HOUSE BILL No. 4466

February 25, 2009, Introduced by Reps. Johnson, Durhal, Stanley, Bettie Scott and Cushingberry and referred to the Committee on Health Policy.

A bill to provide for a Michigan health insurance system; to

provide for governance of the Michigan health insurance system; to

establish health care regions; to establish various committees and

boards; to create an office of consumer advocacy; to create an

inspector general for the Michigan health insurance system; to

provide for certain investigations, audits, and reviews; to create

certain funds and accounts; to determine eligibility for and

benefits of the Michigan health insurance system; to provide for

certain reviews; to provide for certain reports; to provide certain

powers and duties upon certain officials, departments, and

authorities of this state; to provide for an appropriation; and to

prescribe penalties and provide remedies.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

ARTICLE I GENERAL PROVISIONS

Sec. 1. This act shall be known and may be cited as the

"Michigan health insurance system act".

Sec. 3. As used in this act:

(a) "Agency" means the Michigan health insurance agency.

(b) "Commissioner" means the health insurance commissioner.

professional that provides health care services through direct

contact with the patient.

(d) "Essential community provider" means a health facility

that has served as part of the state's health care safety net for

low income and traditionally underserved populations in Michigan

and that is 1 of the following:

(i) A "federally qualified health center" as defined under

section 1395x(aa)(4) or 1396d(l)(2) of the social security act, 42

USC 1395x and 1396d(c)(1).

(ii) A "rural health clinic" as defined under section

1861(aa)(2) or 1905(l)(1) of the social security act, 42 USC

1395x(aa)(2) and 1396d.

(iii) Any clinic conducted, maintained, or operated by a

federally recognized Indian tribe or tribal organization, as

defined under 25 USC 1603.

(e) "Health care professional" means a person licensed or

registered under article 15 of the public health code, 1978 PA 368,

MCL 333.16101 to 333.18838. Health care professional does not

include a sanitarian or veterinarian.

(f) "Health care provider" means a health care professional,

health facility, or other person or institution licensed or

authorized by the state to deliver or furnish health care services.

(g) "Health facility" means a health facility or agency

licensed under article 17 of the public health code, 1978 PA 368,

MCL 333.20101 to 333.22260, or any other organized entity where a

health care professional provides health care to patients.

(h) "Health insurance fund" means the health insurance fund

created in section 41.

(i) "Hospital" means a health facility that is licensed under

part 215 of the public health code, 1978 PA 368, MCL 333.21501 to

333.21571.

(j) "Integrated health care delivery system" means a provider

organization that meets all of the following criteria:

(i) Is fully integrated operationally and clinically to provide

a broad range of health care services, including preventative care,

prenatal and well-baby care, immunizations, screening diagnostics,

emergency services, hospital and medical services, surgical

services, and ancillary services.

(ii) Is compensated using capitation or facility budgets,

except for copayments, for the provision of health care services.

(iii) Provides health care services primarily directly through

direct care providers who are either employees or partners of the

organization, or through arrangements with direct care providers or

1 or more groups of physicians, organized on a group practice or

individual practice basis.

(k) "Primary care provider" means a direct care provider that

is a family physician, internist, general practitioner,

pediatrician, an obstetrician/gynecologist, or a family certified

nurse practitioner or physician's assistant practicing under

supervision as defined under article 15 of the public health code,

1978 PA 368, MCL 333.16101 to 333.18838, or essential community

providers who employ primary care providers.

(l) "System" or "health insurance system" means the Michigan

health insurance system.

ARTICLE II MICHIGAN HEALTH INSURANCE SYSTEM AND GOVERNANCE

Sec. 5. (1) There is established the Michigan health insurance

system, which shall be administered by the Michigan health

insurance agency, an independent agency under the control of the

commissioner and housed in the department of treasury.

(2) The Michigan health insurance agency is a separate entity

in state government and its decisions are not subject to review by

any other agency except as otherwise provided in this act.

(3) The Michigan health insurance agency shall be the single

state agency with full power to supervise every phase of the

administration of the Michigan health insurance system and to

receive grants-in-aid made by the United States government or by

the state in order to secure full compliance with the applicable

provisions of state and federal law.

(4) The Michigan health insurance agency shall be comprised of

the following entities:

(a) The health insurance policy board.

(b) The office of consumer advocacy.

(d) The office of health care quality.

(e) The health insurance fund.

Sec. 7. The Michigan health insurance system shall have all of

the following purposes:

(a) To provide universal and affordable health insurance

coverage for all Michigan residents.

(b) To provide Michigan residents with an extensive benefit

package.

spending.

(d) To achieve measurable improvement in health care outcomes.

(e) To prevent disease and disability and to maintain or

improve health and functionality.

(f) To increase health care provider, consumer, employee, and

employer satisfaction with the health care system.

(g) To implement policies that strengthen and improve

culturally and linguistically sensitive care.

(h) To develop an integrated population-based health care

database to support health care planning.

Sec. 11. (1) The commissioner shall be a citizen of this

state, shall have his or her office at the seat of government,

shall personally superintend the duties of the office, and shall

not be a stockholder or directly or indirectly connected with the

management of affairs of any insurer, pharmaceutical, or medical

equipment company that sells products to the Michigan health

insurance system for a period of 2 years prior to appointment as

commissioner. The commissioner shall be appointed by the governor

for a term of 4 years by and with the consent of the senate. The

first commissioner shall be appointed by the governor not less than

75 days following the effective date of this act and shall be

subject to confirmation by the senate within 30 days of nomination.

If the senate does not take up the nomination within 30 days, the

nominee shall be considered to have been confirmed and may take

office, except that, if the senate is not in session at the time

the governor appoints the commissioner, the senate shall take up

the confirmation of the nominee at the commencement of the next

legislative session. Should the senate, by a vote, fail to confirm

a nominee for the office of commissioner, the governor shall

appoint a new nominee, subject to the confirmation of the senate.

(2) If a vacancy occurs in the office of commissioner by

reason of death, removal, or otherwise, the governor shall fill

that vacancy by appointment, by and with the advice and consent of

the senate in the manner prescribed in subsection (1), for the

balance of the unexpired term.

(3) The commissioner shall not be a state legislator or a

member of the United States congress while holding the position of

commissioner.

(4) The commissioner shall receive an annual salary as the

legislature shall appropriate, payable as other state officers are

paid under the accounting laws of the state. Within 15 days from

the time of notice of his or her appointment, the commissioner

shall take and subscribe the constitutional oath of office and file

the oath in the office of the secretary of state, and shall also

within the same period give to the people of the state of Michigan

a bond in the penal sum of $50,000.00, with sureties to be approved

by the state treasurer, conditioned for the faithful discharge of

the duties of his or her office.

(5) For 2 years after completing service in the Michigan

health insurance system, the commissioner shall not receive

payments of any kind from, or be employed in any capacity or act as

a paid consultant to, an insurer, pharmaceutical, or medical

equipment company that sells products to the Michigan health

insurance system.

Sec. 13. (1) The commissioner shall be the chief officer of

the Michigan health insurance agency and shall administer all

aspects of the agency.

(2) The commissioner shall be responsible for the performance

of all duties, the exercise of all power and jurisdiction, and the

assumption and discharge of all responsibilities vested by law in

the agency. The commissioner shall perform all duties imposed upon

him or her by this act and other laws related to health care, and

shall enforce the execution of those related to health care, and

shall enforce the execution of those provisions and laws to promote

their underlying aims and purposes. These broad powers shall

include, but are not limited to, the power to establish the

Michigan health insurance system budget and to set rates, to

establish Michigan health insurance system goals, standards, and

priorities, to hire and fire and fix the compensation of agency

personnel, to make allocations to the health care regions, and to

promulgate generally binding rules and regulations concerning any

and all matters related to the implementation of this act and its

purposes.

(3) The commissioner shall appoint the deputy health insurance

commissioner, the director of the health insurance fund, the

consumer advocate, the chief medical officer, the chief enforcement

officer, the director of planning, the director of the partnerships

for health, the regional health planning directors, the chief

enforcement counsel, and legal counsel in any action brought by or

against the commissioner under or pursuant to any provision of any

law under the commissioner's jurisdiction, or in which the

commissioner joins or intervenes as to a matter within the

commissioner's jurisdiction, as a friend of the court or otherwise,

and stenographic reporters to take and transcribe the testimony in

any formal hearing or investigation before the commissioner or

before a person authorized by the commissioner.

(4) The personnel of the agency shall perform duties as

assigned to them by the commissioner.

(5) The commissioner shall adopt a seal bearing the

inscription: "Commissioner, Michigan Health Insurance Agency, State

of Michigan." The seal shall be affixed to or imprinted on all

orders and certificates issued by him or her and other instruments

as he or she directs. All courts shall take notice of this seal.

(6) The administration of the agency shall be supported from

the health insurance fund.

(7) The commissioner, as a general rule, shall publish or make

available for public inspection any information filed with or

obtained by the agency, unless the commissioner finds that this

availability or publication is contrary to law. This act does not

authorize the commissioner; any of the commissioner's assistants,

clerks, or deputies; or any other agency personnel to disclose any

information withheld from public inspection except among themselves

or when necessary or appropriate in a proceeding or investigation

under this act or to other federal or state regulatory agencies.

This act does not create or derogate from any privilege that exists

at common law or otherwise when documentary or other evidence is

sought under a subpoena directed to the commissioner; any of his or

her assistants, clerks, and deputies; or any other agency

personnel.

(8) It is unlawful for the commissioner; any of his or her

assistants, clerks, or deputies; or any other agency personnel to

use for personal benefit any information that is filed with or

obtained by the commissioner and that is not then generally

available to the public.

(9) The commissioner shall avoid political activity that may

create the appearance of political bias or impropriety. Prohibited

activities include, but are not limited to, leadership of, or

employment by, a political party or a political organization;

public endorsement of a political candidate; contribution of more

than $500.00 to any 1 candidate in a calendar year or a

contribution in excess of an aggregate of $1,000.00 in a calendar

year for all political parties or organizations; and attempting to

avoid compliance with this prohibition by making contributions

through a spouse or other family member.

(10) The commissioner shall not participate in making or in

any way attempting to use his or her official position to influence

a governmental decision in which he or she knows or has reason to

know that he or she or a family member or a business partner or

colleague has a financial interest.

(11) The commissioner, in pursuit of his or her duties, shall

have unlimited access to all nonconfidential and all nonprivileged

documents in the custody and control of the agency.

(12) The attorney general shall render to the commissioner

opinions upon all questions of law, relating to the construction or

interpretation of any law under the commissioner's jurisdiction or

arising in the administration thereof, that may be submitted to the

attorney general by the commissioner and upon the commissioner's

request shall act as the attorney for the commissioner in actions

and proceedings brought by or against the commissioner or under or

pursuant to any provision of any law under the commissioner's

jurisdiction.

Sec. 15. The commissioner shall do all of the following:

(a) Oversee the establishment as part of the administration of

the agency of all of the following:

(i) The health insurance policy board, pursuant to section 17.

(ii) The office of consumer advocacy, pursuant to section 21.

(iii) The office of health care planning, pursuant to section

111.

(iv) The office of health care quality, pursuant to section

115.

(v) The health insurance fund, pursuant to section 41.

(vi) The payments board, pursuant to section 53.

(vii) The public advisory committee, pursuant to section 19.

(b) Determine Michigan health insurance system goals,

standards, guidelines, and priorities.

(d) Ensure the delivery of, and equal access to, high-quality

health care for Michigan residents.

(e) Establish evidence-based standards to guide delivery of

health care and ensure a smooth transition to delivery of health

care under statewide standards.

(f) Develop methods to measure and monitor the quality of

health care provided to Michigan residents and to make needed

improvements.

(g) Develop methods to measure and monitor the performance of

health care providers and to make needed improvements.

(h) Establish a capital management plan for the Michigan

health insurance system, including, but not limited to, a

standardized process and format for the development and submission

of regional operating and regional capital budget requests.

(i) Ensure the establishment of policies that support the

public health.

(j) Establish and maintain appropriate statewide and regional

health care databases.

(k) Establish a means to identify areas of medical practice

where standards of care do not exist and establish priorities and a

timetable for their development.

(l) Establish standards for mandatory reporting by health care

providers and remedies and penalties for failure to report.

(m) Establish a comprehensive budget that ensures adequate

funding to meet the health care needs of Michigan residents and the

compensation for providers for health care provided pursuant to

this act.

(n) Establish standards and criteria for allocation of

operating and capital funds from the health insurance fund.

(o) Establish standards and criteria for development and

submission of provider operating budget requests.

(p) Determine the level of funding to be allocated to each

health care region.

(q) Annually assess projected revenues and expenditures

pursuant to this act to assure financial solvency of the system.

(r) Institute necessary cost controls pursuant to this act to

assure financial solvency of the system.

(s) Develop separate formulae for budget allocations and

review the formulae annually to ensure they address disparities in

service availability and health care outcomes and for sufficiency

of rates, fees, and prices.

(t) Meet regularly with the chief medical officer, the

consumer advocate, the director of planning, the director of the

payments board, the director of the partnerships for health,

regional planning directors, and regional medical officers to

review the impact of the agency and its policies on the health of

Michigan residents and on satisfaction with the Michigan health

insurance system.

(u) Negotiate for or set rates, fees, and prices involving any

aspect of the Michigan health insurance system and establish

procedures thereto.

(v) Establish a capital management framework for the Michigan

health insurance system pursuant to this act to ensure that the

needs for capital health care infrastructure are met, pursuant to

the goals of the system.

(w) Ensure a smooth transition to Michigan health insurance

system oversight of capital health care planning.

(x) Establish an evidence-based formulary for all prescription

drugs and durable and nondurable medical equipment for use by the

Michigan health insurance system.

(y) Utilize the purchasing power of the state to negotiate

price discounts for prescription drugs and durable and nondurable

medical equipment for use by the Michigan health insurance system.

(z) Ensure that use of state purchasing power achieves the

lowest possible prices for the Michigan health insurance system.

(aa) Create incentives and guidelines for research needed to

meet the goals of the system and disincentives for research that

does not achieve Michigan health insurance system goals.

(bb) Implement eligibility standards for the system.

(cc) Provide support during the transition for training and

job placement for persons who are displaced from employment as a

result of the initiation of the new Michigan health insurance

system.

(dd) Establish an enrollment system that ensures all eligible

Michigan residents, including those who travel frequently; those

who have disabilities that limit their mobility, hearing, or

vision; those who cannot read; and those who do not speak or write

English, are aware of their right to health care and are formally

enrolled.

(ee) Oversee the establishment of a system for resolution of

grievances pursuant to this act.

(ff) Establish an electronic claims and payments system for

the Michigan health insurance system, to which all claims shall be

filed and from which all payments shall be made, and implement, to

the extent permitted by federal law, standardized claims and

reporting methods.

(gg) Establish a system of secure electronic medical records

that comply with state and federal privacy laws and that are

compatible across the system.

(hh) Establish an electronic referral system that is

accessible to providers and to patients.

(ii) Establish guidelines for mandatory reporting by health

care providers.

(jj) Establish a technology advisory committee to evaluate the

cost and effectiveness of new medical technology and make

recommendations for the inclusion of those technologies in the

benefit package.

(kk) Ensure that consumers of health care have access to

information needed to support choice of health care professionals.

(ll) Collaborate with the boards that license health facilities

to ensure that facility performance is monitored and that deficient

practices are recognized and corrected in a timely fashion and that

consumers and health care professionals have access to information

needed to support choice of health facility.

(mm) Establish a health insurance system internet website that

provides information to the public about the Michigan health

insurance system that includes, but is not limited to, information

that supports choice of health care providers and informs the

public about state and regional health insurance policy board

meetings and activities of the partnerships for health.

(nn) Procure funds, including loans, to lease or purchase

insurance for the system and its employees and agents.

(oo) Establish a process for the system to receive the

concerns, opinions, ideas, and recommendations of the public

regarding all aspects of the system.

(pp) Annually report to the legislature and the governor, on

or before October of each year and at other times pursuant to this

act, on the performance of the Michigan health insurance system,

its fiscal condition and need for rate adjustments, consumer

copayments or consumer deductible payments, recommendations for

statutory changes, receipt of payments from the federal government,

whether current year goals and priorities are met, future goals,

and priorities, and major new technology or prescription drugs or

other circumstances that may affect the cost of health care.

Sec. 17. (1) The commissioner shall establish a health

insurance policy board and shall serve as the president of the

board.

(2) The board shall do all of the following:

(a) Establish health insurance system goals and priorities,

including research and capital investment priorities.

(b) Establish the scope of services to be provided to Michigan

residents.

when a change in the health insurance premium structure is needed.

(d) Establish guidelines for evaluating the performance of the

health insurance system, health care regions, and health care

providers.

(e) Establish guidelines for ensuring public input on health

insurance system policy, standards, and goals.

(3) The board shall consist of the following members:

(a) The commissioner.

(b) The deputy health insurance commissioner.

(d) The consumer advocate.

(e) The chief medical officer.

(f) The director of health care planning.

(g) The director of the partnerships for health.

(h) The director of the payments board.

(i) Two representatives from health care regional planning

boards. A regional representative shall serve a term of 1 year, and

terms shall be rotated in order to allow every region to be

represented within a 5-year period. A regional planning director

shall appoint the regional representative to serve on the board.

(4) It is unlawful for the board members or any of their

assistants, clerks, or deputies to use for personal benefit any

information that is filed with or obtained by the board and that is

not then generally available to the public.

Sec. 19. (1) The commissioner shall establish a public

advisory committee to advise the health insurance policy board on

all matters of health insurance system policy.

(2) Members of the public advisory committee shall include all

of the following:

(a) Four physicians, all of whom shall be board certified in

their field. The senate majority leader and the governor shall each

appoint 1 member. The speaker of the house of representatives shall

appoint 2 of these members, both of whom shall be primary care

providers.

(b) One registered nurse, to be appointed by the governor.

senate majority leader.

(d) One licensed health practitioner, to be appointed by the

speaker of the house of representatives.

(e) One mental health care provider, to be appointed by the

senate majority leader.

(f) One dentist, to be appointed by the governor.

(g) One representative of private hospitals, to be appointed

by the senate majority leader.

(h) One representative of public hospitals, to be appointed by

the governor.

(i) Four consumers of health care. The governor shall appoint

2 of these members, one of whom shall be a member of the disability

community. The senate majority leader shall appoint a member who is

65 years of age or older. The speaker of the house of

representatives shall appoint the fourth member.

(j) One representative of organized labor, to be appointed by

the speaker of the house of representatives.

(k) One representative of essential community providers, to be

appointed by the senate majority leader.

(l) One union member, to be appointed by the senate majority

leader.

(m) One representative of small business, to be appointed by

the governor.

(n) One representative of large business, to be appointed by

the speaker of the house of representatives.

(o) One pharmacist, to be appointed by the speaker of the

house of representatives.

(3) In making appointments pursuant to this section, the

governor, the senate majority leader, and the speaker of the house

of representatives shall make good faith efforts to assure that

their appointments, as a whole, reflect, to the greatest extent

feasible, the social and geographic diversity of the state.

(4) Any member appointed by the governor, the senate majority

leader, or the speaker of the house of representatives shall serve

for a 4-year term. These members may be reappointed for succeeding

4-year terms.

(5) Vacancies that occur shall be filled within 30 days after

the occurrence of the vacancy and shall be filled in the same

manner in which the vacating member was selected or appointed. The

commissioner shall notify the appropriate appointing authority of

any actual or expected vacancies on the board.

(6) Members of the advisory committee shall serve without

compensation, but shall be reimbursed for actual and necessary

expenses incurred in the performance of their duties.

(7) The advisory committee shall meet at least 6 times a year

in a place convenient to the public. All meetings of the board

shall be open to the public, pursuant to the open meetings act,

1976 PA 267, MCL 15.261 to 15.275.

(8) Appointed committee members shall have worked in the field

they represent on the committee for a period of at least 2 years

prior to being appointed to the committee.

(9) It is unlawful for the committee members or any of their

assistants, clerks, or deputies to use for personal benefit any

information that is filed with or obtained by the committee and

that is not generally available to the public.

Sec. 21. (1) There is within the agency an office of consumer

advocacy to represent the interests of the consumers of health

care. The goal of the office is to help Michigan residents secure

the health care services and benefits to which they are entitled

under the laws administered by the agency and to advocate on behalf

of and represent the interests of consumers in governance bodies

created by this act and in other forums.

(2) The office shall be headed by a consumer advocate

appointed by the commissioner.

(3) The consumer advocate shall establish an office in Lansing

and other offices throughout the state that shall provide

convenient access to Michigan residents.

(4) The consumer advocate shall do all the following:

(a) Administer all aspects of the office of the consumer

advocate.

(b) Assure that services of the consumer advocate are

available to all Michigan residents.

in the regional partnership for health.

(d) Oversee the establishment and maintenance of a grievance

process and independent medical review system pursuant to this act.

(e) Participate in the grievance process and independent

medical review system on behalf of consumers pursuant to this act.

(f) Receive, evaluate, and respond to consumer complaints

about the health insurance system.

(g) Provide a means to receive recommendations from the public

about ways to improve the health insurance system and hold public

hearings at least once annually to receive recommendations from the

public.

(h) Develop educational and informational guides for consumers

describing their rights and responsibilities and informing them

about effective ways to exercise their rights to secure health care

services and to participate in the health insurance system. The

guides shall be easy to read and understand, available in English

and other languages, including Braille and formats suitable for

those with hearing limitations, and shall be made available to the

public by the agency, including access on the agency's internet

website and through public outreach and educational programs and

displayed in health care provider offices or facilities.

(i) Establish a toll-free telephone number to receive

complaints regarding the agency and its services. The agency

internet website shall have complaint forms and instructions on

their use.

(j) Report annually to the public, the commissioner, and the

legislature about the consumer perspective on the performance of

the health insurance system, including recommendations for needed

improvements.

(5) Nothing in this act prohibits a consumer or class of

consumers or the consumer advocate from seeking relief through the

judicial system.

(6) The consumer advocate in pursuit of his or her duties

shall have unlimited access to all nonconfidential and all

nonprivileged documents in the custody and control of the agency.

(7) It is unlawful for the consumer advocate or any of his or

her assistants, clerks, or deputies to use for personal benefit any

information that is filed with or obtained by the agency and that

is not then generally available to the public.

Sec. 23. (1) There is within the office of the attorney

general an office of the inspector general for the Michigan health

insurance system. The inspector general shall be appointed by the

governor with the advice and consent of the senate.

(2) The inspector general shall have broad powers to

investigate, audit, and review the financial and business records

of individuals, public and private agencies and institutions, and

private corporations that provide services or products to the

system, the costs of which are reimbursed by the system.

(3) The inspector general shall investigate allegations of

misconduct on the part of an employee or appointee of the agency

and on the part of any health care provider of services that are

reimbursed by the system and shall report any findings of

misconduct to the attorney general.

(4) The inspector general shall investigate patterns of

medical practice that may indicate fraud and abuse related to

overutilization or underutilization or other inappropriate

utilization of medical products and services. The inspector general

shall arrange for the collection and analysis of data needed to

investigate the inappropriate utilization of these products and

services.

(5) The inspector general shall conduct additional reviews or

investigations of financial and business records when requested by

the governor or by any member of the legislature and shall report

findings of the review or investigation to the governor and the

legislature.

(6) The inspector general shall establish a telephone hotline

for anonymous reporting of allegations of failure to make health

insurance premium payments established by this act. The inspector

general shall investigate information provided to the hotline and

shall report any findings of misconduct to the attorney general.

(7) The inspector general shall annually report

recommendations for improvements to the system or the agency to the

governor and the legislature.

Sec. 27. (1) The health insurance system shall be operational

no later than 2 years after the effective date of this act and

shall be funded from a loan from the general fund and from private

sources identified by the commissioner.

(2) The commissioner shall assess health plans and insurers

for care provided by the system in those cases in which a person's

health care coverage extends into the time period in which the new

system is operative.

(3) The commissioner shall implement means to assist persons

who are displaced from employment as a result of the initiation of

the new health insurance system, including the period of time

during which assistance shall be provided and possible sources of

funds to support retraining and job placement. That support shall

be provided for a period beginning on the effective date of this

act and ending 5 years after the effective date of this act.

Sec. 29. (1) The commissioner shall appoint a transition

advisory group to assist with the transition to the

system. The transition advisory group shall include, but is not

limited to, the following members:

(a) The commissioner.

(b) The consumer advocate.

(d) The director of health care planning.

(e) The director of the health insurance fund.

(f) Experts in health care financing and health care

administration.

(g) Direct care providers.

(h) Representatives of retirement boards.

(i) Employer and employee representatives.

(j) Hospital, essential community provider, and long-term care

facility representatives.

(k) Representatives from state departments and regulatory

bodies that shall or may relinquish some or all parts of their

delivery of health service to the system.

(l) Representatives of counties.

(m) Consumers of health care.

(2) The transition advisory group shall advise the

commissioner on all aspects of the implementation of this act.

(3) The transition advisory group shall make recommendations

to the commissioner, the governor, and the legislature on how to

integrate health care delivery services and responsibilities

relating to the delivery of the services of the following

departments and agencies into the system:

(a) The department of community health.

(b) The department of human services.

(d) The mental health and substance abuse administration.

(e) The office of financial and insurance services.

(4) The transition advisory group shall report its findings to

the commissioner, the governor, and the legislature. The transition

to the system shall not adversely affect publicly funded programs

currently providing health care services.

ARTICLE III REGIONALIZATION

Sec. 31. (1) The purpose of regionalization is to support

local planning and decision making.

(2) The commissioner shall establish up to 10 health insurance

system regions composed of geographically contiguous counties

grouped on the basis of the following considerations:

(a) Patterns of utilization.

(b) Health care resources, including workforce resources.

health needs.

(d) Geography.

(e) Population and demographic characteristics.

(3) The commissioner shall appoint a director for each region.

Regional planning directors shall serve at the will of the

commissioner and may serve up to 2 8-year terms to coincide with

the terms of the commissioner.

(4) Each regional planning director shall appoint a regional

medical officer.

Sec. 33. (1) Regional planning directors shall administer the

health insurance region and perform regional health care planning

pursuant to this act. The regional planning director shall be

responsible for all duties, the exercise of all powers and

jurisdiction, and the assumptions and discharge of all

responsibilities vested by law in the regional agency. The regional

planning director shall perform all duties imposed upon him or her

by this act and by other laws related to health care and shall

enforce execution of those provisions and laws to promote their

underlying aims and purposes.

(2) The regional planning director shall reside in the region

in which he or she serves.

(3) The regional planning director shall do all of the

following:

(a) Establish and administer a regional office of the state

agency. Each regional office shall include, at minimum, an office

of each of the following: consumer advocacy, health care quality,

health care planning, and partnerships for health.

(b) Establish regional goals and priorities pursuant to

standards, goals, priorities, and guidelines established by the

commissioner.

established by this act.

(d) Seek innovative means to lower the costs of administration

in the region.

(e) Plan for the delivery of, and equal access to, high

quality and culturally and linguistically sensitive health care

that meets the needs of all regional residents pursuant to

standards established by the commissioner.

(f) Seek innovative means to improve health care quality.

(g) Appoint regional planning board members and serve as

president of the board.

(h) Implement policies established by the commissioner to

provide support to persons displaced from employment as a result of

the initiation of the new system.

(i) Make needed revenue sharing arrangements so that

regionalization in no way limits a patient's choice of health care

provider.

(j) Implement procedures established by the commissioner for

the resolution of grievances.

(k) Implement processes established by the commissioner to

permit the public to share concerns and provide ideas, opinions,

and recommendations regarding all aspects of the system policy.

(l) Report regularly to the public and, at intervals determined

by the commissioner, and pursuant to this act, to the commissioner,

on the status of the regional health insurance system, including

evaluating access to health care, quality of health care delivered,

and health care provider performance and recommending needed

improvements.

(m) Identify and prioritize regional health care needs and

goals, in collaboration with the regional medical officer, regional

health care providers, the regional planning board, and the

regional director of partnerships for health.

(n) Identify and maintain an inventory of regional health care

assets.

(o) Establish and maintain regional health care databases.

(p) Convene meetings of regional health care providers to

facilitate coordinated regional health care planning.

(q) Establish and implement a regional capital management plan

pursuant to the capital management plan established by the

commissioner for the system.

(r) Implement standards and formats established by the

commissioner for the development and submission of operating budget

requests.

(s) Support regional health care providers in developing

operating and capital budget requests.

(t) Receive, evaluate, and prioritize health care provider

operating and capital budget requests pursuant to standards and

criteria established by the commissioner.

(u) Prepare a 3-year regional budget request that meets the

health care needs of the region pursuant to this act, for

submission to the commissioner.

(v) Establish a comprehensive 3-year regional health insurance

budget using funds allocated to the region by the commissioner.

(w) Regularly assess projected revenues and expenditures to

ensure fiscal solvency of the regional health insurance system.

Sec. 35. (1) The regional medical officers shall do all of the

following:

(a) Administer all aspects of the regional office of health

care quality.

(b) Serve as a member of the regional health insurance board.

residents of the region pursuant to this act.

(d) Ensure a smooth transition to health care delivery by

regional health care providers under evidence-based standards that

guide clinical decision making.

(e) Support the development and distribution of user-friendly

software for use by health care providers in order to support the

delivery of high-quality health care.

(f) In collaboration with the chief medical officer, evaluate

evidence-based standards of health care in use at the time the

Michigan health insurance system becomes operative.

(g) Assure the implementation of improvements needed so that

all standards of health care are used to guide clinical decision

making in the system.

(h) Assure the delivery of uniformly high standards of health

care to all Michigan residents.

(i) In collaboration with the regional planning director,

oversee a regional effort to assure the establishment of community-

based networks of solo providers, small group practices, essential

community providers, and providers of auxiliary Michigan health

insurance system services that support health care providers in,

and assure the delivery of, comprehensive, coordinated health care

to Michigan residents.

(j) Assure the evaluation and measurement of the quality of

health care delivered in the region, including assessment of the

performance of individual health care providers, pursuant to

standards and methods established by the chief medical officer.

(k) Provide feedback to and support and supervision of health

care providers needed to improve the quality of health care they

deliver.

(l) Assure the provision of information to assist consumers in

evaluating the performance of health care providers.

(m) Identify areas of medical practice where standards have

not been established, and collaborate with the chief medical

officer to establish priorities in developing needed standards.

(n) Collaborate with regional public health officers to

establish regional health policies that support the public health.

(o) Establish a regional program to monitor and decrease

medical errors and their causes pursuant to standards and methods

established by the chief medical officer.

(p) Support the development and implementation of innovative

means to provide high-quality health care and assist providers in

securing funds for innovative demonstration projects that seek to

improve health care quality.

(q) Establish means to assess the impact of health insurance

system policies intended to assure the delivery of high-quality

health care and evidence-based standards.

(r) Collaborate with the chief medical officer and the

director of planning in the development and maintenance of regional

health care databases.

(s) Ensure the enforcement of health insurance system

reporting requirements.

(t) Support health care providers in developing regional

budget requests.

(u) Collaborate with the regional planning director of the

partnerships for health to develop patient education on appropriate

utilization of health care services.

(v) Annually report to the public, the regional planning

board, and the chief medical officer on the status of regional

health care programs, needed improvements, and plans to implement

and evaluate delivery of health care improvements.

Sec. 37. (1) Each region shall have a regional health

insurance board consisting of 13 members who shall be appointed by

the regional planning director. Members shall serve 8-year terms

that coincide with the term of the regional planning director and

may be reappointed for a second term.

(2) Regional planning board members shall have resided for a

minimum of 2 years in the region in which they serve prior to

appointment to the board.

(3) Regional planning board members shall reside in the region

they serve while on the board.

(4) The board shall consist of the following members:

(a) The regional planning director, the regional medical

officer, the regional director of the partnerships for health, and

a public health officer from 1 of the regional counties. When there

is more than 1 county in a region, the public health officer board

position shall rotate among the public health county officers on a

timetable to be established by each regional planning board.

(b) A representative from the office of consumer advocacy.

(d) One expert in health care planning.

(e) Two members who are direct patient care providers in the

region.

(f) One member who represents ancillary health care workers in

the region.

(g) One member representing hospitals in the region.

(h) One member representing essential community providers in

the region.

(i) One member representing the public.

(5) The regional planning director shall serve as chair of the

board.

(6) The purpose of the regional planning boards is to advise

and make recommendations to the regional planning director on all

aspects of regional health policy.

(7) Meetings of the board shall be open to the public pursuant

to the open meetings act, 1976 PA 267, MCL 15.261 to 15.275.

ARTICLE IV FUNDING

Sec. 41. (1) There is established in the department of

treasury the health insurance fund. The fund shall be administered

by a director appointed by the commissioner.

(2) All money collected, received, and transferred pursuant to

this act, including money collected as a remedy or penalty for

violations of this act, shall be transmitted to the department of

treasury to be deposited to the credit of the health insurance fund

for the purpose of financing the Michigan health insurance system.

All money in the fund at the close of the fiscal year shall remain

in the fund, shall not lapse, and shall be carried forward to the

following year.

(3) All claims for health care services rendered shall be made

to the health insurance fund through an electronic claims and

payments system; however, alternative provisions shall be made for

providers without electronic systems.

(4) All payments made for health care services shall be

disbursed from the health insurance fund through an electronic

claims and payments system; however, alternative provisions shall

be made for providers without electronic systems.

(5) The director of the fund shall serve on the health

insurance policy board.

Sec. 43. (1) The director of the health insurance fund shall

establish the following accounts within the health insurance fund:

(a) A system account to provide for all annual state

expenditures for health care.

(b) A reserve account.

(2) During the first 5 years of operation of the system, the

director shall maintain a reserve account.

Sec. 45. (1) The director of the health insurance fund shall

immediately notify the commissioner when regional or statewide

revenue and expenditure trends indicate that expenditures appear to

exceed revenues.

(2) If the commissioner determines that statewide revenue

trends indicate the need for statewide cost control measures, the

commissioner shall convene the health insurance policy board to

discuss the need for cost control measures and shall immediately

report to the public regarding the possible need for cost control

measures.

(3) Cost control measures include any or all of the following:

(a) Changes in the health insurance system or health facility

administration that improve efficiency.

(b) Changes in the delivery of health care services that

improve efficiency and care quality.

improvements.

(d) Postponement of planned capital expenditures.

(e) Limitations on the reimbursement of Michigan health

insurance system managers and upper level managers.

(f) Limitations on health care provider reimbursement above a

specified amount of aggregate billing for employers other than the

Michigan health insurance system administration, whose compensation

is determined by the payment board and who are not subject to state

civil service statutes.

(g) Limitations on aggregate reimbursements to manufacturers

of pharmaceutical and durable and nondurable medical equipment.

(h) Deferred funding of the reserve account.

(i) Imposition of copayments or deductible payments. Any

copayment or deductible payments imposed shall be subject to all of

the following requirements:

(i) No copayment or deductible may be established when

prohibited by federal law.

(ii) All copayments and deductibles shall meet federal

guidelines for copayments and deductible payments that may lawfully

be imposed on persons with low income.

(iii) The commissioner shall establish standards and procedures

for waiving copayments or deductible payments and a waiver card

which shall be issued to a patient or to a family to indicate the

waiver. Copayment and deductible waivers shall be reviewed annually

by the regional planning director.

(iv) Waivers shall not affect the reimbursement of health care

providers.

(v) Any copayments or deductible payments established pursuant

to this section shall be transmitted to the department of treasury

to be deposited to the credit of the health insurance fund.

(vi) No copayments shall be established for preventive care as

determined by a patient's primary provider.

(j) Imposition of an eligibility waiting period if the

commissioner determines that large numbers of people are emigrating

to the state for the purpose of obtaining health care through the

Michigan health insurance system.

(4) Nothing in this act shall be construed to diminish the

benefits that an individual has under a collective bargaining

agreement.

(5) Nothing in this act shall preclude employees from

receiving benefits available to them under a collective bargaining

agreement or other employee-employer agreement that are superior to

benefits under this act.

(6) Cost control measures implemented by the commissioner and

the health insurance policy board shall remain in place in the

state until the commissioner and the health insurance policy board

determine that the cause of a revenue shortfall has been corrected.

(7) If the health insurance policy board determines that cost

control measures described in subsection (3) will not be sufficient

to meet a revenue shortfall, the commissioner shall report to the

legislature and to the public on the causes of the shortfall and

the reasons for the failure of cost controls and shall recommend

measures to correct the shortfall, including an increase in health

insurance system premium payments.

Sec. 47. (1) If the commissioner or a regional planning

director determines that regional revenue and expenditure trends

indicate a need for regional cost control measures, the regional

planning director shall convene the regional planning board to

discuss the possible need for cost control measures and to make a

recommendation about appropriate measures to control costs. These

may include any of the following:

(a) Changes in health insurance system or health facility

administration that improve efficiency.

(b) Changes in the delivery of health services that improve

efficiency or care quality.

(d) Limitation on reimbursement of health care providers,

upper level managers, or pharmaceutical or medical equipment

manufacturers above a specified amount of aggregate billing.

(2) If a regional planning board is convened to implement cost

control measures, the commissioner shall participate in the

regional planning board meeting.

(3) The regional planning director, in consultation with the

commissioner, shall determine if cost control measures are

warranted and those measures that shall be implemented.

(4) Imposition of copayments or deductibles, postponement of

new benefits or benefit improvements, deferred funding of the

reserve account, establishment of eligibility waiting periods, and

increases in health insurance premium payments may occur on a

statewide basis only and with the concurrence of the commissioner

and the health insurance policy board.

(5) If a regional planning director and regional planning

board are considering imposition of cost control measures, the

regional planning director shall immediately report to the

residents of the region regarding the possible need for cost

control measures.

(6) Cost control measures shall remain in place in a region

until the regional planning director and the commissioner determine

that the cause of a revenue shortfall has been corrected.

Sec. 49. (1) The commissioner annually shall prepare a health

insurance system budget that includes all expenditures, specifies a

limit on total annual state expenditures, and establishes

allocations for each health care region that shall cover a 3-year

period and that shall be disbursed on a quarterly basis.

(2) The commissioner shall limit the growth of spending on a

statewide and on a regional basis, by reference to average growth

in state domestic product across multiple years; population growth,

actuarial demographics, and other demographic indicators;

differences in regional costs of living; advances in technology and

their anticipated adoption into the benefit plan; improvements in

efficiency of administration and care delivery; and improvements in

the quality of care, and by reference to projected future state

domestic product growth rates.

(3) The commissioner shall project health insurance system

revenues and expenditures for 3, 6, 9, and 12 years pursuant to

this act.

(4) The commissioner shall annually convene a health insurance

system revenue and expenditure conference to discuss revenue and

expenditure projections and future health insurance system policy

directions and initiatives, including means to lower the cost of

administration. Participants shall include regional health

directors and medical officers, directors of the health insurance

fund and payments board, the consumer advocate, state and regional

directors of the partnerships for health, and representatives of

the health insurance system facility upper level managers.

(5) The Michigan health insurance system budget shall include

all of the following:

(a) Providers and managers budget.

(b) Capitated budgets.

(d) Capital investment budget.

(e) Purchasing budget.

(f) Research and innovation budget.

(g) Workforce training and development budget.

(h) Reserve account.

(i) System administration system.

(j) Regional budgets.

(6) In establishing budgets, the commissioner shall make

adjustments based on all of the following:

(a) Costs of transition to the new system.

(b) Projections regarding the health services anticipated to

be used by Michigan residents.

including the overhead costs of maintaining medical practices.

(d) Health risk of enrollees.

(e) Scope of services provided.

(f) Innovative programs that improve care quality,

administrative efficiency, and workplace safety.

(g) Unrecovered cost of providing health care to persons who

are not members of the Michigan health insurance system. The

commissioner shall seek to recover the costs of health care

provided to persons who are not members of the system.

(h) Costs of workforce training and development.

(i) Costs of correcting health outcome disparities and the

unmet needs of previously uninsured and underinsured enrollees.

(j) Relative usage of different health care providers.

(k) Needed improvements in access to health care.

(l) Projected savings in administrative costs.

(m) Projected savings due to provision of primary and

preventive health care to Michigan residents, including savings

from decreases in preventable emergency room visits and

hospitalizations.

(n) Projected savings from improvements in health care

quality.

(o) Projected savings from decreases in medical errors.

(p) Projected savings from systemwide management of capital

expenditures.

(q) Cost of incentives and bonuses to support the delivery of

high-quality health care, including incentives and bonuses needed

to recruit and retain an adequate supply of needed health care

providers and managers and to attract health care providers to

medically underserved areas.

(r) Costs of treating complex illnesses, including disease

management programs.

(s) Cost of implementing standards of health care, health care

coordination, electronic medical records, and other electronic

initiatives.

(t) Costs of new technology.

(u) Technology research and development costs and costs

related to health insurance system use of new technologies.

Sec. 51. The commissioner shall annually establish the total

funds to be allocated for provider and manager compensation

pursuant to this section. In establishing the provider and manager

budgets, the commissioner shall allot sufficient funds to assure

that Michigan can attract and retain those providers and managers

needed to meet the health needs of Michigan residents.

Sec. 53. (1) The commissioner shall establish the payments

board and shall appoint a director and members of the board.

(2) The payments board shall be composed of experts in health

care finance and insurance systems, a designated representative of

the commissioner, a designated representative of the health

insurance fund, and a representative of the regional planning

directors who shall serve a 2-year term. The position of regional

representative shall rotate among the directors of the regional

planning boards.

(3) The purpose of the board is to establish and maintain a

plan for the compensation of all of the following pursuant to the

manager and provider budget established by the commissioner:

(a) Upper level managers in private health care facilities,

including hospitals, integrated health care delivery systems, group

medical practices, and essential community facilities.

(b) Elected and appointed Michigan health insurance system

managers and officers who are exempt from statutes governing civil

service employment.

osteopathic physicians, dentists, podiatrists, nurse practitioners,

physician assistants, chiropractors, acupuncturists, psychologists,

social workers, marriage, family, and child counselors, and other

health care professionals who are required by law to be licensed to

practice in Michigan and who provide services pursuant to this act.

(d) Health care providers licensed and accredited to provide

services in Michigan may choose to be compensated for their

services either by the Michigan health insurance system or by a

person to whom they provide services.

(e) Nothing in this act is intended to interfere with, change,

or affect the terms of compensation established under contracts

between unions and the health insurance system during negotiations

for the labor cost component of the health insurance system

operating budget.

(f) Health care providers electing to be compensated by the

Michigan health insurance system shall enter into a contract with

the health insurance system pursuant to provisions of this section.

(g) Health care providers electing to be compensated by

persons to whom they provide services, instead of by the Michigan

health insurance system, may establish charges for their services.

(4) Only the Michigan health insurance plan as provided under

this act shall be sold in Michigan for services provided by the

Michigan health insurance plan.

(5) Health care providers licensed or accredited to provide

services in Michigan, who choose to be compensated by the health

insurance system instead of by patients to whom they provide

services, may choose how they wish to be compensated under this

act, as fee-for-service providers or as salaried providers in

health care systems that provide comprehensive, coordinated

services.

(6) The compensation plan shall include all of the following:

(a) Actuarially sound payments for health care providers in

the fee-for-service sector and for health care providers working in

health systems where comprehensive and coordinated services are

provided, including the actuarial basis for them.

(b) Payment schedules which shall be in effect for 3 years.

to, all the following:

(i) Bonus payments for providers and upper level managers who,

in providing services and managing facilities, practices, and

integrated health care delivery systems, pursuant to this act, meet

performance standards and outcome goals established by the Michigan

health insurance system.

(ii) Incentive payments for providers and upper level managers

who provide services to the Michigan health insurance system in

areas identified by the office of health care planning as medically

underserved.

(iii) Incentive payments required to achieve the ratio of

generalist to specialist providers needed in order to meet the

standards of health care and service needs of the population.

(iv) Incentive payments required to recruit and retain nurse

practitioners and physician assistants in order to provide primary

and preventive health care to Michigan residents.

(v) No bonus or incentive payment may be made in excess of the

total allocation for provider and manager incentive and bonus

reimbursement established by the commissioner in the health

insurance system budget.

(vi) No incentive may adversely affect the health care a

patient receives or the care a health care provider recommends.

(7) Health care providers shall be paid for all services

provided pursuant to this act, including health care provided to

persons who are subsequently determined to be ineligible for the

Michigan health insurance system.

(8) Licensed health care providers who deliver services not

covered under the Michigan health insurance system may establish

rates for and charge patients for those services.

(9) Reimbursement to providers and managers shall not exceed

the amount allocated by the commissioner to provider and manager

annual budgets.

Sec. 55. (1) Fee-for-service health care providers shall

choose representatives to negotiate reimbursement rates with the

payments board on their behalf.

(2) The payments board shall establish a uniform system of

payments for all services provided pursuant to this act.

(3) Payment schedules shall be available to health care

providers in printed and in electronic documents.

(4) Payment schedules shall be in effect for 3 years, at which

time payment schedules may be renegotiated. Payment adjustments may

be made at the discretion of the payments board to meet the goals

of the health insurance system.

(5) In establishing a uniform system of payments, the payments

board shall collaborate with regional health directors and shall

take into consideration regional differences in the cost of living

and the need to recruit and retain skilled health care providers in

the region.

(6) Fee-for-service health care providers shall submit claims

electronically to the health insurance fund and shall be paid

promptly for claims filed in compliance with procedures established

by the health insurance fund. If a properly filed claim for

eligible services is not paid promptly, the provider shall be paid

interest on the claim at a rate of 12%, compounded annually.

Sec. 57. Compensation for health care providers and upper

level managers employed by integrated health care delivery systems,

group medical practices, and essential community providers that

provide comprehensive, coordinated services shall be determined

according to the following guidelines:

(a) Providers and upper level managers employed by systems

that provide comprehensive, coordinated health care services shall

be represented by their respective employers for the purposes of

negotiating reimbursement with the payments board.

(b) In negotiating reimbursement with systems providing

comprehensive, coordinated services, the payments board shall take

into consideration the need for comprehensive systems to have

flexibility in establishing provider and upper level manager

reimbursement.

payment adjustments may be made at the discretion of the payments

board to meet the goals of the health insurance system.

(d) The payments board shall take into consideration regional

differences in the cost of living and the need to recruit and

retain skilled providers and upper level managers to the regions.

(e) The payments board shall establish a timetable for

reimbursement negotiations. If an agreement on reimbursement is not

reached according to the timetable established by the payments

board, the payments board shall establish reimbursement rates,

which shall be binding.

Sec. 59. (1) The payments board shall annually report to the

commissioner on the status of health care provider and upper level

manager reimbursement, including satisfaction with reimbursement

levels and the sufficiency of funds allocated by the commissioner

for provider and upper level manager reimbursement. The payments

board shall recommend needed adjustments in the allocation for

provider payments.

(2) The office of health care quality shall annually report to

the commissioner on the impact of the bonus payments in improving

quality of health care, health outcomes, and management

effectiveness. The payments board shall recommend needed

adjustments in bonus allocations.

(3) The office of health care planning shall annually report

to the commissioner on the impact of the incentive payments in

recruiting health care providers and upper level managers to

underserved areas, in establishing the needed ratio of generalist

to specialist providers, and in attracting and retaining nurse

practitioners and physician assistants to the state, and shall

recommend needed adjustments.

Sec. 61. (1) The commissioner shall establish an allocation

for each region to fund regional operating budgets for a period of

3 years. Allocations shall be disbursed to the regions on a

quarterly basis.

(2) Integrated health care delivery systems, essential

community providers, and group medical practices that provide

comprehensive, coordinated services may choose to be reimbursed on

the basis of a capitated operating budget or a system operating

budget that covers all costs of providing health care services.

(3) Health care providers choosing to function on the basis of

a capitated or system operating budget shall submit 3-year

operating budget requests to the regional planning director,

pursuant to standards and guidelines established by the

commissioner.

(4) Health care providers may include in their operating

budget requests reimbursement for ancillary health care or social

services that were previously funded by money now received and

disbursed by the health insurance fund.

(5) No payment may be made from an operating or a capitated

budget for a capital expense except as stipulated in section 69.

(6) Regional planning directors shall negotiate operating

budgets with regional health care entities, which shall cover a

period of 3 years.

(7) Operating and capitated budgets shall include health care

workforce labor costs. Where unions represent employees working in

systems functioning under operating or capitated budgets, unions

shall represent those employees in negotiations with the regional

planning director for the purpose of establishing their

reimbursement.

Sec. 63. (1) Health systems and medical practices functioning

under operating and capitated budgets shall immediately report any

projected operating deficit to the regional planning director. The

regional planning director shall determine whether projected

deficits reflect appropriate increases in utilization, in which

case the director shall make an adjustment to the operating budget.

If the director determines that deficits are not justifiable, no

adjustment shall be made.

(2) If a regional planning director determines that

adjustments to operating budgets will cause a regional revenue

shortfall and that cost control measures may be required, the

regional planning director shall report the possible revenue

shortfall to the commissioner and take actions required pursuant to

section 45.

Sec. 65. (1) No payment may be made from a health system

operating budget or from a capitated budget to provide a

shareholder dividend.

(2) The inspector general shall monitor operating budgets to

determine whether an unlawful payment has been made pursuant to

this section.

(3) The commissioner shall establish and enforce remedies and

penalties for violations of this section.

(4) Money collected for violations of this section shall be

remitted to the health insurance fund for use in the Michigan

health insurance system.

Sec. 67. (1) Margins generated by a facility operating under a

health system capitated budget or from an operating budget may be

retained and used to meet the health care needs of the population.

(2) No margin may be retained if that margin was generated

through inappropriate limitations on access to health care or

compromises in the quality of health care or in any way that

adversely affected or is likely to adversely affect the health of

the persons receiving services from a health facility, integrated

health care delivery system, group medical practice, or essential

community provider functioning under an operating or capitated

budget.

(3) The chief medical officer shall evaluate the source of

margin generation and report violations of this section to the

commissioner.

(4) The commissioner shall establish and enforce remedies and

penalties for violations of this section.

(5) Money collected pursuant to violations of this section

shall be remitted to the health insurance fund for use in the

Michigan health insurance system.

(6) Health facilities operating under health system capitated

and operating budgets may raise and expend funds from sources other

than the Michigan health insurance system, including, but not

limited to, private or foundation donors and other non-Michigan

health insurance system sources for purposes related to the goals

of this act and in accordance with provisions of this act.

Sec. 69. (1) During the transition, the commissioner shall

develop a capital management plan which shall govern all capital

investments and acquisitions undertaken in the Michigan health

insurance system. The plan shall include a framework, standards,

and guidelines for all of the following:

(a) Standards whereby the office of health care planning shall

oversee, assist in the implementation of, and ensure that the

provisions of the capital management plan are enforced.

(b) Assessment and prioritization of short- and long-term

Michigan health insurance system capital needs on statewide and

regional bases.

shortages on a regional and statewide basis.

(d) Development by the commissioner of a health insurance

system capital budget that supports health insurance system goals,

priorities, and performance standards and meets the health needs of

Michigan residents.

(e) Development, as part of the Michigan health insurance

system capital budget, of regional capital allocations that shall

cover a period of 3 years.

(f) Exploration and evaluation of, and support for,

noninvestment means to meet health care needs, including, but not

limited to, improvements in administrative efficiency, health care

quality, and innovative service delivery, use, adaptation, or

refurbishment of existing land and property and identification of

publicly owned land or property that may be available to the

Michigan health insurance system and that may meet a capital need.

(g) Development of capital inventories on a regional basis,

including the condition, utilization capacity, maintenance plan and

costs, deferred maintenance of existing capital inventory, and

excess capital capacity.

(h) A process whereby those intending to make capital

investments or acquisitions shall prepare a business case for

making the investment or acquisition, including the full life-cycle

costs of the project or acquisition, an environmental impact report

that meets existing state standards, and a demonstration of how the

investment or acquisition meets the health needs of Michigan

residents it is intended to serve. Acquisitions include the

acquisition of land, operational property, or administrative office

space.

(i) Standards and a process whereby the regional planning

directors shall evaluate, accept, reject, or modify a business plan

for a capital investment or acquisition. Decisions of a regional

planning director may be appealed through a grievance resolution

process established by the commissioner.

(j) Standards for binding project contracts between the health

insurance system and the party developing a capital project or

making a capital acquisition that shall govern all terms and

conditions of capital investments and acquisitions, including terms

and conditions for health insurance system grants, loans, lines of

credit, and lease purchase arrangements.

(k) A process and standards whereby the health insurance fund

shall negotiate terms and conditions of the Michigan health

insurance system loans, grants, lines of credit, and lease purchase

arrangements for capital investments and acquisitions. Terms and

conditions negotiated by the health insurance fund shall be

included in project contracts.

(l) A plan for the commissioner and for the regional planning

directors to issue requests for proposals and to oversee a process

of competitive bidding for the development of capital projects that

meet the needs of the Michigan health insurance system.

(m) Responses to requests for proposals and competitive bids

shall include a description of how a project meets the service

needs of the region and addresses the environmental impact report

and shall include the full life-cycle costs of a capital asset.

(n) Requests for proposals shall address how intellectual

property will be handled and shall include conflict-of-interest

guidelines.

(o) A process and standards for periodic revisions in the

capital management plan, including annual meetings in each region

to discuss the plan and make recommendations for improvements in

the plan.

(p) Standards for determining when a violation of these

provisions shall be referred to the attorney general for

investigation and possible prosecution of the violation.

(q) Development of performance standards and a process to

monitor and measure performance of those making capital health care

investments and acquisitions, including those making capital

investments pursuant to a state competitive bidding process.

(r) A process for earned autonomy from state capital

investment oversight for those who demonstrate the ability to

manage capital investment and capital assets effectively in

accordance with Michigan health insurance system standards, and

standards for loss of earned autonomy when capital management is

ineffective.

(2) Terms and conditions of capital project oversight by the

Michigan health insurance system shall be based on the performance

history of the project developer. Health care providers may earn

autonomy from oversight if they demonstrate effective capital

planning and project management, pursuant to the goals and

guidelines established by the commissioner. Health care providers

who do not demonstrate such proficiency shall remain subject to

oversight by the regional planning director or shall lose autonomy

from oversight.

(3) In general, no capital investment may be made from an

operating budget. However, guidelines shall be established for the

types and levels of small capital investments that may be

undertaken from an operating budget without the approval of the

regional planning director.

Sec. 71. (1) Regional planning directors shall develop a

regional capital development plan pursuant to the Michigan health

insurance system capital management plan established by the

commissioner. In developing the regional capital development plan,

the regional planning director shall do all of the following:

(a) Implement the standards and requirements of the capital

management plan established by the commissioner.

(b) Develop and annually update a regional budget request that

covers a period of 3 years.

budget requests pursuant to the Michigan health insurance system

capital management plan established by the commissioner.

(d) Receive and evaluate capital budget requests from regional

health care providers.

(e) Establish ranking criteria to assess competing demands for

capital.

(f) Conduct ongoing project evaluation to assure that terms

and conditions of project funding are met.

(2) Services provided as a result of capital investments or

acquisitions that do not meet the terms of the regional capital

development plan and the capital management plan developed by the

commissioner shall not be reimbursed by the Michigan health

insurance system.

Sec. 73. (1) Assets financed by state grants, loans, and lines

of credit and lease purchase arrangements shall be owned, operated,

and maintained by the recipient of the grant, loan, line of credit,

or lease purchase arrangements, according to terms established at

the time of issuance of the grant, loan, or line of credit, or

lease purchase arrangement.

(2) Assets financed under long-term leases with the Michigan

health insurance system shall be transferred to public ownership at

the end of the lease.

(3) Assets financed by private capital or donations are owned,

operated, and maintained by the borrower or donor recipient.

Sec. 75. The health regions shall make financial information

available to the public when the Michigan health insurance system

contribution to a capital project is greater than $50,000,000.00.

Information shall include the purpose of the project or

acquisition, its relation to Michigan health insurance system

goals, the project budget, the timetable for completion, and

performance standards and benchmarks.

Sec. 77. (1) The commissioner shall establish a budget for the

purchase of prescription drugs and durable and nondurable medical

equipment for the health insurance system.

(2) The commissioner shall use the purchasing power of the

state to obtain the lowest possible prices for prescription drugs

and durable and nondurable medical equipment.

(3) The commissioner shall make discounted prices available to

all Michigan residents, health care providers, and prescription

drug and medical equipment wholesalers and retailers of products

approved for use in and included in the benefit package of the

Michigan health insurance system.

Sec. 79. (1) The commissioner shall establish a budget to

support research and innovation that has been recommended by the

chief medical officer, the director of planning, the consumer

advocates, the partnerships for health, and others as required by

the commissioner.

(2) The research and innovation budget shall support the goals

and standards of the Michigan health insurance system.

Sec. 81. (1) The commissioner shall establish a budget to

support the training, development, and continuing education of

health care providers and the health care workforce needed to meet

the health care needs of Michigan residents and the goals and

standards of the health insurance system.

(2) The commissioner shall establish guidelines for giving

special consideration for employment to persons who have been

displaced as a result of the transition to the new health insurance

system.

Sec. 83. (1) The commissioner shall seek all necessary

waivers, exemptions, agreements, or legislation so that all current

federal payments to the state for health care be paid directly to

the Michigan health insurance system, which shall then assume

responsibility for all benefits and services previously paid for by

the federal government with those funds.

(2) In obtaining the waivers, exemptions, agreements, or

legislation, the commissioner shall seek from the federal

government a contribution for health care services in Michigan that

shall not decrease in relation to the contribution to other states

as a result of the waivers, exemptions, agreements, or legislation.

(3) The commissioner shall seek all necessary waivers,

exemptions, agreements, or legislation so that all current state

payments for health care shall be paid directly to the system,

which shall then assume responsibility for all benefits and

services previously paid for by state government with those funds.

(4) In obtaining the waivers, exemptions, agreements, or

legislation, the commissioner shall seek from the legislature a

contribution for health care services that shall not decrease in

relation to state government expenditures for health care services

in the year that this act was enacted, except that it may be

corrected for change in state gross domestic product, the size and

age of population, and the number of residents living below the

federal poverty level.

(5) The commissioner shall establish formulae for equitable

contributions to the Michigan health insurance system from all

Michigan counties and other local government agencies.

(6) The commissioner shall seek all necessary waivers,

exemptions, agreements, or legislation so that all county or other

local government agency payments shall be paid directly to the

Michigan health insurance system.

(7) The system's responsibility for providing care shall be

secondary to existing federal, state, or local governmental

programs for health care services to the extent that funding for

these programs is not transferred to the health insurance fund or

that the transfer is delayed beyond the date on which initial

benefits are provided under the system.

(8) In order to minimize the administrative burden of

maintaining eligibility records for programs transferred to the

system, the commissioner shall strive to reach an agreement with

federal, state, and local governments in which their contributions

to the health insurance fund shall be fixed to the rate of change

of the state gross domestic product, the size and age of

population, and the number of residents living below the federal

poverty level.

Sec. 85. (1) The commissioner shall pursue all reasonable

means to secure a repeal or a waiver of any provision of federal

law that preempts any provision of this act. If a repeal or a

waiver of law or regulations cannot be secured, the commissioner

shall exercise his or her powers to promulgate rules and

regulations, or seek conforming state legislation, consistent with

federal law, in an effort to best fulfill the purposes of this act.

(2) To the extent permitted by federal law, an employee

entitled to health or related benefits under a contract or plan

that, under federal law, preempts provisions of this act shall

first seek benefits under that contract or plan before receiving

benefits from the system under this act.

(3) No benefits shall be denied under the system created by

this act unless the employee has failed to take reasonable steps to

secure like benefits from the contract or plan, if those benefits

are available.

(4) Nothing in this section shall preclude a person from

receiving benefits from the system under this act that are superior

to benefits available to the person under an existing contract or

plan.

(5) Nothing in this act is intended, nor shall this act be

construed, to discourage recourse to contracts or plans that are

protected by federal law.

(6) To the extent permitted by federal law, a health care

provider shall first seek payment from the contract or plan before

submitting bills to the Michigan health insurance system.

Sec. 87. (1) It is the intent of this act to establish a

single public payer for all health care in Michigan. However, until

such time as the role of all other payers for health care has been

terminated, health care costs shall be collected from collateral

sources whenever medical services provided to an individual are, or

may be, covered services under a policy of insurance, health care

service plan, or other collateral source available to that

individual, or for which the individual has a right of action for

compensation to the extent permitted by law.

(2) As used in this act, collateral source includes all of the

following:

(a) Insurance policies written by insurers, including the

medical components of automobile, homeowners, and other forms of

insurance.

(b) Health care service plans and pension plans.

(d) Employee benefit contracts.

(e) Government benefit programs.

(f) A judgment for damages for personal injury.

(g) Any third party who is or may be liable to an individual

for health care services or costs.

(3) "Collateral source" does not include either of the

following:

(a) A contract or plan that is subject to federal preemption.

(b) Any governmental unit, agency, or service, to the extent

that subrogation is prohibited by law. An entity described in

subsection (2) is not excluded from the obligations imposed by this

act by virtue of a contract or relationship with a governmental

unit, agency, or service.

(4) The commissioner shall attempt to negotiate waivers, seek

federal legislation, or make other arrangements to incorporate

collateral sources in Michigan into the Michigan health insurance

system.

(5) Whenever an individual receives health care services under

the system and he or she is entitled to coverage, reimbursement,

indemnity, or other compensation from a collateral source, he or

she shall notify the health care provider and provide information

identifying the collateral source, the nature and extent of

coverage or entitlement, and other relevant information. The health

care provider shall forward this information to the commissioner.

The individual entitled to coverage, reimbursement, indemnity, or

other compensation from a collateral source shall provide

additional information as requested by the commissioner.

(6) The Michigan health insurance system shall seek

reimbursement from the collateral source for services provided to

the individual and may institute appropriate action, including

suit, to recover the reimbursement. Upon demand, the collateral

source shall pay to the health insurance fund the sums it would

have paid or expended on behalf of the individual for the health

care services provided by the system.

Sec. 89. (1) If a collateral source is exempt from subrogation

or the obligation to reimburse the system as provided in this act,

the commissioner may require that an individual who is entitled to

medical services from the source first seek those services from

that source before seeking those services from the system.

(2) To the extent permitted by federal law, contractual

retiree health benefits provided by employers shall be subject to

the same subrogation as other contracts, allowing the Michigan

health insurance system to recover the cost of services provided to

individuals covered by the retiree benefits, unless and until

arrangements are made to transfer the revenues of the benefits

directly to the Michigan health insurance system.

ARTICLE V ELIGIBILITY AND BENEFITS

Sec. 91. (1) All Michigan residents are eligible for the

Michigan health insurance system. Residency shall be based upon

physical presence in the state with the intent to reside. The

commissioner shall establish standards and a simplified procedure

to demonstrate proof of residency.

(2) The commissioner shall establish a procedure to enroll

eligible residents and provide each eligible individual with

identification that can be used by health care providers to

determine eligibility for services.

Sec. 93. (1) The Michigan health insurance system shall

provide health care coverage to Michigan residents who are

temporarily out of the state. The commissioner shall determine

eligibility standards for residents temporarily out of state for

longer than 90 days who intend to return and reside in Michigan and

for nonresidents temporarily employed in Michigan.

(2) Coverage for emergency care obtained out of state shall be

at prevailing local rates. Coverage for nonemergency care obtained

out of state shall be according to rates and conditions established

by the commissioner. The commissioner may require that a resident

be transported back to Michigan when prolonged treatment of an

emergency condition is necessary.

Sec. 95. Visitors to Michigan shall be billed for all services

received under the system. The commissioner may establish

intergovernmental arrangements with other states and countries to

provide reciprocal coverage for temporary visitors.

Sec. 97. All persons eligible for health benefits from

Michigan employers but who are working in another jurisdiction

shall be eligible for health benefits under this act providing that

they make payments equivalent to the payments they would be

required to make if they were residing in Michigan.

Sec. 99. Unmarried, unemancipated minors shall be deemed to

have the residency of their parent or guardian. If a minor's

parents are deceased and a legal guardian has not been appointed,

or if a minor has been emancipated by court order, the minor may

establish his or her own residency.

Sec. 101. (1) An individual shall be presumed to be eligible

if he or she arrives at a health facility and is unconscious,

comatose, or otherwise unable, because of his or her physical or

mental condition, to document eligibility or to act in his or her

own behalf, or if the patient is a minor, the patient shall be

presumed to be eligible, and the health facility shall provide care

as if the patient were eligible.

(2) All health facilities subject to state and federal

provisions governing emergency medical treatment shall continue to

comply with those provisions.

Sec. 103. (1) Any eligible individual may choose to receive

services under the Michigan health insurance system from any

willing health care provider participating in the system.

(2) Covered benefits in the Michigan health insurance system

shall include all medical care determined to be medically

appropriate by the consumer's health care provider, subject to

subsection (4). Covered benefits include, but are not limited to,

all of the following:

(a) Inpatient and outpatient health facility services.

(b) Inpatient and outpatient professional health care provider

services by licensed health care professionals.

diagnostic and evaluative services.

(d) Durable medical equipment, appliances, and assistive

technology, including prosthetics, eyeglasses, and hearing aids and

their repair.

(e) Rehabilitative care.

(f) Emergency transportation and necessary transportation for

health care services for disabled and indigent persons.

(g) Language interpretation and translation for health care

services, including sign language for those unable to speak or hear

or who are language impaired, and Braille translation or other

services for those with no or low vision.

(h) Child and adult immunizations and preventive care.

(i) Health education.

(j) Hospice care.

(k) Home health care.

(l) Prescription drugs that are listed on the system formulary.

Nonformulary prescription drugs may be included where standards and

criteria established by the commissioner are met.

(m) Mental and behavioral health care.

(n) Dental care.

(o) Podiatric care.

(p) Chiropractic care.

(q) Acupuncture.

(r) Blood and blood products.

(s) Emergency care services.

(t) Vision care.

(u) Adult day care.

(v) Case management and coordination to ensure services

necessary to enable a person to remain safely in the least

restrictive setting.

(w) Substance abuse treatment.

(x) Care of up to 100 days in a skilled nursing facility

following hospitalization.

(y) Dialysis.

(z) Benefits offered by a bona fide church, sect,

denomination, or organization whose principles include healing

entirely by prayer or spiritual means provided by a duly authorized

and accredited practitioner or nurse of that bona fide church,

sect, denomination, or organization.

(3) The commissioner may expand benefits beyond the minimum

benefits described in subsection (2) when expansion meets the

intent of this act and when there are sufficient funds to cover the

expansion.

(4) The following health care services shall be excluded from

coverage by the Michigan health insurance system:

(a) Health care services determined to have no medical

indication by the commissioner and the chief medical officer.

(b) Surgery, dermatology, orthodontia, prescription drugs, and

other procedures primarily for cosmetic purposes, unless required

to correct a congenital defect, restore or correct a part of the

body that has been altered as a result of injury, disease, or

surgery, or determined to be medically necessary by a qualified,

licensed health care professional in the system.

appropriate nonprivate rooms are available, unless determined to be

medically necessary by a qualified, licensed health care

professional in the system.

(d) Services of a health care provider that is not licensed or

accredited by the state except for approved services provided to a

Michigan resident who is temporarily out of the state.

Sec. 105. (1) The commissioner shall institute no deductible

payments or copayments other than for specialist visits that are

unreferred by the primary care provider during the initial 2 years

of the system's operation. The commissioner and the health

insurance policy board shall review this policy annually, beginning

in the third year of operation, and determine whether deductible

payments or copayments should be established.

(2) Patients shall incur a copayment charge for unreferred

specialist visits, the amount of which shall be established by the

commissioner.

(3) If the commissioner establishes copayments as provided in

subsection (1), they shall be limited to $250.00 per person per

year and $500.00 per family per year. Copayments for unreferred

specialist visits are not subject to this limit.

(4) If the commissioner establishes deductible payments

consistent with subsection (1), they shall be limited to $250.00

per person per year and $500.00 per family per year.

(5) No copayments or deductible payments shall be established

for preventive care as determined by a patient's primary care

provider.

(6) No copayments or deductible payments shall be established

when prohibited by federal law.

(7) The commissioner shall establish standards and procedures

for waiving copayments or deductible payments. Waivers of

copayments or deductible payments shall not affect the

reimbursement of health care providers.

(8) Any copayments established pursuant to this section and

collected by health care providers shall be transmitted to the

department of treasury to be deposited to the credit of the health

insurance fund.

(9) Nothing in this act shall be construed to diminish the

benefits that an individual has under a collective bargaining

agreement.

(10) Nothing in this act shall preclude employees from

receiving benefits available to them under a collective bargaining

agreement or other employee-employer agreement that are superior to

benefits under this act.

Sec. 107. (1) All health care providers licensed or accredited

to practice in Michigan may participate in the Michigan health

insurance system. No health care provider whose license or

accreditation is suspended or revoked may be a participating health

care provider.

(2) Health care providers may accept eligible persons for care

according to the provider's ability to provide services needed by

the applicant and according to the number of patients a provider

can treat without compromising safety and care quality. A provider

may accept patients in the order of time of application.

(3) Persons eligible for health care services under this act

may choose a primary care provider. Primary care providers include

family practitioners, general practitioners, internists,

pediatricians, and nurse practitioners and physician assistants

practicing under supervision as defined in Michigan law. Women may

choose an obstetrician/gynecologist, in addition to a primary care

provider.

(4) Persons who choose to enroll with integrated health care

delivery systems, group medical practices, or essential community

providers that offer comprehensive services shall retain membership

for at least 1 year after an initial 3-month evaluation period

during which time they may withdraw for any reason. The 3-month

period shall commence on the date when an enrollee first sees a

primary care provider. Persons who want to withdraw after the

initial 3-month period shall request a withdrawal pursuant to

dispute resolution procedures established by the commissioner and

may request assistance from the consumer advocate in the dispute

process. The dispute shall be resolved in a timely fashion and

shall have no adverse effect on the care a patient receives.

(5) Persons needing to change primary care providers because

of health care needs that their primary care provider cannot meet

may change primary care providers at any time.

Sec. 109. (1) Primary care providers shall coordinate the

health care a patient receives or shall ensure that a patient's

care is coordinated.

(2) Patients shall have a referral from their primary care

provider, or from an emergency provider rendering care to them in

the emergency room or other accredited emergency setting, or from a

health care professional treating a patient for an emergency

condition in any setting, or from their obstetrician/gynecologist,

to see a physician or nonphysician specialist whose services are

covered by this act, unless the patient agrees to assume the costs

of care, in which case a referral is not needed. A referral shall

not be required to see a dentist.

(3) Referrals shall be based on the medical needs of the

patient and on guidelines which shall be established by the chief

medical officer to support clinical decision making.

(4) Referrals shall not be restricted or provided solely

because of financial considerations. The chief medical officer

shall monitor referral patterns and intervene as necessary to

assure that referrals are neither restricted nor provided solely

because of financial considerations.

(5) Patients established with a specialist before the system

is implemented do not need a referral to continue seeing the

specialist or their designee.

(6) Where referral systems are in place prior to the

initiation of the system, the chief medical officer shall review

the referral systems to assure that they meet health insurance

system standards for care quality and shall assure needed changes

are implemented so that all Michigan residents receive the same

standards of care quality.

(7) A specialist may serve as the primary care provider if the

patient and the provider agree to this arrangement and if the

provider agrees to coordinate the patient's care or to ensure that

the care the patient receives is coordinated.

(8) The commissioner shall establish or ensure the

establishment of a computerized referral registry to facilitate the

referral process and to allow a specialist and a patient to easily

determine whether a referral has been made pursuant to this act.

(9) A patient may appeal the denial of a referral through

grievance resolution procedures established under this act and may

request the assistance of the consumer advocate during the

grievance resolution process.

Sec. 111. (1) The purpose of the office of health care

planning is to plan for the short- and long-term health needs of

Michigan residents pursuant to the health care and finance

standards established by the commissioner and by this act.

(2) The office shall be headed by a planning director

appointed by the commissioner.

(3) The director shall do all the following:

(a) Administer all aspects of the office of health care

planning.

(b) Serve on the health insurance policy board.

health care goals in consultation with the chief medical officer,

the regional health officers, and directors and others with

experience in health care outcomes measurement and evaluation and

evaluate the performance criteria.

(d) Assist the health care regions to develop operating and

capital requests pursuant to health care and finance guidelines

established by the commissioner and by this act. In assisting

regions, the director shall do all of the following:

(i) Identify medically underserved areas and health service

shortages.

(ii) Identify disparities in health outcomes.

(iii) Support establishment of comprehensive health care

databases using uniform methodology that is compatible between the

regions and between the regions and the state health insurance

agency.

(iv) Provide information to support effective regional

planning.

(v) Provide information to support interregional planning,

including planning for access to specialized centers that perform a

high volume of procedures for conditions requiring highly

specialized treatments, including emergency and trauma and other

interregional access to needed health care, and planning for

coordinated interregional capital investment.

(vi) Evaluate regional budget requests and make recommendations

to the commissioner about regional revenue allocations.

(e) Estimate the health care workforce required to meet the

health needs of Michigan residents pursuant to the standards and

goals established by the commissioner, the costs of providing the

needed workforce, and, in collaboration with regional planners,

educational institutions, the governor, and the legislature,

develop short- and long-term plans to meet those needs, including a

plan to finance needed training.

(f) Estimate the number and types of health facilities

required to meet the short- and long-term health care needs of the

population and the projected costs of needed facilities. In

collaboration with the commissioner, regional planning directors

and health officers, the chief medical officer, the governor, and

the legislature, develop plans to finance and build needed

facilities.

Sec. 113. The director of the office of health care planning

shall establish the following electronic initiatives:

(a) Establish integrated statewide health care databases to

support health care planning and determine which databases should

be established on a statewide basis and which should be established

on a regional basis.

(b) Assure that databases have uniform methodology and formats

that are compatible between regions and between the regions and the

state.

remedies and penalties for noncompliance. Monitor the effectiveness

of reporting and make needed improvements.

(d) Establish electronic, online, scheduling systems for use

in the health insurance system.

(e) Establish electronic provider patient communication

systems that allow for e-visits, for use in the health insurance

system.

(f) Establish electronic systems that allow standard of care

guidelines, including disease management programs to be embedded in

a patient's electronic medical records.

(g) Establish electronic systems that give information to

providers about community-based patient care resources.

(h) Collaborate with the chief medical officer and regional

medical officers to assure the development of software systems that

link clinical guidelines to individual patient conditions, and

guide clinicians through diagnosis and treatment algorithms based

on evidence-based research and best medical practices.

(i) Collaborate with the chief medical officer and regional

medical officers to assure the development of software systems that

offer providers access to guidelines that are appropriate for their

specialty and that include current information on prevention and

treatment of disease.

(j) In collaboration with the partnerships for health and

regional health officers, establish web-based patient-centered

information systems that assist people to promote health and

provide information on health conditions and recent developments in

treatment.

(k) Establish electronic systems and other means to provide

patients with easily understandable information about the

performance of health care providers. This shall include, but is

not limited to, information about the experience that providers

have in the field or fields in which they deliver care, the number

of years they have practiced in their field, and, in the case of

medical and surgical procedures, the number of procedures they have

performed in their area or areas of specialization.

(l) Establish electronic systems that facilitate provider

continuing medical education that meets licensure requirements.

(m) Establish means for anonymous reporting of suspected

medical errors.

(n) Recommend to the commissioner means to link health care

research with the goals and priorities of the health insurance

system.

Sec. 115. (1) Within the agency, the commissioner shall

establish the office of health care quality.

(2) The office shall be headed by the chief medical officer.

(3) The office of health care quality shall have the following

purposes:

(a) Support the delivery of high-quality, coordinated health

care services that enhance health, prevent illness, disease, and

disability, slow the progression of chronic diseases, and improve

personal health management.

(b) Promote efficient health care delivery.

evaluating the quality of care delivered in the health insurance

system, including the performance of individual health

professionals.

(d) Establish means to make changes needed to improve care

quality, including innovative programs that improve quality.

(e) Promote patient, provider, and employer satisfaction with

the health insurance system.

(f) Assist regional planning directors and medical officers in

the development and evaluation of regional budget requests.

Sec. 117. (1) In supporting the goals of the office of health

care quality, the chief medical officer shall do all of the

following:

(a) Administer all aspects of the office.

(b) Serve on the health insurance policy board.

health care providers, and consumers, the director of planning, the

consumer advocate, and partnership for health directors to develop

community-based networks of solo providers, small group practices,

essential community providers, and providers of patient care

support services in order to offer comprehensive,

multidisciplinary, coordinated services to patients.

(d) Establish evidence-based standards of care for the health

insurance system which shall serve as guidelines to support

providers in the delivery of high-quality health care. Standards

shall be based on the best evidence available at the time and shall

be continually updated. Standards are intended to support the

clinical judgment of individual providers, not to replace it, and

to support clinical decisions based on the needs of individual

patients.

(2) In establishing standards under subsection (1), the chief

medical officer shall do all of the following:

(a) Draw on existing standards established by Michigan health

care institutions, on peer-created standards, and on standards

developed by other institutions that have had a positive impact on

care quality, such as the centers for disease control and the

agency for health care quality and research.

(b) Collaborate with regional medical officers in establishing

regional goals, priorities, and a timetable for implementation of

standards of health care.

standards of health care to the consumer advocate who shall report

those views to the chief medical officer.

(d) Collaborate with the director of planning and regional

medical officers to support the development of computer software

systems that link clinical guidelines to individual patient

conditions, guide clinicians through diagnosis and treatment

algorithms based on evidence-based research and best medical

practices, offer access to guidelines appropriate to each medical

specialty, and offer current information on disease prevention and

treatment and that support continuing medical education.

(e) Where referral systems for access to specialty health care

are in place prior to the initiation of the health insurance

system, the chief medical officer shall review the referral systems

to assure that they meet health insurance system standards for care

quality and shall assure that needed changes are implemented so

that all Michigan residents receive the same standards of care

quality.

(3) In collaboration with the director of planning and

regional medical officer, the chief medical officer shall implement

means to measure and monitor the quality of health care delivered

in the health insurance system. Monitoring systems shall include,

but are not limited to, peer and patient performance reviews.

(4) The chief medical officer shall establish means to support

individual providers and health systems in correcting quality of

care problems, including time frames for making needed improvements

and means to evaluate the effectiveness of interventions.

(5) In collaboration with regional medical officers and

directors and the director of planning, the chief medical officer

shall establish means to identify medical errors and their causes

and develop plans to prevent them.

(6) The chief medical officer shall convene an annual

statewide conference to discuss medical errors that occurred during

the year, their causes, means to prevent errors, and the

effectiveness of efforts to decrease errors.

(7) The chief medical officer shall recommend to the

commissioner an evidence-based benefits package for the health

insurance system, including priorities for needed benefit

improvements. In making recommendations, the chief medical officer

shall do all of the following:

(a) Identify safe and effective treatments.

(b) Evaluate and draw on existing benefit packages.

providers about benefits that meet the needs of their patients.

(d) Receive comments and recommendations made directly by

patients or indirectly through the consumer advocate.

(e) Identify and recommend to the commissioner and the health

insurance policy board innovative approaches to health promotion,

disease and injury prevention, education, research, and care

delivery for possible inclusion in the benefit package.

(f) Identify complementary and alternative modalities that

have been shown by the national institutes of health, division of

complementary and alternative medicine to be safe and effective for

possible inclusion as covered benefits.

(g) Recommend to the commissioner and update, as appropriate,

evidence-based pharmaceutical and durable and nondurable medical

equipment formularies. In establishing the formularies, the chief

medical officer shall establish a pharmacy and therapeutics

committee composed of pharmacy and medical health care providers,

representatives of health facilities and organizations that have

system formularies in place at the time the system is implemented,

and other experts that shall do all the following:

(i) Identify safe and effective pharmaceutical agents for use

in the Michigan health insurance system.

(ii) Draw on existing standards and formularies.

(iii) Identify experimental drugs and drug treatment protocols

for possible inclusion in the formulary.

(iv) Review formularies in a timely fashion to ensure that safe

and effective drugs are available and that unsafe drugs are removed

from use.

(v) Assure the timely dissemination of information needed to

prescribe safely and effectively to all Michigan providers.

(vi) Establish standards and criteria and a process for

providers to seek authorization for prescribing pharmaceutical

agents and durable and nondurable medical equipment that are not

included in the system formulary. No standard or criteria shall

impose an undue administrative burden on patients, health care

providers, including pharmacies and pharmacists, and none shall

delay the care a patient needs.

(vii) Develop standards and criteria and a process for

providers to request authorization for services and treatments,

including experimental treatments that are not included in the

system benefit package. Where processes are in place when the

health insurance system is initiated, the chief medical officer

shall review the systems to assure that they meet health insurance

system standards for care quality and shall assure that needed

changes are implemented so that all Michigan residents receive the

same standards of care quality. No standard or criteria shall

impose an undue administrative burden on a provider or a patient,

and none shall delay the care a patient needs.

(h) In collaboration with the director of planning, regional

planning directors, and regional medical officers, identify

appropriate ratios of general medical providers to specialty

medical providers on a regional basis that meet the health care

needs of the population and the goals of the health insurance

system.

(i) Recommend to the commissioner and to the payments board

financial and nonfinancial incentives and other means to achieve

recommended provider ratios.

(j) Collaborate with the director of planning and regional

medical officers and consumer advocates in development of

electronic initiatives, pursuant to section 113.

(k) Collaborate with the commissioner, the regional health

officers, the directors of the payments board and the health

insurance fund to formulate a provider reimbursement model that

promotes the delivery of coordinated, high-quality health services

in all sectors of the health insurance system and creates financial

and other incentives for the delivery of high-quality health care.

(l) Establish or assure the establishment of continuing medical

education programs about advances in the delivery of high-quality

health care.

(m) Convene an annual statewide quality of care conference to

discuss problems with health care quality and to make

recommendations for changes needed to improve health care quality.

Participants shall include regional medical directors, health care

providers, other providers, patients, policy experts, experts in

quality of care measurement, and others.

(n) Annually report to the commissioner, the health insurance

policy board, and the public on the quality of care delivered in

the health insurance system, including improvements that have been

made and problems that have been identified during the year, goals

for health care improvement in the coming year, and plans to meet

these goals.

(8) No person working within the agency, or on a pharmacy and

therapeutics committee or serving as a consultant to the agency or

a pharmacy and therapeutics committee, may receive fees or

remuneration of any kind from a pharmaceutical company.

Sec. 119. (1) The consumer advocate, in collaboration with the

chief medical officer, the regional consumer advocates, medical

officers, and directors, shall establish a program in the state

health insurance agency and in each region called the "Partnerships

for Health".

(2) The purpose of the partnerships for health is to improve

health through community health initiatives, to support the

development of innovative means to improve health care quality, to

promote efficient health care delivery, and to educate the public

about the following:

(a) Personal maintenance of health.

(b) Prevention of disease.

providers.

(d) Improving quality of care.

(3) The consumer advocate shall work with the community and

health care providers in proposing partnerships for health projects

and in developing project budget requests that shall be included in

the regional budget request to the commissioner.

(4) In developing educational programs, the partnerships for

health shall collaborate with educators in the region.

(5) Partnerships for health shall support the coordination of

Michigan health insurance system and public health system programs.

Sec. 121. (1) The consumer advocate shall do all of the

following:

(a) Establish and maintain a grievance resolution system

approved by the commissioner under which enrollees may submit their

grievances to the system. The system shall provide reasonable

procedures in accordance with state rules and regulations that

shall ensure adequate consideration of enrollee grievances and

rectification when appropriate.

(b) Inform enrollees upon enrollment in the system and

annually thereafter of the procedure for processing and resolving

grievances. The information shall include the location and

telephone number where grievances may be submitted.

wish to register grievances. The forms used by the system shall be

approved by the commissioner in advance as to format.

(d) Provide for a written acknowledgment within 5 calendar

days of the receipt of a grievance, except as otherwise provided.

The acknowledgment shall advise the complainant that the grievance

has been received, the date of receipt, and the name of the system

representative and the telephone number and address of the system

representative who may be contacted about the grievance. Grievances

received by telephone, by facsimile, by electronic mail, or online

through the system's website that are not coverage disputes,

disputed health care services involving medical necessity, or

experimental or investigational treatment and that are resolved by

the next business day following receipt are exempt from the

acknowledgement requirements and from subdivision (e). The consumer

advocate shall maintain a log of all these grievances. The log

shall be periodically reviewed by the consumer advocate and shall

include the following information for each complaint:

(i) The date of the call.

(ii) The name of the complainant.

(iii) The complainant's system identification number.

(iv) The nature of the grievance.

(v) The nature of the resolution.

(vi) The name of the system representative who took the call

and resolved the grievance.

(e) Provide enrollees with written responses to grievances,

with a clear and concise explanation of the reasons for the

system's response. For grievances involving the delay, denial, or

modification of health care services, the system response shall

describe the criteria used and the clinical reasons for its

decision, including all criteria and clinical reasons related to

medical necessity. If the system, or 1 of its contracting

providers, issues a decision delaying, denying, or modifying health

care services to an enrollee based in whole or in part on a finding

that the proposed health care services are not a covered benefit in

the system that applies to the enrollee, the decision shall clearly

specify the system provisions that exclude that coverage.

(f) Keep in its files all copies of grievances, and the

responses thereto, for a period of 5 years.

(g) Establish and maintain a website that shall provide an

online form that enrollees can use to file a grievance online.

(2) The commissioner may require enrollees and subscribers to

participate in a plan's grievance resolution system for up to 30

days before pursuing a grievance through the commissioner or the

independent medical review system. However, the commissioner may

not impose this waiting period for expedited review cases or in any

other case where the commissioner determines that an earlier review

is warranted. In any case determined by the consumer advocate to be

a case involving an imminent and serious threat to the health of

the patient, including, but not limited to, severe pain or the

potential loss of life, limb, or major bodily function, or in any

other case where the consumer advocate determines that an earlier

review is warranted, an enrollee shall not be required to complete

the grievance resolution system or to participate in the process

for at least 30 days before submitting a grievance to the

independent medical review system established pursuant to section

123.

(3) If the enrollee is a minor, or is incompetent or

incapacitated, the parent, guardian, conservator, relative, or

other designee of the enrollee, as appropriate, may submit the

grievance to the consumer advocate as a designated agent of the

enrollee. Further, a provider may join with, or otherwise assist,

an enrollee, or the agent, to submit the grievance to the consumer

advocate. In addition, following submission of the grievance to the

consumer advocate, the enrollee, or the agent, may authorize the

provider to assist, including advocating on behalf of the enrollee.

For purposes of this section, a relative includes the parent,

stepparent, spouse, domestic partner, adult son or daughter,

grandparent, brother, sister, uncle, or aunt of the enrollee.

(4) The consumer advocate shall review the written documents

submitted with the enrollee's request for review. The consumer

advocate may ask for additional information and may hold an

informal meeting with the involved parties, including providers who

have joined in submitting the grievance or who are otherwise

assisting or advocating on behalf of the enrollee. If, after

reviewing the record, the consumer advocate concludes that the

grievance, in whole or in part, is eligible for review under the

independent medical review system established pursuant to section

123, the consumer advocate shall immediately notify the enrollee of

that option and shall, if requested orally or in writing, assist

the enrollee in participating in the independent medical review

system.

(5) The consumer advocate shall send a written notice of the

final disposition of the grievance, and the reasons therefor, to

the enrollee, to any provider that has joined with or is otherwise

assisting the enrollee, and to the commissioner, within 30 calendar

days of receipt of the request for review unless the consumer

advocate, in his or her discretion, determines that additional time

is reasonably necessary to fully and fairly evaluate the relevant

grievance. In any case not eligible for the independent medical

review system established pursuant to section 123, the consumer

advocate's written notice shall include, at a minimum, the

following:

(a) A summary of findings and the reasons why the consumer

advocate found the system to be, or not to be, in compliance with

any applicable laws, rules, regulations, or orders of the

commissioner.

(b) A discussion of the consumer advocate's contact with any

medical provider, or any other independent expert relied on by the

consumer advocate, along with a summary of the views and

qualifications of that provider or expert.

part, information about any corrective action taken.

(6) In any consumer advocate review of a grievance involving a

disputed health care service, as defined in section 123, that is

not eligible for the independent medical review system established

pursuant to section 123, in which the consumer advocate finds that

the system has delayed, denied, or modified health care services

that are medically necessary, based on the specific medical

circumstances of the enrollee, and those services are a covered

benefit under the terms and conditions of the health insurance

system contract, the consumer advocate's written notice shall order

the system to promptly offer and provide those health care services

to the enrollee. The consumer advocate's order shall be binding on

the system.

(7) The consumer advocate shall establish and maintain a

system of aging of grievances that are pending and unresolved for

30 days or more that shall include a brief explanation of the

reasons each grievance is pending and unresolved for 30 days or

more.

(8) The grievance resolution system authorized by this section

shall be in addition to any other procedures that may be available

to any person, and failure to pursue, exhaust, or engage in the

procedures described in this section does not preclude the use of

any other remedy provided by law.

(9) Nothing in this section shall be construed to allow the

submission to the consumer advocate of any provider grievance under

this section.

Sec. 123. (1) As used in this section:

(a) "Coverage decision" means the approval or denial by the

health insurance system, or by 1 of its contracting entities,

substantially based on a finding that the provision of a particular

service is included or excluded as a covered benefit under the

terms and conditions of the health insurance system. Coverage

decision does not encompass a plan or contracting provider decision

regarding a disputed health care service.

(b) "Disputed health care service" means any health care

service eligible for coverage and payment under the benefits

package of the health insurance system that has been denied,

modified, or delayed by a decision of the system, or by 1 of its

contracting providers, in whole or in part due to a finding that

the service is not medically necessary. A decision regarding a

disputed health care service relates to the practice of medicine

and is not a coverage decision. If the system, or 1 of its

contracting providers, issues a decision denying, modifying, or

delaying health care services, based in whole or in part on a

finding that the proposed health care services are not a covered

benefit under the system, the statement of decision shall clearly

specify the provisions of the system that exclude coverage.

(2) The consumer advocate shall establish the independent

medical review system to act as an independent, external medical

review process for the health insurance system to provide timely

examinations of disputed health care services as defined in this

section and coverage decisions as defined in this section regarding

experimental and investigational therapies to ensure that the

system provides efficient, appropriate, high-quality health care,

and that the health care system is responsive to patient disputes.

(3) Coverage decisions regarding experimental or

investigational therapies for individual enrollees who meet all of

the following criteria are eligible for review by the independent

medical review system:

(a) The enrollee has a life-threatening or seriously

debilitating condition. As used in this subsection:

(i) "Life-threatening" means either or both of the following:

(A) Diseases or conditions where the likelihood of death is

high unless the course of the disease is interrupted.

(B) Diseases or conditions with potentially fatal outcomes,

where the end point of clinical intervention is survival.

(ii) "Seriously debilitating" means diseases or conditions that

cause major irreversible morbidity.

(b) The enrollee's physician certifies that the enrollee has a

life-threatening or seriously debilitating condition, for which

standard therapies have not been effective in improving the

condition of the enrollee, for which standard therapies would not

be medically appropriate for the enrollee, or for which there is no

more beneficial standard therapy covered by the system than the

therapy proposed pursuant to subdivision (c).

with or employed by the system, has recommended a drug, device,

procedure, or other therapy that the physician certifies in writing

is likely to be more beneficial to the enrollee than any available

standard therapies, or the enrollee, or the enrollee's physician

who is a licensed, board-certified or board-eligible physician

qualified to practice in the area of practice appropriate to treat

the enrollee's condition, has requested a therapy that, based on 2

documents from the medical and scientific evidence, is likely to be

more beneficial for the enrollee than any available standard

therapy. The physician certification pursuant to this subdivision

shall include a statement of the evidence relied upon by the

physician in certifying his or her recommendation. Nothing in this

subdivision shall be construed to require the system to pay for the

services of a nonparticipating provider provided pursuant to this

subdivision that are not otherwise covered pursuant to the system

benefits package.

(d) The enrollee has been denied coverage by the system for a

drug, device, procedure, or other therapy recommended or requested

pursuant to subdivision (c).

(e) The specific drug, device, procedure, or other therapy

recommended pursuant to subdivision (c) would be a covered service,

except for the system's determination that the therapy is

experimental or investigational.

(4) All enrollee grievances involving a disputed health care

service are eligible for review under the independent medical

review system if the requirements of this act are met. If the

consumer advocate finds that a grievance involving a disputed

health care service does not meet the requirements of this act for

review under the independent medical review system, the request for

review shall be treated as a request for the consumer advocate to

review the grievance pursuant to section 121.

(5) In any case in which an enrollee or provider asserts that

a decision to deny, modify, or delay health care services was

based, in whole or in part, on consideration of medical

appropriateness, the consumer advocate shall have the final

authority to determine whether the grievance is more properly

resolved pursuant to an independent medical review as provided

under this act.

(6) The consumer advocate shall be the final arbiter when

there is a question as to whether a grievance is a disputed health

care service or a coverage decision. The consumer advocate shall

establish a process to complete an initial screening of a

grievance. If there appears to be any medical appropriateness

issue, the grievance shall be resolved pursuant to an independent

medical review as provided under this act.

(7) For purposes of this act, an enrollee may designate an

agent to act on his or her behalf. The provider may join with or

otherwise assist the enrollee in seeking an independent medical

review and may advocate on behalf of the enrollee.

(8) The independent medical review process authorized by this

act is in addition to any other procedures or remedies that may be

available.

(9) The office of the consumer advocate shall prominently

display in every relevant informational brochure, on copies of

health care system procedures for resolving grievances, on letters

of denial issued by either the health care system or its

contracting providers, on the grievance forms, and on all written

responses to grievances, information concerning the right of an

enrollee to request an independent medical review in cases where

the enrollee believes that health care services have been

improperly denied, modified, or delayed by the health care system

or by 1 of its contracting providers.

(10) An enrollee may apply to the consumer advocate for an

independent medical review when all of the following conditions are

met:

(a) One of the following applies:

(i) Except as otherwise provided in subparagraph (iv), the

enrollee's health care provider has recommended a health care

service as medically appropriate.

(ii) The enrollee has received urgent care or emergency

services that a provider determined were medically appropriate.

(iii) The enrollee seeks coverage for experimental or

investigational therapies.

(iv) The enrollee, in the absence of a provider recommendation

under subparagraph (i) or the receipt of urgent care or emergency

services from a provider under subparagraph (ii), has been seen by a

contracting provider for the diagnosis or treatment of the medical

condition for which the enrollee seeks independent review. The

health insurance system shall expedite access to a contracting

provider upon request of an enrollee. The contracting provider need

not recommend the disputed health care service as a condition for

the enrollee to be eligible for an independent review. For purposes

of this act, the enrollee's provider may be a nonparticipating

provider. However, the health insurance system shall have no

liability for payment of services provided by a nonparticipating

provider, except as otherwise provided in this act.

(b) The disputed health care service has been denied,

modified, or delayed by the health insurance system, or by 1 of its

contracting providers, based in whole or in part on a decision that

the health care service is not medically appropriate.

advocate and the disputed decision is upheld or the grievance

remains unresolved after 30 days. The enrollee is not required to

participate in the health insurance system's grievance resolution

system for more than 30 days. For a grievance that requires

expedited review, the enrollee is not required to participate in

the health insurance system's grievance resolution system for more

than 3 days.

(11) An enrollee may apply to the consumer advocate for an

independent medical review of a decision to deny, modify, or delay

health care services, based in whole or in part on a finding that

the disputed health care services are not medically appropriate,

within 6 months of any of the qualifying periods or events under

this section. The consumer advocate may extend the application

deadline beyond 6 months if the circumstances of a case warrant the

extension.

(12) The enrollee shall pay no application or processing fees

of any kind.

(13) Upon notice from the consumer advocate that the enrollee

has applied for an independent medical review, the health insurance

system or its contracting providers shall provide to the

independent medical review organization designated by the consumer

advocate a copy of all of the following documents within 3 business

days of the health insurance system's receipt of the consumer

advocate's notice of a request by an enrollee for an independent

review:

(a) A copy of all of the enrollee's medical records in the

possession of the health insurance system or its contracting

providers relevant to each of the following:

(i) The enrollee's medical condition.

(ii) The health care services being provided by the health

insurance system and its contracting providers for the condition.

(iii) The disputed health care services requested by the

enrollee for the condition.

(b) Any newly developed or discovered relevant medical records

in the possession of the health insurance system or its contracting

providers after the initial documents are provided. The system

shall concurrently provide a copy of medical records required by

this subdivision to the enrollee or the enrollee's provider, if

authorized by the enrollee, unless the offer of medical records is

declined or otherwise prohibited by law. The confidentiality of all

medical record information shall be maintained pursuant to

applicable state and federal laws.

system and any of its contracting providers concerning health

insurance system and provider decisions regarding the enrollee's

condition and care, and a copy of any materials the enrollee or the

enrollee's provider submitted to the health insurance system and to

the system's contracting providers in support of the enrollee's

request for disputed health care services. This documentation shall

include the written response to the enrollee's grievance. The

confidentiality of any medical information shall be maintained

pursuant to applicable state and federal laws.

(d) A copy of any other relevant documents or information used

by the health insurance system or its contracting providers in

determining whether disputed health care services should have been

provided, and any statements by the system and its contracting

providers explaining the reasons for the decision to deny, modify,

or delay disputed health care services on the basis of medical

necessity. The system shall concurrently provide a copy of

documents required by this subdivision, except for any information

found by the consumer advocate to be legally privileged

information, to the enrollee and the enrollee's provider. The

consumer advocate and the independent review organization shall

maintain the confidentiality of any information found by the

consumer advocate to be the proprietary information of the health

insurance system.

Sec. 125. (1) Upon receiving the decision adopted by the

consumer advocate pursuant to section 123 that a disputed health

care service is medically appropriate, the health insurance system

shall promptly implement the decision. In the case of reimbursement

for services already rendered, the health insurance system shall

reimburse the provider or enrollee, whichever applies, within 5

working days. In the case of services not yet rendered, the health

insurance system shall authorize the services within 5 working days

of receipt of the written decision from the consumer advocate, or

sooner if appropriate for the nature of the enrollee's medical

condition, and shall inform the enrollee and provider of the

authorization.

(2) The health insurance system shall not engage in any

conduct that has the effect of prolonging the independent review

process.

(3) The consumer advocate shall require the health insurance

system to promptly reimburse the enrollee for any reasonable costs

associated with those services when the consumer advocate finds

that the disputed health care services were a covered benefit

pursuant to this act and either the enrollee's decision to secure

the services outside of the health insurance system provider

network was reasonable under the emergency or urgent medical

circumstances, or the health insurance system does not require or

provide prior authorization before the health care services are

provided to the enrollee.

(4) In addition to requiring system compliance regarding

subsections (1), (2), and (3), the consumer advocate shall review

individual cases submitted for independent medical review to

determine whether any enforcement actions, including remedies and

penalties, may be appropriate. In particular, where substantial

harm to a patient has already occurred because of the decision of

the health care system, or 1 of its contracting providers, to

delay, deny, or modify covered health care services that an

independent medical review determines to be medically appropriate,

the consumer advocate shall impose remedies or penalties.

Sec. 131. The commissioner may promulgate rules pursuant to

the administrative procedures act of 1969, 1969 PA 306, MCL 24.201

to 24.328, as necessary to implement this act.