Prepare a Statement Which Identifies the Financial Benefits Which by kle66196

VIEWS: 7 PAGES: 6

More Info
									                                            Summary

              The Illinois Community Benefits Act – IL Public Act 93-0480

   •   Governor Blagojevich signed into law (August 8, 2003) the Community Benefits Act,
       Public Act 93-0480. Previously known as SB 1064 (Sen. Maggie Crotty; Rep. William
       Delgado). Under the Act:

          o    Nonprofit hospitals must develop the following:

                      An organizational mission statement that identifies the hospital's
                      commitment to serving the health care needs of the community.

                      A community benefits plan, which is defined as an operational plan for
                      serving the community's health care needs that sets out goals and
                      objectives for providing community benefits that include:

                          •   Charity care and government-sponsored indigent health care.

                          •   Identifies the populations and communities served by the hospital.

          o    Each nonprofit hospital shall prepare an annual report of the community
               benefits plan to be filed with the Illinois Attorney General.

                      In the report, the hospital must disclose the amount of charity care
                      and other community benefits provided, its mission statement, the
                      audited financial statements, and community health care needs that
                      were considered in developing a community benefits plan.

                      The Act also provides for a late filing fee, as well as penalties for failure to
                      file the report. The Act also allows the Attorney General to grant
                      extensions for good cause.

          •    Home rule authority for local governments is preempted.

          o    The provisions take effect with each hospital’s fiscal year that begins after
               August 8, 2003.

                      By October 7, 2003, each hospital subject to the Act must file the
                      audited financial report with the Illinois Attorney General for its most
                      recently completed fiscal year. In subsequent years, the audited
                      financial statements will be filed together with the annual report.

          o    The Act does not apply to government or for-profit hospitals, hospitals with 100 or
               fewer beds, or those located outside a metropolitan statistical area. A health
               system can file a single report for all of its hospitals.

In sum, and based on compliance guidance provided by the Office of the Illinois Attorney
General (AG), virtually every Chicago hospital pursuant to PA 93-0480 is required to:
IL P.A. 93-0480                                                                            Page 2



       Formulate a Community Benefits Plan (the Plan). This plan must be operational and
       include:

           o   The hospital’s goals and objectives for providing community benefits,
               including charity care and government-sponsored indigent care.

           o   Identification of the populations and communities served by the hospital.

           o   Disclosure of the health care needs that were considered in the
               development of the plan by the hospital. Hospital may use existing data and
               information; they may also conduct primary data collection efforts independently
               or in conjunction with community groups.

       Annually file a report of the Plan with the Illinois Attorney General (AG). For the
       report, the AG’s office will supply a standardized report form for all hospitals. In the
       report, the hospital must disclose:

       o   The hospital’s mission statement, which must identify the organization’s
           commitment to serving the health care needs of its community.

       o   Audited financial reports for the hospital’s most-recently completed fiscal
           year.

       o   The amount and type of community benefits provided. Based on guidance
           provided by the AG, the amount and type of community benefits provided by the
           hospital is defined as:

               o   Charity Care. This is defined by the AG as care for which the provider dos
                   not expect to receive payment form the patient or a third-party payer. This
                   should be reported separately from any other benefits provided, and the
                   hospital’s cost-to-charge ratio should be applied.

               o   Subsidized health services for which the hospital, in response to
                   community need, must subsidize from other revenue sources. The AG
                   defines this to include, but not be limited to, the following: emergency and
                   trauma care; neonatal intensive care; community health clinics; collaborative
                   efforts with local government or private agencies to prevent illness and
                   improve wellness (e.g., immunization programs). This area also includes
                   those specialty services that yield for the hospital a financial loss, such as:
                   rehabilitation care; burn care; substance abuse services; AIDS care; geriatric
                   care; pediatric care: clinics; hospital care; physician referral services;
                   ambulance services; and, program to prevent illness, injury and improve
                   wellness (e.g., community health screenings, immunization programs, health
                   education, counseling and support groups, poison control, etc.) Hospitals
                   should determine the financial loss by calculating the costs of staff, materials,
                   equipment, space and the like offset by any third-party payment, patient fees
                   and/or donations.
IL P.A. 93-0480                                                                          Page 3



              o   Education. The costs incurred for hospital-based educational programs,
                  such as: residencies and internships; and, nursing, radiology technician and
                  physical therapy programs. These costs should be reduced by any direct
                  medical education funding received from third party payer reimbursement,
                  off-site rotation revenues, fees charged, etc.

              o   Research. The AG defines “research” as the cost of research activities
                  conducted primarily to advance medical or health care services, including:
                  clinical drug trials; demonstration projects for alternative delivery system;
                  disease-specific research, etc. According to the AG guidance, this portion of
                  a hospital’s report should include costs not covered by grant funding or
                  donations.

              o   Language assistance services. This includes: salaries and benefits
                  provided to translators; costs of translation services provided via telephone;
                  and, cost of forms, notices and brochures provided in languages other than
                  English. All costs should be offset by any revenue services.

              o   Government sponsored indigent health care. The AG defines this as the
                  unreimbursed cost of Medicare, Medicaid and other federal, state or local
                  indigent health care programs, eligibility for which is based on financial need.
                  This includes both inpatient and out-patient services. In calculating this cost,
                  hospitals should apply a total cost-to-charge ratio to obtain costs, unless the
                  hospital has an alternative method, then deduct any revenues that were
                  received for such services.

              o   Donations. Cash and in-kind donations, such as the value of meeting space,
                  equipment and personnel to assist other community health care providers,
                  social service agencies and organizations.

              o   Volunteer services. This is defined by the AG as the value of volunteer time
                  provided by hospital employees and volunteers to various activities of the
                  hospital and community, which could be calculated as the number of
                  volunteer hours multiplied by minimum wage.

              o   Bad Debt. According to the AG’s guidance, “bad debt” includes the provision
                  of care for “doubtful accounts” resulting from the extension by the hospital of
                  credit. Accounts or partial accounts that meet the hospital’s charity care
                  policy are list under the “charity” category defined above.
IL P.A. 93-0480                                                     Page 4




Public Act 93-0480

SB1064 Enrolled                      LRB093 06804 AMC 06946 b

    AN ACT concerning health care.

    Be it enacted by the People of the   State   of   Illinois,
represented in the General Assembly:

    Section 1. Short title. This Act may   be    cited   as   the
Community Benefits Act.

    Section 5. Applicability. This Act does not apply to a
hospital operated by a unit of government, a hospital located
outside of a metropolitan statistical area, or a hospital
with 100 or fewer beds. Hospitals that are owned or operated
by or affiliated with a health system shall be deemed to be
in compliance with this Act if the health system has met the
requirements of this Act.

    Section 10. Definitions. As used in this Act:
    "Charity care" means care provided by a health care
provider for which the provider does not expect to receive
payment from the patient or a third party payer.
    "Community benefits" means the unreimbursed cost to a
hospital or health system of providing charity care, language
assistant services, government-sponsored indigent      health
care,     donations,     volunteer    services,    education,
government-sponsored   program   services,   research,    and
subsidized   health   services   and collecting bad debts.
"Community benefits" does not include the cost of paying any
taxes or other governmental assessments.
    "Government sponsored indigent health care" means the
unreimbursed cost to a hospital or health system of Medicare,
providing health care services to recipients of Medicaid, and
other federal, State, or local indigent health care programs,
eligibility for which is based on financial need.
    "Health system" means an entity that owns or operates at
least one hospital.
    "Nonprofit hospital" means a hospital that is organized
as   a    nonprofit    corporation,    including    religious
organizations, or a charitable trust under Illinois law or
the laws of any other state or country.

    "Subsidized health services"     means   those   services
provided by a hospital in response to community needs for
which the reimbursement is less than the hospital's cost of
providing the services that must be subsidized by other
hospital or nonprofit supporting entity revenue sources.
"Subsidized health services" includes, but is not limited to,
emergency and trauma care, neonatal intensive care, community
health   clinics,   and   collaborative efforts with local
government or private agencies to prevent illness and improve
wellness, such as immunization programs.
IL P.A. 93-0480                                                 Page 5




    Section 15. Organizational mission statement; community
benefits plan. A nonprofit hospital shall develop:
         (1) an    organizational   mission   statement that
    identifies the hospital's commitment to serving the
    health care needs of the community; and
         (2) a community benefits plan defined        as  an
    operational plan for serving the community's health care
    needs that:
              (A) sets out     goals   and   objectives  for
         providing community benefits that include charity
         care and government sponsored indigent health care;
         and
              (B) identifies the populations and communities
         served by the hospital.

    Section 20. Annual report for community benefits plan.
    (a) Each nonprofit hospital shall prepare an annual
report of the community benefits plan. The report must
include, in addition to the community benefits plan itself,
all of the following background information:
         (1) The hospital's mission statement.
         (2) A disclosure of the health care needs of the
    community   that   were   considered in developing the
    hospital's community benefits plan.
         (3) A disclosure of the amount and types          of
    community benefits actually provided, including charity
    care. Charity care must be reported separate from other
    community   benefits. In reporting charity care, the
    hospital must report the actual cost        of   services
    provided, based on the total cost to charge ratio derived
    from the hospital's Medicare cost report (CMS 2552-96
    Worksheet C, Part 1, PPS Inpatient Ratios), not the
    charges for the services.
         (4) Audited annual financial reports for its most
    recently completed fiscal year.
    (b) Each nonprofit hospital shall annually file a report
of the community benefits plan with the Attorney General. The
report must be filed not later than the last day of the sixth
month after the close of the hospital's fiscal          year,
beginning with the hospital fiscal year that ends in 2004.
    (c) Each nonprofit hospital shall prepare a statement
that notifies the public that the annual report of the
community benefits plan is:
         (1) public information;
         (2) filed with the Attorney General; and
         (3) available to the public on request from the
    Attorney General.
    This statement shall be made available to the public.
    (d) The obligations of a hospital under this Act, except
for the filing of its audited financial report, shall take
effect beginning with the hospital's fiscal year that begins
after the effective date of this Act. Within 60 days of the
effective date of this Act, a hospital shall file the audited
annual financial report that has been completed for its most
recently completed fiscal year. Thereafter, a hospital shall
include its audited annual financial report for its most
IL P.A. 93-0480                                                            Page 6


recently completed fiscal              year in its annual report of its
community benefits plan.

                                             - More -

    Section 25. Failure to file annual report. The Attorney
General may assess a late filing fee against a nonprofit
hospital that fails to make a report of the community
benefits plan as required under this Act in an amount not to
exceed $100. The Attorney General may grant extensions for
good cause. No penalty may be assessed against a hospital
under this Section until 30 business days have elapsed after
written notification to the hospital of its failure to file a
report.

    Section 30. Other rights and remedies retained. The
rights and remedies provided for in this Act are in addition
to other statutory or common law rights or remedies available
to the State.

    Section 40. Home rule.      A home rule unit may not
regulate   hospitals   in a manner inconsistent with the
provisions of this Act. This Section is a limitation under
subsection (i) of Section 6 of Article VII of the Illinois
Constitution on the concurrent exercise by home rule units of
powers and functions exercised by the State.

    Section 99. Effective date.           This Act takes   effect   upon
becoming law.


Effective Date: 8/8/2003



O:\CountyToolkitB – ILPA 93-0480.doc

								
To top