September 20, 2012, Introduced by Rep. Lori and referred to the Committee on Appropriations.
A bill to amend 1939 PA 280, entitled
"The social welfare act,"
by amending section 111a (MCL 400.111a), as amended by 2000 PA 187.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 111a. (1) The director of the department of community
health, after appropriate consultation with affected providers and
the
medical care advisory council established pursuant according to
federal regulations, may establish policies and procedures that he
or she considers appropriate, relating to the conditions of
participation and requirements for providers established by section
111b and to applicable federal law and regulations, to assure that
the implementation and enforcement of state and federal laws are
all of the following:
(a) Reasonable, fair, effective, and efficient.
(b) In conformance with law.
(c) In conformance with the state plan for medical assistance
adopted
pursuant to under section 10 and approved by the United
States department of health and human services.
(2) The consultation required by this section shall be
conducted in accordance with guidelines adopted by the state
department
pursuant of community
health according to section 24 of
the administrative procedures act of 1969, 1969 PA 306, MCL 24.224.
(3) Except as otherwise provided in section 111i, the director
of the department of community health shall develop, after
appropriate consultation with affected providers in accordance with
guidelines, forms and instructions to be used in administering the
program. Forms developed by the director of the department of
community health shall be, to the extent administratively feasible,
compatible with forms providers are required to file with 1 or more
other third party payers or with 1 or more regulatory agencies and,
to the extent administratively feasible, shall be designed to
facilitate use of a single form to satisfy requirements imposed on
providers by more than 1 payer, agency, or other entity. The forms
and instructions shall relate, at a minimum, to standards of
performance by providers, conditions of participation, methods of
review of claims, and administrative requirements and procedures
that the director of the department of community health considers
reasonable and proper to assure all of the following:
(a) That claims against the program are timely, substantiated,
and not false, misleading, or deceptive.
(b) That reimbursement is made for only medically appropriate
services.
(c) That reimbursement is made for only covered services.
(d) That reimbursement is not made to those providers whose
services, supplies, or equipment cost the program in excess of the
reasonable value received.
(e) That the state is a prudent buyer.
(f) That access and availability of services to the medically
indigent are reasonable.
(4) As used in subsection (3), "prudent buyer" means a
purchaser who does 1 or more of the following:
(a) Buys from only those providers of services, supplies, or
equipment to medically indigent individuals whose performance, in
terms of quality, quantity, cost, setting, and location is
appropriate to the specific needs of those individuals, and who, in
the case of providers who receive payment on the basis of costs,
comply with the prudent buyer concept of titles XVIII and XIX.
(b) Pays for only those services, supplies, or equipment that
are needed or appropriate.
(c) Seeks to economize by minimizing cost.
(5) The director of the department of community health shall
select providers to participate in arrangements such as case
management, in supervision of services for recipients who
misutilize or abuse the medical services program, and in special
projects for the delivery of medical services to eligible
recipients. Providers shall be selected based upon criteria that
may include a comparison of services and related costs with those
of the provider's peers and a review of previous participation
warnings or sanctions undertaken against the provider or the
provider's employer, employees, related business entities, or
others who have a relationship to the provider, by the medicaid,
medicare, or other health-related programs. The director of the
department of community health may consult with the appropriate
peer review advisory committees as appointed by the department of
community health.
(6) The director of the department of community health shall
give notice to each provider of a change in a policy, procedure,
form,
or instruction established or developed pursuant to under
this section that affects the provider. For a change that affects 1
or more types of providers, a departmental bulletin or updating
insert to a departmental manual mailed 30 days before the effective
date of the change shall constitute sufficient notice. The
department of community health may provide notice required under
this subsection via United States mail or electronic mail.
(7) The director of the department of community health may do
all of the following:
(a) Enroll in the program for medical assistance only a
provider who has entered into an agreement of enrollment required
by section 111b(4), and enter into an agreement only with a
provider who satisfies the conditions of participation and
requirements for a provider established by sections 111b and 111i
and the administrative requirements established or developed
pursuant
to under subsections (1), (2), and (3) with the
appropriate consultation required by this section.
(b)
Enforce the requirements established pursuant to under
this act by applying the procedures of sections 111c to 111f. If in
these procedures the director of the department of community health
is
required to consult with professionals or experts prior to
before first utilizing these individuals in the program, the
director of the department of community health shall have given the
opportunity to review their professional credentials to the
appropriate medicaid peer review advisory committee.
(c) Except as otherwise provided in section 111i, develop with
the appropriate consultation required by this section and require
the form or format for claims, applications, certifications, or
certifications and recertifications of medical necessity required
by section 108, and develop specifications for and require
supporting documentation that is compatible with the approved state
medical assistance plan under title XIX.
(d) Recover payments to a provider in excess of the
reimbursement to which the provider is entitled. The department of
community health shall have a priority lien on any assets of a
provider for any overpayment, as a consequence of fraud or abuse,
that is not reimbursed to the department of community health.
(e) Notwithstanding any other provisions of this act, before
payment of claims, identify for examination for compliance with the
program of medical assistance, including but not limited to medical
necessity, the claims submitted by a particular provider based upon
a determination that the provider's claims for disputed services
exceed the average program dollar amount or volume of the same type
of services, submitted by the same type of provider, performed in
the same setting, and submitted during the same period. In order to
carry out the authority conferred by this subdivision, the director
of the department of community health shall notify the provider in
the form of registered mail, receipted by the addressee, or by
proof of service to the provider, or representative of the
provider,
of the state department's department
of community
health's
intent to impose specific conditions
and controls prior to
before authorizing payment for specific claims for services. The
notice shall contain all of the following:
(i) A list of the particular practice or practices disputed by
the state department of community health and a factual description
of the nature of the dispute.
(ii) A request for specific medical records and any other
relevant supporting information that fully discloses the basis and
extent to which the disputed practice or practices were rendered.
(iii) A date certain for an informal conference between the
provider or representative of the provider and the state department
of community health to resolve the differences surrounding the
disputed practice or practices.
(iv) A statement that unless the provider or representative of
the provider demonstrates at the informal conference that the
disputed practice or practices are medically necessary, or are in
compliance with other program coverages, specific conditions and
controls may be imposed on future payments for the disputed
practice or practices, and claims may be rejected, beginning on the
sixteenth day after delivery of this notice.
(8) For any provider who is subject to a notice of intent to
impose
specific conditions and controls prior to before authorizing
payment for specific claims for services, as specified in
subsection (7)(e), the state department of community health shall
afford that provider an opportunity for an informal conference
before the sixteenth day after delivery of the notice under
subsection (7)(e). If the provider fails to appear at the
conference, or fails to demonstrate that the disputed practice or
practices are medically necessary or are in compliance with program
coverages, the state department of community health beginning on
the sixteenth day following receipt of notice by the provider, is
authorized
to impose specific conditions and controls prior to
before payment for the disputed practice or practices and may
reject claims for payments for the practice or practices. The state
department of community health, within 5 days following the
informal conference, shall notify the provider of its decision
regarding
the imposition of special conditions and controls prior
to
before payment for the disputed practice or practices. Upon
the
imposition
of specific conditions and controls prior to before
payment, the provider upon request shall be entitled to an
immediate hearing held in conformity with chapter 4 and chapter 6
of the administrative procedures act of 1969, 1969 PA 306, MCL
24.271 to 24.287 and 24.301 to 24.306, if any of the following
occurs:
(a) The claim for services rendered is not paid within 30 days
of the provider's compliance with the conditions imposed.
(b) The claim is rejected.
(c) The provider notifies the state department of community
health by registered mail that the provider does not intend to
comply with the specific conditions and controls imposed, and the
claim for services rendered is not paid within 30 days after
delivery of this notice.
(9) The hearing provided for under subsection (8) shall be
conducted in a prompt and expeditious manner. At the hearing, the
provider
may contest the state department's department of community
health's
decision to impose specific conditions
and controls prior
to
before payment. Subsequent hearings may be conducted at the
provider's request only if the claims have not been considered at a
prior hearing and reflect issues that also have not been considered
at a prior hearing, or if a claim for services rendered is not paid
within 60 days after the provider's compliance with the conditions
imposed.
(10) The authority conferred in subsection (8) with respect to
the claims submitted by a particular provider does not prohibit the
state department of community health from examining claims or
portions of claims before payment of the claims to determine their
compliance with the program of medical assistance, in compliance
with law. The director of the department of community health may
take
additional action pursuant to under
subsection (8) during the
pendency
of an appeal taken pursuant to under
subsection (8).
(11)
If in the department's department
of community health's
opinion, the provider shifts his or her claims from the disputed
services addressed under subsection (7)(e) to other claims that
fall under the purview of subsection (7)(e), the director of the
department of community health may impose the claims review process
of this section immediately upon delivery of the notice of that
imposition to the provider as provided in subsection (7)(e).
(12)
If in the department's department
of community health's
opinion, claims similar to the disputed services addressed under
subsection (7)(e) are shifted to another provider in the same
corporation, partnership, clinic, provider group, or to another
provider in the employ of the same employer or contractor, the
director of the department of community health may impose the
claims review process of this section immediately upon delivery of
notice of that imposition to the new provider as provided in
subsection (7)(e). The department of community health shall afford
the new provider an opportunity for an immediate informal
conference
within 7 days pursuant to under
subsection (8) after the
initiation of the claims process.
(13) The director of the department of community health may
request a provider to open books and records in accordance with
section
111b(7) and may photocopy, at the state department's
department of community health's expense, the records of a
medically indigent individual. The records shall be confidential,
and the state department shall use the records only for purposes
directly and specifically related to the administration of the
program. The immunity from liability of a provider subject to the
director's
director of the department of
community health's
authority under this subsection is governed by section 111b(7).
(14) The director of the department of community health shall
not pay for services, supplies, or equipment furnished by a
provider, or shall recover for payment made, during a period in
which the provider does not have on file with the state department
of community health disclosure forms as required by section
111b(19).
(15) The director of the department of community health shall
make payments to, and collect overpayments from, the provider,
unless the provider and the provider's employer satisfy the
conditions prescribed in section 111b(25), (26), and (27), in which
case the director of the department of community health may make
payments directly to, and collect overpayments from, the provider's
employer.
(16) The director of the department of community health, with
the appropriate consultation required by this section, may develop
specifications for and require estimated cost and charge
information to be submitted by a provider under section 111b(13)
and the form or format for submission of the information.
(17) If the director of the department of community health
decides that a payment under the program has been made to which a
provider is not or may not be entitled, or that the amount of a
payment is or may be greater or less than the amount to which the
provider is entitled, the director of the department of community
health, except as otherwise provided in this subsection or under
other applicable law or regulation, shall promptly notify the
provider of this decision. The director of the department of
community health shall withhold notification to the provider of the
decision upon advice from the department of attorney general or
other state or federal enforcement agency in a case where action by
the department of attorney general or other state or federal
enforcement agency may be compromised by the notification. If the
director of the department of community health notifies a provider
of a decision that the provider has received an underpayment, the
state department of community health shall reimburse the provider,
either directly or through an adjustment of payments, in the amount
found to be due.