SENATE BILL No. 1038

 

 

May 30, 2018, Introduced by Senators STAMAS, MACGREGOR and HANSEN and referred to the Committee on Oversight.

 

 

 

     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 a full-scope audit. An audit can be of limited or full

 

scope.

 

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

 

care reports submitted annually by a nursing facility that is

 

participating in the Medicaid program, on department cost reporting

 

forms.

 

     (c) "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 45 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 and the related settlement

 

performed by the department are completed not more than 18 months

 

after the initial filing of the cost report.

 

     (4) The department shall perform a full-scope audit of a

 

nursing facility once every 4 years. A full-scope audit shall not

 

last more than 30 days per cost report year for an individual

 

nursing facility and not more than 180 days per cost report year

 

for more than 6 commonly owned or controlled nursing facilities. A

 

limited-scope audit shall be performed in the years a full-scope

 

audit is not performed.

 

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

 

nursing facility and the auditor upon completion of a full-scope

 

audit.

 

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

 

documentation required in accordance with the Medicaid state plan,

 

the Medicaid provider manual, the Medicare principles of

 

reimbursement as described in the provider reimbursement manual,

the Code of Federal Regulations relating to Medicare, and the

 

provider reimbursement manual. 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 or settlement is not completed within 18

 

months as described in subsection (3), the department shall accept

 

the cost report as filed by the nursing facility and issue a

 

settlement not more than 30 days after the end of the eighteenth

 

month described in subsection (3).

 

     (8) The department shall provide auditor education to ensure

 

consistency in application of department policy. The department

 

shall establish an ongoing review of all audit adjustments for

 

consistency in applying department policy and shall identify and

 

eliminate any inconsistencies between audits.

 

     (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 an outside entity. The department is

 

responsible for obtaining the external review and shall provide the

 

completed review to the legislature.

 

     (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 30 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 legislature 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, all of the following:

 

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

 

any other type of audit performed during the reporting period.

 

     (b) How the department has complied with the 1-time-every-4-

 

years full-scope audit requirement.

 

     (c) 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.