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HB 3273

Relating to the Oregon Safety Assessment Program.

2025 Regular Session Introduced by Paul Evans

The bill standardizes Medicaid hospital payments in Illinois by requiring APR-DRG for inpatient and EAPG for outpatient, with set weighting, statewide amounts, and add-ons, using S

In committee upon adjournment.
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Bill Summary · HB 3273

Summary — HB 3273 (2025)

Title: Relating to the Oregon Safety Assessment Program (bill text actually amends Illinois law)
Bill number: HB 3273 (Rep. Jay Hoffman) — 104th General Assembly
Primary statute amended: 305 ILCS 5/14-12 (Illinois Public Aid Code, Hospital rate reform payment system)
Status: In committee upon adjournment (last action: 2025-06-28)
Introduced: February 2025 (filed Feb 6 / first read Feb 18; records show Feb 25 filing)

Note: Although the header in your request names an Oregon program, the bill text amends Illinois Medicaid hospital payment law (305 ILCS 5/14-12). This summary follows the bill text.

Purpose / Intent

To specify software and methodology used to calculate Medicaid hospital reimbursement for inpatient and outpatient services, to standardize weighting and statewide payment amounts, and to add or preserve certain payment adjusters and add-ons (e.g., trauma, transplant, perinatal, GME, outliers, inpatient rehab).

Key provisions

  • Vendor specification:
    • Inpatient payments must use All Patient Refined Diagnosis Related Grouping (APR-DRG) software, version 30, distributed by Solventum (formerly 3M Health Information Systems).
    • Outpatient payments must use Enhanced Ambulatory Procedure Grouping (EAPG) software, version 3.7, distributed by Solventum.
    • Solventum is designated the exclusive software provider unless the Department of Healthcare and Family Services (DHFS) determines Solventum cannot meet required operational or contractual terms; only then may an alternative authorized provider be considered.
  • Weighting factors and statewide-standardized amounts:
    • DHFS shall establish Medicaid weighting factors (initial factors based on the provider-published factors associated with the specified versions).
    • DHFS will publish statewide-standardized amounts on its website at least 10 calendar days prior to their effective date.
  • Adjusters and add-ons:
    • DHFS to develop adjusters for trauma, transplant, perinatal care, and Graduate Medical Education (GME).
    • Outlier payments consistent with Medicare outlier principles; fixed loss thresholds may be updated annually, and if thresholds are updated the base rates must be updated within 12 months.
    • Specific adjustors/add-ons referenced: safety-net hospitals (historical window July 1, 2014–Dec 31, 2023), freestanding inpatient psychiatric hospitals treating patients under 21, Perinatal Level II/II+ centers, burn care cases, and a $96/day add-on for inpatient rehabilitation services beginning July 1, 2018.
  • Exemptions and transparency:
    • DHFS will define hospitals or distinct parts exempt from APR-DRG and publish those inpatient rates at least 10 days prior to effective date.
  • Outpatient specifics:
    • Initial EAPG weighting and statewide amounts follow the provider-published values; CAH (Critical Access Hospital) adjustments and wage-index labor adjustments are specified for initial calculations.

(Outpatient section in provided text is truncated; other granular rules may be in omitted sections.)

Who is affected

  • Directly: Medicaid-enrolled hospitals and hospital providers in Illinois (general acute care, freestanding psychiatric hospitals, safety-net hospitals, trauma and transplant centers, perinatal centers, CAHs).
  • Indirectly: Medicaid beneficiaries (through how hospital payments may affect access and services), DHFS (implementation and contracting), and vendor Solventum (contractual/operational role).
  • Fiscal impact: Changes in payment methodology, add-ons, and statewide-standardized amounts will affect Medicaid expenditures and hospital reimbursements; exact fiscal effect is not provided in the text.

Procedural / timeline notes

  • The bill amends existing statutory hospital payment rules and sets multiple effective dates in past years (e.g., July 1, 2014; July 1, 2018) for certain provisions — these are retained from the statute as amended.
  • Legislative actions recorded include readings and committee referrals through June 28, 2025, with the bill in committee upon adjournment. Sponsor: Rep. Jay Hoffman.

Observations / issues to watch

  • Vendor exclusivity: designating a single commercial vendor (Solventum) as exclusive raises procurement, competition, and contingency planning considerations; the statute includes a fallback if the vendor cannot meet terms.
  • Retroactive/legacy dates: many effective dates in the text predate 2025; reviewers should confirm whether the bill is updating language, formally ratifying prior operational rules, or introducing inconsistencies.
  • Fiscal analysis: the bill text does not include updated cost estimates; implementation will require DHFS operational capacity and budgetary review.

If you want, I can produce a one-page fiscal and operational impact checklist for hospitals and for DHFS procurement readiness.

Compiled from official sources — confirm details with the bill’s official record.

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