HOUSE BILL No. 5386

 

September 17, 2009, Introduced by Rep. Cushingberry and referred to the Committee on Tax Policy.

 

     A bill to amend 1978 PA 368, entitled

 

"Public health code,"

 

(MCL 333.1101 to 333.25211) by amending the title and by adding

 

section 16302.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

TITLE

 

     An act to protect and promote the public health; to codify,

 

revise, consolidate, classify, and add to the laws relating to

 

public health; to provide for the prevention and control of

 

diseases and disabilities; to provide for the classification,

 

administration, regulation, financing, and maintenance of personal,

 

environmental, and other health services and activities; to create

 

or continue, and prescribe the powers and duties of, departments,


 

boards, commissions, councils, committees, task forces, and other

 

agencies; to prescribe the powers and duties of governmental

 

entities and officials; to regulate occupations, facilities, and

 

agencies affecting the public health; to regulate health

 

maintenance organizations and certain third party administrators

 

and insurers; to provide for the imposition of a regulatory fee; to

 

provide for the levy of taxes against certain health professionals

 

and health facilities or agencies; to promote the efficient and

 

economical delivery of health care services, to provide for the

 

appropriate utilization of health care facilities and services, and

 

to provide for the closure of hospitals or consolidation of

 

hospitals or services; to provide for the collection and use of

 

data and information; to provide for the transfer of property; to

 

provide certain immunity from liability; to regulate and prohibit

 

the sale and offering for sale of drug paraphernalia under certain

 

circumstances; to provide for the implementation of federal law; to

 

provide for penalties and remedies; to provide for sanctions for

 

violations of this act and local ordinances; to provide for an

 

appropriation and supplements; to repeal certain acts and parts of

 

acts; to repeal certain parts of this act; and to repeal certain

 

parts of this act on specific dates.

 

     Sec. 16302. (1) The department shall assess and collect a

 

quality assurance assessment on physicians as provided in this

 

section. The quality assurance assessment on physicians is a tax

 

imposed on each physician and entity related to a physician that

 

engages in the practice of medicine or osteopathic medicine and

 

surgery in this state. The quality assurance assessment is imposed


 

at a rate of 4% of the gross revenue of the physician or entity

 

related to a physician. The department shall administer this

 

section in a manner that complies with federal requirements

 

necessary to assure that the quality assurance assessment qualifies

 

for federal matching funds. The department shall cease the

 

assessment and collection of the quality assurance assessment if it

 

is no longer eligible for federal matching funds.

 

     (2) The quality assurance assessment collected under this

 

section and all federal matching funds attributed to that

 

assessment shall be used only for the purposes described in this

 

section and only as prescribed in this section. The quality

 

assurance assessment collected under this section and all federal

 

matching funds attributed to that assessment shall be used to

 

increase medicaid physician services reimbursement payments and to

 

implement, administer, and enforce this section. Only physicians

 

and entities related to physicians that are assessed the quality

 

assurance assessment under this section and that participate in the

 

medicaid program are eligible for increased medicaid physician

 

services reimbursement rates under this section.

 

     (3) The department shall prescribe the forms and format for

 

use by a physician or entity related to a physician subject to the

 

quality assurance assessment under this section, which forms and

 

format are necessary to administer this section, including the

 

reporting of gross revenue and the calculation and collection of

 

the assessment. A physician or entity related to a physician

 

subject to the quality assurance assessment under this section

 

shall file an annual statement with the department on or before the


 

last day of the sixth month after the end of the physician's or

 

entity's tax year. The annual statement shall identify each

 

physician who provided physician services and generated revenue for

 

those services, along with the physician's percentage of ownership

 

in the entity related to a physician, if applicable. The physician

 

or entity shall include with the annual statement the payment of

 

any quality assurance assessment due under this section.

 

     (4) A physician or entity related to a physician that

 

reasonably expects assessment liability under this section for the

 

tax year to be $2,000.00 or more shall file an estimated statement

 

and pay an estimated quality assurance assessment for that quarter.

 

For a physician or entity on a calendar year basis, the estimated

 

quarterly statement and payment shall be made on or before April

 

30, July 31, October 31, and January 31. For a physician or entity

 

not on a calendar year basis, the estimated statement and payment

 

shall be made on a quarterly basis in that physician's or entity's

 

fiscal year. The estimated payment made with each quarterly

 

statement shall be for the estimated gross revenue for the quarter

 

or 25% of the estimated annual assessment. The second, third, and

 

fourth estimated payments in the calendar or fiscal year shall

 

include adjustments, if necessary, to correct underpayments or

 

overpayments from previous quarterly payments in the calendar or

 

fiscal year to a revised estimate of the annual assessment.

 

     (5) If the quality assurance assessment is imposed upon gross

 

revenue reported by a physician, then that gross revenue shall not

 

otherwise be subject to assessment under this section. If the

 

quality assurance assessment is imposed upon gross revenue reported


 

by an entity related to a physician, then that gross revenue shall

 

not otherwise be subject to assessment under this section.

 

     (6) If a physician or entity related to a physician renders

 

physician services in this state and in another state, only the

 

gross revenue received for physician services provided in this

 

state shall be apportioned to this state and assessed as provided

 

under this section. If the apportionment between those gross

 

revenues received for physician services provided in this state and

 

those received in another state cannot be determined by separate

 

accounting methods, the department shall determine the amount of

 

gross revenue that is subject to assessment under this section by

 

multiplying the physician's or entity's total gross revenue by a

 

fraction, the numerator of which is the total gross revenue of the

 

physician or entity for providing physician services in this state

 

and the denominator of which is the total gross revenue of the

 

physician or entity for providing physician services in this state

 

and in any other state.

 

     (7) In computing the amount of the quality assurance

 

assessment under this section, a physician or entity related to a

 

physician may deduct the amount of bad debts for physician services

 

in this state from his or her gross revenue used for the

 

computation of the assessment if the amount of the assessment

 

attributable to the bad debt had already been collected and the bad

 

debt amount is eligible to be claimed or could be eligible to be

 

claimed as a deduction pursuant to 26 USC 166.

 

     (8) Beginning in fiscal year 2009-2010, the department shall

 

increase the medicaid physician services reimbursement rates for


 

that fiscal year. For each subsequent fiscal year in which the

 

quality assurance assessment for physicians is imposed and

 

collected, the department shall maintain the increased medicaid

 

physician services reimbursement rates that are financed by the

 

assessment. Beginning in fiscal year 2009-2010, the department

 

shall determine how much of the money remaining in the physician

 

services quality assurance assessment fund may be utilized to

 

offset any decline in revenue in the medicaid program and to

 

implement, administer, and enforce this section.

 

     (9) The physician services quality assurance assessment fund

 

is created in the state treasury. The state treasurer may receive

 

money or other assets from any source for deposit into the fund.

 

The state treasurer shall direct the investment of the fund. The

 

state treasurer shall credit to the fund interest and earnings from

 

fund investments. Money in the fund at the close of the fiscal year

 

shall remain in the fund and shall not lapse to the general fund.

 

The department shall transmit all money collected under this

 

section and all federal matching funds attributed to that

 

assessment to the state treasury for deposit into the physician

 

services quality assurance assessment fund. The department is the

 

administrator of the physician services quality assurance

 

assessment fund for auditing purposes. The department shall

 

administer the fund in a manner that complies with federal

 

requirements necessary to assure that the quality assurance

 

assessment qualifies for federal matching funds.

 

     (10) If a physician or entity related to a physician fails or

 

refuses to file a quarterly or annual statement or pay the


 

assessment imposed under this section, the department may assess

 

the physician or entity a penalty of 1% of the assessment for each

 

month that the assessment and penalty are not paid up to a maximum

 

of 15% of the assessment. The department may also refer for

 

collection to the department of treasury past due amounts

 

consistent with section 13 of 1941 PA 122, MCL 205.13. Each

 

physician who has an ownership interest in an entity related to a

 

physician is jointly and severally liable for filing the annual

 

statements, estimated quarterly statements, and all other forms and

 

statements required under this section; for paying the assessment

 

for the entity; and for any other requirement under this section.

 

     (11) This section applies to physician services provided by an

 

entity related to a physician that is owned in whole or in part by

 

a hospital, a health maintenance organization, a nonprofit health

 

care corporation, or any other public or private entity.

 

     (12) As used in this section:

 

     (a) "Entity related to a physician" means an organization,

 

association, corporation, partnership, or other legal entity formed

 

by or on behalf of a physician or physicians to engage in the

 

practice of medicine or osteopathic medicine and surgery.

 

     (b) "Gross revenue" means the amount received or receivable,

 

whether in cash or in kind, without deduction, from patients,

 

third-party payers, or any other person for physician services.

 

     (c) "Medicaid" means that term as defined in section 22207.

 

     (d) "Physician" means an individual licensed under this

 

article to engage in the practice of medicine or osteopathic

 

medicine and surgery.


 

     (e) "Physician services" means health care services provided

 

by a physician or by a physician's assistant or nurse under the

 

direction, supervision, control, or delegatory authority of a

 

physician.