Bill Text: MI HB6267 | 2025-2026 | 103rd Legislature | Introduced
Bill Title: Health facilities: nursing homes; nursing home reporting requirements; provide for. Amends sec. 111m of 1939 PA 280 (MCL 400.111m).
Sponsorship: Moderate Partisan Bill (Republican 5-1)
Status: (Introduced) 2026-08-27 - Bill Electronically Reproduced 08/26/2026 [HB6267 Detail]
Download: Michigan-2025-HB6267-Introduced.html
HOUSE BILL NO. 6267
A bill to amend 1939 PA 280, entitled
"The social welfare act,"
by amending section 111m (MCL 400.111m), as added by 2018 PA 612.
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 medical assistance program at a utilization rate on average of at least 6 Medicaid medical assistance residents, on department cost reporting forms. A nursing facility provider with less than 6 Medicaid medical assistance residents per day must file a "less than complete" cost report and is not subject to audit. A nursing home facility with 6 or more medical assistance residents per day must file a complete cost report and is subject to a full audit. A complete cost report must include all of the following information:
(i) Financial information on all the companies the nursing home owns or operates that are a related party to the operation of the nursing homes they own or operate.
(ii) Services received for payments made to a related party and whether the payments were reasonable and prudent.
(iii) The percentage of public funds spent on services that have a direct and positive impact on medical assistance residents, including, but not limited to, staffing, resident care, and resident quality of life.
(iv) An explanation of payments made to a related party that exceed Medicaid allowable costs or are not reasonable and prudent. As used in this subdivision:
(A) "Common ownership" means having significant ownership or equity in the provider or the organization that serves the nursing home.
(B) "Control" means having power, directly or indirectly, to significantly influence or direct the action or policies of the nursing home.
(C) "Reasonable and prudent payment" means a payment made to a related party that does not exceed costs that would have been paid to a nonrelated party on the open market.
(D) "Related party" means a company that does business with a nursing home and has common ownership or control with the nursing home, or, to a significant extent, is associated or affiliated with or has control of or is controlled by the organization furnishing the services, facilities, or supplies to the nursing home.
(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 must 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 must 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 must 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 must 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 2 years after the effective date of the amendatory act that added this section, June 26, 2021, 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. June 26, 2019. 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 by June 26, 2021, 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.
(10) Beginning 2 years after the effective date of the amendatory act that added this section, June 26, 2021, 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 department must make the report publicly available on the department's website. The department shall preserve, archive, and maintain custody of a report prepared in accordance with this section for not less than 5 years. The report shall must 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.
