House Bill 3895e1
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CS/HB 3895, First Engrossed
1 A bill to be entitled
2 An act relating to the delivery of health care
3 services; creating s. 624.1291, F.S., providing
4 an exemption from the Insurance Code for
5 certain health care services; creating part IV
6 of ch. 641, F.S.; creating the "Provider
7 Sponsored Organization Act"; providing
8 legislative findings and purposes; providing
9 definitions; prohibiting provider sponsored
10 organizations from transacting insurance
11 business other than the offering of Medicare
12 Choice plans; providing for application of
13 parts I and III of ch. 641, F.S., to provider
14 sponsored organizations; providing exceptions;
15 amending s. 641.227, F.S.; providing for
16 deposits into the Rehabilitation Administrative
17 Expense Fund by a provider sponsored
18 organization; providing for reimbursements;
19 amending s. 641.316, F.S.; providing for an
20 exemption from s. 455.654, F.S., to provider
21 sponsored organizations relating to certain
22 financial arrangements; providing an exemption
23 for group practices from s. 455.654(4), F.S.,
24 relating to certain financial arrangements;
25 amending s. 409.912, F.S., directing the Agency
26 for Health Care Administration to establish an
27 outpatient specialty services pilot project;
28 providing definitions; providing criteria for
29 participation; requiring an evaluation and a
30 report to the Governor and Legislature;
31 providing effective dates.
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CS/HB 3895, First Engrossed
1 Be It Enacted by the Legislature of the State of Florida:
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3 Section 1. Section 624.1291, Florida Statutes, is
4 created to read:
5 624.1291 Certain health care services; exemption from
6 code.--Any person who enters into a contract or agreement with
7 an authorized insurer, or with a health maintenance
8 organization or provider sponsored organization that has
9 obtained a certificate of authority pursuant to chapter 641,
10 to provide health care services to persons insured under a
11 health insurance policy, health maintenance organization
12 contract, or provider sponsored organization contract, shall
13 not be deemed to be an insurer and shall not be subject to the
14 provisions of this code, regardless of any risk assumed under
15 the contract or agreement, provided:
16 (1) The authorized insurer, health maintenance
17 organization, or provider sponsored organization remains
18 contractually liable to the insured to the full extent
19 provided in the policy or contract with the insured.
20 (2) The person does not receive any premium payment or
21 per-capita fee from the insured other than fees for services
22 not covered under the insured's policy or contract, such as
23 deductible amounts, co-payments, or charges in excess of
24 policy or contract limits which are otherwise allowed to be
25 collected.
26 (3) Any person who is an "administrator" as defined in
27 s. 626.88 meets the requirements of part VII of chapter 626
28 and any person who is performing "fiscal intermediary
29 services" as defined in s. 641.316 meets the requirements of
30 that section.
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CS/HB 3895, First Engrossed
1 Section 2. Part IV of chapter 641, Florida Statutes,
2 consisting of sections 641.801, 641.802, 641.803, 641.804,
3 641.805, and 641.806, Florida Statutes, is created to read:
4 641.801 Short title.--This part may be cited as the
5 "Provider Sponsored Organization Act."
6 641.802 Declaration of legislative findings and
7 purposes.--
8 (1) The Legislature finds that a major restructuring
9 of health care has taken place which has changed the way in
10 which health care services are paid for and delivered and that
11 today, the emphasis is on providing cost-conscious health care
12 services through managed care. The Legislature recognizes that
13 alternative methods for the delivery of health care are needed
14 to promote competition and increase patients' choices.
15 (2) The Legislature finds that the United States
16 Congress has enacted legislation that allows provider
17 sponsored organizations to provide coordinated-care plans to
18 Medicare enrollees through the Medicare Choice program. The
19 federal legislation requires any organization that offers a
20 Medicare Choice plan to be organized and licensed under state
21 law as a risk-bearing entity eligible to offer health-benefit
22 coverage in the state in which it offers a Medicare Choice
23 plan.
24 (3) The Legislature finds that these plans, when
25 properly operated, emphasize cost and quality controls, while
26 ensuring that the provider has control over medical decisions.
27 (4) The Legislature declares the policy of this state
28 is to:
29 (a) Eliminate legal barriers to the organization,
30 promotion, and expansion of provider sponsored organizations
31 that offer Medicare Choice plans in order to encourage the
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CS/HB 3895, First Engrossed
1 development of valuable options for the Medicare beneficiaries
2 of this state.
3 (b) Recognize comprehensive provider sponsored
4 organizations as exempt from the insurance laws of this state
5 except in the manner and to the extent set forth in this part.
6 641.803 Definitions.--As used in this part:
7 (1) "Affiliation" means a relationship between
8 providers in which, through contract, ownership, or otherwise:
9 (a) One provider, directly or indirectly, controls, is
10 controlled by, or is under common control with the other;
11 (b) Both providers are part of a controlled group of
12 corporations under s. 1563 of the Internal Revenue Code of
13 1986;
14 (c) Each provider is a participant in a lawful
15 combination under which each provider shares substantial
16 financial risk in connection with the organization's
17 operations; or
18 (d) Both providers are part of an affiliated service
19 group under s. 414 of the Internal Revenue Code of 1986.
20 (2) "Comprehensive health care services" means
21 services, medical equipment, and supplies required under the
22 Medicare Choice program.
23 (3) "Copayment" means a specific dollar amount that
24 the subscriber must pay upon receipt of covered health care
25 services as required or authorized under the Medicare Choice
26 program.
27 (4) "Provider sponsored contract" means any contract
28 entered into by a provider sponsored organization that serves
29 Medicare Choice beneficiaries.
30 (5) "Provider sponsored organization" means any
31 organization authorized under this part which:
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CS/HB 3895, First Engrossed
1 (a) Is established, organized, and operated by a
2 health care provider or group of affiliated health care
3 providers.
4 (b) Provides a substantial proportion of the health
5 care items and services specified in the Medicare Choice
6 contract, as defined by the Secretary of the United States
7 Department of Health and Human Services, directly through the
8 provider or affiliated group of providers.
9 (c) Shares, with respect to its affiliated providers,
10 directly or indirectly, substantial financial risk in the
11 provision of such items and services and has at least a
12 majority financial interest in the entity.
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14 The term "substantial proportion" shall be defined by the
15 Secretary of the United States Department of Health and Human
16 Services after having taken into account the need for such an
17 organization to assume responsibility for providing
18 significantly more than the majority of the items and services
19 under the Medicare Choice contract through its own affiliated
20 providers and the remainder of the items and services under
21 such contract through providers with which the organization
22 has an agreement to provide such items and services.
23 Consideration shall also be given to the need for the
24 organization to provide a limited proportion of the items and
25 services under the contract through entities that are neither
26 affiliated with nor have an agreement with the organization.
27 (6) "Subscriber" means a Medicare Choice enrollee who
28 is eligible for coverage as a Medicare beneficiary.
29 (7) "Surplus" means total assets in excess of total
30 liabilities as determined by the federal rules on solvency
31 standards established by the Secretary of the United States
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CS/HB 3895, First Engrossed
1 Department of Health and Human Services pursuant to s. 1856(a)
2 of the Balanced Budget of 1997, for provider sponsored
3 organizations that offer the Medicare Choice plan.
4 641.804 Applicability of other laws.--Except as
5 provided in this part, provider sponsored organizations shall
6 be governed by this part and are exempt from all other
7 provisions of the Florida Insurance Code.
8 641.805 Insurance business not authorized.--The
9 provisions of the Florida Insurance Code or this part do not
10 authorize any provider sponsored organization to transact any
11 insurance business other than to offer Medicare Choice plans
12 pursuant to s. 1855 of the Balanced Budget Act of 1997.
13 641.806 Applicability of parts I and III;
14 exceptions.--The provisions of parts I and III of this chapter
15 apply to provider sponsored organizations to the same extent
16 such sections apply to health maintenance organizations,
17 except:
18 (1) The definitions used in this part shall control to
19 the extent of any conflict with the definitions used in s.
20 641.19.
21 (2) The certificate of authority, application for
22 certificate, and all other forms issued or prescribed by the
23 department pursuant to this part shall refer to a "provider
24 sponsored organization" rather than a "health maintenance
25 organization."
26 (3) Such provisions shall not apply to the extent of
27 any conflict with ss. 1855 and 1856 of the Balanced Budget Act
28 of 1997 and rules and regulations adopted by the Secretary of
29 the United States Department of Health and Human Services,
30 including, but not limited to, requirements related to
31 surplus, net worth, assets, liabilities, investments, provider
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CS/HB 3895, First Engrossed
1 sponsored organization contracts, payment of benefits, and
2 procedures for grievances and appeals.
3 (4) Such provisions shall not apply to the extent of
4 any waiver granted by the Secretary of the United States
5 Department of Health and Human Services under s. 1856(a)(2) of
6 the Balanced Budget Act of 1997.
7 (5) Such provisions shall not apply to the extent that
8 they are unrelated to, or inconsistent with, the limited
9 authority of provider sponsored organizations to offer only
10 Medicare Choice plans.
11 (6) Section 641.228, relating to the Florida Health
12 Maintenance Organization Consumer Assistance Plan, shall not
13 apply.
14 (7) Such provisions shall not preclude a
15 provider-sponsored organization from contracting with one or
16 more companies to provide all necessary administrative and
17 management services.
18 Section 3. Section 641.227, Florida Statutes, is
19 amended to read:
20 641.227 Rehabilitation Administrative Expense Fund.--
21 (1) The department may shall not issue or permit to
22 exist a certificate of authority to operate a health
23 maintenance organization or provider sponsored organization in
24 this state unless the organization has deposited with the
25 department $10,000 in cash for use in the Rehabilitation
26 Administrative Expense Fund as established in subsection (2).
27 (2) The department shall maintain all deposits
28 received under this section and all income from such deposits
29 in trust in an account titled "Rehabilitation Administrative
30 Expense Fund." The fund shall be administered by the
31 department and shall be used for the purpose of payment of the
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CS/HB 3895, First Engrossed
1 administrative expenses of the department during any
2 rehabilitation of a health maintenance organization or
3 provider sponsored organization, when rehabilitation is
4 ordered by a court of competent jurisdiction.
5 (3) Upon successful rehabilitation of a health
6 maintenance organization or provider sponsored organization,
7 the organization shall reimburse the fund for the amount of
8 expenses incurred by the department during the court-ordered
9 rehabilitation period.
10 (4) If a court of competent jurisdiction orders
11 liquidation of a health maintenance organization or provider
12 sponsored organization, the fund shall be reimbursed for
13 expenses incurred by the department as provided for in chapter
14 631.
15 (5) Each deposit made under this section shall be
16 allowed as an asset for purposes of determination of the
17 financial condition of the health maintenance organization or
18 provider sponsored organization. The deposit shall be
19 refunded to the organization only when the organization both
20 ceases operation as a health maintenance organization or
21 provider sponsored organization and no longer holds a
22 subsisting certificate of authority.
23 Section 4. Paragraph (b) of subsection (2) and
24 subsection (5) of section 641.315, Florida Statutes, are
25 amended to read:
26 641.316 Fiscal intermediary services.--
27 (2)
28 (b) The term "fiscal intermediary services
29 organization" means a person or entity that which performs
30 fiduciary or fiscal intermediary services to health care
31 professionals who contract with health maintenance
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CS/HB 3895, First Engrossed
1 organizations or provider sponsored organizations other than a
2 fiscal intermediary services organization owned, operated, or
3 controlled by a hospital licensed under chapter 395, an
4 insurer licensed under chapter 624, a third-party
5 administrator licensed under chapter 626, a prepaid limited
6 health organization licensed under chapter 636, a health
7 maintenance organization or provider sponsored organization
8 licensed under this chapter, or physician group practices as
9 defined in s. 455.236(3)(f).
10 (5) Any fiscal intermediary services organization,
11 other than a fiscal intermediary services organization owned,
12 operated, or controlled by a hospital licensed under chapter
13 395, an insurer licensed under chapter 624, a third-party
14 administrator licensed under chapter 626, a prepaid limited
15 health organization licensed under chapter 636, a health
16 maintenance organization or provider sponsored organization
17 licensed under this chapter, or physician group practices as
18 defined in s. 455.236(3)(f), must register with the department
19 and meet the requirements of this section. In order to
20 register as a fiscal intermediary services organization, the
21 organization must comply with ss. 641.21(1)(c) and (d) and
22 641.22(6). Should the department determine that the fiscal
23 intermediary services organization does not meet the
24 requirements of this section, the registration shall be
25 denied. In the event that the registrant fails to maintain
26 compliance with the provisions of this section, the department
27 may revoke or suspend the registration. In lieu of revocation
28 or suspension of the registration, the department may levy an
29 administrative penalty in accordance with s. 641.25.
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CS/HB 3895, First Engrossed
1 Section 5. A provider sponsored organization is exempt
2 from s. 455.654, Florida Statutes, for the provision of health
3 care services to enrollees of a Medicare Choice plan.
4 Section 6. Group practices, as defined in s.
5 455.654(3)(f), Florida Statutes, are exempt from the
6 provisions of s. 455.654(4), Florida Statutes, when providing
7 designated health services. This exemption is forfeited if
8 the group practice accepts a referral from a physician who is
9 not a member of the group practice but who has an investment
10 interest in or is an investor in the group practice.
11 Section 7. New subsection (33) is added to section
12 409.912, Florida Statutes, to read:
13 409.912 Cost-effective purchasing of health care.--The
14 agency shall purchase goods and services for Medicaid
15 recipients in the most cost-effective manner consistent with
16 the delivery of quality medical care. The agency shall
17 maximize the use of prepaid per capita and prepaid aggregate
18 fixed-sum basis services when appropriate and other
19 alternative service delivery and reimbursement methodologies,
20 including competitive bidding pursuant to s. 287.057, designed
21 to facilitate the cost-effective purchase of a case-managed
22 continuum of care. The agency shall also require providers to
23 minimize the exposure of recipients to the need for acute
24 inpatient, custodial, and other institutional care and the
25 inappropriate or unnecessary use of high-cost services.
26 (33) The Agency for Health Care Administration is
27 directed to issue a request for proposal or intent to
28 negotiate to implement on a demonstration basis an outpatient
29 specialty services pilot project in a rural and urban county
30 in the state. As used in this subsection, the term
31 "outpatient specialty services" means clinical laboratory,
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CS/HB 3895, First Engrossed
1 diagnostic imaging, and specified home medical services to
2 include durable medical equipment, prosthetics and orthotics,
3 and infusion therapy.
4 (a) The entity that is awarded the contract to provide
5 Medicaid managed care outpatient specialty services shall, at
6 a minimum, meet the following criteria:
7 1. The entity shall be licensed by the Department of
8 Insurance under part II of chapter 641.
9 2. The entity shall be experienced in providing
10 outpatient specialty services.
11 3. The entity shall demonstrate to the satisfaction of
12 the agency that it provides high-quality services to its
13 patients.
14 4. The entity shall demonstrate that it has in place a
15 complaints and grievance process to assist Medicaid recipients
16 enrolled in the pilot managed care program to resolve
17 complaints and grievances.
18 (b) The pilot managed care program shall operate for a
19 period of three years. The objective of the pilot program
20 shall be to determine the cost-effectiveness and effects on
21 utilization, access, and quality of providing outpatient
22 specialty services to Medicaid recipients on a prepaid,
23 capitated basis.
24 (c) The agency shall conduct a quality-assurance
25 review of the prepaid limited health service organization each
26 year that the demonstration program is in effect. The prepaid
27 limited health service organization is responsible for all
28 expenses incurred by the agency in conducting a quality
29 assurance review.
30 (d) The entity that is awarded the contract to provide
31 outpatient specialty services to Medicaid recipients shall
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CS/HB 3895, First Engrossed
1 report data required by the agency in a format specified by
2 the agency, for the purpose of conducting the evaluation
3 required in paragraph (e).
4 (e) The agency shall conduct an evaluation of the
5 pilot managed care program and report its findings to the
6 Governor and the Legislature by no later than January 1, 2001.
7 (f) Nothing in this subsection is intended to conflict
8 with the provision of the 1997-98 General Appropriations Act
9 which authorizes competitive bidding for Medicaid home health,
10 clinical laboratory, or x-ray services.
11 Section 8. Except as otherwise provided herein, this
12 act shall take effect October 1 of the year in which enacted.
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