Senate Bill sb0046E

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    Florida Senate - 2002                                  SB 46-E

    By Senators Saunders, Pruitt and Lee





    25-2392-02

  1                      A bill to be entitled

  2         An act relating to health care; providing

  3         legislative findings and legislative intent

  4         regarding health flex plans; defining terms;

  5         providing for a pilot program for health flex

  6         plans for certain uninsured persons; providing

  7         criteria; authorizing the Agency for Health

  8         Care Administration and the Department of

  9         Insurance to adopt rules; exempting approved

10         health flex plans from certain licensing

11         requirements; providing criteria for

12         eligibility to enroll in a health flex plan;

13         requiring health flex plan providers to

14         maintain certain records; providing

15         requirements for denial, nonrenewal, or

16         cancellation of coverage; specifying that

17         coverage under an approved health flex plan is

18         not an entitlement; requiring a report with

19         specified evaluation elements; providing for

20         future repeal; establishing the Florida

21         Alzheimer's Center and Research Institute at

22         the University of South Florida; requiring the

23         State Board of Education to enter into an

24         agreement with a not-for-profit corporation for

25         the governance and operation of the institute;

26         providing that the corporation shall act as an

27         instrumentality of the state; authorizing the

28         creation of subsidiaries by the corporation;

29         providing powers of the corporation; providing

30         for a board of directors of the corporation and

31         the appointment and terms of its membership;

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    Florida Senate - 2002                                  SB 46-E
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 1         authorizing the State Board of Education to

 2         secure and provide liability protection;

 3         providing for an annual audit and report;

 4         providing for assumption of certain

 5         responsibilities of the corporation by the

 6         State Board of Education under certain

 7         circumstances; providing for administration of

 8         the institute; providing for disbursal and use

 9         of income; providing for reporting of

10         activities; requiring the appointment of a

11         council of scientific advisers; providing

12         responsibilities and terms of the council;

13         providing that the corporation and its

14         subsidiaries are not agencies within the

15         meaning of s. 20.03(11), F.S.; amending s.

16         408.7057, F.S.; redesignating a program title;

17         revising definitions; including preferred

18         provider organizations and health insurers in

19         the claim dispute resolution program;

20         specifying timeframes for submission of

21         supporting documentation necessary for dispute

22         resolution; providing consequences for failure

23         to comply; providing additional

24         responsibilities for the agency relating to

25         patterns of claim disputes; providing

26         timeframes for review by the resolution

27         organization; directing the agency to notify

28         appropriate licensure and certification

29         entities as part of violation of final orders;

30         amending s. 626.88, F.S.; redefining the term

31         "administrator," with respect to regulation of

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 1         insurance administrators; creating s. 627.6131,

 2         F.S.; specifying payment-of-claims provisions

 3         applicable to certain health insurers;

 4         providing a definition; providing requirements

 5         and procedures for paying, denying, or

 6         contesting claims; providing criteria and

 7         limitations; requiring payment within specified

 8         periods; specifying rate of interest charged on

 9         overdue payments; providing for electronic and

10         nonelectronic transmission of claims; providing

11         procedures for overpayment recovery; specifying

12         timeframes for adjudication of claims,

13         internally and externally; prohibiting action

14         to collect payment from an insured under

15         certain circumstances; providing applicability;

16         prohibiting contractual modification of

17         provisions of law; specifying circumstances for

18         retroactive claim denial; specifying claim

19         payment requirements; providing for billing

20         review procedures; specifying claim content

21         requirements; establishing a permissible error

22         ratio, specifying its applicability, and

23         providing for fines; providing specified

24         exceptions from notice and acknowledgment

25         requirements for pharmacy benefit manager

26         claims; amending s. 627.651, F.S.; conforming a

27         cross-reference; amending s. 627.662, F.S.;

28         specifying application of certain additional

29         provisions to group, blanket, and franchise

30         health insurance; amending s. 641.185, F.S.;

31         specifying that health maintenance organization

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 1         subscribers should receive prompt payment from

 2         the organization; amending s. 641.234, F.S.;

 3         specifying responsibility of a health

 4         maintenance organization for certain violations

 5         under certain circumstances; amending s.

 6         641.30, F.S.; conforming a cross-reference;

 7         amending s. 641.3154, F.S.; modifying the

 8         circumstances under which a provider knows that

 9         an organization is liable for service

10         reimbursement; amending s. 641.3155, F.S.;

11         revising payment of claims provisions

12         applicable to certain health maintenance

13         organizations; providing a definition;

14         providing requirements and procedures for

15         paying, denying, or contesting claims;

16         providing criteria and limitations; requiring

17         payment within specified periods; revising rate

18         of interest charged on overdue payments;

19         providing for electronic and nonelectronic

20         transmission of claims; providing procedures

21         for overpayment recovery; specifying timeframes

22         for adjudication of claims, internally and

23         externally; prohibiting action to collect

24         payment from a subscriber under certain

25         circumstances; prohibiting contractual

26         modification of provisions of law; specifying

27         circumstances for retroactive claim denial;

28         specifying claim payment requirements;

29         providing for billing review procedures;

30         specifying claim content requirements;

31         establishing a permissible error ratio,

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 1         specifying its applicability, and providing for

 2         fines; providing specified exceptions from

 3         notice and acknowledgment requirements for

 4         pharmacy benefit manager claims; amending s.

 5         641.51, F.S.; revising provisions governing

 6         examinations by ophthalmologists; amending s.

 7         456.053, F.S., the "Patient Self-Referral Act

 8         of 1992"; redefining the term "referral" by

 9         revising the list of practices that constitute

10         exceptions; amending s. 627.6699, F.S.;

11         allowing carriers to separate the experience of

12         small-employer groups having fewer than two

13         employees; restricting application of certain

14         laws to health plan policies under certain

15         circumstances; providing for construction of

16         laws enacted at the 2002 Regular Session in

17         relation to this act; providing effective

18         dates.

19  

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

21  

22         Section 1.  Health flex plans.--

23         (1)  INTENT.--The Legislature finds that a significant

24  proportion of the residents of this state are unable to obtain

25  affordable health insurance coverage. Therefore, it is the

26  intent of the Legislature to expand the availability of health

27  care options for low-income uninsured state residents by

28  encouraging health insurers, health maintenance organizations,

29  health-care-provider-sponsored organizations, local

30  governments, health care districts, or other public or private

31  community-based organizations to develop alternative

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 1  approaches to traditional health insurance which emphasize

 2  coverage for basic and preventive health care services. To the

 3  maximum extent possible, these options should be coordinated

 4  with existing governmental or community-based health services

 5  programs in a manner that is consistent with the objectives

 6  and requirements of such programs.

 7         (2)  DEFINITIONS.--As used in this section, the term:

 8         (a)  "Agency" means the Agency for Health Care

 9  Administration.

10         (b)  "Department" means the Department of Insurance.

11         (c)  "Enrollee" means an individual who has been

12  determined to be eligible for and is receiving health care

13  coverage under a health flex plan approved under this section.

14         (d)  "Health care coverage" or "health flex plan

15  coverage" means health care services that are covered as

16  benefits under an approved health flex plan or that are

17  otherwise provided, either directly or through arrangements

18  with other persons, via a health flex plan on a prepaid

19  per-capita basis or on a prepaid aggregate fixed-sum basis.

20         (e)  "Health flex plan" means a health plan approved

21  under subsection (3) which guarantees payment for specified

22  health care coverage provided to the enrollee.

23         (f)  "Health flex plan entity" means a health insurer,

24  health maintenance organization, health care

25  provider-sponsored organization, local government, health care

26  district, or other public or private community-based

27  organization that develops and implements an approved health

28  flex plan and is responsible for administering the health flex

29  plan and paying all claims for health flex plan coverage by

30  enrollees of the health flex plan.

31  

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 1         (3)  PILOT PROGRAM.--The agency and the department

 2  shall each approve or disapprove health flex plans that

 3  provide health care coverage for eligible participants who

 4  reside in the three areas of the state that have the highest

 5  number of uninsured persons, as identified in the Florida

 6  Health Insurance Study conducted by the agency and in Indian

 7  River County. A health flex plan may limit or exclude benefits

 8  otherwise required by law for insurers offering coverage in

 9  this state, may cap the total amount of claims paid per year

10  per enrollee, may limit the number of enrollees, or may take

11  any combination of those actions.

12         (a)  The agency shall develop guidelines for the review

13  of applications for health flex plans and shall disapprove or

14  withdraw approval of plans that do not meet or no longer meet

15  minimum standards for quality of care and access to care.

16         (b)  The department shall develop guidelines for the

17  review of health flex plan applications and shall disapprove

18  or shall withdraw approval of plans that:

19         1.  Contain any ambiguous, inconsistent, or misleading

20  provisions or any exceptions or conditions that deceptively

21  affect or limit the benefits purported to be assumed in the

22  general coverage provided by the health flex plan;

23         2.  Provide benefits that are unreasonable in relation

24  to the premium charged or contain provisions that are unfair

25  or inequitable or contrary to the public policy of this state,

26  that encourage misrepresentation, or that result in unfair

27  discrimination in sales practices; or

28         3.  Cannot demonstrate that the health flex plan is

29  financially sound and that the applicant is able to underwrite

30  or finance the health care coverage provided.

31  

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 1         (c)  The agency and the department may adopt rules as

 2  needed to administer this section.

 3         (4)  LICENSE NOT REQUIRED.--Neither the licensing

 4  requirements of the Florida Insurance Code nor chapter 641,

 5  Florida Statutes, relating to health maintenance

 6  organizations, is applicable to a health flex plan approved

 7  under this section, unless expressly made applicable. However,

 8  for the purpose of prohibiting unfair trade practices, health

 9  flex plans are considered to be insurance subject to the

10  applicable provisions of part IX of chapter 626, Florida

11  Statutes, except as otherwise provided in this section.

12         (5)  ELIGIBILITY.--Eligibility to enroll in an approved

13  health flex plan is limited to residents of this state who:

14         (a)  Are 64 years of age or younger;

15         (b)  Have a family income equal to or less than 200

16  percent of the federal poverty level;

17         (c)  Are not covered by a private insurance policy and

18  are not eligible for coverage through a public health

19  insurance program, such as Medicare or Medicaid, or another

20  public health care program, such as KidCare, and have not been

21  covered at any time during the past 6 months; and

22         (d)  Have applied for health care coverage through an

23  approved health flex plan and have agreed to make any payments

24  required for participation, including periodic payments or

25  payments due at the time health care services are provided.

26         (6)  RECORDS.--Each health flex plan shall maintain

27  enrollment data and reasonable records of its losses,

28  expenses, and claims experience and shall make those records

29  reasonably available to enable the department to monitor and

30  determine the financial viability of the health flex plan, as

31  necessary. Provider networks and total enrollment by area

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 1  shall be reported to the agency biannually to enable the

 2  agency to monitor access to care.

 3         (7)  NOTICE.--The denial of coverage by a health flex

 4  plan, or the nonrenewal or cancellation of coverage, must be

 5  accompanied by the specific reasons for denial, nonrenewal, or

 6  cancellation. Notice of nonrenewal or cancellation must be

 7  provided at least 45 days in advance of the nonrenewal or

 8  cancellation, except that 10 days' written notice must be

 9  given for cancellation due to nonpayment of premiums. If the

10  health flex plan fails to give the required notice, the health

11  flex plan coverage must remain in effect until notice is

12  appropriately given.

13         (8)  NONENTITLEMENT.--Coverage under an approved health

14  flex plan is not an entitlement, and a cause of action does

15  not arise against the state, a local government entity, or any

16  other political subdivision of this state, or against the

17  agency, for failure to make coverage available to eligible

18  persons under this section.

19         (9)  PROGRAM EVALUATION.--The agency and the department

20  shall evaluate the pilot program and its effect on the

21  entities that seek approval as health flex plans, on the

22  number of enrollees, and on the scope of the health care

23  coverage offered under a health flex plan; shall provide an

24  assessment of the health flex plans and their potential

25  applicability in other settings; and shall, by January 1,

26  2004, jointly submit a report to the Governor, the President

27  of the Senate, and the Speaker of the House of

28  Representatives.

29         (10)  EXPIRATION.--This section expires July 1, 2004.

30         Section 2.  Florida Alzheimer's Center and Research

31  Institute.--

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 1         (1)  Effective July 1, 2002, the Florida Alzheimer's

 2  Center and Research Institute is established at the University

 3  of South Florida.

 4         (2)(a)  The State Board of Education shall enter into

 5  an agreement for the use of the facilities on the campus of

 6  the University of South Florida to be known as the Florida

 7  Alzheimer's Center and Research Institute, including all

 8  furnishings, equipment, and other chattels used in the

 9  operation of those facilities, with a Florida not-for-profit

10  corporation organized solely for the purpose of governing and

11  operating the Florida Alzheimer's Center and Research

12  Institute.  This not-for-profit corporation, acting as an

13  instrumentality of the state, shall govern and operate the

14  Florida Alzheimer's Center and Research Institute in

15  accordance with the terms of the agreement between the State

16  Board of Education and the not-for-profit corporation.  The

17  not-for-profit corporation may, with the prior approval of the

18  State Board of Education, create not-for-profit corporate

19  subsidiaries to fulfill its mission.  The not-for-profit

20  corporation and its subsidiaries are authorized to receive,

21  hold, invest, and administer property and any moneys acquired

22  from private, local, state, and federal sources, as well as

23  technical and professional income generated or derived from

24  practice activities of the institute, for the benefit of the

25  institute and the fulfillment of its mission.

26         (b)1.  The affairs of the not-for-profit corporation

27  shall be managed by a board of directors who shall serve

28  without compensation.  The board of directors shall consist of

29  the President of the University of South Florida and the chair

30  of the State Board of Education, or their designees, 5

31  representatives of the state universities, and no fewer than 9

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 1  nor more than 14 representatives of the public who are neither

 2  medical doctors nor state employees.  Each director who is a

 3  representative of a state university or of the public shall be

 4  appointed to serve a term of 3 years.  The chair of the board

 5  of directors shall be selected by a majority vote of the

 6  directors.  Each director shall have only one vote.

 7         2.  The initial board of directors shall consist of the

 8  President of the University of South Florida and the chair of

 9  the State Board of Education, or their designees; the five

10  university representatives, of whom one is to be appointed by

11  the Governor, two by the President of the Senate, and two by

12  the Speaker of the House of Representatives; and nine public

13  representatives, of whom three are to be appointed by the

14  Governor, three by the President of the Senate, and three by

15  the Speaker of the House of Representatives.  Upon the

16  expiration of the terms of the initial appointed directors,

17  all directors subject to 3-year terms of office under this

18  paragraph shall be appointed by a majority vote of the

19  directors, and the board may be expanded to include additional

20  public representative directors up to the maximum number

21  allowed.  Any vacancy in office shall be filled for the

22  remainder of the term by majority vote of the directors. Any

23  director may be reappointed.

24         (3)  The State Board of Education shall provide in the

25  agreement with the not-for-profit corporation for the

26  following:

27         (a)  Approval by the State Board of Education of the

28  articles of incorporation of the not-for-profit corporation.

29         (b)  Approval by the State Board of Education of the

30  articles of incorporation of any not-for-profit corporate

31  subsidiary created by the not-for-profit corporation.

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 1         (c)  Use of hospital facilities and personnel by the

 2  not-for-profit corporation and its subsidiaries for mutually

 3  approved teaching and research programs conducted by the

 4  University of South Florida or other accredited medical

 5  schools or research institutes.

 6         (d)  Preparation of an annual postaudit of the

 7  not-for-profit corporation's financial accounts and the

 8  financial accounts of any subsidiaries to be conducted by an

 9  independent certified public accountant.  The annual audit

10  report shall include management letters and shall be submitted

11  to the Auditor General and the State Board of Education for

12  review.  The State Board of Education, the Auditor General,

13  and the Office of Program Policy Analysis and Government

14  Accountability shall have the authority to require and receive

15  from the not-for-profit corporation and any subsidiaries, or

16  from their independent auditor, any detail or supplemental

17  data relating to the operation of the not-for-profit

18  corporation or subsidiary.

19         (e)  Provision by the not-for-profit corporation and

20  its subsidiaries of equal employment opportunities for all

21  persons regardless of race, color, religion, sex, age, or

22  national origin.

23         (4)  The State Board of Education is authorized to

24  secure comprehensive general liability protection, including

25  professional liability protection, for the not-for-profit

26  corporation and its subsidiaries, pursuant to section 240.213,

27  Florida Statutes.

28         (5)  If the agreement between the not-for-profit

29  corporation and the State Board of Education is terminated for

30  any reason, the State Board of Education shall assume

31  governance and operation of the facilities.

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 1         (6)  The institute shall be administered by a chief

 2  executive officer, who shall be appointed by and serve at the

 3  pleasure of the board of directors of the not-for-profit

 4  corporation and who shall exercise the following powers and

 5  perform the following duties, subject to the approval of the

 6  board of directors:

 7         (a)  The chief executive officer shall establish

 8  programs that fulfill the mission of the institute in

 9  research, education, treatment, prevention, and early

10  detection of Alzheimer's disease; however, the chief executive

11  officer may not establish academic programs for which academic

12  credit is awarded and which culminate in the conferring of a

13  degree, without prior approval of the State Board of

14  Education.

15         (b)  The chief executive officer shall have control

16  over the budget and the dollars appropriated or donated to the

17  institute from private, local, state, and federal sources, as

18  well as technical and professional income generated or derived

19  from practice activities of the institute; however,

20  professional income generated by university faculty from

21  practice activities at the institute shall be shared between

22  the institute and the university as determined by the chief

23  executive officer and the appropriate university dean or vice

24  president.

25         (c)  The chief executive officer shall appoint

26  representatives of the institute to carry out the research,

27  patient-care, and educational activities of the institute and

28  establish the compensation, benefits, and terms of service of

29  such representatives. Representatives of the institute shall

30  be eligible to hold concurrent appointments at affiliated

31  

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 1  academic institutions.  University faculty shall be eligible

 2  to hold concurrent appointments at the institute.

 3         (d)  The chief executive officer shall have control

 4  over the use and assignment of space and equipment within the

 5  facilities.

 6         (e)  The chief executive officer shall have the power

 7  to create the administrative structure necessary to carry out

 8  the mission of the institute.

 9         (f)  The chief executive officer shall have a reporting

10  relationship to the Commissioner of Education.

11         (g)  The chief executive officer shall provide a copy

12  of the institute's annual report to the Governor and Cabinet,

13  the President of the Senate, the Speaker of the House of

14  Representatives, and the chair of the State Board of

15  Education.

16         (7)  The board of directors of the not-for-profit

17  corporation shall create a council of scientific advisers to

18  the chief executive officer consisting of leading researchers,

19  physicians, and scientists.  The council shall review programs

20  and recommend research priorities and initiatives to maximize

21  the state's investment in the institute. The members of the

22  council shall be appointed by the board of directors of the

23  not-for-profit corporation, except for five members who shall

24  be appointed by the State Board of Education. Each member of

25  the council shall be appointed to serve a 2-year term and may

26  be reappointed to the council. 

27         (8)  In carrying out the provisions of this section,

28  the not-for-profit corporation and its subsidiaries are not

29  agencies within the meaning of section 20.03(11), Florida

30  Statutes.

31  

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 1         Section 3.  Section 408.7057, Florida Statutes, is

 2  amended to read:

 3         408.7057  Statewide provider and health plan managed

 4  care organization claim dispute resolution program.--

 5         (1)  As used in this section, the term:

 6         (a)  "Agency" means the Agency for Health Care

 7  Administration.

 8         (b)(a)  "Health plan Managed care organization" means a

 9  health maintenance organization or a prepaid health clinic

10  certified under chapter 641, a prepaid health plan authorized

11  under s. 409.912, or an exclusive provider organization

12  certified under s. 627.6472, or a major medical expense health

13  insurance policy, as defined in s. 627.643(2)(e), offered by a

14  group or an individual health insurer licensed pursuant to

15  chapter 624, including a preferred provider organization under

16  s. 627.6471.

17         (c)(b)  "Resolution organization" means a qualified

18  independent third-party claim-dispute-resolution entity

19  selected by and contracted with the Agency for Health Care

20  Administration.

21         (2)(a)  The agency for Health Care Administration shall

22  establish a program by January 1, 2001, to provide assistance

23  to contracted and noncontracted providers and health plans

24  managed care organizations for resolution of claim disputes

25  that are not resolved by the provider and the health plan

26  managed care organization. The agency shall contract with a

27  resolution organization to timely review and consider claim

28  disputes submitted by providers and health plans managed care

29  organizations and recommend to the agency an appropriate

30  resolution of those disputes. The agency shall establish by

31  rule jurisdictional amounts and methods of aggregation for

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 1  claim disputes that may be considered by the resolution

 2  organization.

 3         (b)  The resolution organization shall review claim

 4  disputes filed by contracted and noncontracted providers and

 5  health plans managed care organizations unless the disputed

 6  claim:

 7         1.  Is related to interest payment;

 8         2.  Does not meet the jurisdictional amounts or the

 9  methods of aggregation established by agency rule, as provided

10  in paragraph (a);

11         3.  Is part of an internal grievance in a Medicare

12  managed care organization or a reconsideration appeal through

13  the Medicare appeals process;

14         4.  Is related to a health plan that is not regulated

15  by the state;

16         5.  Is part of a Medicaid fair hearing pursued under 42

17  C.F.R. ss. 431.220 et seq.;

18         6.  Is the basis for an action pending in state or

19  federal court; or

20         7.  Is subject to a binding claim-dispute-resolution

21  process provided by contract entered into prior to October 1,

22  2000, between the provider and the managed care organization.

23         (c)  Contracts entered into or renewed on or after

24  October 1, 2000, may require exhaustion of an internal

25  dispute-resolution process as a prerequisite to the submission

26  of a claim by a provider or a health plan maintenance

27  organization to the resolution organization when the

28  dispute-resolution program becomes effective.

29         (d)  A contracted or noncontracted provider or health

30  plan maintenance organization may not file a claim dispute

31  with the resolution organization more than 12 months after a

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 1  final determination has been made on a claim by a health plan

 2  or provider maintenance organization.

 3         (e)  The resolution organization shall require the

 4  health plan or provider submitting the claim dispute to submit

 5  any supporting documentation to the resolution organization

 6  within 15 days after receipt by the health plan or provider of

 7  a request from the resolution organization for documentation

 8  in support of the claim dispute. The resolution organization

 9  may extend the time if appropriate. Failure to submit the

10  supporting documentation within such time period shall result

11  in the dismissal of the submitted claim dispute.

12         (f)  The resolution organization shall require the

13  respondent in the claim dispute to submit all documentation in

14  support of its position within 15 days after receiving a

15  request from the resolution organization for supporting

16  documentation. The resolution organization may extend the time

17  if appropriate. Failure to submit the supporting documentation

18  within such time period shall result in a default against the

19  health plan or provider. In the event of such a default, the

20  resolution organization shall issue its written recommendation

21  to the agency that a default be entered against the defaulting

22  entity. The written recommendation shall include a

23  recommendation to the agency that the defaulting entity shall

24  pay the entity submitting the claim dispute the full amount of

25  the claim dispute, plus all accrued interest, and shall be

26  considered a nonprevailing party for the purposes of this

27  section.

28         (g)1.  If on an ongoing basis during the preceding 12

29  months, the agency has reason to believe that a pattern of

30  noncompliance with s. 627.6131 and s. 641.3155 exists on the

31  part of a particular health plan or provider, the agency shall

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 1  evaluate the information contained in these cases to determine

 2  whether the information evidences a pattern and report its

 3  findings, together with substantiating evidence, to the

 4  appropriate licensure or certification entity for the health

 5  plan or provider.

 6         2.  In addition, the agency shall prepare a report to

 7  the Governor and the Legislature by February 1 of each year,

 8  enumerating:  claims dismissed; defaults issued; and failures

 9  to comply with agency final orders issued under this section.

10         (3)  The agency shall adopt rules to establish a

11  process to be used by the resolution organization in

12  considering claim disputes submitted by a provider or health

13  plan managed care organization which must include the issuance

14  by the resolution organization of a written recommendation,

15  supported by findings of fact, to the agency within 60 days

16  after the requested information is received by the resolution

17  organization within the timeframes specified by the resolution

18  organization. In no event shall the review time exceed 90 days

19  following receipt of the initial claim dispute submission by

20  the resolution organization receipt of the claim dispute

21  submission.

22         (4)  Within 30 days after receipt of the recommendation

23  of the resolution organization, the agency shall adopt the

24  recommendation as a final order.

25         (5)  The agency shall notify within 7 days the

26  appropriate licensure or certification entity whenever there

27  is a violation of a final order issued by the agency pursuant

28  to this section.

29         (6)(5)  The entity that does not prevail in the

30  agency's order must pay a review cost to the review

31  organization, as determined by agency rule. Such rule must

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 1  provide for an apportionment of the review fee in any case in

 2  which both parties prevail in part. If the nonprevailing party

 3  fails to pay the ordered review cost within 35 days after the

 4  agency's order, the nonpaying party is subject to a penalty of

 5  not more than $500 per day until the penalty is paid.

 6         (7)(6)  The agency for Health Care Administration may

 7  adopt rules to administer this section.

 8         Section 4.  Subsection (1) of section 626.88, Florida

 9  Statutes, is amended to read:

10         626.88  Definitions of "administrator" and "insurer".--

11         (1)  For the purposes of this part, an "administrator"

12  is any person who directly or indirectly solicits or effects

13  coverage of, collects charges or premiums from, or adjusts or

14  settles claims on residents of this state in connection with

15  authorized commercial self-insurance funds or with insured or

16  self-insured programs which provide life or health insurance

17  coverage or coverage of any other expenses described in s.

18  624.33(1) or any person who, through a health care risk

19  contract as defined in s. 641.234 with an insurer or health

20  maintenance organization, provides billing and collection

21  services to health insurers and health maintenance

22  organizations on behalf of health care providers, other than

23  any of the following persons:

24         (a)  An employer on behalf of such employer's employees

25  or the employees of one or more subsidiary or affiliated

26  corporations of such employer.

27         (b)  A union on behalf of its members.

28         (c)  An insurance company which is either authorized to

29  transact insurance in this state or is acting as an insurer

30  with respect to a policy lawfully issued and delivered by such

31  

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 1  company in and pursuant to the laws of a state in which the

 2  insurer was authorized to transact an insurance business.

 3         (d)  A health care services plan, health maintenance

 4  organization, professional service plan corporation, or person

 5  in the business of providing continuing care, possessing a

 6  valid certificate of authority issued by the department, and

 7  the sales representatives thereof, if the activities of such

 8  entity are limited to the activities permitted under the

 9  certificate of authority.

10         (e)  An insurance agent licensed in this state whose

11  activities are limited exclusively to the sale of insurance.

12         (f)  An adjuster licensed in this state whose

13  activities are limited to the adjustment of claims.

14         (g)  A creditor on behalf of such creditor's debtors

15  with respect to insurance covering a debt between the creditor

16  and its debtors.

17         (h)  A trust and its trustees, agents, and employees

18  acting pursuant to such trust established in conformity with

19  29 U.S.C. s. 186.

20         (i)  A trust exempt from taxation under s. 501(a) of

21  the Internal Revenue Code, a trust satisfying the requirements

22  of ss. 624.438 and 624.439, or any governmental trust as

23  defined in s. 624.33(3), and the trustees and employees acting

24  pursuant to such trust, or a custodian and its agents and

25  employees, including individuals representing the trustees in

26  overseeing the activities of a service company or

27  administrator, acting pursuant to a custodial account which

28  meets the requirements of s. 401(f) of the Internal Revenue

29  Code.

30         (j)  A financial institution which is subject to

31  supervision or examination by federal or state authorities or

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 1  a mortgage lender licensed under chapter 494 who collects and

 2  remits premiums to licensed insurance agents or authorized

 3  insurers concurrently or in connection with mortgage loan

 4  payments.

 5         (k)  A credit card issuing company which advances for

 6  and collects premiums or charges from its credit card holders

 7  who have authorized such collection if such company does not

 8  adjust or settle claims.

 9         (l)  A person who adjusts or settles claims in the

10  normal course of such person's practice or employment as an

11  attorney at law and who does not collect charges or premiums

12  in connection with life or health insurance coverage.

13         (m)  A person approved by the Division of Workers'

14  Compensation of the Department of Labor and Employment

15  Security who administers only self-insured workers'

16  compensation plans.

17         (n)  A service company or service agent and its

18  employees, authorized in accordance with ss. 626.895-626.899,

19  serving only a single employer plan, multiple-employer welfare

20  arrangements, or a combination thereof.

21         (o)  Any provider or group practice, as defined in s.

22  456.053, providing services under the scope of the license of

23  the provider or the member of the group practice.

24         (p)  Any hospital providing billing, claims, and

25  collection services solely on its own and its physicians'

26  behalf and providing services under the scope of its license.

27  

28  A person who provides billing and collection services to

29  health insurers and health maintenance organizations on behalf

30  of health care providers shall comply with the provisions of

31  ss. 627.6131, 641.3155, and 641.51(4).

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 1         Section 5.  Section 627.6131, Florida Statutes, is

 2  created to read:

 3         627.6131  Payment of claims.--

 4         (1)  The contract shall include the following

 5  provision:

 6  

 7         "Time of Payment of Claims: After receiving

 8         written proof of loss, the insurer will pay

 9         monthly all benefits then due for ...(type of

10         benefit).... Benefits for any other loss

11         covered by this policy will be paid as soon as

12         the insurer receives proper written proof."

13  

14         (2)  As used in this section, the term "claim" for a

15  noninstitutional provider means a paper or electronic billing

16  instrument submitted to the insurer's designated location that

17  consists of the HCFA 1500 data set, or its successor, that has

18  all mandatory entries for a physician licensed under chapter

19  458, chapter 459, chapter 460, chapter 461, or chapter 463, or

20  psychologists licensed under chapter 490 or any appropriate

21  billing instrument that has all mandatory entries for any

22  other noninstitutional provider. For institutional providers,

23  "claim" means a paper or electronic billing instrument

24  submitted to the insurer's designated location that consists

25  of the UB-92 data set or its successor with entries stated as

26  mandatory by the National Uniform Billing Committee.

27         (3)  All claims for payment or overpayment, whether

28  electronic or nonelectronic:

29         (a)  Are considered received on the date the claim is

30  received by the insurer at its designated claims-receipt

31  

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 1  location or the date the claim for overpayment is received by

 2  the provider at its designated location.

 3         (b)  Must be mailed or electronically transferred to

 4  the primary insurer within 6 months after the following have

 5  occurred:

 6         1.  Discharge for inpatient services or the date of

 7  service for outpatient services; and

 8         2.  The provider has been furnished with the correct

 9  name and address of the patient's health insurer.

10  

11  All claims for payment, whether electronic or nonelectronic,

12  must be mailed or electronically transferred to the secondary

13  insurer within 90 days after final determination by the

14  primary insurer. A provider's claim is considered submitted on

15  the date it is electronically transferred or mailed.

16         (c)  Must not duplicate a claim previously submitted

17  unless it is determined that the original claim was not

18  received or is otherwise lost.

19         (4)  For all electronically submitted claims, a health

20  insurer shall:

21         (a)  Within 24 hours after the beginning of the next

22  business day after receipt of the claim, provide electronic

23  acknowledgment of the receipt of the claim to the electronic

24  source submitting the claim.

25         (b)  Within 20 days after receipt of the claim, pay the

26  claim or notify a provider or designee if a claim is denied or

27  contested.  Notice of the insurer's action on the claim and

28  payment of the claim is considered to be made on the date the

29  notice or payment was mailed or electronically transferred.

30         (c)1.  Notification of the health insurer's

31  determination of a contested claim must be accompanied by an

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 1  itemized list of additional information or documents the

 2  insurer can reasonably determine are necessary to process the

 3  claim.

 4         2.  A provider must submit the additional information

 5  or documentation, as specified on the itemized list, within 35

 6  days after receipt of the notification. Additional information

 7  is considered submitted on the date it is electronically

 8  transferred or mailed.  The health insurer may not request

 9  duplicate documents.

10         (d)  For purposes of this subsection, electronic means

11  of transmission of claims, notices, documents, forms, and

12  payments shall be used to the greatest extent possible by the

13  health insurer and the provider.

14         (e)  A claim must be paid or denied within 90 days

15  after receipt of the claim. Failure to pay or deny a claim

16  within 120 days after receipt of the claim creates an

17  uncontestable obligation to pay the claim.

18         (5)  For all nonelectronically submitted claims, a

19  health insurer shall:

20         (a)  Effective November 1, 2003, provide acknowledgment

21  of receipt of the claim within 15 days after receipt of the

22  claim to the provider or provide a provider within 15 days

23  after receipt with electronic access to the status of a

24  submitted claim.

25         (b)  Within 40 days after receipt of the claim, pay the

26  claim or notify a provider or designee if a claim is denied or

27  contested.  Notice of the insurer's action on the claim and

28  payment of the claim is considered to be made on the date the

29  notice or payment was mailed or electronically transferred.

30         (c)1.  Notification of the health insurer's

31  determination of a contested claim must be accompanied by an

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 1  itemized list of additional information or documents the

 2  insurer can reasonably determine are necessary to process the

 3  claim.

 4         2.  A provider must submit the additional information

 5  or documentation, as specified on the itemized list, within 35

 6  days after receipt of the notification. Additional information

 7  is considered submitted on the date it is electronically

 8  transferred or mailed.  The health insurer may not request

 9  duplicate documents.

10         (d)  For purposes of this subsection, electronic means

11  of transmission of claims, notices, documents, forms, and

12  payments shall be used to the greatest extent possible by the

13  health insurer and the provider.

14         (e)  A claim must be paid or denied within 120 days

15  after receipt of the claim. Failure to pay or deny a claim

16  within 140 days after receipt of the claim creates an

17  uncontestable obligation to pay the claim.

18         (6)  If a health insurer determines that it has made an

19  overpayment to a provider for services rendered to an insured,

20  the health insurer must make a claim for such overpayment to

21  the provider's designated location.  A health insurer that

22  makes a claim for overpayment to a provider under this section

23  shall give the provider a written or electronic statement

24  specifying the basis for the retroactive denial or payment

25  adjustment. The insurer must identify the claim or claims, or

26  overpayment claim portion thereof, for which a claim for

27  overpayment is submitted.

28         (a)  If an overpayment determination is the result of

29  retroactive review or audit of coverage decisions or payment

30  levels not related to fraud, a health insurer shall adhere to

31  the following procedures:

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 1         1.  All claims for overpayment must be submitted to a

 2  provider within 30 months after the health insurer's payment

 3  of the claim. A provider must pay, deny, or contest the health

 4  insurer's claim for overpayment within 40 days after the

 5  receipt of the claim. All contested claims for overpayment

 6  must be paid or denied within 120 days after receipt of the

 7  claim. Failure to pay or deny overpayment and claim within 140

 8  days after receipt creates an uncontestable obligation to pay

 9  the claim.

10         2.  A provider that denies or contests a health

11  insurer's claim for overpayment or any portion of a claim

12  shall notify the health insurer, in writing, within 35 days

13  after the provider receives the claim that the claim for

14  overpayment is contested or denied. The notice that the claim

15  for overpayment is denied or contested must identify the

16  contested portion of the claim and the specific reason for

17  contesting or denying the claim and, if contested, must

18  include a request for additional information. If the health

19  insurer submits additional information, the health insurer

20  must, within 35 days after receipt of the request, mail or

21  electronically transfer the information to the provider. The

22  provider shall pay or deny the claim for overpayment within 45

23  days after receipt of the information. The notice is

24  considered made on the date the notice is mailed or

25  electronically transferred by the provider.

26         3.  The health insurer may not reduce payment to the

27  provider for other services unless the provider agrees to the

28  reduction in writing or fails to respond to the health

29  insurer's overpayment claim as required by this paragraph.

30         4.  Payment of an overpayment claim is considered made

31  on the date the payment was mailed or electronically

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 1  transferred.  An overdue payment of a claim bears simple

 2  interest at the rate of 12 percent per year.  Interest on an

 3  overdue payment for a claim for an overpayment begins to

 4  accrue when the claim should have been paid, denied, or

 5  contested.

 6         (b)  A claim for overpayment shall not be permitted

 7  beyond 30 months after the health insurer's payment of a

 8  claim, except that claims for overpayment may be sought beyond

 9  that time from providers convicted of fraud pursuant to s.

10  817.234.

11         (7)  Payment of a claim is considered made on the date

12  the payment was mailed or electronically transferred. An

13  overdue payment of a claim bears simple interest of 12 percent

14  per year. Interest on an overdue payment for a claim or for

15  any portion of a claim begins to accrue when the claim should

16  have been paid, denied, or contested. The interest is payable

17  with the payment of the claim.

18         (8)  For all contracts entered into or renewed on or

19  after October 1, 2002, a health insurer's internal dispute

20  resolution process related to a denied claim not under active

21  review by a mediator, arbitrator, or third-party dispute

22  entity must be finalized within 60 days after the receipt of

23  the provider's request for review or appeal.

24         (9)  A provider or any representative of a provider,

25  regardless of whether the provider is under contract with the

26  health insurer, may not collect or attempt to collect money

27  from, maintain any action at law against, or report to a

28  credit agency an insured for payment of covered services for

29  which the health insurer contested or denied the provider's

30  claim. This prohibition applies during the pendency of any

31  claim for payment made by the provider to the health insurer

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 1  for payment of the services or internal dispute resolution

 2  process to determine whether the health insurer is liable for

 3  the services.  For a claim, this pendency applies from the

 4  date the claim or a portion of the claim is denied to the date

 5  of the completion of the health insurer's internal dispute

 6  resolution process, not to exceed 60 days. This subsection

 7  does not prohibit the collection by the provider of

 8  copayments, coinsurance, or deductible amounts due the

 9  provider.

10         (10)  The provisions of this section may not be waived,

11  voided, or nullified by contract.

12         (11)  A health insurer may not retroactively deny a

13  claim because of insured ineligibility more than 1 year after

14  the date of payment of the claim.

15         (12)  A health insurer shall pay a contracted primary

16  care or admitting physician, pursuant to such physician's

17  contract, for providing inpatient services in a contracted

18  hospital to an insured if such services are determined by the

19  health insurer to be medically necessary and covered services

20  under the health insurer's contract with the contract holder.

21         (13)  Upon written notification by an insured, an

22  insurer shall investigate any claim of improper billing by a

23  physician, hospital, or other health care provider. The

24  insurer shall determine if the insured was properly billed for

25  only those procedures and services that the insured actually

26  received. If the insurer determines that the insured has been

27  improperly billed, the insurer shall notify the insured and

28  the provider of its findings and shall reduce the amount of

29  payment to the provider by the amount determined to be

30  improperly billed. If a reduction is made due to such

31  

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 1  notification by the insured, the insurer shall pay to the

 2  insured 20 percent of the amount of the reduction up to $500.

 3         (14)  A permissible error ratio of 5 percent is

 4  established for insurer's claims payment violations of

 5  paragraphs (4)(a), (b), (c), and (e) and (5)(a), (b), (c), and

 6  (e).  If the error ratio of a particular insurer does not

 7  exceed the permissible error ratio of 5 percent for an audit

 8  period, no fine shall be assessed for the noted claims

 9  violations for the audit period.  The error ratio shall be

10  determined by dividing the number of claims with violations

11  found on a statistically valid sample of claims for the audit

12  period by the total number of claims in the sample.  If the

13  error ratio exceeds the permissible error ratio of 5 percent,

14  a fine may be assessed according to s. 624.4211 for those

15  claims payment violations which exceed the error ratio.

16  Notwithstanding the provisions of this section, the department

17  may fine a health insurer for claims payment violations of

18  paragraphs (4)(e) and (5)(e) which create an uncontestable

19  obligation to pay the claim.  The department shall not fine

20  insurers for violations which the department determines were

21  due to circumstances beyond the insurer's control.

22         (15)  This section is applicable only to a major

23  medical expense health insurance policy as defined in s.

24  627.643(2)(e) offered by a group or an individual health

25  insurer licensed pursuant to chapter 624, including a

26  preferred provider policy under s. 627.6471 and an exclusive

27  provider organization under s. 627.6472 or a group or

28  individual insurance contract that only provides direct

29  payments to dentists for enumerated dental services.

30         (16)  Notwithstanding paragraph (4)(b), where an

31  electronic pharmacy claim is submitted to a pharmacy benefits

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 1  manager acting on behalf of a health insurer the pharmacy

 2  benefits manager shall, within 30 days of receipt of the

 3  claim, pay the claim or notify a provider or designee if a

 4  claim is denied or contested.  Notice of the insurer's action

 5  on the claim and payment of the claim is considered to be made

 6  on the date the notice or payment was mailed or electronically

 7  transferred.

 8         (17)  Notwithstanding paragraph (5)(a), effective

 9  November 1, 2003, where a nonelectronic pharmacy claim is

10  submitted to a pharmacy benefits manager acting on behalf of a

11  health insurer the pharmacy benefits manager shall provide

12  acknowledgment of receipt of the claim within 30 days after

13  receipt of the claim to the provider or provide a provider

14  within 30 days after receipt with electronic access to the

15  status of a submitted claim.

16         Section 6.  Subsection (4) of section 627.651, Florida

17  Statutes, is amended to read:

18         627.651  Group contracts and plans of self-insurance

19  must meet group requirements.--

20         (4)  This section does not apply to any plan which is

21  established or maintained by an individual employer in

22  accordance with the Employee Retirement Income Security Act of

23  1974, Pub. L. No. 93-406, or to a multiple-employer welfare

24  arrangement as defined in s. 624.437(1), except that a

25  multiple-employer welfare arrangement shall comply with ss.

26  627.419, 627.657, 627.6575, 627.6578, 627.6579, 627.6612,

27  627.66121, 627.66122, 627.6615, 627.6616, and 627.662(7)(6).

28  This subsection does not allow an authorized insurer to issue

29  a group health insurance policy or certificate which does not

30  comply with this part.

31  

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 1         Section 7.  Section 627.662, Florida Statutes, is

 2  amended to read:

 3         627.662  Other provisions applicable.--The following

 4  provisions apply to group health insurance, blanket health

 5  insurance, and franchise health insurance:

 6         (1)  Section 627.569, relating to use of dividends,

 7  refunds, rate reductions, commissions, and service fees.

 8         (2)  Section 627.602(1)(f) and (2), relating to

 9  identification numbers and statement of deductible provisions.

10         (3)  Section 627.635, relating to excess insurance.

11         (4)  Section 627.638, relating to direct payment for

12  hospital or medical services.

13         (5)  Section 627.640, relating to filing and

14  classification of rates.

15         (6)  Section 627.613, relating to timely payment of

16  claims, or s. 627.6131, relating to payment of claims,

17  whichever is applicable.

18         (7)(6)  Section 627.645(1), relating to denial of

19  claims.

20         (7)  Section 627.613, relating to time of payment of

21  claims.

22         (8)  Section 627.6471, relating to preferred provider

23  organizations.

24         (9)  Section 627.6472, relating to exclusive provider

25  organizations.

26         (10)  Section 627.6473, relating to combined preferred

27  provider and exclusive provider policies.

28         (11)  Section 627.6474, relating to provider contracts.

29         Section 8.  Paragraph (e) of subsection (1) of section

30  641.185, Florida Statutes, is amended to read:

31  

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 1         641.185  Health maintenance organization subscriber

 2  protections.--

 3         (1)  With respect to the provisions of this part and

 4  part III, the principles expressed in the following statements

 5  shall serve as standards to be followed by the Department of

 6  Insurance and the Agency for Health Care Administration in

 7  exercising their powers and duties, in exercising

 8  administrative discretion, in administrative interpretations

 9  of the law, in enforcing its provisions, and in adopting

10  rules:

11         (e)  A health maintenance organization subscriber

12  should receive timely, concise information regarding the

13  health maintenance organization's reimbursement to providers

14  and services pursuant to ss. 641.31 and 641.31015 and should

15  receive prompt payment from the organization pursuant to s.

16  641.3155.

17         Section 9.  Subsection (4) is added to section 641.234,

18  Florida Statutes, to read:

19         641.234  Administrative, provider, and management

20  contracts.--

21         (4)(a)  If a health maintenance organization, through a

22  health care risk contract, transfers to any entity the

23  obligations to pay any provider for any claims arising from

24  services provided to or for the benefit of any subscriber of

25  the organization, the health maintenance organization shall

26  remain responsible for any violations of ss. 641,3155,

27  641.3156, and 641.51(4). The provisions of ss.

28  624.418-624.4211 and 641.52 shall apply to any such

29  violations.

30         (b)  As used in this subsection:

31  

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 1         1.  The term "health care risk contract" means a

 2  contract under which an entity receives compensation in

 3  exchange for providing to the health maintenance organization

 4  a provider network or other services, which may include

 5  administrative services.

 6         2.  The term "entity" means a person licensed as an

 7  administrator under s. 626.88 and does not include any

 8  provider or group practice, as defined in s. 456.053,

 9  providing services under the scope of the license of the

10  provider or the members of the group practice. The term does

11  not include a hospital providing billing, claims, and

12  collection services solely on its own and its physicians'

13  behalf and providing services under the scope of its license.

14         Section 10.  Subsection (1) of section 641.30, Florida

15  Statutes, is amended to read:

16         641.30  Construction and relationship to other laws.--

17         (1)  Every health maintenance organization shall accept

18  the standard health claim form prescribed pursuant to s.

19  641.3155 627.647.

20         Section 11.  Subsection (4) of section 641.3154,

21  Florida Statutes, is amended to read:

22         641.3154  Organization liability; provider billing

23  prohibited.--

24         (4)  A provider or any representative of a provider,

25  regardless of whether the provider is under contract with the

26  health maintenance organization, may not collect or attempt to

27  collect money from, maintain any action at law against, or

28  report to a credit agency a subscriber of an organization for

29  payment of services for which the organization is liable, if

30  the provider in good faith knows or should know that the

31  organization is liable. This prohibition applies during the

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 1  pendency of any claim for payment made by the provider to the

 2  organization for payment of the services and any legal

 3  proceedings or dispute resolution process to determine whether

 4  the organization is liable for the services if the provider is

 5  informed that such proceedings are taking place. It is

 6  presumed that a provider does not know and should not know

 7  that an organization is liable unless:

 8         (a)  The provider is informed by the organization that

 9  it accepts liability;

10         (b)  A court of competent jurisdiction determines that

11  the organization is liable; or

12         (c)  The department or agency makes a final

13  determination that the organization is required to pay for

14  such services subsequent to a recommendation made by the

15  Statewide Provider and Subscriber Assistance Panel pursuant to

16  s. 408.7056; or

17         (d)  The agency issues a final order that the

18  organization is required to pay for such services subsequent

19  to a recommendation made by a resolution organization pursuant

20  to s. 408.7057.

21         Section 12.  Section 641.3155, Florida Statutes, is

22  amended to read:

23         (Substantial rewording of section. See

24         s. 641.3155, F.S., for present text.)

25         641.3155  Prompt payment of claims.--

26         (1)  As used in this section, the term "claim" for a

27  noninstitutional provider means a paper or electronic billing

28  instrument submitted to the health maintenance organization's

29  designated location that consists of the HCFA 1500 data set,

30  or its successor, that has all mandatory entries for a

31  physician licensed under chapter 458, chapter 459, chapter

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 1  460, chapter 461, or chapter 463, or psychologists licensed

 2  under chapter 490 or any appropriate billing instrument that

 3  has all mandatory entries for any other noninstitutional

 4  provider. For institutional providers, "claim" means a paper

 5  or electronic billing instrument submitted to the health

 6  maintenance organization's designated location that consists

 7  of the UB-92 data set or its successor with entries stated as

 8  mandatory by the National Uniform Billing Committee.

 9         (2)  All claims for payment or overpayment, whether

10  electronic or nonelectronic:

11         (a)  Are considered received on the date the claim is

12  received by the organization at its designated claims-receipt

13  location or the date a claim for overpayment is received by

14  the provider at its designated location.

15         (b)  Must be mailed or electronically transferred to

16  the primary organization within 6 months after the following

17  have occurred:

18         1.  Discharge for inpatient services or the date of

19  service for outpatient services; and

20         2.  The provider has been furnished with the correct

21  name and address of the patient's health maintenance

22  organization.

23  

24  All claims for payment, whether electronic or nonelectronic,

25  must be mailed or electronically transferred to the secondary

26  organization within 90 days after final determination by the

27  primary organization. A provider's claim is considered

28  submitted on the date it is electronically transferred or

29  mailed.

30  

31  

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 1         (c)  Must not duplicate a claim previously submitted

 2  unless it is determined that the original claim was not

 3  received or is otherwise lost.

 4         (3)  For all electronically submitted claims, a health

 5  maintenance organization shall:

 6         (a)  Within 24 hours after the beginning of the next

 7  business day after receipt of the claim, provide electronic

 8  acknowledgment of the receipt of the claim to the electronic

 9  source submitting the claim.

10         (b)  Within 20 days after receipt of the claim, pay the

11  claim or notify a provider or designee if a claim is denied or

12  contested.  Notice of the organization's action on the claim

13  and payment of the claim is considered to be made on the date

14  the notice or payment was mailed or electronically

15  transferred.

16         (c)1.  Notification of the health maintenance

17  organization's determination of a contested claim must be

18  accompanied by an itemized list of additional information or

19  documents the insurer can reasonably determine are necessary

20  to process the claim.

21         2.  A provider must submit the additional information

22  or documentation, as specified on the itemized list, within 35

23  days after receipt of the notification. Additional information

24  is considered submitted on the date it is electronically

25  transferred or mailed. The health maintenance organization may

26  not request duplicate documents.

27         (d)  For purposes of this subsection, electronic means

28  of transmission of claims, notices, documents, forms, and

29  payment shall be used to the greatest extent possible by the

30  health maintenance organization and the provider.

31  

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 1         (e)  A claim must be paid or denied within 90 days

 2  after receipt of the claim. Failure to pay or deny a claim

 3  within 120 days after receipt of the claim creates an

 4  uncontestable obligation to pay the claim.

 5         (4)  For all nonelectronically submitted claims, a

 6  health maintenance organization shall:

 7         (a)  Effective November 1, 2003, provide

 8  acknowledgement of receipt of the claim within 15 days after

 9  receipt of the claim to the provider or designee or provide a

10  provider or designee within 15 days after receipt with

11  electronic access to the status of a submitted claim.

12         (b)  Within 40 days after receipt of the claim, pay the

13  claim or notify a provider or designee if a claim is denied or

14  contested.  Notice of the health maintenance organization's

15  action on the claim and payment of the claim is considered to

16  be made on the date the notice or payment was mailed or

17  electronically transferred.

18         (c)1.  Notification of the health maintenance

19  organization's determination of a contested claim must be

20  accompanied by an itemized list of additional information or

21  documents the organization can reasonably determine are

22  necessary to process the claim.

23         2.  A provider must submit the additional information

24  or documentation, as specified on the itemized list, within 35

25  days after receipt of the notification. Additional information

26  is considered submitted on the date it is electronically

27  transferred or mailed. The health maintenance organization may

28  not request duplicate documents.

29         (d)  For purposes of this subsection, electronic means

30  of transmission of claims, notices, documents, forms, and

31  

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 1  payments shall be used to the greatest extent possible by the

 2  health maintenance organization and the provider.

 3         (e)  A claim must be paid or denied within 120 days

 4  after receipt of the claim. Failure to pay or deny a claim

 5  within 140 days after receipt of the claim creates an

 6  uncontestable obligation to pay the claim.

 7         (5)  If a health maintenance organization determines

 8  that it has made an overpayment to a provider for services

 9  rendered to a subscriber, the health maintenance organization

10  must make a claim for such overpayment to the provider's

11  designated location. A health maintenance organization that

12  makes a claim for overpayment to a provider under this section

13  shall give the provider a written or electronic statement

14  specifying the basis for the retroactive denial or payment

15  adjustment.  The health maintenance organization must identify

16  the claim or claims, or overpayment claim portion thereof, for

17  which a claim for overpayment is submitted.

18         (a)  If an overpayment determination is the result of

19  retroactive review or audit of coverage decisions or payment

20  levels not related to fraud, a health maintenance organization

21  shall adhere to the following procedures:

22         1.  All claims for overpayment must be submitted to a

23  provider within 30 months after the health maintenance

24  organization's payment of the claim. A provider must pay,

25  deny, or contest the health maintenance organization's claim

26  for overpayment within 40 days after the receipt of the claim.

27  All contested claims for overpayment must be paid or denied

28  within 120 days after receipt of the claim. Failure to pay or

29  deny overpayment and claim within 140 days after receipt

30  creates an uncontestable obligation to pay the claim.

31  

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 1         2.  A provider that denies or contests a health

 2  maintenance organization's claim for overpayment or any

 3  portion of a claim shall notify the organization, in writing,

 4  within 35 days after the provider receives the claim that the

 5  claim for overpayment is contested or denied.  The notice that

 6  the claim for overpayment is denied or contested must identify

 7  the contested portion of the claim and the specific reason for

 8  contesting or denying the claim and, if contested, must

 9  include a request for additional information.  If the

10  organization submits additional information, the organization

11  must, within 35 days after receipt of the request, mail or

12  electronically transfer the information to the provider.  The

13  provider shall pay or deny the claim for overpayment within 45

14  days after receipt of the information.  The notice is

15  considered made on the date the notice is mailed or

16  electronically transferred by the provider.

17         3.  The health maintenance organization may not reduce

18  payment to the provider for other services unless the provider

19  agrees to the reduction in writing or fails to respond to the

20  health maintenance organization's overpayment claim as

21  required by this paragraph.

22         4.  Payment of an overpayment claim is considered made

23  on the date the payment was mailed or electronically

24  transferred.  An overdue payment of a claim bears simple

25  interest at the rate of 12 percent per year.  Interest on an

26  overdue payment for a claim for an overpayment payment begins

27  to accrue when the claim should have been paid, denied, or

28  contested.

29         (b)  A claim for overpayment shall not be permitted

30  beyond 30 months after the health maintenance organization's

31  payment of a claim, except that claims for overpayment may be

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 1  sought beyond that time from providers convicted of fraud

 2  pursuant to s. 817.234.

 3         (6)  Payment of a claim is considered made on the date

 4  the payment was mailed or electronically transferred. An

 5  overdue payment of a claim bears simple interest of 12 percent

 6  per year. Interest on an overdue payment for a claim or for

 7  any portion of a claim begins to accrue when the claim should

 8  have been paid, denied, or contested.  The interest is payable

 9  with the payment of the claim.

10         (7)(a)  For all contracts entered into or renewed on or

11  after October 1, 2002, a health maintenance organization's

12  internal dispute resolution process related to a denied claim

13  not under active review by a mediator, arbitrator, or

14  third-party dispute entity must be finalized within 60 days

15  after the receipt of the provider's request for review or

16  appeal.

17         (b)  All claims to a health maintenance organization

18  begun after October 1, 2000, not under active review by a

19  mediator, arbitrator, or third-party dispute entity, shall

20  result in a final decision on the claim by the health

21  maintenance organization by January 2, 2003, for the purpose

22  of the statewide provider and health plan claim dispute

23  resolution program pursuant to s. 408.7057.

24         (8)  A provider or any representative of a provider,

25  regardless of whether the provider is under contract with the

26  health maintenance organization, may not collect or attempt to

27  collect money from, maintain any action at law against, or

28  report to a credit agency a subscriber for payment of covered

29  services for which the health maintenance organization

30  contested or denied the provider's claim. This prohibition

31  applies during the pendency of any claim for payment made by

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 1  the provider to the health maintenance organization for

 2  payment of the services or internal dispute resolution process

 3  to determine whether the health maintenance organization is

 4  liable for the services. For a claim, this pendency applies

 5  from the date the claim or a portion of the claim is denied to

 6  the date of the completion of the health maintenance

 7  organization's internal dispute resolution process, not to

 8  exceed 60 days. This subsection does not prohibit collection

 9  by the provider of copayments, coinsurance, or deductible

10  amounts due the provider.

11         (9)  The provisions of this section may not be waived,

12  voided, or nullified by contract.

13         (10)  A health maintenance organization may not

14  retroactively deny a claim because of subscriber ineligibility

15  more than 1 year after the date of payment of the claim.

16         (11)  A health maintenance organization shall pay a

17  contracted primary care or admitting physician, pursuant to

18  such physician's contract, for providing inpatient services in

19  a contracted hospital to a subscriber if such services are

20  determined by the health maintenance organization to be

21  medically necessary and covered services under the health

22  maintenance organization's contract with the contract holder.

23         (12)  A permissible error ratio of 5 percent is

24  established for health maintenance organizations' claims

25  payment violations of paragraphs (3)(a), (b), (c), and (e) and

26  (4)(a), (b), (c), and (e).  If the error ratio of a particular

27  insurer does not exceed the permissible error ratio of 5

28  percent for an audit period, no fine shall be assessed for the

29  noted claims violations for the audit period.  The error ratio

30  shall be determined by dividing the number of claims with

31  violations found on a statistically valid sample of claims for

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 1  the audit period by the total number of claims in the sample.

 2  If the error ratio exceeds the permissible error ratio of 5

 3  percent, a fine may be assessed according to s. 624.4211 for

 4  those claims payment violations which exceed the error ratio.

 5  Notwithstanding the provisions of this section, the department

 6  may fine a health maintenance organization for claims payment

 7  violations of paragraphs (3)(e) and (4)(e) which create an

 8  uncontestable obligation to pay the claim.  The department

 9  shall not fine organizations for violations which the

10  department determines were due to circumstances beyond the

11  organization's control.

12         (13)  This section shall apply to all claims or any

13  portion of a claim submitted by a health maintenance

14  organization subscriber under a health maintenance

15  organization subscriber contract to the organization for

16  payment.

17         (14)  Notwithstanding paragraph (3)(b), where an

18  electronic pharmacy claim is submitted to a pharmacy benefits

19  manager acting on behalf of a health maintenance organization

20  the pharmacy benefits manager shall, within 30 days of receipt

21  of the claim, pay the claim or notify a provider or designee

22  if a claim is denied or contested.  Notice of the

23  organization's action on the claim and payment of the claim is

24  considered to be made on the date the notice or payment was

25  mailed or electronically transferred.

26         (15)  Notwithstanding paragraph (4)(a), effective

27  November 1, 2003, where a nonelectronic pharmacy claim is

28  submitted to a pharmacy benefits manager acting on behalf of a

29  health maintenance organization the pharmacy benefits manager

30  shall provide acknowledgment of receipt of the claim within 30

31  days after receipt of the claim to the provider or provide a

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 1  provider within 30 days after receipt with electronic access

 2  to the status of a submitted claim.

 3         Section 13.  Subsection (12) of section 641.51, Florida

 4  Statutes, is amended to read:

 5         641.51  Quality assurance program; second medical

 6  opinion requirement.--

 7         (12)  If a contracted primary care physician, licensed

 8  under chapter 458 or chapter 459, determines and the

 9  organization determine that a subscriber requires examination

10  by a licensed ophthalmologist for medically necessary,

11  contractually covered services, then the organization shall

12  authorize the contracted primary care physician to send the

13  subscriber to a contracted licensed ophthalmologist.

14         Section 14.  Paragraph (o) of subsection (3) of section

15  456.053, Florida Statutes, is amended to read:

16         456.053  Financial arrangements between referring

17  health care providers and providers of health care services.--

18         (3)  DEFINITIONS.--For the purpose of this section, the

19  word, phrase, or term:

20         (o)  "Referral" means any referral of a patient by a

21  health care provider for health care services, including,

22  without limitation:

23         1.  The forwarding of a patient by a health care

24  provider to another health care provider or to an entity which

25  provides or supplies designated health services or any other

26  health care item or service; or

27         2.  The request or establishment of a plan of care by a

28  health care provider, which includes the provision of

29  designated health services or other health care item or

30  service.

31  

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 1         3.  The following orders, recommendations, or plans of

 2  care shall not constitute a referral by a health care

 3  provider:

 4         a.  By a radiologist for diagnostic-imaging services.

 5         b.  By a physician specializing in the provision of

 6  radiation therapy services for such services.

 7         c.  By a medical oncologist for drugs and solutions to

 8  be prepared and administered intravenously to such

 9  oncologist's patient, as well as for the supplies and

10  equipment used in connection therewith to treat such patient

11  for cancer and the complications thereof.

12         d.  By a cardiologist for cardiac catheterization

13  services.

14         e.  By a pathologist for diagnostic clinical laboratory

15  tests and pathological examination services, if furnished by

16  or under the supervision of such pathologist pursuant to a

17  consultation requested by another physician.

18         f.  By a health care provider who is the sole provider

19  or member of a group practice for designated health services

20  or other health care items or services that are prescribed or

21  provided solely for such referring health care provider's or

22  group practice's own patients, and that are provided or

23  performed by or under the direct supervision of such referring

24  health care provider or group practice; provided, however,

25  that effective July 1, 1999, a physician licensed pursuant to

26  chapter 458, chapter 459, chapter 460, or chapter 461 may

27  refer a patient to a sole provider or group practice for

28  diagnostic imaging services, excluding radiation therapy

29  services, for which the sole provider or group practice billed

30  both the technical and the professional fee for or on behalf

31  of the patient, if the referring physician has no investment

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 1  interest in the practice. The diagnostic imaging service

 2  referred to a group practice or sole provider must be a

 3  diagnostic imaging service normally provided within the scope

 4  of practice to the patients of the group practice or sole

 5  provider. The group practice or sole provider may accept no

 6  more that 15 percent of their patients receiving diagnostic

 7  imaging services from outside referrals, excluding radiation

 8  therapy services.

 9         g.  By a health care provider for services provided by

10  an ambulatory surgical center licensed under chapter 395.

11         h.  By a health care provider for diagnostic clinical

12  laboratory services where such services are directly related

13  to renal dialysis.

14         h.i.  By a urologist for lithotripsy services.

15         i.j.  By a dentist for dental services performed by an

16  employee of or health care provider who is an independent

17  contractor with the dentist or group practice of which the

18  dentist is a member.

19         j.k.  By a physician for infusion therapy services to a

20  patient of that physician or a member of that physician's

21  group practice.

22         k.l.  By a nephrologist for renal dialysis services and

23  supplies, except laboratory services.

24         l.  By a health care provider whose principal

25  professional practice consists of treating patients in their

26  private residences for services to be rendered in such private

27  residences, except for services rendered by a home health

28  agency licensed under chapter 400. For purposes of this

29  sub-subparagraph, the term "private residences" includes

30  patient's private homes, independent living centers, and

31  

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 1  assisted living facilities, but does not include skilled

 2  nursing facilities.

 3         Section 15.  Paragraph (b) of subsection (6) and

 4  paragraph (a) of subsection (15) of section 627.6699, Florida

 5  Statutes, are amended to read:

 6         627.6699  Employee Health Care Access Act.--

 7         (6)  RESTRICTIONS RELATING TO PREMIUM RATES.--

 8         (b)  For all small employer health benefit plans that

 9  are subject to this section and are issued by small employer

10  carriers on or after January 1, 1994, premium rates for health

11  benefit plans subject to this section are subject to the

12  following:

13         1.  Small employer carriers must use a modified

14  community rating methodology in which the premium for each

15  small employer must be determined solely on the basis of the

16  eligible employee's and eligible dependent's gender, age,

17  family composition, tobacco use, or geographic area as

18  determined under paragraph (5)(j) and in which the premium may

19  be adjusted as permitted by this paragraph subparagraphs 5.

20  and 6.

21         2.  Rating factors related to age, gender, family

22  composition, tobacco use, or geographic location may be

23  developed by each carrier to reflect the carrier's experience.

24  The factors used by carriers are subject to department review

25  and approval.

26         3.  Small employer carriers may not modify the rate for

27  a small employer for 12 months from the initial issue date or

28  renewal date, unless the composition of the group changes or

29  benefits are changed. However, a small employer carrier may

30  modify the rate one time prior to 12 months after the initial

31  issue date for a small employer who enrolls under a previously

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 1  issued group policy that has a common anniversary date for all

 2  employers covered under the policy if:

 3         a.  The carrier discloses to the employer in a clear

 4  and conspicuous manner the date of the first renewal and the

 5  fact that the premium may increase on or after that date.

 6         b.  The insurer demonstrates to the department that

 7  efficiencies in administration are achieved and reflected in

 8  the rates charged to small employers covered under the policy.

 9         4.  A carrier may issue a group health insurance policy

10  to a small employer health alliance or other group association

11  with rates that reflect a premium credit for expense savings

12  attributable to administrative activities being performed by

13  the alliance or group association if such expense savings are

14  specifically documented in the insurer's rate filing and are

15  approved by the department.  Any such credit may not be based

16  on different morbidity assumptions or on any other factor

17  related to the health status or claims experience of any

18  person covered under the policy. Nothing in this subparagraph

19  exempts an alliance or group association from licensure for

20  any activities that require licensure under the insurance

21  code. A carrier issuing a group health insurance policy to a

22  small employer health alliance or other group association

23  shall allow any properly licensed and appointed agent of that

24  carrier to market and sell the small employer health alliance

25  or other group association policy. Such agent shall be paid

26  the usual and customary commission paid to any agent selling

27  the policy.

28         5.  Any adjustments in rates for claims experience,

29  health status, or duration of coverage may not be charged to

30  individual employees or dependents. For a small employer's

31  policy, such adjustments may not result in a rate for the

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 1  small employer which deviates more than 15 percent from the

 2  carrier's approved rate. Any such adjustment must be applied

 3  uniformly to the rates charged for all employees and

 4  dependents of the small employer. A small employer carrier may

 5  make an adjustment to a small employer's renewal premium, not

 6  to exceed 10 percent annually, due to the claims experience,

 7  health status, or duration of coverage of the employees or

 8  dependents of the small employer. Semiannually, small group

 9  carriers shall report information on forms adopted by rule by

10  the department, to enable the department to monitor the

11  relationship of aggregate adjusted premiums actually charged

12  policyholders by each carrier to the premiums that would have

13  been charged by application of the carrier's approved modified

14  community rates. If the aggregate resulting from the

15  application of such adjustment exceeds the premium that would

16  have been charged by application of the approved modified

17  community rate by 5 percent for the current reporting period,

18  the carrier shall limit the application of such adjustments

19  only to minus adjustments beginning not more than 60 days

20  after the report is sent to the department. For any subsequent

21  reporting period, if the total aggregate adjusted premium

22  actually charged does not exceed the premium that would have

23  been charged by application of the approved modified community

24  rate by 5 percent, the carrier may apply both plus and minus

25  adjustments. A small employer carrier may provide a credit to

26  a small employer's premium based on administrative and

27  acquisition expense differences resulting from the size of the

28  group. Group size administrative and acquisition expense

29  factors may be developed by each carrier to reflect the

30  carrier's experience and are subject to department review and

31  approval.

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 1         6.  A small employer carrier rating methodology may

 2  include separate rating categories for one dependent child,

 3  for two dependent children, and for three or more dependent

 4  children for family coverage of employees having a spouse and

 5  dependent children or employees having dependent children

 6  only. A small employer carrier may have fewer, but not

 7  greater, numbers of categories for dependent children than

 8  those specified in this subparagraph.

 9         7.  Small employer carriers may not use a composite

10  rating methodology to rate a small employer with fewer than 10

11  employees. For the purposes of this subparagraph, a "composite

12  rating methodology" means a rating methodology that averages

13  the impact of the rating factors for age and gender in the

14  premiums charged to all of the employees of a small employer.

15         8.a.  A carrier may separate the experience of small

16  employer groups with less than 2 eligible employees from the

17  experience of small employer groups with 2-50 eligible

18  employees for purposes of determining an alternative modified

19  community rating.

20         b.  If a carrier separates the experience of small

21  employer groups as provided in sub-subparagraph a., the rate

22  to be charged to small employer groups of less than 2 eligible

23  employees may not exceed 150 percent of the rate determined

24  for small employer groups of 2-50 eligible employees. However,

25  the carrier may charge excess losses of the experience pool

26  consisting of small employer groups with less than 2 eligible

27  employees to the experience pool consisting of small employer

28  groups with 2-50 eligible employees so that all losses are

29  allocated and the 150-percent rate limit on the experience

30  pool consisting of small employer groups with less than 2

31  eligible employees is maintained. Notwithstanding s.

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 1  627.411(1), the rate to be charged to a small employer group

 2  of fewer than 2 eligible employees, insured as of July 1,

 3  2002, may be up to 125 percent of the rate determined for

 4  small employer groups of 2-50 eligible employees for the first

 5  annual renewal and 150 percent for subsequent annual renewals.

 6         (15)  APPLICABILITY OF OTHER STATE LAWS.--

 7         (a)  Except as expressly provided in this section, a

 8  law requiring coverage for a specific health care service or

 9  benefit, or a law requiring reimbursement, utilization, or

10  consideration of a specific category of licensed health care

11  practitioner, does not apply to a standard or basic health

12  benefit plan policy or contract or a limited benefit policy or

13  contract offered or delivered to a small employer unless that

14  law is made expressly applicable to such policies or

15  contracts. A law restricting or limiting deductibles,

16  coinsurance, copayments, or annual or lifetime maximum

17  payments does not apply to any health plan policy, including a

18  standard or basic health benefit plan policy or contract,

19  offered or delivered to a small employer unless such law is

20  made expressly applicable to such policy or contract. However,

21  every small employer carrier must offer to eligible small

22  employers the standard benefit plan and the basic benefit

23  plan, as required by subsection (5), as such plans have been

24  approved by the department pursuant to subsection (12).

25         Section 16.  If any law that is amended by this act was

26  also amended by a law enacted at the 2002 Regular Session of

27  the Legislature, such laws shall be construed as if they had

28  been enacted at the same session of the Legislature, and full

29  effect should be given to each if that is possible.

30  

31  

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 1         Section 17.  This act shall take effect October 1,

 2  2002, except that this section and sections 1, 2, and 16 of

 3  this act shall take effect July 1, 2002.

 4  

 5            *****************************************

 6                          SENATE SUMMARY

 7    Revises and creates provisions relating to a wide variety
      of subjects relating to health care, health care
 8    providers, and health care delivery. (See bill for
      details.)
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CODING: Words stricken are deletions; words underlined are additions.