SB-0234,As Passed House,Jun 5, 2003
HOUSE SUBSTITUTE FOR
SENATE BILL NO. 234
(As amended June 5, 2003)
[A bill to amend 1980 PA 350, entitled
"The nonprofit health care corporation reform act,"
by amending sections 107, 204, 206, 207, 211, 502, 602, 606,
607, 608, 609, 610, 613, and 619 (MCL 550.1107,
550.1204, 550.1206, 550.1207, 550.1211, 550.1502, 550.1602,
550.1606, 550.1607, 550.1608, 550.1609, 550.1610, 550.1613, and
550.1619), section 207 as amended by 1999 PA 210, section 211 as
amended by 1993 PA 127, section 502 as amended by 1998 PA 446,
section 608 as amended by 1991 PA 73, and section 609 as amended
by 1991 PA 61, and by adding sections 204a, 205a, 219, 401j, 403b, and
422c; and to repeal acts and parts of acts.]
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 107. (1) "Participating provider" means a provider
2 that has entered into a participating contract with a health care
3 corporation and that meets the standards set by the corporation
1 for that class of providers.
2 (2) "Participating contract" means an agreement, contract, or
3 other arrangement under which a provider agrees to accept the
4 payment of the health care corporation as payment in full for
5 health care services or parts of health care services covered
6 under a certificate, as provided for in section 502(1).
7 (3) "Person" means an individual, corporation, partnership,
8 organization, limited liability company, or association.
9 (4) "Personal data" means a document incorporating medical or
10 surgical history, care, treatment, or service; or any similar
11 record, including an automated or computer accessible record,
12 relative to a member, which is maintained or stored by a health
13 care corporation.
14 (5) "Proposed rate" means any of the following:
15 (a) A proposed increase or decrease in the rates to be
16 charged to nongroup subscribers.
17 (b) For group subscribers, any proposed changes in the
18 methodology or definitions of any rating system, formula,
19 component, or factor subject to prior approval by the
20 commissioner.
21 (c) A proposed increase or decrease in deductible amounts or
22 coinsurance percentages.
23 (d) A proposed extension of benefits, additional benefits, or
24 a reduction or limitation in benefits.
25 (e) A review
pursuant to section 608(2).
26 (6) "Provider class" means classes of providers, as defined
27 in section 105(4), that have a provider contract or a
Senate Bill No. 234 (H-2) as amended June 5, 2003
1 reimbursement arrangement with a health care corporation to
2 render health care services to subscribers, as those classes are
3 established by the corporation.
4 (7) "Provider class plan" or "plan" means a document
5 containing a reimbursement arrangement and objectives for a
6 provider class, and, in the case of those providers with which a
7 health care corporation contracts, provisions that are included
8 in that contract.
9 (8) "Provider contract" or "contract" means an agreement
10 between a provider and a health care corporation that contains
11 provisions to implement the provider class plan.
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Senate Bill No. 234 (H-2) as amended June 5, 2003
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21 Sec. 204. (1) Before entering into contracts or securing
22 applications of subscribers, the persons incorporating a health
23 care corporation shall file all of the following in the office of
24 the commissioner:
25 (a) Three copies of the articles of incorporation, with the
26 certificate of the attorney general required under section 202(3)
27 attached.
1 (b) A statement showing in full detail the plan upon which
2 the corporation proposes to transact business.
3 (c) A copy of all certificates to be issued to subscribers.
4 (d) A copy of the financial statements of the corporation.
5 (e) Proposed advertising to be used in the solicitation of
6 certificates for subscribers.
7 (f) A copy of the bylaws.
8 (g) A copy of all proposed contracts and reimbursement
9 methods.
10 (2) The commissioner shall examine the statements and
11 documents filed under subsection (1), may conduct any
12 investigation which that
he or she considers necessary, may
13 request additional oral and written information from the
14 incorporators, and may examine under oath any persons interested
15 in or connected with the proposed health care corporation. The
16 commissioner shall ascertain whether all of the following
17 conditions are met:
18 (a) The solicitation of certificates will not work a fraud
19 upon the persons solicited by the corporation.
20 (b) The rates to be charged and the benefits to be provided
21 are adequate, equitable, and not excessive, as defined in section
22 609.
23 (c) The amount of money actually available for working
24 capital is sufficient to carry all acquisition costs and
25 operating expenses for a reasonable period of time from the date
26 of issuance of the certificate of authority, and is not less than
27 $500,000.00 or a greater amount, if the commissioner considers it
1 necessary.
2 (d) The amounts contributed as the working capital of the
3 corporation are payable only out of amounts in excess of minimum
4 required reserves of the corporation.
5 (e) Adequate and reasonable
reserves are provided, as
6 defined in section 205
unimpaired surplus is provided,
as
7 determined under section 204a.
8 (3) If the commissioner finds that the conditions prescribed
9 in subsection (2) are met, the commissioner shall do all of the
10 following:
11 (a) Return to the incorporators 1 copy of the articles of
12 incorporation, certified
for filing with the chief officer
13 director of the
department of commerce consumer and industry
14 services or of any other agency or department authorized by law
15 to administer Act No.
284 of the Public Acts of 1972, as
16 amended, being
sections 450.1101 to 450.2099 of the Michigan
17 Compiled Laws the business corporation act, 1972 PA 284,
18 MCL 450.1101 to 450.2098, or his or her designated
19 representative, and 1 copy of the articles of incorporation
20 certified for the records of the corporation itself.
21 (b) Retain 1 copy of the articles of incorporation for the
22 commissioner's office files.
23 (c) Deliver to the corporation a certificate of authority to
24 commence business and to
issue certificates which that have
25 been approved by the
commissioner, or which that are exempted
26 from prior approval
pursuant to section 607(2) or (7) (8),
27 entitling subscribers to certain health care benefits.
1 Sec. 204a. (1) A health care corporation shall possess and
2 maintain unimpaired surplus in an amount determined adequate by
3 the commissioner to comply with section 403 of the insurance code
4 of 1956, 1956 PA 218, MCL 500.403. The commissioner shall follow
5 the risk-based capital requirements as developed by the national
6 association of insurance commissioners in order to determine
7 whether a health care corporation is in adequate compliance with
8 section 403 of the insurance code of 1956, 1956 PA 218,
9 MCL 500.403.
10 (2) If a health care corporation files a risk-based capital
11 report that indicates that its surplus is less than the amount
12 determined adequate by the commissioner under subsection (1), the
13 health care corporation shall prepare and submit a plan for
14 remedying the deficiency in accordance with risk-based capital
15 requirements adopted by the commissioner. Among the remedies
16 that a health care corporation may employ are planwide viability
17 contributions to surplus by subscribers.
18 (3) If contributions for planwide viability under subsection
19 (2) are employed, those contributions shall be made in accordance
20 with the following:
21 (a) If the health care corporation's surplus is less than
22 200% but more than 150% of the authorized control level under
23 risk-based capital requirements, the maximum contribution rate
24 shall be 0.5% of the rate charged to subscribers for the benefits
25 provided.
26 (b) If the health care corporation's surplus is 150% or less
27 than the authorized control level under risk-based capital
1 requirements, the maximum contribution rate shall be 1% of the
2 rate charged to subscribers for the benefits provided.
3 (c) The actual contribution rate charged is subject to the
4 commissioner's approval.
5 (4) As used in subsection (3), "authorized control level"
6 means the number determined under the risk-based capital formula
7 in accordance with the instructions developed by the national
8 association of insurance commissioners and adopted by the
9 commissioner.
10 (5) Subject to this subsection, a health care corporation
11 shall not maintain surplus in an amount that equals or is greater
12 than 200% of the authorized control level under risk-based
13 capital requirements multiplied by 5. If a health care
14 corporation files a risk-based capital report that indicates that
15 its surplus is more than the allowable maximum surplus permitted
16 under this subsection for 2 successive calendar years, the health
17 care corporation shall file a plan for approval by the
18 commissioner to adjust its surplus to a level below the allowable
19 maximum surplus. If the commissioner disapproves the health care
20 corporation's plan, the commissioner shall formulate an alternate
21 plan and forward the alternate plan to the health care
22 corporation. The health care corporation shall begin
23 implementation of the plan immediately upon receipt of approval
24 of its plan by the commissioner or upon receipt of the
25 commissioner's alternate plan.
26 Sec. 205a. A health care corporation shall report financial
27 information in conformity with sound actuarial practices and
Senate Bill No. 234 (H-2) as amended June 5, 2003
1 statutory accounting principles in the same manner as designated
2 by the commissioner for other carriers pursuant to section 438(2)
3 of the insurance code of 1956, 1956 PA 218, MCL 500.438.
4 Approved permitted practices may be used by a health care
5 corporation until [March 1, 2007] to effectuate the transfer to
6 statutory accounting principles required by this section.
7 Sec. 206. (1) The funds and property of a health care
8 corporation shall be acquired, held, and disposed of only for the
9 lawful purposes of the corporation and for the benefit of the
10 subscribers of the corporation as a whole. A health care
11 corporation shall only
transact such business, receive,
12 collect, and disburse such
money, and acquire, hold, protect,
13 and convey such property,
as are that is properly within the
14 scope of the purposes of the corporation as specifically set
15 forth in section 202(1)(d), for the benefit of the subscribers of
16 the corporation as a whole, and consistent with this act.
17 (2) The funds of a health care corporation shall be invested
18 only in securities permitted by the laws of this state for the
19 investments of assets of life insurance companies, as described
20 in chapter 9 of Act
No. 218 of the Public Acts of 1956, as
21 amended, being
sections 500.901 to 500.947 of the Michigan
22 Compiled Laws the insurance code of 1956, 1956 PA 218,
23 MCL 500.901 to 500.947.
24 (3) Without regard to the limitation in subsection (2), up to
25 2% of the assets of the health care corporation may be invested
26 in venture-type
investments. For purposes of calculating the
27 contingency reserve
pursuant to section 205 adequate
and
1 unimpaired surplus under section 204a, a venture-type investment
2 shall be carried on the books of a health care corporation at the
3 original acquisition cost, and losses may only be realized as an
4 offset against gains from venture-type investments. All
5 venture-type investments under this subsection shall provide
6 employment or capital investment primarily within this state.
7 Each investment under
this subsection shall be is subject to
8 prior approval by the board of directors. As used in this
9 subsection, "venture-type investments" include:
10 (a) Common stock, preferred stock, limited partnerships, or
11 similar equity interests acquired from the issuer subject to a
12 provision barring resale without consent of the issuer for 5
13 years from the date of acquisition by the corporation.
14 (b) Unsecured debt
instruments which that are either
15 convertible into equity or have equity acquisition rights. These
16 debt instruments shall be subordinated by their terms to all
17 borrowings of the issuer from other institutional lenders and
18 shall have no part amortized during the first 5 years.
19 (4) A health care corporation shall not market or transact,
20 as defined in sections
402a and 402b of Act No. 218 of the
21 Public Acts of 1956,
being sections 500.402a and 500.402b of the
22 Michigan Compiled Laws
the insurance code of 1956, 1956
PA 218,
23 MCL 500.402a and 500.402b, any type of insurance described in
24 chapter 6 of Act No.
218 of the Public Acts of 1956, as amended,
25 being sections 500.600
to 500.644 of the Michigan Compiled Laws
26 the insurance code of 1956, 1956 PA 218, MCL 500.600 to 500.644.
27 This subsection shall not be construed to prohibit the provision
1 of prepaid health care benefits.
2 Sec. 207. (1) A health care corporation, subject to any
3 limitation provided in this act, in any other statute of this
4 state, or in its articles of incorporation, may do any or all of
5 the following:
6 (a) Contract to provide computer services and other
7 administrative consulting services to 1 or more providers or
8 groups of providers, if the services are primarily designed to
9 result in cost savings to subscribers.
10 (b) Engage in experimental health care projects to explore
11 more efficient and economical means of implementing the
12 corporation's programs, or the corporation's goals as prescribed
13 in section 504 and the purposes of this act, to develop
14 incentives to promote alternative methods and alternative
15 providers, including nurse midwives, nurse anesthetists, and
16 nurse practitioners, for delivering health care, including
17 preventive care and home health care.
18 (c) For the purpose of providing health care services to
19 employees of this state, the United States, or an agency,
20 instrumentality, or political subdivision of this state or the
21 United States, or for the purpose of providing all or part of the
22 costs of health care services to disabled, aged, or needy
23 persons, contract with this state, the United States, or an
24 agency, instrumentality, or political subdivision of this state
25 or the United States.
26 (d) For the purpose of administering any publicly supported
27 health benefit plan, accept and administer funds, directly or
1 indirectly, made available by a contract authorized under
2 subdivision (c), or made available by or received from any
3 private entity.
4 (e) For the purpose of administering any publicly supported
5 health benefit plan, subcontract with any organization that has
6 contracted with this state, the United States, or an agency,
7 instrumentality, or political subdivision of this state or the
8 United States, for the administration or furnishing of health
9 services or any publicly supported health benefit plan.
10 (f) Provide administrative services only and cost-plus
11 arrangements for the federal medicare program established by
12 parts A and B of title XVIII of the social security act, chapter
13 531, 49 Stat. 620, 42
U.S.C. 1395 to 1395b, 1395b-2, 1395b-6 to
14 1395b-7, 1395c to 1395i, 1395i-2 to 1395i-5, 1395j to 1395t,
15 1395u to 1395w, and
1395w-2 to 1395w-4; , 1395w-21 to 1395w-28,
16 1395x to 1395yy, and
1395bbb to 1395ggg; for the federal
17 medicaid program established under title XIX of the social
18 security act, chapter 531, 49 Stat. 620, 42 U.S.C. 1396 to
19 1396f, 1396g-1 to 1396r-6, and 1396r-8 to 1396v; for title V of
20 the social security act, chapter 531, 49 Stat. 620, 42 U.S.C. 701
21 to 704 and 705 to 710; for the program of medical and dental care
22 established by the military medical benefits amendments of 1966,
23 Public Law 85-861, 80 Stat. 862; for the Detroit maternity and
24 infant care--preschool, school, and adolescent project; and for
25 any other health benefit program established under state or
26 federal law.
27 (g) Provide administrative services only and cost-plus
1 arrangements for any noninsured health benefit plan, subject to
2 the requirements of sections 211 and 211a.
3 (h) Establish, own, and operate a health maintenance
4 organization, subject to
the requirements of the public health
5 code, 1978 PA 368, MCL
333.1101 to 333.25211 insurance
code of
6 1956, 1956 PA 218, MCL 500.100 to 500.8302.
7 (i) Guarantee loans for the education of persons who are
8 planning to enter or have entered a profession that is licensed,
9 certified, or registered under parts 161 to 182 of the public
10 health code, 1978 PA 368, MCL 333.16101 to 333.18237, and has
11 been identified by the commissioner, with the consultation of the
12 office of health and medical affairs in the department of
13 management and budget, as a profession whose practitioners are in
14 insufficient supply in this state or specified areas of this
15 state and who agree, as a condition of receiving a guarantee of a
16 loan, to work in this state, or an area of this state specified
17 in a listing of shortage areas for the profession issued by the
18 commissioner, for a period of time determined by the
19 commissioner.
20 (j) Receive donations to assist or enable the corporation to
21 carry out its purposes, as provided in this act.
22 (k) Bring an action against an officer or director of the
23 corporation.
24 (l) Designate and maintain a registered office and a resident
25 agent in that office upon whom service of process may be made.
26 (m) Sue and be sued in all courts and participate in actions
27 and proceedings, judicial, administrative, arbitrative, or
1 otherwise, in the same cases as natural persons.
2 (n) Have a corporate seal, alter the seal, and use it by
3 causing the seal or a facsimile to be affixed, impressed, or
4 reproduced in any other manner.
5 (o) Invest Subject
to chapter 9 of the insurance code of
6 1956, 1956 PA 218, MCL 500.901 to 500.947, invest and reinvest
7 its funds and, for investment purposes only, purchase, take,
8 receive, subscribe for, or otherwise acquire, own, hold, vote,
9 employ, sell, lend, lease, exchange, transfer, or otherwise
10 dispose of, mortgage, pledge, use, and otherwise deal in and
11 with, bonds and other obligations, shares, or other securities or
12 interests issued by entities other than domestic, foreign, or
13 alien insurers, as defined in sections 106 and 110 of the
14 insurance code of 1956, 1956 PA 218, MCL 500.106 and 500.110,
15 whether engaged in a similar or different business, or
16 governmental or other activity, including banking corporations or
17 trust companies. However, a health care corporation may
18 purchase, take, receive, subscribe for, or otherwise acquire,
19 own, hold, vote, employ, sell, lend, lease, exchange, transfer,
20 or otherwise dispose of bonds or other obligations, shares, or
21 other securities or interests issued by a domestic, foreign, or
22 alien insurer, so long as the activity meets all of the
23 following:
24 (i) Is determined by the attorney general to be lawful under
25 section 202.
26 (ii) Is approved in writing by the commissioner as being in
27 the best interests of the health care corporation and its
1 subscribers.
2 (iii) Will Except as otherwise provided in
subparagraph
3 (iv), will not result in the health care corporation owning or
4 controlling 10% or more of the voting securities of the insurer.
5 Nothing in this subdivision shall be interpreted as expanding the
6 lawful purposes of a health care corporation under this act.
7 Except where expressly authorized by statute, a health care
8 corporation shall not indirectly engage in any investment
9 activity that it may not engage in directly. A health care
10 corporation shall not guarantee or become surety upon a bond or
11 other undertaking securing the deposit of public money. As used
12 in this subparagraph, subparagraph (iv), and subsection (4),
13 "controlled" or "controlling" means that term as defined in
14 section 115 of the insurance code of 1956, 1956 PA 218, MCL
15 500.115.
16 (iv) Beginning on the effective date of the amendatory act
17 that added this subparagraph, will not result in the health care
18 corporation owning or controlling part or all of the insurer
19 unless the transaction satisfies chapter 13 of the insurance code
20 of 1956, 1956 PA 218, MCL 500.1301 to 500.1379; the insurer being
21 acquired is only authorized to sell long-term care insurance; the
22 insurer being acquired will not be exempt from taxation by this
23 state or any political subdivision of this state after the
24 acquisition; the insurer being acquired has a board of directors
25 or other governing body that is separate from the health care
26 corporation's board of directors; and if the insurer being
27 acquired is a foreign or alien insurer, the insurer's domicile is
1 transferred to Michigan as soon as reasonably possible after
2 acquisition.
3 (p) Purchase, receive, take by grant, gift, devise, bequest
4 or otherwise, lease, or otherwise acquire, own, hold, improve,
5 employ, use and otherwise deal in and with, real or personal
6 property, or an interest therein, wherever situated.
7 (q) Sell, convey, lease, exchange, transfer or otherwise
8 dispose of, or mortgage or pledge, or create a security interest
9 in, any of its property, or an interest therein, wherever
10 situated.
11 (r) Borrow money and issue its promissory note or bond for
12 the repayment of the borrowed money with interest.
13 (s) Make donations for the public welfare, including
14 hospital, charitable, or educational contributions that do not
15 significantly affect rates charged to subscribers.
16 (t) Participate with others in any joint venture with respect
17 to any transaction that the health care corporation would have
18 the power to conduct by itself.
19 (u) Cease its activities and dissolve, subject to the
20 commissioner's authority under section 606(2).
21 (v) Make contracts, transact business, carry on its
22 operations, have offices, and exercise the powers granted by this
23 act in any jurisdiction, to the extent necessary to carry out its
24 purposes under this act.
25 (w) Have and exercise all powers necessary or convenient to
26 effect any purpose for which the corporation was formed.
27 (x) Notwithstanding subdivision (o) or any other provision of
1 this act, establish, own, and operate a domestic stock insurance
2 company only for the purpose of acquiring, owning, and operating
3 the state accident fund pursuant to chapter 51 of the insurance
4 code of 1956, 1956 PA 218, MCL 500.5100 to 500.5114, so long as
5 all of the following are met:
6 (i) For insurance products and services the insurer whether
7 directly or indirectly only transacts worker's compensation
8 insurance and employer's liability insurance, transacts
9 disability insurance limited to replacement of loss of earnings,
10 and acts as an administrative services organization for an
11 approved self-insured worker's compensation plan or a disability
12 insurance plan limited to replacement of loss of earnings and
13 does not transact any other type of insurance notwithstanding the
14 authorization in chapter 51 of the insurance code of 1956, 1956
15 PA 218, MCL 500.5100 to 500.5114. This subparagraph does not
16 preclude the insurer from providing either directly or indirectly
17 noninsurance products and services as otherwise provided by law.
18 (ii) The activity is determined by the attorney general to be
19 lawful under section 202.
20 (iii) The health care corporation does not directly or
21 indirectly subsidize the use of any provider or subscriber
22 information, loss data, contract, agreement, reimbursement
23 mechanism or arrangement, computer system, or health care
24 provider discount to the insurer.
25 (iv) Members of the board of directors, employees, and
26 officers of the health care corporation are not, directly or
27 indirectly, employed by the insurer unless the health care
1 corporation is fairly and reasonably compensated for the services
2 rendered to the insurer if those services were paid for by the
3 health care corporation.
4 (v) Health care corporation and subscriber funds are used
5 only for the acquisition from the state of Michigan of the assets
6 and liabilities of the state accident fund.
7 (vi) Health care corporation and subscriber funds are not
8 used to operate or subsidize in any way the insurer including the
9 use of such funds to subsidize contracts for goods and services.
10 This subparagraph does not prohibit joint undertakings between
11 the health care corporation and the insurer to take advantage of
12 economies of scale or arm's-length loans or other financial
13 transactions between the health care corporation and the
14 insurer.
15 (2) In order to ascertain the interests of senior citizens
16 regarding the provision of medicare supplemental coverage, as
17 described in section 202(1)(d)(v), and to ascertain the interests
18 of senior citizens regarding the administration of the federal
19 medicare program when acting as fiscal intermediary in this
20 state, as described in section 202(1)(d)(vi), a health care
21 corporation shall consult with the office of services to the
22 aging and with senior citizens' organizations in this state.
23 (3) An act of a health care corporation, otherwise lawful, is
24 not invalid because the corporation was without capacity or power
25 to do the act. However, the lack of capacity or power may be
26 asserted:
27 (a) In an action by a director or a member of the corporate
1 body against the corporation to enjoin the doing of an act.
2 (b) In an action by or in the right of the corporation to
3 procure a judgment in its favor against an incumbent or former
4 officer or director of the corporation for loss or damage due to
5 an unauthorized act of that officer or director.
6 (c) In an action or special proceeding by the attorney
7 general to enjoin the corporation from the transacting of
8 unauthorized business, to set aside an unauthorized transaction,
9 or to obtain other equitable relief.
10 (4) A health care corporation shall not condition the sale or
11 vary the terms or conditions of any product sold by the
12 corporation or by a person controlled by the corporation by
13 requiring the purchase of any other product from the corporation
14 or by a person controlled by the corporation.
15 Sec. 211. (1) Pursuant to section 207(1)(g), a health care
16 corporation may enter into service contracts containing an
17 administrative services only or cost-plus arrangement. Except as
18 otherwise provided in this section, a corporation shall not enter
19 into a service contract containing an administrative services
20 only or cost-plus arrangement for a noninsured benefit plan
21 covering a group of less than 500 individuals, except that a
22 health care corporation may continue an administrative services
23 only or cost-plus arrangement with a group of less than 500,
24 which arrangement is in existence in September of 1980. A
25 corporation may enter into contracts containing an administrative
26 services only or cost-plus arrangement for a noninsured benefit
27 plan covering a group of less than 500 individuals if either the
1 corporation makes arrangements for excess loss coverage or the
2 sponsor of the plan that covers the individuals is liable for the
3 plan's liabilities and is a sponsor of 1 or more plans covering a
4 group of 500 or more individuals in the aggregate. The
5 commissioner, upon obtaining the advice of the corporations
6 subject to this act, shall establish the standards for the manner
7 and amount of the excess loss coverage required by this
8 subsection. It is the intent of the legislature that the excess
9 loss coverage requirements be uniform as between corporations
10 subject to this act and other persons authorized to provide
11 similar services. The corporation shall offer in connection with
12 a noninsured benefit plan a program of specific or aggregate
13 excess loss coverage.
14 (2) Relative to actual administrative costs, fees for
15 administrative services only and cost-plus arrangements shall be
16 set in a manner that precludes cost transfers between subscribers
17 subject to either of these arrangements and other subscribers of
18 the health care corporation. Administrative costs for these
19 arrangements shall be determined in accordance with the
20 administrative costs allocation methodology and definitions filed
21 and approved under part 6, and shall be expressed clearly and
22 accurately in the contracts establishing the arrangements, as a
23 percentage of costs rather than charges. This subsection shall
24 not be construed to prohibit the inclusion, in fees charged, of
25 contributions to the
contingency reserve of the corporation,
26 consistent with
section 205 adequate and
unimpaired surplus as
27 provided in section 204a.
1 (3) Before a health care corporation may enter into contracts
2 containing administrative services only or cost-plus arrangements
3 pursuant to section 207(1)(g), the board of directors of the
4 corporation shall approve
a marketing policy with respect to
5 such for these arrangements that is consistent with
the
6 provisions of this section. The marketing policy may contain
7 other provisions as the board considers necessary. The marketing
8 policy shall be carried out by the corporation consistent with
9 this act.
10 (4) A corporation providing services under a contract
11 containing an administrative services only or cost-plus
12 arrangement in connection with a noninsured benefit plan shall
13 provide in its service contract a provision that the person
14 contracting for the services in connection with a noninsured
15 benefit plan shall notify each covered individual of what
16 services are being provided; the fact that individuals are not
17 insured or are not covered by a certificate from the corporation,
18 or are only partially insured or are only partially covered by a
19 certificate from the corporation, as the case may be; which party
20 is liable for payment of benefits; and of future changes in
21 benefits.
22 (5) A service contract containing an administrative services
23 only arrangement between a corporation and a governmental entity
24 not subject to the employee retirement income security act of
25 1974, Public Law 93-406, 88 Stat. 829, whose plan provides
26 coverage under a collective bargaining agreement utilizing a
27 policy or certificate issued by a carrier before the signing of
1 the service contract, is void unless the governmental entity has
2 provided the notice described in subsection (4) to the collective
3 bargaining agent and to the members of the collective bargaining
4 unit not less than 30 days before signing the service contract.
5 The voiding of a service contract under this subsection shall not
6 relieve the governmental entity of any obligations to the
7 corporation under the service contract.
8 (6) Nothing in this section shall be construed to permit an
9 actionable interference by a corporation with the rights and
10 obligations of the parties under a collective bargaining
11 agreement.
12 (7) An individual covered under a noninsured benefit plan for
13 which services are provided under a service contract authorized
14 under subsection (1) shall
is not be liable for that portion
15 of claims incurred and subject to payment under the plan if the
16 service contract is entered into between an employer and a
17 corporation, unless that portion of the claim has been paid
18 directly to the covered individual.
19 (8) A corporation shall report with its annual statement the
20 amount of business it has conducted as services provided under
21 subsection (1) that are performed in connection with a noninsured
22 benefit plan, and the commissioner shall transmit annually this
23 information to the state commissioner
of revenue treasurer.
24 The commissioner shall submit to the legislature on April 1,
25 1994, a report detailing the impact of this section on employers
26 and covered individuals, and similar activities under other
27 provisions of law, and in
consultation with the revenue
Senate Bill No. 234 (H-2) as amended June 5, 2003
1 commissioner state treasurer the total financial impact on
the
2 state for the preceding legislative biennium.
3 (9) As used in this section, "noninsured benefit plan" or
4 "plan" means a health benefit plan without coverage by a health
5 care corporation, health maintenance organization, or insurer or
6 the portion of a health benefit plan without coverage by a health
7 care corporation, health maintenance organization, or insurer
8 that has a specific or aggregate excess loss coverage.
9 Sec. 219. A nonprofit health care corporation is subject to
10 chapter 37 of the insurance code of 1956, 1956 PA 218,
11 MCL 500.3701 to 500.3723. To the extent that a provision of this
12 act concerning health coverage, including, but not limited to,
13 premiums, rates, filings, and coverages, conflicts with chapter
14 37 of the insurance code of 1956, 1956 PA 218, MCL 500.3701 to
15 500.3723, chapter 37 of the insurance code of 1956, 1956 PA 218,
16 MCL 500.3701 to 500.3723, supersedes this act.
17 Sec. 401j. The rates charged to nongroup and group
18 conversion subscribers for a certificate that includes
19 prescription drug coverage pursuant to section 401i may include
20 rate differentials based upon age, with not more than 8 separate
21 age bands. The health care corporation shall file its rates for
22 the prescription drug coverage in this section in the same manner
23 and under the same requirements as contained in section 607.
[Sec. 403b. A health care corporation shall not include in any bill for services or products any advertising material for any other service or product sold by the corporation or by a person controlled by the corporation.]
24 Sec. 422c. A health care corporation may condition the
25 granting of long-term care coverage based on answers given on an
26 application under section 422a and pursuant to underwriting
27 standards established by the corporation.
1 Sec. 502. (1) A health care corporation may enter into
2 participating contracts for reimbursement with professional
3 health care providers practicing legally in this state for health
4 care services or with health practitioners practicing legally in
5 any other jurisdiction for health care services that the
6 professional health care providers or practitioners may legally
7 perform. However, a health care corporation shall not enter into
8 participating contracts for reimbursement with health
9 practitioners out of state, for the purpose of disadvantaging a
10 Michigan health care provider or replacing a participating
11 contract with a Michigan health care provider. A participating
12 contract may cover all members or may be a separate and
13 individual contract on a per claim basis, as set forth in the
14 provider class plan, if, in entering into a separate and
15 individual contract on a per claim basis, the participating
16 provider certifies to the health care corporation:
17 (a) That the provider will accept payment from the
18 corporation as payment in full for services rendered for the
19 specified claim for the member indicated.
20 (b) That the provider will accept payment from the
21 corporation as payment in full for all cases involving the
22 procedure specified, for the duration of the calendar year. As
23 used in this subdivision, provider does not include a person
24 licensed as a dentist under part 166 of the public health code,
25 1978 PA 368, MCL 333.16601 to 333.16648.
26 (c) That the provider will not determine whether to
27 participate on a claim on the basis of the race, color, creed,
1 marital status, sex, national origin, residence, age, disability,
2 or lawful occupation of the member entitled to health care
3 benefits.
4 (2) A contract entered into pursuant to subsection (1) shall
5 provide that the private provider-patient relationship shall be
6 maintained to the extent provided for by law. A health care
7 corporation shall continue to offer a reimbursement arrangement
8 to any class of providers with which it has contracted prior to
9 August 27, 1985 and that continues to meet the standards set by
10 the corporation for that class of providers.
11 (3) A health care corporation shall not restrict the methods
12 of diagnosis or treatment of professional health care providers
13 who treat members. Except as otherwise provided in section 502a,
14 each member of the health care corporation shall at all times
15 have a choice of professional health care providers. This
16 subsection does not apply to limitations in benefits contained in
17 certificates, to the reimbursement provisions of a provider
18 contract or reimbursement arrangement, or to standards set by the
19 corporation for all contracting providers. A health care
20 corporation may refuse to reimburse a health care provider for
21 health care services that are overutilized, including those
22 services rendered, ordered, or prescribed to an extent that is
23 greater than reasonably necessary.
24 (4) A health care corporation may provide to a member, upon
25 request, a list of providers with whom the corporation contracts,
26 for the purpose of assisting a member in obtaining a type of
27 health care service. However, except as otherwise provided in
1 section 502a, an employee, agent, or officer of the corporation,
2 or an individual on the board of directors of the corporation,
3 shall not make recommendations on behalf of the corporation with
4 respect to the choice of a specific health care provider. Except
5 as otherwise provided in section 502a, an employee, agent, or
6 officer of the corporation, or a person on the board of directors
7 of the corporation who influences or attempts to influence a
8 person in the choice or selection of a specific professional
9 health care provider on behalf of the corporation, is guilty of a
10 misdemeanor.
11 (5) A health care corporation shall provide a symbol of
12 participation, which can be publicly displayed, to providers who
13 participate on all claims for covered health care services
14 rendered to subscribers.
15 (6) This section does not impede the lawful operation of, or
16 lawful promotion of, a health maintenance organization owned by a
17 health care corporation.
18 (7) Contracts entered into under this section with
19 professional health care providers licensed in this state are
20 subject to the provisions of sections 504 to 518.
21 (8) A health care corporation shall not deny participation to
22 a freestanding surgical outpatient facility on the basis of
23 ownership if the facility meets the reasonable standards set by
24 the health care corporation for similar facilities, is licensed
25 under part 208 of the public health code, 1978 PA 368,
26 MCL 333.20801 to 333.20821, and complies with part 222 of the
27 public health code, 1978 PA 368, MCL 333.22201 to 333.22260.
1 (9) Notwithstanding any other provision of this act, if a
2 certificate provides for benefits for services that are within
3 the scope of practice of optometry, a health care corporation is
4 not required to provide benefits or reimburse for a practice of
5 optometric service unless that service was included in the
6 definition of practice of optometry under section 17401 of the
7 public health code, 1978 PA 368, MCL 333.17401, as of May 20,
8 1992.
9 (10) Notwithstanding any other provision of this act, a
10 health care corporation is not required to reimburse for services
11 otherwise covered under a certificate if the services were
12 performed by a member of a health care profession, which health
13 care profession was not licensed or registered by this state on
14 or before January 1, 1998 but that becomes a health care
15 profession licensed or registered by this state after January 1,
16 1998. This subsection does not change the status of a health
17 care profession that was licensed or registered by this state on
18 or before January 1, 1998.
19 Sec. 602. (1) Not later than March 1 each year, subject to
20 a 30-day extension which
that may be granted by the
21 commissioner, a health care corporation shall file in the office
22 of the commissioner a sworn statement verified by at least 2 of
23 the principal officers of the corporation showing its condition
24 as of the preceding December 31. The statement shall be in a
25 form , and
contain those matters , which that the
26 commissioner prescribes for a health care corporation, including
27 those matters contained
in section 205 204a. The statement
1 shall include the number of members and the number of
2 subscribers' certificates issued by the corporation and
3 outstanding.
4 (2) The commissioner, by order, may require a health care
5 corporation to submit statistical, financial, and other reports
6 for the purpose of monitoring compliance with this act.
7 Sec. 606. (1) The commissioner shall have the same
8 authority regarding the officers and directors of a health care
9 corporation as the commissioner has with respect to the officers
10 and directors of insurers
under sections 249 and 250 of Act
11 No. 218 of the Public
Acts of 1956, being sections 500.249 and
12 500.250 of the
Michigan Compiled Laws the
insurance code of
13 1956, 1956 PA 218, MCL 500.249 and 500.250.
14 (2) The commissioner shall have the same authority with
15 respect to the dissolution, taking over, or liquidation of
16 corporations formed or doing business under this act as is
17 provided in chapter 78
of Act No. 218 of the Public Acts of
18 1956, as amended,
being sections 500.7800 to 500.7868 of the
19 Michigan Compiled Laws
81 of the insurance code of 1956,
1956
20 PA 218, MCL 500.8101 to 500.8159. For purposes of this
21 subsection, a health care corporation shall be considered to be
22 insolvent if its liabilities exceed its assets, unless otherwise
23 defined in chapter 78
of Act No. 218 of the Public Acts of 1956,
24 as amended 81 of the insurance code of 1956, 1956 PA 218,
25 MCL 500.8101 to 500.8159.
26 Sec. 607. (1) A
health care corporation shall submit a
27 copy of any new or
revised certificate to the commissioner along
1 with applicable
proposed rates and rate rationale. The
2 certificates, and
applicable proposed rates, shall be deemed
3 approved and effective
30 days after filing with the
4 commissioner, except
as otherwise provided in this section.
5 Except as otherwise provided in subsection (2) and section 608,
6 if a health care corporation wants to offer a new certificate,
7 change an existing certificate, or change a rate charge, a copy
8 of the proposed certificate, proposed revised certificate, or
9 proposed rate shall be filed with the commissioner and shall not
10 take effect until 60 days after the filing unless the
11 commissioner approves the change in writing before the expiration
12 of the 60 days. The commissioner may subsequently disapprove any
13 certificate deemed
approved or rate change.
14 (2) The commissioner shall exempt from prior approval
15 certificates resulting from a collective bargaining agreement.
16 (3) The commissioner may disapprove, or approve with
17 modifications, a certificate and applicable rates under 1 or more
18 of the following circumstances:
19 (a) If the rate charged for the benefits provided is not
20 equitable, not adequate, or excessive, as defined in section
21 609.
22 (b) If the
certificate contains 1 or more provisions which
23 that are unjust, unfair, inequitable, misleading, deceptive, or
24 which that encourage misrepresentation of the
coverage.
25 (c) If a certificate reduces the scope, amount, or duration
26 of benefits so as to have the effect of reducing the
27 comprehensiveness of existing health care benefits available to
1 groups or to individuals. The commissioner may approve a
2 certificate which that
reduces the scope, amount, or duration
3 of health care benefits if the commissioner determines that the
4 certificate will be offered as an alternative in addition to an
5 existing certificate which
that provides comprehensive health
6 care benefits and if the commissioner determines that approval of
7 the alternative certificate will not adversely affect the
8 opportunity for groups or individuals to obtain comprehensive
9 health care benefits.
10 (4) The commissioner shall approve a certificate and
11 applicable proposed rates if all of the following conditions are
12 met:
13 (a) If the rate charged for the benefits provided is
14 equitable, adequate, and not excessive, as defined in section
15 609.
16 (b) If the
certificate does not contain any provision which
17 that is unjust, unfair, inequitable, misleading, deceptive, or
18 which that encourages misrepresentation of the
coverage.
19 (5) If the commissioner disapproves a certificate and any
20 applicable proposed rates under this section, he or she shall
21 issue a written
notice of disapproval which specifies in what
22 respects specifying how a filing fails to meet the
requirements
23 of this act. The notice shall state that the filing shall not
24 become effective.
25 (6) If the commissioner approves, or approves with
26 modifications, a certificate and any applicable proposed rates
27 under this section, he or she shall issue a written notice of
1 approval or approval with modifications. If the notice is of
2 approval with modifications, the notice shall specify what
3 modifications in the filing are required for approval under this
4 act, and the reasons for the modifications. The notice shall
5 also state that the filing shall become effective after the
6 modifications are made and approved by the commissioner.
7 (7) The commissioner shall schedule a hearing not more than
8 30 days after receipt of a written request from the health care
9 corporation, and the revised certificate, revised proposed
10 certificate, or proposed rate shall not take effect until
11 approved by the commissioner after the hearing. Within 30 days
12 after the hearing, the commissioner shall notify the health care
13 corporation in writing of the disposition of the revised
14 certificate, revised proposed certificate, or proposed rate,
15 together with the commissioner's findings of fact and
16 conclusions.
17 (8) (7) Upon
request by a health care corporation, the
18 commissioner may allow certificates and rates to be implemented
19 prior to filing to allow implementation of a new certificate on
20 the date requested.
21 Sec. 608. (1) The rates charged to nongroup medicare
22 supplemental subscribers for each certificate shall be filed in
23 accordance with section 610 and shall be subject to the prior
24 approval of the commissioner. Annually, the commissioner shall
25 approve, disapprove, or modify and approve the proposed or
26 existing rates for each certificate subject to the standard that
27 the rates must be determined to be equitable, adequate, and not
1 excessive, as defined in section 609. The burden of proof that
2 rates to be charged meet these standards shall be upon the health
3 care corporation proposing to use the rates.
4 (2) The
methodology and definitions of each rating system,
5 formula, component,
and factor used to calculate rates for group
6 subscribers for each
certificate, including the methodology and
7 definitions used to
calculate administrative costs for
8 administrative
services only and cost-plus arrangements, shall be
9 filed in accordance
with section 610 and shall be subject to the
10 prior approval of the
commissioner. The definition of a group,
11 including any
clustering principles applied to nongroup
12 subscribers or small
group subscribers for the purpose of group
13 formation, shall be
subject to the prior approval of the
14 commissioner. However,
if a Michigan caring program is created
15 under section 436,
that program shall be defined as a group
16 program for the
purpose of establishing rates. The commissioner
17 shall approve,
disapprove, or modify and approve the methodology
18 and definitions of
each rating system, formula, component, and
19 factor for each
certificate subject to the standard that the
20 resulting rates for
group subscribers must be determined to be
21 equitable, adequate,
and not excessive, as defined in section
22 609. In addition, the
commissioner may from time to time review
23 the records of the
corporation to determine proper application of
24 a rating system,
formula, component, or factor with respect to
25 any group. The
corporation shall refile for approval under this
26 subsection, every 3
years, the methodology and definitions of
27 each rating system,
formula, component, and factor used to
1 calculate rates for
group subscribers, including the methodology
2 and definitions used
to calculate administrative costs for
3 administrative
services only and cost-plus arrangements. The
4 burden of proof that
the resulting rates to be charged meet these
5 standards shall be
upon the health care corporation proposing to
6 use the rating system,
formula, component, or factor.
7 (2) (3) A
proposed rate filed under subsection (1) shall
8 not take effect until a filing has been made with the
9 commissioner and approved
under section 607 or this section, as
10 applicable, except as
provided in subsections (4) and (5)
11 subsection (3).
12 (3) (4) Upon
request by a health care corporation, the
13 commissioner may allow rate adjustments to become effective prior
14 to approval, for federal or state mandated benefit changes.
15 However, a filing for these adjustments shall be submitted before
16 the effective date of the mandated benefit changes. If the
17 commissioner disapproves or modifies and approves the rates, an
18 adjustment shall be made retroactive to the effective date of the
19 mandated benefit changes or additions.
20 (5) Implementation
prior to approval may be allowed if the
21 health care
corporation is participating with 1 or more health
22 care corporations to
underwrite a group whose employees are
23 located in several
states. Upon request from the commissioner,
24 the corporation shall
file with the commissioner, and the
25 commissioner shall
examine, the financial arrangement, formulae,
26 and factors. If any
are determined to be unacceptable, the
27 commissioner shall take
appropriate action.
1 Sec. 609. (1) A rate is not excessive if the rate is not
2 unreasonably high relative to the following elements,
3 individually or collectively; provision for anticipated benefit
4 costs; provision for administrative expense; provision for cost
5 transfers, if any;
provision for a contribution to or from the
6 corporate contingency
reserve that is consistent with the
7 attainment or
maintenance of the target contingency reserve level
8 prescribed in section
205 surplus that is consistent
with the
9 attainment or maintenance of adequate and unimpaired surplus as
10 provided in section 204a; and provision for adjustments due to
11 prior experience of groups, as defined in the group rating
12 system. A determination as to whether a rate is excessive
13 relative to the these
elements, listed above, individually or
14 collectively, shall be based on the following: reasonable
15 evaluations of recent claim experience; projected trends in claim
16 costs; the allocation of administrative expense budgets; and the
17 present and anticipated contingency
reserve positions
18 unimpaired surplus of the health care corporation. To the extent
19 that any of these elements are considered excessive, the
20 provision in the rates for these elements shall be modified
21 accordingly.
22 (2) The administrative expense budget must be reasonable, as
23 determined by the commissioner after examination of material and
24 substantial administrative and acquisition expense items.
25 (3) A rate is equitable if the rate can be compared to any
26 other rate offered by the health care corporation to its
27 subscribers, and the observed rate differences can be supported
1 by differences in anticipated benefit costs, administrative
2 expense cost, differences in risk, or any identified cost
3 transfer provisions.
4 (4) A rate is adequate if the rate is not unreasonably low
5 relative to the elements prescribed in subsection (1),
6 individually or collectively, based on reasonable evaluations of
7 recent claim experience, projected trends in claim costs, the
8 allocation of administrative expense budgets, and the present and
9 anticipated contingency
reserve positions unimpaired surplus of
10 the health care corporation.
11 (5) Except for identified cost transfers, each line of
12 business, over time, shall be self-sustaining. However, there
13 may be cost transfers for the benefit of senior citizens and
14 group conversion subscribers. Cost transfers for the benefit of
15 senior citizens, in the aggregate, annually shall not exceed 1%
16 of the earned subscription income of the health care corporation
17 as reported in the most recent annual statement of the
18 corporation. Group conversion subscribers are those who have
19 maintained coverage with the health care corporation on an
20 individual basis after
leaving a subscriber group. The Michigan
21 caring program created
in section 436 is not subject to any
22 assessment or
surcharge for cost transfer under this subsection.
23 Sec. 610. (1) Except
as provided under section 608(4) or
24 (5) 608(3), a filing of information and materials
relative to a
25 proposed nongroup medicare supplemental rate shall be made not
26 less than 120 days before the proposed effective date of the
27 proposed rate. A filing shall not be considered to have been
1 received until there has been substantial and material compliance
2 with the requirements prescribed in subsections (6) and (8).
3 (2) Within 30 days after a filing is made of information and
4 materials relative to a proposed nongroup medicare supplemental
5 rate, the commissioner shall do either of the following:
6 (a) Give written notice to the corporation, and to each
7 person described under section 612(1), that the filing is in
8 material and substantial compliance with subsections (6) and (8)
9 and that the filing is complete. The commissioner shall then
10 proceed to approve, approve with modifications, or disapprove the
11 rate filing 60 days after receipt of the filing, based upon
12 whether the filing meets the requirements of this act. However,
13 if a hearing has been requested under section 613, the
14 commissioner shall not approve, approve with modifications, or
15 disapprove a filing until the hearing has been completed and an
16 order issued.
17 (b) Give written notice to the corporation that the
18 corporation has not yet complied with subsections (6) and (8).
19 The notice shall state
specifically in what respects the
20 reasons the filing fails to meet the requirements of subsections
21 (6) and (8).
22 (3) Within 10 days after the filing of notice pursuant to
23 subsection (2)(b), the corporation shall submit to the
24 commissioner such additional
information and materials , as
25 requested by the commissioner. Within 10 days after receipt of
26 the additional information and materials, the commissioner shall
27 determine whether the filing is in material and substantial
1 compliance with subsections (6) and (8). If the commissioner
2 determines that the filing does not yet materially and
3 substantially meet the requirements of subsections (6) and (8),
4 the commissioner shall give notice to the corporation pursuant to
5 subsection (2)(b) or use visitation of the corporation's
6 facilities and examination of the corporation's records to obtain
7 the necessary information described in the notice issued pursuant
8 to subsection (2)(b). The commissioner shall use either
9 procedure previously mentioned, or a combination of both
10 procedures, in order to obtain the necessary information as
11 expeditiously as possible. The per diem, traveling,
12 reproduction, and other necessary expenses in connection with
13 visitation and examination shall be paid by the corporation, and
14 shall be credited to the general fund of the state.
15 (4) If a filing is approved, approved with modifications, or
16 disapproved under subsection (2)(a), the commissioner shall issue
17 a written order of the approval, approval with modifications, or
18 disapproval. If the filing was approved with modifications or
19 disapproved, the order
shall state specifically in what
20 respects the reasons the filing fails to meet the
requirements
21 of this act and, if applicable, what modifications are required
22 for approval under this act. If the filing was approved with
23 modifications, the order shall state that the filing shall take
24 effect after the modifications are made and approved by the
25 commissioner. If the filing was disapproved, the order shall
26 state that the filing shall not take effect.
27 (5) The inability to approve 1 or more rating classes of
1 business within a line of business because of a requirement to
2 submit further data or because a request for a hearing under
3 section 613 has been granted shall not delay the approval of
4 rates by the commissioner
which that could otherwise be
5 approved or the implementation of rates already approved, unless
6 the approval or implementation would affect the consideration of
7 the unapproved classes of business.
8 (6) Information furnished under subsection (1) in support of
9 a nongroup medicare supplemental rate filing shall include the
10 following:
11 (a) Recent claim experience on the benefits or comparable
12 benefits for which the rate filing applies.
13 (b) Actual prior trend experience.
14 (c) Actual prior administrative expenses.
15 (d) Projected trend factors.
16 (e) Projected administrative expenses.
17 (f) Contributions for risk and contingency reserve factors.
18 (g) Actual health care corporation contingency reserve
19 position.
20 (h) Projected health care corporation contingency reserve
21 position.
22 (i) Other information
which the corporation considers
23 pertinent to evaluating the risks to be rated, or relevant to the
24 determination to be made under this section.
25 (j) Other information
which the commissioner considers
26 pertinent to evaluating the risks to be rated, or relevant to the
27 determination to be made under this section.
1 (7) A copy of the filing, and all supporting information,
2 except for the
information which that may not be disclosed
3 under section 604, shall be open to public inspection as of the
4 date filed with the commissioner.
5 (8) The commissioner shall make available forms and
6 instructions for filing
for proposed rates under sections
7 section 608(1). and
608(2). The forms with instructions shall
8 be available not less than 180 days before the proposed effective
9 date of the filing.
10 Sec. 612. (1) Upon receipt of a nongroup medicare
11 supplemental rate filing under section 610, the commissioner
12 immediately shall notify each person who has requested in writing
13 notice of those filings within the previous 2 years, specifying
14 the nature and extent of the proposed rate revision and
15 identifying the location, time, and place where the copy of the
16 rate filing described in section 610(7) shall be open to public
17 inspection and copying. The notice shall also state that if the
18 person has standing, the person shall have, upon making a written
19 request for a hearing within 60 days after receiving notice of
20 the rate filing, an opportunity for an evidentiary hearing under
21 section 613 to determine whether the proposed rates meet the
22 requirements of this act. The request shall identify the issues
23 which that the requesting party asserts are
involved, what
24 portion of the rate filing is requested to be heard, and how the
25 party has standing. The corporation shall place advertisements
26 giving notice, containing the information specified above, in at
27 least 1 newspaper which
serves serving each geographic area in
1 which significant numbers of subscribers reside.
2 (2) Upon receipt of a rate filing under section 607(1), the
3 commissioner shall notify the attorney general and provide to the
4 attorney general a copy of the proposed rate revision. Upon
5 making a written request for a hearing within 30 days after
6 receiving notice of the rate filing, the attorney general shall
7 have an opportunity for an evidentiary hearing under section 613
8 to determine whether the proposed rates meet the requirements of
9 this act. The request shall identify the issues that the
10 attorney general asserts are involved and what portion of the
11 rate filing is requested to be heard. If the attorney general
12 requests a hearing under section 613, the commissioner shall not
13 approve, approve with modifications, or disapprove a filing until
14 the hearing has been completed and an order issued.
15 (3) (2) The
commissioner may charge a fee for providing,
16 pursuant to subsection (1), a copy of the rate filing described
17 in section 610(7). The commissioner may charge a fee for
18 providing a copy of the entire filing to a person whose request
19 for a hearing has been granted by the commissioner pursuant to
20 section 613. The fee shall be limited to actual mailing costs
21 and to the actual incremental cost of duplication, including
22 labor and the cost of deletion and separation of information as
23 provided in section 14 of
Act No. 442 of the Public Acts of
24 1976, being section
15.244 of the Michigan Compiled Laws the
25 freedom of information act, 1976 PA 442, MCL 15.244. Copies of
26 the filing may be provided free of charge or at a reduced charge
27 if the commissioner determines that a waiver or reduction of the
1 fee is in the public interest because the furnishing of a copy of
2 the filing will primarily benefit the general public. In
3 calculating the costs under this subsection, the commissioner
4 shall not attribute more than the hourly wage of the lowest paid,
5 full-time clerical
employee of the insurance bureau office of
6 financial and insurance services to the cost of labor incurred in
7 duplication and mailing and to the cost of separation and
8 deletion. The commissioner shall use the most economical means
9 available to provide copies of a rate filing.
10 Sec. 613. (1) If the request for a hearing under this
11 section is with regard to a rate filing not yet acted upon under
12 section 610(2)(a) or section 612(2), no such action shall be
13 taken by the commissioner until after the hearing has been
14 completed. However, the commissioner shall proceed to act upon
15 those portions of a rate filing upon which no hearing has been
16 requested. Within 15 days after receipt of a request for a
17 hearing, the commissioner shall determine if the person has
18 standing. If the commissioner determines that the person has
19 standing, the person may have access to the entire filing subject
20 to the same confidentiality requirements as the commissioner
21 under section 604 , and
shall be is subject to the penalty
22 provision of section 604(5). Upon determining that the person
23 has standing, the commissioner shall immediately appoint an
24 independent hearing officer before whom the hearing shall be
25 held. In appointing an independent hearing officer, the
26 commissioner shall select a person qualified to conduct hearings,
27 who has experience or education in the area of health care
1 corporation or insurance rate determination and finance, and who
2 is not otherwise associated financially with a health care
3 corporation or a health care provider. The person selected shall
4 not be currently or actively employed by this state. For
5 purposes of this subsection, an employee of an educational
6 institution shall not be considered to be employed by this
7 state. For purposes of this section, a person has "standing" if
8 any of the following circumstances exist:
9 (a) The person is, or there are reasonable grounds to believe
10 that the person could be, aggrieved by the proposed rate.
11 (b) The person is acting on behalf of 1 or more named persons
12 described in subdivision (a).
13 (c) The person is the commissioner, the attorney general, or
14 the health care corporation.
15 (2) Not more than 30 days after receipt of a request for a
16 hearing, and upon not less than 15 days' notice to all parties,
17 the hearing shall be commenced. Each party to the hearing shall
18 be given a reasonable opportunity for discovery before and
19 throughout the course of the hearing. However, the hearing
20 officer may terminate discovery at any time, for good cause
21 shown. The hearing officer shall conduct the hearing pursuant to
22 the administrative procedures act. The hearing shall be
23 conducted in an expeditious manner. At the hearing, the burden
24 of proving compliance with this act shall be upon the health care
25 corporation.
26 (3) In rendering a proposal for a decision, the hearing
27 officer shall consider the factors prescribed in section 609.
1 (4) Within 30 days after receipt of the hearing officer's
2 proposal for decision, the commissioner shall by order render a
3 decision which shall
include that includes a statement of
4 findings.
5 (5) The commissioner shall withdraw an order of approval or
6 approval with modifications if the commissioner finds that the
7 filing no longer meets the requirements of this act.
8 Sec. 619. (1) The attorney general may bring an action, or
9 apply to the circuit court for a court order, to enjoin a health
10 care corporation from transacting business, receiving,
11 collecting, or disbursing money, or acquiring, holding,
12 protecting, or conveying property if that corporate activity is
13 not authorized under this act or chapter 37 of the insurance code
14 of 1956, 1956 PA 218, MCL 500.3701 to 500.3723.
15 (2) The attorney general may apply to the circuit court for a
16 court order enjoining an alleged violation of this act or chapter
17 37 of the insurance code of 1956, 1956 PA 218, MCL 500.3701 to
18 500.3723, or other equitable or extraordinary relief to enforce
19 this act or chapter 37 of the insurance code of 1956, 1956 PA
20 218, MCL 500.3701 to 500.3723.
21 (3) A political subdivision of this state, an agency of this
22 state, or any person may bring an action in the circuit court for
23 Ingham county for declaratory and equitable relief against the
24 commissioner or to compel the commissioner to enforce this act or
25 chapter 37 of the insurance code of 1956, 1956 PA 218, MCL
26 500.3701 to 500.3723, or rules promulgated under this act.
27 Enacting section 1. This amendatory act does not take
1 effect unless Senate Bill No. 460 of the 92nd Legislature is
2 enacted into law.
3 Enacting section 2. Section 205 of the nonprofit health
4 care corporation reform act, 1980 PA 350, MCL 550.1205, is
5 repealed.