Developmentally Disabled Care Provider Fund

Section 140 Section 140.82  Developmentally Disabled Care Provider Fund a)         Purpose and Contents 1)         The Developmentally Disabled Care Provider Fund was created in the State Treasury on July 1, 1992, July 14, 1993 and July 1, 1995 (see 305 ILCS 5/5C-7).  Interest earned by the Fund shall be credited to the Fund.  The Fund shall not be used to replace any funds appropriated to the Medicaid program by the General Assembly. 2)         The Fund is created for the purpose of receiving and disbursing monies in accordance with this Section and Sections 5C-2 and 7 of the Code. 3)         The Fund shall consist of: A)        All monies collected or received by the Department under subsection (b); B)        All federal matching funds received by the Department as a result of expenditures made by the Department that are attributable to monies deposited in the Fund; C)        Any interest or penalty levied in conjunction with the administration of the Fund; D)        All other monies received for the Fund from any other source, including interest earned thereon; and E)        All monies transferred from the Medicaid Developmentally Disabled Provider Participation Fee Trust Fund. b)         Provider Assessments 1)         Beginning on July 1, 1993, an assessment is imposed upon each developmentally disabled care provider in an amount equal to 6%, or the maximum allowed under federal regulation, whichever is less, of its adjusted gross developmentally disabled care revenue for the prior State fiscal year.  The revenue for each year will be reported on the Developmentally Disabled Care Provider Tax form to be filed by a date designated by the Department.  The Department reserves the right to audit the reported data. 2)         Effective July 1, 2013, for the privilege of engaging in the occupation of long term care facility for persons under 22 years of age serving clinically complex residents provider, an assessment is imposed upon each long term care facility for persons under 22 years of age serving clinically complex residents in the same amount and upon the same conditions and requirements as imposed in Section 140.84 and a license fee is imposed in the same amount and upon the same conditions and requirements as imposed in Section 140.84.  Notwithstanding any provision of any other Act, the assessment and license fee imposed by this subsection (b)(2) shall be construed as a tax, but may not be added to the charges of an individual's nursing home care that is paid for in whole, or in part, by a federal, State, or combined federal-State medical care program, except for those individuals receiving Medicare Part B benefits solely. c)         Payment of Assessment Due 1)         The assessment described in subsection (b) shall be due and payable in quarterly installments, each equaling one-fourth of the assessment for the year, on September 30, December 31, March 31, and May 31 of the year, modified to accommodate weekends and holidays.  Providers will be notified, in writing, of the due dates.  Assessment payments postmarked on the due date will be considered paid on time. 2)         All payments received by the Department shall be credited first to unpaid installment amounts (rather than to penalty or interest), beginning with the most delinquent installments. d)         Reporting Requirements, Penalty, and Maintenance of Records 1)         After June 30 of each State fiscal year, and on or before September 30 of the succeeding State fiscal year, every developmentally disabled care provider subject to an assessment under subsection (b) shall file a report with the Department.  The report shall be on a form prepared by the Department.  The report shall include the adjusted gross developmentally disabled care revenue from the State fiscal year just ended and shall be utilized by the Department to calculate the assessment for the State fiscal year commencing on the preceding July 1.  If a developmentally disabled care provider operates or maintains more than one developmentally disabled care facility, a separate report shall be filed for each facility.  In the case of a developmentally disabled care provider existing as a corporation or legal entity other than an individual, the report filed by it shall be signed by its president, vice-president, secretary, or treasurer or by its properly authorized agent. 2)         If the developmentally disabled care provider fails to file its report for a State fiscal year on or before the due date of the report, there shall, unless waived by the Department for reasonable cause, be added to the assessment imposed in subsection (b) a penalty assessment equal to 25 percent of the assessment imposed for the year. 3)         Every developmentally disabled care provider subject to an assessment under subsection (b) shall keep records and books that will permit the determination of adjusted gross developmentally disabled care revenue on a State fiscal year basis.  All such books and records shall be maintained for a minimum of three years following the filing date of the assessment report and shall, at all times during business hours of the day, be subject to inspection by the Department or its duly authorized agents and employees. 4)         Amended Assessment Reports.  With the exception of amended assessment reports filed in accordance with subsections (d)(5) or (6), an amended assessment report must be filed within 30 calendar days after the original report due date.  The amended report must be accompanied by a letter identifying the changes and the justification for the amended report.  The provider will be advised of any adjustments to the original annual assessment amount through a written notification from the Department.  Penalties may be applied to the amount underpaid due to a filing error. 5)         Submission of Financial Audit Statements.  All developmentally disabled care providers are required to submit a copy of all financial statements audited by an external, independent auditor to the Department within 30 days after the close of the externally performed financial audits.  If the provider's year end does not coincide with the June 30 ending date for the assessment report, the provider must submit all financial audits covering the tax report period. An amended assessment report must accompany the external financial audit statements if the data submitted on the initial tax report changes based upon the findings of the external financial audits and as indicated in the audited external financial statements.  Penalties may be applied to the amount underpaid due to a filing error. 6)         Reconsideration of Adjusted Tax.  If the Department, through an audit conducted by the Department or its agent within three years after the end of the fiscal year in which the assessment was due, changes the assessment liability of a developmentally disabled care provider, the developmentally disabled care provider may request a review or reconsideration of the adjusted assessment within 30 days after the Department's notification of the change in assessment liability.  Requests for reconsideration of the assessment adjustment shall not be considered if those requests are not postmarked on or before the end of the 30 day review period.  Penalties may be applied to the amount underpaid due to a filing error. e)         Procedure for Partial Year Reporting/Operating Adjustments 1)         Cessation of business during the fiscal year in which the assessment is being paid.  For a developmentally disabled care provider who ceases to conduct, operate, or maintain a facility for which the person is subject to assessment under subsection (b), the assessment for the State fiscal year in which the cessation occurs shall be adjusted by multiplying the assessment computed under subsection (d) by a fraction, the numerator of which is the number of months in the year during which the provider conducts, operates, or maintains the facility and the denominator of which is 12.  The person shall file a final, amended report with the Department not more than 30 calendar days after the cessation, reflecting the adjustment, and shall pay with the final report the assessment for the year as so adjusted, to the extent not previously paid. 2)         Commencing of business during the fiscal year in which the assessment is being paid.  A developmentally disabled care provider who commences conducting, operating, or maintaining a facility for which the person is subject to assessment under subsection (b) shall file an initial return for the State fiscal year in which the commencement occurs within 30 calendar days thereafter and shall pay the assessment under subsection (d) as computed by the Department in equal installments on the due date of the initial assessment determination and on the regular installment due dates for the State fiscal year occurring after the due date of the initial assessment determination.  In determining the annual assessment amount for the provider the Department shall develop hypothetical annualized revenue projections based upon geographic location, facility size and patient case mix.  The assessment determination made by the Department is final. 3)         Partial Fiscal Year Operation Adjustment.  For a developmentally disabled care provider that did not conduct, operate, or maintain a facility throughout the entire fiscal year reporting period, the assessment for the following State fiscal year shall be annualized based on the provider's actual developmentally disabled care revenue for the portion of the reporting period the facility was operational (dividing adjusted developmentally disabled care revenue by the number of months the facility was in operation and then multiplying that amount by 12).  Developmentally disabled care revenue realized by a prior provider from the same facility during the fiscal year shall be used in the annualization equation, if available. 4)         Change in Ownership and/or Operators.  The full quarterly assessment must be paid on the designated due dates regardless of changes in ownership or operators.  Liability for the payment of the assessment amount (including past due assessments and any interest or penalties that may have accrued against the amount) rests on the developmentally disabled care provider currently operating or maintaining the developmentally disabled care facility regardless if these amounts were incurred by the current owner or were incurred by previous owners.  Collection of delinquent assessment fees from previous providers will be made against the current provider.  Failure of the current provider to pay any outstanding assessment liabilities incurred by previous providers shall result in the application of penalties described in subsection (f)(1). f)         Penalties 1)         Any facility that fails to pay the full amount of an installment when due shall be charged, unless waived by the Department for reasonable cause, a penalty equal to five percent of the amount of the installment not paid on or before the due date, plus five percent of the portion thereof remaining unpaid on the last day of each monthly period thereafter, not to exceed 100% of the installment amount not paid on or before the due date. Reasonable cause may include but is not limited to: A)        a provider who has not been delinquent on payment of an assessment due within the last three calendar years from the time the delinquency occurs; B)        a provider who can demonstrate to the Department's satisfaction that a payment was made prior to the due date; or C)        that the provider is a new owner/operator and the late payment occurred in the quarter in which the new owner/operator assumed control of the facility. 2)         Within 30 days after the due date, the Department may begin recovery actions against delinquent facilities participating in the Medicaid Program. Payments may be withheld from the facility until the entire provider assessment, including any penalties, is satisfied, or until a reasonable repayment schedule has been approved by the Department.  If a reasonable agreement cannot be reached, or if the facility fails to comply with an agreement the Department reserves the right to recover any outstanding provider assessment, interest and penalty by recouping the amount or a portion thereof from the provider's future payments from the Department.  The provider may appeal this recoupment in accordance with the Department's rules at 89 Ill. Adm. Code 104.  The Department has the right to continue recoupment during the appeal process.  Penalties pursuant to subsection (f)(1) will continue to accrue during the recoupment process.  Recoupment proceedings against the same facility two times in a fiscal year may be cause for termination from the Program.  Failure by the Department to initiate recoupment activities within 30 days shall not reduce the provider's liabilities nor shall it preclude the Department from taking action at a later date. 3)         If the facility does not participate in the Medicaid Program, or is no longer doing business with the Department, or the Department cannot recover the full amount due through the claims processing system, within three months of the assessment due date, the Department may begin legal action to recover the monies, including penalties and interest owed, plus court costs. g)         Delayed Payment – Groups of Facilities The Department may establish delayed payment of assessments and/or waive the payment of interest and penalties for groups of facilities when: 1)         the State delays payments to facilities due to problems related to State cash flow; or 2)         a cash flow bond pool's or any other group financing plans' requests from providers for loans are in excess of its scheduled proceeds such that a significant number of facilities will be unable to obtain a loan to pay the assessment. h)         Delayed Payment – Individual Facilities In addition to the provisions of subsection (g), the Department may delay assessments for individual facilities that are unable to make timely payments under this Section due to financial difficulties.  No delayed payment arrangements shall extend beyond the last business day of the calendar quarter following the quarter in which the assessment was to have been received by the Department as described in subsection (c). The request must be received by the Department prior to the date of the assessment. 1)         Criteria.  Delayed payment provisions may be instituted only under extraordinary circumstances.  Delayed payment provisions shall be made only to qualified facilities who meet all of the following requirements: A)        the facility has experienced an emergency which necessitates institution of delayed payment provisions.  Emergency in this instance is defined as a circumstance under which institution of the payment and penalty provisions described in subsections (c)(1), (c)(2), (f)(1), (f)(2) and (f)(3) would impose severe and irreparable harm to the clients served.  Circumstances that may create such emergencies include, but are not limited to, the following: i)          Department system errors (either automated system or clerical) that have precluded payments, or that have caused erroneous payments such that the facility's ability to provide further services to clients is severely impaired; ii)         cash flow problems encountered by a facility that are unrelated to Department technical system problems and that result in extensive financial problems to a facility adversely impacting on its ability to serve its clients. B)        the facility serves a significant number of clients under the Medical Assistance Program.  Significant in this instance means: i)          85 percent or more of their residents must be eligible for public assistance; ii)         a government-owned facility, that meets the cash flow criteria under subsection (h)(1)(A)(ii). iii)        a provider who has filed for Chapter 11 bankruptcy that meets the cash flow criterion under subsection (h)(1)(A)(ii). C)        the facility must ensure that a delay of payment request, as defined in subsection (h)(3)(A), is received by the Department prior to the payment due date, and the request must include a Cash Position Statement that is based upon current assets, current liabilities and other data for a date that is less than 60 days prior to the date of filing.  Any liabilities payable to owners or related parties must not be reported as current liabilities on the Cash Position Statement.  A deferral of assessment payments will be denied if any of the following criteria are met: i)          the ratio of current assets divided by current liabilities is greater than 2.0; ii)         cash, short-term investments and long-term investments equal or exceed the total of accrued wages payable and the assessment payment.  Long-term investments that are unavailable for expenditure for current operations due to donor restrictions or contractual requirements will not be used in this calculation; iii)        cash or other assets have been distributed during the previous 90 days to owners or related parties in an amount equal to or exceeding the assessment payment for dividends, salaries in excess of those allowable under Section 140.541 or payments for purchase of goods or services in excess of cost as defined in Section 140.537. D)        the facility, with the exception of government owned facilities, must show evidence of denial of an application to borrow the assessment funds through a cash flow bond pool or financial institutions such as a commercial bank.  The denial must be 90 days old or less. E)        the facility must sign an agreement with the Department that specifies the terms and conditions of the delayed payment provisions.  The agreement shall contain the following provisions: i)          specific reasons for institution of the delayed payment provisions; ii)         specific dates on which payments must be received and the amount of payment that must be received on each specific date described; iii)        the interest or a statement of interest waiver as described in subsection (h)(5) that shall be due from the facility as a result of institution of the delayed payment provisions; iv)        a certification stating that, should the entity be sold, the new owners will be made aware of the liability and any agreement selling the entity will include provisions that the new owners will assume responsibility for repaying the debt to the Department according to the original agreement; v)         a certification stating that all information submitted to the Department in support of the delayed payment request is true and accurate to the best of the signator's knowledge; and vi)        such other terms and conditions that may be required by the Department. 2)         A facility that does not meet the criteria listed in subsection (h)(1) may request a delayed payment schedule.  The Department may approve the request, notwithstanding the facility not meeting the above criteria, upon a sufficient showing of financial difficulties and good cause by the facility.  If the request for a delayed payment schedule is approved, all other conditions of this subsection (h) shall apply. 3)         Approval Process A)        In order to receive consideration for delayed payment provisions, facilities must ensure that their request is received by the Department prior to the payment due date, in writing (telefax requests are acceptable) to the Bureau of Program and Reimbursement Analysis.  The request must be received by the due date designated by the Department.  Providers will be notified, in writing, of the due dates for submitting delay of payment requests. Requests must be complete and contain all required information before they are considered to have met the time requirements for filing a delayed payment request.  All telefax requests must be followed up with original written requests postmarked no later than the date of the telefax.  The request must include: i)          an explanation of the circumstances creating the need for the delayed payment provisions; ii)         supportive documentation to substantiate the emergency nature of the request and risk of irreparable harm to the clients; and iii)        specification of the specific arrangements requested by the facility B)        The facility shall be notified by the Department, in writing prior to the assessment due date, of the Department's decision with regard to the request for institution of delayed payment provisions.  An agreement shall be issued to the facility for all approved requests.  The agreement must be signed by the administrator, owner or other authorized representative and be received by the Department prior to the first scheduled payment date listed in such agreement. 4)         Waiver of Penalties.  The penalties described in subsections (f)(1) and (f)(2) may be waived upon approval of the facility's request for institution of delayed payment provisions.  In the event a facility's request for institution of delayed payment provisions is approved and the Department has received the signed agreement in accordance with subsection (h)(3)(B), the penalties shall be permanently waived for the subject quarter unless the facility fails to meet all of the terms and conditions of the agreement.  In the event the facility fails to meet all of the terms and conditions of the agreement, the agreement shall be considered null and void and the penalties shall be fully reinstated. 5)         Interest.  The delayed payments shall include interest at a rate not to exceed the State of Illinois borrowing rate.  The applicable interest rate shall be identified in the agreement described in subsection (h)(1)(E). The interest may be waived by the Department if the facility's current ratio, as described in subsection (h)(1)(C), is 1.5 or less and the facility meets the criteria in subsections (h)(1)(A) and (B).  Any such waivers granted shall be expressly identified in the agreement described in subsection (h)(1)(E). 6)         Subsequent Delayed Payment Arrangements.  Once a facility has requested and received approval for delayed payment arrangements, the facility shall not receive approval for subsequent delayed payment arrangements until the terms and conditions of any current delayed payment agreement have been satisfied or unless the provider is in full compliance with the terms of the current delay of payment agreement.  The waiver of penalties described in subsection (h)(4) shall not apply to a facility that has not satisfied the terms and conditions of any current delayed payment agreement. i)          Administration and Enforcement Provisions The Department shall administer and enforce Section 5C-6 of the Public Aid Code and collect the assessments, interest, and penalty assessments imposed under the law, using procedures employed in its administration of the Code generally and, as it deems appropriate, in a manner similar to that in which the Department of Revenue administers and collects the retailers' occupation tax under the Retailers' Occupation Tax Act ("ROTA"). j)          Nothing in Section 5C of the Code shall be construed to prevent the Department from collecting all amounts due under this Section pursuant to an assessment imposed before July 1, 1995. k)         Definitions 1)         "Adjusted gross developmentally disabled care revenue" means the developmentally disabled care provider's total revenue for inpatient residential services, less contractual allowances and discounts on patients' accounts, but does not include non-patient revenue from sources such as contributions, donations or bequests, investments, day training services, television and telephone service, rental of facility space, or sheltered care revenue.  Adjusted gross developmentally disabled care revenue must be reported on an accrual basis for the tax reporting period.  All patient revenue accrued during the tax reporting period must be included even though reimbursement may occur after the tax reporting period.  Patient revenue must be reported on a basis that is consistent with methods used on the facility's last two cost reports. 2)         "Contractual Allowance" means the difference between charges at established rates and the amount estimated to be paid by third party payors or patients, as appropriate, pursuant to agreements/contracts with the developmentally disabled care provider; courtesy and policy discounts provided to employees, medical staff and clergy; and charity care, but "contractual allowance" does not mean any Provider Participation fees/taxes paid to the Department. 3)         "Department" means the Illinois Department of Healthcare and Family Services. 4)         "Developmentally disabled care facility" means an intermediate care facility for the mentally retarded within the meaning of Title XIX of the Social Security Act, whether public or private and whether organized for profit or not-for-profit, but shall not include any facility operated by the State. 5)         "Developmentally disabled care provider" means a person conducting, operating, or maintaining a developmentally disabled care facility.  For this purpose, "person" means any political subdivision of the State, municipal corporation, individual, firm, partnership, corporation, company, limited liability company, association, joint stock association, or trust, or a receiver, executor, trustee, guardian or other representative appointed by order of any court. 6)         "Facility" means all intermediate care facilities as defined under "developmentally disabled care facility" (see subsection (k)(4)). 7)         "Fund" means the Developmentally Disabled Care Provider Fund. 8)         "Long term care facility for persons under 22 years of age serving clinically complex residents" means a facility licensed by the Department of Public Health as a long term care facility for persons under 22 meeting the qualifications of Section 5.4h of the Code.