333.20161. Fees and assessments for health facility and agency licenses and certificates of need; schedule; fees; use of quality assurance assessment; tax levy; notification to ambulance operation; definitions.
Sec. 20161.
(1) The department shall assess fees and other assessments for health facility and agency licenses and certificates of need on an annual basis as provided in this article. Until October 1, 2027, except as otherwise provided in this article, fees and assessments must be paid as provided in the following schedule:
(a) Freestanding surgical outpatient facilities $500.00 per facility license.
(b) Hospitals $500.00 per facility license and $10.00 per licensed bed.
(c) Nursing homes, county medical care facilities, and hospital long-term care units $500.00 per facility license and
$3.00 per licensed bed over 100 licensed beds.
(d) Homes for the aged $500.00 per facility license and $6.27 per licensed bed.
(e) Hospice agencies $500.00 per agency license.
(f) Hospice residences $500.00 per facility license and $5.00 per licensed bed.
(g) Freestanding birth center $500.00 per facility license.
(h) Subject to subsection (11), quality assurance assessment for nursing homes and hospital long-term care units an amount resulting in not more
than 6% of total industry revenues.
(i) Subject to subsection (12), quality assurance assessment for hospitals at a fixed or variable rate that
generates funds not more than the maximum allowable under the federal matching requirements, after consideration for the amounts in subsection (12)(a) and (i).
(j) Initial licensure application fee for subdivisions (a), (b), (c), (d), (e), (f), and (g) $2,000.00 per initial license.
(2) If a hospital requests the department to conduct a certification survey for purposes of title XVIII or title XIX, the hospital shall pay a license fee surcharge of $23.00 per bed. As used in this subsection:
(a) "Title XVIII" means title XVIII of the social security act, 42 USC 1395 to 1395lll.
(b) "Title XIX" means title XIX of the social security act, 42 USC 1396 to 1396w-8.
(3) All of the following apply to the assessment under this section for certificates of need:
(a) The base fee for a certificate of need is $3,000.00 for each application. For a project requiring a projected capital expenditure of more than $500,000.00 but less than $4,000,000.00, an additional fee of $5,000.00 is added to the base fee. For a project requiring a projected capital expenditure of $4,000,000.00 or more but less than $10,000,000.00, an additional fee of $8,000.00 is added to the base fee. For a project requiring a projected capital expenditure of $10,000,000.00 or more, an additional fee of $12,000.00 is added to the base fee.
(b) In addition to the fees under subdivision (a), the applicant shall pay $3,000.00 for any designated complex project including a project scheduled for comparative review or for a consolidated licensed health facility application for acquisition or replacement.
(c) If required by the department, the applicant shall pay $1,000.00 for a certificate of need application that receives expedited processing at the request of the applicant.
(d) The department shall charge a fee of $500.00 to review any letter of intent requesting or resulting in a waiver from certificate of need review and any amendment request to an approved certificate of need.
(e) A health facility or agency that offers certificate of need covered clinical services shall pay $100.00 for each certificate of need approved covered clinical service as part of the certificate of need annual survey at the time of submission of the survey data.
(f) Except as otherwise provided in this section, the department shall use the fees collected under this subsection only to fund the certificate of need program. Funds remaining in the certificate of need program at the end of the fiscal year do not lapse to the general fund but remain available to fund the certificate of need program in subsequent years.
(4) A license issued under this part is effective for no longer than 1 year after the date of issuance.
(5) Fees described in this section are payable to the department at the time an application for a license, permit, or certificate is submitted. If an application for a license, permit, or certificate is denied or if a license, permit, or certificate is revoked before its expiration date, the department shall not refund fees paid to the department.
(6) The fee for a provisional license or temporary permit is the same as for a license. A license may be issued at the expiration date of a temporary permit without an additional fee for the balance of the period for which the fee was paid if the requirements for licensure are met.
(7) The cost of licensure activities must be supported by license fees.
(8) The application fee for a waiver under section 21564 is $200.00 plus $40.00 per hour for the professional services and travel expenses directly related to processing the application. The travel expenses must be calculated in accordance with the state standardized travel regulations of the department of technology, management, and budget in effect at the time of the travel.
(9) An applicant for licensure or renewal of licensure under part 209 shall pay the applicable fees set forth in part 209.
(10) Except as otherwise provided in this section, the fees and assessments collected under this section must be deposited in the state treasury, to the credit of the general fund. The department may use the unreserved fund balance in fees and assessments for the criminal history check program required under this article.
(11) The quality assurance assessment collected under subsection (1)(h) and all federal matching funds attributed to that assessment must be used only for the following purposes and under the following specific circumstances:
(a) The quality assurance assessment and all federal matching funds attributed to that assessment must be used to finance Medicaid nursing home reimbursement payments. Only licensed nursing homes and hospital long-term care units that are assessed the quality assurance assessment and participate in the Medicaid program are eligible for increased per diem Medicaid reimbursement rates under this subdivision. A nursing home or long-term care unit that is assessed the quality assurance assessment and that does not pay the assessment required under subsection (1)(h) in accordance with subdivision (c)(i) or in accordance with a written payment agreement with this state shall not receive the increased per diem Medicaid reimbursement rates under this subdivision until all of its outstanding quality assurance assessments and any penalties assessed under subdivision (f) have been paid in full. This subdivision does not authorize or require the department to overspend tax revenue in violation of the management and budget act, 1984 PA 431, MCL 18.1101 to 18.1594.
(b) Except as otherwise provided under subdivision (c), beginning October 1, 2005, the quality assurance assessment is based on the total number of patient days of care each nursing home and hospital long-term care unit provided to non-Medicare patients within the immediately preceding year, must be assessed at a uniform rate on October 1, 2005 and subsequently on October 1 of each following year, and is payable on a quarterly basis, with the first payment due 90 days after the date the assessment is assessed.
(c) Within 30 days after September 30, 2005, the department shall submit an application to the Centers for Medicare and Medicaid Services to request a waiver according to 42 CFR 433.68(e) to implement this subdivision as follows:
(i) If the waiver is approved, the quality assurance assessment rate for a nursing home or hospital long-term care unit with less than 40 licensed beds or with the maximum number, or more than the maximum number, of licensed beds necessary to secure federal approval of the application is $2.00 per non-Medicare patient day of care provided within the immediately preceding year or a rate as otherwise altered on the application for the waiver to obtain federal approval. If the waiver is approved, for all other nursing homes and long-term care units the quality assurance assessment rate is to be calculated by dividing the total statewide maximum allowable assessment permitted under subsection (1)(h) less the total amount to be paid by the nursing homes and long-term care units with less than 40 licensed beds or with the maximum number, or more than the maximum number, of licensed beds necessary to secure federal approval of the application by the total number of non-Medicare patient days of care provided within the immediately preceding year by those nursing homes and long-term care units with more than 39 licensed beds, but less than the maximum number of licensed beds necessary to secure federal approval. The quality assurance assessment, as provided under this subparagraph, must be assessed in the first quarter after federal approval of the waiver and must be subsequently assessed on October 1 of each following year, and is payable on a quarterly basis, with the first payment due 90 days after the date the assessment is assessed.
(ii) If the waiver is approved, continuing care retirement centers are exempt from the quality assurance assessment if the continuing care retirement center requires each center resident to provide an initial life interest payment of $150,000.00, on average, per resident to ensure payment for that resident's residency and services and the continuing care retirement center utilizes all of the initial life interest payment before the resident becomes eligible for medical assistance under the state's Medicaid plan. As used in this subparagraph, "continuing care retirement center" means a nursing care facility that provides independent living services, assisted living services, and nursing care and medical treatment services, in a campus-like setting that has shared facilities or common areas, or both.
(d) Beginning May 10, 2002, the department shall increase the per diem nursing home Medicaid reimbursement rates for the balance of that year. For each subsequent year in which the quality assurance assessment is assessed and collected, the department shall maintain the Medicaid nursing home reimbursement payment increase financed by the quality assurance assessment.
(e) The department shall implement this section in a manner that complies with federal requirements necessary to ensure that the quality assurance assessment qualifies for federal matching funds.
(f) If a nursing home or a hospital long-term care unit fails to pay the assessment required by subsection (1)(h), the department may assess the nursing home or hospital long-term care unit a penalty of 5% of the assessment for each month that the assessment and penalty are not paid up to a maximum of 50% of the assessment. The department may also refer for collection to the department of treasury past due amounts consistent with section 13 of 1941 PA 122, MCL 205.13.
(g) The Medicaid nursing home quality assurance assessment fund is established in the state treasury. The department shall deposit the revenue raised through the quality assurance assessment with the state treasurer for deposit in the Medicaid nursing home quality assurance assessment fund.
(h) The department shall not implement this subsection in a manner that conflicts with 42 USC 1396b(w).
(i) The quality assurance assessment collected under subsection (1)(h) must be prorated on a quarterly basis for any licensed beds added to or subtracted from a nursing home or hospital long-term care unit since the immediately preceding July 1. Any adjustments in payments are due on the next quarterly installment due date.
(j) In each fiscal year governed by this subsection, Medicaid reimbursement rates must not be reduced below the Medicaid reimbursement rates in effect on April 1, 2002 as a direct result of the quality assurance assessment collected under subsection (1)(h).
(k) The state retention amount of the quality assurance assessment collected under subsection (1)(h) must be equal to 13.2% of the federal funds generated by the nursing homes and hospital long-term care units quality assurance assessment, including the state retention amount. The state retention amount must be appropriated each fiscal year to the department to support Medicaid expenditures for long-term care services. These funds must offset an identical amount of general fund/general purpose revenue originally appropriated for that purpose.
(l) Beginning October 1, 2027, the department shall not assess or collect the quality assurance assessment or apply for federal matching funds. The quality assurance assessment collected under subsection (1)(h) must not be assessed or collected after September 30, 2011 if the quality assurance assessment is not eligible for federal matching funds. Any portion of the quality assurance assessment collected from a nursing home or hospital long-term care unit that is not eligible for federal matching funds must be returned to the nursing home or hospital long-term care unit.
(12) The quality assurance dedication is an earmarked assessment collected under subsection (1)(i). That assessment and all federal matching funds attributed to that assessment must be used only for the following purpose and under the following specific circumstances:
(a) To maintain the increased Medicaid reimbursement rate increases as provided for in subdivision (c).
(b) The quality assurance assessment must be assessed on all net patient revenue, before deduction of expenses, less Medicare net revenue, as reported in the most recently available Medicare cost report and is payable on a quarterly basis, with the first payment due 90 days after the date the assessment is assessed. As used in this subdivision, "Medicare net revenue" includes Medicare payments and amounts collected for coinsurance and deductibles.
(c) Beginning October 1, 2002, the department shall increase the hospital Medicaid reimbursement rates for the balance of that year. For each subsequent year in which the quality assurance assessment is assessed and collected, the department shall maintain the hospital Medicaid reimbursement rate increase financed by the quality assurance assessments.
(d) The department shall implement this section in a manner that complies with federal requirements necessary to ensure that the quality assurance assessment qualifies for federal matching funds.
(e) If a hospital fails to pay the assessment required by subsection (1)(i), the department may assess the hospital a penalty of 5% of the assessment for each month that the assessment and penalty are not paid up to a maximum of 50% of the assessment. The department may also refer for collection to the department of treasury past due amounts consistent with section 13 of 1941 PA 122, MCL 205.13.
(f) The hospital quality assurance assessment fund is established in the state treasury. The department shall deposit the revenue raised through the quality assurance assessment with the state treasurer for deposit in the hospital quality assurance assessment fund.
(g) In each fiscal year governed by this subsection, the quality assurance assessment must only be collected and expended if Medicaid hospital inpatient DRG and outpatient reimbursement rates and graduate medical education payments are not below the level of rates and payments in effect on April 1, 2002 as a direct result of the quality assurance assessment collected under subsection (1)(i), except as provided in subdivision (h).
(h) The quality assurance assessment collected under subsection (1)(i) must not be assessed or collected after September 30, 2011 if the quality assurance assessment is not eligible for federal matching funds. Any portion of the quality assurance assessment collected from a hospital that is not eligible for federal matching funds must be returned to the hospital.
(i) The state retention amount of the quality assurance assessment collected under subsection (1)(i) must be equal to 13.2% of the federal funds generated by the hospital quality assurance assessment, including the state retention amount. The 13.2% state retention amount described in this subdivision does not apply to the Healthy Michigan plan. Beginning in the fiscal year ending September 30, 2018, and for each fiscal year thereafter, there is a retention amount of at least $118,420,600.00 for each fiscal year for the Healthy Michigan plan. By May 31 of each year, the department, the state budget office, and the Michigan Health and Hospital Association shall identify an appropriate retention amount for the Healthy Michigan plan. The state retention percentage must be applied proportionately to each hospital quality assurance assessment program to determine the retention amount for each program. The state retention amount must be appropriated each fiscal year to the department to support Medicaid expenditures for hospital services and therapy. These funds must offset an identical amount of general fund/general purpose revenue originally appropriated for that purpose.
(13) The department may establish a quality assurance assessment to increase ambulance reimbursement as follows:
(a) The quality assurance assessment authorized under this subsection must be used to provide reimbursement to Medicaid ambulance providers. The department may promulgate rules to provide the structure of the quality assurance assessment authorized under this subsection and the level of the assessment.
(b) The department shall implement this subsection in a manner that complies with federal requirements necessary to ensure that the quality assurance assessment qualifies for federal matching funds.
(c) The total annual collections by the department under this subsection must not exceed $20,000,000.00.
(d) The quality assurance assessment authorized under this subsection must not be collected after October 1, 2027. The quality assurance assessment authorized under this subsection must no longer be collected or assessed if the quality assurance assessment authorized under this subsection is not eligible for federal matching funds.
(e) By November 1 of each year, the department shall send a notification to each ambulance operation that will be assessed the quality assurance assessment authorized under this subsection during the year in which the notification is sent.
(14) The quality assurance assessment provided for under this section is a tax that is levied on a health facility or agency.
(15) As used in this section:
(a) "Healthy Michigan plan" means the medical assistance program described in section 105d of the social welfare act, 1939 PA 280, MCL 400.105d, that has a federal matching fund rate of not less than 90%.
(b) "Medicaid" means that term as defined in section 22207.
1978, Act 368, Eff. Sept. 30, 1978; Am. 1981, Act 76, Eff. Oct. 1, 1981; Am. 1984, Act 376, Eff. Mar. 29, 1985; Am. 1987, Act 217, Imd. Eff. Dec. 22, 1987; Am. 1988, Act 332, Eff. Oct. 1, 1988; Am. 1990, Act 179, Imd. Eff. July 2, 1990; Am. 1990, Act 252, Imd. Eff. Oct. 12, 1990; Am. 1996, Act 267, Imd. Eff. June 12, 1996; Am. 2000, Act 253, Imd. Eff. June 29, 2000; Am. 2002, Act 303, Imd. Eff. May 10, 2002; Am. 2002, Act 562, Imd. Eff. Oct. 1, 2002; Am. 2003, Act 113, Imd. Eff. July 24, 2003; Am. 2003, Act 234, Imd. Eff. Dec. 29, 2003; Am. 2004, Act 393, Imd. Eff. Oct. 15, 2004; Am. 2004, Act 469, Imd. Eff. Dec. 28, 2004; Am. 2005, Act 187, Eff. Sept. 30, 2005; Am. 2007, Act 5, Imd. Eff. Mar. 23, 2007; Am. 2007, Act 85, Imd. Eff. Sept. 30, 2007; Am. 2008, Act 173, Imd. Eff. July 2, 2008; Am. 2008, Act 277, Imd. Eff. Sept. 29, 2008; Am. 2011, Act 144, Imd. Eff. Sept. 21, 2011; Am. 2013, Act 137, Imd. Eff. Oct. 15, 2013; Am. 2015, Act 104, Eff. Oct. 1, 2015; Am. 2016, Act 189, Imd. Eff. June 21, 2016; Am. 2018, Act 245, Imd. Eff. June 28, 2018; Am. 2019, Act 74, Imd. Eff. Sept. 30, 2019; Am. 2020, Act 35, Imd. Eff. Mar. 3, 2020; Am. 2020, Act 169, Imd. Eff. Oct. 1, 2020; Am. 2022, Act 187, Imd. Eff. July 25, 2022; Am. 2023, Act 138, Imd. Eff. Sept. 29, 2023; Am. 2024, Act 252, Eff. Apr. 2, 2025
[Compiler] Enacting section 2 of Act 234 of 2003 provides:
[Compiler] "Enacting section 2. (1) Section 20161 as amended by this amendatory act is curative and intended to express the original intent of the legislature regarding the application of 2002 PA 303 and 2002 PA 562, as amended by 2003 PA 113.
[Compiler] "(2) Section 20161 as amended by this amendatory act is retroactive and is effective for all quality assurance assessments made after May 9, 2002."
[Compiler] Enacting section 1 of Act 187 of 2005 provides:
[Compiler] "Enacting section 1. Section 20161 of the public health code, 1978 PA 368, MCL 333.20161, as amended by this amendatory act is retroactive and is effective for all quality assurance assessments made after September 30, 2005."
[Compiler] Enacting section 1 was enacted into law as follows:
[Compiler] "Enacting section 1. This amendatory act takes effect October 1, 2013."
[PopularName] Act 368
[AdminRule] R 325.3801 et seq. of the Michigan Administrative Code.
