Bill Text: MI HB5984 | 2011-2012 | 96th Legislature | Introduced

---

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 1-0)

Status: (Introduced - Dead) 2012-11-27 - Printed Bill Filed 11/09/2012 [HB5984 Detail]

Download: Michigan-2011-HB5984-Introduced.html

---

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 5984

 

November 8, 2012, Introduced by Rep. Heise 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 2006 PA 144,

 

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 family

 

independence agency department 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 is 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 money expended by the state department 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. 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, 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 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; (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, 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 or the this state as a named party.

 

The injured, diseased, or disabled individual shall notify the

 

state department of the action or proceeding entered into upon

 

commencement of the action or proceeding. An action taken by the

 

this state or the state department 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. The costs of legal action initiated by the this state

 

shall be paid by the this 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 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 state department 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 insured's health of the insured makes

 

continuance of continuing 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 state department 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 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 according to

 

title XIX.

 

     (2) As used in this act:

 

     (a) "Medicaid contracted health plan" means a managed care

 

organization with whom the state department contracts to provide or

 

arrange for the delivery of comprehensive health care services as

 

authorized under this act.

 

     (b) "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.

 

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

 

USC 1381 to 1382j and 1383 to 1383f.1385.

 

     (3) An individual receiving medical assistance under this act

 

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

 

filing an action in which the state department may have a right to

 

recover expenses paid under this act. If the individual is enrolled

 

in a medicaid contracted health plan, the individual or his or her

 

legal counsel shall provide notice to the medicaid contracted

 

health plan in addition to providing notice to the state

 

department.

 

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

 

medicaid contracted health plan, or both has have a right to

 

recover expenses paid under this act is filed and settled after

 

November 29, 2004 without notice to the state department or the

 

medicaid contracted health plan, the state department or the

 

medicaid 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 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 medicaid contracted health plan has priority immediately

 

after the state department in an action settled in which notice has

 

been provided under subsection (3). The state department and a

 

medicaid contracted health plan shall recover the full cost of

 

expenses paid under this act unless the state department or the

 

medicaid 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 or medicaid 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 state department 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 state department shall not impose a penalty on an

 

individual, or delay eligibility for medical assistance, for

 

entering into a joinder agreement, transferring assets to a pooled

 

trust, or both.

 

     (3) A joinder agreement may be entered into by a disabled

 

individual of any age, or on behalf of a disabled individual, by

 

any of the following:

 

     (a) With the permission or consent, or both, of the disabled

 

individual, a parent.

 

     (b) With the permission or consent, or both, of the disabled

 

individual, a grandparent.

 

     (c) A guardian.

 

     (d) A conservator.

 

     (e) A court.

 

     (f) 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 who has the

 

right to receive services and benefits of a pooled trust.

 

     (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.

 

     (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 criteria:

 

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

 

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

 

management of funds.

 

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

 

the sole benefit of the beneficiary.

 

     (iv) 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.

 

     (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).