(1) The department shall establish, by rule, an electronic system for monitoring schedule 2, 3, 4, and 5 controlled substances dispensed in this state by veterinarians, and by pharmacists and dispensing prescribers licensed under part 177 or dispensed to an address in this state by a pharmacy licensed in this state. The rules must provide an appropriate electronic format for the reporting of data including, but not limited to, patient identifiers, and the name of the controlled substance dispensed, the date of dispensing, the quantity dispensed, the prescriber, and the dispenser. The department shall require a veterinarian, pharmacist, or dispensing prescriber to utilize the electronic data transmittal process developed by the department or the department's contractor. The department shall not require a veterinarian, pharmacist, or dispensing prescriber to pay a new fee dedicated to the operation of the electronic monitoring system or to incur any additional costs solely related to the transmission of data to the department. The dispensing of a controlled substance in any of the following is exempt from the reporting requirements:

    (a) A hospital that is licensed under article 17 that administers the controlled substance to an individual who is an inpatient.

    (b) A health facility or agency licensed under article 17 if the controlled substance is dispensed by a dispensing prescriber in a quantity adequate to treat the patient for not more than 48 hours.

    (c) A veterinary hospital or clinic that administers the controlled substance to an animal that is an inpatient.

    (2) Notwithstanding any practitioner-patient privilege, the director of the department may provide data obtained under this section to all of the following:

    (a) A designated representative of a board responsible for the licensure, regulation, or discipline of a practitioner, pharmacist, or other person that is authorized to prescribe, administer, or dispense controlled substances.

    (b) An employee or agent of the department.

    (c) A state, federal, or municipal employee or agent whose duty is to enforce the laws of this state or the United States relating to drugs.

    (d) A state-operated Medicaid program.

    (e) A state, federal, or municipal employee who is the holder of a search warrant or subpoena properly issued for the records.

    (f) A practitioner or pharmacist who requests information and certifies that the requested information is for the purpose of providing medical or pharmaceutical treatment to a bona fide current patient.

    (g) An individual with whom the department has contracted under subsection (7).

    (h) A practitioner or other person that is authorized to prescribe controlled substances for the purpose of determining if prescriptions written by that practitioner or other person have been dispensed.

    (i) The health care payment or benefit provider for the purposes of ensuring patient safety and investigating fraud and abuse.

    (3) Except as otherwise provided in this part, a person shall use information submitted under this section only for bona fide drug-related criminal investigatory or evidentiary purposes or for the investigatory or evidentiary purposes in connection with the functions of a disciplinary subcommittee or 1 or more of the licensing or registration boards created in article 15.

    (4) A person that receives data or any report under subsection (2) containing any patient identifiers of the system from the department shall not provide it to any other person except by order of a court of competent jurisdiction.

    (5) Except as otherwise provided in this subsection, reporting under subsection (1) is mandatory for a veterinarian, pharmacist, and dispensing prescriber. However, the department may issue a written waiver of the electronic reporting requirement to a veterinarian, pharmacist, or dispensing prescriber who establishes grounds that he or she is unable to use the electronic monitoring system. The department shall require the applicant for the waiver to report the required information in a manner approved by the department.

    (6) The department, in consultation with the Michigan board of pharmacy, the Michigan board of medicine, the Michigan board of osteopathic medicine and surgery, the department of state police, and appropriate medical professional associations, shall examine the need for and may promulgate rules for the production of a prescription form on paper that minimizes the potential for forgery. The rules must not include any requirement that sequential numbers, bar codes, or symbols be affixed, printed, or written on a prescription form or that the prescription form be a state produced prescription form. In examining the need for rules for the production of a prescription form on paper that minimizes the potential for forgery, the department shall consider and identify the following:

    (a) Cost, benefits, and barriers.

    (b) Overall cost-benefit analysis.

    (c) Compatibility with the electronic monitoring system required under this section.

    (7) The department may enter into 1 or more contractual agreements for the administration of this section.

    (8) The department, all law enforcement officers, all officers of the court, and all regulatory agencies and officers, in using the data for investigative or prosecution purposes, shall consider the nature of the prescriber's and dispenser's practice and the condition for which the patient is being treated.

    (9) The data and any report containing any patient identifiers obtained from the data are not public records and are not subject to disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.

    (10) The department may issue a written request to a health care payment or benefit provider to determine if the provider has accessed the electronic monitoring system as provided in subsection (2)(i) in the previous calendar year and, if so, to determine the number of inquiries the provider made in the previous calendar year and any other information the department requests in relation to the provider's access to the electronic monitoring system. A health care payment or benefit provider shall respond to the written request on or before the March 31 following the request. The department shall collaborate with health care payment or benefit providers to develop a reasonable request and reporting form for use under this subsection.

    (11) Before dispensing or prescribing buprenorphine, or a drug containing buprenorphine or methadone, to a patient in a substance use disorder program, a prescriber shall obtain and review data concerning that patient from the department under subsection (2). A prescriber dispensing buprenorphine, or a drug containing buprenorphine or methadone, to a patient in a substance use disorder program shall also report the data required in subsection (1), if federal law does not prohibit the reporting of data concerning the patient, to the department. As used in this subsection:

    (a) "Approved service program" means that term as defined in section 100a of the mental health code, 1974 PA 258, MCL 330.1100a.

    (b) "Substance use disorder program" means a program as that term is defined in section 260 of the mental health code, 1974 PA 258, MCL 330.1260, an approved service program, a nonregulated substance use disorder services program, a federal certified substance use disorder services program, or a federally regulated substance use disorder services program.

    (12) R 338.3162e of the Michigan Administrative Code is rescinded.

    (13) As used in this section:

    (a) "Department" means the department of licensing and regulatory affairs.

    (b) "Health care payment or benefit provider" means a person that provides health benefits, coverage, or insurance in this state, including a health insurance company, a nonprofit health care corporation, a health maintenance organization, a multiple employer welfare arrangement, a Medicaid contracted health plan, or any other person providing a plan of health benefits, coverage, or insurance subject to state insurance regulation.