HCB 6003

1	A bill to be entitled
2	An act relating to Medicaid reform; providing waiver
3	authority to the Agency for Health Care Administration;
4	providing for implementation of demonstration projects;
5	providing definitions; identifying categorical groups for
6	eligibility under the waiver; establishing the choice
7	counseling process; requiring managed care plans to
8	include mandatory Medicaid services and behavioral health
9	and pharmacy services; requiring managed care plans to
10	provide a wellness and disease management program for
11	certain Medicaid recipients participating in the waiver;
12	requiring managed care plans to provide pharmacy benefits;
13	requiring managed care plans to provide behavioral health
14	benefits; requiring a managed care plan to have a
15	certificate of operation from the agency before operating
16	under the waiver; providing for certification
17	requirements; providing for reimbursement of provider
18	service networks; providing an exemption under certain
19	circumstances; providing for continuance of contracts
20	previously awarded; providing for cost sharing by
21	recipients, and requirements; requiring the agency to have
22	accountability and quality assurance standards; requiring
23	the agency to establish a medical care database; providing
24	data collection requirements; requiring certain entities
25	certified to operate a managed care plan to comply with
26	ss. 641.3155 and 641.513, F.S.; providing for the agency
27	to establish and provide for funding of catastrophic
28	coverage; providing for the agency to develop a rate
29	setting and risk adjustment system; requiring the agency
30	to establish enhanced benefit coverage and providing
31	procedures therefor; establishing flexible spending
32	accounts and individual development accounts; authorizing
33	the agency to allow recipients to opt out of Medicaid and
34	purchase health care coverage through an employer-
35	sponsored insurer; requiring the agency to apply and
36	enforce certain provisions of law relating to Medicaid
37	fraud and abuse; providing penalties; providing for the
38	agency to expand certain demonstration project waivers
39	under certain conditions; providing for integration of
40	state funding to persons who are age 60 and above;
41	requiring the agency to provide a choice of managed care
42	plans to recipients; providing requirements for managed
43	care plans; requiring the agency to withhold certain
44	funding contingent upon the performance of a plan;
45	requiring the plan to rebate certain profits to the
46	agency; authorizing the agency to limit the number of
47	enrollees in a plan under certain circumstances; providing
48	for eligibility determination and choice counseling for
49	persons age 60 and above; providing for imposition of
50	liquidated damages; authorizing the agency to grant a
51	modification of certificate-of-need conditions to nursing
52	homes under certain circumstances; requiring integration
53	of Medicare and Medicaid services; providing legislative
54	intent; providing for awarding of funds for managed care
55	delivery system development, contingent upon an
56	appropriation; requiring the agency to establish and
57	implement a Medicaid buy-in program to assist certain
58	working individuals with disabilities with medical
59	coverage; providing applicability; granting rulemaking
60	authority to the agency; requiring legislative authority
61	to implement the waiver; requiring the Office of Program
62	Policy Analysis and Government Accountability to evaluate
63	the Medicaid reform waiver and issue reports; requiring
64	the agency to submit status reports; requiring the agency
65	to contract for certain evaluation comparisons; providing
66	for future review and repeal of the act; providing an
67	effective date.
68
69	Be It Enacted by the Legislature of the State of Florida:
70
71	Section 1.  Medicaid reform.--
72	(1)  WAIVER AUTHORITY.--Notwithstanding any other law to
73	the contrary, the Agency for Health Care Administration is
74	authorized to seek experimental, pilot, or demonstration project
75	waivers, pursuant to s. 1115 of the Social Security Act, to
76	reform Florida's Medicaid program pursuant to this section in
77	urban and rural demonstration sites. This waiver authority is
78	contingent on federal approval to preserve the upper-payment-
79	limit funding mechanism for hospitals, including a guarantee of
80	a reasonable growth factor, a methodology to allow the use of a
81	portion of these funds to serve as a risk pool for demonstration
82	sites, provisions to preserve the state's ability to use
83	intergovernmental transfers, and provisions to protect the
84	disproportionate share program authorized under chapter 409,
85	Florida Statutes.
86	(2)  IMPLEMENTATION OF DEMONSTRATION PROJECTS.--The agency
87	shall include in the federal waiver request the authority to
88	establish managed care demonstration projects in at least one
89	urban and one rural area, initially in Broward, Baker, Clay,
90	Duval, and Nassau counties.
91	(3)  DEFINITIONS.--As used in this section, the term:
92	(a)  "Agency" means the Agency for Health Care
93	Administration.
94	(b)  "Catastrophic coverage" means coverage for services
95	provided to a Medicaid recipient after that recipient has
96	received services with an aggregate cost, based on Medicaid
97	reimbursement rates, which exceeds a threshold specified by the
98	agency.
99	(c)  "Enhanced benefit coverage" means additional health
100	care services or alternative health care coverage which can be
101	purchased by qualified recipients.
102	(d)  "Flexible spending account" means an account that
103	encourages consumer ownership and management of resources
104	available for enhanced benefit coverage, wellness activities,
105	preventive services, and other services to improve the health of
106	the recipient.
107	(e)  "Individual development account" means a dedicated
108	savings account that is designed to encourage and enable a
109	recipient to build assets in order to purchase health-related
110	services or health-related products.
111	(f)  "Managed care plan" or "plan" means an entity
112	certified by the agency to accept a capitation payment,
113	including, but not limited to, a health maintenance organization
114	authorized under part I of chapter 641, Florida Statutes; an
115	entity under part II or part III of chapter 641, chapter 627,
116	chapter 636, or s. 409.912, Florida Statutes; a licensed mental
117	health provider under chapter 394, Florida Statutes; a licensed
118	substance abuse provider under chapter 397, Florida Statutes; a
119	hospital under chapter 395, Florida Statutes; or a provider
120	service network as defined in this section.
121	(g)  "Medicaid buy-in" means a program under s. 4733 of the
122	federal Balanced Budget Act of 1997 to provide Medicaid coverage
123	to certain working individuals with disabilities and pursuant to
124	the provisions of this section.
125	(h)  "Medicaid opt-out option" means a program that allows
126	a recipient to purchase health care insurance through an
127	employer-sponsored insurer instead of through a Medicaid-
128	certified plan.
129	(i)  "Plan benefits" means the mandatory services required
130	of the state by Title XIX of the Social Security Act; behavioral
131	health services specified in s. 409.906(8), Florida Statutes;
132	pharmacy services specified in s. 409.906(20), Florida Statutes;
133	and other services including, but not limited to, Medicaid
134	optional services specified in s. 409.906, Florida Statutes, for
135	which a plan is receiving a risk adjusted capitation rate.
136	Optional benefits may include any supplemental coverage offered
137	to attract recipients and provide needed care. In all instances,
138	the agency shall ensure that plan benefits include those
139	services that are medically necessary, based on historical
140	Medicaid utilization.
141	(j)  "Provider service network" means an incorporated
142	network:
143	1.  Established or organized, and operated, by a health
144	care provider or group of affiliated health care providers;
145	2.  That provides a substantial proportion of the health
146	care items and services under a contract directly through the
147	provider or affiliated group;
148	3.  That may make arrangements with physicians, other
149	health care professionals, and health care institutions, to
150	assume all or part of the financial risk on a prospective basis
151	for the provision of basic health services; and
152	4.  Within which health care providers have a controlling
153	interest in the governing body of the provider service network
154	organization, as authorized by s. 409.912, Florida Statutes.
155	(k)  "Shall" means the agency must include the provision of
156	a subsection as delineated in this section in the waiver
157	application and implement the provision to the extent allowed in
158	the demonstration project sites by the Centers for Medicare and
159	Medicaid Services and as approved by the Legislature pursuant to
160	this section.
161	(4)  ELIGIBILITY.--
162	(a)  The agency shall pursue waivers to reform Medicaid for
163	the following categorical groups:
164	1.  Temporary Assistance for Needy Families consistent with
165	ss. 402 and 1931 of the Social Security Act and chapter 409,
166	chapter 414, or chapter 445, Florida Statutes.
167	2.  Supplemental Security Income recipients as defined in
168	Title XVI of the Social Security Act, except for persons who are
169	dually eligible for Medicaid and Medicare, individuals 60 years
170	of age or older, individuals who have developmental
171	disabilities, and residents of institutions or nursing homes.
172	3.  All children covered pursuant to Title XIX and Title
173	XXI of the Social Security Act.
174	(b)  The agency may pursue any appropriate federal waiver
175	to reform Medicaid for the populations excluded by this
176	subsection.
177	(5)  CHOICE COUNSELING.--
178	(a)  At the time of eligibility determination, the agency
179	shall provide the recipient with all the Medicaid health care
180	options available in that community to assist the recipient in
181	choosing health care coverage.
182	(b)  A recipient shall either choose or be placed in a
183	managed care plan at the time of eligibility determination.
184	Within 30 days after the time of eligibility determination, a
185	recipient may choose to receive health care coverage through
186	another managed care plan or an employer-sponsored insurer.
187	(c)  The agency shall ensure that the recipient is provided
188	with:
189	1.  A list and description of the benefits provided.
190	2.  Cost data.
191	3.  Plan performance data, if available.
192	4.  Explanation of benefit limitations.
193	5.  Contact information, including geographic locations and
194	phone numbers of all plan providers and transportation
195	limitations.
196	6.  Any other information the agency determines would
197	facilitate a recipient's understanding of the plan or insurance
198	that would best meet his or her needs.
199	(d)  The agency shall ensure that there is a record of
200	recipient acknowledgment that choice counseling has been
201	provided.
202	(e)  The agency shall ensure that the choice counseling
203	process and material provided are designed to allow recipients
204	with limited education, mental impairment, physical impairment,
205	sensory impairment, cultural differences, and language barriers
206	to understand the choices they must make and the consequences of
207	their choices.
208	(f)  The agency shall require the entity performing choice
209	counseling to determine if the recipient has made a choice of a
210	plan or has opted out because of duress, threats, payment to the
211	recipient, or incentives promised to the recipient by a third
212	party. If the choice counseling entity determines that the
213	decision to choose a plan was unlawfully influenced or a plan
214	violated any of the provisions of s. 409.912(21), Florida
215	Statutes, the choice counseling entity shall immediately report
216	the violation to the agency's program integrity section for
217	investigation. Verification of choice counseling by the
218	recipient shall include a stipulation that the recipient
219	acknowledges the provisions of this subsection.
220	(g)  It is the intent of the Legislature, within the
221	authority of the waiver and within available resources, that the
222	agency promote health literacy through outreach activities for
223	Medicaid recipients.
224	(h)  The agency is authorized to contract with entities to
225	perform choice counseling and may establish standards and
226	performance contracts.
227	(6)  PLANS.--
228	(a)  Plan benefits.--The agency shall develop a capitated
229	system of care that promotes choice and competition. Plan
230	benefits shall include the mandatory services required of the
231	state by Title XIX of the Social Security Act; behavioral health
232	services specified in s. 409.906(8), Florida Statutes; pharmacy
233	services specified in s. 409.906(20), Florida Statutes; and
234	other services including, but not limited to, Medicaid optional
235	services specified in s. 409.906, Florida Statutes, for which a
236	plan is receiving a risk adjusted capitation rate. Optional
237	benefits may include any supplemental coverage offered to
238	attract recipients and provide needed care. In all instances,
239	the agency shall ensure that plan benefits include those
240	services that are medically necessary, based on historical
241	Medicaid utilization.
242	(b)  Wellness and disease management.--
243	1.  The agency shall require any plan under this section to
244	establish performance objectives to encourage wellness behaviors
245	or minimize the exposure of recipients to the need for acute
246	inpatient, custodial, and other institutional and long-term care
247	placement and the inappropriate or unnecessary utilization of
248	high-cost services.
249	2.  The agency shall require plans to provide a wellness or
250	disease management program for certain Medicaid recipients
251	participating in the waiver. At a minimum, the agency shall
252	require plans to develop at least four disease management
253	programs for recipients from the following list of diseases and
254	conditions:
255	a.  Diabetes.
256	b.  Asthma.
257	c.  HIV/AIDS.
258	d.  Hemophilia.
259	e.  End-stage renal disease.
260	f.  Congestive heart failure.
261	g.  Chronic obstructive pulmonary disease.
262	h.  Autoimmune disorders.
263	i.  Obesity.
264	j.  Smoking.
265	k.  Hypertension.
266	l.  Coronary artery disease.
267	m.  Chronic kidney disease.
268	n.  Chronic pain.
269	o.  Oral disease.
270	3.  The agency shall require a plan to develop appropriate
271	disease management protocols and develop procedures for
272	implementing those protocols, and determine the procedure for
273	providing disease management services to plan enrollees. The
274	agency is authorized to allow a plan to contract separately with
275	another entity for disease management services or provide
276	disease management services directly through the plan.
277	4.  The agency shall provide oversight to ensure that the
278	service network provides the contractually agreed upon level of
279	service.
280	5.  The agency may establish performance contracts that
281	reward a plan when measurable operational targets in both
282	participation and clinical outcomes are reached or exceeded by
283	the plan.
284	6.  The agency may establish performance contracts that
285	penalize a plan when measurable operational targets for both
286	participation and clinical outcomes are not reached by the plan.
287	7.  The agency shall develop oversight requirements and
288	procedures to ensure that plans utilize standardized methods and
289	clinical protocols for determining compliance with a wellness or
290	disease management plan.
291	(c)  Pharmacy benefits.--
292	1.  The agency shall require plans to provide pharmacy
293	benefits and include pharmacy benefits as part of the capitation
294	risk structure to enable a plan to coordinate and fully manage
295	all aspects of patient care as part of the plan or through a
296	pharmacy benefits manager.
297	2.  The agency may set standards for pharmacy benefits for
298	managed care plans and specify the therapeutic classes of
299	pharmacy benefits to be included as part of the capitation
300	structure to enable a plan to coordinate and fully manage all
301	aspects of patient care as part of the plan or through a
302	pharmacy benefits manager.
303	3.  Each plan shall implement a pharmacy fraud, waste, and
304	abuse initiative that may include a surety bond or letter of
305	credit requirement for participating pharmacies, enhanced
306	provider auditing practices, the use of additional fraud and
307	abuse software, recipient management programs for recipients
308	inappropriately using their benefits, and other measures to
309	reduce provider and recipient fraud, waste, and abuse. The
310	initiative shall address enforcement efforts to reduce the
311	number and use of counterfeit prescriptions.
312	4.  The agency shall require plans to report incidences of
313	pharmacy fraud and abuse and establish procedures for receiving
314	and investigating fraud and abuse reports from plans in the
315	demonstration project sites. Plans must report instances of
316	fraud and abuse pursuant to chapter 641, Florida Statutes.
317	5.  The agency shall facilitate the establishment of a
318	Florida managed care plan purchasing alliance. The purpose of
319	the alliance is to form agreements among participating plans to
320	purchase pharmaceuticals at a discount, to achieve rebates, or
321	to receive best market price adjustments. Participation in the
322	Florida managed care plan purchasing alliance shall be
323	voluntary.
324	6.  The agency shall allow dispensing practitioners to
325	participate as a part of the Medicaid pharmacy network
326	regardless of the practitioner's proximity to any other entity
327	that is dispensing prescription drugs under the Medicaid
328	program. A dispensing practitioner must meet all credentialing
329	requirements applicable to his or her practice, as determined by
330	the agency.
331	(d)  Behavioral health benefits.--
332	1.  The agency shall include behavioral health care
333	benefits as part of the capitation structure to enable a plan to
334	coordinate and fully manage all aspects of patient care.
335	2.  The agency may set standards for behavioral health care
336	benefits for managed care plans and health insurance plans
337	participating in the Medicaid opt-out option pursuant to this
338	section.
339	3.  The agency may set appropriate medication guidelines,
340	including copayments.
341	(7)  CERTIFICATION.--Before any entity may operate a
342	managed care plan under the waiver, it shall obtain a
343	certificate of operation from the agency.
344	(a)  Any entity operating under part I of chapter 641,
345	Florida Statutes, shall be deemed to be a Medicaid-certified
346	plan.
347	(b)  Any entity operating under part II or part III of
348	chapter 641, chapter 627, chapter 636, or s. 409.912, Florida
349	Statutes; a licensed mental health provider under chapter 394,
350	Florida Statutes; a licensed substance abuse provider under
351	chapter 397, Florida Statutes; a hospital under chapter 395,
352	Florida Statutes; or a provider service network as defined in
353	this section shall be in compliance with the requirements and
354	standards developed by the agency. The agency, in consultation
355	with the Office of Insurance Regulation, shall establish
356	certification requirements. It is the intent of the Legislature,
357	to the extent possible, that any project authorized by the state
358	under this section include any federally qualified health
359	center, county health department, or other federal, state, or
360	locally funded entity that serves the geographic area within the
361	boundaries of that project. The certification process shall, at
362	a minimum, take into account the following requirements:
363	1.  The entity has sufficient financial solvency to be
364	placed at risk for the basic plan benefits under ss. 409.905,
365	409.906(8), and 409.906(20), Florida Statutes, and other covered
366	services.
367	2.  The entity has sufficient service network capacity to
368	meet the need of members under ss. 409.905, 409.906(8), and
369	409.906(20), Florida Statutes, and other covered services.
370	3.  The entity's primary care providers are geographically
371	accessible to the recipient.
372	4.  The entity has the capacity to provide a wellness or
373	disease management program.
374	5.  The entity shall provide for ambulance service in
375	accordance with ss. 409.908(13)(d) and 409.9128, Florida
376	Statutes.
377	6.  The entity has the infrastructure to manage financial
378	transactions, recordkeeping, data collection, and other
379	administrative functions.
380	7.  The entity, if not a fully indemnified insurance
381	program under chapter 624, chapter 627, chapter 636, or chapter
382	641, Florida Statues, meets the financial solvency requirements
383	specified in chapter 641, Florida Statutes, as determined by the
384	agency in consultation with the Office of Insurance Regulation.
385	(c)  The agency has the authority to contract with entities
386	not otherwise licensed as an insurer or risk-bearing entity
387	under chapter 627 or chapter 641, Florida Statutes, as long as
388	these entities meet the certification standards of this section
389	and any additional standards as defined by the agency to qualify
390	as managed care plans under this section.
391	(d)  Each entity certified by the agency shall submit to
392	the agency any financial, programmatic, encounter data, or other
393	information required by the agency to determine the actual
394	services provided and cost of administering the plan.
395	(e)  A provider service network may be reimbursed on a fee-
396	for-service or prepaid basis. A provider service network that is
397	reimbursed by the agency on a prepaid basis shall be exempt from
398	parts I and III of chapter 641, but must meet appropriate
399	financial reserve, quality assurance, and patient rights
400	requirements as established by the agency. The agency shall
401	award contracts on a competitive bid basis and shall select
402	bidders based upon price and quality of care. Medicaid
403	recipients assigned to a demonstration project shall be chosen
404	equally from those who would otherwise have been assigned to
405	prepaid plans or MediPass. The agency is authorized to seek
406	federal Medicaid waivers as necessary to implement the
407	provisions of this section. Any contract previously awarded to a
408	provider service network operated by a hospital pursuant to this
409	subsection shall remain in effect, regardless of any contractual
410	provisions to the contrary. This paragraph applies only to
411	waivers under this section.
412	(8)  COST SHARING.--
413	(a)  For recipients enrolled in a Medicaid managed care
414	plan, the agency may continue cost-sharing requirements as
415	currently defined in s. 409.9081, Florida Statutes, or as
416	approved under a waiver granted from the federal Centers for
417	Medicare and Medicaid Services. Such approved cost-sharing
418	requirements may include provisions requiring recipients to pay:
419	1.  An enrollment fee;
420	2.  A deductible;
421	3.  Coinsurance or a portion of the plan premium; or
422	4.  Progressively higher percentages of the cost of the
423	medical assistance by families with higher levels of income.
424	(b)  For recipients who opt out of Medicaid, cost sharing
425	shall be governed by the policy of the plan in which the
426	individual enrolls.
427	(c)  If the employer-sponsored coverage requires that the
428	cost-sharing provisions imposed under paragraph (a) include
429	requirements that recipients pay a portion of the plan premium,
430	the agency shall specify the manner in which the premium is
431	paid. The agency may require that the premium be paid to the
432	agency, an organization operating part of the medical assistance
433	program, or the managed care plan.
434	(d)  Cost-sharing provisions adopted under this section may
435	be determined based on the maximum level authorized under an
436	approved federal waiver.
437	(9)  ACCOUNTABILITY AND QUALITY ASSURANCE.--The agency
438	shall establish standards for plan compliance including, but not
439	limited to, quality assurance and performance improvement
440	standards, peer or professional review standards, grievance
441	policies, and program integrity policies. The agency shall
442	develop a data reporting system, work with managed care plans to
443	establish reasonable encounter reporting requirements, and
444	ensure that the data reported is accurate and complete.
445	(a)  In performing the duties required under this section,
446	the agency shall work with managed care plans to establish a
447	uniform system to measure, improve, and monitor the clinical and
448	functional outcomes of a recipient of Medicaid services. The
449	system may use financial, clinical, and other criteria based on
450	pharmacy, medical services, and other data related to the
451	provision of Medicaid services, including, but not limited to:
452	1.  Health Plan Employer Data and Information Set.
453	2.  Member satisfaction.
454	3.  Provider satisfaction.
455	4.  Report cards on plan performance and best practices.
456	5.  Quarterly reports on compliance with the prompt pay
457	requirements in ss. 627.613, 641.3155, and 641.513, Florida
458	Statutes.
459	(b)  The agency shall require the managed care plans
460	contracted with the agency to establish a quality assurance
461	system incorporating the provisions of s. 409.912(27), Florida
462	Statutes, and any standards, rules, and guidelines developed by
463	the agency.
464	(c)1.  The agency shall establish a medical care database
465	to compile data on health services rendered by health care
466	practitioners providing services to patients enrolled in managed
467	care plans in the demonstration sites. The medical care database
468	shall:
469	a.  Collect for each type of patient encounter with a
470	health care practitioner or facility:
471	(I)  The demographic characteristics of the patient.
472	(II)  The principal, secondary, and tertiary diagnosis.
473	(III)  The procedure performed.
474	(IV)  The date and location where the procedure was
475	performed.
476	(V)  The charge for the procedure, if any.
477	(VI)  If applicable, the health care practitioner's
478	universal identification number.
479	(VII)  If the health care practitioner rendering the
480	service is a dependent practitioner, the modifiers appropriate
481	to indicate that the service was delivered by the dependent
482	practitioner.
483	b.  Collect appropriate information relating to
484	prescription drugs for each type of patient encounter.
485	c.  Collect appropriate information related to health care
486	costs, utilization, or resources from managed care plans
487	participating in the demonstration sites.
488	2.  To the extent practicable, when collecting the data
489	required under sub-subparagraph a., the agency shall utilize any
490	standardized claim form or electronic transfer system being used
491	by health care practitioners, facilities, and payers.
492	3.  Health care practitioners and facilities in the
493	demonstration sites shall submit, and managed care plans
494	participating in the demonstration sites shall receive, claims
495	for payment and any other information reasonably related to the
496	medical care database electronically in a standard format as
497	required by the agency.
498	4.  The agency shall establish reasonable deadlines for
499	phasing in of electronic transmittal of claims.
500	5.  The agency shall ensure that the data reported is
501	accurate and complete.
502	(d)  The agency shall describe the evaluation methodology
503	and standards that will be used to assess the success of the
504	demonstration projects.
505	(10)  STATUTORY COMPLIANCE.--Any entity certified under
506	this section shall comply with ss. 627.613, 641.3155, and
507	641.513, Florida Statutes.
508	(11)  CATASTROPHIC COVERAGE.--
509	(a)  A plan shall provide catastrophic coverage to the
510	extent required by the agency or up to a monetary threshold
511	determined by the agency and within the capitation rate set by
512	the agency.
513	(b)  The agency shall establish a fund for purposes of
514	covering services under catastrophic coverage. The catastrophic
515	coverage fund shall provide for payment of medically necessary
516	care for recipients who are enrolled in a plan and whose care
517	has exceeded a predetermined monetary threshold. The agency may
518	establish an aggregate maximum level of coverage in the
519	catastrophic fund.
520	(c)  The agency shall develop policies and procedures to
521	allow a plan to utilize the catastrophic coverage for a Medicaid
522	recipient in the plan who has reached the catastrophic coverage
523	threshold.
524	(d)  A recipient participating in a plan may be included in
525	catastrophic coverage at a cost threshold determined by the
526	agency based on actuarial analysis.
527	(e)  If a plan does not cover the catastrophic component,
528	placement of the recipient in the catastrophic coverage shall
529	not release the plan from providing other plan benefits or from
530	the case management of the recipient's care, except when the
531	agency determines it is in the best interest of the recipient to
532	release the managed care plan from these obligations.
533	(f)  The agency shall establish or contract for an
534	administrative structure to manage the catastrophic coverage
535	function.
536	(12)  RATE SETTING AND RISK ADJUSTMENT.--The agency shall
537	develop a rate setting and risk adjustment system to include:
538	(a)  Rate setting and risk adjustment mechanisms that may
539	be based on:
540	1.  A clinical diagnostic classification system that is
541	established in consultation with plans, providers, and the
542	federal Centers for Medicare and Medicaid Services.
543	2.  Categorical groups that have separate risks or
544	capitation rates based on actuarially sound methodologies.
545	3.  Funding established by the General Appropriations Act
546	as well as eligibility group, geography, gender, age, and health
547	status.
548	(b)  A reimbursement methodology that recognizes risk
549	factors from both a client perspective and a provider
550	perspective.
551	(c)  Provisions related to stop-loss requirements and the
552	transfer of excess cost to catastrophic coverage that
553	accommodates risks associated with the development of the
554	demonstration projects.
555	(d)  Descriptions of a process to be used by the Social
556	Service Estimating Conference to determine and validate the rate
557	of growth of the per-member costs of providing Medicaid services
558	under the managed care initiative.
559	(e)  Descriptions of the eligibility assignment processes
560	that will be used to facilitate client choice and ensure that
561	demonstration projects have adequate enrollment levels. These
562	processes shall ensure that demonstration project sites have
563	sufficient levels of enrollment to conduct a valid test of the
564	managed care demonstration project model within a 2-year
565	timeframe.
566	(f)  Any such rate setting and risk adjustment systems
567	shall include:
568	1.  Criteria to adjust risk.
569	2.  Validation of the rates and risk adjustments.
570	3.  Minimum medical loss ratios which must be determined by
571	an actuarial study. Medical loss ratios are subject to an annual
572	audit. Failure to comply with the minimum medical loss ratios
573	shall be grounds for fines, reductions in capitated payments in
574	the current fiscal year, or contract termination.
575	(g)  Rates shall be established in consultation with an
576	actuary and the federal Centers for Medicare and Medicaid
577	Services and supported by actuarial analysis.
578	(13)  ENHANCED BENEFIT COVERAGE.--
579	(a)  The agency shall establish enhanced benefit coverage
580	and a methodology to fund the enhanced benefit coverage.
581	(b)  A recipient who complies with the objectives of a
582	wellness or disease management plan, as determined by the plan,
583	shall have access to the enhanced benefit coverage for the
584	purpose of purchasing or securing health-care services or
585	health-care products.
586	(c)  The agency shall establish flexible spending accounts
587	or similar accounts for recipients as approved in the waiver to
588	be administered by the agency or by a managed care plan. The
589	agency shall make deposits to a recipient's flexible spending
590	account contingent on compliance with a wellness plan or a
591	disease management plan.
592	(d)  The purpose of the flexible spending accounts is to
593	allow waiver recipients to accumulate funds up to a maximum of
594	$1,000 for purposes of activities allowed by federal regulations
595	or as approved in the waiver.
596	(e)  The agency may allow a plan to establish other
597	additional reward systems for compliance with a wellness or
598	disease management objective that are supplemental to the
599	enhanced benefit coverage.
600	(f)  The agency shall establish individual development
601	accounts or similar accounts for recipients as approved in the
602	waiver. The agency shall make deposits into a recipient's
603	individual development account contingent upon compliance with a
604	wellness or a disease management plan.
605	(g)  The purpose of an individual development account is to
606	allow waiver recipients to accumulate funds up to a maximum of
607	$1,000 for purposes of activities allowed by federal regulations
608	or as approved in the waiver.
609	(h)  A recipient shall choose to participate in a flexible
610	spending account or an individual development account to
611	accumulate funds pursuant to the provisions of this section.
612	(i)  It is the intent of the Legislature that flexible
613	spending accounts and individual development accounts encourage
614	consumer ownership and management of resources for wellness
615	activities, preventive services, and other services to improve
616	the health of the recipient.
617	(j)  The agency shall develop standards and oversight
618	procedures to monitor access to enhanced services, the use of
619	flexible spending accounts, and the use of individual
620	development accounts as approved by the waiver.
621	(k)  It is the intent of the Legislature that the agency
622	develop an electronic benefit transfer system for the
623	distribution of enhanced benefit funds earned by the recipient.
624	(14)  MEDICAID OPT-OUT OPTION.--
625	(a)  The agency shall allow recipients to purchase health
626	care coverage through an employer-sponsored insurer instead of
627	through a Medicaid-certified plan for recipients who are
628	enrolled in a plan that meets requirements established by the
629	agency in consultation with the Office of Insurance Regulation.
630	(b)  A recipient who chooses the Medicaid opt-out option
631	shall have an opportunity for a specified period of time, as
632	authorized under a waiver granted by the Centers for Medicare
633	and Medicaid Services, to select and enroll in a Medicaid
634	certified plan. If the recipient remains in the employer-
635	sponsored plan after the specified period, the recipient shall
636	remain in the opt-out program for at least 1 year or until the
637	recipient no longer has access to employer-sponsored insurance,
638	until the employer's open enrollment period for a person who
639	opts out in order to participate in employer-sponsored coverage,
640	or until the person is no longer eligible for Medicaid,
641	whichever time period is shorter.
642	(c)  Notwithstanding any other provision of this section,
643	coverage, cost sharing, and any other component of employer-
644	sponsored health insurance shall be governed by applicable state
645	and federal laws.
646	(d)  The agency, in consultation with the Office of
647	Insurance Regulation, shall:
648	1.  Determine which Medicaid recipients may participate in
649	the opt-out option on a voluntary basis.
650	2.  Determine the type of plans currently licensed under
651	state law that are suitable to serve the Medicaid opt-out
652	population.
653	3.  Establish oversight, fraud and abuse, administrative,
654	and accounting procedures as recommended by the Office of
655	Insurance Regulation for the operation of the opt-out option.
656	(15)  FRAUD AND ABUSE.--
657	(a)  To minimize the risk of Medicaid fraud and abuse, the
658	agency shall ensure that applicable provisions of chapters 409,
659	414, 626, 641, and 932, Florida Statutes, relating to Medicaid
660	fraud and abuse, are applied and enforced at the demonstration
661	project sites.
662	(b)  Providers shall have the necessary certification,
663	license, and credentials as required by law and waiver
664	requirements.
665	(c)  The agency shall ensure that the plan is in compliance
666	with the provisions of s. 409.912(21) and (22), Florida
667	Statutes.
668	(d)  The agency shall require each plan to establish
669	program integrity functions and activities to reduce the
670	incidence of fraud and abuse. Plans must report instances of
671	fraud and abuse pursuant to chapter 641, Florida Statutes.
672	(e)  The plan shall have written administrative and
673	management arrangements or procedures, including a mandatory
674	compliance plan that are designed to guard against fraud and
675	abuse. The plan shall designate a compliance officer with
676	sufficient experience in health care.
677	(f)1.  The agency shall require all contractors in the
678	managed care plan to report all instances of suspected fraud and
679	abuse. A failure to report instances of suspected fraud and
680	abuse is a violation of law and subject to the penalties
681	provided by law.
682	2.  An instance of fraud and abuse in the managed care
683	plan, including, but not limited to, defrauding the state health
684	care benefit program by misrepresentation of fact in reports,
685	claims, certifications, enrollment claims, demographic
686	statistics, and encounter data; the misrepresentation of the
687	qualifications of persons rendering health care and ancillary
688	services; bribery and false statements relating to the delivery
689	of health care; unfair and deceptive marketing practices; and
690	managed care false claims actions, is a violation of law and
691	subject to the penalties provided by law.
692	3.  The agency shall require that all contractors make all
693	files and relevant billing and claims data accessible to state
694	regulators and investigators and that all such data be linked
695	onto a unified system for seamless reviews and investigations.
696	(16)  INTEGRATED MANAGED LONG-TERM CARE SERVICES.--
697	(a)  Contingent upon federal approval, the Agency for
698	Health Care Administration may revise or apply for a waiver
699	pursuant to s. 1915 of the Social Security Act or apply for
700	experimental, pilot, or demonstration project waivers pursuant
701	to s. 1115 of the Social Security Act to reform Florida's
702	Medicaid program in order to integrate all state funding for
703	Medicaid services to persons who are 60 years of age or older.
704	Rates shall be developed in accordance with 42 C.F.R. s. 438.6,
705	certified by an actuary, and submitted for approval to the
706	Centers for Medicare and Medicaid Services. The funds to be
707	integrated shall include:
708	1.  All Medicaid home-based and community-based waiver
709	services funds.
710	2.  All funds for all Medicaid services, including Medicaid
711	nursing home services.
712	3.  Funds paid for Medicare coinsurance and deductibles for
713	persons dually eligible for Medicaid and Medicare, for which the
714	state is responsible, but not to exceed federal limits of
715	liability specified in the state plan.
716	(b)  When the agency integrates the funding for Medicaid
717	services for recipients 60 years of age or older into a managed
718	care delivery system under paragraph (a) in any area of the
719	state, the agency shall provide to recipients a choice of plans
720	which shall include:
721	1.  An entity licensed under chapter 627 or chapter 641,
722	Florida Statutes.
723	2.  Any other entity certified by the agency to accept a
724	capitation payment which may include entities eligible to
725	participate in the nursing home diversion program, other
726	qualified providers as defined in s. 430.703(7), Florida
727	Statutes, and community care for the elderly lead agencies.
728	(c)  The agency may begin the integration of Medicaid
729	services for the elderly into a managed care delivery system in
730	Pinellas, Hillsborough, Orange, Osceola, and Seminole counties.
731	(d)  When the agency integrates the funding for Medicaid
732	nursing home and community-based care services into a managed
733	care delivery system, the agency shall ensure that a plan, in
734	addition to other certification requirements:
735	1.  Allows an enrollee to select any provider with whom the
736	plan has a contract.
737	2.  Makes a good faith effort to develop contracts with
738	qualified providers currently under contract with the Department
739	of Elderly Affairs, area agencies on aging, or community care
740	for the elderly lead agencies.
741	3.  Secures subcontracts with providers of nursing home and
742	community-based long-term care services sufficient to ensure
743	access to and choice of providers.
744	4.  Develops and uses a service provider qualification
745	system that describes the quality-of-care standards that
746	providers of medical, health, and long-term care services must
747	meet in order to obtain a contract from the plan.
748	5.  Makes a good faith effort to develop contracts with all
749	qualified nursing homes located in the area that are served by
750	the plan, including those designated as Gold Seal.
751	6.  Ensures that a Medicaid recipient enrolled in a managed
752	care plan who is a resident of a facility licensed under chapter
753	400, Florida Statutes, and who does not choose to move to
754	another setting is allowed to remain in the facility in which he
755	or she is currently receiving care.
756	7.  Includes persons who are in nursing homes and who
757	convert from non-Medicaid payment sources to Medicaid. Plans
758	shall be at risk for serving persons who convert to Medicaid.
759	The agency shall ensure that persons who choose community
760	alternatives instead of nursing home care and who meet level of
761	care and financial eligibility standards continue to receive
762	Medicaid.
763	8.  Demonstrates a quality assurance system and a
764	performance improvement system that is satisfactory to the
765	agency.
766	9.  Develops a system to identify recipients who have
767	special health care needs such as polypharmacy, mental health
768	and substance abuse problems, falls, chronic pain, nutritional
769	deficits, or cognitive deficits or who are ventilator-dependent
770	in order to respond to and meet these needs.
771	10.  Ensures a multidisciplinary team approach to recipient
772	management that facilitates the sharing of information among
773	providers responsible for delivering care to a recipient.
774	11.  Ensures medical oversight of care plans and service
775	delivery, regular medical evaluation of care plans, and the
776	availability of medical consultation for care managers and
777	service coordinators.
778	12.  Develops, monitors, and enforces quality-of-care
779	requirements using existing Agency for Health Care
780	Administration survey and certification data, whenever possible,
781	to avoid duplication of survey or certification activities
782	between the plans and the agency.
783	13.  Ensures a system of care coordination that includes
784	educational and training standards for care managers and service
785	coordinators.
786	14.  Develops a business plan that demonstrates the ability
787	of the plan to organize and operate a risk-bearing entity.
788	15.  Furnishes evidence of liability insurance coverage or
789	a self-insurance plan that is determined by the Office of
790	Insurance Regulation to be adequate to respond to claims for
791	injuries arising out of the furnishing of health care.
792	16.  Complies with the prompt payment of claims
793	requirements of ss. 627.613, 641.3155, and 641.513, Florida
794	Statutes.
795	17.  Provides for a periodic review of its facilities as
796	required by the agency, which does not duplicate other
797	requirements of federal or state law. The agency shall provide
798	provider survey results to the plan.
799	18.  Provides enrollees the ability, to the extent
800	possible, to choose care providers, including nursing home,
801	assisted living, and adult day care service providers affiliated
802	with a person's religious faith or denomination, nursing home
803	and assisted living facility providers that are part of a
804	retirement community in which an enrollee resides, and nursing
805	homes and assisted living facilities that are geographically
806	located as close as possible to an enrollee's family, friends,
807	and social support system.
808	(e)  In addition to other quality assurance standards
809	required by law or by rule or in an approved federal waiver, and
810	in consultation with the Department of Elderly Affairs and area
811	agencies on aging, the agency shall develop quality assurance
812	standards that are specific to the care needs of elderly
813	individuals and that measure enrollee outcomes and satisfaction
814	with care management, nursing home services, and other services
815	that are provided to recipients 60 years of age or older by
816	managed care plans pursuant to this section. The agency shall
817	contract with area agencies on aging to perform initial and
818	ongoing measurement of the appropriateness, effectiveness, and
819	quality of services that are provided to recipients age 60 years
820	of age or older by managed care plans and to collect and report
821	the resolution of enrollee grievances and complaints. The agency
822	and the department shall coordinate the quality measurement
823	activities performed by area agencies on aging with other
824	quality assurance activities required by this section in a
825	manner that promotes efficiency and avoids duplication.
826	(f)  If there is not a contractual relationship between a
827	nursing home provider and a plan in an area in which the
828	demonstration project operates, the nursing home shall cooperate
829	with the efforts of a plan to determine if a recipient would be
830	more appropriately served in a community setting, and payments
831	shall be made in accordance with Medicaid nursing home rates as
832	calculated in the Medicaid state plan.
833	(g)  The agency may develop innovative risk-sharing
834	agreements that limit the level of custodial nursing home risk
835	that the plan assumes, consistent with the intent of the
836	Legislature to reduce the use and cost of nursing home care.
837	Under risk-sharing agreements, the agency may reimburse the plan
838	or a nursing home for the cost of providing nursing home care
839	for Medicaid-eligible recipients who have been permanently
840	placed and remain in nursing home care.
841	(h)  The agency shall withhold a percentage of the
842	capitation rate that would otherwise have been paid to a plan in
843	order to create a quality reserve fund, which shall be annually
844	disbursed to those contracted plans that deliver high-quality
845	services, have a low rate of enrollee complaints, have
846	successful enrollee outcomes, are in compliance with quality
847	improvement standards, and demonstrate other indicators
848	determined by the agency to be consistent with high-quality
849	service delivery.
850	(i)  The agency shall implement a system of profit rebates
851	that require a plan to rebate a portion of the plan's profits
852	that exceed 3 percent. The portion of profit above 3 percent
853	that is to be rebated shall be determined by the agency on a
854	sliding scale; however, no profits above 15 percent may be
855	retained by the plan. Rebates shall be paid to the agency.
856	(j)  The agency may limit the number of persons enrolled in
857	a plan who are not nursing home facility residents but who would
858	be Medicaid eligible as defined under s. 409.904(3), Florida
859	Statutes, if served in an approved home-based or community-based
860	waiver program.
861	(k)  Except as otherwise provided in this section, the
862	Aging Resource Center, if available, shall be the entry point
863	for eligibility determination for persons 60 years of age or
864	older, and shall provide choice counseling to assist recipients
865	in choosing a plan. If an Aging Resource Center is not operating
866	in an area, the agency may, in consultation with the Department
867	of Elderly Affairs, designate other entities to perform these
868	functions until an Aging Resource Center is established and has
869	the capacity to perform these functions.
870	(l)  In the event that a managed care plan does not meet
871	its obligations under its contract with the agency or under the
872	requirements of this section, the agency may impose liquidated
873	damages. Such liquidated damages shall be calculated by the
874	agency as reasonable estimates of the agency's financial loss
875	and are not to be used to penalize the plan. If the agency
876	imposes liquidated damages, the agency may collect those damages
877	by reducing the amount of any monthly premium payments otherwise
878	due to the plan by the amount of the damages. Liquidated damages
879	are forfeited and will not be subsequently paid to a plan upon
880	compliance or cure of default unless a determination is made
881	after appeal that the damages should not have been imposed.
882	(m)  In any area of the state in which the agency has
883	implemented a demonstration project pursuant to this section,
884	the agency may grant a modification of certificate-of-need
885	conditions related to Medicaid participation to a nursing home
886	that has experienced decreased Medicaid patient day utilization
887	due to a transition to a managed care delivery system.
888	(n)  Notwithstanding any other law to the contrary, the
889	agency shall ensure that, to the extent possible, Medicare and
890	Medicaid services are integrated. When possible, persons served
891	by the managed care delivery system who are eligible for
892	Medicare may choose to enroll in a Medicare managed health care
893	plan operated by the same entity that is placed at risk for
894	Medicaid services.
895	(o)  It is the intent of the Legislature that the agency
896	begin discussions with the federal Centers for Medicare and
897	Medicaid Services regarding the inclusion of Medicare in an
898	integrated long-term care system.
899	(17)  FUNDING DEVELOPMENT COSTS OF ESSENTIAL COMMUNITY
900	PROVIDERS.--It is the intent of the Legislature to facilitate
901	development of managed care delivery systems by networks of
902	essential community providers, including current community care
903	for the elderly lead agencies and other networks as defined in
904	this section. To allow the assumption of responsibility and
905	financial risk for managing a recipient through the entire
906	continuum of Medicaid services, the agency shall, subject to
907	appropriations included in the General Appropriations Act, award
908	up to $500,000 per applicant for the purpose of funding managed
909	care delivery system development costs. The terms of repayment
910	may not extend beyond 6 years after the date when the funding
911	begins and must include payment in full with a rate of interest
912	equal to or greater than the federal funds rate. The agency
913	shall establish a grant application process for awards.
914	(18)  MEDICAID BUY-IN.--Subject to specific appropriations,
915	the agency shall establish and implement within the waiver
916	demonstration sites a Medicaid buy-in program to assist certain
917	working individuals with disabilities with medical coverage.
918	(a)  The purpose of the Medicaid buy-in program is to allow
919	persons ineligible for Medicaid because of income and
920	categorical restrictions to participate in Medicaid under
921	certain conditions.
922	(b)  Participation in the buy-in program shall be limited
923	to individuals who meet the following criteria:
924	1.  The individual is at least 16 years of age and less
925	than 65 years of age.
926	2.  Net family income must be below 250 percent of the
927	federal poverty level for a family of the size involved.
928	3.  Except for earned income which is completely
929	disregarded, the individual must meet all Supplemental Security
930	Income eligibility criteria, including:
931	a.  Unearned income does not exceed the Supplemental
932	Security Income program income standard.
933	b.  Resources do not exceed the Supplemental Security
934	Income resource standard.
935	4.  The individual is employed and has a monthly earning
936	that is not less than $492 a month.
937
938	Supplemental Security Income resource and income methodologies
939	shall be used to determine eligibility pursuant to this
940	paragraph.
941	(c)  Individuals determined eligible for the Medicaid buy-
942	in program may choose to receive health care coverage through a
943	managed care plan or through the Medicaid opt-out option
944	pursuant to this section.
945	(d)  The agency shall require payment of premiums or other
946	cost-sharing charges on a sliding scale based on income, as
947	determined by the agency or as provided in the General
948	Appropriations Act or implementing legislation.
949	(e)  Notwithstanding any other provision to the contrary,
950	continued eligibility for the Medicaid buy-in program is
951	contingent on the individual payment of any premiums or other
952	cost sharing required under this subsection and continued
953	eligibility.
954	(f)  An individual who is enrolled in the buy-in program
955	and who is unable to maintain employment for involuntary
956	reasons, including temporary leave due to a health problem or
957	involuntary termination, continues to be eligible for Medicaid
958	coverage under the buy-in program if the individual meets the
959	following requirements:
960	1.  Within 30 days after the date on which the individual
961	becomes unemployed, the individual, or an authorized
962	representative of the individual, submits to the agency a
963	written request to continue the individual's Medicaid coverage.
964	2.  The individual has paid any premium or other cost
965	sharing required under this subsection.
966	3.  The individual agrees to continue to pay any premium or
967	other cost sharing during unemployment.
968	(g)  The agency may continue Medicaid coverage under the
969	buy-in program for an individual described in paragraph (f) for
970	up to 6 months after the date of the individual's involuntary
971	loss of employment for just cause as determined by the agency. A
972	6-month extension under the provision of this paragraph is
973	limited to no more than two extensions in a 5-year period.
974	(19)  APPLICABILITY.--
975	(a)  The provisions of this section apply only to the
976	demonstration project sites approved by the Legislature.
977	(b)  The Legislature authorizes the Agency for Health Care
978	Administration to apply and enforce any provision of law not
979	referenced in this section to ensure the safety, quality, and
980	integrity of the waiver.
981	(c)  In any circumstance when the provisions of chapter
982	409, Florida Statutes, conflict with this section, this section
983	shall prevail.
984	(20)  RULEMAKING.--The Agency for Health Care
985	Administration is authorized to adopt rules in consultation with
986	the appropriate state agencies to implement the provisions of
987	this section.
988	(21)  IMPLEMENTATION.--
989	(a)  This section does not authorize the agency to
990	implement any provision of s. 1115 of the Social Security Act
991	experimental, pilot, or demonstration project waiver to reform
992	the state Medicaid program.
993	(b)  Upon approval of a waiver by the Centers for Medicare
994	and Medicaid Services, the agency shall report the provisions
995	and structure of the approved waiver and any deviations from
996	this section to the Legislature. The agency shall implement the
997	waiver after authority to implement the waiver is granted by the
998	Legislature.
999	(22)  EVALUATION.--
1000	(a)  Two years after the implementation of the waiver and
1001	again at 5 years after the implementation of the waiver, the
1002	Office of Program Policy Analysis and Government Accountability,
1003	in consultation with appropriate legislative committees, shall
1004	conduct an evaluation study and analyze the impact of the
1005	Medicaid reform waiver pursuant to this section, including, at a
1006	minimum, analysis of the following provisions of the waiver to
1007	the extent allowed in the waiver demonstration sites by the
1008	Centers for Medicare and Medicaid Services and implemented as
1009	approved by the Legislature pursuant to this section. This
1010	evaluation study and analysis shall include at a minimum:
1011	1.  Demographic and characteristics of the recipient in the
1012	waiver.
1013	2.  Plan types and service networks.
1014	3.  Health benefit coverage.
1015	4.  Choice counseling.
1016	5.  Disease management.
1017	6.  Pharmacy benefits.
1018	7.  Behavioral health benefits.
1019	8.  Service utilization.
1020	9.  Catastrophic coverage.
1021	10.  Enhanced benefits.
1022	11.  Medicaid opt-out option.
1023	12.  Quality assurance and accountability.
1024	13.  Fraud and abuse.
1025	14.  Cost and cost benefit of the waiver.
1026	15.  Impact of the waiver on the agency.
1027	(b)  The Office of Program Policy Analysis and Government
1028	Accountability shall submit the evaluation study report to the
1029	agency and shall submit quarterly reports to the Governor, the
1030	President of the Senate, the Speaker of the House of
1031	Representatives, and the appropriate committees or councils of
1032	the Senate and the House of Representatives.
1033	(c)  The agency shall submit, every 6 months after the date
1034	of waiver implementation, a status report describing the
1035	progress made on the implementation of the waiver and
1036	identification of any issues or problems to the Governor's
1037	Office of Planning and Budgeting and the appropriate committees
1038	or councils of the Senate and the House of Representatives.
1039	(d)  The agency shall provide to the appropriate committees
1040	or councils of the Senate and House of Representatives copies of
1041	any report or evaluation regarding the waiver that is submitted
1042	to the Center for Medicare and Medicaid Services.
1043	(e)  The agency shall contract for an evaluation comparison
1044	of the waiver demonstration projects with the Medipass fee-for-
1045	service program including, at a minimum:
1046	1.  Administrative or organizational structure of the
1047	service delivery system.
1048	2.  Covered services and service utilization patterns of
1049	mandatory, optional, and other services.
1050	3.  Clinical or health outcomes.
1051	4.  Cost analysis, cost avoidance, and cost benefit.
1052	(23)  REVIEW AND REPEAL.--This section shall stand repealed
1053	on July 1, 2010, unless reviewed and saved from repeal through
1054	reenactment by the Legislature.
1055	Section 2.  This act shall take effect July 1, 2005.

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