Senate Bill sb0404c1

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    Florida Senate - 2005                            CS for SB 404

    By the Committee on Health and Human Services Appropriations;
    and Senator Saunders




    603-1731B-05

  1                      A bill to be entitled

  2         An act relating to health care; amending s.

  3         400.23, F.S.; delaying provisions requiring a

  4         nursing home staffing increase; amending ss.

  5         409.903, 409.904, F.S.; deleting certain

  6         limitations on services to the medically needy;

  7         amending s. 409.906, F.S., relating to optional

  8         Medicaid services; providing for adult denture

  9         services; repealing s. 409.9065, F.S., relating

10         to pharmaceutical expense assistance; amending

11         s. 409.908, F.S.; revising guidelines relating

12         to reimbursement of Medicaid providers;

13         amending ss. 409.9112, 409.9113, 409.9117,

14         F.S., relating to the hospital disproportionate

15         share program; deleting obsolete provisions;

16         amending s. 409.91195, F.S.; revising

17         provisions relating to the Medicaid

18         Pharmaceutical and Therapeutics Committee and

19         its duties with respect to developing a

20         preferred drug list; amending s. 409.912, F.S.;

21         revising the Medicaid prescribed drug spending

22         control program; eliminating case management

23         fees; directing the Agency for Health Care

24         Administration to implement, and authorizing it

25         to seek federal waivers for, the program of

26         all-inclusive care for children; amending s.

27         409.9124, F.S.; requiring the Agency for Health

28         Care Administration to publish managed care

29         reimbursement rates annually; providing

30         effective dates.

31  

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    Florida Senate - 2005                            CS for SB 404
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 1  Be It Enacted by the Legislature of the State of Florida:

 2  

 3         Section 1.  Paragraph (a) of subsection (3) of section

 4  400.23, Florida Statutes, is amended to read:

 5         400.23  Rules; evaluation and deficiencies; licensure

 6  status.--

 7         (3)(a)  The agency shall adopt rules providing for the

 8  minimum staffing requirements for nursing homes. These

 9  requirements shall include, for each nursing home facility, a

10  minimum certified nursing assistant staffing of 2.3 hours of

11  direct care per resident per day beginning January 1, 2002,

12  increasing to 2.6 hours of direct care per resident per day

13  beginning January 1, 2003, and increasing to 2.9 hours of

14  direct care per resident per day beginning July 1, 2006 2005.

15  Beginning January 1, 2002, no facility shall staff below one

16  certified nursing assistant per 20 residents, and a minimum

17  licensed nursing staffing of 1.0 hour of direct resident care

18  per resident per day but never below one licensed nurse per 40

19  residents. Nursing assistants employed under s. 400.211(2) may

20  be included in computing the staffing ratio for certified

21  nursing assistants only if they provide nursing assistance

22  services to residents on a full-time basis. Each nursing home

23  must document compliance with staffing standards as required

24  under this paragraph and post daily the names of staff on duty

25  for the benefit of facility residents and the public. The

26  agency shall recognize the use of licensed nurses for

27  compliance with minimum staffing requirements for certified

28  nursing assistants, provided that the facility otherwise meets

29  the minimum staffing requirements for licensed nurses and that

30  the licensed nurses so recognized are performing the duties of

31  a certified nursing assistant. Unless otherwise approved by

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    Florida Senate - 2005                            CS for SB 404
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 1  the agency, licensed nurses counted toward the minimum

 2  staffing requirements for certified nursing assistants must

 3  exclusively perform the duties of a certified nursing

 4  assistant for the entire shift and shall not also be counted

 5  toward the minimum staffing requirements for licensed nurses.

 6  If the agency approved a facility's request to use a licensed

 7  nurse to perform both licensed nursing and certified nursing

 8  assistant duties, the facility must allocate the amount of

 9  staff time specifically spent on certified nursing assistant

10  duties for the purpose of documenting compliance with minimum

11  staffing requirements for certified and licensed nursing

12  staff. In no event may the hours of a licensed nurse with dual

13  job responsibilities be counted twice.

14         Section 2.  Subsection (5) of section 409.903, Florida

15  Statutes, is amended to read:

16         409.903  Mandatory payments for eligible persons.--The

17  agency shall make payments for medical assistance and related

18  services on behalf of the following persons who the

19  department, or the Social Security Administration by contract

20  with the Department of Children and Family Services,

21  determines to be eligible, subject to the income, assets, and

22  categorical eligibility tests set forth in federal and state

23  law.  Payment on behalf of these Medicaid eligible persons is

24  subject to the availability of moneys and any limitations

25  established by the General Appropriations Act or chapter 216.

26         (5)  A pregnant woman for the duration of her pregnancy

27  and for the postpartum period as defined in federal law and

28  rule, or a child under age 1, if either is living in a family

29  that has an income which is at or below 150 percent of the

30  most current federal poverty level, or, effective January 1,

31  1992, that has an income which is at or below 185 percent of

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    Florida Senate - 2005                            CS for SB 404
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 1  the most current federal poverty level. Such a person is not

 2  subject to an assets test. Further, a pregnant woman who

 3  applies for eligibility for the Medicaid program through a

 4  qualified Medicaid provider must be offered the opportunity,

 5  subject to federal rules, to be made presumptively eligible

 6  for the Medicaid program. Effective July 1, 2005, eligibility

 7  for Medicaid services is eliminated for women who have incomes

 8  above 150 percent of the most current federal poverty level.

 9         Section 3.  Subsections (1) and (2) of section 409.904,

10  Florida Statutes, are amended to read:

11         409.904  Optional payments for eligible persons.--The

12  agency may make payments for medical assistance and related

13  services on behalf of the following persons who are determined

14  to be eligible subject to the income, assets, and categorical

15  eligibility tests set forth in federal and state law. Payment

16  on behalf of these Medicaid eligible persons is subject to the

17  availability of moneys and any limitations established by the

18  General Appropriations Act or chapter 216.

19         (1)(a)  From July 1, 2005, through December 31, 2005, a

20  person who is age 65 or older or is determined to be disabled,

21  whose income is at or below 88 percent of federal poverty

22  level, and whose assets do not exceed established limitations.

23         (b)  Effective January 1, 2006, and subject to federal

24  waiver approval, a person who is age 65 or older or is

25  determined to be disabled, whose income is at or below 88

26  percent of the federal poverty level, whose assets do not

27  exceed established limitations, and who is not eligible for

28  Medicare or, if eligible for Medicare, is also eligible for

29  and receiving Medicaid-covered institutional care services,

30  hospice services, or home and community-based services. The

31  

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    Florida Senate - 2005                            CS for SB 404
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 1  agency shall seek federal authorization through a waiver to

 2  provide this coverage.

 3         (2)  A family, a pregnant woman, a child under age 21,

 4  a person age 65 or over, or a blind or disabled person, who

 5  would be eligible under any group listed in s. 409.903(1),

 6  (2), or (3), except that the income or assets of such family

 7  or person exceed established limitations. For a family or

 8  person in one of these coverage groups, medical expenses are

 9  deductible from income in accordance with federal requirements

10  in order to make a determination of eligibility. A family or

11  person eligible under the coverage known as the "medically

12  needy," is eligible to receive the same services as other

13  Medicaid recipients, with the exception of services in skilled

14  nursing facilities and intermediate care facilities for the

15  developmentally disabled. Effective July 1, 2005, the

16  medically needy are eligible for prescribed drug services

17  only.

18         Section 4.  Paragraph (b) of subsection (1) of section

19  409.906, Florida Statutes, is amended to read:

20         409.906  Optional Medicaid services.--Subject to

21  specific appropriations, the agency may make payments for

22  services which are optional to the state under Title XIX of

23  the Social Security Act and are furnished by Medicaid

24  providers to recipients who are determined to be eligible on

25  the dates on which the services were provided. Any optional

26  service that is provided shall be provided only when medically

27  necessary and in accordance with state and federal law.

28  Optional services rendered by providers in mobile units to

29  Medicaid recipients may be restricted or prohibited by the

30  agency. Nothing in this section shall be construed to prevent

31  or limit the agency from adjusting fees, reimbursement rates,

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    Florida Senate - 2005                            CS for SB 404
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 1  lengths of stay, number of visits, or number of services, or

 2  making any other adjustments necessary to comply with the

 3  availability of moneys and any limitations or directions

 4  provided for in the General Appropriations Act or chapter 216.

 5  If necessary to safeguard the state's systems of providing

 6  services to elderly and disabled persons and subject to the

 7  notice and review provisions of s. 216.177, the Governor may

 8  direct the Agency for Health Care Administration to amend the

 9  Medicaid state plan to delete the optional Medicaid service

10  known as "Intermediate Care Facilities for the Developmentally

11  Disabled." Optional services may include:

12         (1)  ADULT DENTAL SERVICES.--

13         (b)  Beginning January 1, 2005, the agency may pay for

14  dentures, the procedures required to seat dentures, and the

15  repair and reline of dentures, provided by or under the

16  direction of a licensed dentist, for a recipient who is 21

17  years of age or older. This paragraph is repealed effective

18  July 1, 2005.

19         Section 5.  Effective January 1, 2006, section

20  409.9065, Florida Statutes, is repealed.

21         Section 6.  Paragraph (a) of subsection (1) and

22  paragraph (b) of subsection (2) of section 409.908, Florida

23  Statutes, are amended to read:

24         409.908  Reimbursement of Medicaid providers.--Subject

25  to specific appropriations, the agency shall reimburse

26  Medicaid providers, in accordance with state and federal law,

27  according to methodologies set forth in the rules of the

28  agency and in policy manuals and handbooks incorporated by

29  reference therein.  These methodologies may include fee

30  schedules, reimbursement methods based on cost reporting,

31  negotiated fees, competitive bidding pursuant to s. 287.057,

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    Florida Senate - 2005                            CS for SB 404
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 1  and other mechanisms the agency considers efficient and

 2  effective for purchasing services or goods on behalf of

 3  recipients. If a provider is reimbursed based on cost

 4  reporting and submits a cost report late and that cost report

 5  would have been used to set a lower reimbursement rate for a

 6  rate semester, then the provider's rate for that semester

 7  shall be retroactively calculated using the new cost report,

 8  and full payment at the recalculated rate shall be effected

 9  retroactively. Medicare-granted extensions for filing cost

10  reports, if applicable, shall also apply to Medicaid cost

11  reports. Payment for Medicaid compensable services made on

12  behalf of Medicaid eligible persons is subject to the

13  availability of moneys and any limitations or directions

14  provided for in the General Appropriations Act or chapter 216.

15  Further, nothing in this section shall be construed to prevent

16  or limit the agency from adjusting fees, reimbursement rates,

17  lengths of stay, number of visits, or number of services, or

18  making any other adjustments necessary to comply with the

19  availability of moneys and any limitations or directions

20  provided for in the General Appropriations Act, provided the

21  adjustment is consistent with legislative intent.

22         (1)  Reimbursement to hospitals licensed under part I

23  of chapter 395 must be made prospectively or on the basis of

24  negotiation.

25         (a)  Reimbursement for inpatient care is limited as

26  provided for in s. 409.905(5), except for:

27         1.  The raising of rate reimbursement caps, excluding

28  rural hospitals.

29         2.  Recognition of the costs of graduate medical

30  education.

31  

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 1         3.  Other methodologies recognized in the General

 2  Appropriations Act.

 3         4.  Hospital inpatient rates shall be reduced by 6

 4  percent effective July 1, 2001, and restored effective April

 5  1, 2002.

 6  

 7  During the years funds are transferred from the Department of

 8  Health, any reimbursement supported by such funds shall be

 9  subject to certification by the Department of Health that the

10  hospital has complied with s. 381.0403. The agency is

11  authorized to receive funds from state entities, including,

12  but not limited to, the Department of Health, local

13  governments, and other local political subdivisions, for the

14  purpose of making special exception payments, including

15  federal matching funds, through the Medicaid inpatient

16  reimbursement methodologies. Funds received from state

17  entities or local governments for this purpose shall be

18  separately accounted for and shall not be commingled with

19  other state or local funds in any manner. The agency may

20  certify all local governmental funds used as state match under

21  Title XIX of the Social Security Act, to the extent that the

22  identified local health care provider that is otherwise

23  entitled to and is contracted to receive such local funds is

24  the benefactor under the state's Medicaid program as

25  determined under the General Appropriations Act and pursuant

26  to an agreement between the Agency for Health Care

27  Administration and the local governmental entity. The local

28  governmental entity shall use a certification form prescribed

29  by the agency. At a minimum, the certification form shall

30  identify the amount being certified and describe the

31  relationship between the certifying local governmental entity

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    Florida Senate - 2005                            CS for SB 404
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 1  and the local health care provider. The agency shall prepare

 2  an annual statement of impact which documents the specific

 3  activities undertaken during the previous fiscal year pursuant

 4  to this paragraph, to be submitted to the Legislature no later

 5  than January 1, annually.

 6         (2)

 7         (b)  Subject to any limitations or directions provided

 8  for in the General Appropriations Act, the agency shall

 9  establish and implement a Florida Title XIX Long-Term Care

10  Reimbursement Plan (Medicaid) for nursing home care in order

11  to provide care and services in conformance with the

12  applicable state and federal laws, rules, regulations, and

13  quality and safety standards and to ensure that individuals

14  eligible for medical assistance have reasonable geographic

15  access to such care.

16         1.  Changes of ownership or of licensed operator do not

17  qualify for increases in reimbursement rates associated with

18  the change of ownership or of licensed operator. The agency

19  shall amend the Title XIX Long Term Care Reimbursement Plan to

20  provide that the initial nursing home reimbursement rates, for

21  the operating, patient care, and MAR components, associated

22  with related and unrelated party changes of ownership or

23  licensed operator filed on or after September 1, 2001, are

24  equivalent to the previous owner's reimbursement rate.

25         2.  The agency shall amend the long-term care

26  reimbursement plan and cost reporting system to create direct

27  care and indirect care subcomponents of the patient care

28  component of the per diem rate. These two subcomponents

29  together shall equal the patient care component of the per

30  diem rate. Separate cost-based ceilings shall be calculated

31  for each patient care subcomponent. The direct care and

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 1  indirect care subcomponents subcomponent of the per diem rate

 2  shall be limited by the cost-based class ceiling, and the

 3  indirect care subcomponent shall be limited by the lower of a

 4  the cost-based class ceiling, a by the target rate class

 5  ceiling, or an by the individual provider target for each

 6  subcomponent. The agency shall adjust the patient care

 7  component effective January 1, 2002. The cost to adjust the

 8  direct care subcomponent shall be net of the total funds

 9  previously allocated for the case mix add-on. The agency shall

10  make the required changes to the nursing home cost reporting

11  forms to implement this requirement effective January 1, 2002.

12         3.  The direct care subcomponent shall include salaries

13  and benefits of direct care staff providing nursing services

14  including registered nurses, licensed practical nurses, and

15  certified nursing assistants who deliver care directly to

16  residents in the nursing home facility. This excludes nursing

17  administration, minimum data set MDS, and care plan

18  coordinators, staff development, and staffing coordinator.

19         4.  All other patient care costs shall be included in

20  the indirect care cost subcomponent of the patient care per

21  diem rate. There shall be no costs directly or indirectly

22  allocated to the direct care subcomponent from a home office

23  or management company.

24         5.  On July 1 of each year, the agency shall report to

25  the Legislature direct and indirect care costs, including

26  average direct and indirect care costs per resident per

27  facility and direct care and indirect care salaries and

28  benefits per category of staff member per facility.

29         6.  In order to offset the cost of general and

30  professional liability insurance, the agency shall amend the

31  plan to allow for interim rate adjustments to reflect

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 1  increases in the cost of general or professional liability

 2  insurance for nursing homes. This provision shall be

 3  implemented to the extent existing appropriations are

 4  available.

 5  

 6  It is the intent of the Legislature that the reimbursement

 7  plan achieve the goal of providing access to health care for

 8  nursing home residents who require large amounts of care while

 9  encouraging diversion services as an alternative to nursing

10  home care for residents who can be served within the

11  community. The agency shall base the establishment of any

12  maximum rate of payment, whether overall or component, on the

13  available moneys as provided for in the General Appropriations

14  Act. The agency may base the maximum rate of payment on the

15  results of scientifically valid analysis and conclusions

16  derived from objective statistical data pertinent to the

17  particular maximum rate of payment.

18         Section 7.  Section 409.9112, Florida Statutes, is

19  amended to read:

20         409.9112  Disproportionate share program for regional

21  perinatal intensive care centers.--In addition to the payments

22  made under s. 409.911, the Agency for Health Care

23  Administration shall design and implement a system of making

24  disproportionate share payments to those hospitals that

25  participate in the regional perinatal intensive care center

26  program established pursuant to chapter 383. This system of

27  payments shall conform with federal requirements and shall

28  distribute funds in each fiscal year for which an

29  appropriation is made by making quarterly Medicaid payments.

30  Notwithstanding the provisions of s. 409.915, counties are

31  exempt from contributing toward the cost of this special

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 1  reimbursement for hospitals serving a disproportionate share

 2  of low-income patients. For the state fiscal year 2005-2006

 3  2004-2005, the agency shall not distribute moneys under the

 4  regional perinatal intensive care centers disproportionate

 5  share program, except as noted in subsection (2). In the event

 6  the Centers for Medicare and Medicaid Services do not approve

 7  Florida's inpatient hospital state plan amendment for the

 8  public disproportionate share program by January 1, 2005, the

 9  agency may make payments to hospitals under the regional

10  perinatal intensive care centers disproportionate share

11  program.

12         (1)  The following formula shall be used by the agency

13  to calculate the total amount earned for hospitals that

14  participate in the regional perinatal intensive care center

15  program:

16  

17                         TAE = HDSP/THDSP

18  

19  Where:

20         TAE = total amount earned by a regional perinatal

21  intensive care center.

22         HDSP = the prior state fiscal year regional perinatal

23  intensive care center disproportionate share payment to the

24  individual hospital.

25         THDSP = the prior state fiscal year total regional

26  perinatal intensive care center disproportionate share

27  payments to all hospitals.

28  

29         (2)  The total additional payment for hospitals that

30  participate in the regional perinatal intensive care center

31  program shall be calculated by the agency as follows:

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 1  

 2                          TAP = TAE x TA

 3  

 4  Where:

 5         TAP = total additional payment for a regional perinatal

 6  intensive care center.

 7         TAE = total amount earned by a regional perinatal

 8  intensive care center.

 9         TA = total appropriation for the regional perinatal

10  intensive care center disproportionate share program.

11  

12         (3)  In order to receive payments under this section, a

13  hospital must be participating in the regional perinatal

14  intensive care center program pursuant to chapter 383 and must

15  meet the following additional requirements:

16         (a)  Agree to conform to all departmental and agency

17  requirements to ensure high quality in the provision of

18  services, including criteria adopted by departmental and

19  agency rule concerning staffing ratios, medical records,

20  standards of care, equipment, space, and such other standards

21  and criteria as the department and agency deem appropriate as

22  specified by rule.

23         (b)  Agree to provide information to the department and

24  agency, in a form and manner to be prescribed by rule of the

25  department and agency, concerning the care provided to all

26  patients in neonatal intensive care centers and high-risk

27  maternity care.

28         (c)  Agree to accept all patients for neonatal

29  intensive care and high-risk maternity care, regardless of

30  ability to pay, on a functional space-available basis.

31  

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 1         (d)  Agree to develop arrangements with other maternity

 2  and neonatal care providers in the hospital's region for the

 3  appropriate receipt and transfer of patients in need of

 4  specialized maternity and neonatal intensive care services.

 5         (e)  Agree to establish and provide a developmental

 6  evaluation and services program for certain high-risk

 7  neonates, as prescribed and defined by rule of the department.

 8         (f)  Agree to sponsor a program of continuing education

 9  in perinatal care for health care professionals within the

10  region of the hospital, as specified by rule.

11         (g)  Agree to provide backup and referral services to

12  the department's county health departments and other

13  low-income perinatal providers within the hospital's region,

14  including the development of written agreements between these

15  organizations and the hospital.

16         (h)  Agree to arrange for transportation for high-risk

17  obstetrical patients and neonates in need of transfer from the

18  community to the hospital or from the hospital to another more

19  appropriate facility.

20         (4)  Hospitals which fail to comply with any of the

21  conditions in subsection (3) or the applicable rules of the

22  department and agency shall not receive any payments under

23  this section until full compliance is achieved.  A hospital

24  which is not in compliance in two or more consecutive quarters

25  shall not receive its share of the funds.  Any forfeited funds

26  shall be distributed by the remaining participating regional

27  perinatal intensive care center program hospitals.

28         Section 8.  Section 409.9113, Florida Statutes, is

29  amended to read:

30         409.9113  Disproportionate share program for teaching

31  hospitals.--In addition to the payments made under ss. 409.911

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 1  and 409.9112, the Agency for Health Care Administration shall

 2  make disproportionate share payments to statutorily defined

 3  teaching hospitals for their increased costs associated with

 4  medical education programs and for tertiary health care

 5  services provided to the indigent. This system of payments

 6  shall conform with federal requirements and shall distribute

 7  funds in each fiscal year for which an appropriation is made

 8  by making quarterly Medicaid payments. Notwithstanding s.

 9  409.915, counties are exempt from contributing toward the cost

10  of this special reimbursement for hospitals serving a

11  disproportionate share of low-income patients. For the state

12  fiscal year 2005-2006 2004-2005, the agency shall not

13  distribute moneys under the teaching hospital disproportionate

14  share program, except as noted in subsection (2). In the event

15  the Centers for Medicare and Medicaid Services do not approve

16  Florida's inpatient hospital state plan amendment for the

17  public disproportionate share program by January 1, 2005, the

18  agency may make payments to hospitals under the teaching

19  hospital disproportionate share program.

20         (1)  On or before September 15 of each year, the Agency

21  for Health Care Administration shall calculate an allocation

22  fraction to be used for distributing funds to state statutory

23  teaching hospitals. Subsequent to the end of each quarter of

24  the state fiscal year, the agency shall distribute to each

25  statutory teaching hospital, as defined in s. 408.07, an

26  amount determined by multiplying one-fourth of the funds

27  appropriated for this purpose by the Legislature times such

28  hospital's allocation fraction.  The allocation fraction for

29  each such hospital shall be determined by the sum of three

30  primary factors, divided by three. The primary factors are:

31  

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 1         (a)  The number of nationally accredited graduate

 2  medical education programs offered by the hospital, including

 3  programs accredited by the Accreditation Council for Graduate

 4  Medical Education and the combined Internal Medicine and

 5  Pediatrics programs acceptable to both the American Board of

 6  Internal Medicine and the American Board of Pediatrics at the

 7  beginning of the state fiscal year preceding the date on which

 8  the allocation fraction is calculated.  The numerical value of

 9  this factor is the fraction that the hospital represents of

10  the total number of programs, where the total is computed for

11  all state statutory teaching hospitals.

12         (b)  The number of full-time equivalent trainees in the

13  hospital, which comprises two components:

14         1.  The number of trainees enrolled in nationally

15  accredited graduate medical education programs, as defined in

16  paragraph (a).  Full-time equivalents are computed using the

17  fraction of the year during which each trainee is primarily

18  assigned to the given institution, over the state fiscal year

19  preceding the date on which the allocation fraction is

20  calculated. The numerical value of this factor is the fraction

21  that the hospital represents of the total number of full-time

22  equivalent trainees enrolled in accredited graduate programs,

23  where the total is computed for all state statutory teaching

24  hospitals.

25         2.  The number of medical students enrolled in

26  accredited colleges of medicine and engaged in clinical

27  activities, including required clinical clerkships and

28  clinical electives.  Full-time equivalents are computed using

29  the fraction of the year during which each trainee is

30  primarily assigned to the given institution, over the course

31  of the state fiscal year preceding the date on which the

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 1  allocation fraction is calculated. The numerical value of this

 2  factor is the fraction that the given hospital represents of

 3  the total number of full-time equivalent students enrolled in

 4  accredited colleges of medicine, where the total is computed

 5  for all state statutory teaching hospitals.

 6  

 7  The primary factor for full-time equivalent trainees is

 8  computed as the sum of these two components, divided by two.

 9         (c)  A service index that comprises three components:

10         1.  The Agency for Health Care Administration Service

11  Index, computed by applying the standard Service Inventory

12  Scores established by the Agency for Health Care

13  Administration to services offered by the given hospital, as

14  reported on Worksheet A-2 for the last fiscal year reported to

15  the agency before the date on which the allocation fraction is

16  calculated.  The numerical value of this factor is the

17  fraction that the given hospital represents of the total

18  Agency for Health Care Administration Service Index values,

19  where the total is computed for all state statutory teaching

20  hospitals.

21         2.  A volume-weighted service index, computed by

22  applying the standard Service Inventory Scores established by

23  the Agency for Health Care Administration to the volume of

24  each service, expressed in terms of the standard units of

25  measure reported on Worksheet A-2 for the last fiscal year

26  reported to the agency before the date on which the allocation

27  factor is calculated.  The numerical value of this factor is

28  the fraction that the given hospital represents of the total

29  volume-weighted service index values, where the total is

30  computed for all state statutory teaching hospitals.

31  

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 1         3.  Total Medicaid payments to each hospital for direct

 2  inpatient and outpatient services during the fiscal year

 3  preceding the date on which the allocation factor is

 4  calculated.  This includes payments made to each hospital for

 5  such services by Medicaid prepaid health plans, whether the

 6  plan was administered by the hospital or not.  The numerical

 7  value of this factor is the fraction that each hospital

 8  represents of the total of such Medicaid payments, where the

 9  total is computed for all state statutory teaching hospitals.

10  

11  The primary factor for the service index is computed as the

12  sum of these three components, divided by three.

13         (2)  By October 1 of each year, the agency shall use

14  the following formula to calculate the maximum additional

15  disproportionate share payment for statutorily defined

16  teaching hospitals:

17  

18                          TAP = THAF x A

19  

20  Where:

21         TAP = total additional payment.

22         THAF = teaching hospital allocation factor.

23         A = amount appropriated for a teaching hospital

24  disproportionate share program.

25         Section 9.  Section 409.9117, Florida Statutes, is

26  amended to read:

27         409.9117  Primary care disproportionate share

28  program.--For the state fiscal year 2005-2006 2004-2005, the

29  agency shall not distribute moneys under the primary care

30  disproportionate share program, except as noted in subsection

31  (2). In the event the Centers for Medicare and Medicaid

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 1  Services do not approve Florida's inpatient hospital state

 2  plan amendment for the public disproportionate share program

 3  by January 1, 2005, the agency may make payments to hospitals

 4  under the primary care disproportionate share program.

 5         (1)  If federal funds are available for

 6  disproportionate share programs in addition to those otherwise

 7  provided by law, there shall be created a primary care

 8  disproportionate share program.

 9         (2)  The following formula shall be used by the agency

10  to calculate the total amount earned for hospitals that

11  participate in the primary care disproportionate share

12  program:

13  

14                         TAE = HDSP/THDSP

15  

16  Where:

17         TAE = total amount earned by a hospital participating

18  in the primary care disproportionate share program.

19         HDSP = the prior state fiscal year primary care

20  disproportionate share payment to the individual hospital.

21         THDSP = the prior state fiscal year total primary care

22  disproportionate share payments to all hospitals.

23  

24         (3)  The total additional payment for hospitals that

25  participate in the primary care disproportionate share program

26  shall be calculated by the agency as follows:

27  

28                          TAP = TAE x TA

29  

30  Where:

31  

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 1         TAP = total additional payment for a primary care

 2  hospital.

 3         TAE = total amount earned by a primary care hospital.

 4         TA = total appropriation for the primary care

 5  disproportionate share program.

 6  

 7         (4)  In the establishment and funding of this program,

 8  the agency shall use the following criteria in addition to

 9  those specified in s. 409.911, payments may not be made to a

10  hospital unless the hospital agrees to:

11         (a)  Cooperate with a Medicaid prepaid health plan, if

12  one exists in the community.

13         (b)  Ensure the availability of primary and specialty

14  care physicians to Medicaid recipients who are not enrolled in

15  a prepaid capitated arrangement and who are in need of access

16  to such physicians.

17         (c)  Coordinate and provide primary care services free

18  of charge, except copayments, to all persons with incomes up

19  to 100 percent of the federal poverty level who are not

20  otherwise covered by Medicaid or another program administered

21  by a governmental entity, and to provide such services based

22  on a sliding fee scale to all persons with incomes up to 200

23  percent of the federal poverty level who are not otherwise

24  covered by Medicaid or another program administered by a

25  governmental entity, except that eligibility may be limited to

26  persons who reside within a more limited area, as agreed to by

27  the agency and the hospital.

28         (d)  Contract with any federally qualified health

29  center, if one exists within the agreed geopolitical

30  boundaries, concerning the provision of primary care services,

31  in order to guarantee delivery of services in a nonduplicative

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 1  fashion, and to provide for referral arrangements, privileges,

 2  and admissions, as appropriate.  The hospital shall agree to

 3  provide at an onsite or offsite facility primary care services

 4  within 24 hours to which all Medicaid recipients and persons

 5  eligible under this paragraph who do not require emergency

 6  room services are referred during normal daylight hours.

 7         (e)  Cooperate with the agency, the county, and other

 8  entities to ensure the provision of certain public health

 9  services, case management, referral and acceptance of

10  patients, and sharing of epidemiological data, as the agency

11  and the hospital find mutually necessary and desirable to

12  promote and protect the public health within the agreed

13  geopolitical boundaries.

14         (f)  In cooperation with the county in which the

15  hospital resides, develop a low-cost, outpatient, prepaid

16  health care program to persons who are not eligible for the

17  Medicaid program, and who reside within the area.

18         (g)  Provide inpatient services to residents within the

19  area who are not eligible for Medicaid or Medicare, and who do

20  not have private health insurance, regardless of ability to

21  pay, on the basis of available space, except that nothing

22  shall prevent the hospital from establishing bill collection

23  programs based on ability to pay.

24         (h)  Work with the Florida Healthy Kids Corporation,

25  the Florida Health Care Purchasing Cooperative, and business

26  health coalitions, as appropriate, to develop a feasibility

27  study and plan to provide a low-cost comprehensive health

28  insurance plan to persons who reside within the area and who

29  do not have access to such a plan.

30         (i)  Work with public health officials and other

31  experts to provide community health education and prevention

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 1  activities designed to promote healthy lifestyles and

 2  appropriate use of health services.

 3         (j)  Work with the local health council to develop a

 4  plan for promoting access to affordable health care services

 5  for all persons who reside within the area, including, but not

 6  limited to, public health services, primary care services,

 7  inpatient services, and affordable health insurance generally.

 8  

 9  Any hospital that fails to comply with any of the provisions

10  of this subsection, or any other contractual condition, may

11  not receive payments under this section until full compliance

12  is achieved.

13         Section 10.  Section 409.91195, Florida Statutes, is

14  amended to read:

15         409.91195  Medicaid Pharmaceutical and Therapeutics

16  Committee.--There is created a Medicaid Pharmaceutical and

17  Therapeutics Committee within the agency for Health Care

18  Administration for the purpose of developing a Medicaid

19  preferred drug list formulary pursuant to 42 U.S.C. s.

20  1396r-8.

21         (1)  The Medicaid Pharmaceutical and Therapeutics

22  committee shall be comprised as specified in 42 U.S.C. s.

23  1396r-8 and consist of 11 members appointed by the Governor.

24  Four members shall be physicians, licensed under chapter 458;

25  one member licensed under chapter 459; five members shall be

26  pharmacists licensed under chapter 465; and one member shall

27  be a consumer representative. The members shall be appointed

28  to serve for terms of 2 years from the date of their

29  appointment. Members may be appointed to more than one term.

30  The agency for Health Care Administration shall serve as staff

31  for the committee and assist them with all ministerial duties.

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 1  The Governor shall ensure that at least some of the members of

 2  the Medicaid Pharmaceutical and Therapeutics committee

 3  represent Medicaid participating physicians and pharmacies

 4  serving all segments and diversity of the Medicaid population,

 5  and have experience in either developing or practicing under a

 6  preferred drug list formulary. At least one of the members

 7  shall represent the interests of pharmaceutical manufacturers.

 8         (2)  Committee members shall select a chairperson and a

 9  vice chairperson each year from the committee membership.

10         (3)  The committee shall meet at least quarterly and

11  may meet at other times at the discretion of the chairperson

12  and members. The committee shall comply with rules adopted by

13  the agency, including notice of any meeting of the committee

14  pursuant to the requirements of the Administrative Procedure

15  Act.

16         (4)  Upon recommendation of the Medicaid Pharmaceutical

17  and Therapeutics committee, the agency shall adopt a preferred

18  drug list as described in s. 409.912(39). To the extent

19  feasible, the committee shall review all drug classes included

20  on in the preferred drug list formulary at least every 12

21  months, and may recommend additions to and deletions from the

22  preferred drug list formulary, such that the preferred drug

23  list formulary provides for medically appropriate drug

24  therapies for Medicaid patients which achieve cost savings

25  contained in the General Appropriations Act.

26         (5)  Except for mental health-related drugs,

27  antiretroviral drugs, and drugs for nursing home residents and

28  other institutional residents, reimbursement of drugs not

29  included in the formulary is subject to prior authorization.

30         (5)(6)  The agency for Health Care Administration shall

31  publish and disseminate the preferred drug list formulary to

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 1  all Medicaid providers in the state by Internet posting on the

 2  agency's website or in other media.

 3         (6)(7)  The committee shall ensure that interested

 4  parties, including pharmaceutical manufacturers agreeing to

 5  provide a supplemental rebate as outlined in this chapter,

 6  have an opportunity to present public testimony to the

 7  committee with information or evidence supporting inclusion of

 8  a product on the preferred drug list. Such public testimony

 9  shall occur prior to any recommendations made by the committee

10  for inclusion or exclusion from the preferred drug list. Upon

11  timely notice, the agency shall ensure that any drug that has

12  been approved or had any of its particular uses approved by

13  the United States Food and Drug Administration under a

14  priority review classification will be reviewed by the

15  Medicaid Pharmaceutical and Therapeutics committee at the next

16  regularly scheduled meeting following 12 months of

17  distribution of the drug to the general public. To the extent

18  possible, upon notice by a manufacturer the agency shall also

19  schedule a product review for any new product at the next

20  regularly scheduled Medicaid Pharmaceutical and Therapeutics

21  Committee.

22         (8)  Until the Medicaid Pharmaceutical and Therapeutics

23  Committee is appointed and a preferred drug list adopted by

24  the agency, the agency shall use the existing voluntary

25  preferred drug list adopted pursuant to s. 72, chapter

26  2000-367, Laws of Florida. Drugs not listed on the voluntary

27  preferred drug list will require prior authorization by the

28  agency or its contractor.

29         (7)(9)  The Medicaid Pharmaceutical and Therapeutics

30  committee shall develop its preferred drug list

31  recommendations by considering the clinical efficacy, safety,

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 1  and cost-effectiveness of a product. When the preferred drug

 2  formulary is adopted by the agency, if a product on the

 3  formulary is one of the first four brand-name drugs used by a

 4  recipient in a month the drug shall not require prior

 5  authorization.

 6         (8)  Upon timely notice, the agency shall ensure that

 7  any therapeutic class of drugs which includes a drug that has

 8  been removed from distribution to the public by its

 9  manufacturer or the United States Food and Drug Administration

10  or has been required to carry a black box warning label by the

11  United States Food and Drug Administration because of safety

12  concerns is reviewed by the committee at the next regularly

13  scheduled meeting. After such review, the committee must

14  recommend whether to retain the therapeutic class of drugs or

15  subcategories of drugs within a therapeutic class on the

16  preferred drug list and whether to institute prior

17  authorization requirements necessary to ensure patient safety.

18         (9)(10)  The Medicaid Pharmaceutical and Therapeutics

19  Committee may also make recommendations to the agency

20  regarding the prior authorization of any prescribed drug

21  covered by Medicaid.

22         (10)(11)  Medicaid recipients may appeal agency

23  preferred drug formulary decisions using the Medicaid fair

24  hearing process administered by the Department of Children and

25  Family Services.

26         Section 11.  Paragraph (a) of subsection (39) and

27  subsections (44) and (49) of section 409.912, Florida

28  Statutes, are amended, and subsection (50) is added to that

29  section, to read:

30         409.912  Cost-effective purchasing of health care.--The

31  agency shall purchase goods and services for Medicaid

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 1  recipients in the most cost-effective manner consistent with

 2  the delivery of quality medical care. To ensure that medical

 3  services are effectively utilized, the agency may, in any

 4  case, require a confirmation or second physician's opinion of

 5  the correct diagnosis for purposes of authorizing future

 6  services under the Medicaid program. This section does not

 7  restrict access to emergency services or poststabilization

 8  care services as defined in 42 C.F.R. part 438.114. Such

 9  confirmation or second opinion shall be rendered in a manner

10  approved by the agency. The agency shall maximize the use of

11  prepaid per capita and prepaid aggregate fixed-sum basis

12  services when appropriate and other alternative service

13  delivery and reimbursement methodologies, including

14  competitive bidding pursuant to s. 287.057, designed to

15  facilitate the cost-effective purchase of a case-managed

16  continuum of care. The agency shall also require providers to

17  minimize the exposure of recipients to the need for acute

18  inpatient, custodial, and other institutional care and the

19  inappropriate or unnecessary use of high-cost services. The

20  agency may mandate prior authorization, drug therapy

21  management, or disease management participation for certain

22  populations of Medicaid beneficiaries, certain drug classes,

23  or particular drugs to prevent fraud, abuse, overuse, and

24  possible dangerous drug interactions. The Pharmaceutical and

25  Therapeutics Committee shall make recommendations to the

26  agency on drugs for which prior authorization is required. The

27  agency shall inform the Pharmaceutical and Therapeutics

28  Committee of its decisions regarding drugs subject to prior

29  authorization. The agency is authorized to limit the entities

30  it contracts with or enrolls as Medicaid providers by

31  developing a provider network through provider credentialing.

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 1  The agency may limit its network based on the assessment of

 2  beneficiary access to care, provider availability, provider

 3  quality standards, time and distance standards for access to

 4  care, the cultural competence of the provider network,

 5  demographic characteristics of Medicaid beneficiaries,

 6  practice and provider-to-beneficiary standards, appointment

 7  wait times, beneficiary use of services, provider turnover,

 8  provider profiling, provider licensure history, previous

 9  program integrity investigations and findings, peer review,

10  provider Medicaid policy and billing compliance records,

11  clinical and medical record audits, and other factors.

12  Providers shall not be entitled to enrollment in the Medicaid

13  provider network. The agency is authorized to seek federal

14  waivers necessary to implement this policy.

15         (39)(a)  The agency shall implement a Medicaid

16  prescribed-drug spending-control program that includes the

17  following components:

18         1.  A Medicaid preferred drug list, which shall be a

19  listing of cost-effective therapeutic options recommended by

20  the Medicaid Pharmacy and Therapeutics Committee established

21  pursuant to s. 409.91195 and adopted by the agency for each

22  therapeutic class on the preferred drug list. At the

23  discretion of the committee, and when feasible, the preferred

24  drug list should include at least two products in a

25  therapeutic class. Medicaid prescribed-drug coverage for

26  brand-name drugs for adult Medicaid recipients is limited to

27  eight drugs per month the dispensing of four brand-name drugs

28  per month per recipient. Prior authorization is required for

29  all additional prescriptions above the eight-drug limit and

30  must meet step therapy and preferred drug list listing

31  requirements. Children are exempt from this restriction.

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 1  Antiretroviral agents are excluded from this limitation. No

 2  requirements for prior authorization or other restrictions on

 3  medications used to treat mental illnesses such as

 4  schizophrenia, severe depression, or bipolar disorder may be

 5  imposed on Medicaid recipients. Medications that will be

 6  available without restriction for persons with mental

 7  illnesses include atypical antipsychotic medications,

 8  conventional antipsychotic medications, selective serotonin

 9  reuptake inhibitors, and other medications used for the

10  treatment of serious mental illnesses. The agency shall also

11  limit the amount of a prescribed drug dispensed to no more

12  than a 34-day supply unless the drug products' smallest

13  marketed package is greater than a 34-day supply, or the drug

14  is determined by the agency to be a maintenance drug in which

15  case a 100-day maximum supply may be authorized. The agency is

16  authorized to seek any federal waivers necessary to implement

17  these cost-control programs and to continue participation in

18  the federal Medicaid rebate program, or alternatively to

19  negotiate state-only manufacturer rebates. The agency may

20  adopt rules to implement this subparagraph. The agency shall

21  continue to provide unlimited generic drugs, contraceptive

22  drugs and items, and diabetic supplies. Although a drug may be

23  included on the preferred drug formulary, it would not be

24  exempt from the four-brand limit. The agency may authorize

25  exceptions to the brand-name-drug restriction based upon the

26  treatment needs of the patients, only when such exceptions are

27  based on prior consultation provided by the agency or an

28  agency contractor, but The agency must establish procedures to

29  ensure that:

30         a.  There will be a response to a request for prior

31  consultation by telephone or other telecommunication device

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 1  within 24 hours after receipt of a request for prior

 2  consultation; and

 3         b.  A 72-hour supply of the drug prescribed will be

 4  provided in an emergency or when the agency does not provide a

 5  response within 24 hours as required by sub-subparagraph a.;

 6  and

 7         c.  Except for the exception for nursing home residents

 8  and other institutionalized adults and except for drugs on the

 9  restricted formulary for which prior authorization may be

10  sought by an institutional or community pharmacy, prior

11  authorization for an exception to the brand-name-drug

12  restriction is sought by the prescriber and not by the

13  pharmacy. When prior authorization is granted for a patient in

14  an institutional setting beyond the brand-name-drug

15  restriction, such approval is authorized for 12 months and

16  monthly prior authorization is not required for that patient.

17         2.  Reimbursement to pharmacies for Medicaid prescribed

18  drugs shall be set at the lesser of: the average wholesale

19  price (AWP) minus 15.4 percent, the wholesaler acquisition

20  cost (WAC) plus 5.75 percent, the federal upper limit (FUL),

21  the state maximum allowable cost (SMAC), or the usual and

22  customary (UAC) charge billed by the provider.

23         3.  The agency shall develop and implement a process

24  for managing the drug therapies of Medicaid recipients who are

25  using significant numbers of prescribed drugs each month. The

26  management process may include, but is not limited to,

27  comprehensive, physician-directed medical-record reviews,

28  claims analyses, and case evaluations to determine the medical

29  necessity and appropriateness of a patient's treatment plan

30  and drug therapies. The agency may contract with a private

31  organization to provide drug-program-management services. The

                                  29

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 1  Medicaid drug benefit management program shall include

 2  initiatives to manage drug therapies for HIV/AIDS patients,

 3  patients using 20 or more unique prescriptions in a 180-day

 4  period, and the top 1,000 patients in annual spending. The

 5  agency shall enroll any Medicaid recipient in the drug benefit

 6  management program if he or she meets the specifications of

 7  this provision and is not enrolled in a Medicaid health

 8  maintenance organization.

 9         4.  The agency may limit the size of its pharmacy

10  network based on need, competitive bidding, price

11  negotiations, credentialing, or similar criteria. The agency

12  shall give special consideration to rural areas in determining

13  the size and location of pharmacies included in the Medicaid

14  pharmacy network. A pharmacy credentialing process may include

15  criteria such as a pharmacy's full-service status, location,

16  size, patient educational programs, patient consultation,

17  disease-management services, and other characteristics. The

18  agency may impose a moratorium on Medicaid pharmacy enrollment

19  when it is determined that it has a sufficient number of

20  Medicaid-participating providers.

21         5.  The agency shall develop and implement a program

22  that requires Medicaid practitioners who prescribe drugs to

23  use a counterfeit-proof prescription pad for Medicaid

24  prescriptions. The agency shall require the use of

25  standardized counterfeit-proof prescription pads by

26  Medicaid-participating prescribers or prescribers who write

27  prescriptions for Medicaid recipients. The agency may

28  implement the program in targeted geographic areas or

29  statewide.

30         6.  The agency may enter into arrangements that require

31  manufacturers of generic drugs prescribed to Medicaid

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 1  recipients to provide rebates of at least 15.1 percent of the

 2  average manufacturer price for the manufacturer's generic

 3  products. These arrangements shall require that if a

 4  generic-drug manufacturer pays federal rebates for

 5  Medicaid-reimbursed drugs at a level below 15.1 percent, the

 6  manufacturer must provide a supplemental rebate to the state

 7  in an amount necessary to achieve a 15.1-percent rebate level.

 8         7.  The agency may establish a preferred drug list as

 9  described in this subsection formulary in accordance with 42

10  U.S.C. s. 1396r-8, and, pursuant to the establishment of such

11  preferred drug list formulary, it is authorized to negotiate

12  supplemental rebates from manufacturers that are in addition

13  to those required by Title XIX of the Social Security Act and

14  at no less than 14 percent of the average manufacturer price

15  as defined in 42 U.S.C. s. 1936 on the last day of a quarter

16  unless the federal or supplemental rebate, or both, equals or

17  exceeds 29 percent. There is no upper limit on the

18  supplemental rebates the agency may negotiate. The agency may

19  determine that specific products, brand-name or generic, are

20  competitive at lower rebate percentages. Agreement to pay the

21  minimum supplemental rebate percentage will guarantee a

22  manufacturer that the Medicaid Pharmaceutical and Therapeutics

23  Committee will consider a product for inclusion on the

24  preferred drug list formulary. However, a pharmaceutical

25  manufacturer is not guaranteed placement on the preferred drug

26  list formulary by simply paying the minimum supplemental

27  rebate. Agency decisions will be made on the clinical efficacy

28  of a drug and recommendations of the Medicaid Pharmaceutical

29  and Therapeutics Committee, as well as the price of competing

30  products minus federal and state rebates. The agency is

31  authorized to contract with an outside agency or contractor to

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 1  conduct negotiations for supplemental rebates. For the

 2  purposes of this section, the term "supplemental rebates"

 3  means cash rebates. Effective July 1, 2004, value-added

 4  programs as a substitution for supplemental rebates are

 5  prohibited. The agency is authorized to seek any federal

 6  waivers to implement this initiative.

 7         8.  The agency shall establish an advisory committee

 8  for the purposes of studying the feasibility of using a

 9  restricted drug formulary for nursing home residents and other

10  institutionalized adults. The committee shall be comprised of

11  seven members appointed by the Secretary of Health Care

12  Administration. The committee members shall include two

13  physicians licensed under chapter 458 or chapter 459; three

14  pharmacists licensed under chapter 465 and appointed from a

15  list of recommendations provided by the Florida Long-Term Care

16  Pharmacy Alliance; and two pharmacists licensed under chapter

17  465.

18         8.9.  The Agency for Health Care Administration shall

19  expand home delivery of pharmacy products. To assist Medicaid

20  patients in securing their prescriptions and reduce program

21  costs, the agency shall expand its current mail-order-pharmacy

22  diabetes-supply program to include all generic and brand-name

23  drugs used by Medicaid patients with diabetes. Medicaid

24  recipients in the current program may obtain nondiabetes drugs

25  on a voluntary basis. This initiative is limited to the

26  geographic area covered by the current contract. The agency

27  may seek and implement any federal waivers necessary to

28  implement this subparagraph.

29         9.10.  The agency shall limit to one dose per month any

30  drug prescribed to treat erectile dysfunction.

31  

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 1         10.a.11.a.  The agency shall implement a Medicaid

 2  behavioral drug management system. The agency may contract

 3  with a vendor that has experience in operating behavioral drug

 4  management systems to implement this program. The agency is

 5  authorized to seek federal waivers to implement this program.

 6         b.  The agency, in conjunction with the Department of

 7  Children and Family Services, may implement the Medicaid

 8  behavioral drug management system that is designed to improve

 9  the quality of care and behavioral health prescribing

10  practices based on best practice guidelines, improve patient

11  adherence to medication plans, reduce clinical risk, and lower

12  prescribed drug costs and the rate of inappropriate spending

13  on Medicaid behavioral drugs. The program shall include the

14  following elements:

15         (I)  Provide for the development and adoption of best

16  practice guidelines for behavioral health-related drugs such

17  as antipsychotics, antidepressants, and medications for

18  treating bipolar disorders and other behavioral conditions;

19  translate them into practice; review behavioral health

20  prescribers and compare their prescribing patterns to a number

21  of indicators that are based on national standards; and

22  determine deviations from best practice guidelines.

23         (II)  Implement processes for providing feedback to and

24  educating prescribers using best practice educational

25  materials and peer-to-peer consultation.

26         (III)  Assess Medicaid beneficiaries who are outliers

27  in their use of behavioral health drugs with regard to the

28  numbers and types of drugs taken, drug dosages, combination

29  drug therapies, and other indicators of improper use of

30  behavioral health drugs.

31  

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 1         (IV)  Alert prescribers to patients who fail to refill

 2  prescriptions in a timely fashion, are prescribed multiple

 3  same-class behavioral health drugs, and may have other

 4  potential medication problems.

 5         (V)  Track spending trends for behavioral health drugs

 6  and deviation from best practice guidelines.

 7         (VI)  Use educational and technological approaches to

 8  promote best practices, educate consumers, and train

 9  prescribers in the use of practice guidelines.

10         (VII)  Disseminate electronic and published materials.

11         (VIII)  Hold statewide and regional conferences.

12         (IX)  Implement a disease management program with a

13  model quality-based medication component for severely mentally

14  ill individuals and emotionally disturbed children who are

15  high users of care.

16         c.  If the agency is unable to negotiate a contract

17  with one or more manufacturers to finance and guarantee

18  savings associated with a behavioral drug management program

19  by September 1, 2004, the four-brand drug limit and preferred

20  drug list prior-authorization requirements shall apply to

21  mental health-related drugs, notwithstanding any provision in

22  subparagraph 1. The agency is authorized to seek federal

23  waivers to implement this policy.

24         11.12.  The agency is authorized to contract for drug

25  rebate administration, including, but not limited to,

26  calculating rebate amounts, invoicing manufacturers,

27  negotiating disputes with manufacturers, and maintaining a

28  database of rebate collections.

29         12.13.  The agency may specify the preferred daily

30  dosing form or strength for the purpose of promoting best

31  practices with regard to the prescribing of certain drugs as

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 1  specified in the General Appropriations Act and ensuring

 2  cost-effective prescribing practices.

 3         13.14.  The agency may require prior authorization for

 4  the off-label use of Medicaid-covered prescribed drugs as

 5  specified in the General Appropriations Act. The agency may,

 6  but is not required to, preauthorize the use of a product for

 7  an indication not in the approved labeling. Prior

 8  authorization may require the prescribing professional to

 9  provide information about the rationale and supporting medical

10  evidence for the off-label use of a drug.

11         14.  The agency, in conjunction with the Pharmaceutical

12  and Therapeutics Committee, may require age-related prior

13  authorizations for certain prescribed drugs. The agency may

14  preauthorize the use of a drug for a recipient who may not

15  meet the age requirement or may exceed the length of therapy

16  for use of this product as recommended by the manufacturer and

17  approved by the Food and Drug Administration. Prior

18  authorization may require the prescribing professional to

19  provide information about the rationale and supporting medical

20  evidence for the use of a drug.

21         15.  The agency shall implement a step-therapy-prior

22  authorization-approval process for medications excluded from

23  the preferred drug list. Medications listed on the preferred

24  drug list must be used within the previous 12 months prior to

25  the alternative medications that are not listed. The

26  step-therapy-prior authorization may require the prescriber to

27  use the medications of a similar drug class or for a similar

28  medical indication unless contraindicated in the Food and Drug

29  Administration labeling. The trial period between the

30  specified steps may vary according to the medical indication.

31  The step-therapy-approval process shall be developed in

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 1  accordance with the committee as stated in s. 409.91195(7) and

 2  (8).

 3         16.15.  The agency shall implement a return and reuse

 4  program for drugs dispensed by pharmacies to institutional

 5  recipients, which includes payment of a $5 restocking fee for

 6  the implementation and operation of the program. The return

 7  and reuse program shall be implemented electronically and in a

 8  manner that promotes efficiency. The program must permit a

 9  pharmacy to exclude drugs from the program if it is not

10  practical or cost-effective for the drug to be included and

11  must provide for the return to inventory of drugs that cannot

12  be credited or returned in a cost-effective manner.

13         (44)  The Agency for Health Care Administration shall

14  ensure that any Medicaid managed care plan as defined in s.

15  409.9122(2)(h), whether paid on a capitated basis or a shared

16  savings basis, is cost-effective. For purposes of this

17  subsection, the term "cost-effective" means that a network's

18  per-member, per-month costs to the state, including, but not

19  limited to, fee-for-service costs, administrative costs, and

20  case-management fees, if any, must be no greater than the

21  state's costs associated with contracts for Medicaid services

22  established under subsection (3), which shall be actuarially

23  adjusted for case mix, model, and service area. The agency

24  shall conduct actuarially sound audits adjusted for case mix

25  and model in order to ensure such cost-effectiveness and shall

26  publish the audit results on its Internet website and submit

27  the audit results annually to the Governor, the President of

28  the Senate, and the Speaker of the House of Representatives no

29  later than December 31 of each year. Contracts established

30  pursuant to this subsection which are not cost-effective may

31  not be renewed.

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 1         (49)  The agency shall contract with established

 2  minority physician networks that provide services to

 3  historically underserved minority patients. The networks must

 4  provide cost-effective Medicaid services, comply with the

 5  requirements to be a MediPass provider, and provide their

 6  primary care physicians with access to data and other

 7  management tools necessary to assist them in ensuring the

 8  appropriate use of services, including inpatient hospital

 9  services and pharmaceuticals.

10         (a)  The agency shall provide for the development and

11  expansion of minority physician networks in each service area

12  to provide services to Medicaid recipients who are eligible to

13  participate under federal law and rules.

14         (b)  The agency shall reimburse each minority physician

15  network as a fee-for-service provider, including the case

16  management fee for primary care, if any, or as a capitated

17  rate provider for Medicaid services. Any savings shall be

18  shared with the minority physician networks pursuant to the

19  contract.

20         (c)  For purposes of this subsection, the term

21  "cost-effective" means that a network's per-member, per-month

22  costs to the state, including, but not limited to,

23  fee-for-service costs, administrative costs, and

24  case-management fees, if any, must be no greater than the

25  state's costs associated with contracts for Medicaid services

26  established under subsection (3), which shall be actuarially

27  adjusted for case mix, model, and service area. The agency

28  shall conduct actuarially sound audits adjusted for case mix

29  and model in order to ensure such cost-effectiveness and shall

30  publish the audit results on its Internet website and submit

31  the audit results annually to the Governor, the President of

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 1  the Senate, and the Speaker of the House of Representatives no

 2  later than December 31. Contracts established pursuant to this

 3  subsection which are not cost-effective may not be renewed.

 4         (d)  The agency may apply for any federal waivers

 5  needed to implement this subsection.

 6         (50)  The agency shall implement a program of

 7  all-inclusive care for children. The program of all-inclusive

 8  care for children shall be established to provide in-home

 9  hospice-like support services to children diagnosed with a

10  life-threatening illness and enrolled in the Children's

11  Medical Services network to reduce hospitalizations as

12  appropriate. The agency, in consultation with the Department

13  of Health, may implement the program of all-inclusive care for

14  children after obtaining approval from the Centers for

15  Medicare and Medicaid Services.

16         Section 12.  Section 409.9124, Florida Statutes, is

17  amended to read:

18         409.9124  Managed care reimbursement.--

19         (1)  The agency shall develop and adopt by rule a

20  methodology for reimbursing managed care plans.

21         (1)(2)  Final managed care rates shall be published

22  annually prior to September 1 of each year, based on

23  methodology that:

24         (a)  Uses Medicaid's fee-for-service expenditures.

25         (b)  Is certified as an actuarially sound computation

26  of Medicaid fee-for-service expenditures for comparable groups

27  of Medicaid recipients and includes all fee-for-service

28  expenditures, including those fee-for-service expenditures

29  attributable to recipients who are enrolled for a portion of a

30  year in a managed care plan or waiver program.

31  

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 1         (c)  Is compliant with applicable federal laws and

 2  regulations, including, but not limited to, the requirements

 3  to include an allowance for administrative expenses and to

 4  account for all fee-for-service expenditures, including

 5  fee-for-service expenditures for those groups enrolled for

 6  part of a year.

 7         (2)(3)  Each year prior to establishing new managed

 8  care rates, the agency shall review all prior year adjustments

 9  for changes in trend, and shall reduce or eliminate those

10  adjustments which are not reasonable and which reflect

11  policies or programs which are not in effect.

12         (3)(4)  The agency shall by rule prescribe those items

13  of financial information which each managed care plan shall

14  report to the agency, in the time periods prescribed by rule.

15  In prescribing items for reporting and definitions of terms,

16  the agency shall consult with the Office of Insurance

17  Regulation of the Financial Services Commission wherever

18  possible.

19         (4)(5)  The agency shall quarterly examine the

20  financial condition of each managed care plan, and its

21  performance in serving Medicaid patients, and shall utilize

22  examinations performed by the Office of Insurance Regulation

23  wherever possible.

24         Section 13.  Except as otherwise expressly provided in

25  this act, this act shall take effect July 1, 2005.

26  

27  

28  

29  

30  

31  

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 1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 2                         Senate Bill 404

 3                                 

 4  
      -  Delays the scheduled increase in the minimum staffing
 5       standards for nursing homes from 2.6 hours to 2.9 hours
         of direct care per patient per day until July 1, 2006.
 6  
      -  Restores Medicaid  eligibility for pregnant women with
 7       incomes between 150 to 185 percent of the federal poverty
         level, effective July 1,2005.
 8  
      -  Limits eligibility standards for the Medicaid Aged and
 9       Disabled program(MEDS AD).

10    -  Restores coverage for all Medicaid services to Medically
         Needy recipients, effective July 1, 2005.
11  
      -  Restores Medicaid coverage for adult denture services,
12       effective July 1, 2005.

13    -  Eliminates the Silver Saver prescription drug program,
         effective January 1, 2006, as a result of the
14       implementation of Medicare Part D.

15    -  Eliminates outdated language that reduced hospital
         inpatient rates by 6 percent between July 1, 2001 and
16       April 1, 2002.

17    -  Revises guidelines for direct and indirect care
         subcomponents for nursing home reimbursement.
18  
      -  Eliminates outdated language relating to the RPICC,
19       teaching and primary care disproportionate share hospital
         programs.
20  
      -  Eliminates the exemption of the prior authorization
21       requirements for mental health, antiretroviral drugs, and
         drugs for nursing home recipients and other
22       institutionalized individuals.

23    -  Requires the agency to publish the preferred drug list on
         the Internet.
24  
      -  Extends the requirement for the Pharmaceutical and
25       Therapeutics Committee review of newly approved drugs
         from the next scheduled meeting after FDA approval to the
26       next scheduled meeting after the drug has been in
         distribution for twelve months.
27  
      -  Removes outdated language allowing the agency to adopt a
28       voluntary preferred drug list.

29    -  Implements prescription drug safety requirements.

30    -  Establishes a Medicaid preferred drug list that includes
         a list of cost effective therapeutic options with at
31       least two products in each therapeutic class.

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    Florida Senate - 2005                            CS for SB 404
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 1    -  Requires prior authorization of all drugs in excess of
         eight per recipient per month.
 2  
      -  Eliminates the four brand name drug limit and prior
 3       authorization requirements.

 4    -  Eliminates language that exempts children and medications
         to treat mental illness from prior authorization
 5       requirements.

 6    -  Authorizes the dispensing of one-hundred day maximum
         supplies of maintenance medications.
 7  
      -  Eliminates the exception that allows prior authorization
 8       requirements from the pharmacy rather than by the
         prescribing physician for nursing home residents and
 9       other institutionalized adults.

10    -  Eliminates language which established an advisory
         committee for the purpose of studying the feasibility of
11       using a restricted formulary for nursing home residents.

12    -  Eliminates language that required the Agency for Health
         Care Administration to negotiate a contract for a
13       behavioral health management program by September 1,
         2004.
14  
      -  Authorizes the agency, in conjunction with the
15       Pharmaceutical and Therapeutics Committee, to place
         certain age related recipient prior authorization
16       requirements.

17    -  Authorizes the agency to implement a step therapy prior
         authorization process for prescriptions that are not
18       included on the preferred drug list.

19    -  Authorizes the agency to implement the program of
         all-inclusive care for children to provide in-home
20       hospice-like support services to children diagnosed with
         life-threatening illness and enrolled in the Children's
21       Medical Services network.

22    -  Removes language related to administrative expenses and
         accounting for all fee-for-service expenditures currently
23       duplicated in HMO capitation rate setting methodology
         used by the agency.
24  

25  

26  

27  

28  

29  

30  

31  

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