BillCam

HB-6361, As Passed House, December 12, 2018

SUBSTITUTE FOR

HOUSE BILL NO. 6361

A bill to amend 1939 PA 280, entitled

"The social welfare act,"

by amending section 106 (MCL 400.106), as amended by 2014 PA 452.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 106. (1) A medically indigent individual is defined as:

As used in this act, "medically indigent individual" means any of

the following:

(a) An individual receiving family independence program

benefits or an individual receiving supplemental security income

under title XVI or state supplementation under title XVI subject to

limitations imposed by the director according to title XIX.

(b) Except as provided in sections 106a and 106b, an

individual who meets all of the following conditions:

(i) The individual has applied in the manner the department of

community health prescribes.

(ii) The individual's need for the type of medical assistance

available under this act for which the individual applied has been

professionally established and payment for it is not available

through the legal obligation of a public or private contractor to

pay or provide for the care without regard to the income or

resources of the patient. The state department and the department

of community health are is subrogated to any right of recovery that

a patient may have for the cost of hospitalization, pharmaceutical

services, physician services, nursing services, and other medical

services not to exceed the amount of funds money expended by the

state department or the department of community health for the care

and treatment of the patient. The patient or other person acting in

on the patient's behalf shall execute and deliver an assignment of

claim or other authorizations as necessary to secure the right of

recovery to the department. or the department of community health.

A payment may be withheld under this act for medical assistance for

an injury or disability for which the individual is entitled to

medical care or reimbursement for the cost of medical care under

sections 3101 to 3179 chapter 31 of the insurance code of 1956,

1956 PA 218, MCL 500.3101 to 500.3179, or under another policy of

insurance providing medical or hospital benefits, or both, for the

individual unless the individual's entitlement to that medical care

or reimbursement is at issue. If a payment is made, the state

department, or the department of community health, to enforce its

subrogation right, may do either of the following: (a) intervene or

join in an action or proceeding brought by the injured, diseased,

or disabled individual, the individual's guardian, personal

representative, estate, dependents, or survivors, against the third

person who may be liable for the injury, disease, or disability, or

against contractors, public or private, who may be liable to pay or

provide medical care and services rendered to an injured, diseased,

or disabled individual; (b) institute and prosecute a legal

proceeding against a third person who may be liable for the injury,

disease, or disability, or against contractors, public or private,

who may be liable to pay or provide medical care and services

rendered to an injured, diseased, or disabled individual, in state

or federal court, either alone or in conjunction with the injured,

diseased, or disabled individual, the individual's guardian,

personal representative, estate, dependents, or survivors. The

state department may institute the proceedings in its own name or

in the name of the injured, diseased, or disabled individual, the

individual's guardian, personal representative, estate, dependents,

or survivors. As provided in section 6023 of the revised judicature

act of 1961, 1961 PA 236, MCL 600.6023, the state department, or

the department of community health, in enforcing its subrogation

right, shall not satisfy a judgment against the third person's

property that is exempt from levy and sale. The injured, diseased,

or disabled individual may proceed in his or her own name,

collecting the costs without the necessity of joining the state

department, the department of community health, or the state as a

named party. The injured, diseased, or disabled individual shall

notify the state department or the department of community health

of the action or proceeding entered into upon commencement of the

action or proceeding. An action taken by the state, the state

department, or the department of community health in connection

with the right of recovery afforded by this section does not deny

the injured, diseased, or disabled individual any part of the

recovery beyond the costs expended on the individual's behalf by

the state department. or the department of community health. The

costs of legal action initiated by the state shall must be paid by

the state. A payment shall must not be made under this act for

medical assistance for an injury, disease, or disability for which

the individual is entitled to medical care or the cost of medical

care under the worker's disability compensation act of 1969, 1969

PA 317, MCL 418.101 to 418.941; except that payment may be made if

an appropriate application for medical care or the cost of the

medical care has been made under the worker's disability

compensation act of 1969, 1969 PA 317, MCL 418.101 to 418.941,

entitlement has not been finally determined, and an arrangement

satisfactory to the state department or the department of community

health has been made for reimbursement if the claim under the

worker's disability compensation act of 1969, 1969 PA 317, MCL

418.101 to 418.941, is finally sustained.

(iii) The individual has an annual income that is below, or

subject to limitations imposed by the director and because of

medical expenses falls below, the protected basic maintenance

level. The protected basic maintenance level for 1-person and 2-

person families shall must be at least not less than 100% of the

payment standards generally used to determine eligibility in the

family independence program. For families of 3 or more persons, the

protected basic maintenance level shall must be at least not less

than 100% of the payment standard generally used to determine

eligibility in the family independence program. These levels shall

must recognize regional variations and shall must not exceed 133-

1/3% of the payment standard generally used to determine

eligibility in the family independence program.

(iv) The individual, if a family independence program related

individual and living alone, has liquid or marketable assets of not

more than $2,000.00 in value, or, if a 2-person family, the family

has liquid or marketable assets of not more than $3,000.00 in

value. The department of community health shall establish

comparable liquid or marketable asset amounts for larger family

groups. Excluded in making the determination of the value of liquid

or marketable assets are the values of: the homestead; clothing;

household effects; $1,000.00 of cash surrender value of life

insurance, except that if the health of the insured makes

continuance of the insurance desirable, the entire cash surrender

value of life insurance is excluded from consideration, up to the

maximum provided or allowed by federal regulations and in

accordance with department of community health rules; the fair

market value of tangible personal property used in earning income;

an amount paid as judgment or settlement for damages suffered as a

result of exposure to agent orange, Agent Orange as defined in

section 5701 of the public health code, 1978 PA 368, MCL 333.5701;

and a space or plot purchased for the purposes of burial for the

person. For individuals related to the title XVI program, the

appropriate resource levels and property exemptions specified in

title XVI shall must be used.

(v) Except as provided in section 106b, the individual is not

an inmate of a public institution except as a patient in a medical

institution.

(vi) The individual meets the eligibility standards for

supplemental security income under title XVI or for state

supplementation under the act, subject to limitations imposed by

the director of the department of community health according to

title XIX; or meets the eligibility standards for family

independence program benefits; or meets the eligibility standards

for optional eligibility groups under title XIX, subject to

limitations imposed by the director of the department of community

health according to title XIX.

1396a(a)(10)(A)(i)(VIII) of title XIX, also known as the healthy

Michigan plan. This subdivision does not apply if either of the

following occurs:

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

a federal waiver as provided in section 105d(1) or (20).

(ii) If federal government matching funds for the program

described in section 105d are reduced below 100% and annual state

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 must 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 must be submitted to the legislature.

(2) As used in this act:

(a) "Contracted health plan" means a managed care organization

with whom the state department or the department of community

health contracts to provide or arrange for the delivery of

comprehensive health care services as authorized under this act.

(b) "Federal poverty guidelines" means the poverty guidelines

published annually in the federal register Federal Register by the

United States department of health and human services Department of

Health and Human Services under its authority to revise the poverty

line under section 673(2) of subtitle B of title VI of the omnibus

budget reconciliation act of 1981, 42 USC 9902.

hospital, nursing home, medical care facility, psychiatric

hospital, or other facility or identifiable unit of a listed

institution certified as meeting established standards for a

nursing home or hospital in accordance with the laws of this state.

(d) "Title XVI" means title XVI of the social security act, 42

USC 1381 to 1383f.

(3) An individual receiving medical assistance under this act,

his or her representative, or his or her legal counsel, or all 3,

shall notify the state department or the department of community

health when filing an action in which the state department or the

department of community health may have a right to recover expenses

paid under this act. If the individual is enrolled in a contracted

health plan, the individual or his or her legal counsel shall

provide notice to the contracted health plan in addition to

providing notice to the state department.and, if the individual is

enrolled in a contracted health plan, the contracted health plan if

either of the following occurs:

(a) The individual, his or her representative, or his or her

legal counsel, or all 3, file a complaint in which the department

or the contracted health plan may have a right to recover expenses

paid under this act.

(b) The individual, his or her representative, or his or her

legal counsel, or all 3, seek to settle an action, without filing a

complaint, in which the department or the contracted health plan

may have a right to recover expenses paid under this act.

(4) The notice required under subsection (3)(a), along with a

copy of the complaint and all documents filed with the complaint,

must be provided to the department and, if applicable, the

contracted health plan within 30 days after the complaint is filed

with the court. The individual, his or her representative, or his

or her legal counsel shall certify that notice and a copy of the

complaint have been provided to the department and, if applicable,

the contracted health plan on the summons and complaint form. This

certification must be made in cases with the following case type

codes: NF (no-fault automobile insurance), NH (medical

malpractice), NI (personal injury, auto negligence), NO (other

personal injury), and NP (product liability), and in any other case

in which the department or the contracted health plan may have a

right to recover expenses paid under this act. The state court

administrator shall revise the summons and complaint form to allow

certification under this subsection.

(5) The notice required under subsection (3)(b) must be

provided in writing to the department and, if applicable, the

contracted health plan before the action is settled and must

include the proposed settlement terms, including the settlement

amount, attorney costs, attorney fees, and Medicaid health plan or

Medicare subrogation interest amounts, if applicable.

(6) (4) If a legal action in which the state department, the

department of community health, a contracted health plan, or all 3

have a right to recover expenses paid under this act is filed and

settled after November 29, 2004 without notice to the state

department, the department of community health, or the contracted

health plan, notice is not given as required by subsections (3)

through (5), the state department, the department of community

health, or the contracted health plan may file a legal action

against the individual, his or her representative, or his or her

legal counsel, or both, all 3, to recover expenses paid under this

act. The attorney general or the contracted health plan shall

recover any cost or attorney fees associated with a recovery under

this subsection.

(7) An attorney who knowingly fails to timely notify the

department or the contracted health plan as required by this

section is subject, at the discretion of the department, to a

$1,000.00 civil fine for each violation. The civil fine is payable

to the department and must be deposited in the general fund. The

money deposited in the general fund under this subsection may be

used to offset the cost to this state for operating the Medicaid

program.

(8) (5) The state department or the department of community

health has first priority against the proceeds of the net recovery

from the settlement or judgment in an action settled in which

notice has been provided under subsection (3). A contracted health

plan has priority immediately after the state department or the

department of community health in an action settled in which notice

has been provided under subsection (3). The state department, the

department of community health, and a contracted health plan shall

recover the full cost of expenses paid under this act unless the

state department, the department of community health, or the

contracted health plan agrees to accept an amount less than the

full amount. If the individual would recover less against the

proceeds of the net recovery than the expenses paid under this act,

the state department, the department of community health, or the

contracted health plan, and the individual shall share equally in

the proceeds of the net recovery. The department or a contracted

health plan is not required to pay an attorney fee on the net

recovery. As used in this subsection, "net recovery" means the

total settlement or judgment less the costs and fees incurred by or

on behalf of the individual who obtains the settlement or judgment.

(9) The individual, his or her representative, or his or her

legal counsel shall not release the claims of the department or the

contracted health plan against third parties or insurers without

the consent of the department or the contracted health plan.

(10) All of the following apply with respect to the

subrogation interest of the department or the contracted health

plan, or both:

(a) Within 30 days of receiving the notice required under this

act, the department and, if applicable, a contracted health plan

shall provide to the individual, his or her representative, or his

or her legal counsel, a written itemization of expenses paid under

this act for which the third party may be liable.

(b) If the department or a contracted health plan fails to

provide the notice required by subdivision (a), the obligation of

the individual, his or her representative, or his or her legal

counsel, or all 3, to protect the subrogation interest of the

department or the contracted health plan, or both if both failed to

provide notice, is discharged. The department or the contracted

health plan retains the right to pursue recovery through its own

means.

by the department or a contracted health plan.

(d) An individual, his or her representative, or his or her

legal counsel, or all 3, satisfy the obligation to protect the

subrogation interest of the department or a contracted health plan

if a settlement agreement provides for reimbursement of the total

amount of expenses in the last received written itemization from

the department or the contracted health plan, reduced by any

applicable fees and costs for which a reduction is allowed under

statute or administrative rule.