Bill Text: MI HB4034 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Human services; medical services; use of pooled trusts for medicaid eligibility; authorize. Amends sec. 106 of 1939 PA 280 (MCL 400.106) & adds sec. 106b.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Introduced - Dead) 2015-01-20 - Printed Bill Filed 01/16/2015 [HB4034 Detail]

Download: Michigan-2015-HB4034-Introduced.html

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HOUSE BILL No. 4034

 

January 15, 2015, Introduced by Reps. Heise and Poleski and referred to the Committee on Families, Children, and Seniors.

 

     A bill to amend 1939 PA 280, entitled

 

"The social welfare act,"

 

by amending section 106 (MCL 400.106), as amended by 2013 PA 107,

 

and by adding section 106b.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

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

 

     (a) An individual receiving family independence program

 

benefits or an individual receiving supplemental security income

 

under title XVI or state supplementation under title XVI subject to

 

limitations imposed by the director according to title XIX.

 

     (b) Except as provided in section 106a, an individual who

 

meets all of the following conditions:

 

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

 

community health prescribes.

 

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

 

available under this act for which the individual applied has been

 

professionally established and payment for it is not available

 

through the legal obligation of a public or private contractor to

 

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

 

resources of the patient. The state department and the department

 

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

 

patient may have for the cost of hospitalization, pharmaceutical

 

services, physician services, nursing services, and other medical

 

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

 

department or the department of community health for the care and

 

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

 

patient's behalf shall execute and deliver an assignment of claim

 

or other authorizations as necessary to secure the right of

 

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

 

payment may be withheld under this act for medical assistance for

 

an injury or disability for which the individual is entitled to

 

medical care or reimbursement for the cost of medical care under

 

sections 3101 to 3179 of the insurance code of 1956, 1956 PA 218,

 

MCL 500.3101 to 500.3179, or under another policy of insurance

 

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

 

unless the individual's entitlement to that medical care or

 

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

 

department or the department of community health, to enforce its

 

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

 

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

 

or disabled individual, the individual's guardian, personal

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

personal representative, estate, dependents, or survivors. The

 

state department may institute the proceedings in its own name or

 

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

 

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

 

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

 

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

 

department of community health, in enforcing its subrogation right,

 

shall not satisfy a judgment against the third person's property

 

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

 

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

 

the costs without the necessity of joining the state department,

 

the department of community health, or the state as a named party.

 

The injured, diseased, or disabled individual shall notify the

 

state department or the department of community health of the

 

action or proceeding entered into upon commencement of the action

 

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

 

or the department of community health in connection with the right

 

of recovery afforded by this section does not deny the injured,

 

diseased, or disabled individual any part of the recovery beyond

 

the costs expended on the individual's behalf by the state

 

department or the department of community health. The costs of

 

legal action initiated by the state shall be paid by the state. A

 

payment shall not be made under this act for medical assistance for

 

an injury, disease, or disability for which the individual is

 

entitled to medical care or the cost of medical care under the

 

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

 

418.101 to 418.941; except that payment may be made if an

 

appropriate application for medical care or the cost of the medical

 

care has been made under the worker's disability compensation act

 

of 1969, 1969 PA 317, MCL 418.101 to 418.941, entitlement has not

 

been finally determined, and an arrangement satisfactory to the

 

state department or the department of community health has been

 

made for reimbursement if the claim under the worker's disability

 

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

 

finally sustained.

 

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

 

subject to limitations imposed by the director and because of

 

medical expenses falls below, the protected basic maintenance

 

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

 

person families shall be at least 100% of the payment standards

 

generally used to determine eligibility in the family independence

 

program. For families of 3 or more persons, the protected basic

 

maintenance level shall be at least 100% of the payment standard

 

generally used to determine eligibility in the family independence

 

program. These levels shall recognize regional variations and shall

 

not exceed 133-1/3% of the payment standard generally used to

 

determine eligibility in the family independence program. For

 

purposes of this subparagraph, annual income does not include

 

income assigned to a pooled trust described in section 106b.

 

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

 

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

 

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

 

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

 

value. The department of community health shall establish

 

comparable liquid or marketable asset amounts for larger family

 

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

 

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

 

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

 

insurance, except that if the health of the insured makes

 

continuance of the insurance desirable, the entire cash surrender

 

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

 

maximum provided or allowed by federal regulations and in

 

accordance with department of community health rules; the fair

 

market value of tangible personal property used in earning income;

 

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

 

result of exposure to agent orange, as defined in section 5701 of

 

the public health code, 1978 PA 368, MCL 333.5701; and a space or

 

plot purchased for the purposes of burial for the person; and

 

assets, without regard to value, held by, or transferred to, a

 

trustee of a pooled trust as described in section 106b for the

 

benefit of the individual. For individuals related to the title XVI

 

program, the appropriate resource levels and property exemptions

 

specified in title XVI shall be used.

 

     (v) The individual is not an inmate of a public institution

 

except as a patient in a medical institution.

 

     (vi) The individual meets the eligibility standards for

 

supplemental security income under title XVI or for state

 

supplementation under the act, subject to limitations imposed by

 

the director of the department of community health according to

 

title XIX; or meets the eligibility standards for family

 

independence program benefits; or meets the eligibility standards

 

for optional eligibility groups under title XIX, subject to

 

limitations imposed by the director of the department of community

 

health according to title XIX.

 

     (c) An individual is eligible under section

 

1396a(a)(10)(A)(i)(VIII) of title XIX. This subdivision does not

 

apply if either of the following occurs:

 

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

 

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

 

     (ii) If federal government matching funds for the program

 

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

 

savings and other nonfederal net savings associated with the

 

implementation of that program are not sufficient to cover the

 

reduced federal match. The department of community health shall

 

determine and the state budget office shall approve how annual

 

state savings and other nonfederal net savings shall be calculated

 

by June 1, 2014. By September 1, 2014, the calculations and

 

methodology used to determine the state and other nonfederal net

 

savings shall be submitted to the legislature.

 

     (2) As used in this act:

 

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

 

with whom the state department or the department of community

 

health contracts to provide or arrange for the delivery of

 

comprehensive health care services as authorized under this act.

 

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

 

published annually in the federal register by the United States

 

department of health and human services under its authority to

 

revise the poverty line under section 673(2) of subtitle B of title

 

VI of the omnibus budget reconciliation act of 1981, 42 USC 9902.

 

     (c) "Medical institution" means a state licensed or approved

 

hospital, nursing home, medical care facility, psychiatric

 

hospital, or other facility or identifiable unit of a listed

 

institution certified as meeting established standards for a

 

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

 

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

 

USC 1381 to 1383f.

 

     (3) An individual receiving medical assistance under this act

 

or his or her legal counsel shall notify the state department or

 

the department of community health when filing an action in which

 

the state department or the department of community health may have

 

a right to recover expenses paid under this act. If the individual

 

is enrolled in a contracted health plan, the individual or his or

 

her legal counsel shall provide notice to the contracted health

 

plan in addition to providing notice to the state department.

 

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

 

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

 

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

 

settled after November 29, 2004 without notice to the state

 

department, the department of community health, or the contracted

 

health plan, the state department, the department of community

 

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

 

against the individual or his or her legal counsel, or both, to

 

recover expenses paid under this act. The attorney general shall

 

recover any cost or attorney fees associated with a recovery under

 

this subsection.

 

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

 

has first priority against the proceeds of the net recovery from

 

the settlement or judgment in an action settled in which notice has

 

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

 

priority immediately after the state department or the department

 

of community health in an action settled in which notice has been

 

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

 

of community health, and a contracted health plan shall recover the

 

full cost of expenses paid under this act unless the state

 

department, the department of community health, or the contracted

 

health plan agrees to accept an amount less than the full amount.

 

If the individual would recover less against the proceeds of the

 

net recovery than the expenses paid under this act, the state

 

department, the department of community health, or contracted

 

health plan, and the individual shall share equally in the proceeds

 

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

 

means the total settlement or judgment less the costs and fees

 

incurred by or on behalf of the individual who obtains the

 

settlement or judgment.

 

     Sec. 106b. (1) The department of community health shall

 

establish rules, regulations, and policies that are in compliance

 

with, and not more restrictive than, existing federal law,

 

regulations, and policies with regard to the treatment of a pooled

 

trust described in this section.

 

     (2) The transfer of assets to a pooled trust is subject to the

 

imposition of a penalty under the transfer of assets provisions of

 

42 USC 1396p(c) unless the pooled trust agreement meets the

 

requirements under subsection (4)(e). The department may require

 

verification that the requirements of subsection (4)(e) are met at

 

a periodic redetermination of the beneficiary's eligibility for

 

medical assistance.

 

     (3) A joinder agreement may be entered into by any of the

 

following:

 

     (a) A competent individual 65 years of age or older.

 

     (b) A competent disabled individual of any age.

 

     (c) On behalf of an individual 65 years of age or older or a

 

disabled individual of any age, any of the following:

 

     (i) A parent.

 

     (ii) A grandparent.

 

     (iii) A guardian.

 

     (iv) A conservator.

 

     (v) A court.

 

     (vi) A person named as attorney-in-fact through a durable power

 

of attorney that authorizes the attorney-in-fact to enter into a

 

joinder agreement or similar agreement.

 

     (4) As used in this section:

 

     (a) "Beneficiary" means a disabled individual or an individual

 

65 years of age or older who has entered into a joinder agreement.

 

     (b) "Disability" means a physical or mental impairment as

 

described in section 1614 of the social security act, 42 USC 1382c.

 

     (c) "Disabled individual" means an individual with a

 

disability, including an individual who has satisfied the Michigan

 

medicaid nursing facility level of care requirements established by

 

the department of community health.

 

     (d) "Joinder agreement" means an agreement between a trustee

 

and a beneficiary that contains the terms and conditions of the

 

relationship between the trustee and the beneficiary.

 

     (e) "Pooled trust" means a trust that meets all of the

 

following requirements:

 

     (i) The trust meets the requirements under 42 USC

 

1396p(d)(4)(C).

 

     (ii) The trustee maintains an account for each beneficiary.

 

     (iii) The trustee pools accounts for purposes of investment and

 

management of funds.

 

     (iv) The trustee uses funds in the beneficiary's account for

 

the sole benefit of the beneficiary.

 

     (v) Upon the death of a beneficiary, the trustee may retain

 

assets that remain in the beneficiary's account, without limit to

 

dollar amount, in the pooled trust. With respect to assets that

 

remain in the beneficiary's account and that are not retained by

 

the trust, the trustee shall reimburse this state in an amount

 

equal to the total amount of medical assistance paid by this state

 

on behalf of the beneficiary before distributing those assets to

 

other individuals or using those assets for any other purpose.

 

     (vi) The trustee purchases items and services for the

 

beneficiary at fair market value.

 

     (f) "Trustee" means a nonprofit organization that manages a

 

pooled trust. A determination of the internal revenue service, the

 

department of treasury, or both, regarding the nonprofit status of

 

an organization operating a pooled trust is sufficient to satisfy

 

the nonprofit requirement of 42 USC 1396p(d)(4)(C).