April 29, 2008, Introduced by Reps. Garfield, Nitz, Nofs, Hoogendyk, Vagnozzi, Lemmons, Palmer, Caul, Pastor, Wenke and Casperson and referred to the Committee on Insurance.
A bill to amend 1980 PA 350, entitled
"The nonprofit health care corporation reform act,"
(MCL 500.1101 to 500.1704) by adding section 602a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 602a. (1) In addition to any other requirement of this
act regarding visitations and audits of a health care corporation,
a forensic audit of a health care corporation shall be conducted
every 3 years as provided in this section. The forensic audit shall
examine claims payments and reimbursement procedures and practices
by the health care corporation for all of the health care
corporation's health care business including administrative
services only and cost plus arrangements. The forensic audit shall
be conducted for, at a minimum, the immediately preceding 3-year
period but may be extended for a period of not more than the
immediately preceding 4 years if necessary to adjust for and
coordinate with the health care corporation's fiscal year and
reimbursement activities. The forensic audit shall include, but is
not limited to, a comprehensive examination and analysis of all of
the following:
(a) The amounts and methods of reimbursement for health care
services.
(b) Utilization and review functions in the payment processing
and reimbursement system.
(c) Identification of instances of false claim activities.
(d) Identification of instances of noncompliance with this act
and applicable law.
(e) A review of provider relations as they affect
reimbursement policies.
(f) A complete accounting of reimbursement expenditures and
administrative expenses and other costs.
(g) Any fraudulent activity.
(2) The forensic audit required in subsection (1) shall be
conducted by an accounting firm selected by the commissioner
skilled in examining the areas of health care claims and recovery.
The accounting firm shall not be associated in any way with the
health care corporation, including, but not limited to, having any
contractual, employment, or financial interest with the health care
corporation.
(3) The results of the forensic audit required under
subsection (1) shall be reported to the governor, the commissioner,
the attorney general, the auditor general, and the house and senate
standing committees on health, insurance, senior citizens, and
public welfare issues. The report shall detail the results of the
audit and shall include any trends and any recommendations for
improvements and corrections.
(4) The commissioner and the attorney general shall act upon
any violations of law discovered in the forensic audit, including,
but not limited to, any sanctions and recovery procedures provided
for under this act.
(5) The first forensic audit required under this section shall
occur 90 days after the effective date of the amendatory act that
added this section.