SB-1038, As Passed Senate, November 8, 2018

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

SENATE BILL NO. 1038

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1939 PA 280, entitled

 

"The social welfare act,"

 

(MCL 400.1 to 400.119b) by adding section 111m.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 111m. (1) As used in this section and section 111n:

 

     (a) "Audit" means a review of the financial records used to

 

complete a Medicaid cost report for compliance with allowable cost

 

principles and other policy contained in the Medicaid provider

 

manual. Audit includes, but is not limited to, a limited-scope

 

audit or an on-site audit. An audit can be of limited or full

 

scope.

 

     (b) "Completed audit" means issuance of the preliminary

 

summary of audit adjustment notice. Completed audit includes the

 

exit meeting with the nursing facility provider.

 

     (c) "Medicaid cost report" or "cost report" means the cost of

care reports submitted annually by a nursing facility that is

 

participating in the Medicaid programat a utilization rate on

 

average of at least 6 Medicaid residents, on department cost

 

reporting forms. A nursing facility provider with less than 6

 

Medicaid residents per day must file a "less than complete" cost

 

report and is not subject to audit.

 

     (d) "Settlement" means the process of reconciling a nursing

 

facility's interim payments based on filed cost report data to

 

audited cost report data. A final settlement is computed after the

 

cost report has been audited.

 

     (2) The department shall accept a Medicaid cost report filed

 

by a nursing facility not more than 60 calendar days after that

 

nursing facility has filed the cost report.

 

     (3) The department shall ensure that an audit of a Medicaid

 

cost report filed by a nursing facility performed by the department

 

is completed not more than 21 months after the final acceptance of

 

the cost report. The settlement for an audit shall be delivered to

 

the provider not more than 60 calendar days after the provider

 

accepts the final summary of audit adjustments. If a provider fails

 

to release the records necessary to verify a specific cost report

 

expense within 15 business days of a written request from the

 

department, the department may disallow the cost associated with

 

the item in question. The time period described in this subsection

 

does not include time associated with an appeal or a charge of

 

fraud filed against the provider.

 

     (4) An on-site audit may be performed at an individual nursing

 

facility or at the corporate office if a home office cost report is

filed. An on-site audit shall not last more than 30 calendar days

 

per cost report year for an individual nursing facility and not

 

more than 180 calendar days per cost report year for more than 6

 

commonly owned or controlled nursing facilities, unless the nursing

 

facility agrees to an extended timeline. A limited-scope audit

 

shall be performed in the years an on-site audit is not performed.

 

The time periods described in this subsection must be completed

 

within the 21-month time period described in subsection (3).

 

     (5) A customer satisfaction survey shall be provided to the

 

nursing facilities that have completed audits in the previous

 

quarter.

 

     (6) A nursing facility shall make available to an auditor

 

documentation required in accordance with the Medicaid state plan,

 

the Medicaid provider manual, and the Code of Federal Regulations

 

relating to Medicare or Medicaid. A nursing facility shall enhance

 

utilization of electronic documents and correspondence to exchange

 

information to reduce time and travel required for nursing facility

 

audits.

 

     (7) If an audit is not completed within 21 months as described

 

in subsection (3), the department shall accept the cost report as

 

filed and move to settlement.

 

     (8) The department shall provide auditor education to ensure

 

consistency in application of department policy. The department

 

shall include an ongoing discussion of all audit adjustments to

 

ensure consistency in applying department policy and shall identify

 

and eliminate any inconsistencies between offices with this

 

training.

     (9) Not later than 1 year after the effective date of the

 

amendatory act that added this section, an external review by a

 

third party of the office of audit'spractices related to nursing

 

facility providers' filing of Medicaid cost reports and audits and

 

settlements shall be completed. The purpose of the external review

 

shall be to compare the efficiency and cost-benefit effectiveness

 

of existing department audit practices with contracting functions

 

of audits or settlements to a third party. The department is

 

responsible for obtaining the external review and shall provide the

 

completed review to the legislature. The third party must be

 

independent from the department, Medicaid providers, provider trade

 

association members, and nursing facility cost report preparers or

 

consultants.

 

     (10) Not later than 2 years after the effective date of the

 

amendatory act that added this section, the department must

 

finalize all audits and settlements for cost reports that have been

 

filed since before the effective date of the amendatory act that

 

added this section. A cost report described under this subsection

 

that has not been completed by the department within 2 years of the

 

effective date of the amendatory act that added this section must

 

be accepted by the department as filed by the nursing facility, and

 

a cost report settlement must be issued within 60 calendar days

 

after acceptance.

 

     (11) Beginning 2 years after the effective date of the

 

amendatory act that added this section, the department shall

 

provide an annual report to the appropriate stakeholders, including

 

at least 1 representative from each nursing facility provider trade

association, on the implementation and results of the cost report

 

audit and settlement process established under this section. The

 

report shall include, but is not limited to, both of the following:

 

     (a) The number of limited-scope audits, on-site audits, and

 

any other type of audit performed during the reporting period.

 

     (b) Results of the audit satisfaction surveys and how the

 

department has responded to those surveys.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.