July 16, 2014, Introduced by Senator CASWELL and referred to the Committee on Judiciary.
A bill to amend 1939 PA 280, entitled
"The social welfare act,"
by amending section 106 (MCL 400.106), as amended by 2013 PA 107,
and by adding section 106b.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 106. (1) A medically indigent individual is defined as:
(a) An individual receiving family independence program
benefits or an individual receiving supplemental security income
under title XVI or state supplementation under title XVI subject to
limitations imposed by the director according to title XIX.
(b)
Except as provided in section sections
106a and 106b, an
individual who meets all of the following conditions:
(i) The individual has applied in the manner the department of
community health prescribes.
(ii) The individual's need for the type of medical assistance
available under this act for which the individual applied has been
professionally established and payment for it is not available
through the legal obligation of a public or private contractor to
pay or provide for the care without regard to the income or
resources of the patient. The state department and the department
of community health are subrogated to any right of recovery that a
patient may have for the cost of hospitalization, pharmaceutical
services, physician services, nursing services, and other medical
services not to exceed the amount of funds expended by the state
department or the department of community health for the care and
treatment of the patient. The patient or other person acting in the
patient's behalf shall execute and deliver an assignment of claim
or other authorizations as necessary to secure the right of
recovery to the department or the department of community health. A
payment may be withheld under this act for medical assistance for
an injury or disability for which the individual is entitled to
medical care or reimbursement for the cost of medical care under
sections 3101 to 3179 of the insurance code of 1956, 1956 PA 218,
MCL 500.3101 to 500.3179, or under another policy of insurance
providing medical or hospital benefits, or both, for the individual
unless the individual's entitlement to that medical care or
reimbursement is at issue. If a payment is made, the state
department or the department of community health, to enforce its
subrogation right, may do either of the following: (a) intervene or
join in an action or proceeding brought by the injured, diseased,
or disabled individual, the individual's guardian, personal
representative, estate, dependents, or survivors, against the third
person who may be liable for the injury, disease, or disability, or
against contractors, public or private, who may be liable to pay or
provide medical care and services rendered to an injured, diseased,
or disabled individual; (b) institute and prosecute a legal
proceeding against a third person who may be liable for the injury,
disease, or disability, or against contractors, public or private,
who may be liable to pay or provide medical care and services
rendered to an injured, diseased, or disabled individual, in state
or federal court, either alone or in conjunction with the injured,
diseased, or disabled individual, the individual's guardian,
personal representative, estate, dependents, or survivors. The
state department may institute the proceedings in its own name or
in the name of the injured, diseased, or disabled individual, the
individual's guardian, personal representative, estate, dependents,
or survivors. As provided in section 6023 of the revised judicature
act of 1961, 1961 PA 236, MCL 600.6023, the state department or the
department of community health, in enforcing its subrogation right,
shall not satisfy a judgment against the third person's property
that is exempt from levy and sale. The injured, diseased, or
disabled individual may proceed in his or her own name, collecting
the costs without the necessity of joining the state department,
the department of community health, or the state as a named party.
The injured, diseased, or disabled individual shall notify the
state department or the department of community health of the
action or proceeding entered into upon commencement of the action
or proceeding. An action taken by the state, the state department,
or the department of community health in connection with the right
of recovery afforded by this section does not deny the injured,
diseased, or disabled individual any part of the recovery beyond
the costs expended on the individual's behalf by the state
department or the department of community health. The costs of
legal action initiated by the state shall be paid by the state. A
payment shall not be made under this act for medical assistance for
an injury, disease, or disability for which the individual is
entitled to medical care or the cost of medical care under the
worker's disability compensation act of 1969, 1969 PA 317, MCL
418.101 to 418.941; except that payment may be made if an
appropriate application for medical care or the cost of the medical
care has been made under the worker's disability compensation act
of 1969, 1969 PA 317, MCL 418.101 to 418.941, entitlement has not
been finally determined, and an arrangement satisfactory to the
state department or the department of community health has been
made for reimbursement if the claim under the worker's disability
compensation act of 1969, 1969 PA 317, MCL 418.101 to 418.941, is
finally sustained.
(iii) The individual has an annual income that is below, or
subject to limitations imposed by the director and because of
medical expenses falls below, the protected basic maintenance
level. The protected basic maintenance level for 1-person and 2-
person families shall be at least 100% of the payment standards
generally used to determine eligibility in the family independence
program. For families of 3 or more persons, the protected basic
maintenance level shall be at least 100% of the payment standard
generally used to determine eligibility in the family independence
program. These levels shall recognize regional variations and shall
not exceed 133-1/3% of the payment standard generally used to
determine eligibility in the family independence program.
(iv) The individual, if a family independence program related
individual and living alone, has liquid or marketable assets of not
more than $2,000.00 in value, or, if a 2-person family, the family
has liquid or marketable assets of not more than $3,000.00 in
value. The department of community health shall establish
comparable liquid or marketable asset amounts for larger family
groups. Excluded in making the determination of the value of liquid
or marketable assets are the values of: the homestead; clothing;
household effects; $1,000.00 of cash surrender value of life
insurance, except that if the health of the insured makes
continuance of the insurance desirable, the entire cash surrender
value of life insurance is excluded from consideration, up to the
maximum provided or allowed by federal regulations and in
accordance with department of community health rules; the fair
market value of tangible personal property used in earning income;
an amount paid as judgment or settlement for damages suffered as a
result of exposure to agent orange, as defined in section 5701 of
the public health code, 1978 PA 368, MCL 333.5701; and a space or
plot purchased for the purposes of burial for the person. For
individuals related to the title XVI program, the appropriate
resource levels and property exemptions specified in title XVI
shall be used.
(v) The Except as provided in section 106b, the individual is
not an inmate of a public institution except as a patient in a
medical institution.
(vi) The individual meets the eligibility standards for
supplemental security income under title XVI or for state
supplementation under the act, subject to limitations imposed by
the director of the department of community health according to
title XIX; or meets the eligibility standards for family
independence program benefits; or meets the eligibility standards
for optional eligibility groups under title XIX, subject to
limitations imposed by the director of the department of community
health according to title XIX.
(c) An individual is eligible under section
1396a(a)(10)(A)(i)(VIII) of title XIX. This subdivision does not
apply if either of the following occurs:
(i) If the department of community health is unable to obtain a
federal waiver as provided in section 105d(1) or (20).
(ii) If federal government matching funds for the program
described in section 105d are reduced below 100% and annual state
savings and other nonfederal net savings associated with the
implementation of that program are not sufficient to cover the
reduced federal match. The department of community health shall
determine and the state budget office shall approve how annual
state savings and other nonfederal net savings shall be calculated
by June 1, 2014. By September 1, 2014, the calculations and
methodology used to determine the state and other nonfederal net
savings shall be submitted to the legislature.
(2) As used in this act:
(a) "Contracted health plan" means a managed care organization
with whom the state department or the department of community
health contracts to provide or arrange for the delivery of
comprehensive health care services as authorized under this act.
(b) "Federal poverty guidelines" means the poverty guidelines
published annually in the federal register by the United States
department of health and human services under its authority to
revise the poverty line under section 673(2) of subtitle B of title
VI of the omnibus budget reconciliation act of 1981, 42 USC 9902.
(c) "Medical institution" means a state licensed or approved
hospital, nursing home, medical care facility, psychiatric
hospital, or other facility or identifiable unit of a listed
institution certified as meeting established standards for a
nursing home or hospital in accordance with the laws of this state.
(d) "Title XVI" means title XVI of the social security act, 42
USC 1381 to 1383f.
(3) An individual receiving medical assistance under this act
or his or her legal counsel shall notify the state department or
the department of community health when filing an action in which
the state department or the department of community health may have
a right to recover expenses paid under this act. If the individual
is enrolled in a contracted health plan, the individual or his or
her legal counsel shall provide notice to the contracted health
plan in addition to providing notice to the state department.
(4) If a legal action in which the state department, the
department of community health, a contracted health plan, or all 3
have a right to recover expenses paid under this act is filed and
settled after November 29, 2004 without notice to the state
department, the department of community health, or the contracted
health plan, the state department, the department of community
health, or the contracted health plan may file a legal action
against the individual or his or her legal counsel, or both, to
recover expenses paid under this act. The attorney general shall
recover any cost or attorney fees associated with a recovery under
this subsection.
(5) The state department or the department of community health
has first priority against the proceeds of the net recovery from
the settlement or judgment in an action settled in which notice has
been provided under subsection (3). A contracted health plan has
priority immediately after the state department or the department
of community health in an action settled in which notice has been
provided under subsection (3). The state department, the department
of community health, and a contracted health plan shall recover the
full cost of expenses paid under this act unless the state
department, the department of community health, or the contracted
health plan agrees to accept an amount less than the full amount.
If the individual would recover less against the proceeds of the
net recovery than the expenses paid under this act, the state
department, the department of community health, or contracted
health plan, and the individual shall share equally in the proceeds
of the net recovery. As used in this subsection, "net recovery"
means the total settlement or judgment less the costs and fees
incurred by or on behalf of the individual who obtains the
settlement or judgment.
Sec. 106b. (1) The state medicaid plan shall require the
department of community health to suspend rather than terminate the
medical assistance of an individual with a serious mental illness
or a serious emotional disturbance when either of the following
applies:
(a) The individual becomes an inmate residing in a public
institution but otherwise remains eligible for medical assistance.
(b) An inmate was not eligible for medical assistance when he
or she entered the public institution but is subsequently
determined to be eligible for medical assistance while in the
public institution.
(2) The department of community health shall redetermine the
medical assistance eligibility of the individual.
(3) Upon notification that an individual described in
subsection (1) is no longer an inmate residing in a public
institution, the department of community health shall reinstate the
individual's medical assistance if the individual is otherwise
eligible for medical assistance.
(4) This section does not extend medical assistance
eligibility to an otherwise ineligible individual or extend medical
assistance to an individual if matching federal funds are not
available to pay for the medical assistance.
(5) This section applies to the department of community
health, a state agency to which the department of community health
has delegated these functions as provided under section 105c, or a
private or nonprofit entity with which the department of community
health has contracted to perform these functions as provided under
section 105c.
(6) As used in this section:
(a) "Public institution" means 1 of the following:
(i) An inpatient program operated by the department of
community health for treatment of individuals with serious
emotional disturbance or serious mental illness.
(ii) A local correctional facility as that term is defined in
section 2 of the local corrections officers training act, 2003 PA
125, MCL 791.532.
(iii) A correctional facility as that term is defined in section
15 of the corrections code of 1953, 1953 PA 232, MCL 791.215.
(iv) A youth correctional facility operated by the department
of corrections or a private vendor under section 20g of the
corrections code of 1953, 1953 PA 232, MCL 791.220g.
(b) "Serious emotional disturbance" and "serious mental
illness" mean those terms as defined in section 100d of the mental
health code, 1974 PA 258, MCL 330.1100d.