system shall be a joint venture of the
Department of Human Services and Healthcare and Family Services
and the Department on Aging. The Governor shall name a lead
agency no later than 30 days after the effective date of this
amendatory Act of the 98th General Assembly to assume
responsibility for the full implementation of the
establishment and maintenance of the system. Project outcomes
shall include an enhanced eligibility determination tracking
system accessible to providers and a centralized application
review and eligibility determination with all applicants
reviewed within 90 days of receipt by the State of a complete
application. If the Department of Healthcare and Family
Services' Office of the Medicaid Inspector General determines
that there is a likelihood that a non-allowable transfer of
assets has occurred, and the facility in which the applicant
resides is notified, an extension of up to 90 days shall be
permissible. On or before December 31, 2015, a streamlined
application and enrollment process shall be put in place based
on the following principles:
(1) Minimize the burden on applicants by collecting
only the data necessary to determine eligibility for

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medical services, long-term care services, and spousal
impoverishment offset.
(2) Integrate online data sources to simplify the
application process by reducing the amount of information
needed to be entered and to expedite eligibility
verification.
(3) Provide online prompts to alert the applicant that
information is missing or not complete.
(b) The Department shall, on or before July 1, 2014, assess
the feasibility of incorporating all information needed to
determine eligibility for long-term care services, including
asset transfer and spousal impoverishment financials, into the
State's integrated eligibility system identifying all
resources needed and reasonable timeframes for achieving the
specified integration.
(c) The lead agency shall file interim reports with the
Chairs and Minority Spokespersons of the House and Senate Human
Services Committees no later than September 1, 2013 and on
February 1, 2014. The Department of Healthcare and Family
Services shall include in the annual Medicaid report for State
Fiscal Year 2014 and every fiscal year thereafter information
concerning implementation of the provisions of this Section.
(d) No later than August 1, 2014, the Auditor General shall
report to the General Assembly concerning the extent to which
the timeframes specified in this Section have been met and the
extent to which State staffing levels are adequate to meet the

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requirements of this Section.
(Source: P.A. 98-104, eff. 7-22-13.)
(305 ILCS 5/12-4.25) (from Ch. 23, par. 12-4.25)
Sec. 12-4.25. Medical assistance program; vendor
participation.
(A) The Illinois Department may deny, suspend, or terminate
the eligibility of any person, firm, corporation, association,
agency, institution or other legal entity to participate as a
vendor of goods or services to recipients under the medical
assistance program under Article V, or may exclude any such
person or entity from participation as such a vendor, and may
deny, suspend, or recover payments, if after reasonable notice
and opportunity for a hearing the Illinois Department finds:
(a) Such vendor is not complying with the Department's
policy or rules and regulations, or with the terms and
conditions prescribed by the Illinois Department in its
vendor agreement, which document shall be developed by the
Department as a result of negotiations with each vendor
category, including physicians, hospitals, long term care
facilities, pharmacists, optometrists, podiatric
physicians, and dentists setting forth the terms and
conditions applicable to the participation of each vendor
group in the program; or
(b) Such vendor has failed to keep or make available
for inspection, audit or copying, after receiving a written

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request from the Illinois Department, such records
regarding payments claimed for providing services. This
section does not require vendors to make available patient
records of patients for whom services are not reimbursed
under this Code; or
(c) Such vendor has failed to furnish any information
requested by the Department regarding payments for
providing goods or services; or
(d) Such vendor has knowingly made, or caused to be
made, any false statement or representation of a material
fact in connection with the administration of the medical
assistance program; or
(e) Such vendor has furnished goods or services to a
recipient which are (1) in excess of need, (2) harmful, or
(3) of grossly inferior quality, all of such determinations
to be based upon competent medical judgment and
evaluations; or
(f) The vendor; a person with management
responsibility for a vendor; an officer or person owning,
either directly or indirectly, 5% or more of the shares of
stock or other evidences of ownership in a corporate
vendor; an owner of a sole proprietorship which is a
vendor; or a partner in a partnership which is a vendor,
either:
(1) was previously terminated, suspended, or
excluded from participation in the Illinois medical

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assistance program, or was terminated, suspended, or
excluded from participation in another state or
federal medical assistance or health care program; or
(2) was a person with management responsibility
for a vendor previously terminated, suspended, or
excluded from participation in the Illinois medical
assistance program, or terminated, suspended, or
excluded from participation in another state or
federal medical assistance or health care program
during the time of conduct which was the basis for that
vendor's termination, suspension, or exclusion; or
(3) was an officer, or person owning, either
directly or indirectly, 5% or more of the shares of
stock or other evidences of ownership in a corporate or
limited liability company vendor previously
terminated, suspended, or excluded from participation
in the Illinois medical assistance program, or
terminated, suspended, or excluded from participation
in a state or federal medical assistance or health care
program during the time of conduct which was the basis
for that vendor's termination, suspension, or
exclusion; or
(4) was an owner of a sole proprietorship or
partner of a partnership previously terminated,
suspended, or excluded from participation in the
Illinois medical assistance program, or terminated,

SB2787 - 24 - LRB098 15972 KTG 53891 b
suspended, or excluded from participation in a state or
federal medical assistance or health care program
during the time of conduct which was the basis for that
vendor's termination, suspension, or exclusion; or
(f-1) Such vendor has a delinquent debt owed to the
Illinois Department; or
(g) The vendor; a person with management
responsibility for a vendor; an officer or person owning,
either directly or indirectly, 5% or more of the shares of
stock or other evidences of ownership in a corporate or
limited liability company vendor; an owner of a sole
proprietorship which is a vendor; or a partner in a
partnership which is a vendor, either:
(1) has engaged in practices prohibited by
applicable federal or State law or regulation; or
(2) was a person with management responsibility
for a vendor at the time that such vendor engaged in
practices prohibited by applicable federal or State
law or regulation; or
(3) was an officer, or person owning, either
directly or indirectly, 5% or more of the shares of
stock or other evidences of ownership in a vendor at
the time such vendor engaged in practices prohibited by
applicable federal or State law or regulation; or
(4) was an owner of a sole proprietorship or
partner of a partnership which was a vendor at the time

SB2787 - 25 - LRB098 15972 KTG 53891 b
such vendor engaged in practices prohibited by
applicable federal or State law or regulation; or
(h) The direct or indirect ownership of the vendor
(including the ownership of a vendor that is a sole
proprietorship, a partner's interest in a vendor that is a
partnership, or ownership of 5% or more of the shares of
stock or other evidences of ownership in a corporate
vendor) has been transferred by an individual who is
terminated, suspended, or excluded or barred from
participating as a vendor to the individual's spouse,
child, brother, sister, parent, grandparent, grandchild,
uncle, aunt, niece, nephew, cousin, or relative by
marriage.
(A-5) The Illinois Department may deny, suspend, or
terminate the eligibility of any person, firm, corporation,
association, agency, institution, or other legal entity to
participate as a vendor of goods or services to recipients
under the medical assistance program under Article V, or may
exclude any such person or entity from participation as such a
vendor, if, after reasonable notice and opportunity for a
hearing, the Illinois Department finds that the vendor; a
person with management responsibility for a vendor; an officer
or person owning, either directly or indirectly, 5% or more of
the shares of stock or other evidences of ownership in a
corporate vendor; an owner of a sole proprietorship that is a
vendor; or a partner in a partnership that is a vendor has been

SB2787 - 26 - LRB098 15972 KTG 53891 b
convicted of an offense based on fraud or willful
misrepresentation related to any of the following:
(1) The medical assistance program under Article V of
this Code.
(2) A medical assistance or health care program in
another state.
(3) The Medicare program under Title XVIII of the
Social Security Act.
(4) The provision of health care services.
(5) A violation of this Code, as provided in Article
VIIIA, or another state or federal medical assistance
program or health care program.
(A-10) The Illinois Department may deny, suspend, or
terminate the eligibility of any person, firm, corporation,
association, agency, institution, or other legal entity to
participate as a vendor of goods or services to recipients
under the medical assistance program under Article V, or may
exclude any such person or entity from participation as such a
vendor, if, after reasonable notice and opportunity for a
hearing, the Illinois Department finds that (i) the vendor,
(ii) a person with management responsibility for a vendor,
(iii) an officer or person owning, either directly or
indirectly, 5% or more of the shares of stock or other
evidences of ownership in a corporate vendor, (iv) an owner of
a sole proprietorship that is a vendor, or (v) a partner in a
partnership that is a vendor has been convicted of an offense

SB2787 - 27 - LRB098 15972 KTG 53891 b
related to any of the following:
(1) Murder.
(2) A Class X felony under the Criminal Code of 1961 or
the Criminal Code of 2012.
(3) Sexual misconduct that may subject recipients to an
undue risk of harm.
(4) A criminal offense that may subject recipients to
an undue risk of harm.
(5) A crime of fraud or dishonesty.
(6) A crime involving a controlled substance.
(7) A misdemeanor relating to fraud, theft,
embezzlement, breach of fiduciary responsibility, or other
financial misconduct related to a health care program.
(A-15) The Illinois Department may deny the eligibility of
any person, firm, corporation, association, agency,
institution, or other legal entity to participate as a vendor
of goods or services to recipients under the medical assistance
program under Article V if, after reasonable notice and
opportunity for a hearing, the Illinois Department finds:
(1) The applicant or any person with management
responsibility for the applicant; an officer or member of
the board of directors of an applicant; an entity owning
(directly or indirectly) 5% or more of the shares of stock
or other evidences of ownership in a corporate vendor
applicant; an owner of a sole proprietorship applicant; a
partner in a partnership applicant; or a technical or other

SB2787 - 28 - LRB098 15972 KTG 53891 b
advisor to an applicant has a debt owed to the Illinois
Department, and no payment arrangements acceptable to the
Illinois Department have been made by the applicant.
(2) The applicant or any person with management
responsibility for the applicant; an officer or member of
the board of directors of an applicant; an entity owning
(directly or indirectly) 5% or more of the shares of stock
or other evidences of ownership in a corporate vendor
applicant; an owner of a sole proprietorship applicant; a
partner in a partnership vendor applicant; or a technical
or other advisor to an applicant was (i) a person with
management responsibility, (ii) an officer or member of the
board of directors of an applicant, (iii) an entity owning
(directly or indirectly) 5% or more of the shares of stock
or other evidences of ownership in a corporate vendor, (iv)
an owner of a sole proprietorship, (v) a partner in a
partnership vendor, (vi) a technical or other advisor to a
vendor, during a period of time where the conduct of that
vendor resulted in a debt owed to the Illinois Department,
and no payment arrangements acceptable to the Illinois
Department have been made by that vendor.
(3) There is a credible allegation of the use,
transfer, or lease of assets of any kind to an applicant
from a current or prior vendor who has a debt owed to the
Illinois Department, no payment arrangements acceptable to
the Illinois Department have been made by that vendor or

SB2787 - 29 - LRB098 15972 KTG 53891 b
the vendor's alternate payee, and the applicant knows or
should have known of such debt.
(4) There is a credible allegation of a transfer of
management responsibilities, or direct or indirect
ownership, to an applicant from a current or prior vendor
who has a debt owed to the Illinois Department, and no
payment arrangements acceptable to the Illinois Department
have been made by that vendor or the vendor's alternate
payee, and the applicant knows or should have known of such
debt.
(5) There is a credible allegation of the use,
transfer, or lease of assets of any kind to an applicant
who is a spouse, child, brother, sister, parent,
grandparent, grandchild, uncle, aunt, niece, relative by
marriage, nephew, cousin, or relative of a current or prior
vendor who has a debt owed to the Illinois Department and
no payment arrangements acceptable to the Illinois
Department have been made.
(6) There is a credible allegation that the applicant's
previous affiliations with a provider of medical services
that has an uncollected debt, a provider that has been or
is subject to a payment suspension under a federal health
care program, or a provider that has been previously
excluded from participation in the medical assistance
program, poses a risk of fraud, waste, or abuse to the
Illinois Department.

SB2787 - 30 - LRB098 15972 KTG 53891 b
As used in this subsection, "credible allegation" is
defined to include an allegation from any source, including,
but not limited to, fraud hotline complaints, claims data
mining, patterns identified through provider audits, civil
actions filed under the Illinois False Claims Act, and law
enforcement investigations. An allegation is considered to be
credible when it has indicia of reliability.
(B) The Illinois Department shall deny, suspend or
terminate the eligibility of any person, firm, corporation,
association, agency, institution or other legal entity to
participate as a vendor of goods or services to recipients
under the medical assistance program under Article V, or may
exclude any such person or entity from participation as such a
vendor:
(1) immediately, if such vendor is not properly
licensed, certified, or authorized;
(2) within 30 days of the date when such vendor's
professional license, certification or other authorization
has been refused renewal, restricted, revoked, suspended,
or otherwise terminated; or
(3) if such vendor has been convicted of a violation of
this Code, as provided in Article VIIIA.
(C) Upon termination, suspension, or exclusion of a vendor
of goods or services from participation in the medical
assistance program authorized by this Article, a person with
management responsibility for such vendor during the time of

SB2787 - 31 - LRB098 15972 KTG 53891 b
any conduct which served as the basis for that vendor's
termination, suspension, or exclusion is barred from
participation in the medical assistance program.
Upon termination, suspension, or exclusion of a corporate
vendor, the officers and persons owning, directly or
indirectly, 5% or more of the shares of stock or other
evidences of ownership in the vendor during the time of any
conduct which served as the basis for that vendor's
termination, suspension, or exclusion are barred from
participation in the medical assistance program. A person who
owns, directly or indirectly, 5% or more of the shares of stock
or other evidences of ownership in a terminated, suspended, or
excluded vendor may not transfer his or her ownership interest
in that vendor to his or her spouse, child, brother, sister,
parent, grandparent, grandchild, uncle, aunt, niece, nephew,
cousin, or relative by marriage.
Upon termination, suspension, or exclusion of a sole
proprietorship or partnership, the owner or partners during the
time of any conduct which served as the basis for that vendor's
termination, suspension, or exclusion are barred from
participation in the medical assistance program. The owner of a
terminated, suspended, or excluded vendor that is a sole
proprietorship, and a partner in a terminated, suspended, or
excluded vendor that is a partnership, may not transfer his or
her ownership or partnership interest in that vendor to his or
her spouse, child, brother, sister, parent, grandparent,

SB2787 - 32 - LRB098 15972 KTG 53891 b
grandchild, uncle, aunt, niece, nephew, cousin, or relative by
marriage.
A person who owns, directly or indirectly, 5% or more of
the shares of stock or other evidences of ownership in a
corporate or limited liability company vendor who owes a debt
to the Department, if that vendor has not made payment
arrangements acceptable to the Department, shall not transfer
his or her ownership interest in that vendor, or vendor assets
of any kind, to his or her spouse, child, brother, sister,
parent, grandparent, grandchild, uncle, aunt, niece, nephew,
cousin, or relative by marriage.
Rules adopted by the Illinois Department to implement these
provisions shall specifically include a definition of the term
"management responsibility" as used in this Section. Such
definition shall include, but not be limited to, typical job
titles, and duties and descriptions which will be considered as
within the definition of individuals with management
responsibility for a provider.
A vendor or a prior vendor who has been terminated,
excluded, or suspended from the medical assistance program, or
from another state or federal medical assistance or health care
program, and any individual currently or previously barred from
the medical assistance program, or from another state or
federal medical assistance or health care program, as a result
of being an officer or a person owning, directly or indirectly,
5% or more of the shares of stock or other evidences of

SB2787 - 33 - LRB098 15972 KTG 53891 b
ownership in a corporate or limited liability company vendor
during the time of any conduct which served as the basis for
that vendor's termination, suspension, or exclusion, may be
required to post a surety bond as part of a condition of
enrollment or participation in the medical assistance program.
The Illinois Department shall establish, by rule, the criteria
and requirements for determining when a surety bond must be
posted and the value of the bond.
A vendor or a prior vendor who has a debt owed to the
Illinois Department and any individual currently or previously
barred from the medical assistance program, or from another
state or federal medical assistance or health care program, as
a result of being an officer or a person owning, directly or
indirectly, 5% or more of the shares of stock or other
evidences of ownership in that corporate or limited liability
company vendor during the time of any conduct which served as
the basis for the debt, may be required to post a surety bond
as part of a condition of enrollment or participation in the
medical assistance program. The Illinois Department shall
establish, by rule, the criteria and requirements for
determining when a surety bond must be posted and the value of
the bond.
(D) If a vendor has been suspended from the medical
assistance program under Article V of the Code, the Director
may require that such vendor correct any deficiencies which
served as the basis for the suspension. The Director shall

SB2787 - 34 - LRB098 15972 KTG 53891 b
specify in the suspension order a specific period of time,
which shall not exceed one year from the date of the order,
during which a suspended vendor shall not be eligible to
participate. At the conclusion of the period of suspension the
Director shall reinstate such vendor, unless he finds that such
vendor has not corrected deficiencies upon which the suspension
was based.
If a vendor has been terminated, suspended, or excluded
from the medical assistance program under Article V, such
vendor shall be barred from participation for at least one
year, except that if a vendor has been terminated, suspended,
or excluded based on a conviction of a violation of Article
VIIIA or a conviction of a felony based on fraud or a willful
misrepresentation related to (i) the medical assistance
program under Article V, (ii) a federal or another state's
medical assistance or health care program, or (iii) the
provision of health care services, then the vendor shall be
barred from participation for 5 years or for the length of the
vendor's sentence for that conviction, whichever is longer. At
the end of one year a vendor who has been terminated,
suspended, or excluded may apply for reinstatement to the
program. Upon proper application to be reinstated such vendor
may be deemed eligible by the Director providing that such
vendor meets the requirements for eligibility under this Code.
If such vendor is deemed not eligible for reinstatement, he
shall be barred from again applying for reinstatement for one

SB2787 - 35 - LRB098 15972 KTG 53891 b
year from the date his application for reinstatement is denied.
A vendor whose termination, suspension, or exclusion from
participation in the Illinois medical assistance program under
Article V was based solely on an action by a governmental
entity other than the Illinois Department may, upon
reinstatement by that governmental entity or upon reversal of
the termination, suspension, or exclusion, apply for
rescission of the termination, suspension, or exclusion from
participation in the Illinois medical assistance program. Upon
proper application for rescission, the vendor may be deemed
eligible by the Director if the vendor meets the requirements
for eligibility under this Code.
If a vendor has been terminated, suspended, or excluded and
reinstated to the medical assistance program under Article V
and the vendor is terminated, suspended, or excluded a second
or subsequent time from the medical assistance program, the
vendor shall be barred from participation for at least 2 years,
except that if a vendor has been terminated, suspended, or
excluded a second time based on a conviction of a violation of
Article VIIIA or a conviction of a felony based on fraud or a
willful misrepresentation related to (i) the medical
assistance program under Article V, (ii) a federal or another
state's medical assistance or health care program, or (iii) the
provision of health care services, then the vendor shall be
barred from participation for life. At the end of 2 years, a
vendor who has been terminated, suspended, or excluded may

SB2787 - 36 - LRB098 15972 KTG 53891 b
apply for reinstatement to the program. Upon application to be
reinstated, the vendor may be deemed eligible if the vendor
meets the requirements for eligibility under this Code. If the
vendor is deemed not eligible for reinstatement, the vendor
shall be barred from again applying for reinstatement for 2
years from the date the vendor's application for reinstatement
is denied.
(E) The Illinois Department may recover money improperly or
erroneously paid, or overpayments, either by setoff, crediting
against future billings or by requiring direct repayment to the
Illinois Department. The Illinois Department may suspend or
deny payment, in whole or in part, if such payment would be
improper or erroneous or would otherwise result in overpayment.
(1) Payments may be suspended, denied, or recovered
from a vendor or alternate payee: (i) for services rendered
in violation of the Illinois Department's provider
notices, statutes, rules, and regulations; (ii) for
services rendered in violation of the terms and conditions
prescribed by the Illinois Department in its vendor
agreement; (iii) for any vendor who fails to grant the
Office of the Medicaid Inspector General timely access to
full and complete records, including, but not limited to,
records relating to recipients under the medical
assistance program for the most recent 6 years, in
accordance with Section 140.28 of Title 89 of the Illinois
Administrative Code, and other information for the purpose

SB2787 - 37 - LRB098 15972 KTG 53891 b
of audits, investigations, or other program integrity
functions, after reasonable written request by the
Medicaid Inspector General; this subsection (E) does not
require vendors to make available the medical records of
patients for whom services are not reimbursed under this
Code or to provide access to medical records more than 6
years old; (iv) when the vendor has knowingly made, or
caused to be made, any false statement or representation of
a material fact in connection with the administration of
the medical assistance program; or (v) when the vendor
previously rendered services while terminated, suspended,
or excluded from participation in the medical assistance
program or while terminated or excluded from participation
in another state or federal medical assistance or health
care program.
(2) Notwithstanding any other provision of law, if a
vendor has the same taxpayer identification number
(assigned under Section 6109 of the Internal Revenue Code
of 1986) as is assigned to a vendor with past-due financial
obligations to the Illinois Department, the Illinois
Department may make any necessary adjustments to payments
to that vendor in order to satisfy any past-due
obligations, regardless of whether the vendor is assigned a
different billing number under the medical assistance
program.
(E-5) Civil monetary penalties.

SB2787 - 38 - LRB098 15972 KTG 53891 b
(1) As used in this subsection (E-5):
(a) "Knowingly" means that a person, with respect
to information: (i) has actual knowledge of the
information; (ii) acts in deliberate ignorance of the
truth or falsity of the information; or (iii) acts in
reckless disregard of the truth or falsity of the
information. No proof of specific intent to defraud is
required.
(b) "Overpayment" means any funds that a person
receives or retains from the medical assistance
program to which the person, after applicable
reconciliation, is not entitled under this Code.
(c) "Remuneration" means the offer or transfer of
items or services for free or for other than fair
market value by a person; however, remuneration does
not include items or services of a nominal value of no
more than $10 per item or service, or $50 in the
aggregate on an annual basis, or any other offer or
transfer of items or services as determined by the
Department.
(d) "Should know" means that a person, with respect
to information: (i) acts in deliberate ignorance of the
truth or falsity of the information; or (ii) acts in
reckless disregard of the truth or falsity of the
information. No proof of specific intent to defraud is
required.

SB2787 - 39 - LRB098 15972 KTG 53891 b
(2) Any person (including a vendor, provider,
organization, agency, or other entity, or an alternate
payee thereof, but excluding a recipient) who:
(a) knowingly presents or causes to be presented to
an officer, employee, or agent of the State, a claim
that the Department determines:
(i) is for a medical or other item or service
that the person knows or should know was not
provided as claimed, including any person who
engages in a pattern or practice of presenting or
causing to be presented a claim for an item or
service that is based on a code that the person
knows or should know will result in a greater
payment to the person than the code the person
knows or should know is applicable to the item or
service actually provided;
(ii) is for a medical or other item or service
and the person knows or should know that the claim
is false or fraudulent;
(iii) is presented for a vendor physician's
service, or an item or service incident to a vendor
physician's service, by a person who knows or
should know that the individual who furnished, or
supervised the furnishing of, the service:
(AA) was not licensed as a physician;
(BB) was licensed as a physician but such

SB2787 - 40 - LRB098 15972 KTG 53891 b
license had been obtained through a
misrepresentation of material fact (including
cheating on an examination required for
licensing); or
(CC) represented to the patient at the
time the service was furnished that the
physician was certified in a medical specialty
by a medical specialty board, when the
individual was not so certified;
(iv) is for a medical or other item or service
furnished during a period in which the person was
excluded from the medical assistance program or a
federal or state health care program under which
the claim was made pursuant to applicable law; or
(v) is for a pattern of medical or other items
or services that a person knows or should know are
not medically necessary;
(b) knowingly presents or causes to be presented to
any person a request for payment which is in violation
of the conditions for receipt of vendor payments under
the medical assistance program under Section 11-13 of
this Code;
(c) knowingly gives or causes to be given to any
person, with respect to medical assistance program
coverage of inpatient hospital services, information
that he or she knows or should know is false or

SB2787 - 41 - LRB098 15972 KTG 53891 b
misleading, and that could reasonably be expected to
influence the decision when to discharge such person or
other individual from the hospital;
(d) in the case of a person who is not an
organization, agency, or other entity, is excluded
from participating in the medical assistance program
or a federal or state health care program and who, at
the time of a violation of this subsection (E-5):
(i) retains a direct or indirect ownership or
control interest in an entity that is
participating in the medical assistance program or
a federal or state health care program, and who
knows or should know of the action constituting the
basis for the exclusion; or
(ii) is an officer or managing employee of such
an entity;
(e) offers or transfers remuneration to any
individual eligible for benefits under the medical
assistance program that such person knows or should
know is likely to influence such individual to order or
receive from a particular vendor, provider,
practitioner, or supplier any item or service for which
payment may be made, in whole or in part, under the
medical assistance program;
(f) arranges or contracts (by employment or
otherwise) with an individual or entity that the person

SB2787 - 42 - LRB098 15972 KTG 53891 b
knows or should know is excluded from participation in
the medical assistance program or a federal or state
health care program, for the provision of items or
services for which payment may be made under such a
program;
(g) commits an act described in subsection (b) or
(c) of Section 8A-3;
(h) knowingly makes, uses, or causes to be made or
used, a false record or statement material to a false
or fraudulent claim for payment for items and services
furnished under the medical assistance program;
(i) fails to grant timely access, upon reasonable
request (as defined by the Department by rule), to the
Medicaid Inspector General, for the purpose of audits,
investigations, evaluations, or other statutory
functions of the Medicaid Inspector General of the
Department;
(j) orders or prescribes a medical or other item or
service during a period in which the person was
excluded from the medical assistance program or a
federal or state health care program, in the case where
the person knows or should know that a claim for such
medical or other item or service will be made under
such a program;
(k) knowingly makes or causes to be made any false
statement, omission, or misrepresentation of a

SB2787 - 43 - LRB098 15972 KTG 53891 b
material fact in any application, bid, or contract to
participate or enroll as a vendor or provider of
services or a supplier under the medical assistance
program;
(l) knows of an overpayment and does not report and
return the overpayment to the Department in accordance
with paragraph (6);
shall be subject, in addition to any other penalties that
may be prescribed by law, to a civil money penalty of not
more than $10,000 for each item or service (or, in cases
under subparagraph (c), $15,000 for each individual with
respect to whom false or misleading information was given;
in cases under subparagraph (d), $10,000 for each day the
prohibited relationship occurs; in cases under
subparagraph (g), $50,000 for each such act; in cases under
subparagraph (h), $50,000 for each false record or
statement; in cases under subparagraph (i), $15,000 for
each day of the failure described in such subparagraph; or
in cases under subparagraph (k), $50,000 for each false
statement, omission, or misrepresentation of a material
fact). In addition, such a person shall be subject to an
assessment of not more than 3 times the amount claimed for
each such item or service in lieu of damages sustained by
the State because of such claim (or, in cases under
subparagraph (g), damages of not more than 3 times the
total amount of remuneration offered, paid, solicited, or

SB2787 - 44 - LRB098 15972 KTG 53891 b
received, without regard to whether a portion of such
remuneration was offered, paid, solicited, or received for
a lawful purpose; or in cases under subparagraph (k), an
assessment of not more than 3 times the total amount
claimed for each item or service for which payment was made
based upon the application, bid, or contract containing the
false statement, omission, or misrepresentation of a
material fact).
(3) In addition, the Director or his or her designee
may make a determination in the same proceeding to exclude,
terminate, suspend, or bar the person from participation in
the medical assistance program.
(4) The Illinois Department may seek the civil monetary
penalties and exclusion, termination, suspension, or
barment identified in this subsection (E-5). Prior to the
imposition of any penalties or sanctions, the affected
person shall be afforded an opportunity for a hearing after
reasonable notice. The Department shall establish hearing
procedures by rule.
(5) Any final order, decision, or other determination
made, issued, or executed by the Director under the
provisions of this subsection (E-5), whereby a person is
aggrieved, shall be subject to review in accordance with
the provisions of the Administrative Review Law, and the
rules adopted pursuant thereto, which shall apply to and
govern all proceedings for the judicial review of final

SB2787 - 45 - LRB098 15972 KTG 53891 b
administrative decisions of the Director.
(6)(a) If a person has received an overpayment, the
person shall:
(i) report and return the overpayment to the
Department at the correct address; and
(ii) notify the Department in writing of the reason
for the overpayment.
(b) An overpayment must be reported and returned under
subparagraph (a) by the later of:
(i) the date which is 60 days after the date on
which the overpayment was identified; or
(ii) the date any corresponding cost report is due,
if applicable.
(E-10) A vendor who disputes an overpayment identified as
part of a Department audit shall utilize the Department's
self-referral disclosure protocol as set forth under this Code
to identify, investigate, and return to the Department any
undisputed audit overpayment amount. Unless the disputed
overpayment amount is subject to a fraud payment suspension, or
involves a termination sanction, the Department shall defer the
recovery of the disputed overpayment amount up to one year
after the date of the Department's final audit determination,
or earlier, or as required by State or federal law. If the
administrative hearing extends beyond one year, and such delay
was not caused by the request of the vendor, then the
Department shall not recover the disputed overpayment amount

SB2787 - 46 - LRB098 15972 KTG 53891 b
until the date of the final administrative decision. If a final
administrative decision establishes that the disputed
overpayment amount is owed to the Department, then the amount
shall be immediately due to the Department. The Department
shall be entitled to recover interest from the vendor on the
overpayment amount from the date of the overpayment through the
date the vendor returns the overpayment to the Department at a
rate not to exceed the Wall Street Journal Prime Rate, as
published from time to time, but not to exceed 5%. Any interest
billed by the Department shall be due immediately upon receipt
of the Department's billing statement.
(F) The Illinois Department may withhold payments to any
vendor or alternate payee prior to or during the pendency of
any audit or proceeding under this Section, and through the
pendency of any administrative appeal or administrative review
by any court proceeding. The Illinois Department shall state by
rule with as much specificity as practicable the conditions
under which payments will not be withheld under this Section.
Payments may be denied for bills submitted with service dates
occurring during the pendency of a proceeding, after a final
decision has been rendered, or after the conclusion of any
administrative appeal, where the final administrative decision
is to terminate, exclude, or suspend eligibility to participate
in the medical assistance program. The Illinois Department
shall state by rule with as much specificity as practicable the
conditions under which payments will not be denied for such

SB2787 - 47 - LRB098 15972 KTG 53891 b
bills. The Illinois Department shall state by rule a process
and criteria by which a vendor or alternate payee may request
full or partial release of payments withheld under this
subsection. The Department must complete a proceeding under
this Section in a timely manner.
Notwithstanding recovery allowed under subsection (E) or
this subsection (F), the Illinois Department may withhold
payments to any vendor or alternate payee who is not properly
licensed, certified, or in compliance with State or federal
agency regulations. Payments may be denied for bills submitted
with service dates occurring during the period of time that a
vendor is not properly licensed, certified, or in compliance
with State or federal regulations. Facilities licensed under
the Nursing Home Care Act shall have payments denied or
withheld pursuant to subsection (I) of this Section.
(F-5) The Illinois Department may temporarily withhold
payments to a vendor or alternate payee if any of the following
individuals have been indicted or otherwise charged under a law
of the United States or this or any other state with an offense
that is based on alleged fraud or willful misrepresentation on
the part of the individual related to (i) the medical
assistance program under Article V of this Code, (ii) a federal
or another state's medical assistance or health care program,
or (iii) the provision of health care services:
(1) If the vendor or alternate payee is a corporation:
an officer of the corporation or an individual who owns,

SB2787 - 48 - LRB098 15972 KTG 53891 b
either directly or indirectly, 5% or more of the shares of
stock or other evidence of ownership of the corporation.
(2) If the vendor is a sole proprietorship: the owner
of the sole proprietorship.
(3) If the vendor or alternate payee is a partnership:
a partner in the partnership.
(4) If the vendor or alternate payee is any other
business entity authorized by law to transact business in
this State: an officer of the entity or an individual who
owns, either directly or indirectly, 5% or more of the
evidences of ownership of the entity.
If the Illinois Department withholds payments to a vendor
or alternate payee under this subsection, the Department shall
not release those payments to the vendor or alternate payee
while any criminal proceeding related to the indictment or
charge is pending unless the Department determines that there
is good cause to release the payments before completion of the
proceeding. If the indictment or charge results in the
individual's conviction, the Illinois Department shall retain
all withheld payments, which shall be considered forfeited to
the Department. If the indictment or charge does not result in
the individual's conviction, the Illinois Department shall
release to the vendor or alternate payee all withheld payments.
(F-10) If the Illinois Department establishes that the
vendor or alternate payee owes a debt to the Illinois
Department, and the vendor or alternate payee subsequently

SB2787 - 49 - LRB098 15972 KTG 53891 b
fails to pay or make satisfactory payment arrangements with the
Illinois Department for the debt owed, the Illinois Department
may seek all remedies available under the law of this State to
recover the debt, including, but not limited to, wage
garnishment or the filing of claims or liens against the vendor
or alternate payee.
(F-15) Enforcement of judgment.
(1) Any fine, recovery amount, other sanction, or costs
imposed, or part of any fine, recovery amount, other
sanction, or cost imposed, remaining unpaid after the
exhaustion of or the failure to exhaust judicial review
procedures under the Illinois Administrative Review Law is
a debt due and owing the State and may be collected using
all remedies available under the law.
(2) After expiration of the period in which judicial
review under the Illinois Administrative Review Law may be
sought for a final administrative decision, unless stayed
by a court of competent jurisdiction, the findings,
decision, and order of the Director may be enforced in the
same manner as a judgment entered by a court of competent
jurisdiction.
(3) In any case in which any person or entity has
failed to comply with a judgment ordering or imposing any
fine or other sanction, any expenses incurred by the
Illinois Department to enforce the judgment, including,
but not limited to, attorney's fees, court costs, and costs

SB2787 - 50 - LRB098 15972 KTG 53891 b
related to property demolition or foreclosure, after they
are fixed by a court of competent jurisdiction or the
Director, shall be a debt due and owing the State and may
be collected in accordance with applicable law. Prior to
any expenses being fixed by a final administrative decision
pursuant to this subsection (F-15), the Illinois
Department shall provide notice to the individual or entity
that states that the individual or entity shall appear at a
hearing before the administrative hearing officer to
determine whether the individual or entity has failed to
comply with the judgment. The notice shall set the date for
such a hearing, which shall not be less than 7 days from
the date that notice is served. If notice is served by
mail, the 7-day period shall begin to run on the date that
the notice was deposited in the mail.
(4) Upon being recorded in the manner required by
Article XII of the Code of Civil Procedure or by the
Uniform Commercial Code, a lien shall be imposed on the
real estate or personal estate, or both, of the individual
or entity in the amount of any debt due and owing the State
under this Section. The lien may be enforced in the same
manner as a judgment of a court of competent jurisdiction.
A lien shall attach to all property and assets of such
person, firm, corporation, association, agency,
institution, or other legal entity until the judgment is
satisfied.

SB2787 - 51 - LRB098 15972 KTG 53891 b
(5) The Director may set aside any judgment entered by
default and set a new hearing date upon a petition filed at
any time (i) if the petitioner's failure to appear at the
hearing was for good cause, or (ii) if the petitioner
established that the Department did not provide proper
service of process. If any judgment is set aside pursuant
to this paragraph (5), the hearing officer shall have
authority to enter an order extinguishing any lien which
has been recorded for any debt due and owing the Illinois
Department as a result of the vacated default judgment.
(G) The provisions of the Administrative Review Law, as now
or hereafter amended, and the rules adopted pursuant thereto,
shall apply to and govern all proceedings for the judicial
review of final administrative decisions of the Illinois
Department under this Section. The term "administrative
decision" is defined as in Section 3-101 of the Code of Civil
Procedure.
(G-5) Vendors who pose a risk of fraud, waste, abuse, or
harm.
(1) Notwithstanding any other provision in this
Section, the Department may terminate, suspend, or exclude
vendors who pose a risk of fraud, waste, abuse, or harm
from participation in the medical assistance program prior
to an evidentiary hearing but after reasonable notice and
opportunity to respond as established by the Department by
rule.

SB2787 - 52 - LRB098 15972 KTG 53891 b
(2) Vendors who pose a risk of fraud, waste, abuse, or
harm shall submit to a fingerprint-based criminal
background check on current and future information
available in the State system and current information
available through the Federal Bureau of Investigation's
system by submitting all necessary fees and information in
the form and manner prescribed by the Department of State
Police. The following individuals shall be subject to the
check:
(A) In the case of a vendor that is a corporation,
every shareholder who owns, directly or indirectly, 5%
or more of the outstanding shares of the corporation.
(B) In the case of a vendor that is a partnership,
every partner.
(C) In the case of a vendor that is a sole
proprietorship, the sole proprietor.
(D) Each officer or manager of the vendor.
Each such vendor shall be responsible for payment of
the cost of the criminal background check.
(3) Vendors who pose a risk of fraud, waste, abuse, or
harm may be required to post a surety bond. The Department
shall establish, by rule, the criteria and requirements for
determining when a surety bond must be posted and the value
of the bond.
(4) The Department, or its agents, may refuse to accept
requests for authorization from specific vendors who pose a

SB2787 - 53 - LRB098 15972 KTG 53891 b
risk of fraud, waste, abuse, or harm, including
prior-approval and post-approval requests, if:
(A) the Department has initiated a notice of
termination, suspension, or exclusion of the vendor
from participation in the medical assistance program;
or
(B) the Department has issued notification of its
withholding of payments pursuant to subsection (F-5)
of this Section; or
(C) the Department has issued a notification of its
withholding of payments due to reliable evidence of
fraud or willful misrepresentation pending
investigation.
(5) As used in this subsection, the following terms are
defined as follows:
(A) "Fraud" means an intentional deception or
misrepresentation made by a person with the knowledge
that the deception could result in some unauthorized
benefit to himself or herself or some other person. It
includes any act that constitutes fraud under
applicable federal or State law.
(B) "Abuse" means provider practices that are
inconsistent with sound fiscal, business, or medical
practices and that result in an unnecessary cost to the
medical assistance program or in reimbursement for
services that are not medically necessary or that fail

SB2787 - 54 - LRB098 15972 KTG 53891 b
to meet professionally recognized standards for health
care. It also includes recipient practices that result
in unnecessary cost to the medical assistance program.
Abuse does not include diagnostic or therapeutic
measures conducted primarily as a safeguard against
possible vendor liability.
(C) "Waste" means the unintentional misuse of
medical assistance resources, resulting in unnecessary
cost to the medical assistance program. Waste does not
include diagnostic or therapeutic measures conducted
primarily as a safeguard against possible vendor
liability.
(D) "Harm" means physical, mental, or monetary
damage to recipients or to the medical assistance
program.
(G-6) The Illinois Department, upon making a determination
based upon information in the possession of the Illinois
Department that continuation of participation in the medical
assistance program by a vendor would constitute an immediate
danger to the public, may immediately suspend such vendor's
participation in the medical assistance program without a
hearing. In instances in which the Illinois Department
immediately suspends the medical assistance program
participation of a vendor under this Section, a hearing upon
the vendor's participation must be convened by the Illinois
Department within 15 days after such suspension and completed

SB2787 - 55 - LRB098 15972 KTG 53891 b
without appreciable delay. Such hearing shall be held to
determine whether to recommend to the Director that the
vendor's medical assistance program participation be denied,
terminated, suspended, placed on provisional status, or
reinstated. In the hearing, any evidence relevant to the vendor
constituting an immediate danger to the public may be
introduced against such vendor; provided, however, that the
vendor, or his or her counsel, shall have the opportunity to
discredit, impeach, and submit evidence rebutting such
evidence.
(H) Nothing contained in this Code shall in any way limit
or otherwise impair the authority or power of any State agency
responsible for licensing of vendors.
(I) Based on a finding of noncompliance on the part of a
nursing home with any requirement for certification under Title
XVIII or XIX of the Social Security Act (42 U.S.C. Sec. 1395 et
seq. or 42 U.S.C. Sec. 1396 et seq.), the Illinois Department
may impose one or more of the following remedies after notice
to the facility:
(1) Termination of the provider agreement.
(2) Temporary management.
(3) Denial of payment for new admissions.
(4) Civil money penalties.
(5) Closure of the facility in emergency situations or
transfer of residents, or both.
(6) State monitoring.

SB2787 - 56 - LRB098 15972 KTG 53891 b
(7) Denial of all payments when the U.S. Department of
Health and Human Services has imposed this sanction.
The Illinois Department shall by rule establish criteria
governing continued payments to a nursing facility subsequent
to termination of the facility's provider agreement if, in the
sole discretion of the Illinois Department, circumstances
affecting the health, safety, and welfare of the facility's
residents require those continued payments. The Illinois
Department may condition those continued payments on the
appointment of temporary management, sale of the facility to
new owners or operators, or other arrangements that the
Illinois Department determines best serve the needs of the
facility's residents.
Except in the case of a facility that has a right to a
hearing on the finding of noncompliance before an agency of the
federal government, a facility may request a hearing before a
State agency on any finding of noncompliance within 60 days
after the notice of the intent to impose a remedy. Except in
the case of civil money penalties, a request for a hearing
shall not delay imposition of the penalty. The choice of
remedies is not appealable at a hearing. The level of
noncompliance may be challenged only in the case of a civil
money penalty. The Illinois Department shall provide by rule
for the State agency that will conduct the evidentiary
hearings.
The Illinois Department may collect interest on unpaid

SB2787 - 57 - LRB098 15972 KTG 53891 b
civil money penalties.
The Illinois Department may adopt all rules necessary to
implement this subsection (I).
(J) The Illinois Department, by rule, may permit individual
practitioners to designate that Department payments that may be
due the practitioner be made to an alternate payee or alternate
payees.
(a) Such alternate payee or alternate payees shall be
required to register as an alternate payee in the Medical
Assistance Program with the Illinois Department.
(b) If a practitioner designates an alternate payee,
the alternate payee and practitioner shall be jointly and
severally liable to the Department for payments made to the
alternate payee. Pursuant to subsection (E) of this
Section, any Department action to suspend or deny payment
or recover money or overpayments from an alternate payee
shall be subject to an administrative hearing.
(c) Registration as an alternate payee or alternate
payees in the Illinois Medical Assistance Program shall be
conditional. At any time, the Illinois Department may deny
or cancel any alternate payee's registration in the
Illinois Medical Assistance Program without cause. Any
such denial or cancellation is not subject to an
administrative hearing.
(d) The Illinois Department may seek a revocation of
any alternate payee, and all owners, officers, and

SB2787 - 58 - LRB098 15972 KTG 53891 b
individuals with management responsibility for such
alternate payee shall be permanently prohibited from
participating as an owner, an officer, or an individual
with management responsibility with an alternate payee in
the Illinois Medical Assistance Program, if after
reasonable notice and opportunity for a hearing the
Illinois Department finds that:
(1) the alternate payee is not complying with the
Department's policy or rules and regulations, or with
the terms and conditions prescribed by the Illinois
Department in its alternate payee registration
agreement; or
(2) the alternate payee has failed to keep or make
available for inspection, audit, or copying, after
receiving a written request from the Illinois
Department, such records regarding payments claimed as
an alternate payee; or
(3) the alternate payee has failed to furnish any
information requested by the Illinois Department
regarding payments claimed as an alternate payee; or
(4) the alternate payee has knowingly made, or
caused to be made, any false statement or
representation of a material fact in connection with
the administration of the Illinois Medical Assistance
Program; or
(5) the alternate payee, a person with management

SB2787 - 59 - LRB098 15972 KTG 53891 b
responsibility for an alternate payee, an officer or
person owning, either directly or indirectly, 5% or
more of the shares of stock or other evidences of
ownership in a corporate alternate payee, or a partner
in a partnership which is an alternate payee:
(a) was previously terminated, suspended, or
excluded from participation as a vendor in the
Illinois Medical Assistance Program, or was
previously revoked as an alternate payee in the
Illinois Medical Assistance Program, or was
terminated, suspended, or excluded from
participation as a vendor in a medical assistance
program in another state that is of the same kind
as the program of medical assistance provided
under Article V of this Code; or
(b) was a person with management
responsibility for a vendor previously terminated,
suspended, or excluded from participation as a
vendor in the Illinois Medical Assistance Program,
or was previously revoked as an alternate payee in
the Illinois Medical Assistance Program, or was
terminated, suspended, or excluded from
participation as a vendor in a medical assistance
program in another state that is of the same kind
as the program of medical assistance provided
under Article V of this Code, during the time of

SB2787 - 60 - LRB098 15972 KTG 53891 b
conduct which was the basis for that vendor's
termination, suspension, or exclusion or alternate
payee's revocation; or
(c) was an officer, or person owning, either
directly or indirectly, 5% or more of the shares of
stock or other evidences of ownership in a
corporate vendor previously terminated, suspended,
or excluded from participation as a vendor in the
Illinois Medical Assistance Program, or was
previously revoked as an alternate payee in the
Illinois Medical Assistance Program, or was
terminated, suspended, or excluded from
participation as a vendor in a medical assistance
program in another state that is of the same kind
as the program of medical assistance provided
under Article V of this Code, during the time of
conduct which was the basis for that vendor's
termination, suspension, or exclusion; or
(d) was an owner of a sole proprietorship or
partner in a partnership previously terminated,
suspended, or excluded from participation as a
vendor in the Illinois Medical Assistance Program,
or was previously revoked as an alternate payee in
the Illinois Medical Assistance Program, or was
terminated, suspended, or excluded from
participation as a vendor in a medical assistance

SB2787 - 61 - LRB098 15972 KTG 53891 b
program in another state that is of the same kind
as the program of medical assistance provided
under Article V of this Code, during the time of
conduct which was the basis for that vendor's
termination, suspension, or exclusion or alternate
payee's revocation; or
(6) the alternate payee, a person with management
responsibility for an alternate payee, an officer or
person owning, either directly or indirectly, 5% or
more of the shares of stock or other evidences of
ownership in a corporate alternate payee, or a partner
in a partnership which is an alternate payee:
(a) has engaged in conduct prohibited by
applicable federal or State law or regulation
relating to the Illinois Medical Assistance
Program; or
(b) was a person with management
responsibility for a vendor or alternate payee at
the time that the vendor or alternate payee engaged
in practices prohibited by applicable federal or
State law or regulation relating to the Illinois
Medical Assistance Program; or
(c) was an officer, or person owning, either
directly or indirectly, 5% or more of the shares of
stock or other evidences of ownership in a vendor
or alternate payee at the time such vendor or

SB2787 - 62 - LRB098 15972 KTG 53891 b
alternate payee engaged in practices prohibited by
applicable federal or State law or regulation
relating to the Illinois Medical Assistance
Program; or
(d) was an owner of a sole proprietorship or
partner in a partnership which was a vendor or
alternate payee at the time such vendor or
alternate payee engaged in practices prohibited by
applicable federal or State law or regulation
relating to the Illinois Medical Assistance
Program; or
(7) the direct or indirect ownership of the vendor
or alternate payee (including the ownership of a vendor
or alternate payee that is a partner's interest in a
vendor or alternate payee, or ownership of 5% or more
of the shares of stock or other evidences of ownership
in a corporate vendor or alternate payee) has been
transferred by an individual who is terminated,
suspended, or excluded or barred from participating as
a vendor or is prohibited or revoked as an alternate
payee to the individual's spouse, child, brother,
sister, parent, grandparent, grandchild, uncle, aunt,
niece, nephew, cousin, or relative by marriage.
(K) The Illinois Department of Healthcare and Family
Services may withhold payments, in whole or in part, to a
provider or alternate payee where there is credible evidence,

SB2787 - 63 - LRB098 15972 KTG 53891 b
received from State or federal law enforcement or federal
oversight agencies or from the results of a preliminary
Department audit, that the circumstances giving rise to the
need for a withholding of payments may involve fraud or willful
misrepresentation under the Illinois Medical Assistance
program. The Department shall by rule define what constitutes
"credible" evidence for purposes of this subsection. The
Department may withhold payments without first notifying the
provider or alternate payee of its intention to withhold such
payments. A provider or alternate payee may request a
reconsideration of payment withholding, and the Department
must grant such a request. The Department shall state by rule a
process and criteria by which a provider or alternate payee may
request full or partial release of payments withheld under this
subsection. This request may be made at any time after the
Department first withholds such payments.
(a) The Illinois Department must send notice of its
withholding of program payments within 5 days of taking
such action. The notice must set forth the general
allegations as to the nature of the withholding action, but
need not disclose any specific information concerning its
ongoing investigation. The notice must do all of the
following:
(1) State that payments are being withheld in
accordance with this subsection.
(2) State that the withholding is for a temporary

SB2787 - 64 - LRB098 15972 KTG 53891 b
period, as stated in paragraph (b) of this subsection,
and cite the circumstances under which withholding
will be terminated.
(3) Specify, when appropriate, which type or types
of Medicaid claims withholding is effective.
(4) Inform the provider or alternate payee of the
right to submit written evidence for reconsideration
of the withholding by the Illinois Department.
(5) Inform the provider or alternate payee that a
written request may be made to the Illinois Department
for full or partial release of withheld payments and
that such requests may be made at any time after the
Department first withholds such payments.
(b) All withholding-of-payment actions under this
subsection shall be temporary and shall not continue after
any of the following:
(1) The Illinois Department or the prosecuting
authorities determine that there is insufficient
evidence of fraud or willful misrepresentation by the
provider or alternate payee.
(2) Legal proceedings related to the provider's or
alternate payee's alleged fraud, willful
misrepresentation, violations of this Act, or
violations of the Illinois Department's administrative
rules are completed.
(3) The withholding of payments for a period of 3

SB2787 - 65 - LRB098 15972 KTG 53891 b
years.
(c) The Illinois Department may adopt all rules
necessary to implement this subsection (K).
(K-5) The Illinois Department may withhold payments, in
whole or in part, to a provider or alternate payee upon
initiation of an audit, quality of care review, investigation
when there is a credible allegation of fraud, or the provider
or alternate payee demonstrating a clear failure to cooperate
with the Illinois Department such that the circumstances give
rise to the need for a withholding of payments. As used in this
subsection, "credible allegation" is defined to include an
allegation from any source, including, but not limited to,
fraud hotline complaints, claims data mining, patterns
identified through provider audits, civil actions filed under
the Illinois False Claims Act, and law enforcement
investigations. An allegation is considered to be credible when
it has indicia of reliability. The Illinois Department may
withhold payments without first notifying the provider or
alternate payee of its intention to withhold such payments. A
provider or alternate payee may request a hearing or a
reconsideration of payment withholding, and the Illinois
Department must grant such a request. The Illinois Department
shall state by rule a process and criteria by which a provider
or alternate payee may request a hearing or a reconsideration
for the full or partial release of payments withheld under this
subsection. This request may be made at any time after the

SB2787 - 66 - LRB098 15972 KTG 53891 b
Illinois Department first withholds such payments.
(a) The Illinois Department must send notice of its
withholding of program payments within 5 days of taking
such action. The notice must set forth the general
allegations as to the nature of the withholding action but
need not disclose any specific information concerning its
ongoing investigation. The notice must do all of the
following:
(1) State that payments are being withheld in
accordance with this subsection.
(2) State that the withholding is for a temporary
period, as stated in paragraph (b) of this subsection,
and cite the circumstances under which withholding
will be terminated.
(3) Specify, when appropriate, which type or types
of claims are withheld.
(4) Inform the provider or alternate payee of the
right to request a hearing or a reconsideration of the
withholding by the Illinois Department, including the
ability to submit written evidence.
(5) Inform the provider or alternate payee that a
written request may be made to the Illinois Department
for a hearing or a reconsideration for the full or
partial release of withheld payments and that such
requests may be made at any time after the Illinois
Department first withholds such payments.

SB2787 - 67 - LRB098 15972 KTG 53891 b
(b) All withholding of payment actions under this
subsection shall be temporary and shall not continue after
any of the following:
(1) The Illinois Department determines that there
is insufficient evidence of fraud, or the provider or
alternate payee demonstrates clear cooperation with
the Illinois Department, as determined by the Illinois
Department, such that the circumstances do not give
rise to the need for withholding of payments; or
(2) The withholding of payments has lasted for a
period in excess of 3 years.
(c) The Illinois Department may adopt all rules
necessary to implement this subsection (K-5).
(L) The Illinois Department shall establish a protocol to
enable health care providers to disclose an actual or potential
violation of this Section pursuant to a self-referral
disclosure protocol, referred to in this subsection as "the
protocol". The protocol shall include direction for health care
providers on a specific person, official, or office to whom
such disclosures shall be made. The Illinois Department shall
post information on the protocol on the Illinois Department's
public website. The Illinois Department may adopt rules
necessary to implement this subsection (L). In addition to
other factors that the Illinois Department finds appropriate,
the Illinois Department may consider a health care provider's
timely use or failure to use the protocol in considering the

SB2787 - 68 - LRB098 15972 KTG 53891 b
provider's failure to comply with this Code.
(M) Notwithstanding any other provision of this Code, the
Illinois Department, at its discretion, may exempt an entity
licensed under the Nursing Home Care Act and the ID/DD
Community Care Act from the provisions of subsections (A-15),
(B), and (C) of this Section if the licensed entity is in
receivership.
(Source: P.A. 97-689, eff. 6-14-12; 97-1150, eff. 1-25-13;
98-214, eff. 8-9-13; 98-550, eff. 8-27-13; revised 9-19-13.)
(305 ILCS 5/12-4.25b) (from Ch. 23, par. 12-4.25b)
Sec. 12-4.25b. A vendor of physician services who is the
subject of medical quality review by the Illinois Department
shall have the right to record that portion of any Medical
Quality Review Committee meeting or hearing with the Illinois
Department, at which the vendor is present and participates.
The recording shall be privileged and confidential and shall
not be disclosed, except: (1) however if the Illinois
Department initiates action to deny, suspend or terminate the
vendor's participation in the Medicaid program, the recording
may be disclosed to an attorney or physician consultant to
prepare a defense, or (2) pursuant to an official request, the
recording shall be disclosed to the Department of Financial and
Professional Regulation only for use in investigations and
disciplinary action proceedings with regard to a license.
The Medicaid Inspector General, upon making a

SB2787 - 69 - LRB098 15972 KTG 53891 b
determination based upon information in the possession of the
Department of Healthcare and Family Services or the Medicaid
Inspector General that continuation in practice of a licensed
health care professional may constitute a risk of harm to the
public, that the licensed health care professional's care is
grossly inferior or in excess of needs, or that there is a
credible allegation of fraud by the licensed health care
professional, shall submit a written communication to the
Secretary of the Department of Financial and Professional
Regulation indicating such determination and shall recommend
that the Secretary of the Department of Financial and
Professional Regulation investigate such person's license. All
relevant evidence, or copies thereof, in the Illinois
Department's possession may also be submitted in conjunction
with the written communication. A copy of such written
communication is exempt from the copying and inspection
provisions of the Freedom of Information Act.
(Source: P.A. 87-399.)
(305 ILCS 5/12-4.40)
Sec. 12-4.40. Payment Recapture Audits. The Department of
Healthcare and Family Services is authorized to contract with
third-party entities to conduct Payment Recapture Audits to
detect and recapture payments made in error or as a result of
fraud or abuse. Payment Recapture Audits under this Section may
be performed in conjunction with similar audits performed under

SB2787 - 70 - LRB098 15972 KTG 53891 b
federal authorization.
A Payment Recapture Audit shall include the process of
identifying improper payments paid to providers or other
entities whereby accounting specialists and fraud examination
specialists examine payment records and uncover such problems
as duplicate payments, payments for services not rendered,
overpayments, payments for unauthorized services, and
fictitious vendors. This audit may include the use of
professional and specialized auditors on a contingency basis,
with compensation tied to the identification of misspent funds.
The use of Payment Recapture Audits does not preclude the
Office of the Medicaid Inspector General or any other
authorized agency employee from performing activities to
identify and prevent improper payments.
(Source: P.A. 96-942, eff. 6-25-10; 97-333, eff. 8-12-11.)
(305 ILCS 5/12-13.1)
Sec. 12-13.1. Medicaid Inspector General.
(a) The Governor shall appoint, and the Senate shall
confirm, a Medicaid an Inspector General who shall function
within the Illinois Department of Public Aid (now Healthcare
and Family Services) and report to the Governor. The term of
the Medicaid Inspector General shall expire on the third Monday
of January, 1997 and every 4 years thereafter.
(b) In order to prevent, detect, and eliminate fraud,
waste, abuse, mismanagement, and misconduct, the Medicaid

SB2787 - 71 - LRB098 15972 KTG 53891 b
Inspector General shall oversee the program integrity
functions of the Department of Healthcare and Family Services
and the Medicaid funded programs of Services' and the
Department on Aging and Aging's the Department of Human
Services. Program integrity functions, which include, but are
not limited to, the following:
(1) Investigation of misconduct by employees, vendors,
contractors, and medical providers, except for allegations
of violations of the State Officials and Employees Ethics
Act which shall be referred to the Office of the Governor's
Executive Inspector General for investigation.
(2) Prepayment and post-payment audits of medical
providers related to ensuring that appropriate payments
are made for services rendered and to the prevention and
recovery of overpayments.
(3) Monitoring of quality assurance programs
administered by the Department of Healthcare and Family
Services, the Department on Aging, and the Department of
Human Services Department of Healthcare and Family
Services and the Community Care Program administered by the
Department on Aging.
(4) Quality control measurements of the programs
administered by the Department of Healthcare and Family
Services, the Department on Aging, and the Department of
Human Services Department of Healthcare and Family
Services and the Community Care Program administered by the

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Department on Aging.
(5) Investigations of fraud or intentional program
violations committed by clients of the Department of
Healthcare and Family Services, the Department on Aging,
and the Department of Human Services Department of
Healthcare and Family Services and the Community Care
Program administered by the Department on Aging.
(6) Actions initiated against contractors, vendors, or
medical providers for any of the following reasons:
(A) Violations of the programs medical assistance
program and the Community Care Program administered by
the Department on Aging.
(B) Sanctions against providers brought in
conjunction with the Department of Public Health or the
Department of Human Services (as successor to the
Department of Mental Health and Developmental
Disabilities).
(C) Recoveries of assessments against hospitals
and long-term care facilities.
(D) Sanctions mandated by the United States
Department of Health and Human Services against
medical providers.
(E) Violations of contracts related to any
programs administered by the Department of Healthcare
and Family Services, the Department on Aging, and the
Department of Human Services Department of Healthcare

SB2787 - 73 - LRB098 15972 KTG 53891 b
and Family Services and the Community Care Program
administered by the Department on Aging.
(7) Representation of the Department of Healthcare and
Family Services at hearings with the Illinois Department of
Financial and Professional Regulation in actions taken
against professional licenses held by persons who are in
violation of orders for child support payments.
(b-5) The Medicaid At the request of the Secretary of Human
Services, the Inspector General shall, in relation to any
function performed by the Department of Human Services as
successor to the Department of Public Aid, exercise one or more
of the powers provided under this Section as if those powers
related to the Department of Human Services; in such matters,
the Inspector General shall report his or her findings to the
Secretary of Human Services and to the Directors of the
Department of Healthcare and Family Services and the Department
on Aging.
(c) Notwithstanding, and in addition to, any other
provision of law, the Medicaid Inspector General shall have
access to all information, personnel, and facilities of the
Department of Healthcare and Family Services, and the
Department of Human Services, and the Department on Aging, (as
successor to the Department of Public Aid), their employees,
vendors, contractors, and medical providers and any federal,
State, or local governmental agency that are necessary to
perform the duties of the Office of the Medicaid Inspector

SB2787 - 74 - LRB098 15972 KTG 53891 b
General as directly related to public assistance programs
administered by those departments. No medical provider shall be
compelled, however, to provide individual medical records of
patients who are not clients of the programs administered by
the Department of Healthcare and Family Services. State and
local governmental agencies are authorized and directed to
provide the requested information, assistance, or cooperation.
For purposes of enhanced program integrity functions and
oversight, and to the extent consistent with applicable
information and privacy, security, and disclosure laws, State
agencies and departments shall provide the Office of the
Medicaid Inspector General access to confidential and other
information and data, and the Medicaid Inspector General is
authorized to enter into agreements with appropriate federal
agencies and departments to secure similar data. This includes,
but is not limited to, information pertaining to: licensure;
certification; earnings; immigration status; citizenship; wage
reporting; unearned and earned income; pension income;
employment; supplemental security income; social security
numbers; National Provider Identifier (NPI) numbers; the
National Practitioner Data Bank (NPDB); program and agency
exclusions; taxpayer identification numbers; tax delinquency;
corporate information; and death records.
The Medicaid Inspector General shall enter into agreements
with State agencies and departments, and is authorized to enter
into agreements with federal agencies and departments, under

SB2787 - 75 - LRB098 15972 KTG 53891 b
which such agencies and departments shall share data necessary
for medical assistance program integrity functions and
oversight. The Medicaid Inspector General shall enter into
agreements with State agencies and departments, and is
authorized to enter into agreements with federal agencies and
departments, under which such agencies shall share data
necessary for recipient and vendor screening, review, and
investigation, including but not limited to vendor payment and
recipient eligibility verification. The Medicaid Inspector
General shall develop, in cooperation with other State and
federal agencies and departments, and in compliance with
applicable federal laws and regulations, appropriate and
effective methods to share such data. The Medicaid Inspector
General shall enter into agreements with State agencies and
departments, and is authorized to enter into agreements with
federal agencies and departments, including, but not limited
to: the Secretary of State; the Department of Revenue; the
Department of Public Health; the Department of Human Services;
and the Department of Financial and Professional Regulation.
For purposes of enhanced program integrity functions and
oversight, and to the extent consistent with applicable
information and privacy, security, and disclosure laws, State
agencies and departments shall provide the Office of the
Medicaid Inspector General access to confidential and other
information and data necessary to perform the duties of the
Office upon receipt of a written request from the Medicaid

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Inspector General notwithstanding the existence of any
interagency agreement.
The Medicaid Inspector General shall have the authority to
deny payment, prevent overpayments, and recover overpayments.
The Medicaid Inspector General shall have the authority to
deny or suspend payment to, and deny, terminate, or suspend the
eligibility of, any vendor who fails to grant the Medicaid
Inspector General timely access to full and complete records,
including records of recipients under the medical assistance
program for the most recent 6 years, in accordance with Section
140.28 of Title 89 of the Illinois Administrative Code, and
other information for the purpose of audits, investigations, or
other program integrity functions, after reasonable written
request by the Medicaid Inspector General.
(d) The Medicaid Inspector General shall serve as the
Department of Healthcare and Family Services, the Department on
Aging, and the Department of Human Services' Department of
Healthcare and Family Services' primary liaison with law
enforcement, investigatory and prosecutorial agencies,
including but not limited to the following:
(1) The Department of State Police.
(2) The Federal Bureau of Investigation and other
federal law enforcement agencies.
(3) The various Inspectors General of federal agencies
overseeing the programs administered by the Department of
Healthcare and Family Services.

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(4) The various Inspectors General of any other State
agencies with responsibilities for portions of programs
primarily administered by the Department of Healthcare and
Family Services.
(5) The Offices of the several United States Attorneys
in Illinois.
(6) The several State's Attorneys.
(7) The offices of the Centers for Medicare and
Medicaid Services that administer the Medicare and
Medicaid integrity programs.
The Medicaid Inspector General shall meet on a regular
basis with these entities to share information regarding
possible misconduct by any persons or entities involved with
the public aid programs administered by the Department of
Healthcare and Family Services.
(e) All investigations conducted by the Medicaid Inspector
General shall be conducted in a manner that ensures the
preservation of evidence for use in criminal prosecutions. If
the Medicaid Inspector General determines that a possible
criminal act relating to fraud in the provision or
administration of the medical assistance program has been
committed, the Medicaid Inspector General shall immediately
notify the Medicaid Fraud Control Unit. If the Medicaid
Inspector General determines that a possible criminal act has
been committed within the jurisdiction of the Office, the
Medicaid Inspector General may request the special expertise of

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the Department of State Police. The Medicaid Inspector General
may present for prosecution the findings of any criminal
investigation to the Office of the Attorney General, the
Offices of the several United States Attorneys in Illinois or
the several State's Attorneys.
(f) To carry out his or her duties as described in this
Section, the Medicaid Inspector General and his or her
designees shall have the power to compel by subpoena the
attendance and testimony of witnesses and the production of
books, electronic records and papers as directly related to the
medical public assistance programs administered by the
Department of Healthcare and Family Services or the Department
of Human Services (as successor to the Department of Public
Aid). No medical provider shall be compelled, however, to
provide individual medical records of patients who are not
clients of the Medical Assistance Program.
(g) The Medicaid Inspector General shall report all
convictions, terminations, and suspensions taken against
vendors, contractors and medical providers to the Department of
Healthcare and Family Services and to any agency responsible
for licensing or regulating those persons or entities.
(h) The Medicaid Inspector General shall make annual
reports, findings, and recommendations regarding the Office's
investigations into reports of fraud, waste, abuse,
mismanagement, or misconduct relating to any programs
administered by the Department of Healthcare and Family

SB2787 - 79 - LRB098 15972 KTG 53891 b
Services, or the Department of Human Services (as successor to
the Department of Public Aid), and the Department on Aging to
the General Assembly and the Governor. These reports shall
include, but not be limited to, the following information:
(1) Aggregate provider billing and payment
information, including the number of providers at various
Medicaid earning levels.
(2) The number of audits of the medical assistance
program and the dollar savings resulting from those audits.
(3) The number of prescriptions rejected annually
under the Department of Healthcare and Family Services'
Refill Too Soon program and the dollar savings resulting
from that program.
(4) Provider sanctions, in the aggregate, including
terminations and suspensions.
(5) A detailed summary of the investigations
undertaken in the previous fiscal year. These summaries
shall comply with all laws and rules regarding maintaining
confidentiality in the public aid programs.
(i) Nothing in this Section shall limit investigations by
the Department of Healthcare and Family Services, or the
Department of Human Services, or the Department on Aging that
may otherwise be required by law or that may be necessary in
their capacity as the central administrative authorities
responsible for administration of their agency's programs in
this State.

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(j) The Medicaid Inspector General may issue shields or
other distinctive identification to his or her employees not
exercising the powers of a peace officer if the Inspector
General determines that a shield or distinctive identification
is needed by an employee to carry out his or her
responsibilities.
(Source: P.A. 97-689, eff. 6-14-12; 98-8, eff. 5-3-13.)
SB2787 - 81 - LRB098 15972 KTG 53891 b
INDEX
Statutes amended in order of appearance