November 12, 2008, Introduced by Senator CROPSEY and referred to the Committee on Economic Development and Regulatory Reform.
A bill to amend 1980 PA 350, entitled
"The nonprofit health care corporation reform act,"
by amending section 207 (MCL 550.1207), as amended by 2003 PA 59.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 207. (1) A health care corporation, subject to any
limitation provided in this act, in any other statute of this
state, or in its articles of incorporation, may do any or all of
the following:
(a) Contract to provide computer services and other
administrative consulting services to 1 or more providers or groups
of providers, if the services are primarily designed to result in
cost savings to subscribers.
(b) Engage in experimental health care projects to explore
more efficient and economical means of implementing the
corporation's programs, or the corporation's goals as prescribed in
section 504 and the purposes of this act, to develop incentives to
promote alternative methods and alternative providers, including
nurse midwives, nurse anesthetists, and nurse practitioners, for
delivering health care, including preventive care and home health
care.
(c) For the purpose of providing health care services to
employees of this state, the United States, or an agency,
instrumentality, or political subdivision of this state or the
United States, or for the purpose of providing all or part of the
costs of health care services to disabled, aged, or needy persons,
contract with this state, the United States, or an agency,
instrumentality, or political subdivision of this state or the
United States.
(d) For the purpose of administering any publicly supported
health benefit plan, accept and administer funds, directly or
indirectly, made available by a contract authorized under
subdivision (c), or made available by or received from any private
entity.
(e) For the purpose of administering any publicly supported
health benefit plan, subcontract with any organization that has
contracted with this state, the United States, or an agency,
instrumentality, or political subdivision of this state or the
United States, for the administration or furnishing of health
services or any publicly supported health benefit plan.
(f) Provide administrative services only and cost-plus
arrangements
for the federal medicare program established by parts
A
and B of under title XVIII of the social security act, chapter
531,
49 Stat. 620, 42 U.S.C. 1395c to 1395i, 1395i-2 to 1395i-5,
1395j
to 1395t, 1395u to 1395w, and 1395w-2 to 1395w-4 42 USC 1395
to 1395hhh; for the federal medicaid program established under
title
XIX of the social security act, chapter 531, 49 Stat. 620, 42
U.S.C.
1396 to 1396r-6, and 1396r-8 to 1396v 42 USC 1396 to 1396v;
for
title V of the social security act, chapter 531, 49 Stat. 620,
42
U.S.C. USC 701 to 704 and 705 to 710; for the program of
medical
and dental care established by the military medical benefits
amendments
of 1966, Public Law 85-861; , 80 Stat. 862; for the
Detroit maternity and infant care--preschool, school, and
adolescent project; and for any other health benefit program
established under state or federal law.
(g) Provide administrative services only and cost-plus
arrangements for any noninsured health benefit plan, subject to the
requirements of sections 211 and 211a.
(h) Establish, own, and operate a health maintenance
organization, subject to the requirements of the insurance code of
1956, 1956 PA 218, MCL 500.100 to 500.8302.
(i) Guarantee loans for the education of persons who are
planning to enter or have entered a profession that is licensed,
certified, or registered under parts 161 to 182 of the public
health code, 1978 PA 368, MCL 333.16101 to 333.18237, and has been
identified by the commissioner, with the consultation of the office
of health and medical affairs in the department of management and
budget, as a profession whose practitioners are in insufficient
supply in this state or specified areas of this state and who
agree, as a condition of receiving a guarantee of a loan, to work
in this state, or an area of this state specified in a listing of
shortage areas for the profession issued by the commissioner, for a
period of time determined by the commissioner.
(j) Receive donations to assist or enable the corporation to
carry out its purposes, as provided in this act.
(k) Bring an action against an officer or director of the
corporation.
(l) Designate and maintain a registered office and a resident
agent in that office upon whom service of process may be made.
(m) Sue and be sued in all courts and participate in actions
and proceedings, judicial, administrative, arbitrative, or
otherwise, in the same cases as natural persons.
(n) Have a corporate seal, alter the seal, and use it by
causing the seal or a facsimile to be affixed, impressed, or
reproduced in any other manner.
(o) Subject to chapter 9 of the insurance code of 1956, 1956
PA 218, MCL 500.901 to 500.947, invest and reinvest its funds and,
for investment purposes only, purchase, take, receive, subscribe
for, or otherwise acquire, own, hold, vote, employ, sell, lend,
lease, exchange, transfer, or otherwise dispose of, mortgage,
pledge, use, and otherwise deal in and with, bonds and other
obligations, shares, or other securities or interests issued by
entities other than domestic, foreign, or alien insurers, as
defined in sections 106 and 110 of the insurance code of 1956, 1956
PA 218, MCL 500.106 and 500.110, whether engaged in a similar or
different business, or governmental or other activity, including
banking corporations or trust companies. However, a health care
corporation may purchase, take, receive, subscribe for, or
otherwise acquire, own, hold, vote, employ, sell, lend, lease,
exchange, transfer, or otherwise dispose of bonds or other
obligations, shares, or other securities or interests issued by a
domestic, foreign, or alien insurer, so long as the activity meets
all of the following:
(i) Is determined by the attorney general to be lawful under
section 202.
(ii) Is approved in writing by the commissioner as being in the
best interests of the health care corporation and its subscribers.
(iii) For an activity that occurred before the
effective date of
the
amendatory act that added subparagraph (iv) July
23, 2003, will
not result in the health care corporation owning or controlling 10%
or more of the voting securities of the insurer or will not
otherwise result in the health care corporation having control of
the
insurer, either before or after the effective date of the
amendatory
act that added subparagraph (iv) July 23, 2003.
As used
in this subparagraph and subparagraph (iv), "control" means that
term as defined in section 115 of the insurance code of 1956, 1956
PA 218, MCL 500.115.
(iv) Subject to section 218 and beginning on the
effective date
of
the amendatory act that added this subparagraph July 23, 2003,
will not result in the health care corporation owning or
controlling part or all of the insurer unless the transaction
satisfies chapter 13 of the insurance code of 1956, 1956 PA 218,
MCL 500.1301 to 500.1379, and the insurer being acquired is only
authorized to sell disability insurance as defined under section
606 of the insurance code of 1956, 1956 PA 218, MCL 500.606, or
under a statute or regulation in the insurer's domiciliary
jurisdiction that is substantially similar to section 606 of the
insurance code of 1956, 1956 PA 218, MCL 500.606.
(p) Purchase, receive, take by grant, gift, devise, bequest or
otherwise, lease, or otherwise acquire, own, hold, improve, employ,
use and otherwise deal in and with, real or personal property, or
an interest therein, wherever situated.
(q) Sell, convey, lease, exchange, transfer or otherwise
dispose of, or mortgage or pledge, or create a security interest
in, any of its property, or an interest therein, wherever situated.
(r) Borrow money and issue its promissory note or bond for the
repayment of the borrowed money with interest.
(s) Make donations for the public welfare, including hospital,
charitable, or educational contributions that do not significantly
affect rates charged to subscribers.
(t) Participate with others in any joint venture with respect
to any transaction that the health care corporation would have the
power to conduct by itself.
(u) Cease its activities and dissolve, subject to the
commissioner's authority under section 606(2).
(v) Make contracts, transact business, carry on its
operations, have offices, and exercise the powers granted by this
act in any jurisdiction, to the extent necessary to carry out its
purposes under this act.
(w) Have and exercise all powers necessary or convenient to
effect any purpose for which the corporation was formed.
(x) Notwithstanding subdivision (o) or any other provision of
this act, establish, own, and operate a domestic stock insurance
company only for the purpose of acquiring, owning, and operating
the state accident fund pursuant to chapter 51 of the insurance
code of 1956, 1956 PA 218, MCL 500.5100 to 500.5114, so long as all
of the following are met:
(i) For insurance products and services the insurer, whether
directly or indirectly through 1 or more subsidiaries, only
transacts worker's compensation insurance and employer's liability
insurance, transacts disability insurance limited to replacement of
loss of earnings, and acts as an administrative services
organization for an approved self-insured worker's compensation
plan or a disability insurance plan limited to replacement of loss
of earnings and does not transact any other type of insurance
notwithstanding the authorization in chapter 51 of the insurance
code of 1956, 1956 PA 218, MCL 500.5100 to 500.5114. This
subparagraph
does not preclude the insurer, from providing either
whether directly or indirectly through 1 or more subsidiaries, from
providing noninsurance products and services as otherwise provided
by law.
(ii) The activity is determined by the attorney general to be
lawful under section 202.
(iii) The health care corporation does not directly or
indirectly subsidize the use of any provider or subscriber
information, loss data, contract, agreement, reimbursement
mechanism or arrangement, computer system, or health care provider
discount to the insurer.
(iv) Members of the board of directors, employees, and officers
of the health care corporation are not, directly or indirectly,
employed by the insurer unless the health care corporation is
fairly and reasonably compensated for the services rendered to the
insurer if those services were paid for by the health care
corporation.
(v) Health care corporation and subscriber funds are used only
for the acquisition from the state of Michigan of the assets and
liabilities of the state accident fund.
(vi) Health care corporation and subscriber funds are not used
to operate or subsidize in any way the insurer including the use of
such funds to subsidize contracts for goods and services. This
subparagraph does not prohibit joint undertakings between the
health care corporation and the insurer to take advantage of
economies of scale or arm's-length loans or other financial
transactions between the health care corporation and the insurer.
(2) In order to ascertain the interests of senior citizens
regarding the provision of medicare supplemental coverage, as
described in section 202(1)(d)(v), and to ascertain the interests of
senior citizens regarding the administration of the federal
medicare program when acting as fiscal intermediary in this state,
as described in section 202(1)(d)(vi), a health care corporation
shall consult with the office of services to the aging and with
senior citizens' organizations in this state.
(3) An act of a health care corporation, otherwise lawful, is
not invalid because the corporation was without capacity or power
to do the act. However, the lack of capacity or power may be
asserted:
(a) In an action by a director or a member of the corporate
body against the corporation to enjoin the doing of an act.
(b) In an action by or in the right of the corporation to
procure a judgment in its favor against an incumbent or former
officer or director of the corporation for loss or damage due to an
unauthorized act of that officer or director.
(c) In an action or special proceeding by the attorney general
to enjoin the corporation from the transacting of unauthorized
business, to set aside an unauthorized transaction, or to obtain
other equitable relief.
(4) A health care corporation shall not condition the sale or
vary the terms or conditions of any product sold by the corporation
or by a subsidiary of the corporation by requiring the purchase of
any other product from the corporation or from a subsidiary of the
corporation.
Enacting section 1. This amendatory act is curative and
intended to express the original intent of the legislature in 1999
PA 210.