Michigan Legislature Takes Aim at Healthcare Service and Protection Workers

By Timothy Spencer, Law Clerk

The Michigan legislature is poised to amend the Social Welfare Act in ways designed to impose new obligations on professionals working in the health service and protection world. The legislation, titled Senate Bill No. 463 (the “Bill”), passed through and met Senate approval on November 3, 2011 in swift fashion.  Given the Bill’s success in the Michigan Senate, its passage through the House seems likely.

If passed, the Bill will amend sections 11 and 11a of Michigan Compiled Laws 400.11 and 400.11a to address the ongoing issue of financial exploitation in elder abuse law.  Specifically, the Bill will make these, and other, changes: 1) add exploitation to the definition of abuse; 2) add financial exploitation to the definition of exploitation; 3) define financial exploitation to mean “the action of a person who by intimidation or deception knowingly takes control, title, use, or management of an incapacitated or vulnerable adult’s assets or property with the intent to permanently deprive that incapacitated or vulnerable adult of his or her assets or property;” 4) require financial institutions training on how to identify suspected financial exploitation; and 5) provide immunity to any person making a report of financial exploitation if done so in good faith.

With the new changes, individuals enumerated in MCL 400.11a¹  must now report any suspicion or reasonable cause to believe that an adult has been financially exploited.  As with the current version of MCL 400.11a:

a “person who is employed, licensed, registered, or certified to provide health care, educational, social welfare, mental health, or other human services; a law enforcement officer; or an employee of the office of the county medical examiner who suspects or has reasonable cause to believe that an adults has been abused, neglected, or exploited shall make immediately, by telephone or otherwise, an oral report to the country department of social services of the county in which the abuse, neglect, or exploitation is suspected of having or believed to have occurred.” 

The Bill proposes to include financial exploitation under the definition of abuse.²   Any person making a report under this proposed section in good faith is entitled to immunity from civil liability. 

An individual obligated to report under MCL 400.11a must report a reasonable suspicion or belief of financial exploitation or other abuse described in MCL 400.11 within “24 hours…after forming the suspicion” pursuant to the Elder Justice Act (“EJA”), a federal regulation enacted in March 2010.  If the obligated individual forms a reasonable suspicion or belief of “serious bodily injury”, the belief or suspicion must be reported within two hours after forming the belief of suspicion.  The EJA defines “serious bodily injury” to mean “an injury—(i) involving extreme physical pain; (ii) involving substantial risk of death; (iii) involving protracted loss or impairment of the function of bodily member, organ, or mental faculty; or (iv) requiring medical intervention such as surgery, hospitalization, or physical rehabilitation.”³

Two definitions specifically related to financial exploitation will be added to MCL 400.11.  First, “incapacitated adult” is added to mean “an adult who is an incapacitated individual as that term is defined in section 1105 of  the estates and protected individuals code (“EPIC”), 1998 PA 386, MCL 700.1105.”  EPIC defines an incapacitated individual as an adult who is impaired mentally, for any of a number of reasons.  Also added by the Bill is a definition for “suspected financial exploitation,” which means “[an observation or knowledge of] behavior or unusual circumstances or transactions, or a pattern of behavior or unusual circumstances or transactions, that would lead a person with similar training or experience [as a person required to report financial exploitation under the Bill], based on the same facts, to form a reasonable belief that an incapacitated or vulnerable adult is the victim of financial exploitation.”  The definition merely points at what a reasonable person in the same position as the observer would do if the reasonable person in that same position witnessed the same events and/or behaviors.  Along with these obligations of reporting, the Bill would require other entities to assist in detecting and reporting financial exploitation. 

If current policies do not already address the issue of identification of financial exploitation, financial institutions will need to implement new policies designed to train employees on detecting financial exploitation.  Section 11(a)(2) of the Bill makes it mandatory that after September 1, 2012, financial institutions “shall provide to its employees who perform financial services training on how to identify suspected financial exploitation.”  The training must include, at a minimum, “where and how to report suspected financial exploitation, identifying unusual banking or financial activity that may be financial exploitation, and identifying behavior exhibited by an incapacitated or vulnerable adult that may indicate he or she is the victim of financial exploitation.”  Financial institutions, which are obligated to provide financial exploitation training, are defined in the Bill as “a state or nationally chartered bank or a state or federally chartered savings and loan association, savings bank, credit union, brokerage firm, payday lenders, or any person who provides financial services that maintains a principal or branch in [Michigan].”  Specifically excluded from this provision is “an insurance company or a person who sells insurance products or services only.”

If the proposed Bill passes through the Michigan Senate as proposed, the Bill will impose upon health care providers an obligation to report financial exploitation of an incapacitated vulnerable adult.  To do this, the Bill will include the definition of financial exploitation as one form of abuse that must be reported under MCL 400.11a.  Individuals required to report abuse under MCL 400.11a will be required to report any reasonable belief or suspicion of financial exploitation.  Furthermore, the Bill sets reporting timelines for suspected financial exploitation.  Lastly, the Bill will require certain financial institutions to train employees who provide financial services skills necessary in identifying and detecting financial exploitation.
 
Financial exploitation, especially as it pertains to incapacitated and vulnerable adults, is an increasing problem, and the proposed Bill would engage health care providers in helping to curb the issue by imposing upon individuals in the health services industry an obligation to report any beliefs or suspicions of financial exploitation.  While those required to report and the time in which a report must be made remains unchanged, individuals already obligated under MCL 400.11a may soon be required to also report financial exploitation.

¹ These individuals include people who are “employed, licensed, registered, or certified to provide health care, educational, social welfare, mental health, or other human services; [employees] of an agency licensed to provide health care, educational, social welfare, mental health, or other human services; [] law enforcement officers; or [employees] of the office of the county medical examiner.”
² Strangely, MCL 400.11a as it stands now includes both exploitation and abuse as events to be reported; with the amendment, exploitation would be included in the definition of “abuse”.
³ See http://www.ober.com/publications/1374-compliance-elder-justice-acts-reporting-requirements-cautionary-tactics for more information.