HB-4714, As Passed Senate, August 27, 2013

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4714

A bill to amend 1939 PA 280, entitled

"The social welfare act,"

by amending sections 105, 105a, 106, 107, 108, and 109c (MCL

400.105, 400.105a, 400.106, 400.107, 400.108, and 400.109c),

section 105 as amended by 1980 PA 321, section 105a as added by

1988 PA 438, sections 106 and 107 as amended by 2006 PA 144, and

section 109c as amended by 1994 PA 302, and by adding sections

105c, 105d, 105e, and 105f.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 105. (1) The ~~state~~ department of community health shall

establish a program for medical assistance for the medically

indigent under title XIX. The director of the ~~state~~ department of

community health shall administer the program established by the

~~state~~ department of community health and shall be responsible for

determining eligibility under this act. Except as otherwise

provided in this act, the director may delegate the authority to

perform a function necessary or appropriate for the proper

administration of the program.

(2) As used in this section and sections 106 to 112, "peer

review advisory committee" means an entity comprising professionals

and experts who are selected by the director and nominated by an

organization or association or organizations or associations

representing a class of providers.

(3) As used in sections 106 to 112, "professionally accepted

standards" means those standards developed by peer review advisory

committees and professionals and experts with whom the director is

required to consult.

(4) As used in this section and sections 106 to 112,

"provider" means an individual, sole proprietorship, partnership,

association, corporation, institution, agency, or other legal

entity, who has entered into an agreement of enrollment specified

by the director ~~pursuant to~~ under section ~~111b(1)(c).~~111b(4).

Sec. 105a. (1) The department of community health shall

develop written information that sets forth the eligibility

requirements for participation in the program of medical assistance

administered under this act. The written information shall be

updated not less than every 2 years.

(2) The department of community health shall provide copies of

the written information described in subsection (1) to all of the

following persons, agencies, and health facilities:

(a) A person applying to the department of community health

for participation in the program of medical assistance administered

under this act who is considering institutionalization for the

person or person's family member in a nursing home or home for the

aged.

(b) Each nursing home in the state.

(d) Each adult foster care facility in the state.

(e) Each area agency on aging.

(f) The office of services to the aging.

(g) Local health departments.

(h) Community mental health boards.

(i) Medicaid and medicare certified home health agencies.

(j) County medical care facilities.

(k) Appropriate department of ~~social services~~ community health

personnel.

(l) Any other person, agency, or health facility determined to

be appropriate by the department of community health.

Sec. 105c. The director of the department of community health

shall submit a recommendation to the senate majority leader, the

speaker of the house, and the state budget office on how to most

effectively determine medicaid eligibility and enrollment for all

applicants by January 1, 2015. The department of community health

may delegate this function to another state agency, perform the

function directly, or contract with a private or nonprofit entity,

consistent with state law.

Sec. 105d. (1) The department of community health shall seek a

waiver from the United States department of health and human

services to do, without jeopardizing federal match dollars or

otherwise incurring federal financial penalties, and upon approval

of the waiver shall do, all of the following:

(a) Enroll individuals eligible under section

1396a(a)(10)(A)(i)(VIII) of title XIX who meet the citizenship

provisions of 42 CFR 435.406 and who are otherwise eligible for the

medical assistance program under this act into a contracted health

plan that provides for an account into which money from any source,

including, but not limited to, the enrollee, the enrollee's

employer, and private or public entities on the enrollee's behalf,

can be deposited to pay for incurred health expenses, including,

but not limited to, co-pays. The account shall be administered by

the department of community health and can be delegated to a

contracted health plan or a third party administrator, as

considered necessary. The department of community health shall not

begin enrollment of individuals eligible under this subdivision

until January 1, 2014 or until the waiver requested in this

subsection is approved by the United States department of health

and human services, whichever is later.

(b) Ensure that contracted health plans track all enrollee co-

pays incurred for the first 6 months that an individual is enrolled

in the program described in subdivision (a) and calculate the

average monthly co-pay experience for the enrollee. The average co-

pay amount shall be adjusted at least annually to reflect changes

in the enrollee's co-pay experience. The department of community

health shall ensure that each enrollee receives quarterly

statements for his or her account that include expenditures from

the account, account balance, and the cost-sharing amount due for

the following 3 months. The enrollee shall be required to remit

each month the average co-pay amount calculated by the contracted

health plan into the enrollee's account. The department of

community health shall pursue a range of consequences for enrollees

who consistently fail to meet their cost-sharing requirements,

including, but not limited to, using the MIChild program as a

template and closer oversight by health plans in access to

providers. The department of community health shall report its plan

of action for enrollees who consistently fail to meet their cost-

sharing requirements to the legislature by June 1, 2014.

choosing among contracted health plans.

(d) Ensure that all enrollees described in subdivision (a)

have access to a primary care practitioner who is licensed,

registered, or otherwise authorized to engage in his or her health

care profession in this state and to preventive services. The

department of community health shall require that all new enrollees

be assigned and have scheduled an initial appointment with their

primary care practitioner within 60 days of initial enrollment. The

department of community health shall monitor and track contracted

health plans for compliance in this area and consider that

compliance in any health plan incentive programs. The department of

community health shall ensure that the contracted health plans have

procedures to ensure that the privacy of the enrollees' personal

information is protected in accordance with the health insurance

portability and accountability act of 1996, Public Law 104-191.

(e) Require enrollees described in subdivision (a) with annual

incomes between 100% and 133% of the federal poverty guidelines to

contribute not more than 5% of income annually for cost-sharing

requirements. Cost-sharing includes co-pays and required

contributions made into the accounts authorized under subdivision

(a). Contributions required in this subdivision do not apply for

the first 6 months an individual described in subdivision (a) is

enrolled. Required contributions to an account used to pay for

incurred health expenses shall be 2% of income annually.

Notwithstanding this minimum, required contributions may be reduced

by the contracting health plan. The reductions may occur only if

healthy behaviors are being addressed as attested to by the

contracted health plan based on uniform standards developed by the

department of community health in consultation with the contracted

health plans. The uniform standards shall include healthy behaviors

that must include, but are not limited to, completing a department

of community health approved annual health risk assessment to

identify unhealthy characteristics, including alcohol use,

substance use disorders, tobacco use, obesity, and immunization

status. Co-pays can be reduced if healthy behaviors are met, but

not until annual accumulated co-pays reach 2% of income except co-

pays for specific services may be waived by the contracted health

plan if the desired outcome is to promote greater access to

services that prevent the progression of and complications related

to chronic diseases. If the enrollee described in subdivision (a)

becomes ineligible for medical assistance under the program

described in this section, the remaining balance in the account

described in subdivision (a) shall be returned to that enrollee in

the form of a voucher for the sole purpose of purchasing and paying

for private insurance.

(f) By July 1, 2014, design and implement a co-pay structure

that encourages use of high-value services, while discouraging low-

value services such as nonurgent emergency department use.

(g) During the enrollment process, inform enrollees described

in subdivision (a) about advance directives and require the

enrollees to complete a department of community health-approved

advance directive on a form that includes an option to decline. The

advance directives received from enrollees as provided in this

subdivision shall be transmitted to the peace of mind registry

organization to be placed on the peace of mind registry.

(h) By April 1, 2015, develop incentives for enrollees and

providers who assist the department of community health in

detecting fraud and abuse in the medical assistance program. The

department of community health shall provide an annual report that

includes the type of fraud detected, the amount saved, and the

outcome of the investigation to the legislature.

(i) Allow for services provided by telemedicine from a

practitioner who is licensed, registered, or otherwise authorized

under section 16171 of the public health code, 1978 PA 368, MCL

333.16171, to engage in his or her health care profession in the

state where the patient is located.

(2) For services rendered to an uninsured individual, a

hospital that participates in the medical assistance program under

this act shall accept 115% of medicare rates as payments in full

House Bill No. 4714 as amended August 27, 2013

from an uninsured individual with an annual income level up to <<250%>>

of the federal poverty guidelines. This subsection applies whether

or not either or both of the waivers requested under this section

are approved, the patient protection and affordable care act is

repealed, or the state terminates or opts out of the program

established under this section.

(3) Not more than 7 calendar days after receiving each of the

official waiver-related written correspondence from the United

States department of health and human services to implement the

provisions of this section, the department of community health

shall submit a written copy of the approved waiver provisions to

the legislature for review.

(4) By September 30, 2015, the department of community health

shall develop and implement a plan to enroll all existing fee-for-

service enrollees into contracted health plans if allowable by law,

if the medical assistance program is the primary payer and if that

enrollment is cost-effective. This includes all newly eligible

enrollees as described in subsection (1)(a). The department of

community health shall include contracted health plans as the

mandatory delivery system in its waiver request. The department of

community health also shall pursue any and all necessary waivers to

enroll persons eligible for both medicaid and medicare into the 4

integrated care demonstration regions beginning July 1, 2014. By

September 30, 2015, the department of community health shall

identify all remaining populations eligible for managed care,

develop plans for their integration into managed care, and provide

recommendations for a performance bonus incentive plan mechanism

for long-term care managed care providers that are consistent with

other managed care performance bonus incentive plans. By September

30, 2015, the department of community health shall make

recommendations for a performance bonus incentive plan for long-

term care managed care providers of up to 3% of their medicaid

capitation payments, consistent with other managed care performance

bonus incentive plans. These payments shall comply with federal

requirements and shall be based on measures that identify the

appropriate use of long-term care services and that focus on

consumer satisfaction, consumer choice, and other appropriate

quality measures applicable to community-based and nursing home

services. Where appropriate, these quality measures shall be

consistent with quality measures used for similar services

implemented by the integrated care for duals demonstration project.

This subsection applies whether or not either or both of the

waivers requested under this section are approved, the patient

protection and affordable care act is repealed, or the state

terminates or opts out of the program established under this

section.

(5) By September 30, 2016, the department of community health

shall implement a pharmaceutical benefit that utilizes co-pays at

appropriate levels allowable by the centers for medicare and

medicaid services to encourage the use of high-value, low-cost

prescriptions, such as generic prescriptions when such an

alternative exists for a branded product and 90-day prescription

supplies, as recommended by the enrollee's prescribing provider and

as is consistent with section 109h and sections 9701 to 9709 of the

public health code, 1978 PA 368, MCL 333.9701 to 333.9709. This

subsection applies whether or not either or both of the waivers

requested under this section are approved, the patient protection

and affordable care act is repealed, or the state terminates or

opts out of the program established under this section.

(6) The department of community health shall work with

providers, contracted health plans, and other departments as

necessary to create processes that reduce the amount of uncollected

cost-sharing and reduce the administrative cost of collecting cost-

sharing. To this end, a minimum 0.25% of payments to contracted

health plans shall be withheld for the purpose of establishing a

cost-sharing compliance bonus pool beginning October 1, 2015. The

distribution of funds from the cost-sharing compliance pool shall

be based on the contracted health plans' success in collecting

cost-sharing payments. The department of community health shall

develop the methodology for distribution of these funds. This

subsection applies whether or not either or both of the waivers

requested under this section are approved, the patient protection

and affordable care act is repealed, or the state terminates or

opts out of the program established under this section.

(7) By June 1, 2014, the department of community health shall

develop a methodology that decreases the amount an enrollee's

required contribution may be reduced as described in subsection

(1)(e) based on, but not limited to, factors such as an enrollee's

failure to pay cost-sharing requirements and the enrollee's

inappropriate utilization of emergency departments.

(8) The program described in this section is created in part

to extend health coverage to the state's low-income citizens and to

provide health insurance cost relief to individuals and to the

business community by reducing the cost shift attendant to

uncompensated care. Uncompensated care does not include courtesy

allowances or discounts given to patients. The medicaid hospital

cost report shall be part of the uncompensated care definition and

calculation. In addition to the medicaid hospital cost report, the

department of community health shall collect and examine other

relevant financial data for all hospitals and evaluate the impact

that providing medical coverage to the expanded population of

enrollees described in subsection (1)(a) has had on the actual cost

of uncompensated care. This shall be reported for all hospitals in

the state. By December 31, 2014, the department of community health

shall make an initial baseline uncompensated care report containing

at least the data described in this subsection to the legislature

and each December 31 after that shall make a report regarding the

preceding fiscal year's evidence of the reduction in the amount of

the actual cost of uncompensated care compared to the initial

baseline report. The baseline report shall use fiscal year 2012-

2013 data. Based on the evidence of the reduction in the amount of

the actual cost of uncompensated care borne by the hospitals in

this state, beginning April 1, 2015, the department of community

health shall proportionally reduce the disproportionate share

payments to all hospitals and hospital systems for the purpose of

producing general fund savings. The department of community health

shall recognize any savings from this reduction by September 30,

2016. All the reports required under this subsection shall be made

available to the legislature and shall be easily accessible on the

department of community health's website.

(9) The department of insurance and financial services shall

examine the financial reports of health insurers and evaluate the

impact that providing medical coverage to the expanded population

of enrollees described in subsection (1)(a) has had on the cost of

uncompensated care as it relates to insurance rates and insurance

rate change filings, as well as its resulting net effect on rates

overall. The department of insurance and financial services shall

consider the evaluation described in this subsection in the annual

approval of rates. By December 31, 2014, the department of

insurance and financial services shall make an initial baseline

report to the legislature regarding rates and each December 31

after that shall make a report regarding the evidence of the change

in rates compared to the initial baseline report. All the reports

required under this subsection shall be made available to the

legislature and shall be made available and easily accessible on

the department of community health's website.

(10) The department of community health shall explore and

develop a range of innovations and initiatives to improve the

effectiveness and performance of the medical assistance program and

to lower overall health care costs in this state. The department of

community health shall report the results of the efforts described

in this subsection to the legislature and to the house and senate

fiscal agencies by September 30, 2015. The report required under

this subsection shall also be made available and easily accessible

on the department of community health's website. The department of

community health shall pursue a broad range of innovations and

initiatives as time and resources allow that shall include, at a

minimum, all of the following:

(a) The value and cost-effectiveness of optional medicaid

benefits as described in federal statute.

(b) The identification of private sector, primarily small

business, health coverage benefit differences compared to the

medical assistance program services and justification for the

differences.

measure the medical assistance program's return on investment for

taxpayers.

(d) Review and evaluation of the effectiveness of current

incentives for contracted health plans, providers, and

beneficiaries with recommendations for expanding and refining

incentives to accelerate improvement in health outcomes, healthy

behaviors, and cost-effectiveness and review of the compliance of

required contributions and co-pays.

(e) Review and evaluation of the current design principles

that serve as the foundation for the state's medical assistance

program to ensure the program is cost-effective and that

appropriate incentive measures are utilized. The review shall

include, at a minimum, the auto-assignment algorithm and

performance bonus incentive pool. This subsection applies whether

or not either or both of the waivers requested under this section

are approved, the patient protection and affordable care act is

repealed, or the state terminates or opts out of the program

established under this section.

(f) The identification of private sector initiatives used to

incent individuals to comply with medical advice.

(11) By December 31, 2015, the department of community health

shall review and report to the legislature the feasibility of

programs recommended by multiple national organizations that

include, but are not limited to, the council of state governments,

the national conference of state legislatures, and the American

legislative exchange council, on improving the cost-effectiveness

of the medical assistance program.

(12) By January 1, 2014, the department of community health in

collaboration with the contracted health plans and providers shall

create financial incentives for all of the following:

(a) Contracted health plans that meet specified population

improvement goals.

(b) Providers who meet specified quality, cost, and

utilization targets.

maintain healthy behaviors as identified in a health risk

assessment as identified by their primary care practitioner who is

licensed, registered, or otherwise authorized to engage in his or

her health care profession in this state. This subsection applies

whether or not either or both of the waivers requested under this

section are approved, the patient protection and affordable care

act is repealed, or the state terminates or opts out of the program

established under this section.

(13) By October 1, 2015, the performance bonus incentive pool

for contracted health plans that are not specialty prepaid health

plans shall include inappropriate utilization of emergency

departments, ambulatory care, contracted health plan all-cause

acute 30-day readmission rates, and generic drug utilization when

such an alternative exists for a branded product and consistent

with section 109h and sections 9701 to 9709 of the public health

code, 1978 PA 368, MCL 333.9701 to 333.9709, as a percentage of

total. These measurement tools shall be considered and weighed

within the 6 highest factors used in the formula. This subsection

applies whether or not either or both of the waivers requested

under this section are approved, the patient protection and

affordable care act is repealed, or the state terminates or opts

out of the program established under this section.

(14) The department of community health shall ensure that all

capitated payments made to contracted health plans are actuarially

sound. This subsection applies whether or not either or both of the

waivers requested under this section are approved, the patient

protection and affordable care act is repealed, or the state

terminates or opts out of the program established under this

section.

(15) The department of community health shall maintain

administrative costs at a level of not more than 1% of the

department of community health's appropriation of the state medical

assistance program. These administrative costs shall be capped at

the total administrative costs for the fiscal year ending September

30, 2016, except for inflation and project-related costs required

to achieve medical assistance net general fund savings. This

subsection applies whether or not either or both of the waivers

requested under this section are approved, the patient protection

and affordable care act is repealed, or the state terminates or

opts out of the program established under this section.

(16) By October 1, 2015, the department of community health

shall establish uniform procedures and compliance metrics for

utilization by the contracted health plans to ensure that cost-

sharing requirements are being met. This shall include

ramifications for the contracted health plans' failure to comply

with performance or compliance metrics. This subsection applies

whether or not either or both of the waivers requested under this

section are approved, the patient protection and affordable care

act is repealed, or the state terminates or opts out of the program

established under this section.

(17) Beginning October 1, 2015, the department of community

health shall withhold, at a minimum, 0.75% of payments to

contracted health plans, except for specialty prepaid health plans,

for the purpose of expanding the existing performance bonus

incentive pool. Distribution of funds from the performance bonus

incentive pool is contingent on the contracted health plan's

completion of the required performance or compliance metrics. This

subsection applies whether or not either or both of the waivers

requested under this section are approved, the patient protection

and affordable care act is repealed, or the state terminates or

opts out of the program established under this section.

(18) By October 1, 2015, the department of community health

shall withhold, at a minimum, 0.75% of payments to specialty

prepaid health plans for the purpose of establishing a performance

bonus incentive pool. Distribution of funds from the performance

bonus incentive pool is contingent on the specialty prepaid health

plan's completion of the required performance of compliance

metrics, which shall include, at a minimum, partnering with other

contracted health plans to reduce nonemergent emergency department

utilization, increased participation in patient-centered medical

homes, increased use of electronic health records and data sharing

with other providers, and identification of enrollees who may be

eligible for services through the veterans administration. This

subsection applies whether or not either or both of the waivers

requested under this section are approved, the patient protection

and affordable care act is repealed, or the state terminates or

opts out of the program established under this section.

(19) The department of community health shall measure

contracted health plan or specialty prepaid health plan performance

metrics, as applicable, on application of standards of care as that

relates to appropriate treatment of substance use disorders and

efforts to reduce substance use disorders. This subsection applies

whether or not either or both of the waivers requested under this

section are approved, the patient protection and affordable care

act is repealed, or the state terminates or opts out of the program

established under this section.

(20) By September 1, 2015, in addition to the waiver requested

in subsection (1), the department of community health shall seek an

additional waiver from the United States department of health and

human services that requires individuals who are between 100% and

133% of the federal poverty guidelines and who have had medical

assistance coverage for 48 cumulative months beginning on the date

of their enrollment into the program described in subsection (1) to

choose 1 of the following options:

(a) Change their medical assistance program eligibility

status, in accordance with federal law, to be considered eligible

for federal advance premium tax credit and cost-sharing subsidies

from the federal government to purchase private insurance coverage

through an American health benefit exchange without financial

penalty to the state.

(b) Remain in the medical assistance program but increase

cost-sharing requirements up to 7% of income. Required

contributions shall be deposited into an account used to pay for

incurred health expenses for covered benefits and shall be 3.5% of

income but may be reduced as provided in subsection (1)(e). The

department of community health may reduce co-pays as provided in

subsection (1)(e), but not until annual accumulated co-pays reach

3% of income.

(21) The department of community health shall notify enrollees

60 days before the end of the enrollee's forty-eighth month that

coverage under the current program is no longer available to them

and that, in order to continue coverage, the enrollee must choose

between the options described in subsection (20)(a) or (b).

(22) The department of community health shall implement a

system for individuals who fail to choose an option described under

subsection (20)(a) or (b) within a specified time determined by the

department of community health that enrolls those individuals into

the option described in subsection (20)(b).

(23) If the waiver requested under subsection (20) is not

approved by the United States department of health and human

services by December 31, 2015, medical coverage for individuals

described in subsection (1)(a) shall no longer be provided. If the

waiver is not approved by December 31, 2015, then by January 31,

2016, the department of community health shall notify enrollees

that the program described in subsection (1) shall be terminated on

April 30, 2016. If a waiver requested under subsection (1) or (20)

is approved and is required to be renewed at any time after

approval, medical coverage for individuals described in subsection

(1)(a) shall no longer be provided if either renewal request is not

approved by the United States department of health and human

services or if a waiver is canceled after approval. The department

of community health shall give enrollees 4 months' advance notice

before termination of coverage based on a renewal request not being

approved as described in this subsection. A notification described

in this subsection shall state that the enrollment was terminated

due to the failure of the United States department of health and

human services to approve the waiver requested under subsection

(20) or renewal of a waiver described in this subsection.

(24) Individuals described in 42 CFR 440.315 are not subject

to the provisions of the waiver described in subsection (20).

(25) The department of community health shall make available

at least 3 years of state medical assistance program data, without

charge, to any vendor considered qualified by the department of

community health who indicates interest in submitting proposals to

contracted health plans in order to implement cost savings and

population health improvement opportunities through the use of

innovative information and data management technologies. Any

program or proposal to the contracted health plans must be

consistent with the state's goals of improving health, increasing

the quality, reliability, availability, and continuity of care, and

reducing the cost of care of the eligible population of enrollees

described in subsection (1)(a). The use of the data described in

this subsection for the purpose of assessing the potential

opportunity and subsequent development and submission of formal

proposals to contracted health plans is not a cost or contractual

obligation to the department of community health or the state.

(26) If the department of community health does not receive

approval for both of the waivers required under this section before

December 31, 2015, the program described in this section is

terminated. The department of community health shall request

written documentation from the United States department of health

and human services that if the waivers described in this section

are rejected causing the medical assistance program to revert back

to the eligibility requirements in effect on the effective date of

the amendatory act that added this section, excluding any waivers

that have not been renewed, there shall be no financial federal

funding penalty to the state associated with the implementation and

subsequent cancellation of the program created in this section. If

the department of community health does not receive this

documentation by December 31, 2013, the department of community

health shall not implement the program described in this section.

(27) This section does not apply if either of the following

occurs:

(a) If the department of community health is unable to obtain

either of the federal waivers requested in subsection (1) or (20).

(b) If federal government matching funds for the program

described in this section are reduced below 100% and annual state

savings and other nonfederal net savings associated with the

implementation of that program are not sufficient to cover the

reduced federal match. The department of community health shall

determine and the state budget office shall approve how annual

state savings and other nonfederal net savings shall be calculated

by June 1, 2014. By September 1, 2014, the calculations and

methodology used to determine the state and other nonfederal net

savings shall be submitted to the legislature.

(28) The department of community health shall develop,

administer, and coordinate with the department of treasury a

procedure for offsetting the state tax refunds of an enrollee who

owes a liability to the state of past due uncollected cost-sharing,

as allowable by the federal government. The procedure shall include

a guideline that the department of community health submit to the

department of treasury, not later than November 1 of each year, all

requests for the offset of state tax refunds claimed on returns

filed or to be filed for that tax year. For the purpose of this

subsection, any nonpayment of the cost-sharing required under this

section owed by the enrollee is considered a liability to the state

under section 30a(2)(b) of 1941 PA 122, MCL 205.30a.

(29) For the purpose of this subsection, any nonpayment of the

cost-sharing required under this section owed by the enrollee is

considered a current liability to the state under section 32 of the

McCauley-Traxler-Law-Bowman-McNeely lottery act, 1972 PA 239, MCL

432.32, and shall be handled in accordance with the procedures for

handling a liability to the state under that section, as allowed by

the federal government.

(30) By November 30, 2013, the department of community health

shall convene a symposium to examine the issues of emergency

department overutilization and improper usage. By December 31,

2014, the department of community health shall submit a report to

the legislature that identifies the causes of overutilization and

improper emergency service usage that includes specific best

practice recommendations for decreasing overutilization of

emergency departments and improper emergency service usage, as well

as how those best practices are being implemented. Both broad

recommendations and specific recommendations related to the

medicaid program, enrollee behavior, and health plan access issues

shall be included.

(31) The department of community health shall contract with an

independent third party vendor to review the reports required in

subsections (8) and (9) and other data as necessary, in order to

develop a methodology for measuring, tracking, and reporting

medical cost and uncompensated care cost reduction or rate of

increase reduction and their effect on health insurance rates along

with recommendations for ongoing annual review. The final report

and recommendations shall be submitted to the legislature by

September 30, 2015.

(32) For the purposes of submitting reports and other

information or data required under this section only, "legislature"

means the senate majority leader, the speaker of the house of

representatives, the chairs of the senate and house of

representatives appropriations committees, the chairs of the senate

and house of representatives appropriations subcommittees on the

department of community health budget, and the chairs of the senate

and house of representatives standing committees on health policy.

(33) As used in this section:

(a) "Patient protection and affordable care act" means the

patient protection and affordable care act, Public Law 111-148, as

amended by the federal health care and education reconciliation act

of 2010, Public Law 111-152.

(b) "Peace of mind registry" and "peace of mind registry

organization" mean those terms as defined in section 10301 of the

public health code, 1978 PA 368, MCL 333.10301.

calculated as of the closing of the financial books for the

department of community health at the end of each fiscal year, that

result from the program described in this section. The savings

shall result in a reduction in spending from the following state

fund accounts: adult benefit waiver, non-medicaid community mental

health, and prisoner health care. Any identified savings from other

state fund accounts shall be proposed to the house of

representatives and senate appropriations committees for approval

to include in that year's state savings calculation. It is the

intent of the legislature that for fiscal year ending September 30,

2014 only, $193,000,000.00 of the state savings shall be deposited

in the roads and risks reserve fund created in section 211b of

article VIII of 2013 PA 59.

(d) "Telemedicine" means that term as defined in section 3476

of the insurance code of 1956, 1956 PA 218, MCL 500.3476.

Sec. 105e. (1) There is appropriated for the department of

community health and the department of corrections to supplement

appropriations for the fiscal year ending September 30, 2014 an

adjusted gross appropriation of $1,524,903,500.00 appropriated from

$1,704,523,500.00 in federal revenues, $13,145,000.00 in other

state restricted revenues and a negative appropriation of

$192,765,000.00 in state general fund/general purpose revenue.

(2) There is appropriated for the department of community

health for medicaid reform a gross appropriation of

$1,549,115,700.00 appropriated from $1,704,523,500.00 in federal

revenues, $13,145,000.00 in other state restricted revenues, and a

negative appropriation of $168,552,800.00 in state general

fund/general purpose revenue with $1,395,876,600.00 for medical

services reform, $288,646,900.00 for mental health reform, and

$40,000,000.00 for administration, and negative appropriations to

reflect savings with $1,072,200.00 for plan first family planning

waiver, $14,723,900.00 for medicaid adult benefits waiver,

$6,680,600.00 for medicaid adult benefits waiver (mental health),

and $152,931,100.00 for community mental health non-medicaid

services.

(3) There is appropriated for the department of corrections a

negative adjusted gross appropriation of $24,212,200.00 in state

general fund/general purpose revenue with a negative appropriation

of $3,566,600.00 for prison re-entry and community support,

including a negative $377,200.00 for prisoner re-entry local

service providers and a negative $3,189,400.00 for prisoner re-

entry department of corrections programs; a negative appropriation

of $8,066,100.00 for substance abuse testing and treatment services

in field operations administration; and a negative appropriation of

$12,579,500.00 for prisoner health care services in health care.

(4) The appropriations in subsections (1), (2), and (3) for

the department of community health for medicaid reform are not

available for expenditure until approval of the federal waiver in

section 105d(1), except that the funds associated with

administrative expenses are available for immediate expenditure.

The administrative expenditures shall not exceed $20,000,000.00 in

general fund. The department of community health shall enter into

memoranda of understanding with departments that incur

administrative expenditures related to the program identified in

section 105d(1).

Sec. 105f. (1) The director of the department of community

health and the director of the department of insurance and

financial services shall establish a Michigan health care cost and

quality advisory committee consisting of 8 or more members.

(2) The director of the department of community health, or his

or her designee, and 1 department of community health staff member

and the director of the department of insurance and financial

services, or his or her designee, and 1 department of insurance and

financial services staff member are members of the committee

established in subsection (1). The chairs and minority vice chairs

of the senate and house health policy committees or their designees

are members of the committee. The committee members shall elect a

chairperson and appoint additional members to the advisory

committee established in subsection (1) necessary to perform the

duties prescribed in this section.

(3) The advisory committee established in subsection (1) shall

issue a report by December 31, 2014 with recommendations on the

creation of a database on health care costs and health care quality

in this state. This report shall be transmitted to the legislature

and made available on the department of community health's and the

department of insurance and financial services' websites. The

advisory committee shall include in the report at least all of the

following:

(a) A review of existing efforts across the United States to

make health care cost and quality more transparent.

(b) A review of proposed legislation in this state to make

health care cost and quality more transparent.

of similar databases.

(d) A consideration of both price and quality of health care

services rendered in this state.

(e) Transparency and privacy issues.

(f) The possible impact of uncompensated care on commercial

insurance rates.

(g) Other methods to accurately estimate the uncompensated

care impact on commercial insurance rates.

(4) This section applies whether or not either or both of the

waivers requested under section 105d are approved, the patient

protection and affordable care act is repealed, or the state

terminates or opts out of the program established under this

section.

Sec. 106. (1) A medically indigent individual is defined as:

(a) An individual receiving family independence program

benefits or an individual receiving supplemental security income

under title XVI or state supplementation under title XVI subject to

limitations imposed by the director according to title XIX.

(b) Except as provided in section 106a, an individual who

meets all of the following conditions:

(i) The individual has applied in the manner the ~~family~~

~~independence agency~~ department of community health prescribes.

(ii) The individual's need for the type of medical assistance

available under this act for which the individual applied has been

professionally established and payment for it is not available

through the legal obligation of a public or private contractor to

pay or provide for the care without regard to the income or

resources of the patient. The state department is and the

department of community health are subrogated to any right of

recovery that a patient may have for the cost of hospitalization,

pharmaceutical services, physician services, nursing services, and

other medical services not to exceed the amount of funds expended

by the state department or the department of community health for

the care and treatment of the patient. The patient or other person

acting in the patient's behalf shall execute and deliver an

assignment of claim or other authorizations as necessary to secure

the right of recovery to the department or the department of

community health. A payment may be withheld under this act for

medical assistance for an injury or disability for which the

individual is entitled to medical care or reimbursement for the

cost of medical care under sections 3101 to 3179 of the insurance

code of 1956, 1956 PA 218, MCL 500.3101 to 500.3179, or under

another policy of insurance providing medical or hospital benefits,

or both, for the individual unless the individual's entitlement to

that medical care or reimbursement is at issue. If a payment is

made, the state department or the department of community health,

to enforce its subrogation right, may do either of the following:

(a) intervene or join in an action or proceeding brought by the

injured, diseased, or disabled individual, the individual's

guardian, personal representative, estate, dependents, or

survivors, against the third person who may be liable for the

injury, disease, or disability, or against contractors, public or

private, who may be liable to pay or provide medical care and

services rendered to an injured, diseased, or disabled individual;

(b) institute and prosecute a legal proceeding against a third

person who may be liable for the injury, disease, or disability, or

against contractors, public or private, who may be liable to pay or

provide medical care and services rendered to an injured, diseased,

or disabled individual, in state or federal court, either alone or

in conjunction with the injured, diseased, or disabled individual,

the individual's guardian, personal representative, estate,

dependents, or survivors. The state department may institute the

proceedings in its own name or in the name of the injured,

diseased, or disabled individual, the individual's guardian,

personal representative, estate, dependents, or survivors. As

provided in section 6023 of the revised judicature act of 1961,

1961 PA 236, MCL 600.6023, the state department or the department

of community health, in enforcing its subrogation right, shall not

satisfy a judgment against the third person's property that is

exempt from levy and sale. The injured, diseased, or disabled

individual may proceed in his or her own name, collecting the costs

without the necessity of joining the state department, the

department of community health, or the state as a named party. The

injured, diseased, or disabled individual shall notify the state

department or the department of community health of the action or

proceeding entered into upon commencement of the action or

proceeding. An action taken by the state, or the state department,

or the department of community health in connection with the right

of recovery afforded by this section does not deny the injured,

diseased, or disabled individual any part of the recovery beyond

the costs expended on the individual's behalf by the state

department or the department of community health. The costs of

legal action initiated by the state shall be paid by the state. A

payment shall not be made under this act for medical assistance for

an injury, disease, or disability for which the individual is

entitled to medical care or the cost of medical care under the

worker's disability compensation act of 1969, 1969 PA 317, MCL

418.101 to 418.941; except that payment may be made if an

appropriate application for medical care or the cost of the medical

care has been made under the worker's disability compensation act

of 1969, 1969 PA 317, MCL 418.101 to 418.941, entitlement has not

been finally determined, and an arrangement satisfactory to the

state department or the department of community health has been

made for reimbursement if the claim under the worker's disability

compensation act of 1969, 1969 PA 317, MCL 418.101 to 418.941, is

finally sustained.

(iii) The individual has an annual income that is below, or

subject to limitations imposed by the director and because of

medical expenses falls below, the protected basic maintenance

level. The protected basic maintenance level for 1-person and 2-

person families shall be at least 100% of the payment standards

generally used to determine eligibility in the family independence

program. For families of 3 or more persons, the protected basic

maintenance level shall be at least 100% of the payment standard

generally used to determine eligibility in the family independence

program. These levels shall recognize regional variations and shall

not exceed 133-1/3% of the payment standard generally used to

determine eligibility in the family independence program.

(iv) The individual, if a family independence program related

individual and living alone, has liquid or marketable assets of not

more than $2,000.00 in value, or, if a 2-person family, the family

has liquid or marketable assets of not more than $3,000.00 in

value. The ~~state~~ department of community health shall establish

comparable liquid or marketable asset amounts for larger family

groups. Excluded in making the determination of the value of liquid

or marketable assets are the values of: the homestead; clothing;

household effects; $1,000.00 of cash surrender value of life

insurance, except that if the health of the insured makes

continuance of the insurance desirable, the entire cash surrender

value of life insurance is excluded from consideration, up to the

maximum provided or allowed by federal regulations and in

accordance with ~~state~~ department of community health rules; the

fair market value of tangible personal property used in earning

income; an amount paid as judgment or settlement for damages

suffered as a result of exposure to agent orange, as defined in

section 5701 of the public health code, 1978 PA 368, MCL 333.5701;

and a space or plot purchased for the purposes of burial for the

person. For individuals related to the title XVI program, the

appropriate resource levels and property exemptions specified in

title XVI shall be used.

(v) The individual is not an inmate of a public institution

except as a patient in a medical institution.

(vi) The individual meets the eligibility standards for

supplemental security income under title XVI or for state

supplementation under the act, subject to limitations imposed by

the director of the department of community health according to

title XIX; or meets the eligibility standards for family

independence program benefits; or meets the eligibility standards

for optional eligibility groups under title XIX, subject to

limitations imposed by the director of the department of community

health according to title XIX.

1396a(a)(10)(A)(i)(VIII) of title XIX. This subdivision does not

apply if either of the following occurs:

(i) If the department of community health is unable to obtain a

federal waiver as provided in section 105d(1) or (20).

(ii) If federal government matching funds for the program

described in section 105d are reduced below 100% and annual state

savings and other nonfederal net savings associated with the

implementation of that program are not sufficient to cover the

reduced federal match. The department of community health shall

determine and the state budget office shall approve how annual

state savings and other nonfederal net savings shall be calculated

by June 1, 2014. By September 1, 2014, the calculations and

methodology used to determine the state and other nonfederal net

savings shall be submitted to the legislature.

(2) As used in this act:

(a) ~~"Medicaid contracted~~ "Contracted health plan" means a

managed care organization with whom the state department or the

department of community health contracts to provide or arrange for

the delivery of comprehensive health care services as authorized

under this act.

(b) "Federal poverty guidelines" means the poverty guidelines

published annually in the federal register by the United States

department of health and human services under its authority to

revise the poverty line under section 673(2) of subtitle B of title

VI of the omnibus budget reconciliation act of 1981, 42 USC 9902.

approved hospital, nursing home, medical care facility, psychiatric

hospital, or other facility or identifiable unit of a listed

institution certified as meeting established standards for a

nursing home or hospital in accordance with the laws of this state.

(d) ~~(c)~~ "Title XVI" means title XVI of the social security

act, 42 USC 1381 to ~~1382j and 1383 to~~ 1383f.

(3) An individual receiving medical assistance under this act

or his or her legal counsel shall notify the state department or

the department of community health when filing an action in which

the state department or the department of community health may have

a right to recover expenses paid under this act. If the individual

is enrolled in a ~~medicaid~~ contracted health plan, the individual or

his or her legal counsel shall provide notice to the ~~medicaid~~

contracted health plan in addition to providing notice to the state

department.

(4) If a legal action in which the state department, the

department of community health, a ~~medicaid~~ contracted health plan,

or ~~both has~~ all 3 have a right to recover expenses paid under this

act is filed and settled after November 29, 2004 without notice to

the state department, the department of community health, or the

~~medicaid~~ contracted health plan, the state department, the

department of community health, or the ~~medicaid~~ contracted health

plan may file a legal action against the individual or his or her

legal counsel, or both, to recover expenses paid under this act.

The attorney general shall recover any cost or attorney fees

associated with a recovery under this subsection.

(5) The state department or the department of community health

has first priority against the proceeds of the net recovery from

the settlement or judgment in an action settled in which notice has

been provided under subsection (3). A ~~medicaid~~ contracted health

plan has priority immediately after the state department or the

department of community health in an action settled in which notice

has been provided under subsection (3). The state department, the

department of community health, and a ~~medicaid~~ contracted health

plan shall recover the full cost of expenses paid under this act

unless the state department, the department of community health, or

the ~~medicaid~~ contracted health plan agrees to accept an amount less

than the full amount. If the individual would recover less against

the proceeds of the net recovery than the expenses paid under this

act, the state department, the department of community health, or

~~medicaid~~ contracted health plan, and the individual shall share

equally in the proceeds of the net recovery. As used in this

subsection, "net recovery" means the total settlement or judgment

less the costs and fees incurred by or on behalf of the individual

who obtains the settlement or judgment.

Sec. 107. (1) In establishing financial eligibility for the

medically indigent, ~~as defined in section 106,~~ income shall be

disregarded in accordance with standards established for the

related categorical assistance program. For medical assistance

only, income shall include the amount of contribution that an

estranged spouse or parent for a minor child is making to the

applicant according to the standards of the ~~state~~ department of

community health, or according to a court determination, if there

is a court determination. Nothing in this section eliminates the

responsibility of support established in section 76 for cash

assistance received under this act.

(2) The department of community health shall apply a modified

adjusted gross income methodology in determining if an individual's

annual income level is below 133% of the federal poverty

guidelines.

Sec. 108. A medically indigent person as defined under

~~subdivision (1) of~~ section ~~106,~~ 106(1)(a) is entitled to all the

services enumerated in ~~subsections (a), (b), (c), (d), (e) and (f)~~

of section 109. A medically indigent person as defined under

~~subdivision (2) of~~ section ~~106~~ 106(1)(b) is entitled to medical

services enumerated in ~~subsections (a), (c) and (e) of section 109.~~

section 109(1)(a), (c), and (e). He ~~shall also be~~ or she is

entitled to the services enumerated in ~~subsections (b),~~ section

109(1)(b), (d), and (f) ~~of section 109~~ to the extent of

appropriations made available by the legislature for the fiscal

year. Medical services shall be rendered upon certification by the

attending licensed physician and dental services shall be rendered

upon certification of the attending licensed dentist that a service

is required for the treatment of an individual. The services of a

medical institution shall be rendered only after referral by a

licensed physician or dentist and certification by him or her that

the services of the medical institution are required for the

medical or dental treatment of the individual, except that referral

is not necessary in case of an emergency. Periodic recertification

that medical treatment ~~which~~ that extends over a period of time is

required in accordance with regulations of the ~~state~~ department

~~shall be~~ of community health is a condition of continuing

eligibility to receive medical assistance. To comply with federal

statutes governing medicaid, the ~~state~~ department of community

health shall provide ~~such~~ early and periodic screening, diagnostic

and treatment services to eligible children as it ~~deems~~ considers

necessary.

Sec. 109c. (1) The ~~state~~ department of community health shall

include, as part of its program of medical services under this act,

home- or community-based services to eligible persons whom the

~~state~~ department of community health determines would otherwise

require nursing home services or similar institutional care

services under section 109. The home- or community-based services

shall be offered to qualified eligible persons who are receiving

inpatient hospital or nursing home services as an alternative to

those forms of care.

(2) The home- or community-based services shall include

safeguards adequate to protect the health and welfare of

participating eligible persons, and shall be provided according to

a written plan of care for each person. The services available

under the home- or community-based services program shall include,

at a minimum, all of the following:

(a) Home delivered meals.

(b) Chore services.

(d) Respite care.

(e) Personal care.

(f) Adult day care.

(g) Private duty nursing.

(h) Mental health counseling.

(i) Caregiver training.

(j) Emergency response systems.

(k) Home modification.

(l) Transportation.

(m) Medical equipment and supply services.

(3) This section shall be implemented so that the average per

capita expenditure for home- or community-based services for

eligible persons receiving those services does not exceed the

estimated average per capita expenditure that would have been made

for those persons had they been receiving nursing home services,

inpatient hospital or similar institutional care services instead.

(4) The ~~state~~ department of community health shall seek a

waiver necessary to implement this program from the federal

department of health and human services, as provided in section

1915 of title XIX, 42 ~~U.S.C.~~ USC 1396n. The department of community

health shall request any modifications of the waiver that are

necessary in order to expand the program in accordance with

subsection (9).

(5) The ~~state~~ department of community health shall establish

policy for identifying the rules for persons receiving inpatient

hospital or nursing home services who may qualify for home- or

community-based services. The rules shall contain, at a minimum, a

listing of diagnoses and patient conditions to which the option of

home- or community-based services may apply, and a procedure to

determine if the person qualifies for home- or community-based

services.

(6) The ~~state~~ department of community health shall provide to

the legislature and the governor an annual report showing the

detail of its home- and community-based case finding and placement

activities. At a minimum, the report shall contain each of the

following:

(a) The number of persons provided home- or community-based

services who would otherwise require inpatient hospital services.

This shall include a description of medical conditions, services

provided, and projected cost savings for these persons.

(b) The number of persons provided home- or community-based

services who would otherwise require nursing home services. This

shall include a description of medical conditions, services

provided, and projected cost savings for these persons.

personal care services.

(d) The number of hearings requested concerning home- or

community-based services and the outcome of each hearing which has

been adjudicated during the year.

(7) The written plan of care required under subsection (2) for

an eligible person shall not be changed unless the change is

prospective only, and the ~~state~~ department of community health does

both of the following:

(a) Not later than 30 days before making the change, except in

the case of emergency, consults with the eligible person or, in the

case of a child, with the child's parent or guardian.

(b) Consults with each medical service provider involved in

the change. This consultation shall be documented in writing.

(8) An eligible person who is receiving home- or community-

based services under this section, and who is dissatisfied with a

change in his or her plan of care or a denial of any home- or

community-based service, may demand a hearing as provided in

section 9, and subsequently may appeal the hearing decision to

circuit court as provided in section 37.

(9) The ~~state~~ department of community health shall expand the

home- and community-based services program by increasing the number

of counties in which it is available, in conformance with this

subsection. The program may be limited in total cost and in the

number of recipients per county who may receive services at 1 time.

Subject to obtaining the waiver and any modifications of the waiver

sought under subsection (4), the program shall be expanded as

follows:

(a) Not later than ~~1 year after the effective date of this~~

~~subsection,~~ July 14, 1995, home- and community-based services shall

be available to eligible applicants in those counties that, when

combined, contain at least 1/4 of the population of this state.

(b) Not later than ~~2 years after the effective date of this~~

~~subsection,~~ July 14, 1996, home- and community-based services shall

be available to eligible applicants in those counties that, when

combined, contain at least 1/2 of the population of this state.

~~subsection,~~ July 14, 1997, home- and community-based services shall

be available to eligible applicants in those counties that, when

combined, contain at least 3/4 of the population of this state.

(d) Not later than ~~4 years after the effective date of this~~

~~subsection,~~ July 14, 1998, home- and community-based services shall

be available to eligible applicants on a statewide basis.

(10) The ~~state~~ department of community health shall work with

the office of services to the aging in implementing the home- and

community-based services program, including the provision of

preadmission screening, case management, and recipient access to

services.

Enacting section 1. This amendatory act does not do either of

the following:

(a) Authorize the establishment or operation of a state-

created American health benefit exchange in this state related to

the patient protection and affordable care act, Public Law 111-148,

as amended by the federal health care and education reconciliation

act of 2010, Public Law 111-152.

(b) Convey any additional statutory, administrative, rule-

making, or other power to this state or an agency of this state

that did not exist before the effective date of the amendatory act

that added section 105d to the social welfare act, 1939 PA 280, MCL

400.105d, that would authorize, establish, or operate a state-

created American health benefit exchange.