HOUSE BILL No. 4848 September 23, 1999, Introduced by Reps. Switalski, Spade, Thomas, Bogardus, DeHart, Schermesser, Garza, Martinez, Price, Wojno, Jacobs, Clarke, Rivet, Bovin, Pappageorge, LaSata and Lemmons and referred to the Committee on Family and Children Services. A bill to amend 1939 PA 280, entitled "The social welfare act," by amending section 106 (MCL 400.106), as amended by 1990 PA 145. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 106. (1) A medically indigent individual is defined 2 as: 3 (a) An individual receivingaid to dependent children4 FAMILY INDEPENDENCE PROGRAM BENEFITS or an individual receiving 5 supplemental security income under title XVIof the social6security act, 42 U.S.C. 1381 to 1385,or state supplementation 7thereunderUNDER TITLE XVI subject to limitations imposed by 8 the director pursuant to title XIX. 9 (b) An individualmeetingWHO MEETS all of the following 10 conditions: 02965'99 LTB 2 1 (i) The individual hasmade applicationAPPLIED in the 2 mannerprescribed bythestate departmentFAMILY INDEPENDENCE 3 AGENCY PRESCRIBES. 4 (ii) The individual's need for the type of medical assist- 5 ance available under this act for whichapplication has been6madeTHE INDIVIDUAL APPLIED has been professionally established 7 and payment for it is not available through the legal obligation 8 of a PUBLIC OR PRIVATE contractor, public or private,to pay 9 or provide for the care without regard to the income or resources 10 of the patient.The state department shall be subrogated to any11right of recovery which a patient may have for the cost of hospi-12talization, pharmaceutical services, physician services, nursing13services, and other medical services not to exceed the amount of14funds expended by the department for the care and treatment of15the patient. The patient or other person acting in the patient's16behalf shall execute and deliver an assignment of claim or other17authorizations as necessary to secure the right of recovery to18the department. A payment may be withheld under this act for19medical assistance for an injury or disability for which the20patient is entitled to medical care or reimbursement for the cost21of medical care under sections 3101 to 3179 of the insurance code22of 1956, Act No. 218 of the Public Acts of 1956, as amended,23being sections 500.3101 to 500.3179 of the Michigan Compiled24Laws, or under any other policy of insurance providing medical or25hospital benefits, or both, for the patient unless the patient's26entitlement to that medical care or reimbursement is at issue.27If a payment is made, the state department, to enforce its02965'99 3 1subrogation right, may do either of the following: (a) intervene2or join in an action or proceeding brought by the injured, dis-3eased, or disabled person, the person's guardian, personal repre-4sentative, estate, dependents, or survivors, against the third5person who may be liable for the injury, disease, or disability,6or against contractors, public or private, who may be liable to7pay or provide medical care and services rendered to an injured,8diseased, or disabled patient; (b) institute and prosecute a9legal proceeding against a third person who may be liable for the10injury, disease, or disability, or against contractors, public or11private, who may be liable to pay or provide medical care and12services rendered to an injured, diseased, or disabled patient,13in state or federal court, either alone or in conjunction with14the injured, diseased, or disabled person, the person's guardian,15personal representative, estate, dependents, or survivors. The16state department may institute the proceedings in its own name or17in the name of the injured, diseased, or disabled person, the18person's guardian, personal representative, estate, dependents,19or survivors. As provided in section 6023 of the revised judica-20ture act of 1961, Act No. 236 of the Public Acts of 1961, as21amended, being section 600.6023 of the Michigan Compiled Laws,22the state department, in enforcing its subrogation right, shall23not satisfy a judgment against the third person's property which24is exempt from levy and sale. The injured, diseased, or disabled25person may proceed in his or her own name, collecting the costs26without the necessity of joining the state department or the27state as a named party. The injured, diseased, or disabled02965'99 4 1person shall notify the state department of the action or2proceeding entered into upon commencement of the action or3proceeding. An action taken by the state or the state department4in connection with the right of recovery afforded by this section5does not operate to deny the injured, diseased, or disabled6person any part of the recovery beyond the costs expended on the7person's behalf by the state department. The costs of legal8action initiated by the state shall be paid by the state. A pay-9ment shall not be made under this act for medical assistance for10an injury, disease, or disability for which the patient is enti-11tled to medical care or the cost of medical care under the12worker's disability compensation act of 1969, Act No. 317 of the13Public Acts of 1969, as amended, being sections 418.101 to14418.941 of the Michigan Compiled Laws; except that payment may be15made if an appropriate application for medical care or the cost16of the medical care has been made under Act No. 317 of the Public17Acts of 1969, as amended, entitlement has not been finally deter-18mined, and an arrangement satisfactory to the state department19has been made for reimbursement if the claim under Act No. 317 of20the Public Acts of 1969, as amended, is finally sustained.21 (iii) The individual has an annual incomewhichTHAT is 22 below, or because of medical expenses falls below, the protected 23 basic maintenance level. The protected basic maintenance level 24 for 1-person and 2-person families shall be at least 100% of the 25 higher of the payment standards generally used to determine eli- 26 gibility in theaid to dependent childrenFAMILY INDEPENDENCE 27 program and the supplemental security income program under title 02965'99 5 1 XVI of the social security act, CHAPTER 531, 49 STAT. 620, 42 2 U.S.C. 1381 to13851382j AND 1383 TO 1383f, including state 3 supplementation. For families of 3 or more persons, the pro- 4 tected basic maintenance level shall be at least 100% of the pay- 5 ment standard generally used to determine eligibility in theaid6to dependent childrenFAMILY INDEPENDENCE program. These levels 7 shall recognize regional variations and shall not exceed 133-1/3% 8 of the payment standard generally used to determine eligibility 9 in theaid to dependent childrenFAMILY INDEPENDENCE program. 10 (iv) The individual, ifan aid to dependent childrenA 11 FAMILY INDEPENDENCE PROGRAM related individual and living alone, 12 has liquid or marketable assets of not more than $1,500.00 in 13 value, or, if a 2-person family, the family has liquid or market- 14 able assets of not more than $2,000.00 in value. Thestate15departmentFAMILY INDEPENDENCE AGENCY shall establish comparable 16 liquid or marketable asset amounts for larger family groups. 17 Excluded in making the determination of the value of liquid or 18 marketable assets are the values of: the homestead; clothing; 19 household effects;$1,000.00$10,000.00 of cash surrender value 20 of life insurance, except that if the health of the insuredis21such as to makeMAKES continuance of the insurance desirable, 22 the entire cash surrender value of life insurance isto be23 excluded from consideration, up to themaximumsMAXIMUM pro- 24 vided or allowed by federal regulations and in accordance with 25 the rules of thestate departmentFAMILY INDEPENDENCE AGENCY; 26 the fair market value of tangible personal property used in 27 earning income; an amount paid as judgment or settlement for 02965'99 6 1 damages suffered as a result of exposure to agent orange, as 2 defined in section 5701 of the public health code,Act No. 3683of the Public Acts of 1978, being section 333.5701 of the4Michigan Compiled Laws1978 PA 368, MCL 333.5701; and a space or 5 plot purchased for the purposes of burial for the person. For 6 individuals related to the title XVI program,of the social7security act, 42 U.S.C. 1381 to 1385,the appropriate resource 8 levels and property exemptions specified in title XVI shall be 9 used. 10 (v) The individual is not an inmate of a public institution 11 except as a patient in a medical institution. 12 (vi) The individual meets the eligibility standards for sup- 13 plemental security income under title XVIof the social security14act, 42 U.S.C. 1381 to 1385,or for state supplementation under 15 the act, subject to limitations imposed by the director pursuant 16 to title XIX; or meets the eligibility standards foraid to17dependent childrenTHE FAMILY INDEPENDENCE PROGRAM BENEFITS, 18 except for income or income and resources; or is a child from 18 19 to 21 years of age and his or her adult caretaker would be eligi- 20 ble foraid to dependent childrenFAMILY INDEPENDENCE PROGRAM 21 BENEFITS except for age, income, or income and resources; or is a 22 child under 21 years of age and is from a family whose income is 23 below the basic maintenance level. 24 (2) As used in this act:, "medical25 (A) "MEDICAL institution" means a state licensed or approved 26 hospital, nursing home, medical care facility, psychiatric 27 hospital, or other facility or identifiable unitthereofOF A 02965'99 7 1 LISTED INSTITUTION certified as meeting established standards for 2 a nursing home or hospital in accordance with the laws of this 3 state. 4 (B) "TITLE XVI" MEANS TITLE XVI OF THE SOCIAL SECURITY ACT, 5 CHAPTER 531, 49 STAT. 620, 42 U.S.C. 1381 TO 1382j AND 1383 TO 6 1383f. 7 (3) THE FAMILY INDEPENDENCE AGENCY IS SUBROGATED TO A RIGHT 8 OF RECOVERY THAT A PATIENT HAS FOR THE COST OF HOSPITALIZATION, 9 PHARMACEUTICAL SERVICES, PHYSICIAN SERVICES, NURSING SERVICES, 10 AND OTHER MEDICAL SERVICES NOT TO EXCEED THE AMOUNT OF MONEY 11 EXPENDED BY THE DEPARTMENT FOR THE CARE AND TREATMENT OF THE 12 PATIENT. THE PATIENT OR OTHER PERSON ACTING IN THE PATIENT'S 13 BEHALF SHALL EXECUTE AND DELIVER AN ASSIGNMENT OF CLAIM OR OTHER 14 AUTHORIZATION AS NECESSARY TO SECURE THE RIGHT OF RECOVERY TO THE 15 DEPARTMENT. A PAYMENT MAY BE WITHHELD UNDER THIS ACT FOR MEDICAL 16 ASSISTANCE FOR AN INJURY OR DISABILITY FOR WHICH THE PATIENT IS 17 ENTITLED TO MEDICAL CARE OR REIMBURSEMENT FOR THE COST OF MEDICAL 18 CARE UNDER SECTIONS 3101 TO 3179 OF THE INSURANCE CODE OF 1956, 19 1956 PA 218, MCL 500.3101 TO 500.3179, OR UNDER ANOTHER POLICY OF 20 INSURANCE PROVIDING MEDICAL OR HOSPITAL BENEFITS, OR BOTH, FOR 21 ANOTHER THE PATIENT UNLESS THE PATIENT'S ENTITLEMENT TO THAT MED- 22 ICAL CARE OR REIMBURSEMENT IS AT ISSUE. IF A PAYMENT IS MADE, 23 THE FAMILY INDEPENDENCE AGENCY, TO ENFORCE ITS SUBROGATION RIGHT, 24 MAY DO EITHER OF THE FOLLOWING: 25 (A) INTERVENE OR JOIN IN AN ACTION OR PROCEEDING BROUGHT BY 26 THE INJURED, DISEASED, OR DISABLED PERSON, OR THE PERSON'S 27 GUARDIAN, PERSONAL REPRESENTATIVE, ESTATE, DEPENDENTS, OR 02965'99 8 1 SURVIVORS, AGAINST THE THIRD PERSON WHO MAY BE LIABLE FOR THE 2 INJURY, DISEASE, OR DISABILITY OR AGAINST PUBLIC OR PRIVATE CON- 3 TRACTORS WHO MAY BE LIABLE TO PAY OR PROVIDE MEDICAL CARE AND 4 SERVICES RENDERED TO AN INJURED, DISEASED, OR DISABLED PATIENT. 5 (B) INSTITUTE AND PROSECUTE A LEGAL PROCEEDING AGAINST A 6 THIRD PERSON WHO MAY BE LIABLE FOR THE INJURY, DISEASE, OR DIS- 7 ABILITY OR AGAINST A PUBLIC OR PRIVATE CONTRACTOR WHO MAY BE 8 LIABLE TO PAY OR PROVIDE MEDICAL CARE AND SERVICES RENDERED TO AN 9 INJURED, DISEASED, OR DISABLED PATIENT, IN STATE OR FEDERAL 10 COURT, EITHER ALONE OR IN CONJUNCTION WITH THE INJURED, DISEASED, 11 OR DISABLED PERSON OR THE PERSON'S GUARDIAN, PERSONAL REPRESENTA- 12 TIVE, ESTATE, DEPENDENT, OR SURVIVOR. 13 (4) IN ENFORCING ITS SUBROGATION RIGHT UNDER SUBSECTION (3), 14 THE FAMILY INDEPENDENCE AGENCY MAY INSTITUTE THE PROCEEDINGS IN 15 ITS OWN NAME OR IN THE NAME OF THE INJURED, DISEASED, OR DISABLED 16 PERSON OR THE PERSON'S GUARDIAN, PERSONAL REPRESENTATIVE, ESTATE, 17 DEPENDENT, OR SURVIVOR. AS PROVIDED IN SECTION 6023 OF THE 18 REVISED JUDICATURE ACT OF 1961, 1961 PA 236, MCL 600.6023, THE 19 FAMILY INDEPENDENCE AGENCY, IN ENFORCING ITS SUBROGATION RIGHT, 20 SHALL NOT SATISFY A JUDGMENT AGAINST THE THIRD PERSON'S PROPERTY 21 THAT IS EXEMPT FROM LEVY AND SALE. 22 (5) THE INJURED, DISEASED, OR DISABLED PERSON MAY PROCEED IN 23 HIS OR HER OWN NAME, COLLECTING THE COSTS WITHOUT THE NECESSITY 24 OF JOINING THE FAMILY INDEPENDENCE AGENCY OR THE STATE AS A NAMED 25 PARTY. THE INJURED, DISEASED, OR DISABLED PERSON SHALL NOTIFY 26 THE FAMILY INDEPENDENCE AGENCY OF THE ACTION OR PROCEEDING 27 ENTERED INTO UPON COMMENCEMENT OF THE ACTION OR PROCEEDING. 02965'99 9 1 (6) AN ACTION TAKEN BY THE STATE OR THE FAMILY INDEPENDENCE 2 AGENCY IN CONNECTION WITH THE RIGHT OF RECOVERY AFFORDED BY THIS 3 SECTION DOES NOT DENY THE INJURED, DISEASED, OR DISABLED PERSON A 4 PART OF THE RECOVERY BEYOND THE COSTS EXPENDED ON THE PERSON'S 5 BEHALF BY THE FAMILY INDEPENDENCE AGENCY. THE COSTS OF LEGAL 6 ACTION INITIATED BY THE STATE SHALL BE PAID BY THE STATE. A PAY- 7 MENT SHALL NOT BE MADE UNDER THIS ACT FOR MEDICAL ASSISTANCE FOR 8 AN INJURY, DISEASE, OR DISABILITY FOR WHICH THE PATIENT IS ENTI- 9 TLED TO MEDICAL CARE OR THE COST OF MEDICAL CARE UNDER THE 10 WORKER'S DISABILITY COMPENSATION ACT OF 1969, 1969 PA 317, MCL 11 418.101 TO 418.941; EXCEPT THAT PAYMENT MAY BE MADE IF AN APPRO- 12 PRIATE APPLICATION FOR MEDICAL CARE OR THE COST OF THE MEDICAL 13 CARE HAS BEEN MADE UNDER THE WORKER'S DISABILITY COMPENSATION ACT 14 OF 1969, 1969 PA 317, MCL 418.101 TO 418.941, ENTITLEMENT HAS NOT 15 BEEN FINALLY DETERMINED, AND AN ARRANGEMENT SATISFACTORY TO THE 16 FAMILY INDEPENDENCE AGENCY HAS BEEN MADE FOR REIMBURSEMENT IF THE 17 CLAIM IS FINALLY SUSTAINED. 02965'99 Final page. LTB