A new Michigan law bars the state from yanking your Medicaid enrollment over criminal convictions unrelated to healthcare.
Most Michigan health services owners don't realize the state could theoretically suspend their Medicaid provider status over a criminal conviction that has nothing to do with healthcare. That gap in understanding just narrowed significantly—and it's worth knowing why.
In 2024, Michigan enacted HB6399, which amended the Medical Assistance Act (MCL 400.111e). Buried in this bill is a provision that directly limits the power of the Michigan Department of Health and Human Services (DHHS) director to punish Medicaid providers for crimes unrelated to healthcare fraud or medical practice.
Under the newly added Section 111e(4), the DHHS director is now prohibited from suspending, terminating, or placing on probation a provider's Medicaid enrollment solely because of a criminal conviction—unless that conviction relates to healthcare fraud, abuse, or violations of healthcare licensing laws.
In plain terms: your Medicaid billing rights are protected from revocation based on convictions for crimes outside the healthcare context. A conviction for a non-healthcare offense cannot, by itself, be the sole reason DHHS removes you from the Medicaid program.
For small and mid-sized health services providers, losing Medicaid enrollment is often catastrophic. Medicaid patients represent a significant portion of revenue for many practices, clinics, and facilities across Michigan. Before this change, the law gave DHHS broad discretion to exclude providers based on any criminal conviction, regardless of relevance to healthcare delivery or fraud.
This created a real risk: a provider convicted of an unrelated offense—even one resolved years ago—could lose the ability to bill Medicaid, effectively losing access to a major payer without a direct connection between the conviction and patient safety or billing integrity.
The new provision closes that gap. It doesn't eliminate DHHS's authority to sanction providers for healthcare-related crimes or fraud. It simply requires that any exclusion be tied to conduct that actually relates to healthcare practice, fraud, or licensing violations.
HB6399 became effective upon enactment. Importantly, subsection (9) of Section 111e applies retroactively—meaning it covers sanctions that were levied before the law took effect. If your provider status was suspended or terminated based solely on a non-healthcare criminal conviction prior to enactment, this provision may create grounds to revisit that action.
If you currently face or have faced Medicaid enrollment sanctions based on a criminal conviction unrelated to healthcare, consult with legal counsel about whether this provision applies to your situation. The retroactive language suggests the law was designed to address past cases as well as prevent future ones.
For ongoing compliance, document the basis of any DHHS communications about your provider status. If exclusion is threatened, verify that the stated reason relates to healthcare fraud, abuse, or licensing violations—not unrelated criminal matters.
This explainer covers HB6399's amendment to MCL 400.111e, Section 111e(4). For detailed guidance specific to your practice, consult your legal or compliance advisor.