Mich. Comp. Laws Ann. § 550.53 - Prudent purchaser agreements

The Michigan Prudent Purchaser Act allows organizations and health care providers of specific services to enter into prudent purchaser agreements for the purpose of controlling costs, utilization, and quality. Providers that engage in these agreements will form a “provider panel.”

Organizations must file a list of written standards with the Commissioner prior to creating the provider panel. These standards will form the basis of the prudent purchaser agreements and must address maintaining health care quality, controlling costs, facilitating proper utilization of services, assuring access, and any other standards the organization considers appropriate.

Organizations must establish their provider panel by soliciting applications from all providers of relevant health care services within the organization’s geographic service area. The Prudent Purchaser Act establishes minimum procedures for the application process that includes 30 day notice and 60 day application periods and requires an organization to give a written explanation for rejecting a provider’s application. The Act gives organizations the ability to limit the number of prudent purchaser agreements to the amount they deem “sufficient to assure reasonable levels of access to health care services for recipients of those services.”

Organizations must create a program to review the quality of care, provider performance, and use of services provided pursuant to a prudent purchaser agreement and must solicit an independent review of the review program every 2 years at minimum. 

The Act requires organizations to make disclosures to persons offered coverage under a prudent purchaser agreement regarding the identities of the organization, sponsor, and, if applicable, collective bargaining agent.

The Prudent Purchaser Act does not limit the ability of individuals entitled to receive care from members of the provider from obtaining care from non-members in emergency situations.