SB-0897, As Passed House, June 6, 2018

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 897

     A bill to amend 1939 PA 280, entitled

"The social welfare act,"

by amending section 105d (MCL 400.105d), as added by 2013 PA 107,

and by adding sections 107a and 107b.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 105d. (1) The department of community health shall seek a

waiver from the United States department of health and human

services Department of Health and Human Services to do, without

jeopardizing federal match dollars or otherwise incurring federal

financial penalties, and upon approval of the waiver shall do, all

of the following:

     (a) Enroll individuals eligible under section

1396a(a)(10)(A)(i)(VIII) of title XIX who meet the citizenship

provisions of 42 CFR 435.406 and who are otherwise eligible for the

medical assistance program under this act into a contracted health

plan that provides for an account into which money from any source,

including, but not limited to, the enrollee, the enrollee's

employer, and private or public entities on the enrollee's behalf,

can be deposited to pay for incurred health expenses, including,

but not limited to, co-pays. The account shall be administered by

the department of community health and can be delegated to a

contracted health plan or a third party administrator, as

considered necessary. The department of community health shall not

begin enrollment of individuals eligible under this subdivision

until January 1, 2014 or until the waiver requested in this

subsection is approved by the United States department of health

and human services, whichever is later.

     (b) Ensure that contracted health plans track all enrollee co-

pays incurred for the first 6 months that an individual is enrolled

in the program described in subdivision (a) and calculate the

average monthly co-pay experience for the enrollee. The average co-

pay amount shall be adjusted at least annually to reflect changes

in the enrollee's co-pay experience. The department of community

health shall ensure that each enrollee receives quarterly

statements for his or her account that include expenditures from

the account, account balance, and the cost-sharing amount due for

the following 3 months. The enrollee shall be required to remit

each month the average co-pay amount calculated by the contracted

health plan into the enrollee's account. The department of

community health shall pursue a range of consequences for enrollees

who consistently fail to meet their cost-sharing requirements,

including, but not limited to, using the MIChild program as a

template and closer oversight by health plans in access to

providers. The department of community health shall report its plan

of action for enrollees who consistently fail to meet their cost-

sharing requirements to the legislature by June 1, 2014.

     (c) Give enrollees described in subdivision (a) a choice in

choosing among contracted health plans.

     (d) Ensure that all enrollees described in subdivision (a)

have access to a primary care practitioner who is licensed,

registered, or otherwise authorized to engage in his or her health

care profession in this state and to preventive services. The

department of community health shall require that all new enrollees

be assigned and have scheduled an initial appointment with their

primary care practitioner within 60 days of initial enrollment. The

department of community health shall monitor and track contracted

health plans for compliance in this area and consider that

compliance in any health plan incentive programs. The department of

community health shall ensure that the contracted health plans have

procedures to ensure that the privacy of the enrollees' personal

information is protected in accordance with the health insurance

portability and accountability act of 1996, Public Law 104-191.

     (e) Require enrollees described in subdivision (a) with annual

incomes between 100% and 133% of the federal poverty guidelines to

contribute not more than 5% of income annually for cost-sharing

requirements. Cost-sharing includes co-pays and required

contributions made into the accounts authorized under subdivision

(a). Contributions required in this subdivision do not apply for

the first 6 months an individual described in subdivision (a) is

enrolled. Required contributions to an account used to pay for

incurred health expenses shall be 2% of income annually.

Notwithstanding Except as otherwise provided in subsection (20),

notwithstanding this minimum, required contributions may be reduced

by the contracting health plan. The reductions may occur only if

healthy behaviors are being addressed as attested to by the

contracted health plan based on uniform standards developed by the

department of community health in consultation with the contracted

health plans. The uniform standards shall include healthy behaviors

that must include, but are not limited to, such as completing a

department of community health approved annual health risk

assessment to identify unhealthy characteristics, including alcohol

use, substance use disorders, tobacco use, obesity, and

immunization status. Co-pays Except as otherwise provided in

subsection (20), co-pays can be reduced if healthy behaviors are

met, but not until annual accumulated co-pays reach 2% of income

except co-pays for specific services may be waived by the

contracted health plan if the desired outcome is to promote greater

access to services that prevent the progression of and

complications related to chronic diseases. If the enrollee

described in subdivision (a) becomes ineligible for medical

assistance under the program described in this section, the

remaining balance in the account described in subdivision (a) shall

be returned to that enrollee in the form of a voucher for the sole

purpose of purchasing and paying for private insurance.

     (f) By July 1, 2014, design and implement Implement a co-pay

structure that encourages use of high-value services, while

discouraging low-value services such as nonurgent emergency

department use.

     (g) During the enrollment process, inform enrollees described

in subdivision (a) about advance directives and require the

enrollees to complete a department of community health-approved

department-approved advance directive on a form that includes an

option to decline. The advance directives received from enrollees

as provided in this subdivision shall be transmitted to the peace

of mind registry organization to be placed on the peace of mind

registry.

     (h) By April 1, 2015, develop Develop incentives for enrollees

and providers who assist the department of community health in

detecting fraud and abuse in the medical assistance program. The

department of community health shall provide an annual report that

includes the type of fraud detected, the amount saved, and the

outcome of the investigation to the legislature.

     (i) Allow for services provided by telemedicine from a

practitioner who is licensed, registered, or otherwise authorized

under section 16171 of the public health code, 1978 PA 368, MCL

333.16171, to engage in his or her health care profession in the

state where the patient is located.

     (2) For services rendered to an uninsured individual, a

hospital that participates in the medical assistance program under

this act shall accept 115% of medicare Medicare rates as payments

in full from an uninsured individual with an annual income level up

to 250% of the federal poverty guidelines. This subsection applies

whether or not either or both of the waivers requested under this

section are approved, the patient protection and affordable care

act is repealed, or the state terminates or opts out of the program

established under this section.

     (3) Not more than 7 calendar days after receiving each of the

official waiver-related written correspondence from the United

States department of health and human services Department of Health

and Human Services to implement the provisions of this section, the

department of community health shall submit a written copy of the

approved waiver provisions to the legislature for review.

     (4) By September 30, 2015, the The department of community

health shall develop and implement a plan to enroll all existing

fee-for-service enrollees into contracted health plans if allowable

by law, if the medical assistance program is the primary payer and

if that enrollment is cost-effective. This includes all newly

eligible enrollees as described in subsection (1)(a). The

department of community health shall include contracted health

plans as the mandatory delivery system in its waiver request. The

department of community health also shall pursue any and all

necessary waivers to enroll persons eligible for both medicaid

Medicaid and medicare Medicare into the 4 integrated care

demonstration regions. beginning July 1, 2014. By September 30,

2015, the The department of community health shall identify all

remaining populations eligible for managed care, develop plans for

their integration into managed care, and provide recommendations

for a performance bonus incentive plan mechanism for long-term care

managed care providers that are consistent with other managed care

performance bonus incentive plans. By September 30, 2015, the The

department of community health shall make recommendations for a

performance bonus incentive plan for long-term care managed care

providers of up to 3% of their medicaid Medicaid capitation

payments, consistent with other managed care performance bonus

incentive plans. These payments shall comply with federal

requirements and shall be based on measures that identify the

appropriate use of long-term care services and that focus on

consumer satisfaction, consumer choice, and other appropriate

quality measures applicable to community-based and nursing home

services. Where appropriate, these quality measures shall be

consistent with quality measures used for similar services

implemented by the integrated care for duals demonstration project.

This subsection applies whether or not either or both of the

waivers requested under this section are approved, the patient

protection and affordable care act is repealed, or the state

terminates or opts out of the program established under this

section.

     (5) By September 30, 2016, the The department of community

health shall implement a pharmaceutical benefit that utilizes co-

pays at appropriate levels allowable by the centers Centers for

medicare and medicaid services Medicare and Medicaid Services to

encourage the use of high-value, low-cost prescriptions, such as

generic prescriptions when such an alternative exists for a branded

product and 90-day prescription supplies, as recommended by the

enrollee's prescribing provider and as is consistent with section

109h and sections 9701 to 9709 of the public health code, 1978 PA

368, MCL 333.9701 to 333.9709. This subsection applies whether or

not either or both of the waivers requested under this section are

approved, the patient protection and affordable care act is

repealed, or the state terminates or opts out of the program

established under this section.

     (6) The department of community health shall work with

providers, contracted health plans, and other departments as

necessary to create processes that reduce the amount of uncollected

cost-sharing and reduce the administrative cost of collecting cost-

sharing. To this end, a minimum 0.25% of payments to contracted

health plans shall be withheld for the purpose of establishing a

cost-sharing compliance bonus pool beginning October 1, 2015. The

distribution of funds from the cost-sharing compliance pool shall

be based on the contracted health plans' success in collecting

cost-sharing payments. The department of community health shall

develop the methodology for distribution of these funds. This

subsection applies whether or not either or both of the waivers

requested under this section are approved, the patient protection

and affordable care act is repealed, or the state terminates or

opts out of the program established under this section.

     (7) By June 1, 2014, the The department of community health

shall develop a methodology that decreases the amount an enrollee's

required contribution may be reduced as described in subsection

(1)(e) based on, but not limited to, factors such as an enrollee's

failure to pay cost-sharing requirements and the enrollee's

inappropriate utilization of emergency departments.

     (8) The program described in this section is created in part

to extend health coverage to the state's low-income citizens and to

provide health insurance cost relief to individuals and to the

business community by reducing the cost shift attendant to

uncompensated care. Uncompensated care does not include courtesy

allowances or discounts given to patients. The medicaid Medicaid

hospital cost report shall be part of the uncompensated care

definition and calculation. In addition to the medicaid Medicaid

hospital cost report, the department of community health shall

collect and examine other relevant financial data for all hospitals

and evaluate the impact that providing medical coverage to the

expanded population of enrollees described in subsection (1)(a) has

had on the actual cost of uncompensated care. This shall be

reported for all hospitals in the state. By December 31, 2014, the

department of community health shall make an initial baseline

uncompensated care report containing at least the data described in

this subsection to the legislature and each December 31 after that

shall make a report regarding the preceding fiscal year's evidence

of the reduction in the amount of the actual cost of uncompensated

care compared to the initial baseline report. The baseline report

shall use fiscal year 2012-2013 data. Based on the evidence of the

reduction in the amount of the actual cost of uncompensated care

borne by the hospitals in this state, beginning April 1, 2015, the

department of community health shall proportionally reduce the

disproportionate share payments to all hospitals and hospital

systems for the purpose of producing general fund savings. The

department of community health shall recognize any savings from

this reduction by September 30, 2016. All the reports required

under this subsection shall be made available to the legislature

and shall be easily accessible on the department of community

health's department's website.

     (9) The department of insurance and financial services shall

examine the financial reports of health insurers and evaluate the

impact that providing medical coverage to the expanded population

of enrollees described in subsection (1)(a) has had on the cost of

uncompensated care as it relates to insurance rates and insurance

rate change filings, as well as its resulting net effect on rates

overall. The department of insurance and financial services shall

consider the evaluation described in this subsection in the annual

approval of rates. By December 31, 2014, the department of

insurance and financial services shall make an initial baseline

report to the legislature regarding rates and each December 31

after that shall make a report regarding the evidence of the change

in rates compared to the initial baseline report. All the reports

required under this subsection shall be made available to the

legislature and shall be made available and easily accessible on

the department of community health's department's website.

     (10) The department of community health shall explore and

develop a range of innovations and initiatives to improve the

effectiveness and performance of the medical assistance program and

to lower overall health care costs in this state. The department of

community health shall report the results of the efforts described

in this subsection to the legislature and to the house and senate

fiscal agencies by September 30, 2015. The report required under

this subsection shall also be made available and easily accessible

on the department of community health's department's website. The

department of community health shall pursue a broad range of

innovations and initiatives as time and resources allow that shall

include, at a minimum, all of the following:

     (a) The value and cost-effectiveness of optional medicaid

Medicaid benefits as described in federal statute.

     (b) The identification of private sector, primarily small

business, health coverage benefit differences compared to the

medical assistance program services and justification for the

differences.

     (c) The minimum measures and data sets required to effectively

measure the medical assistance program's return on investment for

taxpayers.

     (d) Review and evaluation of the effectiveness of current

incentives for contracted health plans, providers, and

beneficiaries with recommendations for expanding and refining

incentives to accelerate improvement in health outcomes, healthy

behaviors, and cost-effectiveness and review of the compliance of

required contributions and co-pays.

     (e) Review and evaluation of the current design principles

that serve as the foundation for the state's medical assistance

program to ensure the program is cost-effective and that

appropriate incentive measures are utilized. The review shall

include, at a minimum, the auto-assignment algorithm and

performance bonus incentive pool. This subsection applies whether

or not either or both of the waivers requested under this section

are approved, the patient protection and affordable care act is

repealed, or the state terminates or opts out of the program

established under this section.

     (f) The identification of private sector initiatives used to

incent individuals to comply with medical advice.

     (11) By December 31, 2015, the department of community health

shall review and report to the legislature the feasibility of

programs recommended by multiple national organizations that

include, but are not limited to, the council of state governments,

the national conference of state legislatures, and the American

legislative exchange council, on improving the cost-effectiveness

of the medical assistance program.

     (12) By January 1, 2014, the The department of community

health in collaboration with the contracted health plans and

providers shall create financial incentives for all of the

following:

     (a) Contracted health plans that meet specified population

improvement goals.

     (b) Providers who meet specified quality, cost, and

utilization targets.

     (c) Enrollees who demonstrate improved health outcomes or

maintain healthy behaviors as identified in a health risk

assessment as identified by their primary care practitioner who is

licensed, registered, or otherwise authorized to engage in his or

her health care profession in this state. This subsection applies

whether or not either or both of the waivers requested under this

section are approved, the patient protection and affordable care

act is repealed, or the state terminates or opts out of the program

established under this section.

     (13) By October 1, 2015, the The performance bonus incentive

pool for contracted health plans that are not specialty prepaid

health plans shall include inappropriate utilization of emergency

departments, ambulatory care, contracted health plan all-cause

acute 30-day readmission rates, and generic drug utilization when

such an alternative exists for a branded product and consistent

with section 109h and sections 9701 to 9709 of the public health

code, 1978 PA 368, MCL 333.9701 to 333.9709, as a percentage of

total. These measurement tools shall be considered and weighed

within the 6 highest factors used in the formula. This subsection

applies whether or not either or both of the waivers requested

under this section are approved, the patient protection and

affordable care act is repealed, or the state terminates or opts

out of the program established under this section.

     (14) The department of community health shall ensure that all

capitated payments made to contracted health plans are actuarially

sound. This subsection applies whether or not either or both of the

waivers requested under this section are approved, the patient

protection and affordable care act is repealed, or the state

terminates or opts out of the program established under this

section.

     (15) The department of community health shall maintain

administrative costs at a level of not more than 1% of the

department of community health's department's appropriation of the

state medical assistance program. These administrative costs shall

be capped at the total administrative costs for the fiscal year

ending September 30, 2016, except for inflation and project-related

costs required to achieve medical assistance net general fund

savings. This subsection applies whether or not either or both of

the waivers requested under this section are approved, the patient

protection and affordable care act is repealed, or the state

terminates or opts out of the program established under this

section.

     (16) By October 1, 2015, the The department of community

health shall establish uniform procedures and compliance metrics

for utilization by the contracted health plans to ensure that cost-

sharing requirements are being met. This shall include

ramifications for the contracted health plans' failure to comply

with performance or compliance metrics. This subsection applies

whether or not either or both of the waivers requested under this

section are approved, the patient protection and affordable care

act is repealed, or the state terminates or opts out of the program

established under this section.

     (17) Beginning October 1, 2015, the The department of

community health shall withhold, at a minimum, 0.75% of payments to

contracted health plans, except for specialty prepaid health plans,

for the purpose of expanding the existing performance bonus

incentive pool. Distribution of funds from the performance bonus

incentive pool is contingent on the contracted health plan's

completion of the required performance or compliance metrics. This

subsection applies whether or not either or both of the waivers

requested under this section are approved, the patient protection

and affordable care act is repealed, or the state terminates or

opts out of the program established under this section.

     (18) By October 1, 2015, the The department of community

health shall withhold, at a minimum, 0.75% of payments to specialty

prepaid health plans for the purpose of establishing a performance

bonus incentive pool. Distribution of funds from the performance

bonus incentive pool is contingent on the specialty prepaid health

plan's completion of the required performance of compliance metrics

, which that shall include, at a minimum, partnering with other

contracted health plans to reduce nonemergent emergency department

utilization, increased participation in patient-centered medical

homes, increased use of electronic health records and data sharing

with other providers, and identification of enrollees who may be

eligible for services through the veterans administration. United

States Department of Veterans Affairs. This subsection applies

whether or not either or both of the waivers requested under this

section are approved, the patient protection and affordable care

act is repealed, or the state terminates or opts out of the program

established under this section.

     (19) The department of community health shall measure

contracted health plan or specialty prepaid health plan performance

metrics, as applicable, on application of standards of care as that

relates to appropriate treatment of substance use disorders and

efforts to reduce substance use disorders. This subsection applies

whether or not either or both of the waivers requested under this

section are approved, the patient protection and affordable care

act is repealed, or the state terminates or opts out of the program

established under this section.

     (20) By September 1, 2015, October 1, 2018, in addition to the

waiver requested in subsection (1), the department of community

health shall seek an additional waiver from the United States

department of health and human services Department of Health and

Human Services that requires individuals who are between 100% and

133% of the federal poverty guidelines and who have had medical

assistance coverage for 48 cumulative months beginning on the date

of their enrollment into the program described in subsection (1) by

the date of the waiver implementation to choose 1 of the following

options:

     (a) Change their medical assistance program eligibility

status, in accordance with federal law, to be considered eligible

for federal advance premium tax credit and cost-sharing subsidies

from the federal government to purchase private insurance coverage

through an American health benefit exchange without financial

penalty to the state.

     (b) Remain in the medical assistance program but increase

cost-sharing requirements up to 7% of income. Required

contributions shall be deposited into an account used to pay for

incurred health expenses for covered benefits and shall be 3.5% of

income but may be reduced as provided in subsection (1)(e). The

department of community health may reduce co-pays as provided in

subsection (1)(e), but not until annual accumulated co-pays reach

3% of income.

     (a) Complete a healthy behavior as provided in subsection

(1)(e) with intentional effort given to making subsequent year

healthy behaviors incrementally more challenging in order to

continue to focus on eliminating health-related obstacles

inhibiting enrollees from achieving their highest levels of

personal productivity and pay a premium of 5% of income. A required

contribution for a premium is not eligible for reduction or refund.

     (b) Suspend eligibility for the program described in

subsection (1)(a) until the individual complies with subdivision

(a).

     (21) The department of community health shall notify enrollees

60 days before the end of the enrollee's forty-eighth month that

enrollee would lose coverage under the current program that this

coverage is no longer available to them and that, in order to

continue coverage, the enrollee must choose between the options

comply with the option described in subsection (20)(a). or (b).

     (22) The department of community health shall implement a

system for individuals who fail to choose an option described under

subsection (20)(a) or (b) within a specified time determined by the

department of community health that enrolls those individuals into

the option described in subsection (20)(b).

     (22) The medical coverage for individuals described in

subsection (1)(a) shall remain in effect for not longer than a 16-

month period after submission of a new or amended waiver request

under subsection (20) if a new or amended waiver request is not

approved within 12 months after submission. The department must

notify individuals described in subsection (1)(a) that their

coverage will be terminated by February 1, 2020 if a new or amended

waiver request is not approved within 12 months after submission.

     (23) If the waiver requested under subsection (20) is not

approved by the United States department of health and human

services by December 31, 2015, medical coverage for individuals

described in subsection (1)(a) shall no longer be provided. If the

waiver is not approved by December 31, 2015, then by January 31,

2016, the department of community health shall notify enrollees

that the program described in subsection (1) shall be terminated on

April 30, 2016. If a waiver requested under subsection (1) or (20)

is approved and is required to be renewed at any time after

approval, medical coverage for individuals described in subsection

(1)(a) shall no longer be provided if either renewal request is not

approved by the United States department of health and human

services or if a waiver is canceled after approval. The department

of community health shall give enrollees 4 months' advance notice

before termination of coverage based on a renewal request not being

approved as described in this subsection. A notification described

in this subsection shall state that the enrollment was terminated

due to the failure of the United States department of health and

human services to approve the waiver requested under subsection

(20) or renewal of a waiver described in this subsection.

     (23) If a new or amended waiver requested under subsection

(20) is denied by the United States Department of Health and Human

Services, medical coverage for individuals described in subsection

(1)(a) shall remain in effect for a 16-month period after the date

of submission of the new or amended waiver request unless the

United States Department of Health and Human Services approves a

new or amended waiver described in this subsection within the 12

months after the date of submission of the new or amended waiver

request. A request for a new or amended waiver under this

subsection must comply with the other requirements of this section

and must be provided to the chairs of the senate and house of

representatives appropriations committees and the chairs of the

senate and house of representatives appropriations subcommittees on

the department budget, at least 30 days before submission to the

United States Department of Health and Human Services. If a new or

amended waiver request under this subsection is not approved within

the 12-month period described in this subsection, the department

must give 4 months' notice that medical coverage for individuals

described in subsection (1)(a) shall be terminated.

     (24) If a new or amended waiver requested under subsection

(20) is canceled by the United States Department of Health and

Human Services or is invalidated, medical coverage for individuals

described in subsection (1)(a) shall remain in effect for 16 months

after the date of submission of a new or amended waiver unless the

United States Department of Health and Human Services approves a

new or amended waiver described in this subsection within the 12

months after the date of submission of the new or amended waiver. A

request for a new or amended waiver under this subsection must

comply with the other requirements of this section and must be

provided to the chairs of the senate and house of representatives

appropriations committees and the senate and house of

representatives appropriations subcommittees on the department

budget at least 30 days before submission to the United States

Department of Health and Human Services. If a new or amended waiver

under this subsection is not approved within the 12-month period

described in this subsection, the department must give 4 months'

notice that medical coverage for individuals described in

subsection (1)(a) shall be terminated.

     (25) If a new or amended waiver request under subsection (23)

or (24) is approved by the United States Department of Health and

Human Services but does not comply with the other requirements of

this section, medical coverage for individuals described in

subsection (1)(a) shall be terminated 4 months after the new or

amended waiver has been determined to be in noncompliance. The

department must notify individuals described in subsection (1)(a)

at least 4 months before the termination date that enrollment shall

be terminated and the reason for termination.

(26) (24) Individuals described in 42 CFR 440.315 are not

subject to the provisions of the waiver described in subsection

(20).

(27) (25) The department of community health shall make

available at least 3 years of state medical assistance program

data, without charge, to any vendor considered qualified by the

department of community health who indicates interest in submitting

proposals to contracted health plans in order to implement cost

savings and population health improvement opportunities through the

use of innovative information and data management technologies. Any

program or proposal to the contracted health plans must be

consistent with the state's goals of improving health, increasing

the quality, reliability, availability, and continuity of care, and

reducing the cost of care of the eligible population of enrollees

described in subsection (1)(a). The use of the data described in

this subsection for the purpose of assessing the potential

opportunity and subsequent development and submission of formal

proposals to contracted health plans is not a cost or contractual

obligation to the department of community health or the state.

     (26) If the department of community health does not receive

approval for both of the waivers required under this section before

December 31, 2015, the program described in this section is

terminated. The department of community health shall request

written documentation from the United States department of health

and human services that if the waivers described in this section

are rejected causing the medical assistance program to revert back

to the eligibility requirements in effect on the effective date of

the amendatory act that added this section, excluding any waivers

that have not been renewed, there shall be no financial federal

funding penalty to the state associated with the implementation and

subsequent cancellation of the program created in this section. If

the department of community health does not receive this

documentation by December 31, 2013, the department of community

health shall not implement the program described in this section.

(28) (27) This section does not apply if either of the

following occurs:

     (a) If the department of community health is unable to obtain

either of the federal waivers requested in subsection (1) or (20).

     (b) If federal government matching funds for the program

described in this section are reduced below 100% and annual state

Senate Bill No. 897 as amended June 6, 2018

savings and other nonfederal net savings associated with the

implementation of that program are not sufficient to cover the

reduced federal match. The department of community health shall

determine and the state budget office shall approve how annual

state savings and other nonfederal net savings shall be calculated

by June 1, 2014. By September 1, 2014, the calculations and

methodology used to determine the state and other nonfederal net

savings shall be submitted to the legislature.[The calculation of annual

 state and other nonfederal net savings shall be published annually on January 15 by the state budget office. If the annual state savings and other nonfederal net savings are not sufficient to cover the reduced federal match, medical coverage for individuals described in subsection (1)(a) shall remain in effect until the end of the fiscal year in which the calculation described in this subdivision is published by the state budget office.]

(29) (28) The department of community health shall develop,

administer, and coordinate with the department of treasury a

procedure for offsetting the state tax refunds of an enrollee who

owes a liability to the state of past due uncollected cost-sharing,

as allowable by the federal government. The procedure shall include

a guideline that the department of community health submit to the

department of treasury, not later than November 1 of each year, all

requests for the offset of state tax refunds claimed on returns

filed or to be filed for that tax year. For the purpose of this

subsection, any nonpayment of the cost-sharing required under this

section owed by the enrollee is considered a liability to the state

under section 30a(2)(b) of 1941 PA 122, MCL 205.30a.

(30) (29) For the purpose of this subsection, any nonpayment

of the cost-sharing required under this section owed by the

enrollee is considered a current liability to the state under

section 32 of the McCauley-Traxler-Law-Bowman-McNeely lottery act,

1972 PA 239, MCL 432.32, and shall be handled in accordance with

the procedures for handling a liability to the state under that

section, as allowed by the federal government.

(31) (30) By November 30, 2013, the department of community

health shall convene a symposium to examine the issues of emergency

department overutilization and improper usage. By December 31,

2014, the The department of community health shall submit a report

to the legislature that identifies the causes of overutilization

and improper emergency service usage that includes specific best

practice recommendations for decreasing overutilization of

emergency departments and improper emergency service usage, as well

as how those best practices are being implemented. Both broad

recommendations and specific recommendations related to the

medicaid Medicaid program, enrollee behavior, and health plan

access issues shall be included.

(32) (31) The department of community health shall contract

with an independent third party vendor to review the reports

required in subsections (8) and (9) and other data as necessary, in

order to develop a methodology for measuring, tracking, and

reporting medical cost and uncompensated care cost reduction or

rate of increase reduction and their effect on health insurance

rates along with recommendations for ongoing annual review. The

final report and recommendations shall be submitted to the

legislature by September 30, 2015.

(33) (32) For the purposes of submitting reports and other

information or data required under this section only, "legislature"

means the senate majority leader, the speaker of the house of

representatives, the chairs of the senate and house of

representatives appropriations committees, the chairs of the senate

and house of representatives appropriations subcommittees on the

department of community health budget, and the chairs of the senate

and house of representatives standing committees on health policy.

(34) (33) As used in this section:

     (a) "Patient protection and affordable care act" means the

patient protection and affordable care act, Public Law 111-148, as

amended by the federal health care and education reconciliation act

of 2010, Public Law 111-152.

     (b) "Peace of mind registry" and "peace of mind registry

organization" mean those terms as defined in section 10301 of the

public health code, 1978 PA 368, MCL 333.10301.

     (c) "State savings" means any state fund net savings,

calculated as of the closing of the financial books for the

department of community health at the end of each fiscal year, that

result from the program described in this section. The savings

shall result in a reduction in spending from the following state

fund accounts: adult benefit waiver, non-medicaid non-Medicaid

community mental health, and prisoner health care. Any identified

savings from other state fund accounts shall be proposed to the

house of representatives and senate appropriations committees for

approval to include in that year's state savings calculation. It is

the intent of the legislature that for fiscal year ending September

30, 2014 only, $193,000,000.00 of the state savings shall be

deposited in the roads and risks reserve fund created in section

211b of article VIII of 2013 PA 59.

     (d) "Telemedicine" means that term as defined in section 3476

of the insurance code of 1956, 1956 PA 218, MCL 500.3476.

     Sec. 107a. (1) The purpose of adding workforce engagement

requirements to the medical assistance program as provided in

section 107b is to assist, encourage, and prepare an able-bodied

adult for a life of self-sufficiency and independence from

government interference.

     (2) As used in this section and section 107b:

     (a) "Able-bodied adult" means an individual at least 19 to 62

years of age who is not pregnant and who does not have a disability

that makes him or her eligible for medical assistance under section

105d.

     (b) "Caretaker" means a parent or an individual who is taking

care of a child in the absence of a parent or an individual caring

for a disabled individual as described in section 107b(1)(f)(v). A

caretaker is not subject to the workforce engagement requirements

established under section 107b if he or she is not a medical

assistance recipient under section 105d.

     (c) "Child" means an individual who is not emancipated under

1968 PA 293, MCL 722.1 to 722.6, who lives with a parent or

caretaker, and who is either of the following:

     (i) Under the age of 18.

     (ii) Age 18 and a full-time high school student.

     (d) "Good cause temporary exemption" means:

     (i) The recipient is an individual with a disability as

described in subtitle A of title II of the Americans with

disabilities act of 1990, 42 USC 12131 to 12134, section 504 of

title V of the rehabilitation act of 1973, 29 USC 794, or section

1557 of the patient protection and affordable care act, Public Law

111-148, who is unable to meet the workforce engagement

requirements for reasons related to that disability.

     (ii) The recipient has an immediate family member in the home

with a disability under federal disability rights laws and is

unable to meet the workforce engagement requirements for reasons

related to the disability of that family member.

     (iii) The recipient or an immediate family member, who is

living in the home with the recipient, experiences hospitalization

or serious illness.

     (e) "Incapacitated individual" means that term as defined in

section 1105 of the estates and protected individuals code, 1998 PA

386, MCL 700.1105.

     (f) "Medically frail" means that term as described in 42 CFR

440.315(f).

     (g) "Qualifying activity" means any of the following:

     (i) Employment or self-employment, or having income consistent

with being employed or self-employed. As used in this subparagraph,

"having income consistent with being employed or self-employed"

means an individual makes at least minimum wage for an average of

80 hours per month.

     (ii) Education directly related to employment, including, but

not limited to, high school equivalency test preparation program

and postsecondary education.

     (iii) Job training directly related to employment.

     (iv) Vocational training directly related to employment.

     (v) Unpaid workforce engagement directly related to

employment, including, but not limited to, an internship.

     (vi) Tribal employment programs.

     (vii) Participation in substance use disorder treatment.

     (viii) Community service.

     (ix) Job search directly related to job training.

     (h) "Recipient" means an individual receiving medical

assistance under this act.

     (i) "Substance use disorder" means that term as defined in

section 100d of the mental health code, 1974 PA 258, MCL 330.1100d.

     (j) "Unemployment benefits" means benefits received under the

Michigan employment security act, 1936 (Ex Sess) PA 1, MCL 421.1 to

421.75.

     Sec. 107b. (1) No later than October 1, 2018, the department

must apply for or apply to amend a waiver under section 1115 of the

social security act, 42 USC 1315, and submit subsequent waivers to

prohibit and prevent a lapse in the workforce engagement

requirements as a condition of receiving medical assistance under

section 105d. The waiver must be a request to allow for all of the

following:

     (a) A requirement of 80 hours average per month of qualifying

activities or a combination of any qualifying activities, to count

toward the workforce engagement requirement under this section.

     (b) A requirement that able-bodied recipients verify that they

are meeting the workforce engagement requirements by the tenth of

each month for the previous month's qualifying activities through

MiBridges or any other subsequent system. A recipient is allowed 3

months of noncompliance within a 12-month period. The recipient may

use a noncompliance month either by self-reporting that he or she

is not in compliance that month or by the default method of not

reporting compliance for that month. The department shall notify

the recipient after each time a noncompliance month is used. After

a recipient uses 3 noncompliance months in a 12-month period, the

recipient loses coverage for at least 1 month until he or she

becomes compliant under this section.

     (c) Allow substance use disorder treatment that is court-

ordered, prescribed by a licensed medical professional, or is a

Medicaid-funded substance use disorder treatment, to count toward

the workforce engagement requirements if the treatment impedes the

ability to meet the workforce engagement requirements.

     (d) A requirement that community service must be completed

with a nonprofit organization that is exempt from taxation under

section 501(c)(3) or 501(c)(4) of the internal revenue code of

1986, 26 USC 501. Community service can only be used as a

qualifying activity for up to 3 months in a 12-month period.

     (e) A requirement that a recipient who is also a recipient of

the supplemental nutrition assistance program or the temporary

assistance for needy families program who is in compliance with or

exempt from the work requirements of the supplemental nutrition

assistance program or the temporary assistance for needy families

program is considered to be in compliance with or exempt from the

workforce engagement requirements in this section.

     (f) An exemption for a recipient who meets 1 or more of the

following conditions:

     (i) A recipient who is the caretaker of a family member who is

under the age of 6 years. This exemption allows only 1 parent at a

time to be a caretaker, no matter how many children are being cared

for.

     (ii) A recipient who is currently receiving temporary or

permanent long-term disability benefits from a private insurer or

from the government.

     (iii) A recipient who is a full-time student who is not a

dependent of a parent or guardian or whose parent or guardian

qualifies for Medicaid. This subparagraph includes a student in a

postsecondary institution or certificate program.

     (iv) A recipient who is pregnant.

     (v) A recipient who is the caretaker of a dependent with a

disability which dependent needs full-time care based on a licensed

medical professional's order. This exemption is allowed 1 time per

household.

     (vi) A recipient who is the caretaker of an incapacitated

individual even if the incapacitated individual is not a dependent

of the caretaker.

     (vii) A recipient who has proven that he or she has met the

good cause temporary exemption.

     (viii) A recipient who has been designated as medically frail.

     (ix) A recipient who has a medical condition that results in a

work limitation according to a licensed medical professional's

order.

     (x) A recipient who has been incarcerated within the last 6

months.

     (xi) A recipient who is receiving unemployment benefits from

this state. This exemption applies during the period the recipient

received unemployment benefits and ends when the recipient is no

longer receiving unemployment benefits.

     (xii) A recipient who is under 21 years of age who had

previously been in a foster care placement in this state.

     (2) After the waiver requested under this section is approved,

the department must include, but is not limited to, all of the

following, as approved in the waiver, in its implementation of the

workforce engagement requirements under this section:

     (a) A requirement of 80 hours average per month of qualifying

activities or a combination of any qualifying activities counts

toward the workforce engagement requirement under this section.

     (b) A requirement that able-bodied recipients must verify that

they are meeting the workforce engagement requirements by the tenth

of each month for the previous month's qualifying activities

through MiBridges or any other subsequent system. A recipient is

allowed 3 months of noncompliance within a 12-month period. The

recipient may use a noncompliance month either by self-reporting

that he or she is not in compliance that month or by the default

method of not reporting compliance for that month. The department

shall notify the recipient after each time a noncompliance month is

used. After a recipient uses 3 noncompliance months in a 12-month

period, the recipient loses coverage for at least 1 month until he

or she becomes compliant under this section.

     (c) Allowing substance use disorder treatment that is court-

ordered, is prescribed by a licensed medical professional, or is a

Medicaid-funded substance use disorder treatment, to count toward

the workforce engagement requirements if the treatment impedes the

ability to meet the workforce engagement requirements.

     (d) A requirement that community service must be completed

with a nonprofit organization that is exempt from taxation under

section 501(c)(3) or 501(c)(4) of the internal revenue code of

1986, 26 USC 501. Community service can only be used as a

qualifying activity for up to 3 months in a 12-month period.

     (e) A requirement that a recipient who is also a recipient of

the supplemental nutrition assistance program or the temporary

assistance for needy families program who is in compliance with or

exempt from the work requirements of the supplemental nutrition

assistance program or the temporary assistance for needy families

program is considered to be in compliance with or exempt from the

workforce engagement requirements in this section.

     (f) An exemption for a recipient who meets 1 or more of the

following conditions:

     (i) A recipient who is the caretaker of a family member who is

under the age of 6 years. This exemption allows only 1 parent at a

time to be a caretaker, no matter how many children are being cared

for.

     (ii) A recipient who is currently receiving temporary or

permanent long-term disability benefits from a private insurer or

from the government.

     (iii) A recipient who is a full-time student who is not a

dependent of a parent or guardian or whose parent or guardian

qualifies for Medicaid. This subparagraph includes a student in a

postsecondary institution or a certificate program.

     (iv) A recipient who is pregnant.

     (v) A recipient who is the caretaker of a dependent with a

disability which dependent needs full-time care based on a licensed

medical professional's order. This exemption is allowed 1 time per

household.

     (vi) A recipient who is the caretaker of an incapacitated

individual even if the incapacitated individual is not a dependent

of the caretaker.

     (vii) A recipient who has proven that he or she has met the

good cause temporary exemption.

     (viii) A recipient who has been designated as medically frail.

     (ix) A recipient who has a medical condition that results in a

work limitation according to a licensed medical professional's

order.

     (x) A recipient who has been incarcerated within the last 6

months.

     (xi) A recipient who is receiving unemployment benefits from

this state. This exemption applies during the period the recipient

received unemployment benefits and ends when the recipient is no

longer receiving unemployment benefits.

     (xii) A recipient who is under 21 years of age who had

previously been in a foster care placement in this state.

     (3) The department may first direct recipients to existing

resources for job training or other employment services, child care

assistance, transportation, or other supports. The department may

develop strategies for assisting recipients to meet workforce

engagement requirements under this section.

     (4) Beginning October 1, 2018 and each year the department

submits a waiver to prohibit and prevent a lapse in the workforce

engagement requirements after that, the Medicaid director must

submit to the governor, the senate majority leader, and the speaker

of the house of representatives a letter confirming the submission

of the waiver request required under subsection (1).

     (5) Beginning January 1, 2020, the department must execute a

survey to obtain the information needed to complete an evaluation

of the medical assistance program under section 105d to determine

how many recipients have left the Healthy Michigan program as a

result of obtaining employment and medical benefits.

     (6) The department must execute a survey to obtain the

information needed to submit a report to the legislature beginning

January 1, 2021, and every January 1 after that, that shows, for

medical assistance under section 105d known as Healthy Michigan,

the number of exemptions from workforce engagement requirements

granted to individuals in that year and the reason the exemptions

were granted.

     (7) The department shall enforce the provisions of this

section by conducting the compliance review process on medical

assistance recipients under section 105d who are required to meet

the workforce engagement requirements of this section. If a

recipient is found, through the compliance review process, to have

misrepresented his or her compliance with the workforce engagement

requirements in this section, he or she shall not be allowed to

participate in the Healthy Michigan program under section 105d for

a 1-year period.

     (8) The department shall implement the requirements of this

section no later than January 1, 2020, and shall notify recipients

to whom the workforce engagement requirements described in this

section are likely to apply of the workforce engagement

requirements 90 days in advance.

     (9) The cost of initial implementation of the workforce

engagement requirements required under this section shall not be

considered when determining the cost-benefit analysis required

under section 105d(28)(b). The cost of initial implementation does

not include the cost of ongoing administration of the workforce

engagement requirements. The ongoing costs of administering the

workforce engagement requirements required under this section may

have up to a $5,000,000.00 general fund/general purpose revenue

limit that shall not be counted when determining the cost-benefit

analysis required under section 105d(28)(b). Any ongoing costs

above $5,000,000.00 of general fund/general purpose revenue to

administer the workforce engagement requirements under this section

shall be considered in the cost-benefit analysis required under

section 105d(28)(b).

     (10) Beginning January 1, 2020, medical assistance recipients

who are not exempt from the workforce engagement requirements under

this section must be in compliance with this section. Beginning

January 1, 2020, a medical assistance applicant who is not exempt

from the work engagement requirements under this section must be in

compliance with this section not more than 30 days after an

eligibility determination is made.

     (11) The department shall not withdraw, terminate, or amend

any waiver submitted under this section without the express

approval of the legislature in the form of a bill enacted by law.

     Enacting section 1. This amendatory act takes effect 90 days

after the date it is enacted into law.