HOUSE BILL No. 5234


     October 16, 2001, Introduced by Reps. Zelenko, Raczkowski, Bovin, Schauer, Jacobs, Rivet, Basham, Bernero, Sheltrown, Whitmer, Rich Brown,
Neumann, Frank, Mans, Kolb, Spade, Minore, Bogardus, Hardman and DeWeese and referred to the Committee on Health Policy.


        A bill to amend 1980 PA 350, entitled

   "The nonprofit health care corporation reform act,"

   by amending section 605 (MCL 550.1605).

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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           Sec. 605.  (1) Upon due notice and an opportunity for an

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      evidentiary hearing pursuant to the administrative procedures

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      act, the commissioner may suspend or limit the certificate of

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      authority of a health care corporation if the commissioner deter-

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      mines that any of the following circumstances exist:

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           (a) The health care corporation does not meet the require-

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      ments of this act respecting the adequacy of its reserves.

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           (b) The health care corporation is using methods or prac-

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      tices in the conduct of its business  which  THAT render further

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      transactions hazardous or injurious to subscribers of the

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      corporation or TO the public.


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           (c) The health care corporation refuses or fails to comply

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      with this act or with a lawful order of the commissioner.

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           (D) THE HEALTH CARE CORPORATION REFUSES OR FAILS TO COMPLY

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      WITH THE HEALTH CARE INFORMATION PROTECTION AND PRIVACY ACT.

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           (2) If the commissioner finds that the public health,

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      safety, or welfare requires emergency action and incorporates

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      this finding into an order, a summary suspension or limitation of

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      a certificate of authority may be ordered.  The SUMMARY suspen-

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      sion or limitation shall be effective on the date specified in

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      the order or upon service of a certified copy of the order on the

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      health care corporation, whichever is later, and shall be effec-

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      tive during the proceedings.  The corporation shall have the

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      right to an administrative hearing within 5 days to show why the

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      summary suspension or limitation should be terminated.

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           (3) An order of limitation may restrict the solicitation of

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      certificates, the renewal of business in force, and the solicita-

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      tion, offer, or acceptance of contracts, and may impose other

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      conditions to continued authorization as are reasonably necessary

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      to protect the subscribers of the corporation or the public.  The

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      commissioner shall terminate an order of limitation when the cir-

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      cumstance giving rise to the order ceases to exist.

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           (4) Upon suspension or limitation of a corporation's certif-

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      icate of authority, if the commissioner considers it necessary or

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      desirable for the protection of the subscribers of the corpora-

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      tion or OF the public, the commissioner may publish notice of the

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      suspension or limitation in 1 or more newspapers of general

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      circulation in the state.



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           (5) An emergency order by the commissioner  which  THAT

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      suspends or limits a corporation's certificate of authority shall

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      be for a period not to exceed 1 year and, after NOTICE AND AN

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      opportunity  of  FOR A hearing, the commissioner for good cause

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      may extend the period of suspension or limitation for additional

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      periods not to exceed 1 year.

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           Enacting section 1.  This amendatory act does not take

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      effect unless House Bill No. 4936 of the 91st Legislature is

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      enacted into law.






































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