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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5301

Introduced 2/10/2026, by Rep. Suzanne M. Ness

SYNOPSIS AS INTRODUCED:

See Index

Creates the Global Hospital Budget Authority Act. Defines terms.
Established the Global Hospital Budget Authority as a Division of the
Department of Public Health. Provides that the powers and duties of the
Authority shall be vested in and exercised by the Global Hospital Budget
Board, which shall have the sole power to employ staff, including an
executive director, legal counsel, consultants, or any other staff deemed
necessary by the Board to effectuate the purposes of the Act. Provides that
individuals employed by the Board shall not be employees of the State for
any purpose, including for purposes of compensation, pension benefits, or
retirement. Sets forth provisions concerning membership requirements;
powers and duties of the Board; roles of participating payers; roles of
participant hospitals; data collection and retention; confidentiality of
data, contracts, and agreements; and the Global Hospital Budget Fund.
Amends the Hospital Licensing Act. Provides that, in reviewing and issuing
permits and licenses, the Department shall accept, as factors that satisfy
staffing and service-line presence requirements, one or a combination of
the following alternative mechanisms if the Department finds that patient
safety and continuity of care are maintained: (i) on-site staffing by
appropriately licensed clinicians; (ii) written and operative affiliation
agreements meeting standards adopted by the Department that provide timely
specialty coverage; (iii) documented telemedicine coverage that meets
certain standards; or (iv) a waiver issued under certain provisions for a
rural or critical access hospital. In provisions concerning requirements
for the employment of physicians, provides that employing entities may
employ physicians to practice medicine in all of its branches if
employment, privileging, and oversight requirements are met. Amends the
Illinois Health Facilities Planning Act. Makes changes in provisions
concerning definitions; certificates of exemption for change of ownership
of a health care facility; applications for permit for discontinuation of
a health care facility or category of service; and the powers and duties of
State Board. Amends the State Finance Act to make a conforming change.
LRB104 18627 BAB 32070 b

A BILL FOR

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AN ACT concerning regulation.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 1.
Short title.
This Act may be cited as the
Global
5
Hospital Budget Authority Act.

6

Section 2.
Purpose.
The purpose of this Act is to protect
7
and promote access of the residents of this State to
8
high-quality health care in all communities by encouraging
9
innovation in health care delivery.

10

Section 5.
Definitions.
In this Act:
11

"Authority" means the Global Hospital Budget Authority
12
within the Department of Public Health.
13

"Board" means the Global Hospital Budget Board.
14

"Conflict of interest" means situation in which a Board
15
member:
16

(1) has an interest in one or more parties involved in
17

an action under Section 303 of the Illinois Income Tax
18

Act; and
19

(2) may gain access to competitively sensitive or
20

strategically relevant information about a participating
21

payer or participant hospital.
22

"Department" means the Department of Public Health.

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"Director" means the Director of Public Health.
2

"Eligible hospital" means any general acute care hospital,
3
critical access hospital, specialty hospital, or children's
4
hospital licensed under the Hospital Licensing Act that
5
provides inpatient services in this State, excluding:
6

(1) Psychiatric hospitals;
7

(2) Long-term acute care hospitals;
8

(3) Rehabilitation hospitals; and
9

(4) Federal hospitals operated by the United States
10

Department of Veterans Affairs or Department of Defense.
11

"Eligible hospital services" means all inpatient and
12
hospital- based outpatient items and services. "Eligible
13
hospital services" excludes all other items and services,
14
including the following:
15

(1) Post-acute care.
16

(2) Professional services.
17

(3) Durable medical equipment.
18

(4) Dental services.
19

(5) Non-inpatient or non-hospital-based outpatient
20

behavioral health services.
21

(6) Long-term care services, except for swing bed
22

services for critical access hospitals.
23

"Fund" means the Global Hospital Budget Fund.
24

"Global budget" means the prospectively set annual budget
25
that is the basis of payment of each participant hospital for
26
eligible hospital services by participating payers.

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"Global budget model" means an innovative payment and
2
service delivery model that is intended to reduce health care
3
costs while maintaining access to care, improving the quality
4
of care across all counties, and meeting the health needs of
5
participant hospitals' local communities, and under which
6
participating payers pay participant hospitals using a global
7
budget methodology established by the Authority.
8

"Government program" means a health benefit plan offered
9
or administered by or on behalf of the United States, this
10
State, or an agency or instrumentality of either, including:
11

(1) The medical assistance program established under
12

Article V of the Illinois Public Aid Code.
13

(2) The Children's Health Insurance Program
14

established under the Children's Health Insurance Program
15

Act.
16

(3) A health benefit plan offered or administered by
17

or on behalf of the State or an agency or instrumentality
18

of the State.
19

(4) Health care benefits administered under Title 10
20

or Title 38 of the United States Code.
21

(5) The Medicare program established under Title XVIII
22

of the Social Security Act.
23

"Hospital" means a hospital licensed under the Hospital
24
Licensing Act.
25

"Hospital budget transformation plan" means a description
26
of the health care delivery system transformation that a

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participant hospital undergoes under the global budget model,
2
as approved by the Board and the federal government.
3

"Insurer" means a person, corporation, or other entity
4
licensed by the State with Authority to offer, issue, or renew
5
an insurance policy, subscriber contract, or certificate
6
providing health care coverage, including:
7

(1) An insurance company, association, or exchange
8

governed by the Illinois Insurance Code.
9

(2) A health services plan corporation.
10

(3) A professional service corporation that renders
11

professional services in health care.
12

(4) A health maintenance organization governed by the
13

Health Maintenance Organization Act.
14

"Medicaid managed care organization" means entity, as
15
defined in 42 U.S.C. 1396b(m)(1)(A), that is a party to an
16
agreement with the Department of Human Services. "Medicaid
17
managed care organization" includes a county Medicaid managed
18
care organization and a permitted assignee of an agreement.
19
"Medicaid managed care organization" does not include an
20
assignor of an agreement.
21

"Participant hospital" means a hospital that signs an
22
agreement to participate in the global budget model.
23

"Participating payer" means a payer that operates in this
24
State and, with respect to one or more specified products,
25
programs, or payment arrangements, signs an agreement with the
26
Authority to participate in the global budget model.

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"Payer" means an insurer, government program, or Medicaid
2
managed care organization that pays or administers payment for
3
health care services under an insurance policy, subscriber
4
contract, certificate, administrative services arrangement, or
5
other payment arrangement.

6

Section 10.
Global Hospital Budget Authority.
7

(a) The Global Hospital Budget Authority is established as
8
a Division of the Department of Public Health. The powers and
9
duties of the Authority shall be vested in and exercised by the
10
Global Hospital Budget Board, which shall have the sole power
11
to employ staff, including an executive director, legal
12
counsel, consultants, or any other staff deemed necessary by
13
the Board to effectuate the purposes of this Act. Individuals
14
employed by the Board shall not be employees of the State for
15
any purpose, including for purposes of compensation, pension
16
benefits, or retirement.
17

(b) The Board shall consist of the following members:
18

(1) The Director or the Director's designee, who shall
19

be an employee of the Department designated in writing
20

prior to service.
21

(2) The Secretary of Human Services or the Secretary's
22

designee, who shall be an employee of the Department of
23

Human Services designated in writing prior to service.
24

(3) The Director of Insurance or the Director's
25

designee, who shall be an employee of the Department of

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Insurance designated in writing prior to service.
2

(4) One member selected by each participating payer
3

that is an insurer on behalf of the participating payer
4

and the participating payer's parents, affiliates,
5

subsidiaries, other associated entities, and successors,
6

excluding any affiliated, subsidiary, or otherwise
7

associated Medicaid managed care organization.
8

(5) One member selected by each participating payer
9

that is a Medicaid managed care organization.
10

(6) One member selected by an organization
11

representing hospitals and health systems in this State.
12

This member shall be considered a participant hospital
13

member on the Board.
14

(7) Participant hospital members, the number of which
15

shall not exceed the number of participating payer
16

members. The participant hospital members shall represent
17

the participant hospitals, shall be selected from
18

different, geographically diverse participant hospitals,
19

and shall be appointed as follows:
20

(A) The President Pro Tempore of the Senate, the
21

Minority Leader of the Senate, the Speaker of the
22

House of Representatives and the Minority Leader of
23

the House of Representatives shall each appoint one
24

member.
25

(B) The Governor shall appoint the remaining
26

members.

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(8) One member appointed by the Governor that is a
2

statewide organization advocating on behalf of consumers
3

for consumer rights in a health care setting.
4

(9) Two members appointed by the Governor who are
5

nationally recognized experts in health care delivery or
6

in developing and administering global budgets.
7

(c) The terms of the members of the Board shall be as
8
follows:
9

(1) The terms of the members specified under
10

paragraphs (1), (2) and (3) of subsection (b) shall be
11

concurrent with their holding of public office.
12

(2) The Board members specified in paragraphs (4),
13

(5), (6), (7) and (8) of subsection (b) shall serve for a
14

term of 4 years and shall not be eligible to serve more
15

than 2 full consecutive 4-year terms. If a member leaves
16

the Board prior to completing a 4-year term due to a change
17

in professional status, including, but not limited to,
18

retirement, changing jobs, failure to qualify, or similar
19

reasons, a new member shall be appointed or selected
20

within 60 days after the seat becomes vacant.
21

(d) The Governor shall appoint a chairperson from among
22
the Board members.
23

(e) A majority of the members of the Board shall
24
constitute a quorum. Action may be taken by the Board at a
25
meeting upon a vote of a majority of its members present in
26
person or through electronic means. If a tie vote occurs at any

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meeting, it shall be the duty of the chairperson to cast the
2
deciding vote.
3

(f) The Board shall meet at the call of the chairperson or
4
as may be provided in the bylaws of the Board. The Board shall
5
hold meetings at least quarterly, which shall be subject to
6
the requirements of the Open Meetings Act.
7

(g) The Board shall be formed within 90 days after the
8
effective date of this Act.
9

(h) Board members shall recuse themselves from discussions
10
and actions where a conflict of interest may exist. Board
11
members may not receive confidential information, data, or
12
material related to an entity where a conflict of interest may
13
exist.
14

(i) Members of the Board shall not receive a salary or per
15
diem allowance for serving as members of the Board but shall be
16
reimbursed for actual and necessary expenses incurred in the
17
performance of their duties. Reasonable expenses may include
18
the reimbursement of travel and living expenses while engaged
19
in Board business. The reimbursements shall be paid for by the
20
Fund.

21

Section 15.
Powers and duties.
22

(a) The Board shall exercise all powers necessary and
23
appropriate to carry out its duties under this Act, including
24
the following:
25

(1) Adopt bylaws necessary to carry out the provisions

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of this Act. The bylaws shall include a provision
2

addressing conflicts of interest as well as a provision
3

that restricts Board discussions and decisions to the
4

administration of the global budget model as provided
5

under subsection (b).
6

(2) Make, execute, and deliver contracts, grants, and
7

other instruments necessary or convenient to exercise the
8

powers and duties of the Board.
9

(3) Apply for, solicit, receive, establish priorities
10

for, allocate, disburse, contract or grant for,
11

administer, and expend money in the Fund and other money
12

made available to the Authority from any other source
13

consistent with the purposes of this act. The Authority
14

shall be exempt from the applicable provisions of the
15

Illinois Procurement Code.
16

(4) Apply for, accept, and administer grants and loans
17

to carry out the purposes of the Authority.
18

(5) Accept money from both public and private sources,
19

consistent with federal and State law.
20

(6) Take, hold, administer, assign, lend, encumber,
21

mortgage, invest, or otherwise dispose of, at a public or
22

private sale, on behalf of the Authority and for any of the
23

Authority's purposes, real property, personal property,
24

and money or any interest therein, including any mortgage
25

or loan interest owned by the Authority, under the
26

Authority's control, or in the Authority's possession and

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the income from the real or personal property either
2

absolutely or in trust and including the following
3

abilities:
4

(A) The Board may acquire property or money for
5

this purpose by purchase or lease and by the
6

acceptance of gifts, grants, bequests, devises, or
7

loans, but no obligation of the Authority shall be a
8

debt of the State, and the Authority shall have no
9

power to pledge the credit or taxing power of the State
10

nor to make its debts payable out of any money except
11

that of the Authority. This subparagraph (A) shall not
12

be construed as allowing the Board to acquire
13

hospitals or participant hospitals.
14

(B) All accrued and future earnings from money
15

invested by the Board and other accrued and future
16

nonappropriated funds, including, but not limited to,
17

funds obtained from the federal Government and any
18

contributions, shall be available to the Authority,
19

shall be deposited in the State Treasury, and may be
20

utilized at the discretion of the Board for carrying
21

out any of the corporate purposes of the Authority.
22

Any placement of the funds by the State Treasurer in
23

depositories or investments shall be consistent with
24

guidelines approved by the Board.
25

(7) Seek waivers from State agency requirements as
26

necessary to carry out the purposes of this Act.

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(8) Coordinate with the appropriate State agency to
2

seek waivers from federal requirements as necessary to
3

carry out the purposes of this Act.
4

(9) Establish advisory groups with diverse memberships
5

representing interested and affected groups and
6

individuals as the Board finds necessary to carry out the
7

purposes of this Act.
8

(10) Collaborate with all applicable State agencies
9

for purposes of implementing this Act.
10

(11) Perform all other activities necessary to further
11

the purposes of this Act.
12

(b) The Board shall be responsible for administering the
13
global budget model and shall:
14

(1) Evaluate and select hospitals for participation in
15

the global budget model as participant hospitals on the
16

basis of diversity, vision, and commitment to health care
17

delivery transformation.
18

(2) Provide technical assistance, training, and
19

education to participant hospitals.
20

(3) Collect and maintain data from participant
21

hospitals, participating payers, and others as necessary
22

to carry out the responsibilities of this Act.
23

(4) Perform data analysis and quality assurance.
24

(5) Calculate, approve, and administer global budgets.
25

The global budgets may include payments for eligible
26

hospital services provided under a participant hospital's

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employee health plan.
2

(6) Consistent with federal and State law, review and
3

approve hospital transformation plans, advise and approve
4

changes to operational and payment mechanisms, and approve
5

exceptions to agreed-upon payment rules through an
6

approved procedure provided in the Board's bylaws. For the
7

purpose of administration, the Authority shall be subject
8

to the relevant provisions of the Illinois Administrative
9

Code.
10

(7) Assist hospitals and participant hospitals in
11

working with community-based organizations to determine
12

targeted population health improvement goals.
13

(8) Evaluate the progress of the implementation of
14

each participant hospital's global budget toward
15

population health improvement goals and the cost of
16

achieving those goals.
17

(9) Monitor global budgets and quality metrics for
18

participant hospitals.
19

(10) Provide an annual assessment of each rural
20

participant hospital's compliance with its hospital
21

transformation plan and global budget targets.
22

(11) Require a participant hospital to submit a
23

corrective action plan for failure to submit a hospital
24

transformation plan, to comply with its hospital
25

transformation plan, or to meet its global budget targets.
26

(12) Terminate a participant hospital from the global

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budget model in accordance with the rural participant
2

hospital's participation agreement.
3

(13) Contract with an independent evaluation group to
4

provide the Board and Director with an evaluation of the
5

global budget model's progress in the areas of population
6

health, quality of care, and cost targets.
7

(14) Review and update its definition of "eligible
8

hospital services", subject to obtaining all necessary
9

federal approvals. The Board shall use data collected
10

under paragraph (3) in its review.
11

(c)(1) The accounts and books of the Authority shall be
12
examined and audited annually by an independent certified
13
public accounting firm. The audit shall be public information.
14

(2) The Authority shall, by December 31 of each year, file
15
a copy of the audit of the preceding State fiscal year required
16
under paragraph (1) with the Secretary of the Senate and the
17
Chief Clerk of the House of Representatives and provide a copy
18
to the Department.
19

(d) The Authority shall:
20

(1) Electronically submit an annual report on the
21

performance and compliance of each participant rural
22

hospital to the Department and to other appropriate
23

parties, including associations, foundations, academic
24

institutions, and community-based organizations, as
25

determined by the Board.
26

(2) Electronically submit an annual report to the

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Governor, the President Pro Tempore of the Senate, and the
2

Speaker of the House of Representatives for distribution
3

to the Health and Human Services Committee of the Senate
4

and the Health Care Availability and Access Committee of
5

the House of Representatives on the activities of the
6

Authority for the year.
7

(3) Comply with applicable federal reporting
8

requirements.
9

(e) The Authority shall annually transmit a financial
10
statement and the Authority's audit as a notice for
11
publication in the Illinois Register.

12

Section 20.
Roles of participating payers.
13

(a) A payer may submit a letter of interest to the
14
Authority to participate in the global budget model.
15

(b) As a condition of participation, a participating payer
16
shall sign an agreement with the Authority. The agreement
17
shall detail the terms and conditions of participation in the
18
global budget model.
19

(c) A participating payer may terminate its participation
20
with a participant hospital according to the terms and
21
conditions of the agreement under subsection (b).

22

Section 25.
Roles of participant hospitals.
23

(a) A hospital may submit a letter of interest to the
24
Authority to participate in the global budget model.

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(b) As a condition of participation, the following shall
2
occur:
3

(1) A hospital shall submit an initial rural hospital
4

budget transformation plan in the manner and form
5

prescribed by the Authority for review and approval.
6

(2) A participant hospital shall sign an agreement
7

with the Authority. The agreement shall detail the terms
8

and conditions of participation in the global budget
9

model.
10

(3) A participant hospital shall submit annual updates
11

to its rural hospital budget transformation plan in the
12

manner and form prescribed by the Authority for review and
13

approval.

14

Section 30.
Data collection and retention.
15

(a) The Authority may collect and analyze any data from
16
participating payers, rural hospitals, rural participant
17
hospitals, and the Department of Human Services necessary to
18
carry out the Authority's responsibilities under this Act.
19
Data collected by the Authority shall only be used for
20
administering the global budget model. The Authority shall
21
obtain the written approval of a participating payer, rural
22
hospital, rural participant hospital, or the Department of
23
Human Services before the Authority can use the entity's data
24
for any other purpose. The Authority shall retain the data for
25
no more than 7 years.

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(b) A rural participant hospital may authorize its insurer
2
or administrator to provide data to the Authority regarding
3
payments for eligible hospital services provided under the
4
hospital's employee health plan.
5

(c) Unless specifically provided for in this Act, the
6
Authority may not release and no data source, person, member
7
of the public, or other user of any data of the Authority may
8
gain access to:
9

(1) Raw data which could reasonably be expected to
10

reveal the identity of an individual patient.
11

(2) Raw data disclosing discounts or allowances
12

between participating payers and participant rural
13

hospitals that is prejudicial to an individual
14

participating payer or participant rural hospital.
15

(3) Data which the Department of Human Services
16

provides to the Authority, unless the Secretary of Human
17

Services or Secretary's designee specifically authorizes
18

the release or access.
19

(4) Any data where a conflict of interest occurs.

20

Section 35.
Confidentiality of data, contracts, and
21
agreements.
22

(a) Any contract or agreement between participating payers
23
and rural participant hospitals or any data, including patient
24
data, provided by a participating payer, a rural participant
25
hospital, including a rural participant hospital's insurer or

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1
administrator, a rural hospital, or the Department of Human
2
Services to the Authority and maintained by the Authority for
3
the purposes of carrying out the requirements of this Act
4
shall be confidential and shall not be discoverable or
5
admissible as evidence in any civil, criminal, or
6
administrative action or proceeding.
7

(b) Nothing in this Section shall prohibit the Authority
8
from accessing the data to carry out its responsibilities in
9
accordance with law.
10

(c) Data provided to the Centers for Medicare and Medicaid
11
Services, or any other entity, by the Authority shall be
12
provided consistent with applicable laws and regulations,
13
including the Health Insurance Portability and Accountability
14
Act of 1996, the Health Information Technology for Economic
15
and Clinical Health Act, and any implementing regulations, to
16
the extent allowed by law and written agreements between the
17
Authority and each participating payer and rural participant
18
hospital.

19

Section 40.
The Global Hospital Budget Fund.
20

(a) The Global Hospital Budget Fund is created as a
21
separate fund in the State Treasury.
22

(b) All moneys deposited into the Fund shall be held for
23
the purposes of the Authority and shall be used only to
24
effectuate the purposes of this Act as determined by the
25
Authority. All interest earned from the investment or deposit

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of moneys accumulated in the Fund shall be deposited in the
2
Fund for the same use. Any moneys returned to the Authority by
3
any party shall be deposited into the Fund.

4

Section 41.
The State Finance Act is amended by adding
5
Section 5.1038 as follows:

6

(30 ILCS 105/5.1038 new)
7

Sec. 5.1038.
The Global Hospital Budget Fund.

8

Section 45.
The Hospital Licensing Act is amended by
9
changing Sections 4, 10.8, and by adding Section 18 as
10
follows:

11

(210 ILCS 85/4)

(from Ch. 111 1/2, par. 145)
12

Sec. 4.
No person shall establish a hospital without first
13
obtaining a permit from the Department and no person shall
14
open, conduct, operate, or maintain a hospital without first
15
obtaining a license from the Department.
16

Nothing in this Act shall be construed to impair or
17
abridge the power of municipalities to license and regulate
18
hospitals, provided that the municipal ordinance substantially
19
complies with the minimum standards and regulations developed
20
by the Department pursuant to the provisions of this Act. Such
21
compliance shall be determined by the Department subject to
22
review as provided in Section 13 of this Act. Section 13 of

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this Act shall also be applicable to the judicial review of
2
final administrative decisions of the regulatory agency of the
3
municipality. Any municipality having an ordinance licensing
4
and regulating hospitals which provides for minimum standards
5
and regulations substantially in compliance with those
6
developed pursuant to this Act shall make such periodic
7
reports to the Department as the Department deems necessary.
8
This report shall include a list of hospitals meeting
9
standards substantially equivalent to those promulgated by the
10
Department under this Act, and upon the receipt of such report
11
the Department may then issue a license to such hospital.
12

In reviewing and issuing permits and licenses, the
13
Department shall accept, as factors that satisfy staffing and
14
service-line presence requirements, one or a combination of
15
the following alternative mechanisms if the Department finds
16
that patient safety and continuity of care are maintained: (i)
17
on-site staffing by appropriately licensed clinicians; (ii)
18
written and operative affiliation agreements meeting standards
19
adopted by the Department that provide timely specialty
20
coverage; (iii) documented telemedicine coverage that meets
21
standards in Section 6.21; or (iv) a waiver issued under
22
Section 6.21 for a rural or critical access hospital. The
23
Department shall not impose an on-site specialty presence
24
requirement for any service if the hospital demonstrates
25
through documentation that an alternative mechanism described
26
in items (i) through (iv) will provide clinically equivalent,

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timely care and safe transfer protocols.
2

Waiver approvals shall be time-limited, not to exceed 24
3
months, and may be renewed upon demonstration of continued
4
need and compliance with quality and transfer metrics. The
5
Department shall provide technical assistance, model
6
affiliation, and telemedicine contract templates to
7
applicants.

8
(Source: Laws 1965, p. 2350.)

9

(210 ILCS 85/10.8)
10

Sec. 10.8.
Requirements for employment of physicians.
11

(a) Physician employment by hospitals and hospital
12
affiliates. Employing entities may employ physicians to
13
practice medicine in all of its branches provided that the
14
following requirements are met:
15

(1) The employed physician is a member of the medical
16

staff of either the hospital or hospital affiliate. If a
17

hospital affiliate decides to have a medical staff, its
18

medical staff shall be organized in accordance with
19

written bylaws where the affiliate medical staff is
20

responsible for making recommendations to the governing
21

body of the affiliate regarding all quality assurance
22

activities and safeguarding professional autonomy. The
23

affiliate medical staff bylaws may not be unilaterally
24

changed by the governing body of the affiliate. Nothing in
25

this Section requires hospital affiliates to have a

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medical staff.
2

(2) Independent physicians, who are not employed by an
3

employing entity, periodically review the quality of the
4

medical services provided by the employed physician to
5

continuously improve patient care.
6

(3) The employing entity and the employed physician
7

sign a statement acknowledging that the employer shall not
8

unreasonably exercise control, direct, or interfere with
9

the employed physician's exercise and execution of his or
10

her professional judgment in a manner that adversely
11

affects the employed physician's ability to provide
12

quality care to patients. This signed statement shall take
13

the form of a provision in the physician's employment
14

contract or a separate signed document from the employing
15

entity to the employed physician. This statement shall
16

state: "As the employer of a physician, (employer's name)
17

shall not unreasonably exercise control, direct, or
18

interfere with the employed physician's exercise and
19

execution of his or her professional judgment in a manner
20

that adversely affects the employed physician's ability to
21

provide quality care to patients."
22

(4) The employing entity shall establish a mutually
23

agreed upon independent review process with criteria under
24

which an employed physician may seek review of the alleged
25

violation of this Section by physicians who are not
26

employed by the employing entity. The affiliate may

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arrange with the hospital medical staff to conduct these
2

reviews. The independent physicians shall make findings
3

and recommendations to the employing entity and the
4

employed physician within 30 days of the conclusion of the
5

gathering of the relevant information.
6

(a-5) Employing entities may employ physicians to practice
7
medicine in all of its branches if employment, privileging,
8
and oversight requirements are met. For purposes of
9
determining compliance with any requirement that requires a
10
hospital to maintain a clinical service or specialty, the
11
presence of a specialty may be satisfied in whole or in part
12
through documented telemedicine arrangements, affiliation
13
agreements, shared staffing models, or approved waivers under
14
Section 6.21, as long as the hospital maintains written
15
transfer agreements, response-time expectations, clinician
16
credentialing consistent with the applicable standard of care,
17
and measures that assure continuous quality of care.

18

(b) Definitions. For the purpose of this Section:
19

"Employing entity" means a hospital licensed under the
20
Hospital Licensing Act or a hospital affiliate.
21

"Employed physician" means a physician who receives an IRS
22
W-2 form, or any successor federal income tax form, from an
23
employing entity.
24

"Hospital" means a hospital licensed under the Hospital
25
Licensing Act, except county hospitals as defined in
26
subsection (c) of Section 15-1 of the Illinois Public Aid

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Code.
2

"Hospital affiliate" means a corporation, partnership,
3
joint venture, limited liability company, or similar
4
organization, other than a hospital, that is devoted primarily
5
to the provision, management, or support of health care
6
services and that directly or indirectly controls, is
7
controlled by, or is under common control of the hospital.
8
"Control" means having at least an equal or a majority
9
ownership or membership interest. A hospital affiliate shall
10
be 100% owned or controlled by any combination of hospitals,
11
their parent corporations, or physicians licensed to practice
12
medicine in all its branches in Illinois. "Hospital affiliate"
13
does not include a health maintenance organization regulated
14
under the Health Maintenance Organization Act.
15

"Physician" means an individual licensed to practice
16
medicine in all its branches in Illinois.
17

"Professional judgment" means the exercise of a
18
physician's independent clinical judgment in providing
19
medically appropriate diagnoses, care, and treatment to a
20
particular patient at a particular time. Situations in which
21
an employing entity does not interfere with an employed
22
physician's professional judgment include, without limitation,
23
the following:
24

(1) practice restrictions based upon peer review of
25

the physician's clinical practice to assess quality of
26

care and utilization of resources in accordance with

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applicable bylaws;
2

(2) supervision of physicians by appropriately
3

licensed medical directors, medical school faculty,
4

department chairpersons or directors, or supervising
5

physicians;
6

(3) written statements of ethical or religious
7

directives; and
8

(4) reasonable referral restrictions that do not, in
9

the reasonable professional judgment of the physician,
10

adversely affect the health or welfare of the patient.
11

(c) Private enforcement. An employed physician aggrieved
12
by a violation of this Act may seek to obtain an injunction or
13
reinstatement of employment with the employing entity as the
14
court may deem appropriate. Nothing in this Section limits or
15
abrogates any common law cause of action. Nothing in this
16
Section shall be deemed to alter the law of negligence.
17

(d) Department enforcement. The Department may enforce the
18
provisions of this Section, but nothing in this Section shall
19
require or permit the Department to license, certify, or
20
otherwise investigate the activities of a hospital affiliate
21
not otherwise required to be licensed by the Department.
22

(e) Retaliation prohibited. No employing entity shall
23
retaliate against any employed physician for requesting a
24
hearing or review under this Section. No action may be taken
25
that affects the ability of a physician to practice during
26
this review, except in circumstances where the medical staff

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bylaws authorize summary suspension.
2

(f) Physician collaboration. No employing entity shall
3
adopt or enforce, either formally or informally, any policy,
4
rule, regulation, or practice inconsistent with the provision
5
of adequate collaboration, including medical direction of
6
licensed advanced practice registered nurses or supervision of
7
licensed physician assistants and delegation to other
8
personnel under Section 54.5 of the Medical Practice Act of
9
1987.
10

(g) Physician disciplinary actions. Nothing in this
11
Section shall be construed to limit or prohibit the governing
12
body of an employing entity or its medical staff, if any, from
13
taking disciplinary actions against a physician as permitted
14
by law.
15

(h) Physician review. Nothing in this Section shall be
16
construed to prohibit a hospital or hospital affiliate from
17
making a determination not to pay for a particular health care
18
service or to prohibit a medical group, independent practice
19
association, hospital medical staff, or hospital governing
20
body from enforcing reasonable peer review or utilization
21
review protocols or determining whether the employed physician
22
complied with those protocols.
23

(i) Review. Nothing in this Section may be used or
24
construed to establish that any activity of a hospital or
25
hospital affiliate is subject to review under the Illinois
26
Health Facilities Planning Act.

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(j) Rules. The Department shall adopt any rules necessary
2
to implement this Section.
3
(Source: P.A. 100-201, eff. 8-18-17; 100-513, eff. 1-1-18
.)

4

(210 ILCS 85/18 new)
5

Sec. 18.
Affiliation agreements and telemedicine service
6
protocols.
The Department shall, within 6 months after the
7
effective date of this amendatory Act of the 104th General
8
Assembly, adopt rules implementing Sections 3.1 and 6.21 and
9
shall make publicly available guidance templates for
10
affiliation agreements and telemedicine service protocols. The
11
Department shall report to the General Assembly within 18
12
months after the effective date of this amendatory Act of the
13
104th General Assembly on the number of waivers issued, the
14
outcomes, and any impacts on access to care.

15

Section 50.
The Illinois Health Facilities Planning Act is
16
amended by changing Sections 3, 8.5, 8.7, and 12 as follows:

17

(20 ILCS 3960/3)

(from Ch. 111 1/2, par. 1153)
18

(Section scheduled to be repealed on December 31, 2029)
19

Sec. 3.
Definitions.
As used in this Act:
20

"Health care facilities" means and includes the following
21
facilities, organizations, and related persons:
22

(1) An ambulatory surgical treatment center required
23

to be licensed pursuant to the Ambulatory Surgical

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Treatment Center Act.
2

(2) An institution, place, building, or agency
3

required to be licensed pursuant to the Hospital Licensing
4

Act.
5

(3) Skilled and intermediate long term care facilities
6

licensed under the Nursing Home Care Act.
7

(A) If a demonstration project under the Nursing
8

Home Care Act applies for a certificate of need to
9

convert to a nursing facility, it shall meet the
10

licensure and certificate of need requirements in
11

effect as of the date of application.
12

(B) Except as provided in item (A) of this
13

subsection, this Act does not apply to facilities
14

granted waivers under Section 3-102.2 of the Nursing
15

Home Care Act.
16

(3.5) Skilled and intermediate care facilities
17

licensed under the ID/DD Community Care Act or the MC/DD
18

Act. No permit or exemption is required for a facility
19

licensed under the ID/DD Community Care Act or the MC/DD
20

Act prior to the reduction of the number of beds at a
21

facility. If there is a total reduction of beds at a
22

facility licensed under the ID/DD Community Care Act or
23

the MC/DD Act, this is a discontinuation or closure of the
24

facility. If a facility licensed under the ID/DD Community
25

Care Act or the MC/DD Act reduces the number of beds or
26

discontinues the facility, that facility must notify the

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Board as provided in Section 14.1 of this Act.
2

(3.7) Facilities licensed under the Specialized Mental
3

Health Rehabilitation Act of 2013.
4

(4) Hospitals, nursing homes, ambulatory surgical
5

treatment centers, or kidney disease treatment centers
6

maintained by the State or any department or agency
7

thereof.
8

(5) Kidney disease treatment centers, including a
9

free-standing hemodialysis unit required to meet the
10

requirements of 42 CFR 494 in order to be certified for
11

participation in Medicare and Medicaid under Titles XVIII
12

and XIX of the federal Social Security Act.
13

(A) This Act does not apply to a dialysis facility
14

that provides only dialysis training, support, and
15

related services to individuals with end stage renal
16

disease who have elected to receive home dialysis.
17

(B) This Act does not apply to a dialysis unit
18

located in a licensed nursing home that offers or
19

provides dialysis-related services to residents with
20

end stage renal disease who have elected to receive
21

home dialysis within the nursing home.
22

(C) The Board, however, may require dialysis
23

facilities and licensed nursing homes under items (A)
24

and (B) of this subsection to report statistical
25

information on a quarterly basis to the Board to be
26

used by the Board to conduct analyses on the need for

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proposed kidney disease treatment centers.
2

(6) An institution, place, building, or room used for
3

the performance of outpatient surgical procedures that is
4

leased, owned, or operated by or on behalf of an
5

out-of-state facility.
6

(7) An institution, place, building, or room used for
7

provision of a health care category of service, including,
8

but not limited to, cardiac catheterization and open heart
9

surgery.
10

(8) An institution, place, building, or room housing
11

major medical equipment used in the direct clinical
12

diagnosis or treatment of patients, and whose project cost
13

is in excess of the capital expenditure minimum.
14

"Health care facilities" does not include the following
15
entities or facility transactions:
16

(1) Federally-owned facilities.
17

(2) Facilities used solely for healing by prayer or
18

spiritual means.
19

(3) An existing facility located on any campus
20

facility as defined in Section 5-5.8b of the Illinois
21

Public Aid Code, provided that the campus facility
22

encompasses 30 or more contiguous acres and that the new
23

or renovated facility is intended for use by a licensed
24

residential facility.
25

(4) Facilities licensed under the Supportive
26

Residences Licensing Act or the Assisted Living and Shared

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Housing Act.
2

(5) Facilities designated as supportive living
3

facilities that are in good standing with the program
4

established under Section 5-5.01a of the Illinois Public
5

Aid Code.
6

(6) Facilities established and operating under the
7

Alternative Health Care Delivery Act as a children's
8

community-based health care center alternative health care
9

model demonstration program or as an Alzheimer's Disease
10

Management Center alternative health care model
11

demonstration program.
12

(7) The closure of an entity or a portion of an entity
13

licensed under the Nursing Home Care Act, the Specialized
14

Mental Health Rehabilitation Act of 2013, the ID/DD
15

Community Care Act, or the MC/DD Act, with the exception
16

of facilities operated by a county or Illinois Veterans
17

Homes, that elect to convert, in whole or in part, to an
18

assisted living or shared housing establishment licensed
19

under the Assisted Living and Shared Housing Act and with
20

the exception of a facility licensed under the Specialized
21

Mental Health Rehabilitation Act of 2013 in connection
22

with a proposal to close a facility and re-establish the
23

facility in another location.
24

(8) Any change of ownership of a health care facility
25

that is licensed under the Nursing Home Care Act, the
26

Specialized Mental Health Rehabilitation Act of 2013, the

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ID/DD Community Care Act, or the MC/DD Act, with the
2

exception of facilities operated by a county or Illinois
3

Veterans Homes. Changes of ownership of facilities
4

licensed under the Nursing Home Care Act must meet the
5

requirements set forth in Sections 3-101 through 3-119 of
6

the Nursing Home Care Act.
7

(9) (Blank).
8

With the exception of those health care facilities
9
specifically included in this Section, nothing in this Act
10
shall be intended to include facilities operated as a part of
11
the practice of a physician or other licensed health care
12
professional, whether practicing in his individual capacity or
13
within the legal structure of any partnership, medical or
14
professional corporation, or unincorporated medical or
15
professional group. Further, this Act shall not apply to
16
physicians or other licensed health care professional's
17
practices where such practices are carried out in a portion of
18
a health care facility under contract with such health care
19
facility by a physician or by other licensed health care
20
professionals, whether practicing in his individual capacity
21
or within the legal structure of any partnership, medical or
22
professional corporation, or unincorporated medical or
23
professional groups, unless the entity constructs, modifies,
24
or establishes a health care facility as specifically defined
25
in this Section. This Act shall apply to construction or
26
modification and to establishment by such health care facility

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of such contracted portion which is subject to facility
2
licensing requirements, irrespective of the party responsible
3
for such action or attendant financial obligation.
4

"Person" means any one or more natural persons, legal
5
entities, governmental bodies other than federal, or any
6
combination thereof.
7

"Consumer" means any person other than a person (a) whose
8
major occupation currently involves or whose official capacity
9
within the last 12 months has involved the providing,
10
administering or financing of any type of health care
11
facility, (b) who is engaged in health research or the
12
teaching of health, (c) who has a material financial interest
13
in any activity which involves the providing, administering or
14
financing of any type of health care facility, or (d) who is or
15
ever has been a member of the immediate family of the person
16
defined by item (a), (b), or (c).
17

"State Board" or "Board" means the Health Facilities and
18
Services Review Board.
19

"Construction or modification" means the establishment,
20
erection, building, alteration, reconstruction,
21
modernization, improvement, extension, discontinuation,
22
change of ownership, of or by a health care facility, or the
23
purchase or acquisition by or through a health care facility
24
of equipment or service for diagnostic or therapeutic purposes
25
or for facility administration or operation, or any capital
26
expenditure made by or on behalf of a health care facility

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which exceeds the capital expenditure minimum; however, any
2
capital expenditure made by or on behalf of a health care
3
facility for (i) the construction or modification of a
4
facility licensed under the Assisted Living and Shared Housing
5
Act or (ii) a conversion project undertaken in accordance with
6
Section 30 of the Older Adult Services Act shall be excluded
7
from any obligations under this Act.
8

"Establish" means the construction of a health care
9
facility or the replacement of an existing facility on another
10
site or the initiation of a category of service.
11

"Major medical equipment" means medical equipment which is
12
used for the provision of medical and other health services
13
and which costs in excess of the capital expenditure minimum,
14
except that such term does not include medical equipment
15
acquired by or on behalf of a clinical laboratory to provide
16
clinical laboratory services if the clinical laboratory is
17
independent of a physician's office and a hospital and it has
18
been determined under Title XVIII of the Social Security Act
19
to meet the requirements of paragraphs (10) and (11) of
20
Section 1861(s) of such Act. In determining whether medical
21
equipment has a value in excess of the capital expenditure
22
minimum, the value of studies, surveys, designs, plans,
23
working drawings, specifications, and other activities
24
essential to the acquisition of such equipment shall be
25
included.
26

"Capital expenditure" means an expenditure: (A) made by or

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1
on behalf of a health care facility (as such a facility is
2
defined in this Act); and (B) which under generally accepted
3
accounting principles is not properly chargeable as an expense
4
of operation and maintenance, or is made to obtain by lease or
5
comparable arrangement any facility or part thereof or any
6
equipment for a facility or part; and which exceeds the
7
capital expenditure minimum.
8

For the purpose of this paragraph, the cost of any
9
studies, surveys, designs, plans, working drawings,
10
specifications, and other activities essential to the
11
acquisition, improvement, expansion, or replacement of any
12
plant or equipment with respect to which an expenditure is
13
made shall be included in determining if such expenditure
14
exceeds the capital expenditures minimum. Unless otherwise
15
interdependent, or submitted as one project by the applicant,
16
components of construction or modification undertaken by means
17
of a single construction contract or financed through the
18
issuance of a single debt instrument shall not be grouped
19
together as one project. Donations of equipment or facilities
20
to a health care facility which if acquired directly by such
21
facility would be subject to review under this Act shall be
22
considered capital expenditures, and a transfer of equipment
23
or facilities for less than fair market value shall be
24
considered a capital expenditure for purposes of this Act if a
25
transfer of the equipment or facilities at fair market value
26
would be subject to review.

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"Capital expenditure minimum" means $11,500,000 for
2
projects by hospital applicants, $6,500,000 for applicants for
3
projects related to skilled and intermediate care long-term
4
care facilities licensed under the Nursing Home Care Act, and
5
$3,000,000 for projects by all other applicants, which shall
6
be annually adjusted to reflect the increase in construction
7
costs due to inflation, for major medical equipment and for
8
all other capital expenditures.
9

"Financial commitment" means the commitment of at least
10
33% of total funds assigned to cover total project cost, which
11
occurs by the actual expenditure of 33% or more of the total
12
project cost or the commitment to expend 33% or more of the
13
total project cost by signed contracts or other legal means.
14

"Non-clinical service area" means an area (i) for the
15
benefit of the patients, visitors, staff, or employees of a
16
health care facility and (ii) not directly related to the
17
diagnosis, treatment, or rehabilitation of persons receiving
18
services from the health care facility. "Non-clinical service
19
areas" include, but are not limited to, chapels; gift shops;
20
news stands; computer systems; tunnels, walkways, and
21
elevators; telephone systems; projects to comply with life
22
safety codes; educational facilities; components in a patient
23
care unit used as educational space, consultation and
24
touchdown rooms, and on-call rooms; student housing; patient,
25
employee, staff, and visitor dining areas; administration and
26
volunteer offices; modernization of structural components

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(such as roof replacement and masonry work); boiler repair or
2
replacement; vehicle maintenance and storage facilities;
3
parking facilities; mechanical systems for heating,
4
ventilation, and air conditioning; loading docks; and repair
5
or replacement of carpeting, tile, wall coverings, window
6
coverings or treatments, or furniture. "Non-clinical service
7
area" does not include health and fitness centers, areas in a
8
patient care unit, or areas that are required by Department
9
licensing standards, including life safety code regulations,
10
such as hallways and other interdependent components to a
11
clinical area.
12

"Areawide" means a major area of the State delineated on a
13
geographic, demographic, and functional basis for health
14
planning and for health service and having within it one or
15
more local areas for health planning and health service. The
16
term "region", as contrasted with the term "subregion", and
17
the word "area" may be used synonymously with the term
18
"areawide".
19

"Local" means a subarea of a delineated major area that on
20
a geographic, demographic, and functional basis may be
21
considered to be part of such major area. The term "subregion"
22
may be used synonymously with the term "local".
23

"Physician" means a person licensed to practice in
24
accordance with the Medical Practice Act of 1987, as amended.
25

"Licensed health care professional" means a person
26
licensed to practice a health profession under pertinent

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1
licensing statutes of the State of Illinois.
2

"Director" means the Director of the Illinois Department
3
of Public Health.
4

"Agency" or "Department" means the Illinois Department of
5
Public Health.
6

"Alternative health care model" means a facility or
7
program authorized under the Alternative Health Care Delivery
8
Act.
9

"Acquiring interest" means any acquisition, directly or
10
indirectly, of a controlling ownership interest in a health
11
care facility or health system, including by merger, stock
12
purchase, asset purchase, management contract, lease of
13
substantially all operations, or change in controlling
14
membership or partnership interests.

15

"Out-of-state facility" means a person that is both (i)
16
licensed as a hospital or as an ambulatory surgery center
17
under the laws of another state or that qualifies as a hospital
18
or an ambulatory surgery center under regulations adopted
19
pursuant to the Social Security Act and (ii) not licensed
20
under the Ambulatory Surgical Treatment Center Act, the
21
Hospital Licensing Act, or the Nursing Home Care Act.
22
Affiliates of out-of-state facilities shall be considered
23
out-of-state facilities. Affiliates of Illinois licensed
24
health care facilities 100% owned by an Illinois licensed
25
health care facility, its parent, or Illinois physicians
26
licensed to practice medicine in all its branches shall not be

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considered out-of-state facilities. Nothing in this definition
2
shall be construed to include an office or any part of an
3
office of a physician licensed to practice medicine in all its
4
branches in Illinois that is not required to be licensed under
5
the Ambulatory Surgical Treatment Center Act.
6

"Change of ownership of a health care facility" means a
7
change in the person who has ownership or control of a health
8
care facility's physical plant and capital assets. A change in
9
ownership is indicated by the following transactions: sale,
10
transfer, acquisition, lease, change of sponsorship, or other
11
means of transferring control.
12

"Control" means the power to direct or cause the direction
13
of management and policies of a facility or system, whether by
14
ownership of voting securities, by contract, or otherwise.
15

"Covered transaction" means any proposed acquiring
16
interest or transfer of ownership of a hospital, or any
17
proposed material change in ownership, management, or
18
governance that results in the transfer of control.
19

"Material service reduction" includes, but is not limited
20
to: (i) closure or suspension of inpatient beds, (ii)
21
emergency department closure or downsizing, (iii) elimination
22
of maternity or labor-and-delivery services, (iv) elimination
23
of behavioral health services, (v) elimination of essential
24
surgical or diagnostic capabilities, (vi) major staffing
25
reductions likely to affect patient access, or (vii)
26
termination of community health programs.

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1

"Private equity" means an entity that is principally
2
engaged in acquiring equity interests in operating businesses
3
for investment purposes, including buyout funds, venture
4
capital funds, hedge funds, or other pooled investment
5
vehicles, and any affiliated or successor entities through
6
which such funds hold their interests.

7

"Related person" means any person that: (i) is at least
8
50% owned, directly or indirectly, by either the health care
9
facility or a person owning, directly or indirectly, at least
10
50% of the health care facility; or (ii) owns, directly or
11
indirectly, at least 50% of the health care facility.
12

"Charity care" means care provided by a health care
13
facility for which the provider does not expect to receive
14
payment from the patient or a third-party payer.
15

"Freestanding emergency center" means a facility subject
16
to licensure under Section 32.5 of the Emergency Medical
17
Services (EMS) Systems Act.
18

"Category of service" means a grouping by generic class of
19
various types or levels of support functions, equipment, care,
20
or treatment provided to patients or residents, including, but
21
not limited to, classes such as medical-surgical, pediatrics,
22
or cardiac catheterization. A category of service may include
23
subcategories or levels of care that identify a particular
24
degree or type of care within the category of service. Nothing
25
in this definition shall be construed to include the practice
26
of a physician or other licensed health care professional

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while functioning in an office providing for the care,
2
diagnosis, or treatment of patients. A category of service
3
that is subject to the Board's jurisdiction must be designated
4
in rules adopted by the Board.
5

"State Board Staff Report" means the document that sets
6
forth the review and findings of the State Board staff, as
7
prescribed by the State Board, regarding applications subject
8
to Board jurisdiction.
9

"Patient care unit" means a physically identifiable and
10
organized unit in a clearly defined administrative and
11
geographic area that meets applicable standards of service in
12
which nursing care and therapeutic services are provided on a
13
continuous basis and to which specific nursing and support
14
staff are assigned. "Patient care unit" does not include
15
education spaces, consultation and touchdown rooms, and
16
on-call rooms that are not required by Department licensing
17
standards.
18

"Provider" includes, but is not limited to, a hospital,
19
long-term care facility, end-stage renal dialysis facility,
20
ambulatory surgical treatment center, freestanding emergency
21
center, or birth center.
22
(Source: P.A. 104-365, eff. 1-1-26
.)

23

(20 ILCS 3960/8.5)
24

(Section scheduled to be repealed on December 31, 2029)
25

Sec. 8.5.
Certificate of exemption for change of ownership

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of a health care facility; discontinuation of a category of
2
service; public notice and public hearing.
3

(a) Upon a finding that an application for a change of
4
ownership is complete, the State Board shall publish a legal
5
notice on 3 consecutive days in a newspaper of general
6
circulation in the area or community to be affected and afford
7
the public an opportunity to request a hearing. If the
8
application is for a facility located in a Metropolitan
9
Statistical Area, an additional legal notice shall be
10
published in a newspaper of limited circulation, if one
11
exists, in the area in which the facility is located. If the
12
newspaper of limited circulation is published on a daily
13
basis, the additional legal notice shall be published on 3
14
consecutive days. The applicant shall pay the cost incurred by
15
the Board in publishing the change of ownership notice in
16
newspapers as required under this subsection. The legal notice
17
shall also be posted on the Health Facilities and Services
18
Review Board's web site and sent to the State Representative
19
and State Senator of the district in which the health care
20
facility is located and to the Office of the Attorney General.
21
An application for change of ownership of a hospital shall not
22
be deemed complete without a signed certification that for a
23
period of 2 years after the change of ownership transaction is
24
effective, the hospital will not adopt a charity care policy
25
that is more restrictive than the policy in effect during the
26
year prior to the transaction. An application for a change of

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ownership need not contain signed transaction documents so
2
long as it includes the following key terms of the
3
transaction: names and background of the parties; structure of
4
the transaction; the person who will be the licensed or
5
certified entity after the transaction; the ownership or
6
membership interests in such licensed or certified entity both
7
prior to and after the transaction; fair market value of
8
assets to be transferred; and the purchase price or other form
9
of consideration to be provided for those assets. The issuance
10
of the certificate of exemption shall be contingent upon the
11
applicant submitting a statement to the Board within 90 days
12
after the closing date of the transaction, or such longer
13
period as provided by the Board, certifying that the change of
14
ownership has been completed in accordance with the key terms
15
contained in the application. If such key terms of the
16
transaction change, a new application shall be required.
17

Where a change of ownership is among related persons, and
18
there are no other changes being proposed at the health care
19
facility that would otherwise require a permit or exemption
20
under this Act, the applicant shall submit an application
21
consisting of a standard notice in a form set forth by the
22
Board briefly explaining the reasons for the proposed change
23
of ownership. Once such an application is submitted to the
24
Board and reviewed by the Board staff, the Board Chair shall
25
take action on an application for an exemption for a change of
26
ownership among related persons within 45 days after the

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application has been deemed complete, provided the application
2
meets the applicable standards under this Section. If the
3
Board Chair has a conflict of interest or for other good cause,
4
the Chair may request review by the Board. Notwithstanding any
5
other provision of this Act, for purposes of this Section, a
6
change of ownership among related persons means a transaction
7
where the parties to the transaction are under common control
8
or ownership before and after the transaction is completed.
9

Nothing in this Act shall be construed as authorizing the
10
Board to impose any conditions, obligations, or limitations,
11
other than those required by this Section, with respect to the
12
issuance of an exemption for a change of ownership, including,
13
but not limited to, the time period before which a subsequent
14
change of ownership of the health care facility could be
15
sought, or the commitment to continue to offer for a specified
16
time period any services currently offered by the health care
17
facility.
18

The changes made by this amendatory Act of the 103rd
19
General Assembly are inoperative on and after January 1, 2027.
20

In addition to other materials required by this Section,
21
any application for a change of ownership that constitutes a
22
covered transaction shall include:
23

(1) a complete ownership chain disclosing the ultimate
24

beneficial owners and identifying any private equity or
25

pooled-investment entities in the chain;
26

(2) the transaction agreement and all material

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ancillary agreements, including, but not limited to,
2

management agreements, leases of substantially all
3

operations, sale-leasebacks, service contracts, and
4

contingent liability instruments;
5

(3) audited and pro forma financial statements for the
6

facility and the acquiring entity for at least 5 years
7

following the proposed transaction that is prepared
8

consistent with generally accepted accounting principles,
9

and a statement of sources and uses of funds for the
10

transaction;
11

(4) a written statement disclosing any intended or
12

anticipated material service reductions within 3 years of
13

closing and a mitigation plan;
14

(5) a Community Health Impact Assessment (CHIA),
15

prepared by an independent qualified third party that
16

meets Board standards, analyzing baseline access and
17

projected impacts on service availability, capacity,
18

staffing, payer mix, and at least 2 relevant community
19

health outcome measures; and
20

(6) a proposed post-transaction monitoring plan,
21

proposed community benefit commitments, and employee
22

transition protections.
23

The Board shall not approve any covered transaction until
24
completion of the Board's review, which shall include
25
evaluation of the CHIA and any public comments or
26
interventions. The Board may extend review timelines as

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necessary to complete independent evaluations.
2

For any covered transaction involving private equity or a
3
non-operating financial investor, the acquiring party shall
4
bear the burden of proof by a preponderance of the evidence to
5
demonstrate that the transaction will not materially impair
6
access to essential services, quality of care, or community
7
health outcomes in the facility's service area.
8

The Board may approve, approve with conditions, or deny a
9
covered transaction. When approving, the Board may impose
10
conditions, including, but not limited to: (i) minimum
11
service-level guarantees and minimum staffing levels for a
12
specified period of no less than 3 years, (ii) capital
13
investment commitments, (iii) restrictions on dividend
14
distributions or leveraged recapitalizations for a specified
15
period, (iv) binding community benefit agreements, and (v)
16
requirements to maintain charity care levels at prior or
17
higher levels. The Board shall monitor compliance with all
18
conditions for a minimum of 5 years post-transaction and may
19
assess penalties, require restoration of services, or order
20
divestiture for material noncompliance.
21

The Board shall require full disclosure of beneficial
22
ownership and fee structures associated with the acquiring
23
entity. Only disclosing shell companies or nominee entities
24
shall not constitute full disclosure. Financial documents may
25
be submitted under protective order, but confidentiality
26
claims do not relieve the applicant of the burden of proof.

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1

(a-3) (Blank).
2

(a-5) Upon a finding that an application to discontinue a
3
category of service is complete and provides the requested
4
information, as specified by the State Board, an exemption
5
shall be issued. No later than 30 days after the issuance of
6
the exemption, the health care facility must give written
7
notice of the discontinuation of the category of service to
8
the State Senator and State Representative serving the
9
legislative district in which the health care facility is
10
located. No later than 90 days after a discontinuation of a
11
category of service, the applicant must submit a statement to
12
the State Board certifying that the discontinuation is
13
complete.
14

(b) If a public hearing is requested, it shall be held at
15
least 15 days but no more than 30 days after the date of
16
publication of the legal notice in the community in which the
17
facility is located. The hearing shall be held in the affected
18
area or community in a place of reasonable size and
19
accessibility and a full and complete written transcript of
20
the proceedings shall be made. All interested persons
21
attending the hearing shall be given a reasonable opportunity
22
to present their positions in writing or orally. The applicant
23
shall provide a summary or describe the proposed change of
24
ownership at the public hearing.
25

(c) For the purposes of this Section "newspaper of limited
26
circulation" means a newspaper intended to serve a particular

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1
or defined population of a specific geographic area within a
2
Metropolitan Statistical Area such as a municipality, town,
3
village, township, or community area, but does not include
4
publications of professional and trade associations.
5

(d) The changes made to this Section by this amendatory
6
Act of the 101st General Assembly shall apply to all
7
applications submitted after the effective date of this
8
amendatory Act of the 101st General Assembly.
9

(e) The changes made to this Section by this amendatory
10
Act of the 104th General Assembly shall apply to any
11
application for change of ownership or exemption filed on or
12
after the effective date of this amendatory Act of the 104th
13
General Assembly.

14
(Source: P.A. 103-526, eff. 1-1-24
.)

15

(20 ILCS 3960/8.7)
16

(Section scheduled to be repealed on December 31, 2029)
17

Sec. 8.7.
Application for permit for discontinuation of a
18
health care facility or category of service; public notice and
19
public hearing.
20

(a) Upon a finding that an application to close a health
21
care facility or discontinue a category of service is
22
complete, the State Board shall publish a legal notice on 3
23
consecutive days in a newspaper of general circulation in the
24
area or community to be affected and afford the public an
25
opportunity to request a hearing. If the application is for a

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1
facility located in a Metropolitan Statistical Area, an
2
additional legal notice shall be published in a newspaper of
3
limited circulation, if one exists, in the area in which the
4
facility is located. If the newspaper of limited circulation
5
is published on a daily basis, the additional legal notice
6
shall be published on 3 consecutive days. The legal notice
7
shall also be posted on the Health Facilities and Services
8
Review Board's website and sent to the State Representative
9
and State Senator of the district in which the health care
10
facility is located. In addition, the health care facility
11
shall provide notice of closure to the local media that the
12
health care facility would routinely notify about facility
13
events.
14

Before approving an application for closure or
15
discontinuation, the Board shall require a Community Health
16
Impact Assessment (CHIA) consistent with rules promulgated
17
under Section 8.6 and shall not approve the application if the
18
Board finds that the proposed closure or discontinuation will
19
likely degrade essential health outcomes, worsen geographic
20
access to emergent or urgent care, or impose an undue increase
21
in travel time for ordinarily accessible services.

22

An application to close a health care facility shall only
23
be deemed complete if it includes evidence that the health
24
care facility provided written notice at least 30 days prior
25
to filing the application of its intent to do so to the
26
municipality in which it is located, the State Representative

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1
and State Senator of the district in which the health care
2
facility is located, the State Board, the Director of Public
3
Health, and the Director of Healthcare and Family Services.
4
The changes made to this subsection by this amendatory Act of
5
the 101st General Assembly shall apply to all applications
6
submitted after the effective date of this amendatory Act of
7
the 101st General Assembly.
8

(b) No later than 30 days after issuance of a permit to
9
close a health care facility or discontinue a category of
10
service, the permit holder shall give written notice of the
11
closure or discontinuation to the State Senator and State
12
Representative serving the legislative district in which the
13
health care facility is located.
14

(b-5) The Board shall monitor outcomes for a minimum of 5
15
years following any permitted closure or service reduction,
16
including data reported annually on access, such as travel
17
time and ambulance diversion), staffing levels, charity care,
18
and community health indicators. Failure to submit required
19
reports or materially breaching commitments shall subject the
20
permit holder and any applicable owner to penalties and
21
remedies under this Act.

22

(c)(1) If there is a pending lawsuit that challenges an
23
application to discontinue a health care facility that either
24
names the Board as a party or alleges fraud in the filing of
25
the application, the Board may defer action on the application
26
for up to 6 months after the date of the initial deferral of

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1
the application.
2

(2) The Board may defer action on an application to
3
discontinue a hospital that is pending before the Board as of
4
the effective date of this amendatory Act of the 102nd General
5
Assembly for up to 60 days after the effective date of this
6
amendatory Act of the 102nd General Assembly.
7

(3) The Board may defer taking final action on an
8
application to discontinue a hospital that is filed on or
9
after January 12, 2021, until the earlier to occur of: (i) the
10
expiration of the statewide disaster declaration proclaimed by
11
the Governor of the State of Illinois due to the COVID-19
12
pandemic that is in effect on January 12, 2021, or any
13
extension thereof, or July 1, 2021, whichever occurs later; or
14
(ii) the expiration of the declaration of a public health
15
emergency due to the COVID-19 pandemic as declared by the
16
Secretary of the U.S. Department of Health and Human Services
17
that is in effect on January 12, 2021, or any extension
18
thereof, or July 1, 2021, whichever occurs later. This
19
paragraph (3) is repealed as of the date of the expiration of
20
the statewide disaster declaration proclaimed by the Governor
21
of the State of Illinois due to the COVID-19 pandemic that is
22
in effect on January 12, 2021, or any extension thereof, or
23
July 1, 2021, whichever occurs later.
24

(d) The changes made to this Section by this amendatory
25
Act of the 101st General Assembly shall apply to all
26
applications submitted after the effective date of this

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1
amendatory Act of the 101st General Assembly.
2
(Source: P.A. 101-83, eff. 7-15-19; 101-650, eff. 7-7-20;
3
102-4, eff. 4-27-21.)

4

(20 ILCS 3960/12)

(from Ch. 111 1/2, par. 1162)
5

(Section scheduled to be repealed on December 31, 2029)
6

Sec. 12.
Powers and duties of State Board.
For purposes of
7
this Act, the State Board shall exercise the following powers
8
and duties:
9

(1) Prescribe rules, regulations, standards, criteria,
10

procedures or reviews which may vary according to the
11

purpose for which a particular review is being conducted
12

or the type of project reviewed and which are required to
13

carry out the provisions and purposes of this Act.
14

Policies and procedures of the State Board shall take into
15

consideration the priorities and needs of medically
16

underserved areas and other health care services, giving
17

special consideration to the impact of projects on access
18

to safety net services.
19

(2) Adopt procedures for public notice and hearing on
20

all proposed rules, regulations, standards, criteria, and
21

plans required to carry out the provisions of this Act.
22

(3) (Blank).
23

(4) Develop criteria and standards for health care
24

facilities planning, conduct statewide inventories of
25

health care facilities, maintain an updated inventory on

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1

the Board's web site reflecting the most recent bed and
2

service changes and updated need determinations when new
3

census data become available or new need formulae are
4

adopted, and develop health care facility plans which
5

shall be utilized in the review of applications for permit
6

under this Act. Such health facility plans shall be
7

coordinated by the Board with pertinent State Plans.
8

Inventories pursuant to this Section of skilled or
9

intermediate care facilities licensed under the Nursing
10

Home Care Act, skilled or intermediate care facilities
11

licensed under the ID/DD Community Care Act, skilled or
12

intermediate care facilities licensed under the MC/DD Act,
13

facilities licensed under the Specialized Mental Health
14

Rehabilitation Act of 2013, or nursing homes licensed
15

under the Hospital Licensing Act shall be conducted on an
16

annual basis no later than July 1 of each year and shall
17

include among the information requested a list of all
18

services provided by a facility to its residents and to
19

the community at large and differentiate between active
20

and inactive beds.
21

In developing health care facility plans, the State
22

Board shall consider, but shall not be limited to, the
23

following:
24

(a) The size, composition and growth of the
25

population of the area to be served;
26

(b) The number of existing and planned facilities

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1

offering similar programs;
2

(c) The extent of utilization of existing
3

facilities;
4

(d) The availability of facilities which may serve
5

as alternatives or substitutes;
6

(e) The availability of personnel necessary to the
7

operation of the facility;
8

(f) Multi-institutional planning and the
9

establishment of multi-institutional systems where
10

feasible;
11

(g) The financial and economic feasibility of
12

proposed construction or modification; and
13

(h) In the case of health care facilities
14

established by a religious body or denomination, the
15

needs of the members of such religious body or
16

denomination may be considered to be public need.
17

The health care facility plans which are developed and
18

adopted in accordance with this Section shall form the
19

basis for the plan of the State to deal most effectively
20

with statewide health needs in regard to health care
21

facilities.
22

(5) Coordinate with other state agencies having
23

responsibilities affecting health care facilities,
24

including those of licensure and cost reporting.
25

(6) Solicit, accept, hold and administer on behalf of
26

the State any grants or bequests of money, securities or

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1

property for use by the State Board in the administration
2

of this Act; and enter into contracts consistent with the
3

appropriations for purposes enumerated in this Act.
4

(7) (Blank).
5

(8) Prescribe rules, regulations, standards, and
6

criteria for the conduct of an expeditious review of
7

applications for permits for projects of construction or
8

modification of a health care facility, which projects are
9

classified as emergency, substantive, or non-substantive
10

in nature.
11

Substantive projects shall include no more than the
12

following:
13

(a) Projects to construct (1) a new or replacement
14

facility located on a new site or (2) a replacement
15

facility located on the same site as the original
16

facility and the cost of the replacement facility
17

exceeds the capital expenditure minimum, which shall
18

be reviewed by the Board within 120 days;
19

(b) Projects proposing a (1) new service within an
20

existing healthcare facility or (2) discontinuation of
21

a service within an existing healthcare facility,
22

which shall be reviewed by the Board within 60 days; or
23

(c) Projects proposing a change in the bed
24

capacity of a health care facility by an increase in
25

the total number of beds or by a redistribution of beds
26

among various categories of service or by a relocation

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of beds from one physical facility or site to another
2

by more than 20 beds or more than 10% of total bed
3

capacity, as defined by the State Board, whichever is
4

less, over a 2-year period.
5

The Chairman may approve applications for exemption
6

that meet the criteria set forth in rules or refer them to
7

the full Board. The Chairman may approve any unopposed
8

application that meets all of the review criteria or refer
9

them to the full Board.
10

Such rules shall not prevent the conduct of a public
11

hearing upon the timely request of an interested party.
12

Such reviews shall not exceed 60 days from the date the
13

application is declared to be complete.
14

(9) Prescribe rules, regulations, standards, and
15

criteria pertaining to the granting of permits for
16

construction and modifications which are emergent in
17

nature and must be undertaken immediately to prevent or
18

correct structural deficiencies or hazardous conditions
19

that may harm or injure persons using the facility, as
20

defined in the rules and regulations of the State Board.
21

This procedure is exempt from public hearing requirements
22

of this Act.
23

(10) Prescribe rules, regulations, standards and
24

criteria for the conduct of an expeditious review, not
25

exceeding 60 days, of applications for permits for
26

projects to construct or modify health care facilities

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which are needed for the care and treatment of persons who
2

have acquired immunodeficiency syndrome (AIDS) or related
3

conditions.
4

(10.5) Provide its rationale when voting on an item
5

before it at a State Board meeting in order to comply with
6

subsection (b) of Section 3-108 of the Code of Civil
7

Procedure.
8

(11) Issue written decisions upon request of the
9

applicant or an adversely affected party to the Board.
10

Requests for a written decision shall be made within 15
11

days after the Board meeting in which a final decision has
12

been made. A "final decision" for purposes of this Act is
13

the decision to approve or deny an application, or take
14

other actions permitted under this Act, at the time and
15

date of the meeting that such action is scheduled by the
16

Board. The transcript of the State Board meeting shall be
17

incorporated into the Board's final decision. The staff of
18

the Board shall prepare a written copy of the final
19

decision and the Board shall approve a final copy for
20

inclusion in the formal record. The Board shall consider,
21

for approval, the written draft of the final decision no
22

later than the next scheduled Board meeting. The written
23

decision shall identify the applicable criteria and
24

factors listed in this Act and the Board's regulations
25

that were taken into consideration by the Board when
26

coming to a final decision. If the Board denies or fails to

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approve an application for permit or exemption, the Board
2

shall include in the final decision a detailed explanation
3

as to why the application was denied and identify what
4

specific criteria or standards the applicant did not
5

fulfill.
6

(12) (Blank).
7

(13) Provide a mechanism for the public to comment on,
8

and request changes to, draft rules and standards.
9

(14) Implement public information campaigns to
10

regularly inform the general public about the opportunity
11

for public hearings and public hearing procedures.
12

(15) Establish a separate set of rules and guidelines
13

for long-term care that recognizes that nursing homes are
14

a different business line and service model from other
15

regulated facilities. An open and transparent process
16

shall be developed that considers the following: how
17

skilled nursing fits in the continuum of care with other
18

care providers, modernization of nursing homes,
19

establishment of more private rooms, development of
20

alternative services, and current trends in long-term care
21

services. The Chairman of the Board shall appoint a
22

permanent Health Services Review Board Long-term Care
23

Facility Advisory Subcommittee that shall develop and
24

recommend to the Board the rules to be established by the
25

Board under this paragraph (15). The Subcommittee shall
26

also provide continuous review and commentary on policies

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and procedures relative to long-term care and the review
2

of related projects. The Subcommittee shall make
3

recommendations to the Board no later than January 1, 2016
4

and every January thereafter pursuant to the
5

Subcommittee's responsibility for the continuous review
6

and commentary on policies and procedures relative to
7

long-term care. In consultation with other experts from
8

the health field of long-term care, the Board and the
9

Subcommittee shall study new approaches to the current bed
10

need formula and Health Service Area boundaries to
11

encourage flexibility and innovation in design models
12

reflective of the changing long-term care marketplace and
13

consumer preferences and submit its recommendations to the
14

Chairman of the Board no later than January 1, 2017. The
15

Subcommittee shall evaluate, and make recommendations to
16

the State Board regarding, the buying, selling, and
17

exchange of beds between long-term care facilities within
18

a specified geographic area or drive time. The Board shall
19

file the proposed related administrative rules for the
20

separate rules and guidelines for long-term care required
21

by this paragraph (15) by no later than September 30,
22

2011. The Subcommittee shall be provided a reasonable and
23

timely opportunity to review and comment on any review,
24

revision, or updating of the criteria, standards,
25

procedures, and rules used to evaluate project
26

applications as provided under Section 12.3 of this Act.

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1

The Chairman of the Board shall appoint voting members
2

of the Subcommittee, who shall serve for a period of 3
3

years, with one-third of the terms expiring each January,
4

to be determined by lot. Appointees shall include, but not
5

be limited to, recommendations from each of the 3
6

statewide long-term care associations, with an equal
7

number to be appointed from each. Compliance with this
8

provision shall be through the appointment and
9

reappointment process. All appointees serving as of April
10

1, 2015 shall serve to the end of their term as determined
11

by lot or until the appointee voluntarily resigns,
12

whichever is earlier.
13

One representative from the Department of Public
14

Health, the Department of Healthcare and Family Services,
15

the Department on Aging, and the Department of Human
16

Services may each serve as an ex-officio non-voting member
17

of the Subcommittee. The Chairman of the Board shall
18

select a Subcommittee Chair, who shall serve for a period
19

of 3 years.
20

(16) Prescribe the format of the State Board Staff
21

Report. A State Board Staff Report shall pertain to
22

applications that include, but are not limited to,
23

applications for permit or exemption, applications for
24

permit renewal, applications for extension of the
25

financial commitment period, applications requesting a
26

declaratory ruling, or applications under the Health Care

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Worker Self-Referral Act. State Board Staff Reports shall
2

compare applications to the relevant review criteria under
3

the Board's rules.
4

(17) Establish a separate set of rules and guidelines
5

for facilities licensed under the Specialized Mental
6

Health Rehabilitation Act of 2013. An application for the
7

re-establishment of a facility in connection with the
8

relocation of the facility shall not be granted unless the
9

applicant has a contractual relationship with at least one
10

hospital to provide emergency and inpatient mental health
11

services required by facility consumers, and at least one
12

community mental health agency to provide oversight and
13

assistance to facility consumers while living in the
14

facility, and appropriate services, including case
15

management, to assist them to prepare for discharge and
16

reside stably in the community thereafter. No new
17

facilities licensed under the Specialized Mental Health
18

Rehabilitation Act of 2013 shall be established after June
19

16, 2014 (the effective date of Public Act 98-651) except
20

in connection with the relocation of an existing facility
21

to a new location. An application for a new location shall
22

not be approved unless there are adequate community
23

services accessible to the consumers within a reasonable
24

distance, or by use of public transportation, so as to
25

facilitate the goal of achieving maximum individual
26

self-care and independence. At no time shall the total

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1

number of authorized beds under this Act in facilities
2

licensed under the Specialized Mental Health
3

Rehabilitation Act of 2013 exceed the number of authorized
4

beds on June 16, 2014 (the effective date of Public Act
5

98-651).
6

(18) Elect a Vice Chairman to preside over State Board
7

meetings and otherwise act in place of the Chairman when
8

the Chairman is unavailable.
9

(19) The Board may deny or impose conditions on any
10

covered transaction, as defined in Section 8.6, when the
11

Board determines that the transaction is likely to harm
12

access to essential services or materially degrade
13

community health outcomes.
14

(20) The Board may impose enforceable conditions on
15

covered transactions or permits for discontinuation,
16

including minimum staffing and service-level guarantees
17

for a specified minimum period of 3 years, capital
18

investment obligations, restrictions on dividend
19

distributions and leveraged recapitalizations for a
20

specified period, and binding community benefit
21

agreements.
22

(21) The Board shall require disclosure of the full
23

ownership chain and ultimate beneficial owners in all
24

covered transaction filings and may require submission of
25

financial documents under protective order. The Board
26

shall adopt rules defining required disclosures and the

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1

circumstances under which confidential treatment may be
2

granted.

3
(Source: P.A. 100-518, eff. 6-1-18; 100-681, eff. 8-3-18;
4
101-83, eff. 7-15-19.)

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INDEX

2

Statutes amended in order of appearance

3

New Act
4

30 ILCS 105/5.1038 new
5

210 ILCS 85/4
from Ch. 111 1/2, par. 145
6

210 ILCS 85/10.8
7

210 ILCS 85/18 new
8

20 ILCS 3960/3
from Ch. 111 1/2, par. 1153
9

20 ILCS 3960/8.5
10

20 ILCS 3960/8.7
11

20 ILCS 3960/12
from Ch. 111 1/2, par. 1162

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