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State Regulatory Functions Reorganized by Michigan Governor Snyder

February 24, 2011

On Wednesday, Governor Rick Snyder issued two executive orders significantly restructuring the organization of health care regulation and other state regulatory activities in Michigan. Executive Order 2011-4 establishes the Department of Licensing and Regulatory Affairs, replacing the current Department of Energy, Labor, and Economic Growth. Executive Order 2011-5 creates an Office of Regulatory Reinvention.

Healthcare

Included among the healthcare investigative, regulatory, licensing, certification, and registration activities transferred from the Department of Community Health to the new Department of Licensing and Regulation by EO 2011-4 are:

  • the Bureau of Health Systems, which regulates hospitals, clinics, nursing homes, home health agencies, hospices,outpatient surgical facilities, laboratories, and other health facilities;
  • the Bureau of Health Professions, which regulates physicians, dentists, nurses, therapists, pharmacists and other health licensed and registered health professionals;
  • the Emergency Medical Services (EMS) Section; and
  • the Controlled Substances Advisory Commission.

Because the Certificate of Need program (CON) falls under the Bureau of Health Policy and not the Bureau of Health Systems,CON will remain within the Department of Community Health along with other traditional public health activities regulated under the Public Health Code.

Administrative Hearings

EO 2011-4 also creates the Michigan Administrative Hearing System as an independent agency within the new Department to perform centralized administrative hearing functions for all of state government. In addition to administrative hearing functions currently performed by the State Office of Administrative Hearings and Rules, the Michigan Tax Tribunal (property tax appeals),the Michigan Employment Security Board of Review (unemployment compensation appeals), the Workers' Compensation Board of Magistrates, and the Workers' Compensation Appellate Commission also are transferred and become part of the new Michigan Administrative Hearing System.

Regulations and Reform

A new Office of Regulatory Reinvention (ORR) is created within the Department of Licensing and Regulation by EO 2011-5. The ORR is charged with creating a regulatory environment and processes that are "fair, efficient, and conducive to business growth and job creation." ORR will perform administrative rule-making functions previously vested in the State Office of Administrative Hearings and Rules.

A systematic review of all existing administrative rules and rule-making processes also will be undertaken by the ORR. To obtain input from a broad spectrum of stakeholders, the ORR will be establishing Advisory Rules Committees in areas such as insurance, banking, utilities, healthcare, occupational licensing, the environment, and others. The membership of these Committees will be set by the ORR with the expectation that stakeholders, including the regulated community and the general public, will be included. Significantly, the ORR also is granted oversight authority over "non-rule regulatory actions" of state departments and agencies, including guidelines, handbooks, manuals, bulletins, forms, and operational memoranda that have been used by state government to bind businesses and others.

Additionally, the position of Automobile and Home Insurance Consumer Advocate created by executive order in 2008 is abolished under EO 2011-4.

These executive orders represent a significant change in the way that state government organizes administrative and regulatory functions and will impact interaction with state government by a broad range of persons, businesses, and other entities. In addition, the Advisory Rules Committees will create targeted opportunities for persons and businesses to engage and transform the way in which state government issues, administers, and enforces regulations. The executive orders are effective April 24, 2011, unless rejected by a majority vote of both the Michigan House of Representatives and the Michigan Senate.

If you have questions about these executive orders or other state administrative law, regulatory, or government reorganization matters, please contact one of the lawyers listed in the sidebar, or your Dykema relationship attorney.


As part of our service to you, we regularly compile short reports on new and interesting developments and the issues the developments raise. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation.Your comments on this newsletter, or any Dykema publication, are always welcome. © 2011 Dykema Gossett PLLC.

As part of our service to you, we regularly compile short reports on new and interesting developments and the issues the developments raise. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments are always welcome. © 2017 Dykema Gossett PLLC.