June 22, 2006, Introduced by Reps. Garfield, Shaffer, Pastor, Gosselin, Vander Veen, Palmer, Plakas and Meyer and referred to the Committee on Health Policy.
A bill to amend 1939 PA 280, entitled
"The social welfare act,"
(MCL 400.1 to 400.119b) by adding sections 111l, 111m, 111n, and
111o; and to repeal acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 111l. (1) A single state agency shall be responsible for
medicaid health care policy. Through a competitive bid process, the
state shall establish a contract for medicaid claim processing. A
company bidding on or participating in the ongoing contract for
medicaid claim processing may not control 15% or more of the
state's health care coverage market at any time, excluding the
medicaid and medicare programs.
(2) The company selected under this section must have
extensive experience in processing health care claims, including
claims for pharmaceuticals and long-term care. The company selected
must have extensive experience in the principles of managed care.
(3) Not less than 1 time each year, a company selected under
this section shall prepare a report detailing medicaid
reimbursement expenditures, administrative costs, and recovery
activity. The company selected under this section shall report,
annually, the findings described in this subsection, as well as a
detailed summary of reimbursement expenditures by geographic
regions in the state and its costs, to the single state agency
described in subsection (1). The single state agency shall submit
the report and findings to the house and senate appropriations
committees, the house and senate standing committees on health,
insurance, senior citizens, and human services issues, and the
attorney general.
(4) A company selected under this section shall contract with
established groups of practitioners to provide health care
services. In areas where practitioner groups are limited in number,
the contracted company shall assist in creating independent
practitioner groups. The practitioner groups shall be divided into
primary care providers and secondary care providers. All medicaid
recipients shall select a primary care group to provide primary
care services. All referrals for secondary services shall originate
with the recipient's selected primary care group. The secondary
care provider must be a contracted practitioner.
(5) The state shall create a fee schedule that establishes a
single fee for each medical procedure to be reimbursed by the
medicaid program. Cost-based fees shall not be included except for
diagnostic-related group fees for inpatient hospital services. This
fee schedule shall be the basis for the selected company's contract
fee negotiations. The fees established in the fee schedule shall be
the upper limit of the amount that may be reimbursed for a medical
procedure under the medicaid program. The fee schedule established
under this subsection must be actuarially sound. The selected
company shall be responsible for all provider reimbursement.
(6) The state shall establish coverage policies and prices for
generic and selected over-the-counter pharmacy products. The state
shall establish, in cooperation with the selected claims processing
company, a pharmacy panel composed of an equal number of medical
practitioners and clinical pharmacists. This panel will determine
the generic brands and over-the-counter drug products to be covered
by medicaid. The pharmacy panel shall provide the company selected
under this subsection with its determinations and findings to be
used in the payment and processing of pharmacy claims.
(7) The state shall establish a policy that makes it a
priority to allow medicaid-eligible seniors to remain in a home
care setting as long as it is medically appropriate to do so. The
state shall cover home care services for these eligible senior
recipients. The selected company shall contract with home care
providers to provide home care services.
(8) The company selected under this section shall contract
with selected hospitals to provide inpatient hospital services.
Diagnostic-related group fees shall be the basis for contracts with
these hospitals. All outpatient hospital services shall be
reimbursed based on the fee schedule described in subsection (4).
Sec. 111m. (1) Through a competitive bid process, the state
shall establish a contract for medicaid claims utilization and
review and third-party recovery. A company bidding on or
participating in the ongoing medicaid contract for utilization and
review and third-party recovery may not control 15% or more of the
state's health care coverage market at any time, excluding the
medicaid and medicare programs.
(2) The company selected under this section shall have
extensive experience in processing health care claims, including
claims for pharmaceuticals and long-term care, for the purpose of
reviewing medicaid utilization and third-party recovery data. The
company selected under this section shall have extensive experience
in the principles of managed care.
(3) Not less than 1 time each year, the company selected under
this section shall review and prepare reports detailing medicaid
reimbursement expenditures and trends. The company selected under
this section shall review medicaid claims data annually and shall
seek recovery of any inappropriately paid claims and report the
results to the single state agency and to the medicaid claims
processing contractor.
(4) The company selected under this section shall identify and
report systematic error, suspected fraud, or false claim activity
and shall report that activity to the single state agency and to
the medicaid claims processing contractor. The company selected
under this section shall prepare reports that the single state
agency shall submit to the attorney general. If the company
determines that their findings may be indicative of fraudulent or
false claim activity, those findings shall be included in the
report. The single state agency and the company selected shall
cooperate with the attorney general in providing data to support
the investigation of or prosecution of suspected or known
fraudulent or false claim activity against the medicaid program.
The company selected shall make regular recommendations for cost
containment to the single state agency. The company selected shall
annually report its findings as described in subsection (4), by
geographic regions in the state, and its costs to the single state
agency. The single state agency shall submit the report and
findings to the house and senate appropriations committees and to
the single state agency.
Sec. 111n. (1) All medicaid policies and procedures and claims
processing, review, and recovery activities shall be carried out in
compliance with all applicable federal laws and regulations. The
single state agency shall seek a waiver as provided for by federal
law and regulation, if necessary, in order to facilitate cost
reduction, efficiency, and quality of care in the delivery of
services according to sections 111l and 111m.
(2) The state shall establish a special transaction unit to
process medicaid claims properly submitted under the claim system
in use before the single state agency began processing medicaid
claims.
Sec. 111o. Sections 111l, 111m, and 111n take effect 1 year
after the effective date of the amendatory act that added this
section. Claims submitted to the special transaction unit must be
timely and properly submitted. Claims submitted to the special
transaction unit in an untimely manner or improperly submitted
shall not be processed.
Enacting section 1. Sections 111i and 111j of the social
welfare act, 1939 PA 280, MCL 400.111i and 400.111j, are repealed.