HB-6603, As Passed House, November 29, 2006

SUBSTITUTE FOR

HOUSE BILL NO. 6603

     A bill to provide for the sharing of certain health care

coverage information; to provide for the powers and duties of

certain departments and agencies; and to provide penalties and

fines.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 1. As used in this act:

     (a) "Department" means the department of community health.

     (b) "Entity" means a party that is legally responsible for

payment of a health care claim, including, but not limited to, a

health insurer; a health maintenance organization; a nonprofit

health care corporation; a managed care corporation; a preferred

provider organization; an organization operating pursuant to the

prudent purchaser act, 1984 PA 233, MCL 550.51 to 550.63; a self-

funded health plan; a professional association, trust, pool, union,

or fraternal group, offering health coverage; a system of health

care delivery and financing operating pursuant to section 3573 of

the insurance code of 1956, 1956 PA 218, MCL 500.3573; and a third

party administrator or other entity that is by statute, contract,

or agreement, legally responsible for payment of a health care

claim. Entity includes a party legally responsible for payment of a

health care claim arising out of the worker's disability

compensation act 1969, 1969 PA 317, MCL 418.101 to 418.941, or

chapter 31 of the insurance code of 1956, 1956 PA 218, MCL 500.3161

to 500.3179.

     (c) "Medical assistance" means the medical assistance program

administered by the state under the social welfare act, 1939 PA

280, MCL 400.1 to 400.119b.

     (d) "Qualified health plan" means that term as defined in

section 111i of the social welfare act, 1939 PA 280, MCL 400.111i.

     Sec. 3. (1) An entity shall provide on a monthly basis to the

department, in a format determined by the department, information

necessary to enable the department or entity to determine whether a

health coverage recipient of the entity is also a medical

assistance recipient.

     (2) If a health coverage recipient of the entity is also a

medical assistance recipient, the entity shall do all of the

following by not later than 180 days after the department's

request:

     (a) Pay the department for, or assign to the department any

right of recovery owed to the entity for, a covered health claim

for which medical assistance payment has been made.

     (b) Respond to any inquiry by the department concerning a

claim for payment for any health care item or service that is

submitted not later than 3 years after the date the health care

item or service was provided.

     (3) An entity shall not deny a claim submitted by the

department solely on the basis of the date of submission of the

claim, the type or format of the claim form, or a failure to

present proper documentation at the time the health care item or

service that is the basis of the claim was provided so long as both

of the following apply:

     (a) The claim is submitted to the entity within 3 years of the

date that the health care item or service that is the subject of

the claim was provided.

     (b) Any action by the state to enforce its rights under this

subdivision is commenced within 6 years of the date that the health

care item or service that is the subject of the claim was provided.

     Sec. 5. If the department determines that a health coverage

recipient is also a medical assistance recipient:

     (a) The department may use information received under section

3 to update the medical assistance database maintained by the

department.

     (b) If the medical assistance recipient is covered by a

qualified health plan, the department shall share with that

qualified health plan all information received under this act by

the department for that medical assistance recipient.

     Sec. 7. An entity that violates this act is subject to an

administrative fine of not more than $500.00 for each day the

entity does not comply with section 3(1) or with a request for

information made pursuant to section 3(2). Upon the department's

determination that a violation of this act has occurred, the entity

has a right to notice of the alleged violation and an opportunity

for a hearing under the administrative procedures act of 1969, 1969

PA 306, MCL 24.201 to 24.328.

     Sec. 9. The department may promulgate rules pursuant to the

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

24.328, necessary to implement this act. Rules governing the

exchange of information under this act shall be consistent with all

laws, regulations, and rules relating to the confidentiality or

privacy of personal information or medical records, including, but

not limited to, the health insurance portability and accountability

act of 1996, Public Law 104-191, and regulations promulgated under

that act, 45 CFR parts 160 to 164.