MEDICAID-PAYMENT RATES-FQHCS

Illinois General Assembly - Full Text of HB5774

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5774

Introduced 5/14/2026, by Rep. Justin Slaughter

SYNOPSIS AS INTRODUCED:

305 ILCS 5/5-5.20

Amends the Medical Assistance Article of the Illinois Public Aid
Code. Requires the Department of Healthcare and Family Services to seek a
State Plan amendment from the Centers for Medicare and Medicaid Services
regarding a prospective cost-reimbursement methodology for services
provided by federally qualified health centers (FQHC) and FQHC Look-Alikes
(LALs). Requires the State Plan amendment to include the following: (1)
Prospective Payment System (PPS) rates for FQHCs; (2) a rate adjustment
process; (3) a rate setting for new FQHCs; (4) payment in the event of
Medicaid managed care; (5) payment in the event of dual enrollment in
Medicare and Medicaid; and (6) appeal rights.
LRB104 21890 KTG 37769 b

A BILL FOR

HB5774
LRB104 21890 KTG 37769 b
1

AN ACT concerning public aid.

2

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

4

Section 5.
The Illinois Public Aid Code is amended by
5
changing Section 5-5.20 as follows:

6

(305 ILCS 5/5-5.20)
7

Sec. 5-5.20.
Clinic payments.
For services provided by
8
federally qualified health centers
(FQHC) and FQHC Look-Alikes
9
(LALs)
as defined in Section 1905 (l)(2)(B) of the federal
10
Social Security Act, on or after April 1, 1989, and as long as
11
required by federal law, the Illinois Department shall
12
reimburse those
FQHCs and LALs

health centers
for those
13
services according to a prospective cost-reimbursement
14
methodology
as required by Section 1902(bb) of the federal
15
Social Security Act and paragraphs (1) through (6) of this
16
Section. In setting this prospective cost-reimbursement
17
methodology, the Illinois Department shall seek a State Plan
18
amendment from the Centers for Medicare and Medicaid Services
19
(CMS) as soon as possible. The Illinois Department shall
20
implement the State Plan amendment promptly after CMS approval
21
and no later than 30 days after approval. The State Plan
22
amendment shall contain the following provisions:

.
23

(1) Prospective Payment System (PPS) rates for FQHCs,

HB5774
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LRB104 21890 KTG 37769 b
1

whether initial rates or rates adjusted in accordance with
2

paragraph (2), shall be based on reasonable costs of each
3

individual FQHC related to the provision of covered
4

ambulatory services using the cost principles found at 2
5

Code of Federal Regulations Part 200 or its successor.
6

Such rates shall be set without the application of cost
7

caps, productivity standards, the use of statewide
8

averages or other methods unrelated to the specific,
9

reasonable cost of the individual FQHC; notwithstanding
10

the foregoing, the Illinois Department shall pay FQHCs for
11

vaccines separately on a fee-for-service basis and the
12

cost of such vaccines shall not be included in the PPS
13

rate.
14

(2) Rate adjustment process. Each FQHC shall have its
15

rate adjusted annually by the Medicare Economic Index as
16

required by Section 1902(bb)(3)(A) of the federal Social
17

Security Act, and shall also have the right annually to
18

apply for an adjustment, as required by Section
19

1902(bb)(3)(B) of the federal Social Security Act, to its
20

current rate to take into account statutory and regulatory
21

changes, including changes as a result of this amendatory
22

Act of the 104th General Assembly as well as other changes
23

that affect the type, intensity, duration, or amount of
24

services provided in an average visit; for the purposes of
25

this paragraph, the new adjusted rate shall be equivalent
26

to the total cost per visit for the FQHC's fiscal year in

HB5774
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LRB104 21890 KTG 37769 b
1

which the changes took place and shall be finalized by the
2

Illinois Department within 90 days of the FQHC's
3

application.
4

(3) Rate setting for new FQHCs. The Illinois
5

Department shall establish a process to set a provisional
6

PPS rate for a new FQHC based upon 100% of the projected
7

cost per visit for the provision of ambulatory services as
8

required in this Section; this provisional rate shall be
9

replaced by a final PPS rate based on 100% of the actual
10

costs of the FQHC for the first full fiscal year of
11

operation as an FQHC as approved by the Illinois
12

Department within 12 months of the end of that fiscal
13

year; the Illinois Department shall reconcile the
14

provisional PPS rate to the actual, final PPS rate and
15

make any necessary payment adjustments.
16

(4) Payment in the event of Medicaid Managed Care. The
17

Illinois Department shall ensure that:
18

(A) FQHCs are fully paid under the methodology
19

required by Section 1902(bb) of the federal Social
20

Security Act when serving a Medicaid beneficiary
21

regardless of whether or not that FQHC has entered
22

into a provider agreement with a Medicaid managed care
23

organization (MCO) in which the beneficiary is
24

enrolled;
25

(B) if it utilizes the MCOs to fulfill or
26

eliminate its obligation to make the supplemental or

HB5774
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LRB104 21890 KTG 37769 b
1

wraparound payment to one or more FQHCs as required
2

under Section 1902(bb)(5) of the federal Social
3

Security Act, it shall make a payment on at least a
4

quarterly basis to the MCOs to compensate them for
5

fulfilling or eliminating that obligation; such
6

payment shall be in addition to and separate from the
7

monthly capitated payment negotiated between the
8

Illinois Department and the MCOs; and
9

(C) FQHCs are fully compensated in a managed care
10

setting if they have more than one type of visit per
11

day per patient.
12

(5) Payment in the event of dual enrollment in
13

Medicare and Medicaid. The Illinois Department shall
14

ensure that:

15

(A) FQHCs are fully compensated under the
16

methodology required by Section 1902(bb) of the
17

federal Social Security Act when serving an individual
18

who is both a Medicaid beneficiary and a federal
19

Medicare beneficiary; and
20

(B) payment to an FQHC equals the amount due to the
21

FQHC under Section 1902(bb) of the federal Social
22

Security Act less any amount paid to the FQHC for the
23

same beneficiary visit by Medicare.

24

(6) Appeal rights. The Illinois Department shall
25

ensure that FQHCs receive notice and an opportunity to
26

appeal any Department determination set forth in

HB5774
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LRB104 21890 KTG 37769 b
1

paragraphs (1) through (5) in accordance with State
2

administrative procedures.
3

On and after July 1, 2012, the Department shall reduce any
4
rate of reimbursement for services or other payments or alter
5
any methodologies authorized by this Code to reduce any rate
6
of reimbursement for services or other payments in accordance
7
with Section 5-5e.
8
(Source: P.A. 97-689, eff. 6-14-12.)

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