HOUSE BILL No. 5931

 

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.