HOUSE BILL No. 6010
September 15, 1998, Introduced by Rep. Brackenridge and referred to the Committee on Health Policy. A bill to amend 1980 PA 350, entitled "The nonprofit health care corporation reform act," by amending sections 401 and 414a (MCL 550.1401 and 550.1414a), section 401 as amended by 1998 PA 135 and section 414a as amended by 1988 PA 345. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 401. (1) A health care corporation established, main- 2 tained, or operating in this state shall offer health care bene- 3 fits to all residents of this state, and may offer other health 4 care benefits as the corporation specifies with the approval of 5 the commissioner. 6 (2) A health care corporation may limit the health care ben- 7 efits that it will furnish, except as provided in this act, and 8 may divide the health care benefits that it elects to furnish 9 into classes or kinds. 06043'98 a CPD 2 1 (3) A health care corporation shall not do any 1 OR MORE 2 of the following: 3 (a) Refuse to issue or continue a certificate to 1 or more 4 residents of this state, except while the individual, based on a 5 transaction or occurrence involving a health care corporation, is 6 serving a sentence arising out of a charge of fraud, is satisfy- 7 ing a civil judgment, or is making restitution pursuant to a vol- 8 untary payment agreement between the corporation and the 9 individual. 10 (b) Refuse to continue in effect a certificate with 1 or 11 more residents of this state, other than for failure to pay 12 amounts due for a certificate, except as allowed for refusal to 13 issue a certificate under subdivision (a). 14 (c) Limit the coverage available under a certificate, with- 15 out the prior approval of the commissioner, unless the limitation 16 is as a result of 1 OR MORE OF THE FOLLOWING: an 17 (i) AN agreement with the person paying for the coverage. ; 18 an 19 (ii) AN agreement with the individual designated by the per- 20 sons paying for or contracting for the coverage. or a 21 (iii) A collective bargaining agreement. 22 (d) Rate, cancel benefits on, refuse to provide benefits 23 for, or refuse to issue or continue a certificate solely because 24 a subscriber or applicant is or has been a victim of domestic 25 violence. A health care corporation shall IS not be held 26 civilly liable for any A cause of action that may result from 27 compliance with this subdivision. This subdivision applies to 06043'98 a 3 1 all health care corporation certificates issued or renewed on or 2 after June 1, 1998. As used in this subdivision, "domestic 3 violence" means inflicting bodily injury, causing serious emo- 4 tional injury or psychological trauma, or placing in fear of 5 imminent physical harm by threat or force a person who is a 6 spouse or former spouse of, has or has had a dating relationship 7 with, resides or has resided with, or has a child in common with 8 the person committing the violence. 9 (4) Subsection (3) does not prevent a health care corpora- 10 tion from denying to a resident of this state coverage under a 11 certificate for any 1 OR MORE of the following grounds: 12 (a) That the individual was not a member of a group that had 13 contracted for coverage under this certificate. 14 (b) That the individual is not a member of a group with a 15 size greater than a minimum size established for a certificate 16 pursuant to sound underwriting requirements. 17 (c) That the individual does not meet requirements for cov- 18 erage contained in a certificate. 19 (5) A certificate may provide for the coordination of bene- 20 fits, subrogation, and the nonduplication of benefits. Savings 21 realized by the coordination of benefits, subrogation, and nondu- 22 plication of benefits shall be reflected in the rates for those 23 certificates. If a group certificate issued by the corporation 24 contains a coordination of benefits provision, the benefits shall 25 be payable pursuant to the coordination of benefits act, 1984 26 PA 64, MCL 550.251 TO 550.255. 06043'98 a 4 1 (6) A health care corporation shall have the right to HAS 2 THE status as OF a party in interest, whether by intervention 3 or otherwise, in any judicial, quasi-judicial, or administrative 4 agency proceeding in this state for the purpose of enforcing any 5 rights it may have for reimbursement of payments made or advanced 6 for health care services on behalf of 1 or more of its subscrib- 7 ers or members. 8 (7) A health care corporation shall not directly reimburse a 9 provider in this state who has not entered into a participating 10 contract with the corporation. 11 (8) A health care corporation shall not limit or deny cover- 12 age to a subscriber or limit or deny reimbursement to a provider 13 on the ground that services were rendered while the subscriber 14 was in a health care facility operated by this state or a politi- 15 cal subdivision of this state. A health care corporation shall 16 not limit or deny participation status to a health care facility 17 on the ground that the health care facility is operated by this 18 state or a political subdivision of this state, if the HEALTH 19 CARE facility meets the standards set by the corporation for all 20 other HEALTH CARE facilities of that type, government-operated or 21 otherwise. To qualify for participation and reimbursement, a 22 HEALTH CARE facility shall, at a minimum, meet all of the follow- 23 ing requirements, which shall apply to all similar HEALTH CARE 24 facilities: 25 (a) Be accredited by the joint commission on accreditation 26 of hospitals. 06043'98 a 5 1 (b) Meet the certification standards of the medicare program 2 and the medicaid program. 3 (c) Meet all statutory requirements for certificate of 4 need. 5 (C) (d) Follow generally accepted accounting principles 6 and practices. 7 (D) (e) Have a community advisory board. 8 (E) (f) Have a program of utilization and peer review to 9 assure that patient care is appropriate and at an acute level. 10 (F) (g) Designate that portion of the HEALTH CARE facility 11 that is to be used for acute care. 12 Sec. 414a. (1) A health care corporation shall offer bene- 13 fits for the inpatient treatment of substance abuse by a licensed 14 allopathic physician or a licensed osteopathic physician in a 15 health care facility operated by this state or approved by the 16 department of public health CONSUMER AND INDUSTRY SERVICES for 17 the hospitalization for, or treatment of, substance abuse. 18 (2) Subject to subsections (3), (5), and (7), a health care 19 corporation may enter into contracts with providers for the 20 rendering of inpatient substance abuse treatment by those 21 providers. 22 (3) A contracting provider rendering inpatient substance 23 abuse treatment for patients other than adolescent patients shall 24 be a licensed hospital or a substance abuse service program 25 licensed under article 6 of the public health code, Act No. 368 26 of the Public Acts of 1978, being sections 333.6101 to 333.6523 27 of the Michigan Compiled Laws 1978 PA 368, MCL 333.6101 TO 06043'98 a 6 1 333.6523, and shall meet the standards set by the HEALTH CARE 2 corporation for contracting health care facilities. 3 (4) A health care corporation shall provide coverage for 4 intermediate and outpatient care for substance abuse, upon issu- 5 ance or renewal, in all group and nongroup certificates other 6 than service-specific certificates, such as certificates provid- 7 ing coverage solely for 1 of the following: dental care; hearing 8 care; vision care; prescription drugs; or another type of health 9 care benefit. Subject to subsections (5) and (7), a health care 10 corporation may enter into contracts with providers for the 11 rendering of intermediate care, outpatient care, or both types of 12 care, for the treatment of substance abuse. 13 (5) A health care corporation shall enter into and maintain 14 5-year contracts with not less than 5 providers in this state, as 15 demonstration projects pursuant to section 207(1)(b), for the 16 rendering of inpatient, intermediate, and outpatient care to ado- 17 lescent substance abuse patients. A provider who contracts with 18 a health care corporation for the rendering of inpatient, inter- 19 mediate, and outpatient care to adolescent substance abuse 20 patients shall meet all of the following requirements: 21 (a) Is BE accredited by the joint commission on accredit- 22 ation of hospitals, the council on accreditation for families and 23 children, the commission on accreditation of rehabilitation 24 facilities, or the American osteopathic association. 25 (b) If applicable, has obtained a certificate of need under 26 part 221 of the public health code, Act No. 368 of the Public 06043'98 a 7 1 Acts of 1978, being sections 333.22101 to 333.22181 of the 2 Michigan Compiled Laws. 3 (B) (c) Is BE licensed by the office of substance abuse 4 services under article 6 of the public health code, Act No. 368 5 of the Public Acts of 1978 1978 PA 368, MCL 333.6101 TO 6 333.6523. 7 (C) (d) Is BE licensed by the department of social 8 services as a child caring institution under Act No. 116 of the 9 Public Acts of 1973, being sections 722.111 to 722.128 of the 10 Michigan Compiled Laws 1973 PA 116, MCL 722.111 TO 722.128. 11 (D) (e) Agrees AGREE to follow generally accepted account- 12 ing principles and practices. 13 (E) (f) Agrees AGREE to supply all data required to ful- 14 fill the objectives of the demonstration program. 15 (F) (g) Agrees AGREE to work with the substance abuse 16 advisory committee and the health care corporation in conducting 17 the evaluation of the demonstration program. 18 (6) The substance abuse advisory committee is established, 19 with the cooperation of the office of substance abuse services, 20 under the direction of the office of health and medical affairs. 21 The committee shall consist of 7 members to include the director 22 of the office of health and medical affairs or his or her desig- 23 nee, the administrator of the office of substance abuse services 24 or his or her designee, a representative of the department of 25 public COMMUNITY health, 2 designees of the chief executive 26 officer of a health care corporation contracting for a 27 demonstration project under subsection (5), a member of the 06043'98 a 8 1 family of an adolescent substance abuser to be appointed by the 2 office of health and medical affairs, and a service provider of 3 an adolescent substance abuse treatment program to be appointed 4 by the office of health and medical affairs. The substance abuse 5 advisory committee shall evaluate each demonstration project and 6 shall report at the conclusion of each demonstration project to 7 the senate and house standing committees responsible for public 8 health issues. A final report of all the demonstration projects 9 shall be issued by not later than December 31, 1994, and shall 10 include evaluations of and recommendations concerning all of the 11 following: 12 (a) The cost of specialized adolescent substance abuse 13 treatment compared with the effectiveness of adolescent substance 14 abuse treatment. 15 (b) The cost and effectiveness of the different levels of 16 adolescent substance abuse treatment, including inpatient, inter- 17 mediate, and outpatient care and aftercare programs. 18 (7) Based on the final report submitted pursuant to 19 subsection (6), beginning December 31, 1994, a health care corpo- 20 ration shall continue to enter into and maintain contracts with 21 not less than 5 providers in this state, and may enter into addi- 22 tional contracts for the rendering of inpatient, intermediate, 23 and outpatient care to adolescent substance abuse patients if the 24 provider meets the requirements of subsection (5)(a) to (e). 25 Contracts entered into under this subsection shall be based upon 26 the recommendations of the final report submitted pursuant to 27 subsection (6). 06043'98 a 9 1 (8) A health care corporation shall reimburse providers for 2 the rendering of inpatient, intermediate, and outpatient care to 3 adolescent substance abuse patients at a rate that shall be IS 4 commensurate with reimbursement rates for other similar providers 5 rendering inpatient, intermediate, and outpatient care to adoles- 6 cent substance abuse patients. 7 (9) In the case of group certificates, if the amount due for 8 a group certificate would be increased by 3% or more because of 9 the provision of the coverage required under subsection (4), the 10 master policyholder shall have the option to decline the coverage 11 required to be provided under subsection (4). In the case of 12 nongroup certificates, if the total amount due for all nongroup 13 certificates of the health care corporation would be increased by 14 3% or more because of the provision of the coverage required 15 under subsection (4), the subscriber for each such certificate 16 shall have the option to decline the coverage required to be pro- 17 vided under subsection (4). 18 (10) Charges, terms, and conditions for the coverage for 19 intermediate and outpatient care for substance abuse required to 20 be provided under subsection (4) shall not be less favorable than 21 the maximum prescribed for any other comparable service. 22 (11) The coverage for intermediate and outpatient care for 23 substance abuse required to be provided under subsection (4) 24 shall not be reduced by terms or conditions which THAT apply to 25 other items of coverage in a certificate, group or nongroup. 26 This subsection shall not be construed to DOES NOT prohibit 27 certificates that provide for deductibles and copayment 06043'98 a 10 1 provisions for coverage for intermediate and outpatient care for 2 substance abuse, as approved by the commissioner. 3 (12) The coverage for intermediate and outpatient care for 4 substance abuse required to be provided under subsection (4) 5 shall, at a minimum, provide for up to $1,500.00 in health care 6 benefits for intermediate and outpatient care for substance abuse 7 per member per year. This minimum shall be adjusted by March 31, 8 1982 and by March 31 each year thereafter in accordance with the 9 annual average percentage increase or decrease in the United 10 States consumer price index for the 12-month period ending the 11 preceding December 31. 12 (13) As used in this section: 13 (a) "Adolescent" means an individual who is less than 18 14 years of age, but more than 11 years of age. 15 (b) "Intermediate care" means the use, in a full 24-hour 16 residential therapy setting, or in a partial, less than 24-hour, 17 residential therapy setting, of any or all of the following ther- 18 apeutic techniques, as identified in a treatment plan for indi- 19 viduals physiologically or psychologically dependent upon or 20 abusing alcohol or drugs: 21 (i) Chemotherapy. 22 (ii) Counseling. 23 (iii) Detoxification services. 24 (iv) Other ancillary services, such as medical testing, 25 diagnostic evaluation, and referral to other services identified 26 in a treatment plan. 06043'98 a 11 1 (c) "Outpatient care" means the use, on both a scheduled and 2 a nonscheduled basis, of any or all of the following therapeutic 3 techniques, as identified in a treatment plan for individuals 4 physiologically or psychologically dependent upon or abusing 5 alcohol or drugs: 6 (i) Chemotherapy. 7 (ii) Counseling. 8 (iii) Detoxification services. 9 (iv) Other ancillary services, such as medical testing, 10 diagnostic evaluation, and referral to other services identified 11 in a treatment plan. 12 (d) "Substance abuse" means that term as defined in section 13 6107 of the public health code, Act No. 368 of the Public Acts 14 of 1978, being section 333.6107 of the Michigan Compiled Laws 15 1978 PA 368, MCL 333.6107. 16 Enacting section 1. This amendatory act does not take 17 effect unless Senate Bill No. _____ or House Bill No. _____ 18 (request no. 06043'98) of the 89th Legislature is enacted into 19 law. 06043'98 a Final page. CPD