The proposed bill establishes a Hospital Cost Review Board in Michigan to oversee the financial operations of nonprofit hospitals. This five-member board, appointed by the governor, will analyze financial information from these hospitals, engage in budget discussions, and recommend legislative measures to reduce hospital spending while maintaining quality care. Nonprofit hospitals will be required to submit detailed financial reports starting January 1, 2027, and must reduce their total prices for health services by 10% within 14 days of the act's effective date, ensuring uniformity across all third-party payers. Compliance documentation must be submitted to the board within 120 days, and the board will have the authority to impose penalties on non-compliant hospitals based on their tax exemptions.

Additionally, the bill introduces a health care cost grant program to support hospitals facing significant financial challenges, defined as a negative operating profit margin of at least 3% for three consecutive years. Hospitals seeking these grants must apply and agree to specific conditions, including entering into a performance improvement agreement with the board. The board will also be responsible for annual reporting on grant activities, violations, and price increases, with the information made publicly accessible. The implementation of this act is contingent upon the passage of two additional bills from the 103rd Legislature.