SB-0981, As Passed Senate, March 29, 2012

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 981

A bill to create an autism coverage reimbursement program to

encourage insurance and health coverage providers to provide autism

coverage; to impose certain duties on certain state departments,

agencies, and officials; to create certain funds; to authorize

certain expenditures; and to provide for an appropriation.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 1. This act shall be known and may be cited as the

"autism coverage reimbursement act".

Sec. 3. As used in this act:

(a) "Autism coverage reimbursement program" or "program" means

the autism coverage reimbursement program created under section 5.

(b) "Autism diagnostic observation schedule", "autism spectrum

disorders", "diagnosis of autism spectrum disorders", and

"treatment of autism spectrum disorders" mean those terms as

defined under section 416e of the nonprofit health care corporation

reform act, 1980 PA 350, MCL 550.1416e, and section 3406s of the

insurance code of 1956, 1956 PA 218, MCL 500.3406s.

(i) An insurer or health maintenance organization regulated

under the insurance code of 1956, 1956 PA 218, MCL 500.100 to

500.8302.

(ii) A health care corporation regulated under the nonprofit

health care corporation reform act, 1980 PA 350, MCL 550.1101 to

550.1704.

(iii) A specialty prepaid health plan.

(iv) A group health plan sponsor including, but not limited to,

1 or more of the following:

(A) An employer if a group health plan is established or

maintained by a single employer.

(B) An employee organization if a plan is established or

maintained by an employee organization.

employers or jointly by 1 or more employers and 1 or more employee

organizations, the association, committee, joint board of trustees,

or other similar group of representatives of the parties that

establish or maintain the plan.

(d) "Department" means the department of licensing and

regulatory affairs.

(e) "Excess loss" or "stop loss" means coverage that provides

insurance protection against the accumulation of total claims

exceeding a stated level for a group as a whole or protection

against a high-dollar claim on any 1 individual.

(f) "Federal act" means the federal patient protection and

affordable care act, Public Law 111-148, as amended by the federal

health care and education reconciliation act of 2010, Public Law

111-152, and any regulations promulgated under those acts.

(g) "Federal employee health benefit program" means the

program of health benefits plans, as defined in 5 USC 8901,

available to federal employees under 5 USC 8901 to 8914.

(h) "Fund" means the autism coverage fund created in section

(i) "Group health plan" means an employee welfare benefit plan

as defined in section 3(1) of subtitle A of title I of the employee

retirement income security act of 1974, Public Law 93-406, 29 USC

1002, to the extent that the plan provides medical care, including

items and services paid for as medical care to employees or their

dependents as defined under the terms of the plan directly or

through insurance, reimbursement, or otherwise.

(j) "Medicaid" means the program of medical assistance

established under title XIX of the social security act, 42 USC 1396

to 1396w-5.

(k) "Medicare" means the federal medicare program established

under title XVIII of the social security act, 42 USC 1395 to

1395kkk-1.

(l) "Medicare advantage plan" means a plan of coverage for

health benefits under part C of title XVIII of the social security

act, 42 USC 1395w-21 to 1395w-28.

(m) "Medicare part D" means a plan of coverage for

prescription drug benefits under part D of title XVIII of the

social security act, 42 USC 1395w-101 to 1395w-154.

(n) "Paid claims" means actual payments, net of recoveries,

made for the diagnosis of autism spectrum disorders and treatment

of autism spectrum disorders whether made to a provider or

reimbursed to an individual by a carrier, third party

administrator, or excess loss or stop loss carrier. Paid claims do

not include any of the following:

(i) Claims paid for services rendered to a nonresident of this

state.

(ii) Claims paid for services rendered to a person covered

under a health benefit plan for federal employees.

(iii) Claims paid for services rendered outside of this state to

a person who is a resident of this state.

(iv) Claims paid under a federal employee health benefit

program, medicare, medicare advantage plan, medicare part D,

tricare, by the United States veterans administration, and for

high-risk pools established pursuant to the federal act.

(v) Costs paid by an individual for cost-sharing requirements,

including deductibles, coinsurance, or copays.

(vi) Claims paid by, or on behalf of, this state.

(vii) Claims paid that are covered by medicaid.

(viii) Claims paid for which the carrier or third party

administrator has already been reimbursed or compensated, in whole

or in part, through any increase in premiums or rates or from any

other source.

(ix) Beginning January 1, 2014, claims paid for services that

are included in the essential health benefits as required pursuant

to the federal act.

(o) "Specialty prepaid health plan" means that term as

described in section 109f of the social welfare act, 1939 PA 280,

MCL 400.109f.

(p) "Third party administrator" means an entity that processes

claims under a service contract and that may also provide 1 or more

other administrative services under a service contract.

Sec. 5. (1) No later than 120 days after the effective date of

this act, the department shall create and operate an autism

coverage reimbursement program to encourage carriers to provide

coverage for the diagnosis of autism spectrum disorders and

treatment of autism spectrum disorders and, to the extent coverage

for the diagnosis of autism spectrum disorders and treatment of

autism spectrum disorders is required under section 416e of the

nonprofit health care corporation reform act, 1980 PA 350, MCL

550.1416e, or section 3406s of the insurance code of 1956, 1956 PA

218, MCL 500.3406s, to offset any additional costs that may be

incurred as a result of the mandate.

(2) The department shall develop the application, approval,

and compliance process necessary to operate and manage this

program. The department shall develop and implement the use of an

application form to be used by carriers and third party

administrators who seek reimbursement for the coverage of autism

spectrum disorders. The program standards, guidelines, templates,

and any other forms used by the department to implement this

program shall be published and available on the department's

website.

(3) Subject to the limitations provided under this section,

the program shall, as approved by the department, reimburse

carriers and third party administrators in an amount equal to the

amount of paid claims that are paid 180 days after the effective

date of this act by the carrier or third party administrator. A

carrier or third party administrator shall apply, on the form

prescribed by the department, for approval of funding associated

with paid claims. As part of the application, the applicant shall

include the results from a completed autism diagnostic observation

schedule or the results from any other annual development

evaluation and documentation verifying those paid claims for which

they are seeking reimbursement under this program. In determining

whether to approve an application for the reimbursement of paid

claims under this section, the department may review whether the

treatment for which the paid claims were paid is consistent with

current protocols and cost-containment practices as described in

section 416e of the nonprofit health care corporation reform act,

1980 PA 350, MCL 550.1416e, or section 3406s of the insurance code

of 1956, 1956 PA 218, MCL 500.3406s. The department shall review

and consider applications in the order in which they are received

and shall approve or deny an application within 30 days after

receipt of the application.

(4) To the extent there is a cap on the amount of coverage

mandated under section 416e of the nonprofit health care

corporation reform act, 1980 PA 350, MCL 550.1416e, or section

3406s of the insurance code of 1956, 1956 PA 218, MCL 500.3406s,

Senate Bill No. 981 (H-2) as amended March 28, 2012

the department shall not approve more than the mandated amount to

any carrier or third party administrator that seeks reimbursement

under this act for paid claims.

(5) If a third party administrator receives any funding under

this program, the third party administrator shall apply that

funding to the benefit of the carrier covering the claim upon which

the funding was received.

[(6) If the department determines at the end of the fiscal year that a carrier was not fully reimbursed for paid claims paid due to a shortfall in the reimbursement fund for the fiscal year, and the carrier increases its rates in the following year to cover the total amount of such unreimbursed paid claims, the rate increase shall not be considered reimbursement or compensation for paid claims paid under section 3(n)(viii), if the commissioner determines that such rate increase is a reasonable recoupment of the amount of such unreimbursed paid claims.]

Sec. 7. (1) The autism coverage fund is created within the

state treasury.

(2) The state treasurer may receive money or other assets from

any source for deposit into the fund. The state treasurer shall

direct the investment of the fund. The state treasurer shall credit

to the fund interest and earnings from fund investments.

(3) The department shall be the administrator of the fund for

auditing purposes. The department shall expend money from the fund,

upon appropriation, only for the purpose of creating, operating,

and funding the program.

(4) The department shall reimburse carriers and third party

administrators from the fund in the order in which the applications

are approved under the program. If there is insufficient money in

the fund to reimburse a carrier or third party administrator for

paid claims approved under section 5, then reimbursement shall not

be made. However, applications that are approved but not reimbursed

may be paid if revenues of the fund become available.

(5) The department shall develop and implement a process to

notify carriers, third party administrators, and the legislature

Senate Bill No 981 (H-2) as amended March 28, 2012

that funds in this program may be insufficient to cover future

claims when the department reasonably believes that within 60 days

the funds in the program will be insufficient to pay claims. The

process shall, at a minimum, do all of the following:

(a) Identify a specific date by which carriers and third party

administrators will no longer receive reimbursement for claims

submitted to the program.

(b) Outline a clear process indicating the order in which

claims pending with the program will be paid.

claims that were pending with the program when funds became

insufficient will be paid if funds subsequently become available.

(6) Money in the fund at the close of the fiscal year shall

remain in the fund and shall not lapse to the general fund.

Sec. 9. The department shall submit an annual report to the

state budget director and the senate and house of representatives

standing committees on appropriations not later than April 1 of

each year that includes, but is not limited to, all of the

following:

(a) The total number of applications received under this

program in the immediately preceding calendar year.

(b) The number of applications approved and the total amount

of funding awarded under this program in the immediately preceding

calendar year.

program in the immediately preceding calendar year.

Sec. 11. (1) The department shall not implement the program

under this act until the legislature has appropriated sufficient

funds to cover the same.

(2) Not more than 1% of the annual appropriation made to the

autism coverage fund may be used for the purpose of administering

the program authorized under this act.

Enacting section 1. This act does not take effect unless all

of the following bills of the 96th Legislature are enacted into

law:

(a) Senate Bill No. 414.

(b) Senate Bill No. 415.