New Michigan Health Insurance Claims Tax – Applies to PIHPs

The Michigan Governor signed into law a one percent (1%) tax on health insurance claims which will be levied upon and collected from specialty prepaid health plans, among other types of commercial and government third party payors. As a result, prepaid inpatient health plans that pay for services rendered to behavior health consumers will be subject to the new tax.

Under the new law, the tax will be applied to services beginning on or after January 1, 2012 and the tax will be levied upon a “carrier’s” or “third party administrator’s”¹ paid claims.

The new law was signed in anticipation of action by the Centers for Medicare and Medicaid offices to disallow the current Use Tax on Medicaid contracted health plans and specialty prepaid health plan as a means to generate State revenue for purposes of obtaining federal matching funds for the Medicaid program. Thus, the new tax replaces the current six percent (6%) Use Tax levied upon Medicaid contracted health plans and specialty prepaid health plans.

A copy of the new law is available online through the Michigan Legislature website at: http://www.legislature.mi.gov/(S(d2epzp45p2r4odfaqtuhrjff))/mileg.aspx?page=getObject&objectName=2011-SB-0348

¹Please see definitions set forth under the new law at: http://www.legislature.mi.gov/(S(d2epzp45p2r4odfaqtuhrjff))/mileg.aspx?page=getObject&objectName=2011-SB-0348

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Health and Human Services (“HHS”) Office of Inspector General (“OIG”) issues Proposed Rules on State Medicaid Fraud Control Units (“MFCUs”); Data Mining

HHS, today (March 17, 2011) issued a proposed rule to amend 42 CFR 1007.19(e)(2) to allow State MFCUs to receive Federal funding for use of sophisticated data mining technology in detecting and investigating Medicaid Fraud. Currently, the CFR prohibits MFCUs from receiving Federal matching funds for the costs of data mining .

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9th Circuit Lifts Injunction Against Cap on Hospice Care

On Tuesday, March 15, the 9th Circuit Court of Appeals invalidated Medicare regulations limiting hospice care and ruled that the US Department of Health & Human Services has violated federal law for years by enforcing an invalid regulation.

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Hospital FTE Resident Cap Reductions/Increases for GME Payments

The Centers for Medicare & Medicaid Services (“CMS”) recently published an interim final rule with comment period regarding reductions and increases to hospital full-time equivalent (“FTE”) resident caps for graduate medical education (“GME”) payments

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First Civil Money Penalty Levied by HHS for HIPAA Privacy Rule Violation

For the first time ever, the U.S. Department of Health and Human Services (“HHS”) imposed a civil money penalty against a covered entity for violations of the Privacy Rule under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).

            HHS issued a Notice of Final Determination (“NFD”) concluding that Cignet Health, located in Maryland, (“Cignet”) violated the Privacy Rule and imposed a civil money penalty (“CMP”) of $4,351,600.

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