Senate Bill sb0404c2

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    Florida Senate - 2005                     CS for CS for SB 404

    By the Committees on Ways and Means; Health and Human Services
    Appropriations; and Senator Saunders




    576-1869-05

  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         409.9122, F.S.; revising a provision governing

28         assignment to a managed care option for a

29         Medicaid recipient who does not choose a plan

30         or provider in certain geographic areas where

31         the Agency for Health Care Administration

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 1         contracts for comprehensive behavioral health

 2         services; amending s. 409.9124, F.S.; requiring

 3         the Agency for Health Care Administration to

 4         publish managed care reimbursement rates

 5         annually; limiting the application of certain

 6         rates and rate reductions; providing effective

 7         dates.

 8  

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

10  

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

12  400.23, Florida Statutes, is amended to read:

13         400.23  Rules; evaluation and deficiencies; licensure

14  status.--

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

16  minimum staffing requirements for nursing homes. These

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

18  minimum certified nursing assistant staffing of 2.3 hours of

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

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

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

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

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

24  certified nursing assistant per 20 residents, and a minimum

25  licensed nursing staffing of 1.0 hour of direct resident care

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

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

28  be included in computing the staffing ratio for certified

29  nursing assistants only if they provide nursing assistance

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

31  must document compliance with staffing standards as required

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

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

 3  agency shall recognize the use of licensed nurses for

 4  compliance with minimum staffing requirements for certified

 5  nursing assistants, provided that the facility otherwise meets

 6  the minimum staffing requirements for licensed nurses and that

 7  the licensed nurses so recognized are performing the duties of

 8  a certified nursing assistant. Unless otherwise approved by

 9  the agency, licensed nurses counted toward the minimum

10  staffing requirements for certified nursing assistants must

11  exclusively perform the duties of a certified nursing

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

13  toward the minimum staffing requirements for licensed nurses.

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

15  nurse to perform both licensed nursing and certified nursing

16  assistant duties, the facility must allocate the amount of

17  staff time specifically spent on certified nursing assistant

18  duties for the purpose of documenting compliance with minimum

19  staffing requirements for certified and licensed nursing

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

21  job responsibilities be counted twice.

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

23  Statutes, is amended to read:

24         409.903  Mandatory payments for eligible persons.--The

25  agency shall make payments for medical assistance and related

26  services on behalf of the following persons who the

27  department, or the Social Security Administration by contract

28  with the Department of Children and Family Services,

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

30  categorical eligibility tests set forth in federal and state

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

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 1  subject to the availability of moneys and any limitations

 2  established by the General Appropriations Act or chapter 216.

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

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

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

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

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

 8  1992, that has an income which is at or below 185 percent of

 9  the most current federal poverty level. Such a person is not

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

11  applies for eligibility for the Medicaid program through a

12  qualified Medicaid provider must be offered the opportunity,

13  subject to federal rules, to be made presumptively eligible

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

15  for Medicaid services is eliminated for women who have incomes

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

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

18  Florida Statutes, are amended to read:

19         409.904  Optional payments for eligible persons.--The

20  agency may make payments for medical assistance and related

21  services on behalf of the following persons who are determined

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

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

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

25  availability of moneys and any limitations established by the

26  General Appropriations Act or chapter 216.

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

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

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

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

31  

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

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

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

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

 5  exceed established limitations, and who is not eligible for

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

 7  and receiving Medicaid-covered institutional care services,

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

 9  agency shall seek federal authorization through a waiver to

10  provide this coverage.

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

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

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

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

15  or person exceed established limitations. For a family or

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

17  deductible from income in accordance with federal requirements

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

19  person eligible under the coverage known as the "medically

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

21  Medicaid recipients, with the exception of services in skilled

22  nursing facilities and intermediate care facilities for the

23  developmentally disabled. Effective July 1, 2005, the

24  medically needy are eligible for prescribed drug services

25  only.

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

27  409.906, Florida Statutes, is amended to read:

28         409.906  Optional Medicaid services.--Subject to

29  specific appropriations, the agency may make payments for

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

31  the Social Security Act and are furnished by Medicaid

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 1  providers to recipients who are determined to be eligible on

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

 3  service that is provided shall be provided only when medically

 4  necessary and in accordance with state and federal law.

 5  Optional services rendered by providers in mobile units to

 6  Medicaid recipients may be restricted or prohibited by the

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

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

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

10  making any other adjustments necessary to comply with the

11  availability of moneys and any limitations or directions

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

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

14  services to elderly and disabled persons and subject to the

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

16  direct the Agency for Health Care Administration to amend the

17  Medicaid state plan to delete the optional Medicaid service

18  known as "Intermediate Care Facilities for the Developmentally

19  Disabled." Optional services may include:

20         (1)  ADULT DENTAL SERVICES.--

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

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

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

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

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

26  July 1, 2005.

27         Section 5.  Effective January 1, 2006, section

28  409.9065, Florida Statutes, is repealed.

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

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

31  Statutes, are amended to read:

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 1         409.908  Reimbursement of Medicaid providers.--Subject

 2  to specific appropriations, the agency shall reimburse

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

 4  according to methodologies set forth in the rules of the

 5  agency and in policy manuals and handbooks incorporated by

 6  reference therein.  These methodologies may include fee

 7  schedules, reimbursement methods based on cost reporting,

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

 9  and other mechanisms the agency considers efficient and

10  effective for purchasing services or goods on behalf of

11  recipients. If a provider is reimbursed based on cost

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

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

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

15  shall be retroactively calculated using the new cost report,

16  and full payment at the recalculated rate shall be effected

17  retroactively. Medicare-granted extensions for filing cost

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

19  reports. Payment for Medicaid compensable services made on

20  behalf of Medicaid eligible persons is subject to the

21  availability of moneys and any limitations or directions

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

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

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

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

26  making any other adjustments necessary to comply with the

27  availability of moneys and any limitations or directions

28  provided for in the General Appropriations Act, provided the

29  adjustment is consistent with legislative intent.

30  

31  

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 1         (1)  Reimbursement to hospitals licensed under part I

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

 3  negotiation.

 4         (a)  Reimbursement for inpatient care is limited as

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

 6         1.  The raising of rate reimbursement caps, excluding

 7  rural hospitals.

 8         2.  Recognition of the costs of graduate medical

 9  education.

10         3.  Other methodologies recognized in the General

11  Appropriations Act.

12         4.  Hospital inpatient rates shall be reduced by 6

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

14  1, 2002.

15  

16  During the years funds are transferred from the Department of

17  Health, any reimbursement supported by such funds shall be

18  subject to certification by the Department of Health that the

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

20  authorized to receive funds from state entities, including,

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

22  governments, and other local political subdivisions, for the

23  purpose of making special exception payments, including

24  federal matching funds, through the Medicaid inpatient

25  reimbursement methodologies. Funds received from state

26  entities or local governments for this purpose shall be

27  separately accounted for and shall not be commingled with

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

29  certify all local governmental funds used as state match under

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

31  identified local health care provider that is otherwise

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

 2  the benefactor under the state's Medicaid program as

 3  determined under the General Appropriations Act and pursuant

 4  to an agreement between the Agency for Health Care

 5  Administration and the local governmental entity. The local

 6  governmental entity shall use a certification form prescribed

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

 8  identify the amount being certified and describe the

 9  relationship between the certifying local governmental entity

10  and the local health care provider. The agency shall prepare

11  an annual statement of impact which documents the specific

12  activities undertaken during the previous fiscal year pursuant

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

14  than January 1, annually.

15         (2)

16         (b)  Subject to any limitations or directions provided

17  for in the General Appropriations Act, the agency shall

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

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

20  to provide care and services in conformance with the

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

22  quality and safety standards and to ensure that individuals

23  eligible for medical assistance have reasonable geographic

24  access to such care.

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

26  qualify for increases in reimbursement rates associated with

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

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

29  provide that the initial nursing home reimbursement rates, for

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

31  with related and unrelated party changes of ownership or

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

 2  equivalent to the previous owner's reimbursement rate.

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

 4  reimbursement plan and cost reporting system to create direct

 5  care and indirect care subcomponents of the patient care

 6  component of the per diem rate. These two subcomponents

 7  together shall equal the patient care component of the per

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

 9  for each patient care subcomponent. The direct care

10  subcomponent of the per diem rate shall be limited by the

11  cost-based class ceiling and may be limited by the target rate

12  class ceiling, and the indirect care subcomponent shall be

13  limited by the lower of the cost-based class ceiling, by the

14  target rate class ceiling, or by the individual provider

15  target. The agency shall adjust the patient care component

16  effective January 1, 2002. The cost to adjust the direct care

17  subcomponent shall be net of the total funds previously

18  allocated for the case mix add-on. The agency shall make the

19  required changes to the nursing home cost reporting forms to

20  implement this requirement effective January 1, 2002.

21         3.  The direct care subcomponent shall include salaries

22  and benefits of direct care staff providing nursing services

23  including registered nurses, licensed practical nurses, and

24  certified nursing assistants who deliver care directly to

25  residents in the nursing home facility. This excludes nursing

26  administration, minimum data set MDS, and care plan

27  coordinators, staff development, and staffing coordinator.

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

29  the indirect care cost subcomponent of the patient care per

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

31  

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 1  allocated to the direct care subcomponent from a home office

 2  or management company.

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

 4  the Legislature direct and indirect care costs, including

 5  average direct and indirect care costs per resident per

 6  facility and direct care and indirect care salaries and

 7  benefits per category of staff member per facility.

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

 9  professional liability insurance, the agency shall amend the

10  plan to allow for interim rate adjustments to reflect

11  increases in the cost of general or professional liability

12  insurance for nursing homes. This provision shall be

13  implemented to the extent existing appropriations are

14  available.

15  

16  It is the intent of the Legislature that the reimbursement

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

18  nursing home residents who require large amounts of care while

19  encouraging diversion services as an alternative to nursing

20  home care for residents who can be served within the

21  community. The agency shall base the establishment of any

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

23  available moneys as provided for in the General Appropriations

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

25  results of scientifically valid analysis and conclusions

26  derived from objective statistical data pertinent to the

27  particular maximum rate of payment.

28         Section 7.  Section 409.9112, Florida Statutes, is

29  amended to read:

30         409.9112  Disproportionate share program for regional

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

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

 2  Administration shall design and implement a system of making

 3  disproportionate share payments to those hospitals that

 4  participate in the regional perinatal intensive care center

 5  program established pursuant to chapter 383. This system of

 6  payments shall conform with federal requirements and shall

 7  distribute funds in each fiscal year for which an

 8  appropriation is made by making quarterly Medicaid payments.

 9  Notwithstanding the provisions of s. 409.915, counties are

10  exempt from contributing toward the cost of this special

11  reimbursement for hospitals serving a disproportionate share

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

13  2004-2005, the agency shall not distribute moneys under the

14  regional perinatal intensive care centers disproportionate

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

16  the Centers for Medicare and Medicaid Services do not approve

17  Florida's inpatient hospital state plan amendment for the

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

19  agency may make payments to hospitals under the regional

20  perinatal intensive care centers disproportionate share

21  program.

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

23  to calculate the total amount earned for hospitals that

24  participate in the regional perinatal intensive care center

25  program:

26  

27                         TAE = HDSP/THDSP

28  

29  Where:

30         TAE = total amount earned by a regional perinatal

31  intensive care center.

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 1         HDSP = the prior state fiscal year regional perinatal

 2  intensive care center disproportionate share payment to the

 3  individual hospital.

 4         THDSP = the prior state fiscal year total regional

 5  perinatal intensive care center disproportionate share

 6  payments to all hospitals.

 7  

 8         (2)  The total additional payment for hospitals that

 9  participate in the regional perinatal intensive care center

10  program shall be calculated by the agency as follows:

11  

12                          TAP = TAE x TA

13  

14  Where:

15         TAP = total additional payment for a regional perinatal

16  intensive care center.

17         TAE = total amount earned by a regional perinatal

18  intensive care center.

19         TA = total appropriation for the regional perinatal

20  intensive care center disproportionate share program.

21  

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

23  hospital must be participating in the regional perinatal

24  intensive care center program pursuant to chapter 383 and must

25  meet the following additional requirements:

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

27  requirements to ensure high quality in the provision of

28  services, including criteria adopted by departmental and

29  agency rule concerning staffing ratios, medical records,

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

31  

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 1  and criteria as the department and agency deem appropriate as

 2  specified by rule.

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

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

 5  department and agency, concerning the care provided to all

 6  patients in neonatal intensive care centers and high-risk

 7  maternity care.

 8         (c)  Agree to accept all patients for neonatal

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

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

11         (d)  Agree to develop arrangements with other maternity

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

13  appropriate receipt and transfer of patients in need of

14  specialized maternity and neonatal intensive care services.

15         (e)  Agree to establish and provide a developmental

16  evaluation and services program for certain high-risk

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

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

19  in perinatal care for health care professionals within the

20  region of the hospital, as specified by rule.

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

22  the department's county health departments and other

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

24  including the development of written agreements between these

25  organizations and the hospital.

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

27  obstetrical patients and neonates in need of transfer from the

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

29  appropriate facility.

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

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

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 1  department and agency shall not receive any payments under

 2  this section until full compliance is achieved.  A hospital

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

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

 5  shall be distributed by the remaining participating regional

 6  perinatal intensive care center program hospitals.

 7         Section 8.  Section 409.9113, Florida Statutes, is

 8  amended to read:

 9         409.9113  Disproportionate share program for teaching

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

11  and 409.9112, the Agency for Health Care Administration shall

12  make disproportionate share payments to statutorily defined

13  teaching hospitals for their increased costs associated with

14  medical education programs and for tertiary health care

15  services provided to the indigent. This system of payments

16  shall conform with federal requirements and shall distribute

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

18  by making quarterly Medicaid payments. Notwithstanding s.

19  409.915, counties are exempt from contributing toward the cost

20  of this special reimbursement for hospitals serving a

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

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

23  distribute moneys under the teaching hospital disproportionate

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

25  the Centers for Medicare and Medicaid Services do not approve

26  Florida's inpatient hospital state plan amendment for the

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

28  agency may make payments to hospitals under the teaching

29  hospital disproportionate share program.

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

31  for Health Care Administration shall calculate an allocation

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 1  fraction to be used for distributing funds to state statutory

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

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

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

 5  amount determined by multiplying one-fourth of the funds

 6  appropriated for this purpose by the Legislature times such

 7  hospital's allocation fraction.  The allocation fraction for

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

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

10         (a)  The number of nationally accredited graduate

11  medical education programs offered by the hospital, including

12  programs accredited by the Accreditation Council for Graduate

13  Medical Education and the combined Internal Medicine and

14  Pediatrics programs acceptable to both the American Board of

15  Internal Medicine and the American Board of Pediatrics at the

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

17  the allocation fraction is calculated.  The numerical value of

18  this factor is the fraction that the hospital represents of

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

20  all state statutory teaching hospitals.

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

22  hospital, which comprises two components:

23         1.  The number of trainees enrolled in nationally

24  accredited graduate medical education programs, as defined in

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

26  fraction of the year during which each trainee is primarily

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

28  preceding the date on which the allocation fraction is

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

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

31  equivalent trainees enrolled in accredited graduate programs,

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 1  where the total is computed for all state statutory teaching

 2  hospitals.

 3         2.  The number of medical students enrolled in

 4  accredited colleges of medicine and engaged in clinical

 5  activities, including required clinical clerkships and

 6  clinical electives.  Full-time equivalents are computed using

 7  the fraction of the year during which each trainee is

 8  primarily assigned to the given institution, over the course

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

10  allocation fraction is calculated. The numerical value of this

11  factor is the fraction that the given hospital represents of

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

13  accredited colleges of medicine, where the total is computed

14  for all state statutory teaching hospitals.

15  

16  The primary factor for full-time equivalent trainees is

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

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

19         1.  The Agency for Health Care Administration Service

20  Index, computed by applying the standard Service Inventory

21  Scores established by the Agency for Health Care

22  Administration to services offered by the given hospital, as

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

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

25  calculated.  The numerical value of this factor is the

26  fraction that the given hospital represents of the total

27  Agency for Health Care Administration Service Index values,

28  where the total is computed for all state statutory teaching

29  hospitals.

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

31  applying the standard Service Inventory Scores established by

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 1  the Agency for Health Care Administration to the volume of

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

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

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

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

 6  the fraction that the given hospital represents of the total

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

 8  computed for all state statutory teaching hospitals.

 9         3.  Total Medicaid payments to each hospital for direct

10  inpatient and outpatient services during the fiscal year

11  preceding the date on which the allocation factor is

12  calculated.  This includes payments made to each hospital for

13  such services by Medicaid prepaid health plans, whether the

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

15  value of this factor is the fraction that each hospital

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

17  total is computed for all state statutory teaching hospitals.

18  

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

20  sum of these three components, divided by three.

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

22  the following formula to calculate the maximum additional

23  disproportionate share payment for statutorily defined

24  teaching hospitals:

25  

26                          TAP = THAF x A

27  

28  Where:

29         TAP = total additional payment.

30         THAF = teaching hospital allocation factor.

31  

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 1         A = amount appropriated for a teaching hospital

 2  disproportionate share program.

 3         Section 9.  Section 409.9117, Florida Statutes, is

 4  amended to read:

 5         409.9117  Primary care disproportionate share

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

 7  agency shall not distribute moneys under the primary care

 8  disproportionate share program, except as noted in subsection

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

10  Services do not approve Florida's inpatient hospital state

11  plan amendment for the public disproportionate share program

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

13  under the primary care disproportionate share program.

14         (1)  If federal funds are available for

15  disproportionate share programs in addition to those otherwise

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

17  disproportionate share program.

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

19  to calculate the total amount earned for hospitals that

20  participate in the primary care disproportionate share

21  program:

22  

23                         TAE = HDSP/THDSP

24  

25  Where:

26         TAE = total amount earned by a hospital participating

27  in the primary care disproportionate share program.

28         HDSP = the prior state fiscal year primary care

29  disproportionate share payment to the individual hospital.

30         THDSP = the prior state fiscal year total primary care

31  disproportionate share payments to all hospitals.

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 1  

 2         (3)  The total additional payment for hospitals that

 3  participate in the primary care disproportionate share program

 4  shall be calculated by the agency as follows:

 5  

 6                          TAP = TAE x TA

 7  

 8  Where:

 9         TAP = total additional payment for a primary care

10  hospital.

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

12         TA = total appropriation for the primary care

13  disproportionate share program.

14  

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

16  the agency shall use the following criteria in addition to

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

18  hospital unless the hospital agrees to:

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

20  one exists in the community.

21         (b)  Ensure the availability of primary and specialty

22  care physicians to Medicaid recipients who are not enrolled in

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

24  to such physicians.

25         (c)  Coordinate and provide primary care services free

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

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

28  otherwise covered by Medicaid or another program administered

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

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

31  percent of the federal poverty level who are not otherwise

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 1  covered by Medicaid or another program administered by a

 2  governmental entity, except that eligibility may be limited to

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

 4  the agency and the hospital.

 5         (d)  Contract with any federally qualified health

 6  center, if one exists within the agreed geopolitical

 7  boundaries, concerning the provision of primary care services,

 8  in order to guarantee delivery of services in a nonduplicative

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

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

11  provide at an onsite or offsite facility primary care services

12  within 24 hours to which all Medicaid recipients and persons

13  eligible under this paragraph who do not require emergency

14  room services are referred during normal daylight hours.

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

16  entities to ensure the provision of certain public health

17  services, case management, referral and acceptance of

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

19  and the hospital find mutually necessary and desirable to

20  promote and protect the public health within the agreed

21  geopolitical boundaries.

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

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

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

25  Medicaid program, and who reside within the area.

26         (g)  Provide inpatient services to residents within the

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

28  not have private health insurance, regardless of ability to

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

30  shall prevent the hospital from establishing bill collection

31  programs based on ability to pay.

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

 2  the Florida Health Care Purchasing Cooperative, and business

 3  health coalitions, as appropriate, to develop a feasibility

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

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

 6  do not have access to such a plan.

 7         (i)  Work with public health officials and other

 8  experts to provide community health education and prevention

 9  activities designed to promote healthy lifestyles and

10  appropriate use of health services.

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

12  plan for promoting access to affordable health care services

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

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

15  inpatient services, and affordable health insurance generally.

16  

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

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

19  not receive payments under this section until full compliance

20  is achieved.

21         Section 10.  Section 409.91195, Florida Statutes, is

22  amended to read:

23         409.91195  Medicaid Pharmaceutical and Therapeutics

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

25  Therapeutics Committee within the agency for Health Care

26  Administration for the purpose of developing a Medicaid

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

28  1396r-8.

29         (1)  The Medicaid Pharmaceutical and Therapeutics

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

31  1396r-8 and consist of 11 members appointed by the Governor.

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

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

 3  pharmacists licensed under chapter 465; and one member shall

 4  be a consumer representative. The members shall be appointed

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

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

 7  The agency for Health Care Administration shall serve as staff

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

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

10  the Medicaid Pharmaceutical and Therapeutics committee

11  represent Medicaid participating physicians and pharmacies

12  serving all segments and diversity of the Medicaid population,

13  and have experience in either developing or practicing under a

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

15  shall represent the interests of pharmaceutical manufacturers.

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

17  vice chairperson each year from the committee membership.

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

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

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

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

22  pursuant to the requirements of the Administrative Procedure

23  Act.

24         (4)  Upon recommendation of the Medicaid Pharmaceutical

25  and Therapeutics committee, the agency shall adopt a preferred

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

27  feasible, the committee shall review all drug classes included

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

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

30  preferred drug list formulary, such that the preferred drug

31  list formulary provides for medically appropriate drug

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 1  therapies for Medicaid patients which achieve cost savings

 2  contained in the General Appropriations Act.

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

 4  antiretroviral drugs, and drugs for nursing home residents and

 5  other institutional residents, reimbursement of drugs not

 6  included in the formulary is subject to prior authorization.

 7         (5)(6)  The agency for Health Care Administration shall

 8  publish and disseminate the preferred drug list formulary to

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

10  agency's website or in other media.

11         (6)(7)  The committee shall ensure that interested

12  parties, including pharmaceutical manufacturers agreeing to

13  provide a supplemental rebate as outlined in this chapter,

14  have an opportunity to present public testimony to the

15  committee with information or evidence supporting inclusion of

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

17  shall occur prior to any recommendations made by the committee

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

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

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

21  the United States Food and Drug Administration under a

22  priority review classification will be reviewed by the

23  Medicaid Pharmaceutical and Therapeutics committee at the next

24  regularly scheduled meeting following 12 months of

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

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

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

28  regularly scheduled Medicaid Pharmaceutical and Therapeutics

29  Committee.

30         (8)  Until the Medicaid Pharmaceutical and Therapeutics

31  Committee is appointed and a preferred drug list adopted by

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 1  the agency, the agency shall use the existing voluntary

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

 3  2000-367, Laws of Florida. Drugs not listed on the voluntary

 4  preferred drug list will require prior authorization by the

 5  agency or its contractor.

 6         (7)(9)  The Medicaid Pharmaceutical and Therapeutics

 7  committee shall develop its preferred drug list

 8  recommendations by considering the clinical efficacy, safety,

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

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

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

12  recipient in a month the drug shall not require prior

13  authorization.

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

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

16  been removed from distribution to the public by its

17  manufacturer or the United States Food and Drug Administration

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

19  United States Food and Drug Administration because of safety

20  concerns is reviewed by the committee at the next regularly

21  scheduled meeting. After such review, the committee must

22  recommend whether to retain the therapeutic class of drugs or

23  subcategories of drugs within a therapeutic class on the

24  preferred drug list and whether to institute prior

25  authorization requirements necessary to ensure patient safety.

26         (9)(10)  The Medicaid Pharmaceutical and Therapeutics

27  Committee may also make recommendations to the agency

28  regarding the prior authorization of any prescribed drug

29  covered by Medicaid.

30         (10)(11)  Medicaid recipients may appeal agency

31  preferred drug formulary decisions using the Medicaid fair

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 1  hearing process administered by the Department of Children and

 2  Family Services.

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

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

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

 6  section, to read:

 7         409.912  Cost-effective purchasing of health care.--The

 8  agency shall purchase goods and services for Medicaid

 9  recipients in the most cost-effective manner consistent with

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

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

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

13  the correct diagnosis for purposes of authorizing future

14  services under the Medicaid program. This section does not

15  restrict access to emergency services or poststabilization

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

17  confirmation or second opinion shall be rendered in a manner

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

19  prepaid per capita and prepaid aggregate fixed-sum basis

20  services when appropriate and other alternative service

21  delivery and reimbursement methodologies, including

22  competitive bidding pursuant to s. 287.057, designed to

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

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

25  minimize the exposure of recipients to the need for acute

26  inpatient, custodial, and other institutional care and the

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

28  agency may mandate prior authorization, drug therapy

29  management, or disease management participation for certain

30  populations of Medicaid beneficiaries, certain drug classes,

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

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 1  possible dangerous drug interactions. The Pharmaceutical and

 2  Therapeutics Committee shall make recommendations to the

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

 4  agency shall inform the Pharmaceutical and Therapeutics

 5  Committee of its decisions regarding drugs subject to prior

 6  authorization. The agency is authorized to limit the entities

 7  it contracts with or enrolls as Medicaid providers by

 8  developing a provider network through provider credentialing.

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

10  beneficiary access to care, provider availability, provider

11  quality standards, time and distance standards for access to

12  care, the cultural competence of the provider network,

13  demographic characteristics of Medicaid beneficiaries,

14  practice and provider-to-beneficiary standards, appointment

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

16  provider profiling, provider licensure history, previous

17  program integrity investigations and findings, peer review,

18  provider Medicaid policy and billing compliance records,

19  clinical and medical record audits, and other factors.

20  Providers shall not be entitled to enrollment in the Medicaid

21  provider network. The agency is authorized to seek federal

22  waivers necessary to implement this policy.

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

24  prescribed-drug spending-control program that includes the

25  following components:

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

27  listing of cost-effective therapeutic options recommended by

28  the Medicaid Pharmacy and Therapeutics Committee established

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

30  therapeutic class on the preferred drug list. At the

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

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 1  drug list should include at least two products in a

 2  therapeutic class. Medicaid prescribed-drug coverage for

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

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

 5  per month per recipient. Prior authorization is required for

 6  all additional prescriptions above the eight-drug limit and

 7  must meet step therapy and preferred drug list listing

 8  requirements. Children are exempt from this restriction.

 9  Antiretroviral agents are excluded from this limitation. No

10  requirements for prior authorization or other restrictions on

11  medications used to treat mental illnesses such as

12  schizophrenia, severe depression, or bipolar disorder may be

13  imposed on Medicaid recipients. Medications that will be

14  available without restriction for persons with mental

15  illnesses include atypical antipsychotic medications,

16  conventional antipsychotic medications, selective serotonin

17  reuptake inhibitors, and other medications used for the

18  treatment of serious mental illnesses. The agency shall also

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

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

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

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

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

24  authorized to seek any federal waivers necessary to implement

25  these cost-control programs and to continue participation in

26  the federal Medicaid rebate program, or alternatively to

27  negotiate state-only manufacturer rebates. The agency may

28  adopt rules to implement this subparagraph. The agency shall

29  continue to provide unlimited generic drugs, contraceptive

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

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

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

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

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

 4  based on prior consultation provided by the agency or an

 5  agency contractor, but The agency must establish procedures to

 6  ensure that:

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

 8  consultation by telephone or other telecommunication device

 9  within 24 hours after receipt of a request for prior

10  consultation; and

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

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

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

14  and

15         c.  Except for the exception for nursing home residents

16  and other institutionalized adults and except for drugs on the

17  restricted formulary for which prior authorization may be

18  sought by an institutional or community pharmacy, prior

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

20  restriction is sought by the prescriber and not by the

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

22  an institutional setting beyond the brand-name-drug

23  restriction, such approval is authorized for 12 months and

24  monthly prior authorization is not required for that patient.

25         2.  Reimbursement to pharmacies for Medicaid prescribed

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

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

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

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

30  customary (UAC) charge billed by the provider.

31  

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 1         3.  The agency shall develop and implement a process

 2  for managing the drug therapies of Medicaid recipients who are

 3  using significant numbers of prescribed drugs each month. The

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

 5  comprehensive, physician-directed medical-record reviews,

 6  claims analyses, and case evaluations to determine the medical

 7  necessity and appropriateness of a patient's treatment plan

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

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

10  Medicaid drug benefit management program shall include

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

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

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

14  agency shall enroll any Medicaid recipient in the drug benefit

15  management program if he or she meets the specifications of

16  this provision and is not enrolled in a Medicaid health

17  maintenance organization.

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

19  network based on need, competitive bidding, price

20  negotiations, credentialing, or similar criteria. The agency

21  shall give special consideration to rural areas in determining

22  the size and location of pharmacies included in the Medicaid

23  pharmacy network. A pharmacy credentialing process may include

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

25  size, patient educational programs, patient consultation,

26  disease-management services, and other characteristics. The

27  agency may impose a moratorium on Medicaid pharmacy enrollment

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

29  Medicaid-participating providers.

30         5.  The agency shall develop and implement a program

31  that requires Medicaid practitioners who prescribe drugs to

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 1  use a counterfeit-proof prescription pad for Medicaid

 2  prescriptions. The agency shall require the use of

 3  standardized counterfeit-proof prescription pads by

 4  Medicaid-participating prescribers or prescribers who write

 5  prescriptions for Medicaid recipients. The agency may

 6  implement the program in targeted geographic areas or

 7  statewide.

 8         6.  The agency may enter into arrangements that require

 9  manufacturers of generic drugs prescribed to Medicaid

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

11  average manufacturer price for the manufacturer's generic

12  products. These arrangements shall require that if a

13  generic-drug manufacturer pays federal rebates for

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

15  manufacturer must provide a supplemental rebate to the state

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

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

18  described in this subsection formulary in accordance with 42

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

20  preferred drug list formulary, it is authorized to negotiate

21  supplemental rebates from manufacturers that are in addition

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

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

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

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

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

27  supplemental rebates the agency may negotiate. The agency may

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

29  competitive at lower rebate percentages. Agreement to pay the

30  minimum supplemental rebate percentage will guarantee a

31  manufacturer that the Medicaid Pharmaceutical and Therapeutics

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 1  Committee will consider a product for inclusion on the

 2  preferred drug list formulary. However, a pharmaceutical

 3  manufacturer is not guaranteed placement on the preferred drug

 4  list formulary by simply paying the minimum supplemental

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

 6  of a drug and recommendations of the Medicaid Pharmaceutical

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

 8  products minus federal and state rebates. The agency is

 9  authorized to contract with an outside agency or contractor to

10  conduct negotiations for supplemental rebates. For the

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

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

13  programs as a substitution for supplemental rebates are

14  prohibited. The agency is authorized to seek any federal

15  waivers to implement this initiative.

16         8.  The agency shall establish an advisory committee

17  for the purposes of studying the feasibility of using a

18  restricted drug formulary for nursing home residents and other

19  institutionalized adults. The committee shall be comprised of

20  seven members appointed by the Secretary of Health Care

21  Administration. The committee members shall include two

22  physicians licensed under chapter 458 or chapter 459; three

23  pharmacists licensed under chapter 465 and appointed from a

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

25  Pharmacy Alliance; and two pharmacists licensed under chapter

26  465.

27         8.9.  The Agency for Health Care Administration shall

28  expand home delivery of pharmacy products. To assist Medicaid

29  patients in securing their prescriptions and reduce program

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

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

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 1  drugs used by Medicaid patients with diabetes. Medicaid

 2  recipients in the current program may obtain nondiabetes drugs

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

 4  geographic area covered by the current contract. The agency

 5  may seek and implement any federal waivers necessary to

 6  implement this subparagraph.

 7         9.10.  The agency shall limit to one dose per month any

 8  drug prescribed to treat erectile dysfunction.

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

10  behavioral drug management system. The agency may contract

11  with a vendor that has experience in operating behavioral drug

12  management systems to implement this program. The agency is

13  authorized to seek federal waivers to implement this program.

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

15  Children and Family Services, may implement the Medicaid

16  behavioral drug management system that is designed to improve

17  the quality of care and behavioral health prescribing

18  practices based on best practice guidelines, improve patient

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

20  prescribed drug costs and the rate of inappropriate spending

21  on Medicaid behavioral drugs. The program shall include the

22  following elements:

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

24  practice guidelines for behavioral health-related drugs such

25  as antipsychotics, antidepressants, and medications for

26  treating bipolar disorders and other behavioral conditions;

27  translate them into practice; review behavioral health

28  prescribers and compare their prescribing patterns to a number

29  of indicators that are based on national standards; and

30  determine deviations from best practice guidelines.

31  

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 1         (II)  Implement processes for providing feedback to and

 2  educating prescribers using best practice educational

 3  materials and peer-to-peer consultation.

 4         (III)  Assess Medicaid beneficiaries who are outliers

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

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

 7  drug therapies, and other indicators of improper use of

 8  behavioral health drugs.

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

10  prescriptions in a timely fashion, are prescribed multiple

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

12  potential medication problems.

13         (V)  Track spending trends for behavioral health drugs

14  and deviation from best practice guidelines.

15         (VI)  Use educational and technological approaches to

16  promote best practices, educate consumers, and train

17  prescribers in the use of practice guidelines.

18         (VII)  Disseminate electronic and published materials.

19         (VIII)  Hold statewide and regional conferences.

20         (IX)  Implement a disease management program with a

21  model quality-based medication component for severely mentally

22  ill individuals and emotionally disturbed children who are

23  high users of care.

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

25  with one or more manufacturers to finance and guarantee

26  savings associated with a behavioral drug management program

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

28  drug list prior-authorization requirements shall apply to

29  mental health-related drugs, notwithstanding any provision in

30  subparagraph 1. The agency is authorized to seek federal

31  waivers to implement this policy.

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 1         11.12.  The agency is authorized to contract for drug

 2  rebate administration, including, but not limited to,

 3  calculating rebate amounts, invoicing manufacturers,

 4  negotiating disputes with manufacturers, and maintaining a

 5  database of rebate collections.

 6         12.13.  The agency may specify the preferred daily

 7  dosing form or strength for the purpose of promoting best

 8  practices with regard to the prescribing of certain drugs as

 9  specified in the General Appropriations Act and ensuring

10  cost-effective prescribing practices.

11         13.14.  The agency may require prior authorization for

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

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

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

15  an indication not in the approved labeling. Prior

16  authorization may require the prescribing professional to

17  provide information about the rationale and supporting medical

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

19         14.  The agency, in conjunction with the Pharmaceutical

20  and Therapeutics Committee, may require age-related prior

21  authorizations for certain prescribed drugs. The agency may

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

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

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

25  approved by the Food and Drug Administration. Prior

26  authorization may require the prescribing professional to

27  provide information about the rationale and supporting medical

28  evidence for the use of a drug.

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

30  authorization-approval process for medications excluded from

31  the preferred drug list. Medications listed on the preferred

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

 2  the alternative medications that are not listed. The

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

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

 5  medical indication unless contraindicated in the Food and Drug

 6  Administration labeling. The trial period between the

 7  specified steps may vary according to the medical indication.

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

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

10  (8).

11         16.15.  The agency shall implement a return and reuse

12  program for drugs dispensed by pharmacies to institutional

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

14  the implementation and operation of the program. The return

15  and reuse program shall be implemented electronically and in a

16  manner that promotes efficiency. The program must permit a

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

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

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

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

21         (44)  The Agency for Health Care Administration shall

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

23  409.9122(2)(h), whether paid on a capitated basis or a shared

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

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

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

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

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

29  state's costs associated with contracts for Medicaid services

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

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

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 1  shall conduct actuarially sound audits adjusted for case mix

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

 3  publish the audit results on its Internet website and submit

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

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

 6  later than December 31 of each year. Contracts established

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

 8  not be renewed.

 9         (49)  The agency shall contract with established

10  minority physician networks that provide services to

11  historically underserved minority patients. The networks must

12  provide cost-effective Medicaid services, comply with the

13  requirements to be a MediPass provider, and provide their

14  primary care physicians with access to data and other

15  management tools necessary to assist them in ensuring the

16  appropriate use of services, including inpatient hospital

17  services and pharmaceuticals.

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

19  expansion of minority physician networks in each service area

20  to provide services to Medicaid recipients who are eligible to

21  participate under federal law and rules.

22         (b)  The agency shall reimburse each minority physician

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

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

25  rate provider for Medicaid services. Any savings shall be

26  shared with the minority physician networks pursuant to the

27  contract.

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

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

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

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

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

 2  state's costs associated with contracts for Medicaid services

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

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

 5  shall conduct actuarially sound audits adjusted for case mix

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

 7  publish the audit results on its Internet website and submit

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

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

10  later than December 31. Contracts established pursuant to this

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

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

13  needed to implement this subsection.

14         (50)  The agency shall implement a program of

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

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

17  hospice-like support services to children diagnosed with a

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

19  Medical Services network to reduce hospitalizations as

20  appropriate. The agency, in consultation with the Department

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

22  children after obtaining approval from the Centers for

23  Medicare and Medicaid Services.

24         Section 12.  Paragraph (k) of subsection (2) of section

25  409.9122, Florida Statutes, is amended to read:

26         409.9122  Mandatory Medicaid managed care enrollment;

27  programs and procedures.--

28         (2)

29         (k)  When a Medicaid recipient does not choose a

30  managed care plan or MediPass provider, the agency shall

31  assign the Medicaid recipient to a managed care plan, except

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 1  in those counties in which there are fewer than two managed

 2  care plans accepting Medicaid enrollees, in which case

 3  assignment shall be to a managed care plan or a MediPass

 4  provider. Medicaid recipients in counties with fewer than two

 5  managed care plans accepting Medicaid enrollees who are

 6  subject to mandatory assignment but who fail to make a choice

 7  shall be assigned to managed care plans until an enrollment of

 8  40 percent in MediPass and 60 percent in managed care plans is

 9  achieved. Once that enrollment is achieved, the assignments

10  shall be divided in order to maintain an enrollment in

11  MediPass and managed care plans which is in a 40 percent and

12  60 percent proportion, respectively. In service areas 1 and 6

13  of the Agency for Health Care Administration geographic areas

14  where the agency is contracting for the provision of

15  comprehensive behavioral health services through a capitated

16  prepaid arrangement, recipients who fail to make a choice

17  shall be assigned equally to MediPass or a managed care plan.

18  For purposes of this paragraph, when referring to assignment,

19  the term "managed care plans" includes exclusive provider

20  organizations, provider service networks, Children's Medical

21  Services Network, minority physician networks, and pediatric

22  emergency department diversion programs authorized by this

23  chapter or the General Appropriations Act. When making

24  assignments, the agency shall take into account the following

25  criteria:

26         1.  A managed care plan has sufficient network capacity

27  to meet the need of members.

28         2.  The managed care plan or MediPass has previously

29  enrolled the recipient as a member, or one of the managed care

30  plan's primary care providers or MediPass providers has

31  previously provided health care to the recipient.

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 1         3.  The agency has knowledge that the member has

 2  previously expressed a preference for a particular managed

 3  care plan or MediPass provider as indicated by Medicaid

 4  fee-for-service claims data, but has failed to make a choice.

 5         4.  The managed care plan's or MediPass primary care

 6  providers are geographically accessible to the recipient's

 7  residence.

 8         5.  The agency has authority to make mandatory

 9  assignments based on quality of service and performance of

10  managed care plans.

11         Section 13.  Section 409.9124, Florida Statutes, is

12  amended to read:

13         409.9124  Managed care reimbursement.--

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

15  methodology for reimbursing managed care plans.

16         (1)(2)  Final managed care rates shall be published

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

18  methodology that:

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

20         (b)  Is certified as an actuarially sound computation

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

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

23  expenditures, including those fee-for-service expenditures

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

25  year in a managed care plan or waiver program.

26         (c)  Is compliant with applicable federal laws and

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

28  to include an allowance for administrative expenses and to

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

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

31  part of a year.

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 1         (2)(3)  Each year prior to establishing new managed

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

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

 4  adjustments which are not reasonable and which reflect

 5  policies or programs which are not in effect. In addition, the

 6  agency shall apply only those policy reductions applicable to

 7  the fiscal year for which the rates are being set, which can

 8  be accurately estimated and verified by an independent

 9  actuary, and which have been implemented prior to or will be

10  implemented during the fiscal year. The agency shall pay rates

11  at per-member, per-month averages that equal, but do not

12  exceed, the amounts allowed for in the General Appropriations

13  Act applicable to the fiscal year for which the rates will be

14  in effect.

15         (3)(4)  The agency shall by rule prescribe those items

16  of financial information which each managed care plan shall

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

18  In prescribing items for reporting and definitions of terms,

19  the agency shall consult with the Office of Insurance

20  Regulation of the Financial Services Commission wherever

21  possible.

22         (4)(5)  The agency shall quarterly examine the

23  financial condition of each managed care plan, and its

24  performance in serving Medicaid patients, and shall utilize

25  examinations performed by the Office of Insurance Regulation

26  wherever possible.

27         Section 14.  Except as otherwise expressly provided in

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

29  

30  

31  

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 1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 2                          CS for SB 404

 3                                 

 4    -  Revises guidelines for the direct care subcomponent for
         nursing home reimbursement.
 5  
      -  Requires equal assignment of recipients to MediPass or a
 6       managed care plan in service areas 1 and 6 where the
         agency is contracting for prepaid behavioral health
 7       services and requires the assignment of 40 percent
         MediPass and 60 percent managed care in all other areas
 8       of the state for recipients who fail to choose a plan at
         the time of enrollment.
 9  
      -  Requires the agency to include policy reductions when
10       establishing managed care rates, and limits payments of
         managed care rates to the amounts allowed in the General
11       Appropriations Act.

12  

13  

14  

15  

16  

17  

18  

19  

20  

21  

22  

23  

24  

25  

26  

27  

28  

29  

30  

31  

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