SB 3528

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Full Text of SB3528
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	SB3528 - 104th General Assembly
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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3528
Introduced 2/5/2026, by Sen. Adriane Johnson
SYNOPSIS AS INTRODUCED:
305 ILCS 5/14-12
Amends the Hospital Services Trust Fund Article in the Illinois Public Aid Code. In provisions concerning annual funding for the health care transformation program, provides that funds that had been budgeted but unexpended in State fiscal years 2021 through 2027 may be allocated in State fiscal year 2028 in an amount not to exceed $150,000,000.
LRB104 19026 KTG 32471 b
A BILL FOR
		SB3528		LRB104 19026 KTG 32471 b
1    AN ACT concerning public aid.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Public Aid Code is amended by
5changing Section 14-12 as follows:
6    (305 ILCS 5/14-12)
7    Sec. 14-12. Hospital rate reform payment system. The
8hospital payment system pursuant to Section 14-11 of this
9Article shall be as follows:
10    (a) Inpatient hospital services. Effective on and after
11the effective date of this amendatory Act of the 104th General
12Assembly, reimbursement for inpatient general acute care
13services shall utilize the All Patient Refined Diagnosis
14Related Grouping (APR-DRG) software distributed by SolventumTM
15previously known as 3MTM Health Information System. SolventumTM
16shall be the exclusive provider of this software unless the
17Department determines that SolventumTM is unable to meet the
18required operational or contractual terms. Only under these
19circumstances may an alternative authorized provider of the
20software be considered.
21        (1) The Department shall establish Medicaid weighting
22    factors to be used in the reimbursement system established
23    under this subsection. Initial weighting factors shall be
		SB3528	- 2 -	LRB104 19026 KTG 32471 b
1    the weighting factors as published by the authorized
2    provider of this software adjusted for the Illinois
3    experience.
4        (2) The Department shall establish a
5    statewide-standardized amount to be used in the inpatient
6    reimbursement system. The Department shall publish these
7    amounts on its website no later than 10 calendar days
8    prior to their effective date.
9        (3) In addition to the statewide-standardized amount,
10    the Department shall develop adjusters to adjust the rate
11    of reimbursement for critical Medicaid providers or
12    services for trauma, transplantation services, perinatal
13    care, and Graduate Medical Education (GME).
14        (4) The Department shall develop add-on payments to
15    account for exceptionally costly inpatient stays,
16    consistent with Medicare outlier principles. Outlier fixed
17    loss thresholds may be updated to control for excessive
18    growth in outlier payments no more frequently than on an
19    annual basis, but at least once every 4 years. Upon
20    updating the fixed loss thresholds, the Department shall
21    be required to update base rates within 12 months.
22        (5) The Department shall define those hospitals or
23    distinct parts of hospitals that shall be exempt from the
24    APR-DRG reimbursement system established under this
25    Section. The Department shall publish these hospitals'
26    inpatient rates on its website no later than 10 calendar
		SB3528	- 3 -	LRB104 19026 KTG 32471 b
1    days prior to their effective date.
2        (6) Beginning July 1, 2014 and ending on December 31,
3    2023, in addition to the statewide-standardized amount,
4    the Department shall develop an adjustor to adjust the
5    rate of reimbursement for safety-net hospitals defined in
6    Section 5-5e.1 of this Code excluding pediatric hospitals.
7        (7) Beginning July 1, 2014, in addition to the
8    statewide-standardized amount, the Department shall
9    develop an adjustor to adjust the rate of reimbursement
10    for Illinois freestanding inpatient psychiatric hospitals
11    that are not designated as children's hospitals by the
12    Department but are primarily treating patients under the
13    age of 21.
14        (7.5) (Blank).
15        (8) Beginning July 1, 2018, in addition to the
16    statewide-standardized amount, the Department shall adjust
17    the rate of reimbursement for hospitals designated by the
18    Department of Public Health as a Perinatal Level II or II+
19    center by applying the same adjustor that is applied to
20    Perinatal and Obstetrical care cases for Perinatal Level
21    III centers, as of December 31, 2017.
22        (9) Beginning July 1, 2018, in addition to the
23    statewide-standardized amount, the Department shall apply
24    the same adjustor that is applied to trauma cases as of
25    December 31, 2017 to inpatient claims to treat patients
26    with burns, including, but not limited to, APR-DRGs 841,
		SB3528	- 4 -	LRB104 19026 KTG 32471 b
1    842, 843, and 844.
2        (10) Beginning July 1, 2018, the
3    statewide-standardized amount for inpatient general acute
4    care services shall be uniformly increased so that base
5    claims projected reimbursement is increased by an amount
6    equal to the funds allocated in paragraph (1) of
7    subsection (b) of Section 5A-12.6, less the amount
8    allocated under paragraphs (8) and (9) of this subsection
9    and paragraphs (3) and (4) of subsection (b) multiplied by
10    40%.
11        (11) Beginning July 1, 2018, the reimbursement for
12    inpatient rehabilitation services shall be increased by
13    the addition of a $96 per day add-on.
14    (b) Outpatient hospital services. Effective on and after
15the effective date of this amendatory Act of the 104th General
16Assembly, reimbursement for outpatient services shall utilize
17the Enhanced Ambulatory Procedure Grouping (EAPG) software
18distributed by SolventumTM previously known as 3MTM Health
19Information System. SolventumTM shall be the exclusive
20provider of this software unless the Agency determines that
21SolventumTM is unable to meet the required operational or
22contractual terms. Only under these circumstances may an
23alternative authorized provider of the software be considered.
24        (1) The Department shall establish Medicaid weighting
25    factors to be used in the reimbursement system established
26    under this subsection. The initial weighting factors shall
		SB3528	- 5 -	LRB104 19026 KTG 32471 b
1    be the weighting factors as published by the authorized
2    provider.
3        (2) The Department shall establish service specific
4    statewide-standardized amounts to be used in the
5    reimbursement system.
6            (A) The initial statewide standardized amounts,
7        with the labor portion adjusted by the Calendar Year
8        2013 Medicare Outpatient Prospective Payment System
9        wage index with reclassifications, shall be published
10        by the Department on its website no later than 10
11        calendar days prior to their effective date.
12            (B) The Department shall establish adjustments to
13        the statewide-standardized amounts for each Critical
14        Access Hospital, as designated by the Department of
15        Public Health in accordance with 42 CFR 485, Subpart
16        F. For outpatient services provided on or before June
17        30, 2018, the EAPG standardized amounts are determined
18        separately for each critical access hospital such that
19        simulated EAPG payments using outpatient base period
20        paid claim data plus payments under Section 5A-12.4 of
21        this Code net of the associated tax costs are equal to
22        the estimated costs of outpatient base period claims
23        data with a rate year cost inflation factor applied.
24        (3) In addition to the statewide-standardized amounts,
25    the Department shall develop adjusters to adjust the rate
26    of reimbursement for critical Medicaid hospital outpatient
		SB3528	- 6 -	LRB104 19026 KTG 32471 b
1    providers or services, including outpatient high volume or
2    safety-net hospitals. Beginning July 1, 2018, the
3    outpatient high volume adjustor shall be increased to
4    increase annual expenditures associated with this adjustor
5    by $79,200,000, based on the State Fiscal Year 2015 base
6    year data and this adjustor shall apply to public
7    hospitals, except for large public hospitals, as defined
8    under 89 Ill. Adm. Code 148.25(a).
9        (4) Beginning July 1, 2018, in addition to the
10    statewide standardized amounts, the Department shall make
11    an add-on payment for outpatient expensive devices and
12    drugs. This add-on payment shall at least apply to claim
13    lines that: (i) are assigned with one of the following
14    EAPGs: 490, 1001 to 1020, and coded with one of the
15    following revenue codes: 0274 to 0276, 0278; or (ii) are
16    assigned with one of the following EAPGs: 430 to 441, 443,
17    444, 460 to 465, 495, 496, 1090. The add-on payment shall
18    be calculated as follows: the claim line's covered charges
19    multiplied by the hospital's total acute cost to charge
20    ratio, less the claim line's EAPG payment plus $1,000,
21    multiplied by 0.8.
22        (5) Beginning July 1, 2018, the statewide-standardized
23    amounts for outpatient services shall be increased by a
24    uniform percentage so that base claims projected
25    reimbursement is increased by an amount equal to no less
26    than the funds allocated in paragraph (1) of subsection
		SB3528	- 7 -	LRB104 19026 KTG 32471 b
1    (b) of Section 5A-12.6, less the amount allocated under
2    paragraphs (8) and (9) of subsection (a) and paragraphs
3    (3) and (4) of this subsection multiplied by 46%.
4        (6) Effective for dates of service on or after July 1,
5    2018, the Department shall establish adjustments to the
6    statewide-standardized amounts for each Critical Access
7    Hospital, as designated by the Department of Public Health
8    in accordance with 42 CFR 485, Subpart F, such that each
9    Critical Access Hospital's standardized amount for
10    outpatient services shall be increased by the applicable
11    uniform percentage determined pursuant to paragraph (5) of
12    this subsection. It is the intent of the General Assembly
13    that the adjustments required under this paragraph (6) by
14    Public Act 100-1181 shall be applied retroactively to
15    claims for dates of service provided on or after July 1,
16    2018.
17        (7) Effective for dates of service on or after March
18    8, 2019 (the effective date of Public Act 100-1181), the
19    Department shall recalculate and implement an updated
20    statewide-standardized amount for outpatient services
21    provided by hospitals that are not Critical Access
22    Hospitals to reflect the applicable uniform percentage
23    determined pursuant to paragraph (5).
24            (1) Any recalculation to the
25        statewide-standardized amounts for outpatient services
26        provided by hospitals that are not Critical Access
		SB3528	- 8 -	LRB104 19026 KTG 32471 b
1        Hospitals shall be the amount necessary to achieve the
2        increase in the statewide-standardized amounts for
3        outpatient services increased by a uniform percentage,
4        so that base claims projected reimbursement is
5        increased by an amount equal to no less than the funds
6        allocated in paragraph (1) of subsection (b) of
7        Section 5A-12.6, less the amount allocated under
8        paragraphs (8) and (9) of subsection (a) and
9        paragraphs (3) and (4) of this subsection, for all
10        hospitals that are not Critical Access Hospitals,
11        multiplied by 46%.
12            (2) It is the intent of the General Assembly that
13        the recalculations required under this paragraph (7)
14        by Public Act 100-1181 shall be applied prospectively
15        to claims for dates of service provided on or after
16        March 8, 2019 (the effective date of Public Act
17        100-1181) and that no recoupment or repayment by the
18        Department or an MCO of payments attributable to
19        recalculation under this paragraph (7), issued to the
20        hospital for dates of service on or after July 1, 2018
21        and before March 8, 2019 (the effective date of Public
22        Act 100-1181), shall be permitted.
23        (8) The Department shall ensure that all necessary
24    adjustments to the managed care organization capitation
25    base rates necessitated by the adjustments under
26    subparagraph (6) or (7) of this subsection are completed
		SB3528	- 9 -	LRB104 19026 KTG 32471 b
1    and applied retroactively in accordance with Section
2    5-30.8 of this Code within 90 days of March 8, 2019 (the
3    effective date of Public Act 100-1181).
4        (9) Within 60 days after federal approval of the
5    change made to the assessment in Section 5A-2 by Public
6    Act 101-650, the Department shall incorporate into the
7    EAPG system for outpatient services those services
8    performed by hospitals currently billed through the
9    Non-Institutional Provider billing system.
10    (b-5) Notwithstanding any other provision of this Section,
11beginning with dates of service on and after January 1, 2023,
12any general acute care hospital with more than 500 outpatient
13psychiatric Medicaid services to persons under 19 years of age
14in any calendar year shall be paid the outpatient add-on
15payment of no less than $113.
16    (c) In consultation with the hospital community, the
17Department is authorized to replace 89 Ill. Adm. Code 152.150
18as published in 38 Ill. Reg. 4980 through 4986 within 12 months
19of June 16, 2014 (the effective date of Public Act 98-651). If
20the Department does not replace these rules within 12 months
21of June 16, 2014 (the effective date of Public Act 98-651), the
22rules in effect for 152.150 as published in 38 Ill. Reg. 4980
23through 4986 shall remain in effect until modified by rule by
24the Department. Nothing in this subsection shall be construed
25to mandate that the Department file a replacement rule.
26    (d) Transition period. There shall be a transition period
		SB3528	- 10 -	LRB104 19026 KTG 32471 b
1to the reimbursement systems authorized under this Section
2that shall begin on the effective date of these systems and
3continue until June 30, 2018, unless extended by rule by the
4Department. To help provide an orderly and predictable
5transition to the new reimbursement systems and to preserve
6and enhance access to the hospital services during this
7transition, the Department shall allocate a transitional
8hospital access pool of at least $290,000,000 annually so that
9transitional hospital access payments are made to hospitals.
10        (1) After the transition period, the Department may
11    begin incorporating the transitional hospital access pool
12    into the base rate structure; however, the transitional
13    hospital access payments in effect on June 30, 2018 shall
14    continue to be paid, if continued under Section 5A-16.
15        (2) After the transition period, if the Department
16    reduces payments from the transitional hospital access
17    pool, it shall increase base rates, develop new adjustors,
18    adjust current adjustors, develop new hospital access
19    payments based on updated information, or any combination
20    thereof by an amount equal to the decreases proposed in
21    the transitional hospital access pool payments, ensuring
22    that the entire transitional hospital access pool amount
23    shall continue to be used for hospital payments.
24    (d-5) Hospital and health care transformation program. The
25Department shall develop a hospital and health care
26transformation program to provide financial assistance to
		SB3528	- 11 -	LRB104 19026 KTG 32471 b
1hospitals in transforming their services and care models to
2better align with the needs of the communities they serve. The
3payments authorized in this Section shall be subject to
4approval by the federal government.
5        (1) Phase 1. In State fiscal years 2019 through 2020,
6    the Department shall allocate funds from the transitional
7    access hospital pool to create a hospital transformation
8    pool of at least $262,906,870 annually and make hospital
9    transformation payments to hospitals. Subject to Section
10    5A-16, in State fiscal years 2019 and 2020, an Illinois
11    hospital that received either a transitional hospital
12    access payment under subsection (d) or a supplemental
13    payment under subsection (f) of this Section in State
14    fiscal year 2018, shall receive a hospital transformation
15    payment as follows:
16            (A) If the hospital's Rate Year 2017 Medicaid
17        inpatient utilization rate is equal to or greater than
18        45%, the hospital transformation payment shall be
19        equal to 100% of the sum of its transitional hospital
20        access payment authorized under subsection (d) and any
21        supplemental payment authorized under subsection (f).
22            (B) If the hospital's Rate Year 2017 Medicaid
23        inpatient utilization rate is equal to or greater than
24        25% but less than 45%, the hospital transformation
25        payment shall be equal to 75% of the sum of its
26        transitional hospital access payment authorized under
		SB3528	- 12 -	LRB104 19026 KTG 32471 b
1        subsection (d) and any supplemental payment authorized
2        under subsection (f).
3            (C) If the hospital's Rate Year 2017 Medicaid
4        inpatient utilization rate is less than 25%, the
5        hospital transformation payment shall be equal to 50%
6        of the sum of its transitional hospital access payment
7        authorized under subsection (d) and any supplemental
8        payment authorized under subsection (f).
9        (2) Phase 2.
10            (A) The funding amount from phase one shall be
11        incorporated into directed payment and pass-through
12        payment methodologies described in Section 5A-12.7.
13            (B) Because there are communities in Illinois that
14        experience significant health care disparities due to
15        systemic racism, as recently emphasized by the
16        COVID-19 pandemic, aggravated by social determinants
17        of health and a lack of sufficiently allocated health
18        care resources, particularly community-based services,
19        preventive care, obstetric care, chronic disease
20        management, and specialty care, the Department shall
21        establish a health care transformation program that
22        shall be supported by the transformation funding pool.
23        It is the intention of the General Assembly that
24        innovative partnerships funded by the pool must be
25        designed to establish or improve integrated health
26        care delivery systems that will provide significant
		SB3528	- 13 -	LRB104 19026 KTG 32471 b
1        access to the Medicaid and uninsured populations in
2        their communities, as well as improve health care
3        equity. It is also the intention of the General
4        Assembly that partnerships recognize and address the
5        disparities revealed by the COVID-19 pandemic, as well
6        as the need for post-COVID care. During State fiscal
7        years 2021 through 2027, the hospital and health care
8        transformation program shall be supported by an annual
9        transformation funding pool of up to $150,000,000,
10        pending federal matching funds, to be allocated during
11        the specified fiscal years for the purpose of
12        facilitating hospital and health care transformation.
13        Funds that had been budgeted but unexpended in State 
14        fiscal years 2021 through 2027 may be allocated in 
15        State fiscal year 2028 in an amount not to exceed 
16        $150,000,000. No disbursement of moneys for
17        transformation projects from the transformation
18        funding pool described under this Section shall be
19        considered an award, a grant, or an expenditure of
20        grant funds. Funding agreements made in accordance
21        with the transformation program shall be considered
22        purchases of care under the Illinois Procurement Code,
23        and funds shall be expended by the Department in a
24        manner that maximizes federal funding to expend the
25        entire allocated amount.
26            The Department shall convene, within 30 days after
		SB3528	- 14 -	LRB104 19026 KTG 32471 b
1        March 12, 2021 (the effective date of Public Act
2        101-655), a workgroup that includes subject matter
3        experts on health care disparities and stakeholders
4        from distressed communities, which could be a
5        subcommittee of the Medicaid Advisory Committee, to
6        review and provide recommendations on how Department
7        policy, including health care transformation, can
8        improve health disparities and the impact on
9        communities disproportionately affected by COVID-19.
10        The workgroup shall consider and make recommendations
11        on the following issues: a community safety-net
12        designation of certain hospitals, racial equity, and a
13        regional partnership to bring additional specialty
14        services to communities.
15            (C) As provided in paragraph (9) of Section 3 of
16        the Illinois Health Facilities Planning Act, any
17        hospital participating in the transformation program
18        may be excluded from the requirements of the Illinois
19        Health Facilities Planning Act for those projects
20        related to the hospital's transformation. To be
21        eligible, the hospital must submit to the Health
22        Facilities and Services Review Board approval from the
23        Department that the project is a part of the
24        hospital's transformation.
25            (D) As provided in subsection (a-20) of Section
26        32.5 of the Emergency Medical Services (EMS) Systems
		SB3528	- 15 -	LRB104 19026 KTG 32471 b
1        Act, a hospital that received hospital transformation
2        payments under this Section may convert to a
3        freestanding emergency center. To be eligible for such
4        a conversion, the hospital must submit to the
5        Department of Public Health approval from the
6        Department that the project is a part of the
7        hospital's transformation.
8            (E) Criteria for proposals. To be eligible for
9        funding under this Section, a transformation proposal
10        shall meet all of the following criteria:
11                (i) the proposal shall be designed based on
12            community needs assessment completed by either a
13            University partner or other qualified entity with
14            significant community input;
15                (ii) the proposal shall be a collaboration
16            among providers across the care and community
17            spectrum, including preventative care, primary
18            care specialty care, hospital services, mental
19            health and substance abuse services, as well as
20            community-based entities that address the social
21            determinants of health;
22                (iii) the proposal shall be specifically
23            designed to improve health care outcomes and
24            reduce health care disparities, and improve the
25            coordination, effectiveness, and efficiency of
26            care delivery;
		SB3528	- 16 -	LRB104 19026 KTG 32471 b
1                (iv) the proposal shall have specific
2            measurable metrics related to disparities that
3            will be tracked by the Department and made public
4            by the Department;
5                (v) the proposal shall include a commitment to
6            include Business Enterprise Program certified
7            vendors or other entities controlled and managed
8            by minorities or women; and
9                (vi) the proposal shall specifically increase
10            access to primary, preventive, or specialty care.
11            (F) Entities eligible to be funded.
12                (i) Proposals for funding should come from
13            collaborations operating in one of the most
14            distressed communities in Illinois as determined
15            by the U.S. Centers for Disease Control and
16            Prevention's Social Vulnerability Index for
17            Illinois and areas disproportionately impacted by
18            COVID-19 or from rural areas of Illinois.
19                (ii) The Department shall prioritize
20            partnerships from distressed communities, which
21            include Business Enterprise Program certified
22            vendors or other entities controlled and managed
23            by minorities or women and also include one or
24            more of the following: safety-net hospitals,
25            critical access hospitals, the campuses of
26            hospitals that have closed since January 1, 2018,
		SB3528	- 17 -	LRB104 19026 KTG 32471 b
1            or other health care providers designed to address
2            specific health care disparities, including the
3            impact of COVID-19 on individuals and the
4            community and the need for post-COVID care. All
5            funded proposals must include specific measurable
6            goals and metrics related to improved outcomes and
7            reduced disparities which shall be tracked by the
8            Department.
9                (iii) The Department should target the funding
10            in the following ways: $30,000,000 of
11            transformation funds to projects that are a
12            collaboration between a safety-net hospital,
13            particularly community safety-net hospitals, and
14            other providers and designed to address specific
15            health care disparities, $20,000,000 of
16            transformation funds to collaborations between
17            safety-net hospitals and a larger hospital partner
18            that increases specialty care in distressed
19            communities, $30,000,000 of transformation funds
20            to projects that are a collaboration between
21            hospitals and other providers in distressed areas
22            of the State designed to address specific health
23            care disparities, $15,000,000 to collaborations
24            between critical access hospitals and other
25            providers designed to address specific health care
26            disparities, and $15,000,000 to cross-provider
		SB3528	- 18 -	LRB104 19026 KTG 32471 b
1            collaborations designed to address specific health
2            care disparities, and $5,000,000 to collaborations
3            that focus on workforce development.
4                (iv) The Department may allocate up to
5            $5,000,000 for planning, racial equity analysis,
6            or consulting resources for the Department or
7            entities without the resources to develop a plan
8            to meet the criteria of this Section. Any contract
9            for consulting services issued by the Department
10            under this subparagraph shall comply with the
11            provisions of Section 5-45 of the State Officials
12            and Employees Ethics Act. Based on availability of
13            federal funding, the Department may directly
14            procure consulting services or provide funding to
15            the collaboration. The provision of resources
16            under this subparagraph is not a guarantee that a
17            project will be approved.
18                (v) The Department shall take steps to ensure
19            that safety-net hospitals operating in
20            under-resourced communities receive priority
21            access to hospital and health care transformation
22            funds, including consulting funds, as provided
23            under this Section.
24            (G) Process for submitting and approving projects
25        for distressed communities. The Department shall issue
26        a template for application. The Department shall post
		SB3528	- 19 -	LRB104 19026 KTG 32471 b
1        any proposal received on the Department's website for
2        at least 2 weeks for public comment, and any such
3        public comment shall also be considered in the review
4        process. Applicants may request that proprietary
5        financial information be redacted from publicly posted
6        proposals and the Department in its discretion may
7        agree. Proposals for each distressed community must
8        include all of the following:
9                (i) A detailed description of how the project
10            intends to affect the goals outlined in this
11            subsection, describing new interventions, new
12            technology, new structures, and other changes to
13            the health care delivery system planned.
14                (ii) A detailed description of the racial and
15            ethnic makeup of the entities' board and
16            leadership positions and the salaries of the
17            executive staff of entities in the partnership
18            that is seeking to obtain funding under this
19            Section.
20                (iii) A complete budget, including an overall
21            timeline and a detailed pathway to sustainability
22            within a 5-year period, specifying other sources
23            of funding, such as in-kind, cost-sharing, or
24            private donations, particularly for capital needs.
25            There is an expectation that parties to the
26            transformation project dedicate resources to the
		SB3528	- 20 -	LRB104 19026 KTG 32471 b
1            extent they are able and that these expectations
2            are delineated separately for each entity in the
3            proposal.
4                (iv) A description of any new entities formed
5            or other legal relationships between collaborating
6            entities and how funds will be allocated among
7            participants.
8                (v) A timeline showing the evolution of sites
9            and specific services of the project over a 5-year
10            period, including services available to the
11            community by site.
12                (vi) Clear milestones indicating progress
13            toward the proposed goals of the proposal as
14            checkpoints along the way to continue receiving
15            funding. The Department is authorized to refine
16            these milestones in agreements, and is authorized
17            to impose reasonable penalties, including
18            repayment of funds, for substantial lack of
19            progress.
20                (vii) A clear statement of the level of
21            commitment the project will include for minorities
22            and women in contracting opportunities, including
23            as equity partners where applicable, or as
24            subcontractors and suppliers in all phases of the
25            project.
26                (viii) If the community study utilized is not
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1            the study commissioned and published by the
2            Department, the applicant must define the
3            methodology used, including documentation of clear
4            community participation.
5                (ix) A description of the process used in
6            collaborating with all levels of government in the
7            community served in the development of the
8            project, including, but not limited to,
9            legislators and officials of other units of local
10            government.
11                (x) Documentation of a community input process
12            in the community served, including links to
13            proposal materials on public websites.
14                (xi) Verifiable project milestones and quality
15            metrics that will be impacted by transformation.
16            These project milestones and quality metrics must
17            be identified with improvement targets that must
18            be met.
19                (xii) Data on the number of existing employees
20            by various job categories and wage levels by the
21            zip code of the employees' residence and
22            benchmarks for the continued maintenance and
23            improvement of these levels. The proposal must
24            also describe any retraining or other workforce
25            development planned for the new project.
26                (xiii) If a new entity is created by the
		SB3528	- 22 -	LRB104 19026 KTG 32471 b
1            project, a description of how the board will be
2            reflective of the community served by the
3            proposal.
4                (xiv) An explanation of how the proposal will
5            address the existing disparities that exacerbated
6            the impact of COVID-19 and the need for post-COVID
7            care in the community, if applicable.
8                (xv) An explanation of how the proposal is
9            designed to increase access to care, including
10            specialty care based upon the community's needs.
11            (H) The Department shall evaluate proposals for
12        compliance with the criteria listed under subparagraph
13        (G). Proposals meeting all of the criteria may be
14        eligible for funding with the areas of focus
15        prioritized as described in item (ii) of subparagraph
16        (F). Based on the funds available, the Department may
17        negotiate funding agreements with approved applicants
18        to maximize federal funding. Nothing in this
19        subsection requires that an approved project be funded
20        to the level requested. Agreements shall specify the
21        amount of funding anticipated annually, the
22        methodology of payments, the limit on the number of
23        years such funding may be provided, and the milestones
24        and quality metrics that must be met by the projects in
25        order to continue to receive funding during each year
26        of the program. Agreements shall specify the terms and
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1        conditions under which a health care facility that
2        receives funds under a purchase of care agreement and
3        closes in violation of the terms of the agreement must
4        pay an early closure fee no greater than 50% of the
5        funds it received under the agreement, prior to the
6        Health Facilities and Services Review Board
7        considering an application for closure of the
8        facility. Any project that is funded shall be required
9        to provide quarterly written progress reports, in a
10        form prescribed by the Department, and at a minimum
11        shall include the progress made in achieving any
12        milestones or metrics or Business Enterprise Program
13        commitments in its plan. The Department may reduce or
14        end payments, as set forth in transformation plans, if
15        milestones or metrics or Business Enterprise Program
16        commitments are not achieved. The Department shall
17        seek to make payments from the transformation fund in
18        a manner that is eligible for federal matching funds.
19            In reviewing the proposals, the Department shall
20        take into account the needs of the community, data
21        from the study commissioned by the Department from the
22        University of Illinois-Chicago if applicable, feedback
23        from public comment on the Department's website, as
24        well as how the proposal meets the criteria listed
25        under subparagraph (G). Alignment with the
26        Department's overall strategic initiatives shall be an
		SB3528	- 24 -	LRB104 19026 KTG 32471 b
1        important factor. To the extent that fiscal year
2        funding is not adequate to fund all eligible projects
3        that apply, the Department shall prioritize
4        applications that most comprehensively and effectively
5        address the criteria listed under subparagraph (G).
6        (3) (Blank).
7        (4) Hospital Transformation Review Committee. There is
8    created the Hospital Transformation Review Committee. The
9    Committee shall consist of 14 members. No later than 30
10    days after March 12, 2018 (the effective date of Public
11    Act 100-581), the 4 legislative leaders shall each appoint
12    3 members; the Governor shall appoint the Director of
13    Healthcare and Family Services, or his or her designee, as
14    a member; and the Director of Healthcare and Family
15    Services shall appoint one member. Any vacancy shall be
16    filled by the applicable appointing authority within 15
17    calendar days. The members of the Committee shall select a
18    Chair and a Vice-Chair from among its members, provided
19    that the Chair and Vice-Chair cannot be appointed by the
20    same appointing authority and must be from different
21    political parties. The Chair shall have the authority to
22    establish a meeting schedule and convene meetings of the
23    Committee, and the Vice-Chair shall have the authority to
24    convene meetings in the absence of the Chair. The
25    Committee may establish its own rules with respect to
26    meeting schedule, notice of meetings, and the disclosure
		SB3528	- 25 -	LRB104 19026 KTG 32471 b
1    of documents; however, the Committee shall not have the
2    power to subpoena individuals or documents and any rules
3    must be approved by 9 of the 14 members. The Committee
4    shall perform the functions described in this Section and
5    advise and consult with the Director in the administration
6    of this Section. In addition to reviewing and approving
7    the policies, procedures, and rules for the hospital and
8    health care transformation program, the Committee shall
9    consider and make recommendations related to qualifying
10    criteria and payment methodologies related to safety-net
11    hospitals and children's hospitals. Members of the
12    Committee appointed by the legislative leaders shall be
13    subject to the jurisdiction of the Legislative Ethics
14    Commission, not the Executive Ethics Commission, and all
15    requests under the Freedom of Information Act shall be
16    directed to the applicable Freedom of Information officer
17    for the General Assembly. The Department shall provide
18    operational support to the Committee as necessary. The
19    Committee is dissolved on April 1, 2019.
20    (e) Beginning 36 months after initial implementation, the
21Department shall update the reimbursement components in
22subsections (a) and (b), including standardized amounts and
23weighting factors, and at least once every 4 years and no more
24frequently than annually thereafter. The Department shall
25publish these updates on its website no later than 30 calendar
26days prior to their effective date.
		SB3528	- 26 -	LRB104 19026 KTG 32471 b
1    (f) Continuation of supplemental payments. Any
2supplemental payments authorized under 89 Illinois
3Administrative Code 148 effective January 1, 2014 and that
4continue during the period of July 1, 2014 through December
531, 2014 shall remain in effect as long as the assessment
6imposed by Section 5A-2 that is in effect on December 31, 2017
7remains in effect.
8    (g) Notwithstanding subsections (a) through (f) of this
9Section and notwithstanding the changes authorized under
10Section 5-5b.1, any updates to the system shall not result in
11any diminishment of the overall effective rates of
12reimbursement as of the implementation date of the new system
13(July 1, 2014). These updates shall not preclude variations in
14any individual component of the system or hospital rate
15variations. Nothing in this Section shall prohibit the
16Department from increasing the rates of reimbursement or
17developing payments to ensure access to hospital services.
18Nothing in this Section shall be construed to guarantee a
19minimum amount of spending in the aggregate or per hospital as
20spending may be impacted by factors, including, but not
21limited to, the number of individuals in the medical
22assistance program and the severity of illness of the
23individuals.
24    (h) The Department shall have the authority to modify by
25rulemaking any changes to the rates or methodologies in this
26Section as required by the federal government to obtain
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1federal financial participation for expenditures made under
2this Section.
3    (i) Except for subsections (g) and (h) of this Section,
4the Department shall, pursuant to subsection (c) of Section
55-40 of the Illinois Administrative Procedure Act, provide for
6presentation at the June 2014 hearing of the Joint Committee
7on Administrative Rules (JCAR) additional written notice to
8JCAR of the following rules in order to commence the second
9notice period for the following rules: rules published in the
10Illinois Register, rule dated February 21, 2014 at 38 Ill.
11Reg. 4559 (Medical Payment), 4628 (Specialized Health Care
12Delivery Systems), 4640 (Hospital Services), 4932 (Diagnostic
13Related Grouping (DRG) Prospective Payment System (PPS)), and
144977 (Hospital Reimbursement Changes), and published in the
15Illinois Register dated March 21, 2014 at 38 Ill. Reg. 6499
16(Specialized Health Care Delivery Systems) and 6505 (Hospital
17Services).
18    (j) Out-of-state hospitals. Beginning July 1, 2018, for
19purposes of determining for State fiscal years 2019 and 2020
20and subsequent fiscal years the hospitals eligible for the
21payments authorized under subsections (a) and (b) of this
22Section, the Department shall include out-of-state hospitals
23that are designated a Level I pediatric trauma center or a
24Level I trauma center by the Department of Public Health as of
25December 1, 2017.
26    (k) The Department shall notify each hospital and managed
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1care organization, in writing, of the impact of the updates
2under this Section at least 30 calendar days prior to their
3effective date.
4    (l) This Section is subject to Section 14-12.5.
5(Source: P.A. 103-102, eff. 6-16-23; 103-154, eff. 6-30-23;
6104-9, eff. 6-16-25; 104-417, eff. 8-15-25.)