C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

LARA’s Office of Regulatory Reinvention (ORR) and New

Bureau of Health Care Services (BHCS)

Shelly Edgerton, LARA’s Deputy Director

for Licensing and Regulation

March 7, 2013

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C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

Office of Regulatory Reinvention (ORR) Overview

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• Mission: Create a regulatory environment that is simple, fair, efficient and transparent, and that supports business growth and job creation.

• Has been operating since April 25, 2011

• Responsibilities of ORR per EO 2011-5:

1. All rulemaking functions formerly housed in the State Office of Administrative Hearings and Rules (SOAHR) transferred to ORR

2. Systematic review of existing Michigan rules and rulemaking

3. Oversight of “non-rule regulatory actions” as defined in EO 2011-5

4. Implement “best regulatory management practices”

C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

• Michigan is 35th in the nation for friendliness of regulation (D+ grade)

• Michigan is second worst in the Great Lakes Region for friendliness of regulation

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Michigan’s Need for Reform is UNMISTAKABLE

Great Lakes Region

Overall Regulatory

Friendliness

Friendliness of Health and

Safety Regulations

Friendliness of Employment,

Labor, and Hiring Regulations

Friendliness of Licensing

Regulations

Friendliness of Environmental

Regulations

Friendliness of Zoning

Regulations

States Rank Grade Rank Grade Rank Grade Rank Grade Rank Grade Rank Grade Indiana 11 A- 10 A- 3 A+ 13 B+ 12 B+ 12 B+ Minnesota 22 C+ 21 B- 25 C+ 26 C 18 B 17 B Ohio 26 C 30 C- 27 C 28 C 24 C+ 19 B- Pennsylvania 27 C 25 C+ 32 C- 30 C- 29 C 29 C Wisconsin 30 C- 38 D 33 C- 10 B- 26 C 36 D+ Illinois 33 C- 32 C- 29 C 40 D 27 C 22 C+ Michigan 35 D+ 33 C- 34 D+ 35 D+ 34 D+ 34 D+ New York 43 F 41 D 42 F 45 F 39 D 42 F

C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

• States directly regulate 20% of the national economy through administrative rules according to NYU’s Institute of Policy Integrity’s “52 Experiments with Regulatory Review” November 2010 report.

• These rules raise the cost of doing business, which in some cases prevents business growth, further limiting job creation.

Rules and Regulations Matter

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• BOTTOM LINE: Michigan’s regulatory environment directly influences Michigan’s economic turnaround because it is a factor in whether a business decides to start, relocate or expand here.

C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

Rule Evaluation Process

Advisory Rules Committees

Executive Office, Department & Agency

Recommendations

Legislative Input

Public Feedback

Other Factors Determined by

ORR

ORR Reviews Inputs

ORR Makes Final Recommendations

to the Governor

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C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

Rule Evaluation Process

Implementation

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Utilizing the rule-making process

Working with the legislature to make statutory changes

Working with relevant department

to make internal changes

C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

• Under EO 2011-5, every rule must be evaluated by the following 7 factors: 1. Health or safety benefits

2. Whether rules are mandated by constitution/statutory provision

3. Cost of compliance (complexity, reporting and other factors)

4. Whether conflict with/duplicate similar state or federal rules

5. Extent to which rules exceed national or regional compliance standards

6. Date of last evaluation and impact of technology, economic or other conditions

7. Other changes or developments that demonstrate no continued need for the rule

Rule Evaluation Criteria

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C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

• Net reduction of 1,106 administrative rules

• Eliminating 10 rules for each 1 new rule created

• Held 104 Advisory Rule Committee meetings, resulting in…. – 311 recommendations to Gov. Snyder which have been publicly

released, covering seven areas of regulation that will significantly impact Michigan’s economy

– 18 bills signed by Gov. Snyder in Dec. 2012 that will improve Michigan’s environmental, workplace safety, and insurance & finance regulatory climates.

Progress To Date

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C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

Example: Obsolete and Onerous Rules

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C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

• While it’s important to get ridiculous rules such as these off the books – our first priority is to get rid of the most costly and burdensome rules and regulations.

• To facilitate this, we are working to: – Identify high-impact changes that we can implement

quickly

– Create a regulatory culture that gives companies tools to comply with regulations, instead of the old punitive or “gotcha” culture

– Create a predictable regulatory environment – Eliminate unnecessary and costly reporting

Focusing on Burdensome Rules and Regulations First…

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C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

• EO 2011-5 defines as follows: “a regulatory action not adopted by a department or agency as a rule pursuant to the Administrative Procedures Act, 1969 PA 306, as amended, MCL 24.201, et seq., that is utilized by a department or agency to govern or bind MI businesses, entities, or individuals including, but not limited to, guidelines, handbooks, manuals, instructional bulletins, forms with instructions, and operational memoranda.”

• ORR may order the elimination, suspension or modification of any “non-rule regulatory action” if ORR determines it: - Is being used to support actions/decisions not to act - Exceeds constitutional or statutory scope - Is unduly burdensome or otherwise inconsistent with purposes of EO 2011-5

• Working with the Departments, ORR has identified over 35,000 pages of “non-rule regulatory actions.”

“Non-Rule Regulatory Actions”

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C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

• Advisory Rules Committees (ARCs) are advisory in nature, and focus on evaluation of regulations under 7 factors included in EO 2011-5.

• Eight ARCs created to date: Environmental (DEQ), Insurance & Finance (OFIR), Inspections & Permitting (LARA), Liquor Control (LCC), Occupational Licensing (LARA), Natural Resources (DNR), Workplace Safety (MIOSHA), and Rulemaking Process.

• ARCs typically consist of 10-20 members including regulators, regulated community members and the public; 120-day term unless extended by ORR.

• ORR selects and appoints members and chairs each ARC.

Advisory Rules Committees (ARCs)

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C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

ARCs - Progress to Date

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Name Date Started No. of Meetings Finished? ORR Report to Gov.?

No. of Recommendations (projected in Italics)

Environmental June 15, 2011 33 Yes; Yes 77

Insurance & Finance June 27, 2011 10 Yes; Yes 46

Workplace Safety June 20, 2011 12 Yes; Yes 9 (plus 300+ rule rescissions)

Liquor Control Aug. 24, 2011 7 Yes; Yes 72

Occupational Licensing

Aug. 18, 2011 14 Yes; Yes 62

Natural Resources Oct. 3, 2011 9 Yes; Yes 17

Inspections & Permitting

Nov. 29, 2011 11 Yes; Yes

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Rulemaking Sept. 21, 2012 8 No; No TBD

C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

• Michigan is the sixth most-regulated state in terms of occupational regulations.

• Occupational regulations operate as a barrier to entry into a given profession. This inhibits entrepreneurship and restricts competition, leading to increased costs and decreased levels of service for consumers.

• ORR ARC evaluated all occupations regulated by the state, and evaluated whether regulation was critical to public safety.

Occupational Licensing ARC Recommendations

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C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

Occupational Licensing ARC Recommendations • Acupuncturist • Auctioneers • Community Planner • Consumer Finance Services • Dieticians & Nutritionists • Forensic Polygraph Examiner • Forester • Immigration Clerical Assistant • Insurance Solicitor

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• Interior Designer • Landscape Architect • Ocularist • Professional Employer Organizations • Proprietary School Solicitors • Respiratory Care • Security Alarm Contractors • Speech Pathologist • Vehicle Protection Product Warrantor

The ORR recommended 18 occupations and 9 boards for deregulation, including:

C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

• Reorganization allows for greater coordination between the former Bureau of Health Professions (BHP) and the Bureau of Health Systems (BHS)

• Leverages natural synergies in the licensing of health care providers and health care facilities

• Realigns similar regulatory systems such as the regulation of long-term care previously vested separately

• Makes regulatory system simple, fair, efficient, and responsive to customer needs and demands that are driven by the current health care market

• Develops common, effective customer service protocols serving multiple facets of the health care delivery system

The New Bureau of Health Care Services (BHCS)

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C U S T O M E R D R I V E N. B U S I N E S S M I N D E D. 17

C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

The New Bureau of Health Care Services (BHCS)

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Mission: Protect the public health, safety and welfare of Michigan citizens, comply with the Public Health Code, and provide the highest level of customer service.

Through the Health Professions Division, Long Term Care Division, and the Health Facilities Division, BHCS:

• Regulates over 400,000 health professionals in Michigan who are licensed, registered, or certified under Articles 7 and 15 of the Michigan Public Health Code and pharmacy related facilities

• Operates the Michigan Medical Marihuana Program, the Michigan Automated Prescription System (MAPS) Program, and the Health Professional Recovery Program

• Oversees the federal licensing and certification programs for long-term care and non-long-term care providers in Michigan in accordance with guidelines established by the Centers for Medicare and Medicaid Services (CMS)

• Coordinates the certification program for providers in Michigan to participate in Medicare/Medicaid programs in accordance with guidelines established by CMS

C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

Health Facilities Division

Health Facility Construction

• State and Federal guidelines regarding health facility licensing

• Efforts to streamline plan review and permit processes for constructing or remodeling health facilities by working closely with LARA’s Bureau of Fire Services (BFS) and Bureau of Construction Codes (BCC)

• Reducing the number of forms needed when submitting project plans, reducing plan review wait times, and strengthening customer support communications

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C U S T O M E R D R I V E N. B U S I N E S S M I N D E D.

Thank You and We Look Forward to our Collaboration!

QUESTIONS?

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LARA’s Office of Regulatory Reinvention (ORR) and New Bureau of Health Care Services (BHCS)Office of Regulatory Reinvention (ORR) Overview�Michigan’s Need for Reform is UNMISTAKABLE�Rules and Regulations MatterRule Evaluation ProcessRule Evaluation ProcessRule Evaluation CriteriaProgress To DateExample: Obsolete and Onerous RulesFocusing on Burdensome Rules and Regulations First…“Non-Rule Regulatory Actions”Advisory Rules Committees (ARCs)ARCs - Progress to DateOccupational Licensing ARC RecommendationsOccupational Licensing ARC Recommendations The New Bureau of Health Care Services (BHCS)Slide Number 17The New Bureau of Health Care Services (BHCS)Health Facilities Division�Thank You and We Look Forward to our Collaboration!��QUESTIONS?