Bill Text: MI SB1038 | 2017-2018 | 99th Legislature | Engrossed
Bill Title: Human services; medical services; audit of Medicaid cost reports; modify and create deadlines for completion. Amends 1939 PA 280 (MCL 400.1 - 400.119b) by adding sec. 111m.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2018-12-31 - Assigned Pa 612'18 With Immediate Effect 12/31/18 Addenda [SB1038 Detail]
Download: Michigan-2017-SB1038-Engrossed.html
SB-1038, As Passed Senate, November 8, 2018
SUBSTITUTE FOR
SENATE BILL NO. 1038
A bill to amend 1939 PA 280, entitled
"The social welfare act,"
(MCL 400.1 to 400.119b) by adding section 111m.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 111m. (1) As used in this section and section 111n:
(a) "Audit" means a review of the financial records used to
complete a Medicaid cost report for compliance with allowable cost
principles and other policy contained in the Medicaid provider
manual. Audit includes, but is not limited to, a limited-scope
audit or an on-site audit. An audit can be of limited or full
scope.
(b) "Completed audit" means issuance of the preliminary
summary of audit adjustment notice. Completed audit includes the
exit meeting with the nursing facility provider.
(c) "Medicaid cost report" or "cost report" means the cost of
care reports submitted annually by a nursing facility that is
participating in the Medicaid program at a utilization rate on
average of at least 6 Medicaid residents, on department cost
reporting forms. A nursing facility provider with less than 6
Medicaid residents per day must file a "less than complete" cost
report and is not subject to audit.
(d) "Settlement" means the process of reconciling a nursing
facility's interim payments based on filed cost report data to
audited cost report data. A final settlement is computed after the
cost report has been audited.
(2) The department shall accept a Medicaid cost report filed
by a nursing facility not more than 60 calendar days after that
nursing facility has filed the cost report.
(3) The department shall ensure that an audit of a Medicaid
cost report filed by a nursing facility performed by the department
is completed not more than 21 months after the final acceptance of
the cost report. The settlement for an audit shall be delivered to
the provider not more than 60 calendar days after the provider
accepts the final summary of audit adjustments. If a provider fails
to release the records necessary to verify a specific cost report
expense within 15 business days of a written request from the
department, the department may disallow the cost associated with
the item in question. The time period described in this subsection
does not include time associated with an appeal or a charge of
fraud filed against the provider.
(4) An on-site audit may be performed at an individual nursing
facility or at the corporate office if a home office cost report is
filed. An on-site audit shall not last more than 30 calendar days
per cost report year for an individual nursing facility and not
more than 180 calendar days per cost report year for more than 6
commonly owned or controlled nursing facilities, unless the nursing
facility agrees to an extended timeline. A limited-scope audit
shall be performed in the years an on-site audit is not performed.
The time periods described in this subsection must be completed
within the 21-month time period described in subsection (3).
(5) A customer satisfaction survey shall be provided to the
nursing facilities that have completed audits in the previous
quarter.
(6) A nursing facility shall make available to an auditor
documentation required in accordance with the Medicaid state plan,
the Medicaid provider manual, and the Code of Federal Regulations
relating to Medicare or Medicaid. A nursing facility shall enhance
utilization of electronic documents and correspondence to exchange
information to reduce time and travel required for nursing facility
audits.
(7) If an audit is not completed within 21 months as described
in subsection (3), the department shall accept the cost report as
filed and move to settlement.
(8) The department shall provide auditor education to ensure
consistency in application of department policy. The department
shall include an ongoing discussion of all audit adjustments to
ensure consistency in applying department policy and shall identify
and eliminate any inconsistencies between offices with this
training.
(9) Not later than 1 year after the effective date of the
amendatory act that added this section, an external review by a
third party of the office of audit's practices related to nursing
facility providers' filing of Medicaid cost reports and audits and
settlements shall be completed. The purpose of the external review
shall be to compare the efficiency and cost-benefit effectiveness
of existing department audit practices with contracting functions
of audits or settlements to a third party. The department is
responsible for obtaining the external review and shall provide the
completed review to the legislature. The third party must be
independent from the department, Medicaid providers, provider trade
association members, and nursing facility cost report preparers or
consultants.
(10) Not later than 2 years after the effective date of the
amendatory act that added this section, the department must
finalize all audits and settlements for cost reports that have been
filed since before the effective date of the amendatory act that
added this section. A cost report described under this subsection
that has not been completed by the department within 2 years of the
effective date of the amendatory act that added this section must
be accepted by the department as filed by the nursing facility, and
a cost report settlement must be issued within 60 calendar days
after acceptance.
(11) Beginning 2 years after the effective date of the
amendatory act that added this section, the department shall
provide an annual report to the appropriate stakeholders, including
at least 1 representative from each nursing facility provider trade
association, on the implementation and results of the cost report
audit and settlement process established under this section. The
report shall include, but is not limited to, both of the following:
(a) The number of limited-scope audits, on-site audits, and
any other type of audit performed during the reporting period.
(b) Results of the audit satisfaction surveys and how the
department has responded to those surveys.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
