Bill Text: IL SB3354 | 2011-2012 | 97th General Assembly | Introduced

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Bill Title: Amends the Illinois Public Aid Code. Sets forth certain circumstances under which the Department of Healthcare and Family Services 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 Medicaid recipients because of an outstanding debt owed to the Department. Sets forth the conditions under which a debtor-vendor may enroll or participate in the medical assistance program. Contains provisions concerning the recovery of interest on overpayments; the withholding of payments to vendors who are not in compliance with State and federal regulations; the recovery of a debt owed by a vendor or alternate payee; the withholding of payments to vendors upon initiation of an audit; and other matters.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2013-01-08 - Session Sine Die [SB3354 Detail]

Download: Illinois-2011-SB3354-Introduced.html

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97TH GENERAL ASSEMBLY State of Illinois 2011 and 2012 SB3354 Introduced 2/7/2012, by Sen. Kwame Raoul SYNOPSIS AS INTRODUCED:
305 ILCS 5/12-4.25 from Ch. 23, par. 12-4.25
Amends the Illinois Public Aid Code. Sets forth certain circumstances under which the Department of Healthcare and Family Services 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 Medicaid recipients because of an outstanding debt owed to the Department. Sets forth the conditions under which a debtor-vendor may enroll or participate in the medical assistance program. Contains provisions concerning the recovery of interest on overpayments; the withholding of payments to vendors who are not in compliance with State and federal regulations; the recovery of a debt owed by a vendor or alternate payee; the withholding of payments to vendors upon initiation of an audit; and other matters.
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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 Illinois Public Aid Code is amended by
changing Section 12-4.25 as follows:
(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, exclude, 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, 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, podiatrists and
dentists setting forth the terms and conditions applicable

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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
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 his or her needs, (2)
harmful to the recipient, 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

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vendor; or a partner in a partnership which is a vendor,
either:
(1) was previously terminated or excluded from
participation in the Illinois medical assistance
program, or was terminated or excluded from
participation 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
(2) was a person with management responsibility
for a vendor previously terminated or excluded from
participation in the Illinois medical assistance
program, or terminated or excluded from participation
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 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
vendor previously terminated or excluded from
participation in the Illinois medical assistance
program, or terminated or excluded from participation
in a medical assistance program in another state that
is of the same kind as the program of medical

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assistance provided under Article V of this Code,
during the time of conduct which was the basis for that
vendor's termination or exclusion; or
(4) was an owner of a sole proprietorship or
partner of a partnership previously terminated or
excluded from participation in the Illinois medical
assistance program, or terminated or excluded from
participation 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 or exclusion; 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
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 relating
to the medical assistance program; 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 relating to the medical assistance

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program; 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 relating
to the medical assistance program; or
(4) was an owner of a sole proprietorship or
partner of a partnership which was a vendor at the time
such vendor engaged in practices prohibited by
applicable federal or State law or regulation relating
to the medical assistance program; 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, 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, or exclude the eligibility of any person, firm,
corporation, association, agency, institution, or other legal
entity to participate as a vendor of goods or services to

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recipients under the medical assistance program under Article V
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 convicted of
a felony 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 program in another state that
is of the same kind as the program of medical assistance
provided under Article V of this Code.
(3) The Medicare program under Title XVIII of the
Social Security Act.
(4) The provision of health care services.
(A-10) The Illinois Department may deny, suspend, or
terminate, or exclude 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 that (i) the vendor, (ii) a person
with management responsibility for a vendor, (iii) an officer

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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 a felony offense related to any of the
following:
(1) Murder.
(2) A Class X felony under the Criminal Code of 1961.
(A-15) The 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 Department finds:
(1) The applicant or any person with management
responsibility for the applicant; an incorporator,
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 advisor to an applicant
has a debt owed to the Department, and no payment
arrangements acceptable to the Department have been made.
(2) The applicant or any person with management
responsibility for the applicant; an incorporator,

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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 incorporator, 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, or (vi) a technical or other advisor to a vendor,
during a period of time when the conduct of that vendor
resulted in a debt owed to the Department, and no payment
arrangements acceptable to the Department have been made by
that vendor.
(3) There is credible evidence 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 Department and
no payment arrangements acceptable to the Department have
been made by that vendor.
(4) There is credible evidence of a transfer of
management responsibilities, or direct or indirect
ownership, or other evidences of ownership of any kind, to
an applicant from a current or prior vendor who has a debt

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owed to the Department and no payment arrangements
acceptable to the Department have been made.
(5) There is credible evidence 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 Department and no payment
arrangements acceptable to the Department have been made.
The Department shall by rule define what constitutes
"credible" evidence for purposes of this subsection. The
Department shall state by rule a process and criteria by which
a provider or alternate payee may request to make acceptable
payment arrangements.
(B) The Illinois Department shall deny, suspend, or
terminate, or exclude 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:
(1) if such vendor is not properly licensed;
(2) within 30 days of the date when such vendor's
professional license, certification or other authorization
has been refused renewal or has been revoked, suspended or
otherwise terminated; or
(3) if such vendor has been convicted of a violation of

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this Code, as provided in Article VIIIA.
(C) Upon termination 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 any conduct
which served as the basis for that vendor's termination or
exclusion is barred from participation in the medical
assistance program.
Upon termination 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 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 or excluded
corporate 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 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
or exclusion are barred from participation in the medical
assistance program. The owner of a terminated or excluded
vendor that is a sole proprietorship, and a partner in a

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terminated 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, 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 vendor
who owes a debt to the Department and has not made acceptable
payment arrangements 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 Illinois medical assistance
program, or from another State program of the same kind
provided under Article V of this Code or from the Medicare
program under Title XVIII of the Social Security Act, and any
individual currently or previously barred as a result of being

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an officer or a person owning, directly or indirectly, 5% or
more of the shares of stock or other evidences of ownership in
a 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 Illinois medical assistance
program. 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.
A vendor or a prior vendor who has a debt owed to the
Department, including debts discharged under federal or State
bankruptcy laws, and any individual currently or previously
barred 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 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 Illinois medical assistance
program. 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.
(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
specify in the suspension order a specific period of time,

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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 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 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
medical assistance program in another state that is of the kind
provided under Article V, (iii) the Medicare program under
Title XVIII of the Social Security Act, or (iv) 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 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 year from the date his

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application for reinstatement is denied.
A vendor whose termination 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 or
exclusion, apply for rescission of the termination 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 or excluded and reinstated
to the medical assistance program under Article V and the
vendor is terminated 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 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
medical assistance program in another state that is of the kind
provided under Article V, (iii) the Medicare program under
Title XVIII of the Social Security Act, or (iv) 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 or excluded may apply for reinstatement to the

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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 Department may recover interest on the amount of the
overpayment if the total overpayment is greater than $100. The
interest on the outstanding overpayment balance shall be at a
rate of one-half of 1% per month or fraction thereof, based on
the date the Department first notifies the vendor or payee of
the debt owed the Department, subject to a maximum of 6% per
annum.
If the Illinois Department establishes through an
administrative hearing that the overpayments resulted from the
vendor or alternate payee willfully making, or causing to be
made, a false statement or misrepresentation of a material fact
in connection with billings and payments under the medical
assistance program under Article V, the Department may recover
interest on the amount of the overpayments at the rate of 5%
per annum. For purposes of this paragraph, "willfully" means
that a person makes a statement or representation with actual

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knowledge that it was false, or makes a statement or
representation with knowledge of facts or information that
would cause one to be aware that the statement or
representation was false when made.
(F) The Illinois Department may withhold payments to any
vendor or alternate payee during the pendency of any 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 during the pendency of any
proceeding 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 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) of
this Section, the Illinois Department may withhold payments to

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any vendor or alternate payee who is not properly licensed,
certified, or in compliance with the State or federal agency
regulations. Payments may be denied for bills submitted with
service dates occurring during the period of time in which a
vendor is not properly licensed, certified, or in compliance
with State or federal regulations.
(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 a felony
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 medical assistance program provided in another state
which is of the kind provided under Article V of this Code,
(iii) the Medicare program under Title XVIII of the Social
Security Act, or (iv) 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,
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

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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 Department establishes that the vendor or
alternate payee owes a debt to the Department, and the vendor
or alternate payee subsequently fails to pay or make
satisfactory payment arrangements with the Department for the
debt owed, the Department may seek all remedies available under
the laws 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

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imposed, or any part of any fine, recovery amount, other
sanction, or costs imposed, remaining unpaid after the
exhaustion of or the failure to exhaust judicial review
procedures under the Illinois Administrative Review Law
are a debt due and owing the State and may be collected in
accordance with applicable 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, or any expenses incurred by the
State agency to enforce the judgment, including, but not
limited to, attorney's fees, court costs, and costs related
to property demolition or foreclosure, after they are fixed
by a court of competent jurisdiction or the Director, that
fine or other sanction, or those expenses, 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 Department shall provide notice to the
individual or entity that states that the individual shall

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appear at a hearing before the administrative hearing
officer to determine whether the defendant 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.
(5) The Director may set aside any judgment entered by
default and set a new hearing date, upon a petition filed
within 21 days after the issuance of the order of default,
if the hearing officer determines that the petitioner's
failure to appear at the hearing was for good cause, or at
any time if the petitioner's failure to appear at the
hearing was for good cause, or at any time if the
petitioner established that the Department did not provide

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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
State 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) Non-emergency transportation.
(1) Notwithstanding any other provision in this
Section, for non-emergency transportation vendors, the
Department may terminate or exclude the vendor 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.
(2) Vendors of non-emergency medical transportation
services, as defined by the Department by rule, 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

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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 of non-emergency medical transportation
services 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 non-emergency transportation authorizations,
including prior-approval and post-approval requests, for a
specific non-emergency transportation vendor if:
(A) the Department has initiated a notice of
termination or exclusion of the vendor from
participation in the medical assistance program; or
(B) the Department has issued notification of its

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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.
(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.
(7) Denial of all payments when the Health Care Finance
Administration has imposed this sanction.
The Illinois Department shall by rule establish criteria
governing continued payments to a nursing facility subsequent

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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
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

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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 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
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

SB3354 - 26 - LRB097 14548 KTG 62162 b
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
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

SB3354 - 27 - LRB097 14548 KTG 62162 b
in a partnership which is an alternate payee:
(a) was previously terminated 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 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
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 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 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

SB3354 - 28 - LRB097 14548 KTG 62162 b
corporate vendor previously terminated 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 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 or exclusion; or
(d) was an owner of a sole proprietorship or
partner in a partnership previously terminated 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 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 or exclusion
or alternate payee's revocation; or
(6) the alternate payee, a person with management
responsibility for an alternate payee, an officer or

SB3354 - 29 - LRB097 14548 KTG 62162 b
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
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

SB3354 - 30 - LRB097 14548 KTG 62162 b
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,
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 upon receipt of evidence, received
from State or federal law enforcement or federal oversight
agencies or from the results of a preliminary Department audit
and determined by the Department to be credible, 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

SB3354 - 31 - LRB097 14548 KTG 62162 b
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
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

SB3354 - 32 - LRB097 14548 KTG 62162 b
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
years.
(c) The Illinois Department may adopt all rules
necessary to implement this subsection (K).
(K-5) The Illinois Department of Healthcare and Family
Services may withhold payments, in whole or in part, to a
provider or alternate payee upon initiation of an audit,
quality of care review, or investigation when there is credible

SB3354 - 33 - LRB097 14548 KTG 62162 b
evidence of financial risk or the provider demonstrates a
failure to cooperate with the Department creating
circumstances giving rise to the need for a withholding of
payments. 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 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.

SB3354 - 34 - LRB097 14548 KTG 62162 b
(3) Specify, when appropriate, which type or types
of Medicaid claims withholding are effective.
(4) Inform the provider or alternate payee of the
right to submit written evidence for reconsideration
of the withholding by the Department.
(5) Inform the provider or alternate payee that a
written request may be made to the 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 Department determines that there is
insufficient evidence of financial risk by the
provider or alternate payee; or
(2) the withholding of payments has lasted for a
period in excess of 3 years.
(c) The Department may adopt all rules necessary to
implement this subsection (K-5).
(Source: P.A. 94-265, eff. 1-1-06; 94-975, eff. 6-30-06.)