Senate Bill 0232e1

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    CS for SB 232                                  First Engrossed



  1                      A bill to be entitled

  2         An act relating to health care; amending s.

  3         641.3903, F.S.; providing that certain actions

  4         by a health maintenance organization against a

  5         provider based on the provider's communication

  6         of certain information to a patient are unfair

  7         or deceptive practices; amending s. 641.315,

  8         F.S.; requiring certain written notice in order

  9         to terminate certain provider contracts;

10         providing limitations on the use of such

11         notice; amending s. 641.51, F.S.; providing for

12         continued care of subscribers when certain

13         provider contracts are terminated; amending s.

14         110.123, F.S.; requiring the state-contracted

15         health maintenance organization to provide an

16         enrollee with continued access to a treating

17         health care provider who loses provider status

18         under the program; providing limitations;

19         providing applicability; amending s. 641.31,

20         F.S.; revising the procedures and standards for

21         rate changes made by an organization; deleting

22         current provisions that allow rate changes to

23         be implemented immediately upon filing with the

24         Department of Insurance, subject to

25         disapproval; requiring rate changes to be filed

26         with the department a specified time period

27         prior to use; providing that a filing is deemed

28         approved after a certain time period absent

29         affirmative approval or disapproval by the

30         department; making conforming changes;

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  1         providing for applicability of the act;

  2         providing an effective date.

  3

  4  Be It Enacted by the Legislature of the State of Florida:

  5

  6         Section 1.  Subsection (14) is added to section

  7  641.3903, Florida Statutes, to read:

  8         641.3903  Unfair methods of competition and unfair or

  9  deceptive acts or practices defined.--The following are

10  defined as unfair methods of competition and unfair or

11  deceptive acts or practices:

12         (14)  ADVERSE ACTION AGAINST A PROVIDER.--Any

13  retaliatory action by a health maintenance organization

14  against a contracted provider, including, but not limited to,

15  termination of a contract with the provider, on the basis that

16  the provider communicated information to the provider's

17  patient regarding medical care or treatment options for the

18  patient when the provider deems knowledge of such information

19  by the patient to be in the best interest of the patient.

20         Section 2.  Subsection (9) is added to section 641.315,

21  Florida Statutes, to read:

22         641.315  Provider contracts.--

23         (9)  A health maintenance organization or health care

24  provider may not terminate a contract with a health care

25  provider or health maintenance organization unless the party

26  terminating the contract provides the terminated party with a

27  written reason for the contract termination, which may include

28  termination for business reasons of the terminating party. The

29  reason provided in the notice required in this section or any

30  other information relating to the reason for termination does

31  not create any new administrative or civil action and may not


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  1  be used as substantive evidence in any such action, but may be

  2  used for impeachment purposes. As used in this subsection, the

  3  term "health care provider" means a physician licensed under

  4  ch. 458, ch. 459, ch. 460, or ch. 461, or a dentist licensed

  5  under chapter 466.

  6         Section 3.  Subsection (7) of section 641.51, Florida

  7  Statutes, is amended to read:

  8         641.51  Quality assurance program; second medical

  9  opinion requirement.--

10         (7)  When a contract between an organization and a

11  treating provider is terminated for any reason other than for

12  cause, each party Each organization shall allow subscribers

13  for whom treatment was active to continue coverage and care

14  when medically necessary, through completion of treatment of a

15  condition for which the subscriber was receiving care at the

16  time of the termination, until the subscriber selects another

17  treating provider, or during the next open enrollment period

18  offered by the organization, whichever is longer, but not

19  longer than 6 months after termination of the contract. for 60

20  days with a terminated treating provider when medically

21  necessary, provided the subscriber has a life-threatening

22  condition or a disabling and degenerative condition.  Each

23  party to the terminated contract organization shall allow a

24  subscriber who has initiated a course of prenatal care,

25  regardless of is in the third trimester in which care was

26  initiated, of pregnancy to continue care and coverage with a

27  terminated treating provider until completion of postpartum

28  care.  This does not prevent a provider from refusing to

29  continue to provide care to a subscriber who is abusive,

30  noncompliant, or in arrears in payments for services provided.

31  For care continued under this subsection, the organization and


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  1  the provider shall continue to be bound by the terms of the

  2  terminated contract for such continued care. This subsection

  3  shall not apply to treating providers who have been terminated

  4  by the organization for cause. Changes made within 30 days

  5  before termination of a contract are effective only if agreed

  6  to by both parties.

  7         Section 4.  Paragraph (h) of subsection (3) of section

  8  110.123, Florida Statutes, 1998 Supplement, is amended to

  9  read:

10         110.123  State group insurance program.--

11         (3)  STATE GROUP INSURANCE PROGRAM.--

12         (h)1.  A person eligible to participate in the state

13  group health insurance plan may be authorized by rules adopted

14  by the division, in lieu of participating in the state group

15  health insurance plan, to exercise an option to elect

16  membership in a health maintenance organization plan which is

17  under contract with the state in accordance with criteria

18  established by this section and by said rules.  The offer of

19  optional membership in a health maintenance organization plan

20  permitted by this paragraph may be limited or conditioned by

21  rule as may be necessary to meet the requirements of state and

22  federal laws.

23         2.  The division shall contract with health maintenance

24  organizations to participate in the state group insurance

25  program through a request for proposal based upon a premium

26  and a minimum benefit package as follows:

27         a.  A minimum benefit package to be provided by a

28  participating HMO shall include: physician services; inpatient

29  and outpatient hospital services; emergency medical services,

30  including out-of-area emergency coverage; diagnostic

31  laboratory and diagnostic and therapeutic radiologic services;


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  1  mental health, alcohol, and chemical dependency treatment

  2  services meeting the minimum requirements of state and federal

  3  law; skilled nursing facilities and services; prescription

  4  drugs; and other benefits as may be required by the division.

  5  Additional services may be provided subject to the contract

  6  between the division and the HMO.

  7         b.  A uniform schedule for deductibles and copayments

  8  may be established for all participating HMOs.

  9         c.  Based upon the minimum benefit package and

10  copayments and deductibles contained in sub-subparagraphs a.

11  and b., the division shall issue a request for proposal for

12  all HMOs which are interested in participating in the state

13  group insurance program.  Upon receipt of all proposals, the

14  division may, as it deems appropriate, enter into contract

15  negotiations with HMOs submitting bids. As part of the request

16  for proposal process, the division may require detailed

17  financial data from each HMO which participates in the bidding

18  process for the purpose of determining the financial stability

19  of the HMO.

20         d.  In determining which HMOs to contract with, the

21  division shall, at a minimum, consider:  each proposed

22  contractor's previous experience and expertise in providing

23  prepaid health benefits; each proposed contractor's historical

24  experience in enrolling and providing health care services to

25  participants in the state group insurance program; the cost of

26  the premiums; the plan's ability to adequately provide service

27  coverage and administrative support services as determined by

28  the division; plan benefits in addition to the minimum benefit

29  package; accessibility to providers; and the financial

30  solvency of the plan. Nothing shall preclude the division from

31  negotiating regional or statewide contracts with health


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  1  maintenance organization plans when this is cost-effective and

  2  when the division determines the plan has the best overall

  3  benefit package for the service areas involved.  However, no

  4  HMO shall be eligible for a contract if the HMO's retiree

  5  Medicare premium exceeds the retiree rate as set by the

  6  division for the state group health insurance plan.

  7         e.  The division may limit the number of HMOs that it

  8  contracts with in each service area based on the nature of the

  9  bids the division receives, the number of state employees in

10  the service area, and any unique geographical characteristics

11  of the service area. The division shall establish by rule

12  service areas throughout the state.

13         f.  All persons participating in the state group

14  insurance program who are required to contribute towards a

15  total state group health premium shall be subject to the same

16  dollar contribution regardless of whether the enrollee enrolls

17  in the state group health insurance plan or in an HMO plan.

18         3.  The division is authorized to negotiate and to

19  contract with specialty psychiatric hospitals for mental

20  health benefits, on a regional basis, for alcohol, drug abuse,

21  and mental and nervous disorders. The division may establish,

22  subject to the approval of the Legislature pursuant to

23  subsection (5), any such regional plan upon completion of an

24  actuarial study to determine any impact on plan benefits and

25  premiums.

26         4.  In addition to contracting pursuant to subparagraph

27  2., the division shall enter into contract with any HMO to

28  participate in the state group insurance program which:

29         a.  Serves greater than 5,000 recipients on a prepaid

30  basis under the Medicaid program;

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  1         b.  Does not currently meet the 25 percent

  2  non-Medicare/non-Medicaid enrollment composition requirement

  3  established by the Department of Health and Human Services

  4  excluding participants enrolled in the state group insurance

  5  program;

  6         c.  Meets the minimum benefit package and copayments

  7  and deductibles contained in sub-subparagraphs 2.a. and b.;

  8         d.  Is willing to participate in the state group

  9  insurance program at a cost of premiums that is not greater

10  than 95 percent of the cost of HMO premiums accepted by the

11  division in each service area; and

12         e.  Meets the minimum surplus requirements of s.

13  641.225.

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15  The division is authorized to contract with HMOs that meet the

16  requirements of sub-subparagraphs a. through d. prior to the

17  open enrollment period for state employees.  The division is

18  not required to renew the contract with the HMOs as set forth

19  in this paragraph more than twice. Thereafter, the HMOs shall

20  be eligible to participate in the state group insurance

21  program only through the request for proposal process

22  described in subparagraph 2.

23         5.  All enrollees in the state group health insurance

24  plan or any health maintenance organization plan shall have

25  the option of changing to any other health plan which is

26  offered by the state within any open enrollment period

27  designated by the division. Open enrollment shall be held at

28  least once each calendar year.

29         6.  When a contract between a treating provider and the

30  state-contracted health maintenance organization is terminated

31  for any reason other than for cause, each party shall allow


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  1  any enrollee for whom treatment was active to continue

  2  coverage and care when medically necessary, through completion

  3  of treatment of a condition for which the enrollee was

  4  receiving care at the time of the termination, until the

  5  enrollee selects another treating provider, or until the next

  6  open enrollment period offered, whichever is longer, but no

  7  longer than 9 months after termination of the contract. Each

  8  party to the terminated contract shall allow an enrollee who

  9  has initiated a course of prenatal care, regardless of the

10  trimester in which care was initiated, to continue care and

11  coverage until completion of postpartum care. This does not

12  prevent a provider from refusing to continue to provide care

13  to an enrollee who is abusive, noncompliant, or in arrears in

14  payments for services provided. For care continued under this

15  subparagraph, the program and the provider shall continue to

16  be bound by the terms of the terminated contract. Changes made

17  within 30 days before termination of a contract are effective

18  only if agreed to by both parties.

19         7.6.  Any HMO participating in the state group

20  insurance program shall, upon the request of the division,

21  submit to the division standardized data for the purpose of

22  comparison of the appropriateness, quality, and efficiency of

23  care provided by the HMO. Such standardized data shall

24  include:  membership profiles; inpatient and outpatient

25  utilization by age and sex, type of service, provider type,

26  and facility; and emergency care experience. Requirements and

27  timetables for submission of such standardized data and such

28  other data as the division deems necessary to evaluate the

29  performance of participating HMOs shall be adopted by rule.

30         8.7.  The division shall, after consultation with

31  representatives from each of the unions representing state and


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  1  university employees, establish a comprehensive package of

  2  insurance benefits including, but not limited to, supplemental

  3  health and life coverage, dental care, long-term care, and

  4  vision care to allow state employees the option to choose the

  5  benefit plans which best suit their individual needs.

  6         a.  Based upon a desired benefit package, the division

  7  shall issue a request for proposal for health insurance

  8  providers interested in participating in the state group

  9  insurance program, and the division shall issue a request for

10  proposal for insurance providers interested in participating

11  in the non-health-related components of the state group

12  insurance program.  Upon receipt of all proposals, the

13  division may enter into contract negotiations with insurance

14  providers submitting bids or negotiate a specially designed

15  benefit package. Insurance providers offering or providing

16  supplemental coverage as of May 30, 1991, which qualify for

17  pretax benefit treatment pursuant to s. 125 of the Internal

18  Revenue Code of 1986, with 5,500 or more state employees

19  currently enrolled may be included by the division in the

20  supplemental insurance benefit plan established by the

21  division without participating in a request for proposal,

22  submitting bids, negotiating contracts, or negotiating a

23  specially designed benefit package.  These contracts shall

24  provide state employees with the most cost-effective and

25  comprehensive coverage available; however, no state or agency

26  funds shall be contributed toward the cost of any part of the

27  premium of such supplemental benefit plans.

28         b.  Pursuant to the applicable provisions of s.

29  110.161, and s. 125 of the Internal Revenue Code of 1986, the

30  division shall enroll in the pretax benefit program those

31  state employees who voluntarily elect coverage in any of the


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  1  supplemental insurance benefit plans as provided by

  2  sub-subparagraph a.

  3         c.  Nothing herein contained shall be construed to

  4  prohibit insurance providers from continuing to provide or

  5  offer supplemental benefit coverage to state employees as

  6  provided under existing agency plans.

  7         Section 5.  Effective July 1, 1999, and applicable to

  8  policies and contracts issued or renewed on or after that

  9  date, subsections (2) and (3) of section 641.31, Florida

10  Statutes, are amended to read:

11         641.31  Health maintenance contracts.--

12         (2)  The rates charged by any health maintenance

13  organization to its subscribers shall not be excessive,

14  inadequate, or unfairly discriminatory or follow a rating

15  methodology that is inconsistent, indeterminate, or ambiguous

16  or encourages misrepresentation or misunderstanding.  The

17  department, in accordance with generally accepted actuarial

18  practice as applied to health maintenance organizations, may

19  define by rule what constitutes excessive, inadequate, or

20  unfairly discriminatory rates and may require whatever

21  information it deems necessary to determine that a rate or

22  proposed rate meets the requirements of this subsection.

23         (3)(a)  If a health maintenance organization desires to

24  amend any contract with its subscribers or any certificate or

25  member handbook, or desires to change any rate charged for the

26  contract or to change any basic health maintenance contract,

27  certificate, grievance procedure, or member handbook form, or

28  application form where written application is required and is

29  to be made a part of the contract, or printed amendment,

30  addendum, rider, or endorsement form or form of renewal

31  certificate, it may do so, upon filing with the department the


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  1  proposed change or, amendment, or change in rates.  Any

  2  proposed change shall be effective immediately, subject to

  3  disapproval by the department.  Following receipt of notice of

  4  such disapproval or withdrawal of approval, no health

  5  maintenance organization shall issue or use any form or rate

  6  disapproved by the department or as to which the department

  7  has withdrawn approval.

  8         (b)  Any change in the rate is subject to paragraph (d)

  9  and requires at least 30 days' advance written notice to the

10  subscriber.  In the case of a group member, there may be a

11  contractual agreement with the health maintenance organization

12  to have the employer provide the required notice to the

13  individual members of the group.

14         (c)(b)  The department shall disapprove any form filed

15  under this subsection, or withdraw any previous approval

16  thereof, if the form:

17         1.  Is in any respect in violation of, or does not

18  comply with, any provision of this part or rule adopted

19  thereunder.

20         2.  Contains or incorporates by reference, where such

21  incorporation is otherwise permissible, any inconsistent,

22  ambiguous, or misleading clauses or exceptions and conditions

23  which deceptively affect the risk purported to be assumed in

24  the general coverage of the contract.

25         3.  Has any title, heading, or other indication of its

26  provisions which is misleading.

27         4.  Is printed or otherwise reproduced in such a manner

28  as to render any material provision of the form substantially

29  illegible.

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  1         5.  Contains provisions which are unfair, inequitable,

  2  or contrary to the public policy of this state or which

  3  encourage misrepresentation.

  4         6.  Charges rates that are determined by the department

  5  to be inadequate, excessive, or unfairly discriminatory, or

  6  the rating methodology followed by the health maintenance

  7  organization is determined by the department to be

  8  inconsistent, indeterminate, ambiguous, or encouraging

  9  misrepresentation or misunderstanding. Use of the rating

10  methodology must be discontinued immediately upon disapproval

11  unless the health maintenance organization seeks

12  administrative relief.  If a new rating methodology is filed

13  with the department, the premiums determined by such newly

14  filed rating methodology may apply prospectively only to new

15  or renewal business written on or after the effective date of

16  the responsive filing made by the health maintenance

17  organization.

18         6.7.  Excludes coverage for human immunodeficiency

19  virus infection or acquired immune deficiency syndrome or

20  contains limitations in the benefits payable, or in the terms

21  or conditions of such contract, for human immunodeficiency

22  virus infection or acquired immune deficiency syndrome which

23  are different than those which apply to any other sickness or

24  medical condition.

25         (d)  Any change in rates charged for the contract must

26  be filed with the department not less than 30 days in advance

27  of the effective date. At the expiration of such 30 days, the

28  rate filing shall be deemed approved unless prior to such time

29  the filing has been affirmatively approved or disapproved by

30  order of the department. The approval of the filing by the

31  department constitutes a waiver of any unexpired portion of


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  1  such waiting period. The department may extend by not more

  2  than an additional 15 days the period within which it may so

  3  affirmatively approve or disapprove any such filing, by giving

  4  notice of such extension before expiration of the initial

  5  30-day period. At the expiration of any such period as so

  6  extended, and in the absence of such prior affirmative

  7  approval or disapproval, any such filing shall be deemed

  8  approved.

  9         (e)(c)  It is not the intent of this subsection to

10  restrict unduly the right to modify rates in the exercise of

11  reasonable business judgment.

12         Section 6.  This act shall take effect upon becoming a

13  law and shall apply only to contracts entered into after the

14  effective date.

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