HB 1873

1	A bill to be entitled
2	An act relating to Medicaid; providing waiver authority
3	for the Agency for Health Care Administration; providing
4	definitions; requiring managed care plans to provide a
5	wellness and disease management program for certain
6	Medicaid recipients participating in the waiver; requiring
7	managed care plans to provide pharmacy benefits; requiring
8	the agency to establish enhanced benefit coverage and
9	providing procedures therefor; establishing flexible
10	spending accounts and individual development accounts;
11	authorizing the agency to allow recipients to opt out of
12	Medicaid and purchase health care coverage through the
13	private insurance market; authorizing the agency to
14	establish health savings accounts and providing
15	requirements and procedures therefor; requiring the Office
16	of Program Policy Analysis and Government Accountability
17	to study and issue a report on the opt-out program;
18	requiring the agency to apply and enforce certain
19	provisions of law relating to Medicaid fraud and abuse;
20	providing penalties; providing applicability; granting
21	rulemaking authority to the agency; requiring the
22	Legislative Budget Commission to approve the waiver
23	application; requiring legislative authority to implement
24	the waiver; providing for future review and repeal of the
25	act; providing an effective date.
26
27	Be It Enacted by the Legislature of the State of Florida:
28
29	Section 1.  Medicaid reform; eligibility determination;
30	services.--
31	(1)  WAIVER AUTHORITY.--Notwithstanding any other law to
32	the contrary, the Agency for Health Care Administration is
33	authorized to seek an experimental, pilot, or demonstration
34	project waiver, pursuant to s. 1115 of the Social Security Act,
35	to reform Florida's Medicaid program in urban and rural
36	demonstration sites contingent on federal approval to preserve
37	the upper-payment-limit funding method and the disproportionate
38	share program pursuant to chapter 409, Florida Statutes.
39	(2)  DEFINITIONS.--As used in this section, the term:
40	(a)  "Agency" means the Agency for Health Care
41	Administration.
42	(b)  "Enhanced benefit coverage" means additional health
43	care services or alternative health care coverage which can be
44	purchased by qualified recipients.
45	(c)  "Flexible spending account" means an account that
46	encourages consumer ownership and management of resources
47	available for enhanced benefit coverage, wellness activities,
48	preventive services, and other services to improve the health of
49	the recipient.
50	(d)  "Health savings account" means an account under which
51	an individual covered by a high-deductible health plan may
52	contribute funds to pay for qualified medical expenses.
53	(e)  "Individual development account" means a dedicated
54	savings account that is designed to encourage and enable a
55	recipient to build assets in order to purchase health-related
56	services or health-related products.
57	(f)  "Managed care plan" means a health maintenance
58	organization authorized under part I of chapter 641, Florida
59	Statutes; an entity under part II or part III of chapter 641,
60	chapter 627, chapter 636, or s. 409.912, Florida Statutes; a
61	licensed mental health provider under chapter 394, Florida
62	Statutes; a licensed substance abuse provider under chapter 397,
63	Florida Statutes; a certified administrator under chapter 626,
64	Florida Statutes; or a hospital under chapter 395, Florida
65	Statutes, certified by the agency to operate as a managed care
66	plan.
67	(g)  "Medicaid opt-out option" means a program that allows
68	a recipient to purchase health care insurance through the
69	private insurance market or an employer-sponsored insurer
70	instead of through a Medicaid-certified plan.
71	(h)  "Shall" means the agency must include the provision of
72	a subsection, paragraph, or subparagraph as delineated in this
73	section in the waiver application and implement the provision to
74	the extent allowed in the waiver demonstration sites by the
75	Centers for Medicare and Medicaid Services and as approved by
76	the Legislature pursuant to this section.
77	(3)  MANAGED CARE PLANS; WELLNESS AND DISEASE
78	MANAGEMENT.--The agency shall develop a capitated system of care
79	that promotes choice and competition.
80	(a)  The agency shall require any plan under this section
81	to establish performance objectives to encourage wellness
82	behaviors or minimize the exposure of recipients to the need for
83	acute inpatient, custodial, and other institutional and long-
84	term care placement and the inappropriate or unnecessary
85	utilization of high-cost services.
86	(b)  The agency shall require plans to provide a wellness
87	or disease management program for certain Medicaid recipients
88	participating in the waiver. At a minimum, the agency shall
89	require plans to develop at least four disease management
90	programs for recipients from the following list of diseases and
91	conditions:
92	1.  Diabetes.
93	2.  Asthma.
94	3.  HIV/AIDS.
95	4.  Hemophilia.
96	5.  End-stage renal disease.
97	6.  Congestive heart failure.
98	7.  Chronic obstructive pulmonary disease.
99	8.  Autoimmune disorders.
100	9.  Obesity.
101	10.  Smoking.
102	11.  Hypertension.
103	12.  Coronary artery disease.
104	13.  Chronic kidney disease.
105	14.  Chronic pain.
106	(c)  The agency shall require a plan to develop appropriate
107	disease management protocols and develop procedures for
108	implementing those protocols, and determine the procedure for
109	providing disease management services to plan enrollees. The
110	agency is authorized to allow a plan to contract separately with
111	another entity for disease management services or provide
112	disease management services directly through the plan.
113	(d)  The agency shall provide oversight to ensure that the
114	service network provides the contractually agreed upon level of
115	service.
116	(e)  The agency may establish performance contracts that
117	reward a plan when measurable operational targets in both
118	participation and clinical outcomes are reached or exceeded by
119	the plan.
120	(f)  The agency shall establish performance contracts that
121	penalize a plan when measurable operational targets for both
122	participation and clinical outcomes are not reached by the plan.
123	(g)  The agency shall develop oversight requirements and
124	procedures to ensure that plans utilize standardized methods and
125	clinical protocols for determining compliance with a wellness or
126	disease management plan.
127	(4)  PHARMACY BENEFITS.--
128	(a)  The agency shall require plans to provide pharmacy
129	benefits and include pharmacy benefits as part of the capitation
130	risk structure to enable a plan to coordinate and fully manage
131	all aspects of patient care as part of the plan or through a
132	pharmacy benefits manager.
133	(b)  The agency may set standards for pharmacy benefits for
134	managed care plans and health insurance plans participating in
135	the Medicaid opt-out option.
136	(c)  The agency may set appropriate medication guidelines,
137	including guidelines for copayments.
138	(d)  The agency shall facilitate the establishment of a
139	Florida managed care plan purchasing alliance. The purpose of
140	the alliance is to form agreements among participating plans to
141	purchase pharmaceuticals at a discount, to achieve rebates, or
142	to receive best market price adjustments. Participation in the
143	Florida managed care plan purchasing alliance shall be
144	voluntary.
145	(e)  Each plan shall implement a pharmacy fraud, waste, and
146	abuse initiative that may include a surety bond or letter of
147	credit requirement for participating pharmacies, enhanced
148	provider auditing practices, the use of additional fraud and
149	abuse software, recipient management programs for recipients
150	inappropriately using their benefits, and other measures to
151	reduce provider and recipient fraud, waste, and abuse. The
152	initiative shall address enforcement efforts to reduce the
153	number and use of counterfeit prescriptions.
154	(f)  The agency shall require plans to report incidences of
155	pharmacy fraud and abuse and establish procedures for receiving
156	and investigating fraud and abuse reports from plans in the
157	demonstration sites. Plans must report instances of fraud and
158	abuse pursuant to chapter 641, Florida Statutes.
159	(5)  ENHANCED BENEFIT COVERAGE.--
160	(a)  The agency shall establish enhanced benefit coverage
161	and a methodology to fund the enhanced benefit coverage.
162	(b)  A recipient who complies with the objectives of a
163	wellness or disease management plan, as determined by the plan,
164	shall have access to the enhanced benefit coverage for the
165	purpose of purchasing or securing health-care services or
166	health-care products.
167	(c)  The agency shall establish flexible spending accounts
168	or similar accounts for recipients as approved in the waiver to
169	be administered by the agency or by a managed care plan. The
170	agency shall make deposits to a recipient's flexible spending
171	account contingent on compliance with a wellness plan or a
172	disease management plan.
173	(d)  The purpose of the flexible spending accounts is to
174	allow waiver recipients to accumulate funds up to a maximum of
175	$1,000 for purposes of activities allowed by federal regulations
176	or as approved in the waiver.
177	(e)  The agency may allow a plan to establish other
178	additional reward systems for compliance with a wellness or
179	disease management objective that are supplemental to the
180	enhanced benefit coverage.
181	(f)  The agency shall establish individual development
182	accounts or similar account for recipients as approved in the
183	waiver. The agency shall make deposits into a recipient's
184	individual development account contingent upon compliance with a
185	wellness or a disease management plan.
186	(g)  The purpose of an individual development account is to
187	allow waiver recipients to accumulate funds up to a maximum of
188	$1,000 for purposes of activities allowed by federal regulations
189	or as approved in the waiver.
190	(h)  A recipient shall choose to participate in a flexible
191	spending account or an individual development account to
192	accumulate funds pursuant to the provisions of this section.
193	(i)  It is the intent of the Legislature that flexible
194	spending accounts and individual development accounts encourage
195	consumer ownership and management of resources for wellness
196	activities, preventive services, and other services to improve
197	the health of the recipient.
198	(j)  The agency shall develop standards and oversight
199	procedures to monitor access to enhanced services, the use of
200	flexible spending accounts, and the use of individual
201	development accounts as approved by the waiver.
202	(k)  It is the intent of the Legislature that the agency
203	develop an electronic benefit transfer system for the
204	distribution of enhanced benefit funds earned by the recipient.
205	(l)  The agency shall establish or contract for an
206	administrative structure to manage the enhanced benefit
207	coverage.
208	(6)  MEDICAID OPT-OUT OPTION.--
209	(a)  The agency may allow recipients to purchase health
210	care coverage through the private insurance market instead of
211	through a Medicaid-certified plan for recipients who are
212	enrolled in a plan that meets requirements established by the
213	agency in consultation with the Office of Insurance Regulation.
214	(b)  A recipient who chooses the Medicaid opt-out option
215	shall remain in the opt-out program for at least 1 year or until
216	the recipient no longer has access to employer-sponsored
217	insurance, until the employer's open enrollment period for a
218	person who opts out in order to participate in employer-
219	sponsored coverage, or until the person is no longer eligible
220	for Medicaid, whichever time period is shorter.
221	(c)  The agency may establish other criteria and procedures
222	to allow recipients who are not satisfied with the insurance
223	plan to redirect the defined contribution allocated to the
224	recipient to a managed care plan.
225	(d)  The agency may allow recipients to opt out of Medicaid
226	and establish health savings accounts. Recipients who choose to
227	opt out of Medicaid and establish health savings accounts must
228	purchase catastrophic insurance coverage.
229	(e)  The agency may allow a recipient who chooses to
230	participate in the opt-out option to direct the defined
231	contribution allocated to the recipient to pay the recipient's
232	portion of the premiums for employer-sponsored or direct health
233	care coverage available to the recipient in his or her place of
234	employment. Notwithstanding any other provision of this section,
235	coverage, cost sharing, and any other component of employer-
236	sponsored health insurance shall be governed by applicable state
237	and federal laws.
238	(f)  The agency, in consultation with the Office of
239	Insurance Regulation, shall:
240	1.  Determine which Medicaid recipients may participate in
241	the opt-out option on a voluntary basis.
242	2.  Determine the comprehensive services and benefits to be
243	included in the opt-out option consistent with the mandatory
244	services specified in s. 409.905, Florida Statutes, the
245	behavioral health services specified in s. 409.906(8), Florida
246	Statutes, and the pharmacy services specified in s. 409.906(20),
247	Florida Statutes, and may develop additional specifications for
248	the insurance coverage.
249	3.  Determine the type of plans currently licensed under
250	state law that are suitable to serve the Medicaid opt-out
251	population.
252	4.  Establish oversight, fraud and abuse, administrative,
253	and accounting procedures as recommended by the Office of
254	Insurance Regulation for the operation of the opt-out option.
255	5.  Implement oversight and monitoring activities,
256	including, but not limited to, administrative and financial
257	monitoring, which shall be conducted by the Office of Insurance
258	Regulation.
259	6.  Include the results of oversight and monitoring
260	activities in the choice counseling process to allow individuals
261	to review the information before making a choice to enroll in a
262	plan.
263	(g)  The agency may:
264	1.  Enter into contracts with qualified third parties,
265	private or public, for any service necessary to carry out the
266	purposes of the opt-out option.
267	2.  Take any legal action on behalf of the recipient
268	against any insurance company to enforce compliance with
269	coverage requirements.
270	(h)  Two years after the implementation of the waiver, the
271	Office of Program Policy Analysis and Government Accountability
272	shall conduct studies and analyses related to the opt-out
273	option, including examining the type of health care benefits
274	provided, utilization, costs, quality, and efforts to address
275	occurrences of fraud and abuse. A copy of the report shall be
276	provided to the legislative committees having jurisdiction over
277	the opt-out option.
278	(7)  FRAUD AND ABUSE.--
279	(a)  To minimize the risk of Medicaid fraud and abuse, the
280	agency shall ensure that applicable provisions of chapters 409,
281	414, 626, 641, and 932, Florida Statutes, relating to Medicaid
282	fraud and abuse, are applied and enforced at the waiver
283	demonstration sites.
284	(b)  Providers must have the necessary certification,
285	license, and credentials as required by law and waiver
286	requirements.
287	(c)  When a plan is not a fully indemnified insurance
288	program under chapter 624, chapter 627, chapter 636, or chapter
289	641, Florida Statutes, the plan must meet financial solvency
290	requirements as specified in chapter 641, Florida Statutes, and
291	as determined by the agency in the certification process, in
292	consultation with the Office of Insurance Regulation.
293	(d)  The agency shall ensure that the plan is in compliance
294	with the provisions of s. 409.912(21) and (22), Florida
295	Statutes.
296	(e)  The agency shall require each plan to establish
297	program integrity functions and activities to reduce the
298	incidence of fraud and abuse. Plans must report instances of
299	fraud and abuse pursuant to chapter 641, Florida Statutes.
300	(f)  The agency shall establish a unit within the Office of
301	Medicaid Program Integrity dedicated to fraud and abuse
302	prevention, mitigation, and intervention in the waiver
303	demonstration sites.
304	(g)1.  The agency shall require all contractors in the
305	managed care plan to report all instances of suspected fraud and
306	abuse. A failure to report instances of suspected fraud and
307	abuse is a violation of law and subject to the penalties
308	provided by law.
309	2.  An instance of fraud and abuse in the managed care
310	plan, including, but not limited to, defrauding the state health
311	care benefit program by misrepresentation of fact in reports,
312	claims, certifications, enrollment claims, demographic
313	statistics, and encounter data; the misrepresentation of the
314	qualifications of persons rendering health care and ancillary
315	services; bribery and false statements relating to the delivery
316	of health care; unfair and deceptive marketing practices; and
317	managed care false claims actions, is a violation of law and
318	subject to the penalties provided by law.
319	3.  The agency shall require that all contractors make all
320	files and relevant billing and claims data accessible to state
321	regulators and investigators and that all such data be linked
322	onto a unified system for seamless reviews and investigations.
323	(8)  APPLICABILITY.--
324	(a)  The provisions of this section apply only to the
325	waiver demonstration sites approved by the Legislature.
326	(b)  The Legislature authorizes the Agency for Health Care
327	Administration to apply and enforce any provision of law not
328	referenced in this section to ensure the safety, quality, and
329	integrity of the waiver.
330	(c)  In any circumstance when the provisions of chapter
331	409, Florida Statutes, conflict with this section, this section
332	shall prevail.
333	(9)  RULEMAKING AUTHORITY.--The Agency for Health Care
334	Administration is authorized to adopt rules to implement the
335	provisions of this section.
336	(10)  WAIVER APPLICATION.--The agency shall submit the
337	waiver application pursuant to this section to the Legislative
338	Budget Commission for approval prior to submitting the waiver
339	application to the Centers for Medicare and Medicaid Services.
340	(11)  IMPLEMENTATION.--
341	(a)  This section does not authorize the agency to
342	implement any provision of the s. 1115 of the Social Security
343	Act experimental, pilot, or demonstration program waiver to
344	reform the state Medicaid program.
345	(b)  Upon approval of a waiver by the Centers for Medicare
346	and Medicaid Services, the agency shall report the provisions
347	and structure of the approved waiver and any deviations from
348	this section to the Legislature. The agency shall implement the
349	waiver after authority to implement the waiver is granted by the
350	Legislature.
351	(12)  REVIEW AND REPEAL.--This section shall stand repealed
352	on July 1, 2010, unless reviewed and saved from repeal through
353	reenactment by the Legislature.
354	Section 2.  This act shall take effect July 1, 2005.

CODING: Words stricken are deletions; words underlined are additions.