HCB 6003 (for HBs 1869, 1871, 1873, 1875)

1
A bill to be entitled
2An act relating to Medicaid reform; providing a popular
3name; providing legislative findings and intent; providing
4waiver authority to the Agency for Health Care
5Administration; providing for implementation of
6demonstration projects; providing definitions; identifying
7categorical groups for eligibility under the waiver;
8establishing the choice counseling process; providing for
9disenrollment in a plan during a specified period of time;
10providing conditions for changes; requiring managed care
11plans to include mandatory Medicaid services; requiring
12managed care plans to provide a wellness and disease
13management program, pharmacy benefits, behavioral health
14care benefits, and a grievance resolution process;
15authorizing the agency to establish enhanced benefit
16coverage and providing procedures therefor; establishing
17flexible spending accounts; providing for cost sharing by
18recipients, and requirements; requiring the agency to
19submit a report to the Legislature relating to enforcement
20of Medicaid copayment requirements and other measures;
21providing for the agency to establish a catastrophic
22coverage fund or purchase stop-loss coverage to cover
23certain services; requiring a managed care plan to have a
24certificate of operation from the agency before operating
25under the waiver; providing certification requirements;
26providing for reimbursement of provider service networks;
27providing an exemption from competitive bid requirements
28for provider service networks under certain circumstances;
29providing for continuance of contracts previously awarded
30for a specified period of time; requiring the agency to
31have accountability and quality assurance standards;
32requiring the agency to establish a medical care database;
33providing data collection requirements; requiring certain
34entities certified to operate a managed care plan to
35comply with ss. 641.3155 and 641.513, F.S.; providing for
36the agency to develop a rate setting and risk adjustment
37system; authorizing the agency to allow recipients to opt
38out of Medicaid and purchase health care coverage through
39an employer-sponsored insurer; requiring the agency to
40apply and enforce certain provisions of law relating to
41Medicaid fraud and abuse; providing penalties; requiring
42the agency to develop a reimbursement system for school
43districts participating in the certified school match
44program; providing for integrated fixed payment delivery
45system for Medicaid recipients who are a certain age;
46authorizing the agency to implement the system in certain
47counties; providing exceptions; requiring the agency to
48provide a choice of managed care plans to recipients;
49providing requirements for managed care plans; requiring
50the agency to withhold certain funding contingent upon the
51performance of a plan; requiring the plan to rebate
52certain profits to the agency; authorizing the agency to
53limit the number of enrollees in a plan under certain
54circumstances; providing for eligibility determination and
55choice counseling for persons who are a certain age;
56requiring the agency to evaluate the medical loss ratios
57of certain managed care plans; authorizing the agency to
58adopt rules for minimum loss ratios; providing for
59imposition of liquidated damages; authorizing the agency
60to grant a modification of certificate-of-need conditions
61to nursing homes under certain circumstances; requiring
62integration of Medicare and Medicaid services; providing
63legislative intent; providing for awarding of funds for
64managed care delivery system development, contingent upon
65an appropriation; requiring the Office of Program Policy
66Analysis and Government Accountability conduct a study of
67the feasibility of establishing a Medicaid buy-in program
68for certain non-Medicaid eligible persons; requiring the
69office to submit a report to the Legislature; providing
70applicability; granting rulemaking authority to the
71agency; requiring legislative authority to implement the
72waiver; requiring the Office of Program Policy Analysis
73and Government Accountability to evaluate the Medicaid
74reform waiver and issue reports; requiring the agency to
75submit status reports; requiring the agency to contract
76for certain evaluation comparisons; providing for future
77review and repeal of the act; amending s. 409.912, F.S.;
78requiring the Agency for Health Care Administration to
79contract with a vendor to monitor and evaluate the
80clinical practice patterns of providers; authorizing the
81agency to competitively bid for single-source providers
82for certain services; authorizing the agency to examine
83whether purchasing certain durable medical equipment is
84more cost-effective than long-term rental of such
85equipment; providing that a contract awarded to a provider
86service network remains in effect for a certain period;
87defining a provider service network; providing health care
88providers with a controlling interest in the governing
89body of the provider service network organization;
90requiring that the agency, in partnership with the
91Department of Elderly Affairs, develop an integrated,
92fixed-payment delivery system for Medicaid recipients age
9360 and older; deleting an obsolete provision requiring the
94agency to develop a plan for implementing emergency and
95crisis care; requiring the agency to develop a system
96where health care vendors may provide data demonstrating
97that higher reimbursement for a good or service will be
98offset by cost savings in other goods or services;
99requiring the Comprehensive Assessment and Review for
100Long-Term Care Services (CARES) teams to consult with any
101person making a determination that a nursing home resident
102funded by Medicare is not making progress toward
103rehabilitation and assist in any appeals of the decision;
104requiring the agency to contract with an entity to design
105a clinical-utilization information database or electronic
106medical record for Medicaid providers; requiring that the
107agency develop a plan to expand disease-management
108programs; requiring the agency to coordinate with other
109entities to create emergency room diversion programs for
110Medicaid recipients; revising the Medicaid prescription
111drug spending control program to reduce costs and improve
112Medicaid recipient safety; requiring that the agency
113implement a Medicaid prescription drug management system;
114allowing the agency to require age-related prior
115authorizations for certain prescription drugs; requiring
116the agency to determine the extent that prescription drugs
117are returned and reused in institutional settings and
118whether this program could be expanded; requiring the
119agency to develop an in-home, all-inclusive program of
120services for Medicaid children with life-threatening
121illnesses; authorizing the agency to pay for emergency
122mental health services provided through licensed crisis
123stabilization centers; creating s. 409.91211, F.S.;
124requiring that the agency develop a pilot program for
125capitated managed care networks to deliver Medicaid health
126care services for all eligible Medicaid recipients in
127Medicaid fee-for-service or the MediPass program;
128authorizing the agency to include an alternative
129methodology for making additional Medicaid payments to
130hospitals; providing legislative intent; providing powers,
131duties, and responsibilities of the agency under the pilot
132program; requiring that the agency provide a plan to the
133Legislature for implementing the pilot program; requiring
134that the Office of Program Policy Analysis and Government
135Accountability, in consultation with the Auditor General,
136evaluate the pilot program and report to the Governor and
137the Legislature on whether it should be expanded
138statewide; amending s. 409.9122, F.S.; revising a
139reference; amending s. 409.913, F.S.; requiring 5 percent
140of all program integrity audits to be conducted on a
141random basis; requiring that Medicaid recipients be
142provided with an explanation of benefits; requiring that
143the agency report to the Legislature on the legal and
144administrative barriers to enforcing the copayment
145requirements of s. 409.9081, F.S.; requiring the agency to
146recommend ways to ensure that Medicaid is the payer of
147last resort; requiring the agency to conduct a study of
148provider pay-for-performance systems; requiring the Office
149of Program Policy Analysis and Government Accountability
150to conduct a study of the long-term care diversion
151programs; requiring the agency to evaluate the cost-saving
152potential of contracting with a multistate prescription
153drug purchasing pool; requiring the agency to determine
154how many individuals in long-term care diversion programs
155have a patient payment responsibility that is not being
156collected and to recommend how to collect such payments;
157requiring the Office of Program Policy Analysis and
158Government Accountability to conduct a study of Medicaid
159buy-in programs to determine if these programs can be
160created in this state without expanding the overall
161Medicaid program budget or if the Medically Needy program
162can be changed into a Medicaid buy-in program; providing
163an appropriation for the purpose of contracting to monitor
164and evaluate clinical practice patterns; providing an
165appropriation for the purpose of contracting for the
166database to review real-time utilization of Medicaid
167services; providing an appropriation for the purpose of
168developing infrastructure and administrative resources
169necessary to implement the pilot project as created in s.
170409.91211, F.S.; providing an appropriation for developing
171an encounter data system for Medicaid managed care plans;
172providing an effective date.
173
174Be It Enacted by the Legislature of the State of Florida:
175
176     Section 1.  Popular name.--This act shall be known as the
177"Medicaid Reform Act of 2005."
178     Section 2.  Medicaid reform.--
179     (1)  WAIVER AUTHORITY.-- The Agency for Health Care
180Administration is authorized to seek experimental, pilot, or
181demonstration project waivers, pursuant to s. 1115 of the Social
182Security Act, to reform the Florida Medicaid program pursuant to
183this section. The initial phase shall be in two geographic
184areas. One pilot program shall include only Broward County. A
185second pilot program shall initially include Duval County and
186shall be expanded to include Baker, Clay, and Nassau Counties
187within the timeframes approved in the implementation plan. This
188waiver authority is contingent upon federal approval to preserve
189the upper-payment-limit funding mechanisms for hospitals and
190contingent upon protection of the disproportionate share program
191authorized pursuant to chapter 409, Florida Statutes. The agency
192is directed to negotiate with the Centers for Medicare and
193Medicaid Services to include in the approved waiver a
194methodology whereby savings from the demonstration waiver shall
195be used to increase total upper-payment-limit and
196disproportionate share payments. Any increased funds shall be
197reinvested in programs that provide direct services to uninsured
198individuals in a cost-effective manner and reduce reliance on
199hospital emergency care.
200     (3)  IMPLEMENTATION OF DEMONSTRATION PROJECTS.--The agency
201shall include in the federal waiver request the authority to
202establish managed care demonstration projects as provided in
203this section and as approved by the Legislature in the waiver.
204It is the intent of the Legislature that the agency shall design
205a demonstration project to initiate a statewide phase-in of
206reform of the Medicaid program pursuant to this act.
207Implementation of each phase of reform shall be contingent upon
208approval of the Legislature or the Legislative Budget Commission
209if the Legislature is not in session.
210     (4)  DEFINITIONS.--As used in this section, the term:
211     (a)  "Agency" means the Agency for Health Care
212Administration.
213     (b)  "Enhanced benefit coverage" means additional health
214care services or alternative health care coverage which can be
215purchased by qualified recipients.
216     (c)  "Flexible spending account" means an account that
217encourages consumer ownership and management of resources
218available for enhanced benefit coverage, wellness activities,
219preventive services, and other services to improve the health of
220the recipient.
221     (d)  "Managed care plan" or "plan" means an entity
222certified by the agency to accept a capitation payment,
223including, but not limited to, a health maintenance organization
224authorized under part I of chapter 641, Florida Statutes; an
225entity under part II or part III of chapter 641, Florida
226Statutes, or under chapter 627, chapter 636, chapter 391, or s.
227409.912, Florida Statutes; a licensed mental health provider
228under chapter 394, Florida Statutes; a licensed substance abuse
229provider under chapter 397, Florida Statutes; a hospital under
230chapter 395, Florida Statutes; a provider service network as
231defined in this section; or a state-certified contractor as
232defined in this section.
233     (e)  "Medicaid opt-out option" means a program that allows
234a recipient to purchase health care insurance through an
235employer-sponsored plan instead of through a Medicaid-certified
236plan.
237     (f)  "Plan benefits" means the mandatory services specified
238in s. 409.905, Florida Statutes; behavioral health services
239specified in s. 409.906(8), Florida Statutes; pharmacy services
240specified in s. 409.906(20), Florida Statutes; and other
241services, including, but not limited to, Medicaid optional
242services specified in s. 409.906, Florida Statutes, for which a
243plan is receiving a risk adjusted capitation rate. Plans shall
244provide all mandatory services and may cover optional services
245to attract recipients and provide needed care. Services to
246recipients under plan benefits shall include emergency services
247pursuant to s. 409.9128, Florida Statutes.
248     1.  Mandatory and optional services as delineated in s.
249409.905, and s. 409.906, Florida Statutes may vary in amount,
250duration and scope based on actuarial analysis and determination
251of service utilization among a categorical or predetermined risk
252group served by the plan.
253     2.  A plan shall provide all mandatory and optional
254services as delineated in ss. 409.905, and 409.906, Florida
255Statutes, to a level of amount, duration and scope based on the
256actuarial analysis and corresponding capitation rate.
257Contractual stipulations for each risk or categorical group
258shall not vary among plans.
259     3.  A plan shall be at risk for all services as defined in
260this section needed by a recipient up to a monetary catastrophic
261threshold pursuant to this section.
262     4.  Catastrophic coverage pursuant to this section shall
263not release the plan from continued care management of the
264recipient and providing other services as stipulated in the
265contract with the agency.
266     (g)  "Provider service network" means an incorporated
267network:
268     1.  Established or organized, and operated, by a health
269care provider or group of affiliated health care providers;
270     2.  That provides a substantial proportion of the health
271care items and services under a contract directly through the
272provider or affiliated group;
273     3.  That may make arrangements with physicians, other
274health care professionals, and health care institutions, to
275assume all or part of the financial risk on a prospective basis
276for the provision of basic health services; and
277     4.  Within which health care providers have a controlling
278interest in the governing body of the provider service network
279organization, as authorized by s. 409.912, Florida Statutes.
280     (h)  "Shall" means the agency must include the provision of
281a subsection as delineated in this section in the waiver
282application and implement the provision to the extent allowed in
283the demonstration project sites by the Centers for Medicare and
284Medicaid Services and as approved by the Legislature pursuant to
285this section.
286     (i)  "State-certified contractor" means an entity not
287authorized under part I, part II, or part III of chapter 641,
288Florida Statutes, or under chapter 624, chapter 627, or chapter
289636, Florida Statutes, qualified by the agency to be certified
290as a managed care plan. The agency shall develop the standards
291necessary to authorize an entity to become a state-certified
292contractor.
293     (5)  ELIGIBILITY.--
294     (a)  The agency shall pursue waivers to reform Medicaid for
295the following categorical groups:
296     1.  Temporary Assistance for Needy Families, consistent
297with ss. 402 and 1931 of the Social Security Act and chapter
298409, chapter 414, or chapter 445, Florida Statutes.
299     2.  Supplemental Security Income recipients as defined in
300Title XVI of the Social Security Act, except for persons who are
301dually eligible for Medicaid and Medicare, individuals 60 years
302of age or older, individuals who have developmental
303disabilities, and residents of institutions or nursing homes.
304     3.  All children covered pursuant to Title XIX of the
305Social Security Act.
306     (b)  The agency may pursue any appropriate federal waiver
307to reform Medicaid for the populations not identified by this
308subsection, including Title XXI children, if authorized by the
309Legislature.
310     (6)  CHOICE COUNSELING.--
311     (a)  At the time of eligibility determination, the agency
312shall provide the recipient with all the Medicaid health care
313options available in that community to assist the recipient in
314choosing health care coverage. The recipient shall choose a plan
315within 30 days after the recipient is eligible unless the
316recipient loses eligibility. Failure to choose a plan within 30
317days will result in the recipient being assigned to a managed
318care plan.
319     (b)  After a recipient has chosen a plan or has been
320assigned to a plan, the recipient shall have 90 days in which to
321voluntarily disenroll and select another managed care plan.
322After 90 days, no further changes may be made except for cause.
323Cause shall include, but not be limited to, poor quality of
324care, lack of access to necessary specialty services, an
325unreasonable delay or denial of service, inordinate or
326inappropriate changes of primary care providers, service access
327impairments due to significant changes in the geographic
328location of services, or fraudulent enrollment. The agency may
329require a recipient to use the managed care plan's grievance
330process prior to the agency's determination of cause, except in
331cases in which immediate risk of permanent damage to the
332recipient's health is alleged. The grievance process, when used,
333must be completed in time to permit the recipient to disenroll
334no later than the first day of the second month after the month
335the disenrollment request was made. If the capitated managed
336care network, as a result of the grievance process, approves an
337enrollee's request to disenroll, the agency is not required to
338make a determination in the case. The agency must make a
339determination and take final action on a recipient's request so
340that disenrollment occurs no later than the first day of the
341second month after the month the request was made. If the agency
342fails to act within the specified timeframe, the recipient's
343request to disenroll is deemed to be approved as of the date
344agency action was required. Recipients who disagree with the
345agency's finding that cause does not exist for disenrollment
346shall be advised of their right to pursue a Medicaid fair
347hearing to dispute the agency's finding.
348     (c)  In the managed care demonstration projects, the
349Medicaid recipients who are already enrolled in a managed care
350plan shall remain with that plan until their next eligibility
351determination. The agency shall develop a method whereby newly
352eligible Medicaid recipients, Medicaid recipients with renewed
353eligibility, and Medipass enrollees shall enroll in managed care
354plans certified pursuant to this section.
355     (d)  A Medicaid recipient receiving services under this
356section is eligible for only emergency services until the
357recipient enrolls in a managed care plan. Emergency services
358provided under this paragraph shall be reimbursed on a fee-for-
359service basis.
360     (e)  The agency shall ensure that the recipient is provided
361with:
362     1.  A list and description of the benefits provided.
363     2.  Information about cost sharing.
364     3.  Plan performance data, if available.
365     4.  An explanation of benefit limitations.
366     5.  Contact information, including identification of
367providers participating in the network, geographic locations,
368and transportation limitations.
369     6.  Any other information the agency determines would
370facilitate a recipient's understanding of the plan or insurance
371that would best meet his or her needs.
372     (f)  The agency shall ensure that there is a record of
373recipient acknowledgment that choice counseling has been
374provided.
375     (g)  To accommodate the needs of recipients, the agency
376shall ensure that the choice counseling process and related
377material are designed to provide counseling through face-to-face
378interaction, by telephone, and in writing and through other
379forms of relevant media. Materials shall be written at the
380fourth-grade reading level and available in a language other
381than English when 5 percent of the county speaks a language
382other than English. Choice counseling shall also utilize
383language lines and other services for impaired recipients, such
384as TTD/TTY.
385     (h)  The agency shall require the entity performing choice
386counseling to determine if the recipient has made a choice of a
387plan or has opted out because of duress, threats, payment to the
388recipient, or incentives promised to the recipient by a third
389party. If the choice counseling entity determines that the
390decision to choose a plan was unlawfully influenced or a plan
391violated any of the provisions of s. 409.912(21), Florida
392Statutes, the choice counseling entity shall immediately report
393the violation to the agency's program integrity section for
394investigation. Verification of choice counseling by the
395recipient shall include a stipulation that the recipient
396acknowledges the provisions of this subsection.
397     (i)  It is the intent of the Legislature, within the
398authority of the waiver and within available resources, that the
399agency promote health literacy and partner with the Department
400of Health to provide information aimed to reduce minority health
401disparities through outreach activities for Medicaid recipients.
402     (j)  The agency is authorized to contract with entities to
403perform choice counseling and may establish standards and
404performance contracts, including standards requiring the
405contractor to hire choice counselors representative of the
406state's diverse population and to train choice counselors in
407working with culturally diverse populations.
408     (k)  The agency shall develop processes to ensure that
409demonstration sites have sufficient levels of enrollment to
410conduct a valid test of the managed care demonstration project
411model within a 2-year timeframe.
412     (7)  PLANS.--
413     (a)  Plan benefits.--The agency shall develop a capitated
414system of care that promotes choice and competition. Plan
415benefits shall include the mandatory services delineated in
416federal law and specified in s. 409.905, Florida Statutes;
417behavioral health services specified in s. 409.906(8), Florida
418Statutes; pharmacy services specified in s. 409.906(20), Florida
419Statutes; and other services including, but not limited to,
420Medicaid optional services specified in s. 409.906, Florida
421Statutes, for which a plan is receiving a risk-adjusted
422capitation rate. Plans shall provide all mandatory services and
423may cover optional services to attract recipients and provide
424needed care. Mandatory and optional services may vary in amount,
425duration, and scope of benefits. Services to recipients under
426plan benefits shall include emergency services pursuant to s.
427409.9128, Florida Statutes.
428     1.  Mandatory and optional services as delineated in ss.
429409.905 and 409.906, Florida Statutes, may vary in amount,
430duration, and scope based on actuarial analysis and
431determination of service utilization among a categorical or
432predetermined risk group served by the plan.
433     2.  A plan shall provide all mandatory and optional
434services as delineated in ss. 409.905 and 409.906, Florida
435Statutes, to a level of amount, duration, and scope based on the
436actuarial analysis and corresponding capitation rate.
437Contractual stipulations for each risk or categorical group
438shall not vary among plans.
439     3.  A plan shall be at risk for all services as defined in
440this section needed by a recipient up to a monetary catastrophic
441threshold pursuant to this section.
442     4.  Catastrophic coverage pursuant to this section shall
443not release the plan from continued care management of the
444recipient and providing other services as stipulated in the
445contract with the agency.
446     (b)  Wellness and disease management.--
447     1.  The agency shall require plans to provide a wellness
448disease management program for certain Medicaid recipients
449participating in the waiver. The agency shall require plans to
450develop disease management programs necessary to meet the needs
451of the population they serve.
452     2.  The agency shall require a plan to develop appropriate
453disease management protocols and develop procedures for
454implementing those protocols, and determine the procedure for
455providing disease management services to plan enrollees. The
456agency is authorized to allow a plan to contract separately with
457another entity for disease management services or provide
458disease management services directly through the plan.
459     3.  The agency shall provide oversight to ensure that the
460service network provides the contractually agreed upon level of
461service.
462     4.  The agency may establish performance contracts that
463reward a plan when measurable operational targets in both
464participation and clinical outcomes are reached or exceeded by
465the plan.
466     5.  The agency may establish performance contracts that
467penalize a plan when measurable operational targets for both
468participation and clinical outcomes are not reached by the plan.
469     6.  The agency shall develop oversight requirements and
470procedures to ensure that plans utilize standardized methods and
471clinical protocols for determining compliance with a wellness or
472disease management plan.
473     (c)  Pharmacy benefits.--
474     1.  The agency shall require plans to provide pharmacy
475benefits and include pharmacy benefits as part of the capitation
476risk structure to enable a plan to coordinate and fully manage
477all aspects of patient care as part of the plan or through a
478pharmacy benefits manager.
479     2.  The agency may set standards for pharmacy benefits for
480managed care plans and specify the therapeutic classes of
481pharmacy benefits to enable a plan to coordinate and fully
482manage all aspects of patient care as part of the plan or
483through a pharmacy benefits manager.
484     3.  Each plan shall implement a pharmacy fraud, waste, and
485abuse initiative that may include a surety bond or letter of
486credit requirement for participating pharmacies, enhanced
487provider auditing practices, the use of additional fraud and
488abuse software, recipient management programs for recipients
489inappropriately using their benefits, and other measures to
490reduce provider and recipient fraud, waste, and abuse. The
491initiative shall address enforcement efforts to reduce the
492number and use of counterfeit prescriptions.
493     4.  The agency shall require plans to report incidences of
494pharmacy fraud and abuse and establish procedures for receiving
495and investigating fraud and abuse reports from plans in the
496demonstration project sites. Plans must report instances of
497fraud and abuse pursuant to chapter 641, Florida Statutes.
498     5.  The agency may facilitate the establishment of a
499Florida managed care plan purchasing alliance. The purpose of
500the alliance is to form agreements among participating plans to
501purchase pharmaceuticals at a discount, to achieve rebates, or
502to receive best market price adjustments. Participation in the
503Florida managed care plan purchasing alliance shall be
504voluntary.
505     (d)  Behavioral health care benefits.--
506     1.  The agency shall include behavioral health care
507benefits as part of the capitation structure to enable a plan to
508coordinate and fully manage all aspects of patient care.
509     2.  Managed care plans shall require their contracted
510behavioral health providers to have a member's behavioral
511treatment plan on file in the provider's medical record.
512     3. Managed care plans are encouraged to contract with
513specialty mental health providers.
514     (e)  Grievance resolution process.--A grievance resolution
515process shall be established that uses the subscriber assistance
516panel, as created in s. 408.7056, Florida Statutes, and the
517Medicaid fair hearing process to address grievances.
518     (8)  ENHANCED BENEFIT COVERAGE.--
519     (a)  The agency may establish enhanced benefit coverage and
520a methodology to fund the enhanced benefit coverage within funds
521provided in the General Appropriations Act.
522     (b)  A recipient who complies with the objectives of a
523wellness or disease management plan, as determined by the
524agency, shall have access to the enhanced benefit coverage for
525the purpose of purchasing or securing health-care services or
526health-care products.
527     (c)  The agency shall establish flexible spending accounts
528or similar accounts for recipients as approved in the waiver to
529be administered by the agency or by a managed care plan. The
530agency shall make deposits to a recipient's flexible spending
531account contingent upon compliance with a wellness plan or a
532disease management plan.
533     (d)  It is the intent of the Legislature that enhanced
534benefits encourage consumer participation in wellness
535activities, preventive services, and other services to improve
536the health of the recipient.
537     (e)  The agency shall develop standards and oversight
538procedures to monitor access to enhanced benefits during the
539eligibility period and up to 3 years after loss of eligibility
540as approved by the waiver.
541     (f)  It is the intent of the Legislature that the agency
542may develop an electronic benefit transfer system for the
543distribution of enhanced benefit funds earned by the recipient.
544     (9)  COST SHARING; REPORT.--The Agency for Health Care
545Administration shall submit to the President of the Senate and
546the Speaker of the House of Representatives by December 15,
5472005, a report on the legal and administrative barriers to
548enforcing s. 409.9081, Florida Statutes. The report must
549describe how many services require copayments, which providers
550collect copayments, and the total amount of copayments collected
551from recipients for all services required under s. 409.9081,
552Florida Statutes, by provider type for the fiscal years 2001-
5532002 through 2004-2005. The agency shall recommend a mechanism
554to enforce the requirement for Medicaid recipients to make
555copayments which does not shift the copayment amount to the
556provider. The agency shall also identify the federal or state
557laws or regulations that permit Medicaid recipients to declare
558impoverishment in order to avoid paying the copayment and extent
559to which these statements of impoverishment are verified. If
560claims of impoverishment are not currently verified, the agency
561shall recommend a system for such verification. The report must
562also identify any other cost-sharing measures that could be
563imposed on Medicaid recipients.     
564     (10)  CATASTROPHIC COVERAGE.--
565     (a)  To the extent of available appropriations contained in
566the annual General Appropriations Act for such purposes, all
567managed care plans shall provide coverage to the extent required
568by the agency up to a monetary threshold determined by the
569agency and within the capitation rate set by the agency. This
570limitation threshold may vary by eligibility group or other
571appropriate factors, including, but not limited to, recipients
572with special needs and recipients with certain disease states.
573     (b)  The agency shall establish a fund or purchase stop-
574loss coverage from a plan under part I of chapter 641, Florida
575Statutes, or a health insurer authorized under chapter 624,
576Florida Statutes, for purposes of covering services in excess of
577those covered by the managed care plan. The catastrophic
578coverage fund or stop-loss coverage shall provide for payment of
579medically necessary care for recipients who are enrolled in a
580plan and whose care has exceeded the predetermined service
581threshold. The agency may establish an aggregate maximum level
582of coverage in the catastrophic fund or for the stop-loss
583coverage.
584     (c)  The agency shall develop policies and procedures to
585allow all plans to utilize the catastrophic coverage fund or
586stop-loss coverage for a Medicaid recipient in the plan who has
587reached the catastrophic coverage threshold.
588     (d)  The agency shall contract for an administrative
589structure to manage the catastrophic coverage fund.
590     (11)  CERTIFICATION.--Before any entity may operate a
591managed care plan under the waiver, it shall obtain a
592certificate of operation from the agency.
593     (a)  Any entity operating under part I, part II, or part
594III of chapter 641, Florida Statutes, or under chapter 627,
595chapter 636, chapter 391, or s. 409.912, Florida Statutes; a
596licensed mental health provider under chapter 394, Florida
597Statutes; a licensed substance abuse provider under chapter 397,
598Florida Statutes; a hospital under chapter 395, Florida
599Statutes; a provider service network as defined in this section;
600or a state-certified contractor as defined in this section shall
601be in compliance with the requirements and standards developed
602by the agency. For purposes of the waiver established under this
603section, provider service networks shall be exempt from the
604competitive bid requirements in s. 409.912, Florida Statutes.
605The agency, in consultation with the Office of Insurance
606Regulation, shall establish certification requirements. It is
607the intent of the Legislature that, to the extent possible, any
608project authorized by the state under this section include any
609federally qualified health center, federally qualified rural
610health clinic, county health department, or any other federally,
611state, or locally funded entity that serves the geographic area
612within the boundaries of that project. The certification process
613shall, at a minimum, include all requirements in the current
614Medicaid prepaid health plan contract and take into account the
615following requirements:
616     1.  The entity has sufficient financial solvency to be
617placed at risk for the basic plan benefits under ss. 409.905,
618409.906(8), and 409.906(20), Florida Statutes, and other covered
619services.
620     2.  Any plan benefit package shall be actuarially
621equivalent to the premium calculated by the agency to ensure
622that competing plan benefits are equivalent in value. In all
623instances, the benefit package must provide services sufficient
624to meet the needs of the target population based on historical
625Medicaid utilization.
626     3.  The entity has sufficient service network capacity to
627meet the needs of members under ss. 409.905, 409.906(8), and
628409.906(20), Florida Statutes, and other covered services.
629     4.  The entity's primary care providers are geographically
630accessible to the recipient.
631     5.  The entity has the capacity to provide a wellness or
632disease management program.
633     6.  The entity shall provide for ambulance service in
634accordance with ss. 409.908(13)(d) and 409.9128, Florida
635Statutes.
636     7.  The entity has the infrastructure to manage financial
637transactions, recordkeeping, data collection, and other
638administrative functions.
639     8.  The entity, if not a fully indemnified insurance
640program under chapter 624, chapter 627, chapter 636, or chapter
641641, Florida Statutes, must meet the financial solvency
642requirements under this section.
643     (b)  The agency has the authority to contract with entities
644not otherwise licensed as an insurer or risk-bearing entity
645under chapter 627 or chapter 641, Florida Statutes, as long as
646these entities meet the certification standards of this section
647and any additional standards as defined by the agency to qualify
648as managed care plans under this section.
649     (c)  In certifying a risk-bearing entity and determining
650the financial solvency of such an entity as a provider service
651network, the following shall apply:
652     1.  The entity shall maintain a minimum surplus in an
653amount that is the greater of $1 million or 1.5 percent of
654projected annual premiums.
655     2.  In lieu of the requirements in subparagraph 1., the
656agency may consider the following:
657     a.  If the organization is a public entity, the agency may
658take under advisement a statement from the public entity that a
659county supports the managed care plan with the county's full
660faith and credit. In order to qualify for the agency's
661consideration, the county must own, operate, manage, administer,
662or oversee the managed care plan, either partly or wholly,
663through a county department or agency;
664     b.  The state guarantees the solvency of the organization;
665     c.  The organization is a federally qualified health center
666or is controlled by one or more federally qualified health
667centers and meets the solvency standards established by the
668state for such organization pursuant to s. 409.912(4)(c),
669Florida Statute; or
670     d.  The entity meets the solvency requirements for
671federally approved provider-sponsored organizations as defined
672in 42 C.F.R. ss. 422.380-422.390. However, if the provider
673service network does not meet the solvency requirements of
674either chapter 627 or chapter 641, Florida Statutes, the
675provider service network is limited to the issuance of Medicaid
676plans.
677     (d)  Each entity certified by the agency shall submit to
678the agency any financial, programmatic, or patient-encounter
679data or other information required by the agency to determine
680the actual services provided and the cost of administering the
681plan.
682     (e)  Notwithstanding the provisions of s. 409.912, Florida
683Statutes, the agency shall extend the existing contract with a
684hospital-based provider service network for a period not to
685exceed 3 years.
686     (12)  ACCOUNTABILITY AND QUALITY ASSURANCE.--The agency
687shall establish standards for plan compliance, including, but
688not limited to, quality assurance and performance improvement
689standards, peer or professional review standards, grievance
690policies, and program integrity policies. The agency shall
691develop a data reporting system, work with managed care plans to
692establish reasonable patient-encounter reporting requirements,
693and ensure that the data reported is accurate and complete.
694     (a)  In performing the duties required under this section,
695the agency shall work with managed care plans to establish a
696uniform system to measure, improve, and monitor the clinical and
697functional outcomes of a recipient of Medicaid services. The
698system may use financial, clinical, and other criteria based on
699pharmacy, medical services, and other data related to the
700provision of Medicaid services, including, but not limited to:
701     1.  Health Plan Employer Data and Information Set.
702     2.  Member satisfaction.
703     3.  Provider satisfaction.
704     4.  Report cards on plan performance and best practices.
705     5.  Quarterly reports on compliance with the prompt payment
706of claims requirements of ss. 627.613, 641.3155, and 641.513,
707Florida Statutes.
708     (b)  The agency shall require the managed care plans that
709have contracted with the agency to establish a quality assurance
710system that incorporates the provisions of s. 409.912(27),
711Florida Statutes, and any standards, rules, and guidelines
712developed by the agency.
713     (c)1.  The agency shall establish a medical care database
714to compile data on health services rendered by health care
715practitioners that provide services to patients enrolled in
716managed care plans in the demonstration sites. The medical care
717database shall:
718     a.  Collect for each type of patient encounter with a
719health care practitioner or facility:
720     (I)  The demographic characteristics of the patient.
721     (II)  The principal, secondary, and tertiary diagnosis.
722     (III)  The procedure performed.
723     (IV)  The date and location where the procedure was
724performed.
725     (V)  The payment for the procedure, if any.
726     (VI)  If applicable, the health care practitioner's
727universal identification number.
728     (VII)  If the health care practitioner rendering the
729service is a dependent practitioner, the modifiers appropriate
730to indicate that the service was delivered by the dependent
731practitioner.
732     b.  Collect appropriate information relating to
733prescription drugs for each type of patient encounter.
734     c.  Collect appropriate information related to health care
735costs, utilization, or resources from managed care plans
736participating in the demonstration sites.
737     2.  To the extent practicable, when collecting the data
738required under sub-subparagraph 1.a., the agency shall utilize
739any standardized claim form or electronic transfer system being
740used by health care practitioners, facilities, and payers.
741     3.  Health care practitioners and facilities in the
742demonstration sites shall submit, and managed care plans
743participating in the demonstration sites shall receive, claims
744for payment and any other information reasonably related to the
745medical care database electronically in a standard format as
746required by the agency.
747     4.  The agency shall establish reasonable deadlines for
748phasing in of electronic transmittal of claims.
749     5.  The plan shall ensure that the data reported is
750accurate and complete.
751     (13)  STATUTORY COMPLIANCE.--Any entity certified under
752this section shall comply with ss. 627.613, 641.3155, and
753641.513, Florida Statutes as applicable.
754     (14)  RATE SETTING AND RISK ADJUSTMENT.--The agency shall
755develop an actuarially sound rate setting and risk adjustment
756system for payment to managed care plans that:
757     (a)  Adjusts payment for differences in risk assumed by
758managed care plans, based on a widely recognized clinical
759diagnostic classification system or on categorical groups that
760are established in consultation with the federal Centers for
761Medicare and Medicaid Services.
762     (b)  Includes a phase-in of patient-encounter level data
763reporting.
764     (c)  Includes criteria to adjust risk and validation of the
765rates and risk adjustments.
766     (d)  Establishes rates in consultation with an actuary and
767the federal Centers for Medicare and Medicaid Services and
768supported by actuarial analysis.
769     (e)  Reimburses managed care demonstration projects on a
770capitated basis, except for the first year of operation of a
771provider service network. The agency shall develop contractual
772arrangements with the provider service network for a fee-for-
773service reimbursement methodology that does not exceed total
774payments under the risk-adjusted capitation during the first
775year of operation of a managed care demonstration project.
776Contracts must, at a minimum, require provider service networks
777to report patient-encounter data, reconcile costs to established
778risk-adjusted capitation rates at specified periods, and specify
779the method and process for settlement of cost differences at the
780end of the contract period.
781     (f)  Provides actuarial benefit design analyses that
782indicate the effect on capitation rates and benefits offered in
783the demonstration program over a prospective 5-year period based
784on the following assumptions:
785     1.  Growth in capitation rates which is limited to the
786estimated growth rate in general revenue.
787     2.  Growth in capitation rates which is limited to the
788average growth rate over the last 3 years in per-recipient
789Medicaid expenditures.
790     3.  Growth in capitation rates which is limited to the
791growth rate of aggregate Medicaid expenditures between the 2003-
7922004 fiscal year and the 2004-2005 fiscal year.
793     (15)  MEDICAID OPT-OUT OPTION.--
794     (a)  The agency shall allow recipients to purchase health
795care coverage through an employer-sponsored health insurance
796plan instead of through a Medicaid certified plan.
797     (b)  A recipient who chooses the Medicaid opt-out option
798shall have an opportunity for a specified period of time, as
799authorized under a waiver granted by the Centers for Medicare
800and Medicaid Services, to select and enroll in a Medicaid
801certified plan. If the recipient remains in the employer-
802sponsored plan after the specified period, the recipient shall
803remain in the opt-out program for at least 1 year or until the
804recipient no longer has access to employer-sponsored coverage,
805until the employer's open enrollment period for a person who
806opts out in order to participate in employer-sponsored coverage,
807or until the person is no longer eligible for Medicaid,
808whichever time period is shorter.
809     (c)  Notwithstanding any other provision of this section,
810coverage, cost sharing, and any other component of employer-
811sponsored health insurance shall be governed by applicable state
812and federal laws.
813     (16)  FRAUD AND ABUSE.--
814     (a)  To minimize the risk of Medicaid fraud and abuse, the
815agency shall ensure that applicable provisions of chapters 409,
816414, 626, 641, and 932, Florida Statutes, relating to Medicaid
817fraud and abuse, are applied and enforced at the demonstration
818project sites.
819     (b)  Providers shall have the necessary certification,
820license and credentials as required by law and waiver
821requirements.
822     (c)  The agency shall ensure that the plan is in compliance
823with the provisions of s. 409.912(21) and (22), Florida
824Statutes.
825     (d)  The agency shall require each plan to establish
826program integrity functions and activities to reduce the
827incidence of fraud and abuse. Plans must report instances of
828fraud and abuse pursuant to chapter 641, Florida Statutes.
829     (e)  The plan shall have written administrative and
830management arrangements or procedures, including a mandatory
831compliance plan, that are designed to guard against fraud and
832abuse. The plan shall designate a compliance officer with
833sufficient experience in health care.
834     (f)1.  The agency shall require all contractors in the
835managed care plan to report all instances of suspected fraud and
836abuse. A failure to report instances of suspected fraud and
837abuse is a violation of law and subject to the penalties
838provided by law.
839     2.  An instance of fraud and abuse in the managed care
840plan, including, but not limited to, defrauding the state health
841care benefit program by misrepresentation of fact in reports,
842claims, certifications, enrollment claims, demographic
843statistics, and patient-encounter data; misrepresentation of the
844qualifications of persons rendering health care and ancillary
845services; bribery and false statements relating to the delivery
846of health care; unfair and deceptive marketing practices; and
847managed care false claims actions, is a violation of law and
848subject to the penalties provided by law.
849     3.  The agency shall require that all contractors make all
850files and relevant billing and claims data accessible to state
851regulators and investigators and that all such data be linked
852into a unified system for seamless reviews and investigations.
853     (17)  CERTIFIED SCHOOL MATCH PROGRAM.-The agency shall
854develop a system whereby school districts participating in the
855certified school match program pursuant to ss. 409.908(21) and
8561011.70 shall be reimbursed by Medicaid, subject to the
857limitations of s. 1011.70(1), for a Medicaid-eligible child
858participating in the services as authorized in s. 1011.70, as
859provided for in s. 409.9071, regardless of whether the child is
860enrolled in a capitated managed care network. Capitated managed
861care networks must make a good-faith effort to execute
862agreements with school districts regarding the coordinated
863provision of services authorized under s. 1011.70. County health
864departments delivering school-based services pursuant to ss.
865381.0056 and 381.0057 must be reimbursed by Medicaid for the
866federal share for a Medicaid-eligible child who receives
867Medicaid-covered services in a school setting, regardless of
868whether the child is enrolled in a capitated managed care
869network. Capitated managed care networks must make a good-faith
870effort to execute agreements with county health departments
871regarding the coordinated provision of services to a Medicaid-
872eligible child. To ensure continuity of care for Medicaid
873patients, the agency, the Department of Health, and the
874Department of Education shall develop procedures for ensuring
875that a student's capitated managed care network provider
876receives information relating to services provided in accordance
877with ss. 381.0056, 381.0057, 409.9071, and 1011.70.
878     (18)  INTEGRATED MANAGED LONG-TERM CARE SERVICES.--
879     (a)  By December 1, 2005, the Agency for Health Care
880Administration may revise or apply for waivers pursuant to s.
8811915 of the Social Security Act or apply for experimental,
882pilot, or demonstration project waivers pursuant to s. 1115 of
883the Social Security Act to create an integrated, fixed-payment
884delivery system for Medicaid recipients who are 60 years of age
885or older. The Agency for Health Care Administration shall create
886the integrated, fixed-payment delivery system in partnership
887with the Department of Elderly Affairs. Rates shall be developed
888in accordance with 42 C.F.R. s. 438.60, certified by an actuary,
889and submitted for approval to the Centers for Medicare and
890Medicaid Services. Rates must reflect the intent to provide
891quality care in the least-restrictive setting. The funds to be
892integrated shall include:
893     1.  All Medicaid home and community-based waiver services
894funds.
895     2.  All funds for all Medicaid services, including Medicaid
896nursing home services. Inclusion of funds for nursing home
897services shall be upon certification by the agency that the
898integration of nursing home funds will improve coordinated care
899for these services in a less costly manner.
900     3.  All funds paid for Medicare coinsurance and deductibles
901for persons dually eligible for Medicaid and Medicare, for which
902the state is responsible, but not to exceed the federal limits
903of liability specified in the state plan.
904     (b)  The Agency for Health Care Administration shall
905implement the integrated system initially on a pilot basis in
906two areas of the state. In one of the areas enrollment shall be
907on a voluntary basis. In counties where the integrated system is
908implemented on a voluntary basis, Medicaid recipients 60 years
909of age and older shall initially enroll in a managed long-term
910care delivery system, but may, within 30 days, choose to receive
911services through the traditional fee-for-service delivery
912system.
913     (c)  The Agency for Health Care Administration and the
914Department of Elderly Affairs shall evaluate the feasibility of
915expanding managed long-term care into additional counties using
916a combined global budgeting system in which funding for Medicaid
917services which would be available to provide Medicaid services
918for an elderly person is combined into a single payment amount
919that can be used flexibly to provide services required by a
920participant. Under such a system, a participant is to be
921assisted in choosing appropriate Medicaid services and providers
922by means of choice counseling, case management, and other
923mechanisms designed to assist recipients to choose cost-
924efficient services in their own homes and communities rather
925than rely on institutional placement. In evaluating the
926feasibility of a global budgeting system, the agency and the
927department shall ensure that such a system is cost-neutral to
928the state and, to the extent possible, includes services funded
929by Medicaid, state general revenue programs, and programs funded
930under the federal Older American's Act.
931     (d)  When the agency integrates the funding for Medicaid
932services for recipients 60 years of age or older into a managed
933care delivery system under paragraph (a) in any area of the
934state, the agency shall provide to recipients a choice of plans
935which shall include:
936     1.  Entities licensed under chapter 627 or chapter 641,
937Florida Statutes.
938     2.  Any other entity certified by the agency to accept a
939capitation payment, including entities eligible to participate
940in the nursing home diversion program, other qualified providers
941as defined in s. 430.703(7), Florida Statutes, and community
942care for the elderly lead agencies. Entities not licensed under
943chapters 627 or 641 must meet comparable standards as defined by
944the agency, in consultation with the Department of Elderly
945Affairs and the Office of Insurance Regulation, to be
946financially solvent and able to take on financial risk for
947managed care. Community service networks that are certified
948pursuant to the comparable standards defined by the agency are
949not required to be licensed under chapter 641, Florida Statutes.
950     (e)  Individuals who are 60 years of age or older who have
951developmental disabilities or who are participants in the family
952and supported-living waiver program, the project AIDS care
953waiver program, the traumatic brain injury and spinal cord
954injury waiver program, the consumer-directed care waiver
955program, or the program of all-inclusive care for the elderly
956program, and residents of intermediate-care facilities for the
957developmentally disabled must be excluded from the integrated
958system.
959     (f)  When the agency implements an integrated system and
960includes funding for Medicaid nursing home and community-based
961care services into a managed care delivery system in any area of
962the state, the agency shall ensure that a plan, in addition to
963other certification requirements:
964     1.  Allows an enrollee to select any provider with whom the
965plan has a contract.
966     2.  Makes a good faith effort to develop contracts with
967qualified providers currently under contract with the Department
968of Elderly Affairs, area agencies on aging, or community care
969for the elderly lead agencies.
970     3.  Secures subcontracts with providers of nursing home and
971community-based long-term care services sufficient to ensure
972access to and choice of providers.
973     4.  Develops and uses a service provider qualification
974system that describes the quality-of-care standards that
975providers of medical, health, and long-term care services must
976meet in order to obtain a contract from the plan.
977     5.  Makes a good faith effort to develop contracts with all
978qualified nursing homes located in the area that are served by
979the plan, including those designated as Gold Seal.
980     6.  Ensures that a Medicaid recipient enrolled in a managed
981care plan who is a resident of a facility licensed under chapter
982400, Florida Statutes, and who does not choose to move to
983another setting is allowed to remain in the facility in which he
984or she is currently receiving care.
985     7.  Includes persons who are in nursing homes and who
986convert from non-Medicaid payment sources to Medicaid. Plans
987shall be at risk for serving persons who convert to Medicaid.
988The agency shall ensure that persons who choose community
989alternatives instead of nursing home care and who meet level of
990care and financial eligibility standards continue to receive
991Medicaid.
992     8.  Demonstrates a quality assurance system and a
993performance improvement system that is satisfactory to the
994agency.
995     9.  Develops a system to identify recipients who have
996special health care needs such as polypharmacy, mental health
997and substance abuse problems, falls, chronic pain, nutritional
998deficits, or cognitive deficits or who are ventilator-dependent
999in order to respond to and meet these needs.
1000     10.  Ensures a multidisciplinary team approach to recipient
1001management that facilitates the sharing of information among
1002providers responsible for delivering care to a recipient.
1003     11.  Ensures medical oversight of care plans and service
1004delivery, regular medical evaluation of care plans, and the
1005availability of medical consultation for care managers and
1006service coordinators.
1007     12.  Develops, monitors, and enforces quality-of-care
1008requirements using existing Agency for Health Care
1009Administration survey and certification data, whenever possible,
1010to avoid duplication of survey or certification activities
1011between the plans and the agency.
1012     13.  Ensures a system of care coordination that includes
1013educational and training standards for care managers and service
1014coordinators.
1015     14.  Develops a business plan that demonstrates the ability
1016of the plan to organize and operate a risk-bearing entity.
1017     15.  Furnishes evidence of liability insurance coverage or
1018a self-insurance plan that is determined by the Office of
1019Insurance Regulation to be adequate to respond to claims for
1020injuries arising out of the furnishing of health care.
1021     16.  Complies with the prompt payment of claims
1022requirements of ss. 627.613, 641.3155, and 641.513, Florida
1023Statutes.
1024     17.  Provides for a periodic review of its facilities, as
1025required by the agency, which does not duplicate other
1026requirements of federal or state law. The agency shall provide
1027provider survey results to the plan.
1028     18.  Provides enrollees the ability, to the extent
1029possible, to choose care providers, including nursing home,
1030assisted living, and adult day care service providers affiliated
1031with a person's religious faith or denomination, nursing home
1032and assisted living facility providers that are part of a
1033retirement community in which an enrollee resides, and nursing
1034homes and assisted living facilities that are geographically
1035located as close as possible to an enrollee's family, friends,
1036and social support system.
1037     (g)  In addition to other quality assurance standards
1038required by law or by rule or in an approved federal waiver, and
1039in consultation with the Department of Elderly Affairs and area
1040agencies on aging, the agency shall develop quality assurance
1041standards that are specific to the care needs of elderly
1042individuals and that measure enrollee outcomes and satisfaction
1043with care management and home and community-based services that
1044are provided to recipients 60 years of age or older by managed
1045care plans pursuant to this section. The agency in consultation
1046with the Department of Elderly Affairs shall contract with area
1047agencies on aging to perform initial and ongoing measurement of
1048the appropriateness, effectiveness, and quality of care
1049management and home and community-based services that are
1050provided to recipients 60 years of age or older by managed care
1051plans and to collect and report the resolution of enrollee
1052grievances and complaints. The agency and the department shall
1053coordinate the quality measurement activities performed by area
1054agencies on aging with other quality assurance activities
1055required by this section in a manner that promotes efficiency
1056and avoids duplication.
1057     (h)  If there is not a contractual relationship between a
1058nursing home provider and a plan in an area in which the
1059demonstration project operates, the nursing home shall cooperate
1060with the efforts of a plan to determine if a recipient would be
1061more appropriately served in a community setting, and payments
1062shall be made in accordance with Medicaid nursing home rates as
1063calculated in the Medicaid state plan.
1064     (i)  The agency may develop innovative risk-sharing
1065agreements that limit the level of custodial nursing home risk
1066that the plan assumes, consistent with the intent of the
1067Legislature to reduce the use and cost of nursing home care.
1068Under risk-sharing agreements, the agency may reimburse the plan
1069or a nursing home for the cost of providing nursing home care
1070for Medicaid-eligible recipients who have been permanently
1071placed and remain in nursing home care.
1072     (j)  The agency shall withhold a percentage of the
1073capitation rate that would otherwise have been paid to a plan in
1074order to create a quality reserve fund, which shall be annually
1075disbursed to those contracted plans that deliver high-quality
1076services, have a low rate of enrollee complaints, have
1077successful enrollee outcomes, are in compliance with quality
1078improvement standards, and demonstrate other indicators
1079determined by the agency to be consistent with high-quality
1080service delivery.
1081     (k)  The agency shall evaluate the medical loss ratios of
1082managed care plans providing services to individuals 60 years of
1083age or older in the Medicaid program and shall annually report
1084such medical loss ratios to the Legislature. Medical loss ratios
1085are subject to an annual audit. The agency may, by rule, adopt
1086minimum medical loss ratios for such managed care plans. Failure
1087to comply with the minimum medical loss ratios shall be grounds
1088for imposition of fines, reductions in capitated payments in the
1089current fiscal year, or contract termination.
1090     (l)  The agency may limit the number of persons enrolled in
1091a plan who are not nursing home facility residents but who would
1092be Medicaid eligible as defined under s. 409.904(3), Florida
1093Statutes, if served in an approved home or community-based
1094waiver program.
1095     (m)  Except as otherwise provided in this section, the
1096Aging Resource Center, if available, shall be the entry point
1097for eligibility determination for persons 60 years of age or
1098older and shall provide choice counseling to assist recipients
1099in choosing a plan. If an Aging Resource Center is not operating
1100in an area or if the Aging Resource Center or area agency on
1101aging has a contractual relationship with or has any ownership
1102interest in a managed care plan, the agency may, in consultation
1103with the Department of Elderly Affairs, designate other entities
1104to perform these functions until an Aging Resource Center is
1105established and has the capacity to perform these functions.
1106     (n)  In the event that a managed care plan does not meet
1107its obligations under its contract with the agency or under the
1108requirements of this section, the agency may impose liquidated
1109damages. Such liquidated damages shall be calculated by the
1110agency as reasonable estimates of the agency's financial loss
1111and are not to be used to penalize the plan. If the agency
1112imposes liquidated damages, the agency may collect those damages
1113by reducing the amount of any monthly premium payments otherwise
1114due to the plan by the amount of the damages. Liquidated damages
1115are forfeited and will not be subsequently paid to a plan upon
1116compliance or cure of default unless a determination is made
1117after appeal that the damages should not have been imposed.
1118     (o)  In any area of the state in which the agency has
1119implemented a demonstration project pursuant to this section,
1120the agency may grant a modification of certificate-of-need
1121conditions related to Medicaid participation to a nursing home
1122that has experienced decreased Medicaid patient day utilization
1123due to a transition to a managed care delivery system.
1124     (p)  Notwithstanding any other law to the contrary, the
1125agency shall ensure that, to the extent possible, Medicare and
1126Medicaid services are integrated. When possible, persons served
1127by the managed care delivery system who are eligible for
1128Medicare may choose to enroll in a Medicare managed health care
1129plan operated by the same entity that is placed at risk for
1130Medicaid services.
1131     (q)  It is the intent of the Legislature that the agency
1132and the Department of Elderly Affairs begin discussions with the
1133federal Centers for Medicare and Medicaid Services regarding the
1134inclusion of Medicare in an integrated long-term care system.
1135     (19)  FUNDING DEVELOPMENT COSTS OF ESSENTIAL COMMUNITY
1136PROVIDERS.--It is the intent of the Legislature to facilitate
1137the development of managed care delivery systems by networks of
1138essential community providers comprised of current community
1139care for the elderly lead agencies. To allow the assumption of
1140responsibility and financial risk for managing a recipient
1141through the entire continuum of Medicaid services, the agency
1142shall, subject to appropriations included in the General
1143Appropriations Act, award up to $500,000 per applicant for the
1144purpose of funding managed care delivery system development
1145costs. The terms of repayment may not extend beyond 6 years
1146after the date when the funding begins and must include payment
1147in full with a rate of interest equal to or greater than the
1148federal funds rate. The agency, in consultation with the
1149Department of Elderly Affairs shall establish a grant
1150application process for awards.
1151     (20)  MEDICAID BUY-IN.--The Office of Program Policy
1152Analysis and Government Accountability shall conduct a study of
1153state programs that allow non-Medicaid eligible persons under a
1154certain income level to buy into the Medicaid program as if it
1155was private insurance. The study shall examine Medicaid buy-in
1156programs in other states to determine if there are any models
1157that can be implemented in Florida which would provide access to
1158uninsured Floridians and what effect this program would have on
1159Medicaid expenditures based on the experience of similar states.
1160The study must also examine whether the Medically Needy program
1161could be redesigned to be a Medicaid buy-in program. The study
1162must be submitted to the President of the Senate and the Speaker
1163of the House of representatives by January 1, 2006.
1164     (21)  APPLICABILITY.--
1165     (a)  The provisions of this section apply only to the
1166demonstration project sites approved by the Legislature.
1167     (b)  The Legislature authorizes the Agency for Health Care
1168Administration to apply and enforce any provision of law not
1169referenced in this section to ensure the safety, quality, and
1170integrity of the waiver.
1171     (22)  RULEMAKING.--The Agency for Health Care
1172Administration is authorized to adopt rules in consultation with
1173the appropriate state agencies to implement the provisions of
1174this section.
1175     (23)  IMPLEMENTATION.--
1176     (a)  This section does not authorize the agency to
1177implement any provision of s. 1115 of the Social Security Act
1178experimental, pilot, or demonstration project waiver to reform
1179the state Medicaid program unless approved by the Legislature.
1180     (b)  The agency shall develop and submit for approval
1181applications for waivers of applicable federal laws and
1182regulations as necessary to implement the managed care
1183demonstration project as defined in this section. The agency
1184shall post all waiver applications under this section on its
1185Internet website 30 days before submitting the applications to
1186the United States Centers for Medicare and Medicaid Services.
1187All waiver applications shall be provided for review and comment
1188to the appropriate committees of the Senate and House of
1189Representatives for at least 10 working days prior to
1190submission. All waivers submitted to and approved by the United
1191States Centers for Medicare and Medicaid Services under this
1192section must be submitted to the appropriate committees of the
1193Senate and the House of Representatives in order to obtain
1194authority for implementation as required by s. 409.912(11),
1195Florida Statutes, before program implementation. The appropriate
1196committees shall recommend whether to approve the implementation
1197of the waivers to the Legislature or to the Legislative Budget
1198Commission if the Legislature is not in session. The agency
1199shall submit a plan containing a detailed timeline for
1200implementation and budgetary projections of the effect of the
1201pilot program on the total Medicaid budget for the 2006-2007
1202through 2009-2010 fiscal years
1203     (24)  EVALUATION.--
1204     (a)  Two years after the implementation of the waiver and
1205again 5 years after the implementation of the waiver, the Office
1206of Program Policy Analysis and Government Accountability, shall
1207conduct an evaluation study and analyze the impact of the
1208Medicaid reform waiver pursuant to this section to the extent
1209allowed in the waiver demonstration sites by the Centers for
1210Medicare and Medicaid Services and implemented as approved by
1211the Legislature pursuant to this section. The Office of Program
1212Policy Analysis and Government Accountability shall consult with
1213appropriate legislative committees to select provisions of the
1214waiver to evaluate from among the following:
1215     1.  Demographic characteristics of the recipient of the
1216waiver.
1217     2.  Plan types and service networks.
1218     3.  Health benefit coverage.
1219     4.  Choice counseling.
1220     5.  Disease management.
1221     6.  Pharmacy benefits.
1222     7.  Behavioral health benefits.
1223     8.  Service utilization.
1224     9.  Catastrophic coverage.
1225     10.  Enhanced benefits.
1226     11.  Medicaid opt-out option.
1227     12.  Quality assurance and accountability.
1228     13.  Fraud and abuse.
1229     14.  Cost and cost benefit of the waiver.
1230     15.  Impact of the waiver on the agency.
1231     16.  Positive impact of plans on health disparities among
1232minorities.
1233     17.  Administrative or legal barriers to the implementation
1234and operation of each pilot program.
1235     (b)  The Office of Program Policy Analysis and Government
1236Accountability shall submit the evaluation study report to the
1237agency and to the Governor, the President of the Senate, the
1238Speaker of the House of Representatives, and the appropriate
1239committees or councils of the Senate and the House of
1240Representatives.
1241     (c)  One year after implementation of the integrated
1242managed long-term care plan, the agency shall contract with an
1243entity experienced in evaluating managed long-term care plans in
1244another state to evaluate, at a minimum, demonstrated cost
1245savings realized and expected, consumer satisfaction, the range
1246of services being provided under the program, and rate-setting
1247methodology.
1248     (d)  The agency shall submit, every 6 months after the date
1249of waiver implementation, a status report describing the
1250progress made on the implementation of the waiver and
1251identification of any issues or problems to the Governor's
1252Office of Planning and Budgeting and the appropriate committees
1253or councils of the Senate and the House of Representatives.
1254     (e)  The agency shall provide to the appropriate committees
1255or councils of the Senate and House of Representatives copies of
1256any report or evaluation regarding the waiver that is submitted
1257to the Center for Medicare and Medicaid Services.
1258     (f)  The agency shall contract for an evaluation comparison
1259of the waiver demonstration projects with the Medipass fee-for-
1260service program including, at a minimum:
1261     1.  Administrative or organizational structure of the
1262service delivery system.
1263     2.  Covered services and service utilization patterns of
1264mandatory, optional, and other services.
1265     3.  Clinical or health outcomes.
1266     4.  Cost analysis, cost avoidance, and cost benefit.
1267     (25)  REVIEW AND REPEAL.--This section shall stand repealed
1268on July 1, 2010, unless reviewed and saved from repeal through
1269reenactment by the Legislature.
1270     Section 3.  Section 409.912, Florida Statutes, is amended
1271to read:
1272     409.912  Cost-effective purchasing of health care.--The
1273agency shall purchase goods and services for Medicaid recipients
1274in the most cost-effective manner consistent with the delivery
1275of quality medical care. To ensure that medical services are
1276effectively utilized, the agency may, in any case, require a
1277confirmation or second physician's opinion of the correct
1278diagnosis for purposes of authorizing future services under the
1279Medicaid program. This section does not restrict access to
1280emergency services or poststabilization care services as defined
1281in 42 C.F.R. part 438.114. Such confirmation or second opinion
1282shall be rendered in a manner approved by the agency. The agency
1283shall maximize the use of prepaid per capita and prepaid
1284aggregate fixed-sum basis services when appropriate and other
1285alternative service delivery and reimbursement methodologies,
1286including competitive bidding pursuant to s. 287.057, designed
1287to facilitate the cost-effective purchase of a case-managed
1288continuum of care. The agency shall also require providers to
1289minimize the exposure of recipients to the need for acute
1290inpatient, custodial, and other institutional care and the
1291inappropriate or unnecessary use of high-cost services. The
1292agency shall contract with a vendor to monitor and evaluate the
1293clinical practice patterns of providers in order to identify
1294trends that are outside the normal practice patterns of a
1295provider's professional peers or the national guidelines of a
1296provider's professional association. The vendor must be able to
1297provide information and counseling to a provider whose practice
1298patterns are outside the norms, in consultation with the agency,
1299to improve patient care and reduce inappropriate utilization.
1300The agency may mandate prior authorization, drug therapy
1301management, or disease management participation for certain
1302populations of Medicaid beneficiaries, certain drug classes, or
1303particular drugs to prevent fraud, abuse, overuse, and possible
1304dangerous drug interactions. The Pharmaceutical and Therapeutics
1305Committee shall make recommendations to the agency on drugs for
1306which prior authorization is required. The agency shall inform
1307the Pharmaceutical and Therapeutics Committee of its decisions
1308regarding drugs subject to prior authorization. The agency is
1309authorized to limit the entities it contracts with or enrolls as
1310Medicaid providers by developing a provider network through
1311provider credentialing. The agency may competitively bid single-
1312source-provider contracts if procurement of goods or services
1313results in demonstrated cost savings to the state without
1314limiting access to care. The agency may limit its network based
1315on the assessment of beneficiary access to care, provider
1316availability, provider quality standards, time and distance
1317standards for access to care, the cultural competence of the
1318provider network, demographic characteristics of Medicaid
1319beneficiaries, practice and provider-to-beneficiary standards,
1320appointment wait times, beneficiary use of services, provider
1321turnover, provider profiling, provider licensure history,
1322previous program integrity investigations and findings, peer
1323review, provider Medicaid policy and billing compliance records,
1324clinical and medical record audits, and other factors. Providers
1325shall not be entitled to enrollment in the Medicaid provider
1326network. The agency shall determine instances in which allowing
1327Medicaid beneficiaries to purchase durable medical equipment and
1328other goods is less expensive to the Medicaid program than long-
1329term rental of the equipment or goods. The agency may establish
1330rules to facilitate purchases in lieu of long-term rentals in
1331order to protect against fraud and abuse in the Medicaid program
1332as defined in s. 409.913. The agency may is authorized to seek
1333federal waivers necessary to administer these policies implement
1334this policy.
1335     (1)  The agency shall work with the Department of Children
1336and Family Services to ensure access of children and families in
1337the child protection system to needed and appropriate mental
1338health and substance abuse services.
1339     (2)  The agency may enter into agreements with appropriate
1340agents of other state agencies or of any agency of the Federal
1341Government and accept such duties in respect to social welfare
1342or public aid as may be necessary to implement the provisions of
1343Title XIX of the Social Security Act and ss. 409.901-409.920.
1344     (3)  The agency may contract with health maintenance
1345organizations certified pursuant to part I of chapter 641 for
1346the provision of services to recipients.
1347     (4)  The agency may contract with:
1348     (a)  An entity that provides no prepaid health care
1349services other than Medicaid services under contract with the
1350agency and which is owned and operated by a county, county
1351health department, or county-owned and operated hospital to
1352provide health care services on a prepaid or fixed-sum basis to
1353recipients, which entity may provide such prepaid services
1354either directly or through arrangements with other providers.
1355Such prepaid health care services entities must be licensed
1356under parts I and III by January 1, 1998, and until then are
1357exempt from the provisions of part I of chapter 641. An entity
1358recognized under this paragraph which demonstrates to the
1359satisfaction of the Office of Insurance Regulation of the
1360Financial Services Commission that it is backed by the full
1361faith and credit of the county in which it is located may be
1362exempted from s. 641.225.
1363     (b)  An entity that is providing comprehensive behavioral
1364health care services to certain Medicaid recipients through a
1365capitated, prepaid arrangement pursuant to the federal waiver
1366provided for by s. 409.905(5). Such an entity must be licensed
1367under chapter 624, chapter 636, or chapter 641 and must possess
1368the clinical systems and operational competence to manage risk
1369and provide comprehensive behavioral health care to Medicaid
1370recipients. As used in this paragraph, the term "comprehensive
1371behavioral health care services" means covered mental health and
1372substance abuse treatment services that are available to
1373Medicaid recipients. The secretary of the Department of Children
1374and Family Services shall approve provisions of procurements
1375related to children in the department's care or custody prior to
1376enrolling such children in a prepaid behavioral health plan. Any
1377contract awarded under this paragraph must be competitively
1378procured. In developing the behavioral health care prepaid plan
1379procurement document, the agency shall ensure that the
1380procurement document requires the contractor to develop and
1381implement a plan to ensure compliance with s. 394.4574 related
1382to services provided to residents of licensed assisted living
1383facilities that hold a limited mental health license. Except as
1384provided in subparagraph 8., the agency shall seek federal
1385approval to contract with a single entity meeting these
1386requirements to provide comprehensive behavioral health care
1387services to all Medicaid recipients not enrolled in a managed
1388care plan in an AHCA area. Each entity must offer sufficient
1389choice of providers in its network to ensure recipient access to
1390care and the opportunity to select a provider with whom they are
1391satisfied. The network shall include all public mental health
1392hospitals. To ensure unimpaired access to behavioral health care
1393services by Medicaid recipients, all contracts issued pursuant
1394to this paragraph shall require 80 percent of the capitation
1395paid to the managed care plan, including health maintenance
1396organizations, to be expended for the provision of behavioral
1397health care services. In the event the managed care plan expends
1398less than 80 percent of the capitation paid pursuant to this
1399paragraph for the provision of behavioral health care services,
1400the difference shall be returned to the agency. The agency shall
1401provide the managed care plan with a certification letter
1402indicating the amount of capitation paid during each calendar
1403year for the provision of behavioral health care services
1404pursuant to this section. The agency may reimburse for substance
1405abuse treatment services on a fee-for-service basis until the
1406agency finds that adequate funds are available for capitated,
1407prepaid arrangements.
1408     1.  By January 1, 2001, the agency shall modify the
1409contracts with the entities providing comprehensive inpatient
1410and outpatient mental health care services to Medicaid
1411recipients in Hillsborough, Highlands, Hardee, Manatee, and Polk
1412Counties, to include substance abuse treatment services.
1413     2.  By July 1, 2003, the agency and the Department of
1414Children and Family Services shall execute a written agreement
1415that requires collaboration and joint development of all policy,
1416budgets, procurement documents, contracts, and monitoring plans
1417that have an impact on the state and Medicaid community mental
1418health and targeted case management programs.
1419     3.  Except as provided in subparagraph 8., by July 1, 2006,
1420the agency and the Department of Children and Family Services
1421shall contract with managed care entities in each AHCA area
1422except area 6 or arrange to provide comprehensive inpatient and
1423outpatient mental health and substance abuse services through
1424capitated prepaid arrangements to all Medicaid recipients who
1425are eligible to participate in such plans under federal law and
1426regulation. In AHCA areas where eligible individuals number less
1427than 150,000, the agency shall contract with a single managed
1428care plan to provide comprehensive behavioral health services to
1429all recipients who are not enrolled in a Medicaid health
1430maintenance organization. The agency may contract with more than
1431one comprehensive behavioral health provider to provide care to
1432recipients who are not enrolled in a Medicaid health maintenance
1433organization in AHCA areas where the eligible population exceeds
1434150,000. Contracts for comprehensive behavioral health providers
1435awarded pursuant to this section shall be competitively
1436procured. Both for-profit and not-for-profit corporations shall
1437be eligible to compete. Managed care plans contracting with the
1438agency under subsection (3) shall provide and receive payment
1439for the same comprehensive behavioral health benefits as
1440provided in AHCA rules, including handbooks incorporated by
1441reference.
1442     4.  By October 1, 2003, the agency and the department shall
1443submit a plan to the Governor, the President of the Senate, and
1444the Speaker of the House of Representatives which provides for
1445the full implementation of capitated prepaid behavioral health
1446care in all areas of the state.
1447     a.  Implementation shall begin in 2003 in those AHCA areas
1448of the state where the agency is able to establish sufficient
1449capitation rates.
1450     b.  If the agency determines that the proposed capitation
1451rate in any area is insufficient to provide appropriate
1452services, the agency may adjust the capitation rate to ensure
1453that care will be available. The agency and the department may
1454use existing general revenue to address any additional required
1455match but may not over-obligate existing funds on an annualized
1456basis.
1457     c.  Subject to any limitations provided for in the General
1458Appropriations Act, the agency, in compliance with appropriate
1459federal authorization, shall develop policies and procedures
1460that allow for certification of local and state funds.
1461     5.  Children residing in a statewide inpatient psychiatric
1462program, or in a Department of Juvenile Justice or a Department
1463of Children and Family Services residential program approved as
1464a Medicaid behavioral health overlay services provider shall not
1465be included in a behavioral health care prepaid health plan or
1466any other Medicaid managed care plan pursuant to this paragraph.
1467     6.  In converting to a prepaid system of delivery, the
1468agency shall in its procurement document require an entity
1469providing only comprehensive behavioral health care services to
1470prevent the displacement of indigent care patients by enrollees
1471in the Medicaid prepaid health plan providing behavioral health
1472care services from facilities receiving state funding to provide
1473indigent behavioral health care, to facilities licensed under
1474chapter 395 which do not receive state funding for indigent
1475behavioral health care, or reimburse the unsubsidized facility
1476for the cost of behavioral health care provided to the displaced
1477indigent care patient.
1478     7.  Traditional community mental health providers under
1479contract with the Department of Children and Family Services
1480pursuant to part IV of chapter 394, child welfare providers
1481under contract with the Department of Children and Family
1482Services in areas 1 and 6, and inpatient mental health providers
1483licensed pursuant to chapter 395 must be offered an opportunity
1484to accept or decline a contract to participate in any provider
1485network for prepaid behavioral health services.
1486     8.  For fiscal year 2004-2005, all Medicaid eligible
1487children, except children in areas 1 and 6, whose cases are open
1488for child welfare services in the HomeSafeNet system, shall be
1489enrolled in MediPass or in Medicaid fee-for-service and all
1490their behavioral health care services including inpatient,
1491outpatient psychiatric, community mental health, and case
1492management shall be reimbursed on a fee-for-service basis.
1493Beginning July 1, 2005, such children, who are open for child
1494welfare services in the HomeSafeNet system, shall receive their
1495behavioral health care services through a specialty prepaid plan
1496operated by community-based lead agencies either through a
1497single agency or formal agreements among several agencies. The
1498specialty prepaid plan must result in savings to the state
1499comparable to savings achieved in other Medicaid managed care
1500and prepaid programs. Such plan must provide mechanisms to
1501maximize state and local revenues. The specialty prepaid plan
1502shall be developed by the agency and the Department of Children
1503and Family Services. The agency is authorized to seek any
1504federal waivers to implement this initiative.
1505     (c)  A federally qualified health center or an entity owned
1506by one or more federally qualified health centers or an entity
1507owned by other migrant and community health centers receiving
1508non-Medicaid financial support from the Federal Government to
1509provide health care services on a prepaid or fixed-sum basis to
1510recipients. Such prepaid health care services entity must be
1511licensed under parts I and III of chapter 641, but shall be
1512prohibited from serving Medicaid recipients on a prepaid basis,
1513until such licensure has been obtained. However, such an entity
1514is exempt from s. 641.225 if the entity meets the requirements
1515specified in subsections (16) (17) and (17)(18).
1516     (d)  A provider service network may be reimbursed on a fee-
1517for-service or prepaid basis. A provider service network which
1518is reimbursed by the agency on a prepaid basis shall be exempt
1519from parts I and III of chapter 641, but must meet appropriate
1520financial reserve, quality assurance, and patient rights
1521requirements as established by the agency. The agency shall
1522award contracts on a competitive bid basis and shall select
1523bidders based upon price and quality of care. Medicaid
1524recipients assigned to a demonstration project shall be chosen
1525equally from those who would otherwise have been assigned to
1526prepaid plans and MediPass. The agency is authorized to seek
1527federal Medicaid waivers as necessary to implement the
1528provisions of this section.
1529     (e)  An entity that provides only comprehensive behavioral
1530health care services to certain Medicaid recipients through an
1531administrative services organization agreement. Such an entity
1532must possess the clinical systems and operational competence to
1533provide comprehensive health care to Medicaid recipients. As
1534used in this paragraph, the term "comprehensive behavioral
1535health care services" means covered mental health and substance
1536abuse treatment services that are available to Medicaid
1537recipients. Any contract awarded under this paragraph must be
1538competitively procured. The agency must ensure that Medicaid
1539recipients have available the choice of at least two managed
1540care plans for their behavioral health care services.
1541     (f)  An entity that provides in-home physician services to
1542test the cost-effectiveness of enhanced home-based medical care
1543to Medicaid recipients with degenerative neurological diseases
1544and other diseases or disabling conditions associated with high
1545costs to Medicaid. The program shall be designed to serve very
1546disabled persons and to reduce Medicaid reimbursed costs for
1547inpatient, outpatient, and emergency department services. The
1548agency shall contract with vendors on a risk-sharing basis.
1549     (g)  Children's provider networks that provide care
1550coordination and care management for Medicaid-eligible pediatric
1551patients, primary care, authorization of specialty care, and
1552other urgent and emergency care through organized providers
1553designed to service Medicaid eligibles under age 18 and
1554pediatric emergency departments' diversion programs. The
1555networks shall provide after-hour operations, including evening
1556and weekend hours, to promote, when appropriate, the use of the
1557children's networks rather than hospital emergency departments.
1558     (h)  An entity authorized in s. 430.205 to contract with
1559the agency and the Department of Elderly Affairs to provide
1560health care and social services on a prepaid or fixed-sum basis
1561to elderly recipients. Such prepaid health care services
1562entities are exempt from the provisions of part I of chapter 641
1563for the first 3 years of operation. An entity recognized under
1564this paragraph that demonstrates to the satisfaction of the
1565Office of Insurance Regulation that it is backed by the full
1566faith and credit of one or more counties in which it operates
1567may be exempted from s. 641.225.
1568     (i)  A Children's Medical Services Network, as defined in
1569s. 391.021.
1570     (5)  By October 1, 2003, the agency and the department
1571shall, to the extent feasible, develop a plan for implementing
1572new Medicaid procedure codes for emergency and crisis care,
1573supportive residential services, and other services designed to
1574maximize the use of Medicaid funds for Medicaid-eligible
1575recipients. The agency shall include in the agreement developed
1576pursuant to subsection (4) a provision that ensures that the
1577match requirements for these new procedure codes are met by
1578certifying eligible general revenue or local funds that are
1579currently expended on these services by the department with
1580contracted alcohol, drug abuse, and mental health providers. The
1581plan must describe specific procedure codes to be implemented, a
1582projection of the number of procedures to be delivered during
1583fiscal year 2003-2004, and a financial analysis that describes
1584the certified match procedures, and accountability mechanisms,
1585projects the earnings associated with these procedures, and
1586describes the sources of state match. This plan may not be
1587implemented in any part until approved by the Legislative Budget
1588Commission. If such approval has not occurred by December 31,
15892003, the plan shall be submitted for consideration by the 2004
1590Legislature.
1591     (5)(6)  The agency may contract with any public or private
1592entity otherwise authorized by this section on a prepaid or
1593fixed-sum basis for the provision of health care services to
1594recipients. An entity may provide prepaid services to
1595recipients, either directly or through arrangements with other
1596entities, if each entity involved in providing services:
1597     (a)  Is organized primarily for the purpose of providing
1598health care or other services of the type regularly offered to
1599Medicaid recipients;
1600     (b)  Ensures that services meet the standards set by the
1601agency for quality, appropriateness, and timeliness;
1602     (c)  Makes provisions satisfactory to the agency for
1603insolvency protection and ensures that neither enrolled Medicaid
1604recipients nor the agency will be liable for the debts of the
1605entity;
1606     (d)  Submits to the agency, if a private entity, a
1607financial plan that the agency finds to be fiscally sound and
1608that provides for working capital in the form of cash or
1609equivalent liquid assets excluding revenues from Medicaid
1610premium payments equal to at least the first 3 months of
1611operating expenses or $200,000, whichever is greater;
1612     (e)  Furnishes evidence satisfactory to the agency of
1613adequate liability insurance coverage or an adequate plan of
1614self-insurance to respond to claims for injuries arising out of
1615the furnishing of health care;
1616     (f)  Provides, through contract or otherwise, for periodic
1617review of its medical facilities and services, as required by
1618the agency; and
1619     (g)  Provides organizational, operational, financial, and
1620other information required by the agency.
1621     (6)(7)  The agency may contract on a prepaid or fixed-sum
1622basis with any health insurer that:
1623     (a)  Pays for health care services provided to enrolled
1624Medicaid recipients in exchange for a premium payment paid by
1625the agency;
1626     (b)  Assumes the underwriting risk; and
1627     (c)  Is organized and licensed under applicable provisions
1628of the Florida Insurance Code and is currently in good standing
1629with the Office of Insurance Regulation.
1630     (7)(8)  The agency may contract on a prepaid or fixed-sum
1631basis with an exclusive provider organization to provide health
1632care services to Medicaid recipients provided that the exclusive
1633provider organization meets applicable managed care plan
1634requirements in this section, ss. 409.9122, 409.9123, 409.9128,
1635and 627.6472, and other applicable provisions of law.
1636     (8)(9)  The Agency for Health Care Administration may
1637provide cost-effective purchasing of chiropractic services on a
1638fee-for-service basis to Medicaid recipients through
1639arrangements with a statewide chiropractic preferred provider
1640organization incorporated in this state as a not-for-profit
1641corporation. The agency shall ensure that the benefit limits and
1642prior authorization requirements in the current Medicaid program
1643shall apply to the services provided by the chiropractic
1644preferred provider organization.
1645     (9)(10)  The agency shall not contract on a prepaid or
1646fixed-sum basis for Medicaid services with an entity which knows
1647or reasonably should know that any officer, director, agent,
1648managing employee, or owner of stock or beneficial interest in
1649excess of 5 percent common or preferred stock, or the entity
1650itself, has been found guilty of, regardless of adjudication, or
1651entered a plea of nolo contendere, or guilty, to:
1652     (a)  Fraud;
1653     (b)  Violation of federal or state antitrust statutes,
1654including those proscribing price fixing between competitors and
1655the allocation of customers among competitors;
1656     (c)  Commission of a felony involving embezzlement, theft,
1657forgery, income tax evasion, bribery, falsification or
1658destruction of records, making false statements, receiving
1659stolen property, making false claims, or obstruction of justice;
1660or
1661     (d)  Any crime in any jurisdiction which directly relates
1662to the provision of health services on a prepaid or fixed-sum
1663basis.
1664     (10)(11)  The agency, after notifying the Legislature, may
1665apply for waivers of applicable federal laws and regulations as
1666necessary to implement more appropriate systems of health care
1667for Medicaid recipients and reduce the cost of the Medicaid
1668program to the state and federal governments and shall implement
1669such programs, after legislative approval, within a reasonable
1670period of time after federal approval. These programs must be
1671designed primarily to reduce the need for inpatient care,
1672custodial care and other long-term or institutional care, and
1673other high-cost services.
1674     (a)  Prior to seeking legislative approval of such a waiver
1675as authorized by this subsection, the agency shall provide
1676notice and an opportunity for public comment. Notice shall be
1677provided to all persons who have made requests of the agency for
1678advance notice and shall be published in the Florida
1679Administrative Weekly not less than 28 days prior to the
1680intended action.
1681     (b)  Notwithstanding s. 216.292, funds that are
1682appropriated to the Department of Elderly Affairs for the
1683Assisted Living for the Elderly Medicaid waiver and are not
1684expended shall be transferred to the agency to fund Medicaid-
1685reimbursed nursing home care.
1686     (11)(12)  The agency shall establish a postpayment
1687utilization control program designed to identify recipients who
1688may inappropriately overuse or underuse Medicaid services and
1689shall provide methods to correct such misuse.
1690     (12)(13)  The agency shall develop and provide coordinated
1691systems of care for Medicaid recipients and may contract with
1692public or private entities to develop and administer such
1693systems of care among public and private health care providers
1694in a given geographic area.
1695     (13)(14)(a)  The agency shall operate or contract for the
1696operation of utilization management and incentive systems
1697designed to encourage cost-effective use services.
1698     (b)  The agency shall develop a procedure for determining
1699whether health care providers and service vendors can provide
1700the Medicaid program with a business case that demonstrates
1701whether a particular good or service can offset the cost of
1702providing the good or service in an alternative setting or
1703through other means and therefore should receive a higher
1704reimbursement.  The business case must include, but need not be
1705limited to:
1706     1.  A detailed description of the good or service to be
1707provided, a description and analysis of the agency's current
1708performance of the service, and a rationale documenting how
1709providing the service in an alternative setting would be in the
1710best interest of the state, the agency, and its clients.
1711     2.  A cost-benefit analysis documenting the estimated
1712specific direct and indirect costs, savings, performance
1713improvements, risks, and qualitative and quantitative benefits
1714involved in or resulting from providing the service. The cost-
1715benefit analysis must include a detailed plan and timeline
1716identifying all actions that must be implemented to realize
1717expected benefits.  The Secretary of the Agency for Health Care
1718Administration shall verify that all costs, savings, and
1719benefits are valid and achievable.
1720     (14)(15)(a)  The agency shall operate the Comprehensive
1721Assessment and Review for Long-Term Care Services (CARES)
1722nursing facility preadmission screening program to ensure that
1723Medicaid payment for nursing facility care is made only for
1724individuals whose conditions require such care and to ensure
1725that long-term care services are provided in the setting most
1726appropriate to the needs of the person and in the most
1727economical manner possible. The CARES program shall also ensure
1728that individuals participating in Medicaid home and community-
1729based waiver programs meet criteria for those programs,
1730consistent with approved federal waivers.
1731     (b)  The agency shall operate the CARES program through an
1732interagency agreement with the Department of Elderly Affairs.
1733The agency, in consultation with the Department of Elderly
1734Affairs, may contract for any function or activity of the CARES
1735program, including any function or activity required by 42
1736C.F.R. part 483.20, relating to preadmission screening and
1737resident review.
1738     (c)  Prior to making payment for nursing facility services
1739for a Medicaid recipient, the agency must verify that the
1740nursing facility preadmission screening program has determined
1741that the individual requires nursing facility care and that the
1742individual cannot be safely served in community-based programs.
1743The nursing facility preadmission screening program shall refer
1744a Medicaid recipient to a community-based program if the
1745individual could be safely served at a lower cost and the
1746recipient chooses to participate in such program.     (d)  For the
1747purpose of initiating immediate prescreening and diversion
1748assistance for individuals residing in nursing homes and in
1749order to make families aware of alternative long-term care
1750resources so that they may choose a more cost-effective setting
1751for long-term placement, CARES staff shall conduct an assessment
1752and review of a sample of individuals whose nursing home stay is
1753expected to exceed 20 days, regardless of the initial funding
1754source for the nursing home placement. CARES staff shall provide
1755counseling and referral services to these individuals regarding
1756choosing appropriate long-term care alternatives. This paragraph
1757does not apply to continuing care facilities licensed under
1758chapter 651 or to retirement communities that provide a
1759combination of nursing home, independent living, and other long-
1760term care services.
1761     (e)  By January 15 of each year, the agency shall submit a
1762report to the Legislature and the Office of Long-Term-Care
1763Policy describing the operations of the CARES program. The
1764report must describe:
1765     1.  Rate of diversion to community alternative programs;
1766     2.  CARES program staffing needs to achieve additional
1767diversions;
1768     3.  Reasons the program is unable to place individuals in
1769less restrictive settings when such individuals desired such
1770services and could have been served in such settings;
1771     4.  Barriers to appropriate placement, including barriers
1772due to policies or operations of other agencies or state-funded
1773programs; and
1774     5.  Statutory changes necessary to ensure that individuals
1775in need of long-term care services receive care in the least
1776restrictive environment.
1777     (f)  The Department of Elderly Affairs shall track
1778individuals over time who are assessed under the CARES program
1779and who are diverted from nursing home placement. By January 15
1780of each year, the department shall submit to the Legislature and
1781the Office of Long-Term-Care Policy a longitudinal study of the
1782individuals who are diverted from nursing home placement. The
1783study must include:
1784     1.  The demographic characteristics of the individuals
1785assessed and diverted from nursing home placement, including,
1786but not limited to, age, race, gender, frailty, caregiver
1787status, living arrangements, and geographic location;
1788     2.  A summary of community services provided to individuals
1789for 1 year after assessment and diversion;
1790     3.  A summary of inpatient hospital admissions for
1791individuals who have been diverted; and
1792     4.  A summary of the length of time between diversion and
1793subsequent entry into a nursing home or death.
1794     (g)  By July 1, 2005, the department and the Agency for
1795Health Care Administration shall report to the President of the
1796Senate and the Speaker of the House of Representatives regarding
1797the impact to the state of modifying level-of-care criteria to
1798eliminate the Intermediate II level of care.
1799     (15)(16)(a)  The agency shall identify health care
1800utilization and price patterns within the Medicaid program which
1801are not cost-effective or medically appropriate and assess the
1802effectiveness of new or alternate methods of providing and
1803monitoring service, and may implement such methods as it
1804considers appropriate. Such methods may include disease
1805management initiatives, an integrated and systematic approach
1806for managing the health care needs of recipients who are at risk
1807of or diagnosed with a specific disease by using best practices,
1808prevention strategies, clinical-practice improvement, clinical
1809interventions and protocols, outcomes research, information
1810technology, and other tools and resources to reduce overall
1811costs and improve measurable outcomes.
1812     (b)  The responsibility of the agency under this subsection
1813shall include the development of capabilities to identify actual
1814and optimal practice patterns; patient and provider educational
1815initiatives; methods for determining patient compliance with
1816prescribed treatments; fraud, waste, and abuse prevention and
1817detection programs; and beneficiary case management programs.
1818     1.  The practice pattern identification program shall
1819evaluate practitioner prescribing patterns based on national and
1820regional practice guidelines, comparing practitioners to their
1821peer groups. The agency and its Drug Utilization Review Board
1822shall consult with the Department of Health and a panel of
1823practicing health care professionals consisting of the
1824following: the Speaker of the House of Representatives and the
1825President of the Senate shall each appoint three physicians
1826licensed under chapter 458 or chapter 459; and the Governor
1827shall appoint two pharmacists licensed under chapter 465 and one
1828dentist licensed under chapter 466 who is an oral surgeon. Terms
1829of the panel members shall expire at the discretion of the
1830appointing official. The panel shall begin its work by August 1,
18311999, regardless of the number of appointments made by that
1832date. The advisory panel shall be responsible for evaluating
1833treatment guidelines and recommending ways to incorporate their
1834use in the practice pattern identification program.
1835Practitioners who are prescribing inappropriately or
1836inefficiently, as determined by the agency, may have their
1837prescribing of certain drugs subject to prior authorization or
1838may be terminated from all participation in the Medicaid
1839program.
1840     2.  The agency shall also develop educational interventions
1841designed to promote the proper use of medications by providers
1842and beneficiaries.
1843     3.  The agency shall implement a pharmacy fraud, waste, and
1844abuse initiative that may include a surety bond or letter of
1845credit requirement for participating pharmacies, enhanced
1846provider auditing practices, the use of additional fraud and
1847abuse software, recipient management programs for beneficiaries
1848inappropriately using their benefits, and other steps that will
1849eliminate provider and recipient fraud, waste, and abuse. The
1850initiative shall address enforcement efforts to reduce the
1851number and use of counterfeit prescriptions.
1852     4.  By September 30, 2002, the agency shall contract with
1853an entity in the state to implement a wireless handheld clinical
1854pharmacology drug information database for practitioners. The
1855initiative shall be designed to enhance the agency's efforts to
1856reduce fraud, abuse, and errors in the prescription drug benefit
1857program and to otherwise further the intent of this paragraph.
1858     5.  The agency may apply for any federal waivers needed to
1859implement this paragraph.
1860     (16)(17)  An entity contracting on a prepaid or fixed-sum
1861basis shall, in addition to meeting any applicable statutory
1862surplus requirements, also maintain at all times in the form of
1863cash, investments that mature in less than 180 days allowable as
1864admitted assets by the Office of Insurance Regulation, and
1865restricted funds or deposits controlled by the agency or the
1866Office of Insurance Regulation, a surplus amount equal to one-
1867and-one-half times the entity's monthly Medicaid prepaid
1868revenues. As used in this subsection, the term "surplus" means
1869the entity's total assets minus total liabilities. If an
1870entity's surplus falls below an amount equal to one-and-one-half
1871times the entity's monthly Medicaid prepaid revenues, the agency
1872shall prohibit the entity from engaging in marketing and
1873preenrollment activities, shall cease to process new
1874enrollments, and shall not renew the entity's contract until the
1875required balance is achieved. The requirements of this
1876subsection do not apply:
1877     (a)  Where a public entity agrees to fund any deficit
1878incurred by the contracting entity; or
1879     (b)  Where the entity's performance and obligations are
1880guaranteed in writing by a guaranteeing organization which:
1881     1.  Has been in operation for at least 5 years and has
1882assets in excess of $50 million; or
1883     2.  Submits a written guarantee acceptable to the agency
1884which is irrevocable during the term of the contracting entity's
1885contract with the agency and, upon termination of the contract,
1886until the agency receives proof of satisfaction of all
1887outstanding obligations incurred under the contract.
1888     (17)(18)(a)  The agency may require an entity contracting
1889on a prepaid or fixed-sum basis to establish a restricted
1890insolvency protection account with a federally guaranteed
1891financial institution licensed to do business in this state. The
1892entity shall deposit into that account 5 percent of the
1893capitation payments made by the agency each month until a
1894maximum total of 2 percent of the total current contract amount
1895is reached. The restricted insolvency protection account may be
1896drawn upon with the authorized signatures of two persons
1897designated by the entity and two representatives of the agency.
1898If the agency finds that the entity is insolvent, the agency may
1899draw upon the account solely with the two authorized signatures
1900of representatives of the agency, and the funds may be disbursed
1901to meet financial obligations incurred by the entity under the
1902prepaid contract. If the contract is terminated, expired, or not
1903continued, the account balance must be released by the agency to
1904the entity upon receipt of proof of satisfaction of all
1905outstanding obligations incurred under this contract.
1906     (b)  The agency may waive the insolvency protection account
1907requirement in writing when evidence is on file with the agency
1908of adequate insolvency insurance and reinsurance that will
1909protect enrollees if the entity becomes unable to meet its
1910obligations.
1911     (18)(19)  An entity that contracts with the agency on a
1912prepaid or fixed-sum basis for the provision of Medicaid
1913services shall reimburse any hospital or physician that is
1914outside the entity's authorized geographic service area as
1915specified in its contract with the agency, and that provides
1916services authorized by the entity to its members, at a rate
1917negotiated with the hospital or physician for the provision of
1918services or according to the lesser of the following:
1919     (a)  The usual and customary charges made to the general
1920public by the hospital or physician; or
1921     (b)  The Florida Medicaid reimbursement rate established
1922for the hospital or physician.
1923     (19)(20)  When a merger or acquisition of a Medicaid
1924prepaid contractor has been approved by the Office of Insurance
1925Regulation pursuant to s. 628.4615, the agency shall approve the
1926assignment or transfer of the appropriate Medicaid prepaid
1927contract upon request of the surviving entity of the merger or
1928acquisition if the contractor and the other entity have been in
1929good standing with the agency for the most recent 12-month
1930period, unless the agency determines that the assignment or
1931transfer would be detrimental to the Medicaid recipients or the
1932Medicaid program. To be in good standing, an entity must not
1933have failed accreditation or committed any material violation of
1934the requirements of s. 641.52 and must meet the Medicaid
1935contract requirements. For purposes of this section, a merger or
1936acquisition means a change in controlling interest of an entity,
1937including an asset or stock purchase.
1938     (20)(21)  Any entity contracting with the agency pursuant
1939to this section to provide health care services to Medicaid
1940recipients is prohibited from engaging in any of the following
1941practices or activities:
1942     (a)  Practices that are discriminatory, including, but not
1943limited to, attempts to discourage participation on the basis of
1944actual or perceived health status.
1945     (b)  Activities that could mislead or confuse recipients,
1946or misrepresent the organization, its marketing representatives,
1947or the agency. Violations of this paragraph include, but are not
1948limited to:
1949     1.  False or misleading claims that marketing
1950representatives are employees or representatives of the state or
1951county, or of anyone other than the entity or the organization
1952by whom they are reimbursed.
1953     2.  False or misleading claims that the entity is
1954recommended or endorsed by any state or county agency, or by any
1955other organization which has not certified its endorsement in
1956writing to the entity.
1957     3.  False or misleading claims that the state or county
1958recommends that a Medicaid recipient enroll with an entity.
1959     4.  Claims that a Medicaid recipient will lose benefits
1960under the Medicaid program, or any other health or welfare
1961benefits to which the recipient is legally entitled, if the
1962recipient does not enroll with the entity.
1963     (c)  Granting or offering of any monetary or other valuable
1964consideration for enrollment, except as authorized by subsection
1965(24).
1966     (d)  Door-to-door solicitation of recipients who have not
1967contacted the entity or who have not invited the entity to make
1968a presentation.
1969     (e)  Solicitation of Medicaid recipients by marketing
1970representatives stationed in state offices unless approved and
1971supervised by the agency or its agent and approved by the
1972affected state agency when solicitation occurs in an office of
1973the state agency. The agency shall ensure that marketing
1974representatives stationed in state offices shall market their
1975managed care plans to Medicaid recipients only in designated
1976areas and in such a way as to not interfere with the recipients'
1977activities in the state office.
1978     (f)  Enrollment of Medicaid recipients.
1979     (21)(22)  The agency may impose a fine for a violation of
1980this section or the contract with the agency by a person or
1981entity that is under contract with the agency. With respect to
1982any nonwillful violation, such fine shall not exceed $2,500 per
1983violation. In no event shall such fine exceed an aggregate
1984amount of $10,000 for all nonwillful violations arising out of
1985the same action. With respect to any knowing and willful
1986violation of this section or the contract with the agency, the
1987agency may impose a fine upon the entity in an amount not to
1988exceed $20,000 for each such violation. In no event shall such
1989fine exceed an aggregate amount of $100,000 for all knowing and
1990willful violations arising out of the same action.
1991     (22)(23)  A health maintenance organization or a person or
1992entity exempt from chapter 641 that is under contract with the
1993agency for the provision of health care services to Medicaid
1994recipients may not use or distribute marketing materials used to
1995solicit Medicaid recipients, unless such materials have been
1996approved by the agency. The provisions of this subsection do not
1997apply to general advertising and marketing materials used by a
1998health maintenance organization to solicit both non-Medicaid
1999subscribers and Medicaid recipients.
2000     (23)(24)  Upon approval by the agency, health maintenance
2001organizations and persons or entities exempt from chapter 641
2002that are under contract with the agency for the provision of
2003health care services to Medicaid recipients may be permitted
2004within the capitation rate to provide additional health benefits
2005that the agency has found are of high quality, are practicably
2006available, provide reasonable value to the recipient, and are
2007provided at no additional cost to the state.
2008     (24)(25)  The agency shall utilize the statewide health
2009maintenance organization complaint hotline for the purpose of
2010investigating and resolving Medicaid and prepaid health plan
2011complaints, maintaining a record of complaints and confirmed
2012problems, and receiving disenrollment requests made by
2013recipients.
2014     (25)(26)  The agency shall require the publication of the
2015health maintenance organization's and the prepaid health plan's
2016consumer services telephone numbers and the "800" telephone
2017number of the statewide health maintenance organization
2018complaint hotline on each Medicaid identification card issued by
2019a health maintenance organization or prepaid health plan
2020contracting with the agency to serve Medicaid recipients and on
2021each subscriber handbook issued to a Medicaid recipient.
2022     (26)(27)  The agency shall establish a health care quality
2023improvement system for those entities contracting with the
2024agency pursuant to this section, incorporating all the standards
2025and guidelines developed by the Medicaid Bureau of the Health
2026Care Financing Administration as a part of the quality assurance
2027reform initiative. The system shall include, but need not be
2028limited to, the following:
2029     (a)  Guidelines for internal quality assurance programs,
2030including standards for:
2031     1.  Written quality assurance program descriptions.
2032     2.  Responsibilities of the governing body for monitoring,
2033evaluating, and making improvements to care.
2034     3.  An active quality assurance committee.
2035     4.  Quality assurance program supervision.
2036     5.  Requiring the program to have adequate resources to
2037effectively carry out its specified activities.
2038     6.  Provider participation in the quality assurance
2039program.
2040     7.  Delegation of quality assurance program activities.
2041     8.  Credentialing and recredentialing.
2042     9.  Enrollee rights and responsibilities.
2043     10.  Availability and accessibility to services and care.
2044     11.  Ambulatory care facilities.
2045     12.  Accessibility and availability of medical records, as
2046well as proper recordkeeping and process for record review.
2047     13.  Utilization review.
2048     14.  A continuity of care system.
2049     15.  Quality assurance program documentation.
2050     16.  Coordination of quality assurance activity with other
2051management activity.
2052     17.  Delivering care to pregnant women and infants; to
2053elderly and disabled recipients, especially those who are at
2054risk of institutional placement; to persons with developmental
2055disabilities; and to adults who have chronic, high-cost medical
2056conditions.
2057     (b)  Guidelines which require the entities to conduct
2058quality-of-care studies which:
2059     1.  Target specific conditions and specific health service
2060delivery issues for focused monitoring and evaluation.
2061     2.  Use clinical care standards or practice guidelines to
2062objectively evaluate the care the entity delivers or fails to
2063deliver for the targeted clinical conditions and health services
2064delivery issues.
2065     3.  Use quality indicators derived from the clinical care
2066standards or practice guidelines to screen and monitor care and
2067services delivered.
2068     (c)  Guidelines for external quality review of each
2069contractor which require: focused studies of patterns of care;
2070individual care review in specific situations; and followup
2071activities on previous pattern-of-care study findings and
2072individual-care-review findings. In designing the external
2073quality review function and determining how it is to operate as
2074part of the state's overall quality improvement system, the
2075agency shall construct its external quality review organization
2076and entity contracts to address each of the following:
2077     1.  Delineating the role of the external quality review
2078organization.
2079     2.  Length of the external quality review organization
2080contract with the state.
2081     3.  Participation of the contracting entities in designing
2082external quality review organization review activities.
2083     4.  Potential variation in the type of clinical conditions
2084and health services delivery issues to be studied at each plan.
2085     5.  Determining the number of focused pattern-of-care
2086studies to be conducted for each plan.
2087     6.  Methods for implementing focused studies.
2088     7.  Individual care review.
2089     8.  Followup activities.
2090     (27)(28)  In order to ensure that children receive health
2091care services for which an entity has already been compensated,
2092an entity contracting with the agency pursuant to this section
2093shall achieve an annual Early and Periodic Screening, Diagnosis,
2094and Treatment (EPSDT) Service screening rate of at least 60
2095percent for those recipients continuously enrolled for at least
20968 months. The agency shall develop a method by which the EPSDT
2097screening rate shall be calculated. For any entity which does
2098not achieve the annual 60 percent rate, the entity must submit a
2099corrective action plan for the agency's approval. If the entity
2100does not meet the standard established in the corrective action
2101plan during the specified timeframe, the agency is authorized to
2102impose appropriate contract sanctions. At least annually, the
2103agency shall publicly release the EPSDT Services screening rates
2104of each entity it has contracted with on a prepaid basis to
2105serve Medicaid recipients.
2106     (28)(29)  The agency shall perform enrollments and
2107disenrollments for Medicaid recipients who are eligible for
2108MediPass or managed care plans. Notwithstanding the prohibition
2109contained in paragraph (20)(21)(f), managed care plans may
2110perform preenrollments of Medicaid recipients under the
2111supervision of the agency or its agents. For the purposes of
2112this section, "preenrollment" means the provision of marketing
2113and educational materials to a Medicaid recipient and assistance
2114in completing the application forms, but shall not include
2115actual enrollment into a managed care plan. An application for
2116enrollment shall not be deemed complete until the agency or its
2117agent verifies that the recipient made an informed, voluntary
2118choice. The agency, in cooperation with the Department of
2119Children and Family Services, may test new marketing initiatives
2120to inform Medicaid recipients about their managed care options
2121at selected sites. The agency shall report to the Legislature on
2122the effectiveness of such initiatives. The agency may contract
2123with a third party to perform managed care plan and MediPass
2124enrollment and disenrollment services for Medicaid recipients
2125and is authorized to adopt rules to implement such services. The
2126agency may adjust the capitation rate only to cover the costs of
2127a third-party enrollment and disenrollment contract, and for
2128agency supervision and management of the managed care plan
2129enrollment and disenrollment contract.
2130     (29)(30)  Any lists of providers made available to Medicaid
2131recipients, MediPass enrollees, or managed care plan enrollees
2132shall be arranged alphabetically showing the provider's name and
2133specialty and, separately, by specialty in alphabetical order.
2134     (30)(31)  The agency shall establish an enhanced managed
2135care quality assurance oversight function, to include at least
2136the following components:
2137     (a)  At least quarterly analysis and followup, including
2138sanctions as appropriate, of managed care participant
2139utilization of services.
2140     (b)  At least quarterly analysis and followup, including
2141sanctions as appropriate, of quality findings of the Medicaid
2142peer review organization and other external quality assurance
2143programs.
2144     (c)  At least quarterly analysis and followup, including
2145sanctions as appropriate, of the fiscal viability of managed
2146care plans.
2147     (d)  At least quarterly analysis and followup, including
2148sanctions as appropriate, of managed care participant
2149satisfaction and disenrollment surveys.
2150     (e)  The agency shall conduct regular and ongoing Medicaid
2151recipient satisfaction surveys.
2152
2153The analyses and followup activities conducted by the agency
2154under its enhanced managed care quality assurance oversight
2155function shall not duplicate the activities of accreditation
2156reviewers for entities regulated under part III of chapter 641,
2157but may include a review of the finding of such reviewers.
2158     (31)(32)  Each managed care plan that is under contract
2159with the agency to provide health care services to Medicaid
2160recipients shall annually conduct a background check with the
2161Florida Department of Law Enforcement of all persons with
2162ownership interest of 5 percent or more or executive management
2163responsibility for the managed care plan and shall submit to the
2164agency information concerning any such person who has been found
2165guilty of, regardless of adjudication, or has entered a plea of
2166nolo contendere or guilty to, any of the offenses listed in s.
2167435.03.
2168     (32)(33)  The agency shall, by rule, develop a process
2169whereby a Medicaid managed care plan enrollee who wishes to
2170enter hospice care may be disenrolled from the managed care plan
2171within 24 hours after contacting the agency regarding such
2172request. The agency rule shall include a methodology for the
2173agency to recoup managed care plan payments on a pro rata basis
2174if payment has been made for the enrollment month when
2175disenrollment occurs.
2176     (33)(34)  The agency and entities that which contract with
2177the agency to provide health care services to Medicaid
2178recipients under this section or ss. 409.91211 and s. 409.9122
2179must comply with the provisions of s. 641.513 in providing
2180emergency services and care to Medicaid recipients and MediPass
2181recipients. Where feasible, safe, and cost-effective, the agency
2182shall encourage hospitals, emergency medical services providers,
2183and other public and private health care providers to work
2184together in their local communities to enter into agreements or
2185arrangements to ensure access to alternatives to emergency
2186services and care for those Medicaid recipients who need
2187nonemergent care. The agency shall coordinate with hospitals,
2188emergency medical services providers, private health plans,
2189capitated managed care networks as established in s. 409.91211,
2190and other public and private health care providers to implement
2191the provisions of ss. 395.1041(7), 409.91255(3)(g), 627.6405,
2192and 641.31097 to develop and implement emergency department
2193diversion programs for Medicaid recipients.
2194     (38)(39)(a)  The agency shall implement a Medicaid
2195prescribed-drug spending-control program that includes the
2196following components:
2197     11.a.  The agency shall implement a Medicaid prescription-
2198drug-management system. The agency may contract with a vendor
2199that has experience in operating prescription-drug-management
2200systems in order to implement this system. Any management system
2201that is implemented in accordance with this subparagraph must
2202rely on cooperation between physicians and pharmacists to
2203determine appropriate practice patterns and clinical guidelines
2204to improve the prescribing, dispensing, and use of drugs in the
2205Medicaid program. The agency may seek federal waivers to
2206implement this program.
2207     b.  The drug-management system must be designed to improve
2208the quality of care and prescribing practices based on best-
2209practice guidelines, improve patient adherence to medication
2210plans, reduce clinical risk, and lower prescribed drug costs and
2211the rate of inappropriate spending on Medicaid prescription
2212drugs. The program must:
2213     (I)  Provide for the development and adoption of best-
2214practice guidelines for the prescribing and use of drugs in the
2215Medicaid program, including translating best-practice guidelines
2216into practice; reviewing prescriber patterns and comparing them
2217to indicators that are based on national standards and practice
2218patterns of clinical peers in their community, statewide, and
2219nationally; and determine deviations from best-practice
2220guidelines.
2221     (II)  Implement processes for providing feedback to and
2222educating prescribers using best-practice educational materials
2223and peer-to-peer consultation.
2224     (III)  Assess Medicaid recipients who are outliers in their
2225use of a single or multiple prescription drugs with regard to
2226the numbers and types of drugs taken, drug dosages, combination
2227drug therapies, and other indicators of improper use of
2228prescription drugs.
2229     (IV)  Alert prescribers to patients who fail to refill
2230prescriptions in a timely fashion, are prescribed multiple drugs
2231that may be redundant or contraindicated, or may have other
2232potential medication problems.
2233     (V)  Track spending trends for prescription drugs and
2234deviation from best practice guidelines.
2235     (VI)  Use educational and technological approaches to
2236promote best practices, educate consumers, and train prescribers
2237in the use of practice guidelines.
2238     (VII)  Disseminate electronic and published materials.
2239     (VIII)  Hold statewide and regional conferences.
2240     (IX)  Implement disease-management programs in cooperation
2241with physicians and pharmacists, along with a model quality-
2242based medication component for individuals having chronic
2243medical conditions.
2244     12.  The agency is authorized to contract for drug rebate
2245administration, including, but not limited to, calculating
2246rebate amounts, invoicing manufacturers, negotiating disputes
2247with manufacturers, and maintaining a database of rebate
2248collections.
2249     13.  The agency may specify the preferred daily dosing form
2250or strength for the purpose of promoting best practices with
2251regard to the prescribing of certain drugs as specified in the
2252General Appropriations Act and ensuring cost-effective
2253prescribing practices.
2254     14.  The agency may require prior authorization for the
2255off-label use of Medicaid-covered prescribed drugs as specified
2256in the General Appropriations Act. The agency may, but is not
2257required to, preauthorize the use of a product for an indication
2258not in the approved labeling. Prior authorization may require
2259the prescribing professional to provide information about the
2260rationale and supporting medical evidence for the off-label use
2261of a drug.
2262     17.15.  The agency shall implement a return and reuse
2263program for drugs dispensed by pharmacies to institutional
2264recipients, which includes payment of a $5 restocking fee for
2265the implementation and operation of the program. The return and
2266reuse program shall be implemented electronically and in a
2267manner that promotes efficiency. The program must permit a
2268pharmacy to exclude drugs from the program if it is not
2269practical or cost-effective for the drug to be included and must
2270provide for the return to inventory of drugs that cannot be
2271credited or returned in a cost-effective manner. The agency
2272shall determine if the program has reduced the amount of
2273Medicaid prescription drugs which are destroyed on an annual
2274basis and if there are additional ways to ensure more
2275prescription drugs are not destroyed which could safely be
2276reused. The agency's conclusion and recommendations shall be
2277reported to the Legislature by December 1, 2005.
2278     (b)  The agency shall implement this subsection to the
2279extent that funds are appropriated to administer the Medicaid
2280prescribed-drug spending-control program. The agency may
2281contract all or any part of this program to private
2282organizations.
2283     (c)  The agency shall submit quarterly reports to the
2284Governor, the President of the Senate, and the Speaker of the
2285House of Representatives which must include, but need not be
2286limited to, the progress made in implementing this subsection
2287and its effect on Medicaid prescribed-drug expenditures.
2288     (39)(40)  Notwithstanding the provisions of chapter 287,
2289the agency may, at its discretion, renew a contract or contracts
2290for fiscal intermediary services one or more times for such
2291periods as the agency may decide; however, all such renewals may
2292not combine to exceed a total period longer than the term of the
2293original contract.
2294     (40)(41)  The agency shall provide for the development of a
2295demonstration project by establishment in Miami-Dade County of a
2296long-term-care facility licensed pursuant to chapter 395 to
2297improve access to health care for a predominantly minority,
2298medically underserved, and medically complex population and to
2299evaluate alternatives to nursing home care and general acute
2300care for such population. Such project is to be located in a
2301health care condominium and colocated with licensed facilities
2302providing a continuum of care. The establishment of this project
2303is not subject to the provisions of s. 408.036 or s. 408.039.
2304The agency shall report its findings to the Governor, the
2305President of the Senate, and the Speaker of the House of
2306Representatives by January 1, 2003.
2307     (41)(42)  The agency shall develop and implement a
2308utilization management program for Medicaid-eligible recipients
2309for the management of occupational, physical, respiratory, and
2310speech therapies. The agency shall establish a utilization
2311program that may require prior authorization in order to ensure
2312medically necessary and cost-effective treatments. The program
2313shall be operated in accordance with a federally approved waiver
2314program or state plan amendment. The agency may seek a federal
2315waiver or state plan amendment to implement this program. The
2316agency may also competitively procure these services from an
2317outside vendor on a regional or statewide basis.
2318     (42)(43)  The agency may contract on a prepaid or fixed-sum
2319basis with appropriately licensed prepaid dental health plans to
2320provide dental services.
2321     (43)(44)  The Agency for Health Care Administration shall
2322ensure that any Medicaid managed care plan as defined in s.
2323409.9122(2)(h), whether paid on a capitated basis or a shared
2324savings basis, is cost-effective. For purposes of this
2325subsection, the term "cost-effective" means that a network's
2326per-member, per-month costs to the state, including, but not
2327limited to, fee-for-service costs, administrative costs, and
2328case-management fees, must be no greater than the state's costs
2329associated with contracts for Medicaid services established
2330under subsection (3), which shall be actuarially adjusted for
2331case mix, model, and service area. The agency shall conduct
2332actuarially sound audits adjusted for case mix and model in
2333order to ensure such cost-effectiveness and shall publish the
2334audit results on its Internet website and submit the audit
2335results annually to the Governor, the President of the Senate,
2336and the Speaker of the House of Representatives no later than
2337December 31 of each year. Contracts established pursuant to this
2338subsection which are not cost-effective may not be renewed.
2339     (44)(45)  Subject to the availability of funds, the agency
2340shall mandate a recipient's participation in a provider lock-in
2341program, when appropriate, if a recipient is found by the agency
2342to have used Medicaid goods or services at a frequency or amount
2343not medically necessary, limiting the receipt of goods or
2344services to medically necessary providers after the 21-day
2345appeal process has ended, for a period of not less than 1 year.
2346The lock-in programs shall include, but are not limited to,
2347pharmacies, medical doctors, and infusion clinics. The
2348limitation does not apply to emergency services and care
2349provided to the recipient in a hospital emergency department.
2350The agency shall seek any federal waivers necessary to implement
2351this subsection. The agency shall adopt any rules necessary to
2352comply with or administer this subsection.
2353     (45)(46)  The agency shall seek a federal waiver for
2354permission to terminate the eligibility of a Medicaid recipient
2355who has been found to have committed fraud, through judicial or
2356administrative determination, two times in a period of 5 years.
2357     (46)(47)  The agency shall conduct a study of available
2358electronic systems for the purpose of verifying the identity and
2359eligibility of a Medicaid recipient. The agency shall recommend
2360to the Legislature a plan to implement an electronic
2361verification system for Medicaid recipients by January 31, 2005.
2362     (47)(48)  A provider is not entitled to enrollment in the
2363Medicaid provider network. The agency may implement a Medicaid
2364fee-for-service provider network controls, including, but not
2365limited to, competitive procurement and provider credentialing.
2366If a credentialing process is used, the agency may limit its
2367provider network based upon the following considerations:
2368beneficiary access to care, provider availability, provider
2369quality standards and quality assurance processes, cultural
2370competency, demographic characteristics of beneficiaries,
2371practice standards, service wait times, provider turnover,
2372provider licensure and accreditation history, program integrity
2373history, peer review, Medicaid policy and billing compliance
2374records, clinical and medical record audit findings, and such
2375other areas that are considered necessary by the agency to
2376ensure the integrity of the program.
2377     (48)(49)  The agency shall contract with established
2378minority physician networks that provide services to
2379historically underserved minority patients. The networks must
2380provide cost-effective Medicaid services, comply with the
2381requirements to be a MediPass provider, and provide their
2382primary care physicians with access to data and other management
2383tools necessary to assist them in ensuring the appropriate use
2384of services, including inpatient hospital services and
2385pharmaceuticals.
2386     (a)  The agency shall provide for the development and
2387expansion of minority physician networks in each service area to
2388provide services to Medicaid recipients who are eligible to
2389participate under federal law and rules.
2390     (b)  The agency shall reimburse each minority physician
2391network as a fee-for-service provider, including the case
2392management fee for primary care, or as a capitated rate provider
2393for Medicaid services. Any savings shall be shared with the
2394minority physician networks pursuant to the contract.
2395     (c)  For purposes of this subsection, the term "cost-
2396effective" means that a network's per-member, per-month costs to
2397the state, including, but not limited to, fee-for-service costs,
2398administrative costs, and case-management fees, must be no
2399greater than the state's costs associated with contracts for
2400Medicaid services established under subsection (3), which shall
2401be actuarially adjusted for case mix, model, and service area.
2402The agency shall conduct actuarially sound audits adjusted for
2403case mix and model in order to ensure such cost-effectiveness
2404and shall publish the audit results on its Internet website and
2405submit the audit results annually to the Governor, the President
2406of the Senate, and the Speaker of the House of Representatives
2407no later than December 31. Contracts established pursuant to
2408this subsection which are not cost-effective may not be renewed.
2409     (d)  The agency may apply for any federal waivers needed to
2410implement this subsection.
2411     (50)  To the extent permitted by federal law and as allowed
2412under s. 409.906, the agency shall provide reimbursement for
2413emergency mental health care services for Medicaid recipients in
2414crisis-stabilization facilities licensed under s. 394.875 as
2415long as those services are less expensive than the same services
2416provided in a hospital setting.
2417     Section 4.  Paragraphs (a) and (j) of subsection (2) of
2418section 409.9122, Florida Statutes, are amended to read:
2419     409.9122  Mandatory Medicaid managed care enrollment;
2420programs and procedures.--
2421     (2)(a)  The agency shall enroll in a managed care plan or
2422MediPass all Medicaid recipients, except those Medicaid
2423recipients who are: in an institution; enrolled in the Medicaid
2424medically needy program; or eligible for both Medicaid and
2425Medicare. Upon enrollment, individuals will be able to change
2426their managed care option during the 90-day opt out period
2427required by federal Medicaid regulations. The agency is
2428authorized to seek the necessary Medicaid state plan amendment
2429to implement this policy. However, to the extent permitted by
2430federal law, the agency may enroll in a managed care plan or
2431MediPass a Medicaid recipient who is exempt from mandatory
2432managed care enrollment, provided that:
2433     1.  The recipient's decision to enroll in a managed care
2434plan or MediPass is voluntary;
2435     2.  If the recipient chooses to enroll in a managed care
2436plan, the agency has determined that the managed care plan
2437provides specific programs and services which address the
2438special health needs of the recipient; and
2439     3.  The agency receives any necessary waivers from the
2440federal Centers for Medicare and Medicaid Services Health Care
2441Financing Administration.
2442
2443The agency shall develop rules to establish policies by which
2444exceptions to the mandatory managed care enrollment requirement
2445may be made on a case-by-case basis. The rules shall include the
2446specific criteria to be applied when making a determination as
2447to whether to exempt a recipient from mandatory enrollment in a
2448managed care plan or MediPass. School districts participating in
2449the certified school match program pursuant to ss. 409.908(21)
2450and 1011.70 shall be reimbursed by Medicaid, subject to the
2451limitations of s. 1011.70(1), for a Medicaid-eligible child
2452participating in the services as authorized in s. 1011.70, as
2453provided for in s. 409.9071, regardless of whether the child is
2454enrolled in MediPass or a managed care plan. Managed care plans
2455shall make a good faith effort to execute agreements with school
2456districts regarding the coordinated provision of services
2457authorized under s. 1011.70. County health departments
2458delivering school-based services pursuant to ss. 381.0056 and
2459381.0057 shall be reimbursed by Medicaid for the federal share
2460for a Medicaid-eligible child who receives Medicaid-covered
2461services in a school setting, regardless of whether the child is
2462enrolled in MediPass or a managed care plan. Managed care plans
2463shall make a good faith effort to execute agreements with county
2464health departments regarding the coordinated provision of
2465services to a Medicaid-eligible child. To ensure continuity of
2466care for Medicaid patients, the agency, the Department of
2467Health, and the Department of Education shall develop procedures
2468for ensuring that a student's managed care plan or MediPass
2469provider receives information relating to services provided in
2470accordance with ss. 381.0056, 381.0057, 409.9071, and 1011.70.
2471     (j)  The agency shall apply for a federal waiver from the
2472Centers for Medicare and Medicaid Services Health Care Financing
2473Administration to lock eligible Medicaid recipients into a
2474managed care plan or MediPass for 12 months after an open
2475enrollment period. After 12 months' enrollment, a recipient may
2476select another managed care plan or MediPass provider. However,
2477nothing shall prevent a Medicaid recipient from changing primary
2478care providers within the managed care plan or MediPass program
2479during the 12-month period.
2480     Section 5.  Subsection (2) of section 409.913, Florida
2481Statutes, is amended, and subsection (36) is added to that
2482section, to read:
2483     409.913  Oversight of the integrity of the Medicaid
2484program.--The agency shall operate a program to oversee the
2485activities of Florida Medicaid recipients, and providers and
2486their representatives, to ensure that fraudulent and abusive
2487behavior and neglect of recipients occur to the minimum extent
2488possible, and to recover overpayments and impose sanctions as
2489appropriate. Beginning January 1, 2003, and each year
2490thereafter, the agency and the Medicaid Fraud Control Unit of
2491the Department of Legal Affairs shall submit a joint report to
2492the Legislature documenting the effectiveness of the state's
2493efforts to control Medicaid fraud and abuse and to recover
2494Medicaid overpayments during the previous fiscal year. The
2495report must describe the number of cases opened and investigated
2496each year; the sources of the cases opened; the disposition of
2497the cases closed each year; the amount of overpayments alleged
2498in preliminary and final audit letters; the number and amount of
2499fines or penalties imposed; any reductions in overpayment
2500amounts negotiated in settlement agreements or by other means;
2501the amount of final agency determinations of overpayments; the
2502amount deducted from federal claiming as a result of
2503overpayments; the amount of overpayments recovered each year;
2504the amount of cost of investigation recovered each year; the
2505average length of time to collect from the time the case was
2506opened until the overpayment is paid in full; the amount
2507determined as uncollectible and the portion of the uncollectible
2508amount subsequently reclaimed from the Federal Government; the
2509number of providers, by type, that are terminated from
2510participation in the Medicaid program as a result of fraud and
2511abuse; and all costs associated with discovering and prosecuting
2512cases of Medicaid overpayments and making recoveries in such
2513cases. The report must also document actions taken to prevent
2514overpayments and the number of providers prevented from
2515enrolling in or reenrolling in the Medicaid program as a result
2516of documented Medicaid fraud and abuse and must recommend
2517changes necessary to prevent or recover overpayments.
2518     (2)  The agency shall conduct, or cause to be conducted by
2519contract or otherwise, reviews, investigations, analyses,
2520audits, or any combination thereof, to determine possible fraud,
2521abuse, overpayment, or recipient neglect in the Medicaid program
2522and shall report the findings of any overpayments in audit
2523reports as appropriate. At least 5 percent of all audits shall
2524be conducted on a random basis.
2525     (36)  The agency shall provide to each Medicaid recipient
2526or his or her representative an explanation of benefits in the
2527form of a letter that is mailed to the most recent address of
2528the recipient on the record with the Department of Children and
2529Family Services. The explanation of benefits must include the
2530patient's name, the name of the health care provider and the
2531address of the location where the service was provided, a
2532description of all services billed to Medicaid in terminology
2533that should be understood by a reasonable person, and
2534information on how to report inappropriate or incorrect billing
2535to the agency or other law enforcement entities for review or
2536investigation.
2537     Section 6.  The Agency for Health Care Administration shall
2538submit to the Legislature by January 15, 2006, recommendations
2539to ensure that Medicaid is the payer of last resort as required
2540by section 409.910, Florida Statutes. The report must identify
2541the public and private entities that are liable for primary
2542payment of health care services and recommend methods to improve
2543enforcement of third-party liability responsibility and
2544repayment of benefits to the state Medicaid program. The report
2545must estimate the potential recoveries that may be achieved
2546through third-party liability efforts if administrative and
2547legal barriers are removed. The report must recommend whether
2548modifications to the agency's contingency-fee contract for
2549third-party liability could enhance third-party liability for
2550benefits provided to Medicaid recipients.
2551     Section 7.  By January 15, 2006, the Office of Program
2552Policy Analysis and Government Accountability shall submit to
2553the Legislature a study of the long-term care community
2554diversion pilot project authorized under ss. 430.701-430.709.
2555The study may be conducted by Office of Program Policy Analysis
2556and Government Accountability staff or by a consultant obtained
2557through a competitive bid. The study must use a statistically-
2558valid methodology to assess the percent of persons served in the
2559project over a 2-year period who would have required Medicaid
2560nursing home services without the diversion services, which
2561services are most frequently used, and which services are least
2562frequently used. The study must determine whether the project is
2563cost-effective or is an expansion of the Medicaid program
2564because a preponderance of the project enrollees would not have
2565required Medicaid nursing home services within a 2-year period
2566regardless of the availability of the project or that the
2567enrollees could have been safely served through another Medicaid
2568program at a lower cost to the state.
2569     Section 8.  The Agency for Health Care Administration shall
2570identify how many individuals in the long-term care diversion
2571programs who receive care at home have a patient-responsibility
2572payment associated with their participation in the diversion
2573program. If no system is available to assess this information,
2574the agency shall determine the cost of creating a system to
2575identify and collect these payments and whether the cost of
2576developing a system for this purpose is offset by the amount of
2577patient-responsibility payments which could be collected with
2578the system. The agency shall report this information to the
2579Legislature by December 1, 2005.
2580     Section 9.  This act shall take effect July 1, 2005.


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