SB-0981, As Passed Senate, March 29, 2012
HOUSE SUBSTITUTE FOR
SENATE BILL NO. 981
A bill to create an autism coverage reimbursement program to
encourage insurance and health coverage providers to provide autism
coverage; to impose certain duties on certain state departments,
agencies, and officials; to create certain funds; to authorize
certain expenditures; and to provide for an appropriation.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"autism coverage reimbursement act".
Sec. 3. As used in this act:
(a) "Autism coverage reimbursement program" or "program" means
the autism coverage reimbursement program created under section 5.
(b) "Autism diagnostic observation schedule", "autism spectrum
disorders", "diagnosis of autism spectrum disorders", and
"treatment of autism spectrum disorders" mean those terms as
defined under section 416e of the nonprofit health care corporation
reform act, 1980 PA 350, MCL 550.1416e, and section 3406s of the
insurance code of 1956, 1956 PA 218, MCL 500.3406s.
(c) "Carrier" means any of the following:
(i) An insurer or health maintenance organization regulated
under the insurance code of 1956, 1956 PA 218, MCL 500.100 to
(ii) A health care corporation regulated under the nonprofit
health care corporation reform act, 1980 PA 350, MCL 550.1101 to
(iii) A specialty prepaid health plan.
(iv) A group health plan sponsor including, but not limited to,
1 or more of the following:
(A) An employer if a group health plan is established or
maintained by a single employer.
(B) An employee organization if a plan is established or
maintained by an employee organization.
(C) If a plan is established or maintained by 2 or more
employers or jointly by 1 or more employers and 1 or more employee
organizations, the association, committee, joint board of trustees,
or other similar group of representatives of the parties that
establish or maintain the plan.
(d) "Department" means the department of licensing and
(e) "Excess loss" or "stop loss" means coverage that provides
insurance protection against the accumulation of total claims
exceeding a stated level for a group as a whole or protection
against a high-dollar claim on any 1 individual.
(f) "Federal act" means the federal patient protection and
affordable care act, Public Law 111-148, as amended by the federal
health care and education reconciliation act of 2010, Public Law
111-152, and any regulations promulgated under those acts.
(g) "Federal employee health benefit program" means the
program of health benefits plans, as defined in 5 USC 8901,
available to federal employees under 5 USC 8901 to 8914.
(h) "Fund" means the autism coverage fund created in section
(i) "Group health plan" means an employee welfare benefit plan
as defined in section 3(1) of subtitle A of title I of the employee
retirement income security act of 1974, Public Law 93-406, 29 USC
1002, to the extent that the plan provides medical care, including
items and services paid for as medical care to employees or their
dependents as defined under the terms of the plan directly or
through insurance, reimbursement, or otherwise.
(j) "Medicaid" means the program of medical assistance
established under title XIX of the social security act, 42 USC 1396
(k) "Medicare" means the federal medicare program established
under title XVIII of the social security act, 42 USC 1395 to
(l) "Medicare advantage plan" means a plan of coverage for
health benefits under part C of title XVIII of the social security
act, 42 USC 1395w-21 to 1395w-28.
(m) "Medicare part D" means a plan of coverage for
prescription drug benefits under part D of title XVIII of the
social security act, 42 USC 1395w-101 to 1395w-154.
(n) "Paid claims" means actual payments, net of recoveries,
made for the diagnosis of autism spectrum disorders and treatment
of autism spectrum disorders whether made to a provider or
reimbursed to an individual by a carrier, third party
administrator, or excess loss or stop loss carrier. Paid claims do
not include any of the following:
(i) Claims paid for services rendered to a nonresident of this
(ii) Claims paid for services rendered to a person covered
under a health benefit plan for federal employees.
(iii) Claims paid for services rendered outside of this state to
a person who is a resident of this state.
(iv) Claims paid under a federal employee health benefit
program, medicare, medicare advantage plan, medicare part D,
tricare, by the United States veterans administration, and for
high-risk pools established pursuant to the federal act.
(v) Costs paid by an individual for cost-sharing requirements,
including deductibles, coinsurance, or copays.
(vi) Claims paid by, or on behalf of, this state.
(vii) Claims paid that are covered by medicaid.
(viii) Claims paid for which the carrier or third party
administrator has already been reimbursed or compensated, in whole
or in part, through any increase in premiums or rates or from any
(ix) Beginning January 1, 2014, claims paid for services that
are included in the essential health benefits as required pursuant
to the federal act.
(o) "Specialty prepaid health plan" means that term as
described in section 109f of the social welfare act, 1939 PA 280,
(p) "Third party administrator" means an entity that processes
claims under a service contract and that may also provide 1 or more
other administrative services under a service contract.
Sec. 5. (1) No later than 120 days after the effective date of
this act, the department shall create and operate an autism
coverage reimbursement program to encourage carriers to provide
coverage for the diagnosis of autism spectrum disorders and
treatment of autism spectrum disorders and, to the extent coverage
for the diagnosis of autism spectrum disorders and treatment of
autism spectrum disorders is required under section 416e of the
nonprofit health care corporation reform act, 1980 PA 350, MCL
550.1416e, or section 3406s of the insurance code of 1956, 1956 PA
218, MCL 500.3406s, to offset any additional costs that may be
incurred as a result of the mandate.
(2) The department shall develop the application, approval,
and compliance process necessary to operate and manage this
program. The department shall develop and implement the use of an
application form to be used by carriers and third party
administrators who seek reimbursement for the coverage of autism
spectrum disorders. The program standards, guidelines, templates,
and any other forms used by the department to implement this
program shall be published and available on the department's
(3) Subject to the limitations provided under this section,
the program shall, as approved by the department, reimburse
carriers and third party administrators in an amount equal to the
amount of paid claims that are paid 180 days after the effective
date of this act by the carrier or third party administrator. A
carrier or third party administrator shall apply, on the form
prescribed by the department, for approval of funding associated
with paid claims. As part of the application, the applicant shall
include the results from a completed autism diagnostic observation
schedule or the results from any other annual development
evaluation and documentation verifying those paid claims for which
they are seeking reimbursement under this program. In determining
whether to approve an application for the reimbursement of paid
claims under this section, the department may review whether the
treatment for which the paid claims were paid is consistent with
current protocols and cost-containment practices as described in
section 416e of the nonprofit health care corporation reform act,
1980 PA 350, MCL 550.1416e, or section 3406s of the insurance code
of 1956, 1956 PA 218, MCL 500.3406s. The department shall review
and consider applications in the order in which they are received
and shall approve or deny an application within 30 days after
receipt of the application.
(4) To the extent there is a cap on the amount of coverage
mandated under section 416e of the nonprofit health care
corporation reform act, 1980 PA 350, MCL 550.1416e, or section
3406s of the insurance code of 1956, 1956 PA 218, MCL 500.3406s,
Senate Bill No. 981 (H-2) as amended March 28, 2012
the department shall not approve more than the mandated amount to
any carrier or third party administrator that seeks reimbursement
under this act for paid claims.
(5) If a third party administrator receives any funding under
this program, the third party administrator shall apply that
funding to the benefit of the carrier covering the claim upon which
the funding was received.
[(6) If the department determines at the end of the fiscal year that a carrier was not fully reimbursed for paid claims paid due to a shortfall in the reimbursement fund for the fiscal year, and the carrier increases its rates in the following year to cover the total amount of such unreimbursed paid claims, the rate increase shall not be considered reimbursement or compensation for paid claims paid under section 3(n)(viii), if the commissioner determines that such rate increase is a reasonable recoupment of the amount of such unreimbursed paid claims.]
Sec. 7. (1) The autism coverage fund is created within the
(2) 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.
(3) The department shall be the administrator of the fund for
auditing purposes. The department shall expend money from the fund,
upon appropriation, only for the purpose of creating, operating,
and funding the program.
(4) The department shall reimburse carriers and third party
administrators from the fund in the order in which the applications
are approved under the program. If there is insufficient money in
the fund to reimburse a carrier or third party administrator for
paid claims approved under section 5, then reimbursement shall not
be made. However, applications that are approved but not reimbursed
may be paid if revenues of the fund become available.
(5) The department shall develop and implement a process to
notify carriers, third party administrators, and the legislature
Senate Bill No 981 (H-2) as amended March 28, 2012
that funds in this program may be insufficient to cover future
claims when the department reasonably believes that within 60 days
the funds in the program will be insufficient to pay claims. The
process shall, at a minimum, do all of the following:
(a) Identify a specific date by which carriers and third party
administrators will no longer receive reimbursement for claims
submitted to the program.
(b) Outline a clear process indicating the order in which
claims pending with the program will be paid.
(c) Outline a clear process indicating the order in which
claims that were pending with the program when funds became
insufficient will be paid if funds subsequently become available.
(6) Money in the fund at the close of the fiscal year shall
remain in the fund and shall not lapse to the general fund.
Sec. 9. The department shall submit an annual report to the
state budget director and the senate and house of representatives
standing committees on appropriations not later than April 1 of
each year that includes, but is not limited to, all of the
(a) The total number of applications received under this
program in the immediately preceding calendar year.
(b) The number of applications approved and the total amount
of funding awarded under this program in the immediately preceding
(c) The amount of administrative costs used to administer the
program in the immediately preceding calendar year.
Sec. 11. (1) The department shall not implement the program
under this act until the legislature has appropriated sufficient
funds to cover the same.
(2) Not more than 1% of the annual appropriation made to the
autism coverage fund may be used for the purpose of administering
the program authorized under this act.
Enacting section 1. This act does not take effect unless all
of the following bills of the 96th Legislature are enacted into
(a) Senate Bill No. 414.
(b) Senate Bill No. 415.