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

1	A bill to be entitled
2	An act relating to Medicaid reform; providing a popular
3	name; providing legislative findings and intent; providing
4	waiver authority to the Agency for Health Care
5	Administration; providing for implementation of
6	demonstration projects; providing definitions; identifying
7	categorical groups for eligibility under the waiver;
8	establishing the choice counseling process; providing for
9	disenrollment in a plan during a specified period of time;
10	providing conditions for changes; requiring managed care
11	plans to include mandatory Medicaid services; requiring
12	managed care plans to provide a wellness and disease
13	management program, pharmacy benefits, behavioral health
14	care benefits, and a grievance resolution process;
15	authorizing the agency to establish enhanced benefit
16	coverage and providing procedures therefor; establishing
17	flexible spending accounts; providing for cost sharing by
18	recipients, and requirements; requiring the agency to
19	submit a report to the Legislature relating to enforcement
20	of Medicaid copayment requirements and other measures;
21	providing for the agency to establish a catastrophic
22	coverage fund or purchase stop-loss coverage to cover
23	certain services; requiring a managed care plan to have a
24	certificate of operation from the agency before operating
25	under the waiver; providing certification requirements;
26	providing for reimbursement of provider service networks;
27	providing an exemption from competitive bid requirements
28	for provider service networks under certain circumstances;
29	providing for continuance of contracts previously awarded
30	for a specified period of time; requiring the agency to
31	have accountability and quality assurance standards;
32	requiring the agency to establish a medical care database;
33	providing data collection requirements; requiring certain
34	entities certified to operate a managed care plan to
35	comply with ss. 641.3155 and 641.513, F.S.; providing for
36	the agency to develop a rate setting and risk adjustment
37	system; authorizing the agency to allow recipients to opt
38	out of Medicaid and purchase health care coverage through
39	an employer-sponsored insurer; requiring the agency to
40	apply and enforce certain provisions of law relating to
41	Medicaid fraud and abuse; providing penalties; requiring
42	the agency to develop a reimbursement system for school
43	districts participating in the certified school match
44	program; providing for integrated fixed payment delivery
45	system for Medicaid recipients who are a certain age;
46	authorizing the agency to implement the system in certain
47	counties; providing exceptions; requiring the agency to
48	provide a choice of managed care plans to recipients;
49	providing requirements for managed care plans; requiring
50	the agency to withhold certain funding contingent upon the
51	performance of a plan; requiring the plan to rebate
52	certain profits to the agency; authorizing the agency to
53	limit the number of enrollees in a plan under certain
54	circumstances; providing for eligibility determination and
55	choice counseling for persons who are a certain age;
56	requiring the agency to evaluate the medical loss ratios
57	of certain managed care plans; authorizing the agency to
58	adopt rules for minimum loss ratios; providing for
59	imposition of liquidated damages; authorizing the agency
60	to grant a modification of certificate-of-need conditions
61	to nursing homes under certain circumstances; requiring
62	integration of Medicare and Medicaid services; providing
63	legislative intent; providing for awarding of funds for
64	managed care delivery system development, contingent upon
65	an appropriation; requiring the Office of Program Policy
66	Analysis and Government Accountability conduct a study of
67	the feasibility of establishing a Medicaid buy-in program
68	for certain non-Medicaid eligible persons; requiring the
69	office to submit a report to the Legislature; providing
70	applicability; granting rulemaking authority to the
71	agency; requiring legislative authority to implement the
72	waiver; requiring the Office of Program Policy Analysis
73	and Government Accountability to evaluate the Medicaid
74	reform waiver and issue reports; requiring the agency to
75	submit status reports; requiring the agency to contract
76	for certain evaluation comparisons; providing for future
77	review and repeal of the act; amending s. 409.912, F.S.;
78	requiring the Agency for Health Care Administration to
79	contract with a vendor to monitor and evaluate the
80	clinical practice patterns of providers; authorizing the
81	agency to competitively bid for single-source providers
82	for certain services; authorizing the agency to examine
83	whether purchasing certain durable medical equipment is
84	more cost-effective than long-term rental of such
85	equipment; providing that a contract awarded to a provider
86	service network remains in effect for a certain period;
87	defining a provider service network; providing health care
88	providers with a controlling interest in the governing
89	body of the provider service network organization;
90	requiring that the agency, in partnership with the
91	Department of Elderly Affairs, develop an integrated,
92	fixed-payment delivery system for Medicaid recipients age
93	60 and older; deleting an obsolete provision requiring the
94	agency to develop a plan for implementing emergency and
95	crisis care; requiring the agency to develop a system
96	where health care vendors may provide data demonstrating
97	that higher reimbursement for a good or service will be
98	offset by cost savings in other goods or services;
99	requiring the Comprehensive Assessment and Review for
100	Long-Term Care Services (CARES) teams to consult with any
101	person making a determination that a nursing home resident
102	funded by Medicare is not making progress toward
103	rehabilitation and assist in any appeals of the decision;
104	requiring the agency to contract with an entity to design
105	a clinical-utilization information database or electronic
106	medical record for Medicaid providers; requiring that the
107	agency develop a plan to expand disease-management
108	programs; requiring the agency to coordinate with other
109	entities to create emergency room diversion programs for
110	Medicaid recipients; revising the Medicaid prescription
111	drug spending control program to reduce costs and improve
112	Medicaid recipient safety; requiring that the agency
113	implement a Medicaid prescription drug management system;
114	allowing the agency to require age-related prior
115	authorizations for certain prescription drugs; requiring
116	the agency to determine the extent that prescription drugs
117	are returned and reused in institutional settings and
118	whether this program could be expanded; requiring the
119	agency to develop an in-home, all-inclusive program of
120	services for Medicaid children with life-threatening
121	illnesses; authorizing the agency to pay for emergency
122	mental health services provided through licensed crisis
123	stabilization centers; creating s. 409.91211, F.S.;
124	requiring that the agency develop a pilot program for
125	capitated managed care networks to deliver Medicaid health
126	care services for all eligible Medicaid recipients in
127	Medicaid fee-for-service or the MediPass program;
128	authorizing the agency to include an alternative
129	methodology for making additional Medicaid payments to
130	hospitals; providing legislative intent; providing powers,
131	duties, and responsibilities of the agency under the pilot
132	program; requiring that the agency provide a plan to the
133	Legislature for implementing the pilot program; requiring
134	that the Office of Program Policy Analysis and Government
135	Accountability, in consultation with the Auditor General,
136	evaluate the pilot program and report to the Governor and
137	the Legislature on whether it should be expanded
138	statewide; amending s. 409.9122, F.S.; revising a
139	reference; amending s. 409.913, F.S.; requiring 5 percent
140	of all program integrity audits to be conducted on a
141	random basis; requiring that Medicaid recipients be
142	provided with an explanation of benefits; requiring that
143	the agency report to the Legislature on the legal and
144	administrative barriers to enforcing the copayment
145	requirements of s. 409.9081, F.S.; requiring the agency to
146	recommend ways to ensure that Medicaid is the payer of
147	last resort; requiring the agency to conduct a study of
148	provider pay-for-performance systems; requiring the Office
149	of Program Policy Analysis and Government Accountability
150	to conduct a study of the long-term care diversion
151	programs; requiring the agency to evaluate the cost-saving
152	potential of contracting with a multistate prescription
153	drug purchasing pool; requiring the agency to determine
154	how many individuals in long-term care diversion programs
155	have a patient payment responsibility that is not being
156	collected and to recommend how to collect such payments;
157	requiring the Office of Program Policy Analysis and
158	Government Accountability to conduct a study of Medicaid
159	buy-in programs to determine if these programs can be
160	created in this state without expanding the overall
161	Medicaid program budget or if the Medically Needy program
162	can be changed into a Medicaid buy-in program; providing
163	an appropriation for the purpose of contracting to monitor
164	and evaluate clinical practice patterns; providing an
165	appropriation for the purpose of contracting for the
166	database to review real-time utilization of Medicaid
167	services; providing an appropriation for the purpose of
168	developing infrastructure and administrative resources
169	necessary to implement the pilot project as created in s.
170	409.91211, F.S.; providing an appropriation for developing
171	an encounter data system for Medicaid managed care plans;
172	providing appropriations; providing an effective date.
173
174	Be 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
180	Administration is authorized to seek experimental, pilot, or
181	demonstration project waivers, pursuant to s. 1115 of the Social
182	Security Act, to reform the Florida Medicaid program pursuant to
183	this section. The initial phase shall be in two geographic
184	areas. One pilot program shall include only Broward County. A
185	second pilot program shall initially include Duval County and
186	shall be expanded to include Baker, Clay, and Nassau Counties
187	within the timeframes approved in the implementation plan. This
188	waiver authority is contingent upon federal approval to preserve
189	the upper-payment-limit funding mechanisms for hospitals and
190	contingent upon protection of the disproportionate share program
191	authorized pursuant to chapter 409, Florida Statutes. The agency
192	is directed to negotiate with the Centers for Medicare and
193	Medicaid Services to include in the approved waiver a
194	methodology whereby savings from the demonstration waiver shall
195	be used to increase total upper-payment-limit and
196	disproportionate share payments. Any increased funds shall be
197	reinvested in programs that provide direct services to uninsured
198	individuals in a cost-effective manner and reduce reliance on
199	hospital emergency care.
200	(3)  IMPLEMENTATION OF DEMONSTRATION PROJECTS.--The agency
201	shall include in the federal waiver request the authority to
202	establish managed care demonstration projects as provided in
203	this section and as approved by the Legislature in the waiver.
204	It is the intent of the Legislature that the agency shall design
205	a demonstration project to initiate a statewide phase-in of
206	reform of the Medicaid program pursuant to this act.
207	Implementation of each phase of reform shall be contingent upon
208	approval of the Legislature or the Legislative Budget Commission
209	if 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
212	Administration.
213	(b)  "Enhanced benefit coverage" means additional health
214	care services or alternative health care coverage which can be
215	purchased by qualified recipients.
216	(c)  "Flexible spending account" means an account that
217	encourages consumer ownership and management of resources
218	available for enhanced benefit coverage, wellness activities,
219	preventive services, and other services to improve the health of
220	the recipient.
221	(d)  "Managed care plan" or "plan" means an entity
222	certified by the agency to accept a capitation payment,
223	including, but not limited to, a health maintenance organization
224	authorized under part I of chapter 641, Florida Statutes; an
225	entity under part II or part III of chapter 641, Florida
226	Statutes, or under chapter 627, chapter 636, chapter 391, or s.
227	409.912, Florida Statutes; a licensed mental health provider
228	under chapter 394, Florida Statutes; a licensed substance abuse
229	provider under chapter 397, Florida Statutes; a hospital under
230	chapter 395, Florida Statutes; a provider service network as
231	defined in this section; or a state-certified contractor as
232	defined in this section.
233	(e)  "Medicaid opt-out option" means a program that allows
234	a recipient to purchase health care insurance through an
235	employer-sponsored plan instead of through a Medicaid-certified
236	plan.
237	(f)  "Plan benefits" means the mandatory services specified
238	in s. 409.905, Florida Statutes; behavioral health services
239	specified in s. 409.906(8), Florida Statutes; pharmacy services
240	specified in s. 409.906(20), Florida Statutes; and other
241	services, including, but not limited to, Medicaid optional
242	services specified in s. 409.906, Florida Statutes, for which a
243	plan is receiving a risk-adjusted capitation rate. Services to
244	recipients under plan benefits shall include emergency services
245	pursuant to s. 409.9128, Florida Statutes, and must include
246	pharmacy and behavioral health services as medically
247	appropriate.
248	1.  A plan shall be at risk for all services as defined in
249	this section needed by a recipient up to a monetary catastrophic
250	threshold pursuant to this section.
251	2.  Catastrophic coverage pursuant to this section shall
252	not release the plan from continued care management of the
253	recipient and providing other services as stipulated in the
254	contract with the agency.
255	(g)  "Provider service network" means an incorporated
256	network:
257	1.  Established or organized, and operated, by a health
258	care provider or group of affiliated health care providers;
259	2.  That provides a substantial proportion of the health
260	care items and services under a contract directly through the
261	provider or affiliated group;
262	3.  That may make arrangements with physicians, other
263	health care professionals, and health care institutions, to
264	assume all or part of the financial risk on a prospective basis
265	for the provision of basic health services; and
266	4.  Within which health care providers have a controlling
267	interest in the governing body of the provider service network
268	organization, as authorized by s. 409.912, Florida Statutes.
269	(h)  "Shall" means the agency must include the provision of
270	a subsection as delineated in this section in the waiver
271	application and implement the provision to the extent allowed in
272	the demonstration project sites by the Centers for Medicare and
273	Medicaid Services and as approved by the Legislature pursuant to
274	this section.
275	(i)  "State-certified contractor" means an entity not
276	authorized under part I, part II, or part III of chapter 641,
277	Florida Statutes, or under chapter 624, chapter 627, or chapter
278	636, Florida Statutes, qualified by the agency to be certified
279	as a managed care plan. The agency shall develop the standards
280	necessary to authorize an entity to become a state-certified
281	contractor.
282	(5)  ELIGIBILITY.--
283	(a)  The agency shall pursue waivers to reform Medicaid for
284	the following categorical groups:
285	1.  Temporary Assistance for Needy Families, consistent
286	with ss. 402 and 1931 of the Social Security Act and chapter
287	409, chapter 414, or chapter 445, Florida Statutes.
288	2.  Supplemental Security Income recipients as defined in
289	Title XVI of the Social Security Act, except for persons who are
290	dually eligible for Medicaid and Medicare, individuals 60 years
291	of age or older, individuals who have developmental
292	disabilities, and residents of institutions or nursing homes.
293	3.  All children covered pursuant to Title XIX of the
294	Social Security Act.
295	(b)  The agency may pursue any appropriate federal waiver
296	to reform Medicaid for the populations not identified by this
297	subsection, including Title XXI children, if authorized by the
298	Legislature.
299	(6)  CHOICE COUNSELING.--
300	(a)  At the time of eligibility determination, the agency
301	shall provide the recipient with all the Medicaid health care
302	options available in that community to assist the recipient in
303	choosing health care coverage. The recipient shall choose a plan
304	within 30 days after the recipient is eligible unless the
305	recipient loses eligibility. Failure to choose a plan within 30
306	days will result in the recipient being assigned to a managed
307	care plan.
308	(b)  After a recipient has chosen a plan or has been
309	assigned to a plan, the recipient shall have 90 days in which to
310	voluntarily disenroll and select another managed care plan.
311	After 90 days, no further changes may be made except for cause.
312	Cause shall include, but not be limited to, poor quality of
313	care, lack of access to necessary specialty services, an
314	unreasonable delay or denial of service, inordinate or
315	inappropriate changes of primary care providers, service access
316	impairments due to significant changes in the geographic
317	location of services, or fraudulent enrollment. The agency may
318	require a recipient to use the managed care plan's grievance
319	process prior to the agency's determination of cause, except in
320	cases in which immediate risk of permanent damage to the
321	recipient's health is alleged. The grievance process, when used,
322	must be completed in time to permit the recipient to disenroll
323	no later than the first day of the second month after the month
324	the disenrollment request was made. If the capitated managed
325	care network, as a result of the grievance process, approves an
326	enrollee's request to disenroll, the agency is not required to
327	make a determination in the case. The agency must make a
328	determination and take final action on a recipient's request so
329	that disenrollment occurs no later than the first day of the
330	second month after the month the request was made. If the agency
331	fails to act within the specified timeframe, the recipient's
332	request to disenroll is deemed to be approved as of the date
333	agency action was required. Recipients who disagree with the
334	agency's finding that cause does not exist for disenrollment
335	shall be advised of their right to pursue a Medicaid fair
336	hearing to dispute the agency's finding.
337	(c)  In the managed care demonstration projects, the
338	Medicaid recipients who are already enrolled in a managed care
339	plan shall remain with that plan until their next eligibility
340	determination. The agency shall develop a method whereby newly
341	eligible Medicaid recipients, Medicaid recipients with renewed
342	eligibility, and Medipass enrollees shall enroll in managed care
343	plans certified pursuant to this section.
344	(d)  A Medicaid recipient receiving services under this
345	section is eligible for only emergency services until the
346	recipient enrolls in a managed care plan. Emergency services
347	provided under this paragraph shall be reimbursed on a fee-for-
348	service basis.
349	(e)  The agency shall ensure that the recipient is provided
350	with:
351	1.  A list and description of the benefits provided.
352	2.  Information about cost sharing.
353	3.  Plan performance data, if available.
354	4.  An explanation of benefit limitations.
355	5.  Contact information, including identification of
356	providers participating in the network, geographic locations,
357	and transportation limitations.
358	6.  Any other information the agency determines would
359	facilitate a recipient's understanding of the plan or insurance
360	that would best meet his or her needs.
361	(f)  The agency shall ensure that there is a record of
362	recipient acknowledgment that choice counseling has been
363	provided.
364	(g)  To accommodate the needs of recipients, the agency
365	shall ensure that the choice counseling process and related
366	material are designed to provide counseling through face-to-face
367	interaction, by telephone, and in writing and through other
368	forms of relevant media. Materials shall be written at the
369	fourth-grade reading level and available in a language other
370	than English when 5 percent of the county speaks a language
371	other than English. Choice counseling shall also utilize
372	language lines and other services for impaired recipients, such
373	as TTD/TTY.
374	(h)  The agency shall require the entity performing choice
375	counseling to determine if the recipient has made a choice of a
376	plan or has opted out because of duress, threats, payment to the
377	recipient, or incentives promised to the recipient by a third
378	party. If the choice counseling entity determines that the
379	decision to choose a plan was unlawfully influenced or a plan
380	violated any of the provisions of s. 409.912(21), Florida
381	Statutes, the choice counseling entity shall immediately report
382	the violation to the agency's program integrity section for
383	investigation. Verification of choice counseling by the
384	recipient shall include a stipulation that the recipient
385	acknowledges the provisions of this subsection.
386	(i)  It is the intent of the Legislature, within the
387	authority of the waiver and within available resources, that the
388	agency promote health literacy and partner with the Department
389	of Health to provide information aimed to reduce minority health
390	disparities through outreach activities for Medicaid recipients.
391	(j)  The agency is authorized to contract with entities to
392	perform choice counseling and may establish standards and
393	performance contracts, including standards requiring the
394	contractor to hire choice counselors representative of the
395	state's diverse population and to train choice counselors in
396	working with culturally diverse populations.
397	(k)  The agency shall develop processes to ensure that
398	demonstration sites have sufficient levels of enrollment to
399	conduct a valid test of the managed care demonstration project
400	model within a 2-year timeframe.
401	(7)  PLANS.--
402	(a)  Plan benefits.--The agency shall develop a capitated
403	system of care that promotes choice and competition. Plan
404	benefits shall include the mandatory services delineated in
405	federal law and specified in s. 409.905, Florida Statutes;
406	behavioral health services specified in s. 409.906(8), Florida
407	Statutes; pharmacy services specified in s. 409.906(20), Florida
408	Statutes; and other services including, but not limited to,
409	Medicaid optional services specified in s. 409.906, Florida
410	Statutes, for which a plan is receiving a risk-adjusted
411	capitation rate. Services to recipients under plan benefits
412	shall include emergency services pursuant to s. 409.9128,
413	Florida Statutes, and must include pharmacy and behavioral
414	health services as medically appropriate.
415	1.  A plan shall be at risk for all services as defined in
416	this section needed by a recipient up to a monetary catastrophic
417	threshold pursuant to this section.
418	2.  Catastrophic coverage pursuant to this section shall
419	not release the plan from continued care management of the
420	recipient and providing other services as stipulated in the
421	contract with the agency.
422	(b)  Wellness and disease management.--
423	1.  The agency shall require plans to provide a wellness
424	disease management program for certain Medicaid recipients
425	participating in the waiver. The agency shall require plans to
426	develop disease management programs necessary to meet the needs
427	of the population they serve.
428	2.  The agency shall require a plan to develop appropriate
429	disease management protocols and develop procedures for
430	implementing those protocols, and determine the procedure for
431	providing disease management services to plan enrollees. The
432	agency is authorized to allow a plan to contract separately with
433	another entity for disease management services or provide
434	disease management services directly through the plan.
435	3.  The agency shall provide oversight to ensure that the
436	service network provides the contractually agreed upon level of
437	service.
438	4.  The agency may establish performance contracts that
439	reward a plan when measurable operational targets in both
440	participation and clinical outcomes are reached or exceeded by
441	the plan.
442	5.  The agency may establish performance contracts that
443	penalize a plan when measurable operational targets for both
444	participation and clinical outcomes are not reached by the plan.
445	6.  The agency shall develop oversight requirements and
446	procedures to ensure that plans utilize standardized methods and
447	clinical protocols for determining compliance with a wellness or
448	disease management plan.
449	(c)  Pharmacy benefits.--
450	1.  The agency may set standards for pharmacy benefits for
451	managed care plans and specify the therapeutic classes of
452	pharmacy benefits to enable a plan to coordinate and fully
453	manage all aspects of patient care as part of the plan or
454	through a pharmacy benefits manager.
455	2.  Each plan shall implement a pharmacy fraud, waste, and
456	abuse initiative that may include a surety bond or letter of
457	credit requirement for participating pharmacies, enhanced
458	provider auditing practices, the use of additional fraud and
459	abuse software, recipient management programs for recipients
460	inappropriately using their benefits, and other measures to
461	reduce provider and recipient fraud, waste, and abuse. The
462	initiative shall address enforcement efforts to reduce the
463	number and use of counterfeit prescriptions.
464	3.  The agency shall require plans to report incidences of
465	pharmacy fraud and abuse and establish procedures for receiving
466	and investigating fraud and abuse reports from plans in the
467	demonstration project sites. Plans must report instances of
468	fraud and abuse pursuant to chapter 641, Florida Statutes.
469	4.  The agency may facilitate the establishment of a
470	Florida managed care plan purchasing alliance. The purpose of
471	the alliance is to form agreements among participating plans to
472	purchase pharmaceuticals at a discount, to achieve rebates, or
473	to receive best market price adjustments. Participation in the
474	Florida managed care plan purchasing alliance shall be
475	voluntary.
476	(d)  Behavioral health care benefits. --
477	1.  Managed care plans shall require their contracted
478	behavioral health providers to have a member's behavioral
479	treatment plan on file in the provider's medical record.
480	2. Managed care plans are encouraged to contract with
481	specialty mental health providers.
482	(e)  Grievance resolution process.--A grievance resolution
483	process shall be established that uses the subscriber assistance
484	panel, as created in s. 408.7056, Florida Statutes, and the
485	Medicaid fair hearing process to address grievances.
486	(8)  ENHANCED BENEFIT COVERAGE.--
487	(a)  The agency may establish enhanced benefit coverage and
488	a methodology to fund the enhanced benefit coverage within funds
489	provided in the General Appropriations Act.
490	(b)  A recipient who complies with the objectives of a
491	wellness or disease management plan, as determined by the
492	agency, shall have access to the enhanced benefit coverage for
493	the purpose of purchasing or securing health-care services or
494	health-care products.
495	(c)  The agency shall establish flexible spending accounts
496	or similar accounts for recipients as approved in the waiver to
497	be administered by the agency or by a managed care plan. The
498	agency shall make deposits to a recipient's flexible spending
499	account contingent upon compliance with a wellness plan or a
500	disease management plan.
501	(d)  It is the intent of the Legislature that enhanced
502	benefits encourage consumer participation in wellness
503	activities, preventive services, and other services to improve
504	the health of the recipient.
505	(e)  The agency shall develop standards and oversight
506	procedures to monitor access to enhanced benefits during the
507	eligibility period and up to 3 years after loss of eligibility
508	as approved by the waiver.
509	(f)  It is the intent of the Legislature that the agency
510	may develop an electronic benefit transfer system for the
511	distribution of enhanced benefit funds earned by the recipient.
512	(9)  COST SHARING; REPORT.--The Agency for Health Care
513	Administration shall submit to the President of the Senate and
514	the Speaker of the House of Representatives by December 15,
515	2005, a report on the legal and administrative barriers to
516	enforcing s. 409.9081, Florida Statutes. The report must
517	describe how many services require copayments, which providers
518	collect copayments, and the total amount of copayments collected
519	from recipients for all services required under s. 409.9081,
520	Florida Statutes, by provider type for the fiscal years 2001-
521	2002 through 2004-2005. The agency shall recommend a mechanism
522	to enforce the requirement for Medicaid recipients to make
523	copayments which does not shift the copayment amount to the
524	provider. The agency shall also identify the federal or state
525	laws or regulations that permit Medicaid recipients to declare
526	impoverishment in order to avoid paying the copayment and extent
527	to which these statements of impoverishment are verified. If
528	claims of impoverishment are not currently verified, the agency
529	shall recommend a system for such verification. The report must
530	also identify any other cost-sharing measures that could be
531	imposed on Medicaid recipients.
532	(10)  CATASTROPHIC COVERAGE.--
533	(a)  To the extent of available appropriations contained in
534	the annual General Appropriations Act for such purposes, all
535	managed care plans shall provide coverage to the extent required
536	by the agency up to a monetary threshold determined by the
537	agency and within the capitation rate set by the agency. This
538	limitation threshold may vary by eligibility group or other
539	appropriate factors, including, but not limited to, recipients
540	with special needs and recipients with certain disease states.
541	(b)  The agency shall establish a fund or purchase stop-
542	loss coverage from a plan under part I of chapter 641, Florida
543	Statutes, or a health insurer authorized under chapter 624,
544	Florida Statutes, for purposes of covering services in excess of
545	those covered by the managed care plan. The catastrophic
546	coverage fund or stop-loss coverage shall provide for payment of
547	medically necessary care for recipients who are enrolled in a
548	plan and whose care has exceeded the predetermined service
549	threshold. The agency may establish an aggregate maximum level
550	of coverage in the catastrophic fund or for the stop-loss
551	coverage.
552	(c)  The agency shall develop policies and procedures to
553	allow all plans to utilize the catastrophic coverage fund or
554	stop-loss coverage for a Medicaid recipient in the plan who has
555	reached the catastrophic coverage threshold.
556	(d)  The agency shall contract for an administrative
557	structure to manage the catastrophic coverage fund.
558	(11)  CERTIFICATION.--Before any entity may operate a
559	managed care plan under the waiver, it shall obtain a
560	certificate of operation from the agency.
561	(a)  Any entity operating under part I, part II, or part
562	III of chapter 641, Florida Statutes, or under chapter 627,
563	chapter 636, chapter 391, or s. 409.912, Florida Statutes; a
564	licensed mental health provider under chapter 394, Florida
565	Statutes; a licensed substance abuse provider under chapter 397,
566	Florida Statutes; a hospital under chapter 395, Florida
567	Statutes; a provider service network as defined in this section;
568	or a state-certified contractor as defined in this section shall
569	be in compliance with the requirements and standards developed
570	by the agency. For purposes of the waiver established under this
571	section, provider service networks shall be exempt from the
572	competitive bid requirements in s. 409.912, Florida Statutes.
573	The agency, in consultation with the Office of Insurance
574	Regulation, shall establish certification requirements. It is
575	the intent of the Legislature that, to the extent possible, any
576	project authorized by the state under this section include any
577	federally qualified health center, federally qualified rural
578	health clinic, county health department, or any other federally,
579	state, or locally funded entity that serves the geographic area
580	within the boundaries of that project. The certification process
581	shall, at a minimum, include all requirements in the current
582	Medicaid prepaid health plan contract and take into account the
583	following requirements:
584	1.  The entity has sufficient financial solvency to be
585	placed at risk for the basic plan benefits under ss. 409.905,
586	409.906(8), and 409.906(20), Florida Statutes, and other covered
587	services.
588	2.  Any plan benefit package shall be actuarially
589	equivalent to the premium calculated by the agency to ensure
590	that competing plan benefits are equivalent in value. In all
591	instances, the benefit package must provide services sufficient
592	to meet the needs of the target population based on historical
593	Medicaid utilization.
594	3.  The entity has sufficient service network capacity to
595	meet the needs of members under ss. 409.905, 409.906(8), and
596	409.906(20), Florida Statutes, and other covered services.
597	4.  The entity's primary care providers are geographically
598	accessible to the recipient.
599	5.  The entity has the capacity to provide a wellness or
600	disease management program.
601	6.  The entity shall provide for ambulance service in
602	accordance with ss. 409.908(13)(d) and 409.9128, Florida
603	Statutes.
604	7.  The entity has the infrastructure to manage financial
605	transactions, recordkeeping, data collection, and other
606	administrative functions.
607	8.  The entity, if not a fully indemnified insurance
608	program under chapter 624, chapter 627, chapter 636, or chapter
609	641, Florida Statutes, must meet the financial solvency
610	requirements under this section.
611	(b)  The agency has the authority to contract with entities
612	not otherwise licensed as an insurer or risk-bearing entity
613	under chapter 627 or chapter 641, Florida Statutes, as long as
614	these entities meet the certification standards of this section
615	and any additional standards as defined by the agency to qualify
616	as managed care plans under this section.
617	(c)  In certifying a risk-bearing entity and determining
618	the financial solvency of such an entity as a provider service
619	network, the following shall apply:
620	1.  The entity shall maintain a minimum surplus in an
621	amount that is the greater of $1 million or 1.5 percent of
622	projected annual premiums.
623	2.  In lieu of the requirements in subparagraph 1., the
624	agency may consider the following:
625	a.  If the organization is a public entity, the agency may
626	take under advisement a statement from the public entity that a
627	county supports the managed care plan with the county's full
628	faith and credit. In order to qualify for the agency's
629	consideration, the county must own, operate, manage, administer,
630	or oversee the managed care plan, either partly or wholly,
631	through a county department or agency;
632	b.  The state guarantees the solvency of the organization;
633	c.  The organization is a federally qualified health center
634	or is controlled by one or more federally qualified health
635	centers and meets the solvency standards established by the
636	state for such organization pursuant to s. 409.912(4)(c),
637	Florida Statute; or
638	d.  The entity meets the solvency requirements for
639	federally approved provider-sponsored organizations as defined
640	in 42 C.F.R. ss. 422.380-422.390. However, if the provider
641	service network does not meet the solvency requirements of
642	either chapter 627 or chapter 641, Florida Statutes, the
643	provider service network is limited to the issuance of Medicaid
644	plans.
645	(d)  Each entity certified by the agency shall submit to
646	the agency any financial, programmatic, or patient-encounter
647	data or other information required by the agency to determine
648	the actual services provided and the cost of administering the
649	plan.
650	(e)  Notwithstanding the provisions of s. 409.912, Florida
651	Statutes, the agency shall extend the existing contract with a
652	hospital-based provider service network for a period not to
653	exceed 3 years.
654	(12)  ACCOUNTABILITY AND QUALITY ASSURANCE.--The agency
655	shall establish standards for plan compliance, including, but
656	not limited to, quality assurance and performance improvement
657	standards, peer or professional review standards, grievance
658	policies, and program integrity policies. The agency shall
659	develop a data reporting system, work with managed care plans to
660	establish reasonable patient-encounter reporting requirements,
661	and ensure that the data reported is accurate and complete.
662	(a)  In performing the duties required under this section,
663	the agency shall work with managed care plans to establish a
664	uniform system to measure, improve, and monitor the clinical and
665	functional outcomes of a recipient of Medicaid services. The
666	system may use financial, clinical, and other criteria based on
667	pharmacy, medical services, and other data related to the
668	provision of Medicaid services, including, but not limited to:
669	1.  Health Plan Employer Data and Information Set.
670	2.  Member satisfaction.
671	3.  Provider satisfaction.
672	4.  Report cards on plan performance and best practices.
673	5.  Quarterly reports on compliance with the prompt payment
674	of claims requirements of ss. 627.613, 641.3155, and 641.513,
675	Florida Statutes.
676	(b)  The agency shall require the managed care plans that
677	have contracted with the agency to establish a quality assurance
678	system that incorporates the provisions of s. 409.912(27),
679	Florida Statutes, and any standards, rules, and guidelines
680	developed by the agency.
681	(c)1.  The agency shall establish a medical care database
682	to compile data on health services rendered by health care
683	practitioners that provide services to patients enrolled in
684	managed care plans in the demonstration sites. The medical care
685	database shall:
686	a.  Collect for each type of patient encounter with a
687	health care practitioner or facility:
688	(I)  The demographic characteristics of the patient.
689	(II)  The principal, secondary, and tertiary diagnosis.
690	(III)  The procedure performed.
691	(IV)  The date and location where the procedure was
692	performed.
693	(V)  The payment for the procedure, if any.
694	(VI)  If applicable, the health care practitioner's
695	universal identification number.
696	(VII)  If the health care practitioner rendering the
697	service is a dependent practitioner, the modifiers appropriate
698	to indicate that the service was delivered by the dependent
699	practitioner.
700	b.  Collect appropriate information relating to
701	prescription drugs for each type of patient encounter.
702	c.  Collect appropriate information related to health care
703	costs, utilization, or resources from managed care plans
704	participating in the demonstration sites.
705	2.  To the extent practicable, when collecting the data
706	required under sub-subparagraph 1.a., the agency shall utilize
707	any standardized claim form or electronic transfer system being
708	used by health care practitioners, facilities, and payers.
709	3.  Health care practitioners and facilities in the
710	demonstration sites shall submit, and managed care plans
711	participating in the demonstration sites shall receive, claims
712	for payment and any other information reasonably related to the
713	medical care database electronically in a standard format as
714	required by the agency.
715	4.  The agency shall establish reasonable deadlines for
716	phasing in of electronic transmittal of claims.
717	5.  The plan shall ensure that the data reported is
718	accurate and complete.
719	(13)  STATUTORY COMPLIANCE.--Any entity certified under
720	this section shall comply with ss. 627.613, 641.3155, and
721	641.513, Florida Statutes as applicable.
722	(14)  RATE SETTING AND RISK ADJUSTMENT.--The agency shall
723	develop an actuarially sound rate setting and risk adjustment
724	system for payment to managed care plans that:
725	(a)  Adjusts payment for differences in risk assumed by
726	managed care plans, based on a widely recognized clinical
727	diagnostic classification system or on categorical groups that
728	are established in consultation with the federal Centers for
729	Medicare and Medicaid Services.
730	(b)  Includes a phase-in of patient-encounter level data
731	reporting.
732	(c)  Includes criteria to adjust risk and validation of the
733	rates and risk adjustments.
734	(d)  Establishes rates in consultation with an actuary and
735	the federal Centers for Medicare and Medicaid Services and
736	supported by actuarial analysis.
737	(e)  Reimburses managed care demonstration projects on a
738	capitated basis, except for the first year of operation of a
739	provider service network. The agency shall develop contractual
740	arrangements with the provider service network for a fee-for-
741	service reimbursement methodology that does not exceed total
742	payments under the risk-adjusted capitation during the first
743	year of operation of a managed care demonstration project.
744	Contracts must, at a minimum, require provider service networks
745	to report patient-encounter data, reconcile costs to established
746	risk-adjusted capitation rates at specified periods, and specify
747	the method and process for settlement of cost differences at the
748	end of the contract period.
749	(f)  Provides actuarial benefit design analyses that
750	indicate the effect on capitation rates and benefits offered in
751	the demonstration program over a prospective 5-year period based
752	on the following assumptions:
753	1.  Growth in capitation rates which is limited to the
754	estimated growth rate in general revenue.
755	2.  Growth in capitation rates which is limited to the
756	average growth rate over the last 3 years in per-recipient
757	Medicaid expenditures.
758	3.  Growth in capitation rates which is limited to the
759	growth rate of aggregate Medicaid expenditures between the 2003-
760	2004 fiscal year and the 2004-2005 fiscal year.
761	(15)  MEDICAID OPT-OUT OPTION.--
762	(a)  The agency shall allow recipients to purchase health
763	care coverage through an employer-sponsored health insurance
764	plan instead of through a Medicaid certified plan.
765	(b)  A recipient who chooses the Medicaid opt-out option
766	shall have an opportunity for a specified period of time, as
767	authorized under a waiver granted by the Centers for Medicare
768	and Medicaid Services, to select and enroll in a Medicaid
769	certified plan. If the recipient remains in the employer-
770	sponsored plan after the specified period, the recipient shall
771	remain in the opt-out program for at least 1 year or until the
772	recipient no longer has access to employer-sponsored coverage,
773	until the employer's open enrollment period for a person who
774	opts out in order to participate in employer-sponsored coverage,
775	or until the person is no longer eligible for Medicaid,
776	whichever time period is shorter.
777	(c)  Notwithstanding any other provision of this section,
778	coverage, cost sharing, and any other component of employer-
779	sponsored health insurance shall be governed by applicable state
780	and federal laws.
781	(16)  FRAUD AND ABUSE.--
782	(a)  To minimize the risk of Medicaid fraud and abuse, the
783	agency shall ensure that applicable provisions of chapters 409,
784	414, 626, 641, and 932, Florida Statutes, relating to Medicaid
785	fraud and abuse, are applied and enforced at the demonstration
786	project sites.
787	(b)  Providers shall have the necessary certification,
788	license and credentials as required by law and waiver
789	requirements.
790	(c)  The agency shall ensure that the plan is in compliance
791	with the provisions of s. 409.912(21) and (22), Florida
792	Statutes.
793	(d)  The agency shall require each plan to establish
794	program integrity functions and activities to reduce the
795	incidence of fraud and abuse. Plans must report instances of
796	fraud and abuse pursuant to chapter 641, Florida Statutes.
797	(e)  The plan shall have written administrative and
798	management arrangements or procedures, including a mandatory
799	compliance plan, that are designed to guard against fraud and
800	abuse. The plan shall designate a compliance officer with
801	sufficient experience in health care.
802	(f)1.  The agency shall require all contractors in the
803	managed care plan to report all instances of suspected fraud and
804	abuse. A failure to report instances of suspected fraud and
805	abuse is a violation of law and subject to the penalties
806	provided by law.
807	2.  An instance of fraud and abuse in the managed care
808	plan, including, but not limited to, defrauding the state health
809	care benefit program by misrepresentation of fact in reports,
810	claims, certifications, enrollment claims, demographic
811	statistics, and patient-encounter data; misrepresentation of the
812	qualifications of persons rendering health care and ancillary
813	services; bribery and false statements relating to the delivery
814	of health care; unfair and deceptive marketing practices; and
815	managed care false claims actions, is a violation of law and
816	subject to the penalties provided by law.
817	3.  The agency shall require that all contractors make all
818	files and relevant billing and claims data accessible to state
819	regulators and investigators and that all such data be linked
820	into a unified system for seamless reviews and investigations.
821	(17)  CERTIFIED SCHOOL MATCH PROGRAM.-The agency shall
822	develop a system whereby school districts participating in the
823	certified school match program pursuant to ss. 409.908(21) and
824	1011.70 shall be reimbursed by Medicaid, subject to the
825	limitations of s. 1011.70(1), for a Medicaid-eligible child
826	participating in the services as authorized in s. 1011.70, as
827	provided for in s. 409.9071, regardless of whether the child is
828	enrolled in a capitated managed care network. Capitated managed
829	care networks must make a good-faith effort to execute
830	agreements with school districts regarding the coordinated
831	provision of services authorized under s. 1011.70. County health
832	departments delivering school-based services pursuant to ss.
833	381.0056 and 381.0057 must be reimbursed by Medicaid for the
834	federal share for a Medicaid-eligible child who receives
835	Medicaid-covered services in a school setting, regardless of
836	whether the child is enrolled in a capitated managed care
837	network. Capitated managed care networks must make a good-faith
838	effort to execute agreements with county health departments
839	regarding the coordinated provision of services to a Medicaid-
840	eligible child. To ensure continuity of care for Medicaid
841	patients, the agency, the Department of Health, and the
842	Department of Education shall develop procedures for ensuring
843	that a student's capitated managed care network provider
844	receives information relating to services provided in accordance
845	with ss. 381.0056, 381.0057, 409.9071, and 1011.70.
846	(18)  INTEGRATED MANAGED LONG-TERM CARE SERVICES.--
847	(a)  By December 1, 2005, the Agency for Health Care
848	Administration may revise or apply for waivers pursuant to s.
849	1915 of the Social Security Act or apply for experimental,
850	pilot, or demonstration project waivers pursuant to s. 1115 of
851	the Social Security Act to create an integrated, fixed-payment
852	delivery system for Medicaid recipients who are 60 years of age
853	or older. The Agency for Health Care Administration shall create
854	the integrated, fixed-payment delivery system in partnership
855	with the Department of Elderly Affairs. Rates shall be developed
856	in accordance with 42 C.F.R. s. 438.60, certified by an actuary,
857	and submitted for approval to the Centers for Medicare and
858	Medicaid Services. Rates must reflect the intent to provide
859	quality care in the least-restrictive setting. The funds to be
860	integrated shall include:
861	1.  All Medicaid home and community-based waiver services
862	funds.
863	2.  All funds for all Medicaid services, including Medicaid
864	nursing home services. Inclusion of funds for nursing home
865	services shall be upon certification by the agency that the
866	integration of nursing home funds will improve coordinated care
867	for these services in a less costly manner.
868	3.  All funds paid for Medicare coinsurance and deductibles
869	for persons dually eligible for Medicaid and Medicare, for which
870	the state is responsible, but not to exceed the federal limits
871	of liability specified in the state plan.
872	(b)  The Agency for Health Care Administration shall
873	implement the integrated system initially on a pilot basis in
874	two areas of the state. In one of the areas enrollment shall be
875	on a voluntary basis. In counties where the integrated system is
876	implemented on a voluntary basis, Medicaid recipients 60 years
877	of age and older shall initially enroll in a managed long-term
878	care delivery system, but may, within 30 days, choose to receive
879	services through the traditional fee-for-service delivery
880	system.
881	(c)  The Agency for Health Care Administration and the
882	Department of Elderly Affairs shall evaluate the feasibility of
883	expanding managed long-term care into additional counties using
884	a combined global budgeting system in which funding for Medicaid
885	services which would be available to provide Medicaid services
886	for an elderly person is combined into a single payment amount
887	that can be used flexibly to provide services required by a
888	participant. Under such a system, a participant is to be
889	assisted in choosing appropriate Medicaid services and providers
890	by means of choice counseling, case management, and other
891	mechanisms designed to assist recipients to choose cost-
892	efficient services in their own homes and communities rather
893	than rely on institutional placement. In evaluating the
894	feasibility of a global budgeting system, the agency and the
895	department shall ensure that such a system is cost-neutral to
896	the state and, to the extent possible, includes services funded
897	by Medicaid, state general revenue programs, and programs funded
898	under the federal Older American's Act.
899	(d)  When the agency integrates the funding for Medicaid
900	services for recipients 60 years of age or older into a managed
901	care delivery system under paragraph (a) in any area of the
902	state, the agency shall provide to recipients a choice of plans
903	which shall include:
904	1.  Entities licensed under chapter 627 or chapter 641,
905	Florida Statutes.
906	2.  Any other entity certified by the agency to accept a
907	capitation payment, including entities eligible to participate
908	in the nursing home diversion program, other qualified providers
909	as defined in s. 430.703(7), Florida Statutes, and community
910	care for the elderly lead agencies. Entities not licensed under
911	chapters 627 or 641 must meet comparable standards as defined by
912	the agency, in consultation with the Department of Elderly
913	Affairs and the Office of Insurance Regulation, to be
914	financially solvent and able to take on financial risk for
915	managed care. Community service networks that are certified
916	pursuant to the comparable standards defined by the agency are
917	not required to be licensed under chapter 641, Florida Statutes.
918	(e)  Individuals who are 60 years of age or older who have
919	developmental disabilities or who are participants in the family
920	and supported-living waiver program, the project AIDS care
921	waiver program, the traumatic brain injury and spinal cord
922	injury waiver program, the consumer-directed care waiver
923	program, or the program of all-inclusive care for the elderly
924	program, and residents of intermediate-care facilities for the
925	developmentally disabled must be excluded from the integrated
926	system.
927	(f)  When the agency implements an integrated system and
928	includes funding for Medicaid nursing home and community-based
929	care services into a managed care delivery system in any area of
930	the state, the agency shall ensure that a plan, in addition to
931	other certification requirements:
932	1.  Allows an enrollee to select any provider with whom the
933	plan has a contract.
934	2.  Makes a good faith effort to develop contracts with
935	qualified providers currently under contract with the Department
936	of Elderly Affairs, area agencies on aging, or community care
937	for the elderly lead agencies.
938	3.  Secures subcontracts with providers of nursing home and
939	community-based long-term care services sufficient to ensure
940	access to and choice of providers.
941	4.  Develops and uses a service provider qualification
942	system that describes the quality-of-care standards that
943	providers of medical, health, and long-term care services must
944	meet in order to obtain a contract from the plan.
945	5.  Makes a good faith effort to develop contracts with all
946	qualified nursing homes located in the area that are served by
947	the plan, including those designated as Gold Seal.
948	6.  Ensures that a Medicaid recipient enrolled in a managed
949	care plan who is a resident of a facility licensed under chapter
950	400, Florida Statutes, and who does not choose to move to
951	another setting is allowed to remain in the facility in which he
952	or she is currently receiving care.
953	7.  Includes persons who are in nursing homes and who
954	convert from non-Medicaid payment sources to Medicaid. Plans
955	shall be at risk for serving persons who convert to Medicaid.
956	The agency shall ensure that persons who choose community
957	alternatives instead of nursing home care and who meet level of
958	care and financial eligibility standards continue to receive
959	Medicaid.
960	8.  Demonstrates a quality assurance system and a
961	performance improvement system that is satisfactory to the
962	agency.
963	9.  Develops a system to identify recipients who have
964	special health care needs such as polypharmacy, mental health
965	and substance abuse problems, falls, chronic pain, nutritional
966	deficits, or cognitive deficits or who are ventilator-dependent
967	in order to respond to and meet these needs.
968	10.  Ensures a multidisciplinary team approach to recipient
969	management that facilitates the sharing of information among
970	providers responsible for delivering care to a recipient.
971	11.  Ensures medical oversight of care plans and service
972	delivery, regular medical evaluation of care plans, and the
973	availability of medical consultation for care managers and
974	service coordinators.
975	12.  Develops, monitors, and enforces quality-of-care
976	requirements using existing Agency for Health Care
977	Administration survey and certification data, whenever possible,
978	to avoid duplication of survey or certification activities
979	between the plans and the agency.
980	13.  Ensures a system of care coordination that includes
981	educational and training standards for care managers and service
982	coordinators.
983	14.  Develops a business plan that demonstrates the ability
984	of the plan to organize and operate a risk-bearing entity.
985	15.  Furnishes evidence of liability insurance coverage or
986	a self-insurance plan that is determined by the Office of
987	Insurance Regulation to be adequate to respond to claims for
988	injuries arising out of the furnishing of health care.
989	16.  Complies with the prompt payment of claims
990	requirements of ss. 627.613, 641.3155, and 641.513, Florida
991	Statutes.
992	17.  Provides for a periodic review of its facilities, as
993	required by the agency, which does not duplicate other
994	requirements of federal or state law. The agency shall provide
995	provider survey results to the plan.
996	18.  Provides enrollees the ability, to the extent
997	possible, to choose care providers, including nursing home,
998	assisted living, and adult day care service providers affiliated
999	with a person's religious faith or denomination, nursing home
1000	and assisted living facility providers that are part of a
1001	retirement community in which an enrollee resides, and nursing
1002	homes and assisted living facilities that are geographically
1003	located as close as possible to an enrollee's family, friends,
1004	and social support system.
1005	(g)  In addition to other quality assurance standards
1006	required by law or by rule or in an approved federal waiver, and
1007	in consultation with the Department of Elderly Affairs and area
1008	agencies on aging, the agency shall develop quality assurance
1009	standards that are specific to the care needs of elderly
1010	individuals and that measure enrollee outcomes and satisfaction
1011	with care management and home and community-based services that
1012	are provided to recipients 60 years of age or older by managed
1013	care plans pursuant to this section. The agency in consultation
1014	with the Department of Elderly Affairs shall contract with area
1015	agencies on aging to perform initial and ongoing measurement of
1016	the appropriateness, effectiveness, and quality of care
1017	management and home and community-based services that are
1018	provided to recipients 60 years of age or older by managed care
1019	plans and to collect and report the resolution of enrollee
1020	grievances and complaints. The agency and the department shall
1021	coordinate the quality measurement activities performed by area
1022	agencies on aging with other quality assurance activities
1023	required by this section in a manner that promotes efficiency
1024	and avoids duplication.
1025	(h)  If there is not a contractual relationship between a
1026	nursing home provider and a plan in an area in which the
1027	demonstration project operates, the nursing home shall cooperate
1028	with the efforts of a plan to determine if a recipient would be
1029	more appropriately served in a community setting, and payments
1030	shall be made in accordance with Medicaid nursing home rates as
1031	calculated in the Medicaid state plan.
1032	(i)  The agency may develop innovative risk-sharing
1033	agreements that limit the level of custodial nursing home risk
1034	that the plan assumes, consistent with the intent of the
1035	Legislature to reduce the use and cost of nursing home care.
1036	Under risk-sharing agreements, the agency may reimburse the plan
1037	or a nursing home for the cost of providing nursing home care
1038	for Medicaid-eligible recipients who have been permanently
1039	placed and remain in nursing home care.
1040	(j)  The agency shall withhold a percentage of the
1041	capitation rate that would otherwise have been paid to a plan in
1042	order to create a quality reserve fund, which shall be annually
1043	disbursed to those contracted plans that deliver high-quality
1044	services, have a low rate of enrollee complaints, have
1045	successful enrollee outcomes, are in compliance with quality
1046	improvement standards, and demonstrate other indicators
1047	determined by the agency to be consistent with high-quality
1048	service delivery.
1049	(k)  The agency shall evaluate the medical loss ratios of
1050	managed care plans providing services to individuals 60 years of
1051	age or older in the Medicaid program and shall annually report
1052	such medical loss ratios to the Legislature. Medical loss ratios
1053	are subject to an annual audit. The agency may, by rule, adopt
1054	minimum medical loss ratios for such managed care plans. Failure
1055	to comply with the minimum medical loss ratios shall be grounds
1056	for imposition of fines, reductions in capitated payments in the
1057	current fiscal year, or contract termination.
1058	(l)  The agency may limit the number of persons enrolled in
1059	a plan who are not nursing home facility residents but who would
1060	be Medicaid eligible as defined under s. 409.904(3), Florida
1061	Statutes, if served in an approved home or community-based
1062	waiver program.
1063	(m)  Except as otherwise provided in this section, the
1064	Aging Resource Center, if available, shall be the entry point
1065	for eligibility determination for persons 60 years of age or
1066	older and shall provide choice counseling to assist recipients
1067	in choosing a plan. If an Aging Resource Center is not operating
1068	in an area or if the Aging Resource Center or area agency on
1069	aging has a contractual relationship with or has any ownership
1070	interest in a managed care plan, the agency may, in consultation
1071	with the Department of Elderly Affairs, designate other entities
1072	to perform these functions until an Aging Resource Center is
1073	established and has the capacity to perform these functions.
1074	(n)  In the event that a managed care plan does not meet
1075	its obligations under its contract with the agency or under the
1076	requirements of this section, the agency may impose liquidated
1077	damages. Such liquidated damages shall be calculated by the
1078	agency as reasonable estimates of the agency's financial loss
1079	and are not to be used to penalize the plan. If the agency
1080	imposes liquidated damages, the agency may collect those damages
1081	by reducing the amount of any monthly premium payments otherwise
1082	due to the plan by the amount of the damages. Liquidated damages
1083	are forfeited and will not be subsequently paid to a plan upon
1084	compliance or cure of default unless a determination is made
1085	after appeal that the damages should not have been imposed.
1086	(o)  In any area of the state in which the agency has
1087	implemented a demonstration project pursuant to this section,
1088	the agency may grant a modification of certificate-of-need
1089	conditions related to Medicaid participation to a nursing home
1090	that has experienced decreased Medicaid patient day utilization
1091	due to a transition to a managed care delivery system.
1092	(p)  Notwithstanding any other law to the contrary, the
1093	agency shall ensure that, to the extent possible, Medicare and
1094	Medicaid services are integrated. When possible, persons served
1095	by the managed care delivery system who are eligible for
1096	Medicare may choose to enroll in a Medicare managed health care
1097	plan operated by the same entity that is placed at risk for
1098	Medicaid services.
1099	(q)  It is the intent of the Legislature that the agency
1100	and the Department of Elderly Affairs begin discussions with the
1101	federal Centers for Medicare and Medicaid Services regarding the
1102	inclusion of Medicare in an integrated long-term care system.
1103	(19)  FUNDING DEVELOPMENT COSTS OF ESSENTIAL COMMUNITY
1104	PROVIDERS.--It is the intent of the Legislature to facilitate
1105	the development of managed care delivery systems by networks of
1106	essential community providers comprised of current community
1107	care for the elderly lead agencies. To allow the assumption of
1108	responsibility and financial risk for managing a recipient
1109	through the entire continuum of Medicaid services, the agency
1110	shall, subject to appropriations included in the General
1111	Appropriations Act, award up to $500,000 per applicant for the
1112	purpose of funding managed care delivery system development
1113	costs. The terms of repayment may not extend beyond 6 years
1114	after the date when the funding begins and must include payment
1115	in full with a rate of interest equal to or greater than the
1116	federal funds rate. The agency, in consultation with the
1117	Department of Elderly Affairs shall establish a grant
1118	application process for awards.
1119	(20)  MEDICAID BUY-IN.--The Office of Program Policy
1120	Analysis and Government Accountability shall conduct a study of
1121	state programs that allow non-Medicaid eligible persons under a
1122	certain income level to buy into the Medicaid program as if it
1123	was private insurance. The study shall examine Medicaid buy-in
1124	programs in other states to determine if there are any models
1125	that can be implemented in Florida which would provide access to
1126	uninsured Floridians and what effect this program would have on
1127	Medicaid expenditures based on the experience of similar states.
1128	The study must also examine whether the Medically Needy program
1129	could be redesigned to be a Medicaid buy-in program. The study
1130	must be submitted to the President of the Senate and the Speaker
1131	of the House of representatives by January 1, 2006.
1132	(21)  APPLICABILITY.--
1133	(a)  The provisions of this section apply only to the
1134	demonstration project sites approved by the Legislature.
1135	(b)  The Legislature authorizes the Agency for Health Care
1136	Administration to apply and enforce any provision of law not
1137	referenced in this section to ensure the safety, quality, and
1138	integrity of the waiver.
1139	(22)  RULEMAKING.--The Agency for Health Care
1140	Administration is authorized to adopt rules in consultation with
1141	the appropriate state agencies to implement the provisions of
1142	this section.
1143	(23)  IMPLEMENTATION.--
1144	(a)  This section does not authorize the agency to
1145	implement any provision of s. 1115 of the Social Security Act
1146	experimental, pilot, or demonstration project waiver to reform
1147	the state Medicaid program unless approved by the Legislature.
1148	(b)  The agency shall develop and submit for approval
1149	applications for waivers of applicable federal laws and
1150	regulations as necessary to implement the managed care
1151	demonstration project as defined in this section. The agency
1152	shall post all waiver applications under this section on its
1153	Internet website 30 days before submitting the applications to
1154	the United States Centers for Medicare and Medicaid Services.
1155	All waiver applications shall be provided for review and comment
1156	to the appropriate committees of the Senate and House of
1157	Representatives for at least 10 working days prior to
1158	submission. All waivers submitted to and approved by the United
1159	States Centers for Medicare and Medicaid Services under this
1160	section must be submitted to the appropriate committees of the
1161	Senate and the House of Representatives in order to obtain
1162	authority for implementation as required by s. 409.912(11),
1163	Florida Statutes, before program implementation. The appropriate
1164	committees shall recommend whether to approve the implementation
1165	of the waivers to the Legislature or to the Legislative Budget
1166	Commission if the Legislature is not in session. The agency
1167	shall submit a plan containing a detailed timeline for
1168	implementation and budgetary projections of the effect of the
1169	pilot program on the total Medicaid budget for the 2006-2007
1170	through  2009-2010 fiscal years
1171	(c)  When a waiver submitted pursuant to this section is
1172	approved by the United States Centers for Medicare and Medicaid
1173	Services and by the Legislature, or by the Legislative Budget
1174	Commission when the Legislature is not in session, and
1175	provisions of the approved waiver conflict with current law,
1176	waiver provisions shall prevail.
1177	(d)  When current law conflicts with the implementation of
1178	the waiver pursuant to this section as approved by the Centers
1179	for Medicare and Medicaid Services and by the Legislature, this
1180	section shall prevail.
1181	(24)  EVALUATION.--
1182	(a)  Two years after the implementation of the waiver and
1183	again 5 years after the implementation of the waiver, the Office
1184	of Program Policy Analysis and Government Accountability, shall
1185	conduct an evaluation study and analyze the impact of the
1186	Medicaid reform waiver pursuant to this section to the extent
1187	allowed in the waiver demonstration sites by the Centers for
1188	Medicare and Medicaid Services and implemented as approved by
1189	the Legislature pursuant to this section. The Office of Program
1190	Policy Analysis and Government Accountability shall consult with
1191	appropriate legislative committees to select provisions of the
1192	waiver to evaluate from among the following:
1193	1.  Demographic characteristics of the recipient of the
1194	waiver.
1195	2.  Plan types and service networks.
1196	3.  Health benefit coverage.
1197	4.  Choice counseling.
1198	5.  Disease management.
1199	6.  Pharmacy benefits.
1200	7.  Behavioral health benefits.
1201	8.  Service utilization.
1202	9.  Catastrophic coverage.
1203	10.  Enhanced benefits.
1204	11.  Medicaid opt-out option.
1205	12.  Quality assurance and accountability.
1206	13.  Fraud and abuse.
1207	14.  Cost and cost benefit of the waiver.
1208	15.  Impact of the waiver on the agency.
1209	16.  Positive impact of plans on health disparities among
1210	minorities.
1211	17.  Administrative or legal barriers to the implementation
1212	and operation of each pilot program.
1213	(b)  The Office of Program Policy Analysis and Government
1214	Accountability shall submit the evaluation study report to the
1215	agency and to the Governor, the President of the Senate, the
1216	Speaker of the House of Representatives, and the appropriate
1217	committees or councils of the Senate and the House of
1218	Representatives.
1219	(c)  One year after implementation of the integrated
1220	managed long-term care plan, the agency shall contract with an
1221	entity experienced in evaluating managed long-term care plans in
1222	another state to evaluate, at a minimum, demonstrated cost
1223	savings realized and expected, consumer satisfaction, the range
1224	of services being provided under the program, and rate-setting
1225	methodology.
1226	(d)  The agency shall submit, every 6 months after the date
1227	of waiver implementation, a status report describing the
1228	progress made on the implementation of the waiver and
1229	identification of any issues or problems to the Governor's
1230	Office of Planning and Budgeting and the appropriate committees
1231	or councils of the Senate and the House of Representatives.
1232	(e)  The agency shall provide to the appropriate committees
1233	or councils of the Senate and House of Representatives copies of
1234	any report or evaluation regarding the waiver that is submitted
1235	to the Center for Medicare and Medicaid Services.
1236	(f)  The agency shall contract for an evaluation comparison
1237	of the waiver demonstration projects with the Medipass fee-for-
1238	service program including, at a minimum:
1239	1.  Administrative or organizational structure of the
1240	service delivery system.
1241	2.  Covered services and service utilization patterns of
1242	mandatory, optional, and other services.
1243	3.  Clinical or health outcomes.
1244	4.  Cost analysis, cost avoidance, and cost benefit.
1245	(25)  REVIEW AND REPEAL.--This section shall stand repealed
1246	on July 1, 2010, unless reviewed and saved from repeal through
1247	reenactment by the Legislature.
1248	Section 3.  Section 409.912, Florida Statutes, is amended
1249	to read:
1250	409.912  Cost-effective purchasing of health care.--The
1251	agency shall purchase goods and services for Medicaid recipients
1252	in the most cost-effective manner consistent with the delivery
1253	of quality medical care. To ensure that medical services are
1254	effectively utilized, the agency may, in any case, require a
1255	confirmation or second physician's opinion of the correct
1256	diagnosis for purposes of authorizing future services under the
1257	Medicaid program. This section does not restrict access to
1258	emergency services or poststabilization care services as defined
1259	in 42 C.F.R. part 438.114. Such confirmation or second opinion
1260	shall be rendered in a manner approved by the agency. The agency
1261	shall maximize the use of prepaid per capita and prepaid
1262	aggregate fixed-sum basis services when appropriate and other
1263	alternative service delivery and reimbursement methodologies,
1264	including competitive bidding pursuant to s. 287.057, designed
1265	to facilitate the cost-effective purchase of a case-managed
1266	continuum of care. The agency shall also require providers to
1267	minimize the exposure of recipients to the need for acute
1268	inpatient, custodial, and other institutional care and the
1269	inappropriate or unnecessary use of high-cost services. The
1270	agency shall contract with a vendor to monitor and evaluate the
1271	clinical practice patterns of providers in order to identify
1272	trends that are outside the normal practice patterns of a
1273	provider's professional peers or the national guidelines of a
1274	provider's professional association. The vendor must be able to
1275	provide information and counseling to a provider whose practice
1276	patterns are outside the norms, in consultation with the agency,
1277	to improve patient care and reduce inappropriate utilization.
1278	The agency may mandate prior authorization, drug therapy
1279	management, or disease management participation for certain
1280	populations of Medicaid beneficiaries, certain drug classes, or
1281	particular drugs to prevent fraud, abuse, overuse, and possible
1282	dangerous drug interactions. The Pharmaceutical and Therapeutics
1283	Committee shall make recommendations to the agency on drugs for
1284	which prior authorization is required. The agency shall inform
1285	the Pharmaceutical and Therapeutics Committee of its decisions
1286	regarding drugs subject to prior authorization. The agency is
1287	authorized to limit the entities it contracts with or enrolls as
1288	Medicaid providers by developing a provider network through
1289	provider credentialing. The agency may competitively bid single-
1290	source-provider contracts if procurement of goods or services
1291	results in demonstrated cost savings to the state without
1292	limiting access to care. The agency may limit its network based
1293	on the assessment of beneficiary access to care, provider
1294	availability, provider quality standards, time and distance
1295	standards for access to care, the cultural competence of the
1296	provider network, demographic characteristics of Medicaid
1297	beneficiaries, practice and provider-to-beneficiary standards,
1298	appointment wait times, beneficiary use of services, provider
1299	turnover, provider profiling, provider licensure history,
1300	previous program integrity investigations and findings, peer
1301	review, provider Medicaid policy and billing compliance records,
1302	clinical and medical record audits, and other factors. Providers
1303	shall not be entitled to enrollment in the Medicaid provider
1304	network. The agency shall determine instances in which allowing
1305	Medicaid beneficiaries to purchase durable medical equipment and
1306	other goods is less expensive to the Medicaid program than long-
1307	term rental of the equipment or goods. The agency may establish
1308	rules to facilitate purchases in lieu of long-term rentals in
1309	order to protect against fraud and abuse in the Medicaid program
1310	as defined in s. 409.913. The agency may is authorized to seek
1311	federal waivers necessary to administer these policies implement
1312	this policy.
1313	(1)  The agency shall work with the Department of Children
1314	and Family Services to ensure access of children and families in
1315	the child protection system to needed and appropriate mental
1316	health and substance abuse services.
1317	(2)  The agency may enter into agreements with appropriate
1318	agents of other state agencies or of any agency of the Federal
1319	Government and accept such duties in respect to social welfare
1320	or public aid as may be necessary to implement the provisions of
1321	Title XIX of the Social Security Act and ss. 409.901-409.920.
1322	(3)  The agency may contract with health maintenance
1323	organizations certified pursuant to part I of chapter 641 for
1324	the provision of services to recipients.
1325	(4)  The agency may contract with:
1326	(a)  An entity that provides no prepaid health care
1327	services other than Medicaid services under contract with the
1328	agency and which is owned and operated by a county, county
1329	health department, or county-owned and operated hospital to
1330	provide health care services on a prepaid or fixed-sum basis to
1331	recipients, which entity may provide such prepaid services
1332	either directly or through arrangements with other providers.
1333	Such prepaid health care services entities must be licensed
1334	under parts I and III by January 1, 1998, and until then are
1335	exempt from the provisions of part I of chapter 641. An entity
1336	recognized under this paragraph which demonstrates to the
1337	satisfaction of the Office of Insurance Regulation of the
1338	Financial Services Commission that it is backed by the full
1339	faith and credit of the county in which it is located may be
1340	exempted from s. 641.225.
1341	(b)  An entity that is providing comprehensive behavioral
1342	health care services to certain Medicaid recipients through a
1343	capitated, prepaid arrangement pursuant to the federal waiver
1344	provided for by s. 409.905(5). Such an entity must be licensed
1345	under chapter 624, chapter 636, or chapter 641 and must possess
1346	the clinical systems and operational competence to manage risk
1347	and provide comprehensive behavioral health care to Medicaid
1348	recipients. As used in this paragraph, the term "comprehensive
1349	behavioral health care services" means covered mental health and
1350	substance abuse treatment services that are available to
1351	Medicaid recipients. The secretary of the Department of Children
1352	and Family Services shall approve provisions of procurements
1353	related to children in the department's care or custody prior to
1354	enrolling such children in a prepaid behavioral health plan. Any
1355	contract awarded under this paragraph must be competitively
1356	procured. In developing the behavioral health care prepaid plan
1357	procurement document, the agency shall ensure that the
1358	procurement document requires the contractor to develop and
1359	implement a plan to ensure compliance with s. 394.4574 related
1360	to services provided to residents of licensed assisted living
1361	facilities that hold a limited mental health license. Except as
1362	provided in subparagraph 8., the agency shall seek federal
1363	approval to contract with a single entity meeting these
1364	requirements to provide comprehensive behavioral health care
1365	services to all Medicaid recipients not enrolled in a managed
1366	care plan in an AHCA area. Each entity must offer sufficient
1367	choice of providers in its network to ensure recipient access to
1368	care and the opportunity to select a provider with whom they are
1369	satisfied. The network shall include all public mental health
1370	hospitals. To ensure unimpaired access to behavioral health care
1371	services by Medicaid recipients, all contracts issued pursuant
1372	to this paragraph shall require 80 percent of the capitation
1373	paid to the managed care plan, including health maintenance
1374	organizations, to be expended for the provision of behavioral
1375	health care services. In the event the managed care plan expends
1376	less than 80 percent of the capitation paid pursuant to this
1377	paragraph for the provision of behavioral health care services,
1378	the difference shall be returned to the agency. The agency shall
1379	provide the managed care plan with a certification letter
1380	indicating the amount of capitation paid during each calendar
1381	year for the provision of behavioral health care services
1382	pursuant to this section. The agency may reimburse for substance
1383	abuse treatment services on a fee-for-service basis until the
1384	agency finds that adequate funds are available for capitated,
1385	prepaid arrangements.
1386	1.  By January 1, 2001, the agency shall modify the
1387	contracts with the entities providing comprehensive inpatient
1388	and outpatient mental health care services to Medicaid
1389	recipients in Hillsborough, Highlands, Hardee, Manatee, and Polk
1390	Counties, to include substance abuse treatment services.
1391	2.  By July 1, 2003, the agency and the Department of
1392	Children and Family Services shall execute a written agreement
1393	that requires collaboration and joint development of all policy,
1394	budgets, procurement documents, contracts, and monitoring plans
1395	that have an impact on the state and Medicaid community mental
1396	health and targeted case management programs.
1397	3.  Except as provided in subparagraph 8., by July 1, 2006,
1398	the agency and the Department of Children and Family Services
1399	shall contract with managed care entities in each AHCA area
1400	except area 6 or arrange to provide comprehensive inpatient and
1401	outpatient mental health and substance abuse services through
1402	capitated prepaid arrangements to all Medicaid recipients who
1403	are eligible to participate in such plans under federal law and
1404	regulation. In AHCA areas where eligible individuals number less
1405	than 150,000, the agency shall contract with a single managed
1406	care plan to provide comprehensive behavioral health services to
1407	all recipients who are not enrolled in a Medicaid health
1408	maintenance organization. The agency may contract with more than
1409	one comprehensive behavioral health provider to provide care to
1410	recipients who are not enrolled in a Medicaid health maintenance
1411	organization in AHCA areas where the eligible population exceeds
1412	150,000. Contracts for comprehensive behavioral health providers
1413	awarded pursuant to this section shall be competitively
1414	procured. Both for-profit and not-for-profit corporations shall
1415	be eligible to compete. Managed care plans contracting with the
1416	agency under subsection (3) shall provide and receive payment
1417	for the same comprehensive behavioral health benefits as
1418	provided in AHCA rules, including handbooks incorporated by
1419	reference.
1420	4.  By October 1, 2003, the agency and the department shall
1421	submit a plan to the Governor, the President of the Senate, and
1422	the Speaker of the House of Representatives which provides for
1423	the full implementation of capitated prepaid behavioral health
1424	care in all areas of the state.
1425	a.  Implementation shall begin in 2003 in those AHCA areas
1426	of the state where the agency is able to establish sufficient
1427	capitation rates.
1428	b.  If the agency determines that the proposed capitation
1429	rate in any area is insufficient to provide appropriate
1430	services, the agency may adjust the capitation rate to ensure
1431	that care will be available. The agency and the department may
1432	use existing general revenue to address any additional required
1433	match but may not over-obligate existing funds on an annualized
1434	basis.
1435	c.  Subject to any limitations provided for in the General
1436	Appropriations Act, the agency, in compliance with appropriate
1437	federal authorization, shall develop policies and procedures
1438	that allow for certification of local and state funds.
1439	5.  Children residing in a statewide inpatient psychiatric
1440	program, or in a Department of Juvenile Justice or a Department
1441	of Children and Family Services residential program approved as
1442	a Medicaid behavioral health overlay services provider shall not
1443	be included in a behavioral health care prepaid health plan or
1444	any other Medicaid managed care plan pursuant to this paragraph.
1445	6.  In converting to a prepaid system of delivery, the
1446	agency shall in its procurement document require an entity
1447	providing only comprehensive behavioral health care services to
1448	prevent the displacement of indigent care patients by enrollees
1449	in the Medicaid prepaid health plan providing behavioral health
1450	care services from facilities receiving state funding to provide
1451	indigent behavioral health care, to facilities licensed under
1452	chapter 395 which do not receive state funding for indigent
1453	behavioral health care, or reimburse the unsubsidized facility
1454	for the cost of behavioral health care provided to the displaced
1455	indigent care patient.
1456	7.  Traditional community mental health providers under
1457	contract with the Department of Children and Family Services
1458	pursuant to part IV of chapter 394, child welfare providers
1459	under contract with the Department of Children and Family
1460	Services in areas 1 and 6, and inpatient mental health providers
1461	licensed pursuant to chapter 395 must be offered an opportunity
1462	to accept or decline a contract to participate in any provider
1463	network for prepaid behavioral health services.
1464	8.  For fiscal year 2004-2005, all Medicaid eligible
1465	children, except children in areas 1 and 6, whose cases are open
1466	for child welfare services in the HomeSafeNet system, shall be
1467	enrolled in MediPass or in Medicaid fee-for-service and all
1468	their behavioral health care services including inpatient,
1469	outpatient psychiatric, community mental health, and case
1470	management shall be reimbursed on a fee-for-service basis.
1471	Beginning July 1, 2005, such children, who are open for child
1472	welfare services in the HomeSafeNet system, shall receive their
1473	behavioral health care services through a specialty prepaid plan
1474	operated by community-based lead agencies either through a
1475	single agency or formal agreements among several agencies. The
1476	specialty prepaid plan must result in savings to the state
1477	comparable to savings achieved in other Medicaid managed care
1478	and prepaid programs. Such plan must provide mechanisms to
1479	maximize state and local revenues. The specialty prepaid plan
1480	shall be developed by the agency and the Department of Children
1481	and Family Services. The agency is authorized to seek any
1482	federal waivers to implement this initiative.
1483	(c)  A federally qualified health center or an entity owned
1484	by one or more federally qualified health centers or an entity
1485	owned by other migrant and community health centers receiving
1486	non-Medicaid financial support from the Federal Government to
1487	provide health care services on a prepaid or fixed-sum basis to
1488	recipients. Such prepaid health care services entity must be
1489	licensed under parts I and III of chapter 641, but shall be
1490	prohibited from serving Medicaid recipients on a prepaid basis,
1491	until such licensure has been obtained. However, such an entity
1492	is exempt from s. 641.225 if the entity meets the requirements
1493	specified in subsections (16) (17) and (17)(18).
1494	(d)  A provider service network may be reimbursed on a fee-
1495	for-service or prepaid basis. A provider service network which
1496	is reimbursed by the agency on a prepaid basis shall be exempt
1497	from parts I and III of chapter 641, but must meet appropriate
1498	financial reserve, quality assurance, and patient rights
1499	requirements as established by the agency. The agency shall
1500	award contracts on a competitive bid basis and shall select
1501	bidders based upon price and quality of care. Medicaid
1502	recipients assigned to a demonstration project shall be chosen
1503	equally from those who would otherwise have been assigned to
1504	prepaid plans and MediPass. The agency is authorized to seek
1505	federal Medicaid waivers as necessary to implement the
1506	provisions of this section.
1507	(e)  An entity that provides only comprehensive behavioral
1508	health care services to certain Medicaid recipients through an
1509	administrative services organization agreement. Such an entity
1510	must possess the clinical systems and operational competence to
1511	provide comprehensive health care to Medicaid recipients. As
1512	used in this paragraph, the term "comprehensive behavioral
1513	health care services" means covered mental health and substance
1514	abuse treatment services that are available to Medicaid
1515	recipients. Any contract awarded under this paragraph must be
1516	competitively procured. The agency must ensure that Medicaid
1517	recipients have available the choice of at least two managed
1518	care plans for their behavioral health care services.
1519	(f)  An entity that provides in-home physician services to
1520	test the cost-effectiveness of enhanced home-based medical care
1521	to Medicaid recipients with degenerative neurological diseases
1522	and other diseases or disabling conditions associated with high
1523	costs to Medicaid. The program shall be designed to serve very
1524	disabled persons and to reduce Medicaid reimbursed costs for
1525	inpatient, outpatient, and emergency department services. The
1526	agency shall contract with vendors on a risk-sharing basis.
1527	(g)  Children's provider networks that provide care
1528	coordination and care management for Medicaid-eligible pediatric
1529	patients, primary care, authorization of specialty care, and
1530	other urgent and emergency care through organized providers
1531	designed to service Medicaid eligibles under age 18 and
1532	pediatric emergency departments' diversion programs. The
1533	networks shall provide after-hour operations, including evening
1534	and weekend hours, to promote, when appropriate, the use of the
1535	children's networks rather than hospital emergency departments.
1536	(h)  An entity authorized in s. 430.205 to contract with
1537	the agency and the Department of Elderly Affairs to provide
1538	health care and social services on a prepaid or fixed-sum basis
1539	to elderly recipients. Such prepaid health care services
1540	entities are exempt from the provisions of part I of chapter 641
1541	for the first 3 years of operation. An entity recognized under
1542	this paragraph that demonstrates to the satisfaction of the
1543	Office of Insurance Regulation that it is backed by the full
1544	faith and credit of one or more counties in which it operates
1545	may be exempted from s. 641.225.
1546	(i)  A Children's Medical Services Network, as defined in
1547	s. 391.021.
1548	(5)  By October 1, 2003, the agency and the department
1549	shall, to the extent feasible, develop a plan for implementing
1550	new Medicaid procedure codes for emergency and crisis care,
1551	supportive residential services, and other services designed to
1552	maximize the use of Medicaid funds for Medicaid-eligible
1553	recipients. The agency shall include in the agreement developed
1554	pursuant to subsection (4) a provision that ensures that the
1555	match requirements for these new procedure codes are met by
1556	certifying eligible general revenue or local funds that are
1557	currently expended on these services by the department with
1558	contracted alcohol, drug abuse, and mental health providers. The
1559	plan must describe specific procedure codes to be implemented, a
1560	projection of the number of procedures to be delivered during
1561	fiscal year 2003-2004, and a financial analysis that describes
1562	the certified match procedures, and accountability mechanisms,
1563	projects the earnings associated with these procedures, and
1564	describes the sources of state match. This plan may not be
1565	implemented in any part until approved by the Legislative Budget
1566	Commission. If such approval has not occurred by December 31,
1567	2003, the plan shall be submitted for consideration by the 2004
1568	Legislature.
1569	(5)(6)  The agency may contract with any public or private
1570	entity otherwise authorized by this section on a prepaid or
1571	fixed-sum basis for the provision of health care services to
1572	recipients. An entity may provide prepaid services to
1573	recipients, either directly or through arrangements with other
1574	entities, if each entity involved in providing services:
1575	(a)  Is organized primarily for the purpose of providing
1576	health care or other services of the type regularly offered to
1577	Medicaid recipients;
1578	(b)  Ensures that services meet the standards set by the
1579	agency for quality, appropriateness, and timeliness;
1580	(c)  Makes provisions satisfactory to the agency for
1581	insolvency protection and ensures that neither enrolled Medicaid
1582	recipients nor the agency will be liable for the debts of the
1583	entity;
1584	(d)  Submits to the agency, if a private entity, a
1585	financial plan that the agency finds to be fiscally sound and
1586	that provides for working capital in the form of cash or
1587	equivalent liquid assets excluding revenues from Medicaid
1588	premium payments equal to at least the first 3 months of
1589	operating expenses or $200,000, whichever is greater;
1590	(e)  Furnishes evidence satisfactory to the agency of
1591	adequate liability insurance coverage or an adequate plan of
1592	self-insurance to respond to claims for injuries arising out of
1593	the furnishing of health care;
1594	(f)  Provides, through contract or otherwise, for periodic
1595	review of its medical facilities and services, as required by
1596	the agency; and
1597	(g)  Provides organizational, operational, financial, and
1598	other information required by the agency.
1599	(6)(7)  The agency may contract on a prepaid or fixed-sum
1600	basis with any health insurer that:
1601	(a)  Pays for health care services provided to enrolled
1602	Medicaid recipients in exchange for a premium payment paid by
1603	the agency;
1604	(b)  Assumes the underwriting risk; and
1605	(c)  Is organized and licensed under applicable provisions
1606	of the Florida Insurance Code and is currently in good standing
1607	with the Office of Insurance Regulation.
1608	(7)(8)  The agency may contract on a prepaid or fixed-sum
1609	basis with an exclusive provider organization to provide health
1610	care services to Medicaid recipients provided that the exclusive
1611	provider organization meets applicable managed care plan
1612	requirements in this section, ss. 409.9122, 409.9123, 409.9128,
1613	and 627.6472, and other applicable provisions of law.
1614	(8)(9)  The Agency for Health Care Administration may
1615	provide cost-effective purchasing of chiropractic services on a
1616	fee-for-service basis to Medicaid recipients through
1617	arrangements with a statewide chiropractic preferred provider
1618	organization incorporated in this state as a not-for-profit
1619	corporation. The agency shall ensure that the benefit limits and
1620	prior authorization requirements in the current Medicaid program
1621	shall apply to the services provided by the chiropractic
1622	preferred provider organization.
1623	(9)(10)  The agency shall not contract on a prepaid or
1624	fixed-sum basis for Medicaid services with an entity which knows
1625	or reasonably should know that any officer, director, agent,
1626	managing employee, or owner of stock or beneficial interest in
1627	excess of 5 percent common or preferred stock, or the entity
1628	itself, has been found guilty of, regardless of adjudication, or
1629	entered a plea of nolo contendere, or guilty, to:
1630	(a)  Fraud;
1631	(b)  Violation of federal or state antitrust statutes,
1632	including those proscribing price fixing between competitors and
1633	the allocation of customers among competitors;
1634	(c)  Commission of a felony involving embezzlement, theft,
1635	forgery, income tax evasion, bribery, falsification or
1636	destruction of records, making false statements, receiving
1637	stolen property, making false claims, or obstruction of justice;
1638	or
1639	(d)  Any crime in any jurisdiction which directly relates
1640	to the provision of health services on a prepaid or fixed-sum
1641	basis.
1642	(10)(11)  The agency, after notifying the Legislature, may
1643	apply for waivers of applicable federal laws and regulations as
1644	necessary to implement more appropriate systems of health care
1645	for Medicaid recipients and reduce the cost of the Medicaid
1646	program to the state and federal governments and shall implement
1647	such programs, after legislative approval, within a reasonable
1648	period of time after federal approval. These programs must be
1649	designed primarily to reduce the need for inpatient care,
1650	custodial care and other long-term or institutional care, and
1651	other high-cost services.
1652	(a)  Prior to seeking legislative approval of such a waiver
1653	as authorized by this subsection, the agency shall provide
1654	notice and an opportunity for public comment. Notice shall be
1655	provided to all persons who have made requests of the agency for
1656	advance notice and shall be published in the Florida
1657	Administrative Weekly not less than 28 days prior to the
1658	intended action.
1659	(b)  Notwithstanding s. 216.292, funds that are
1660	appropriated to the Department of Elderly Affairs for the
1661	Assisted Living for the Elderly Medicaid waiver and are not
1662	expended shall be transferred to the agency to fund Medicaid-
1663	reimbursed nursing home care.
1664	(11)(12)  The agency shall establish a postpayment
1665	utilization control program designed to identify recipients who
1666	may inappropriately overuse or underuse Medicaid services and
1667	shall provide methods to correct such misuse.
1668	(12)(13)  The agency shall develop and provide coordinated
1669	systems of care for Medicaid recipients and may contract with
1670	public or private entities to develop and administer such
1671	systems of care among public and private health care providers
1672	in a given geographic area.
1673	(13)(14)(a)  The agency shall operate or contract for the
1674	operation of utilization management and incentive systems
1675	designed to encourage cost-effective use services.
1676	(b)  The agency shall develop a procedure for determining
1677	whether health care providers and service vendors can provide
1678	the Medicaid program with a business case that demonstrates
1679	whether a particular good or service can offset the cost of
1680	providing the good or service in an alternative setting or
1681	through other means and therefore should receive a higher
1682	reimbursement.  The business case must include, but need not be
1683	limited to:
1684	1.  A detailed description of the good or service to be
1685	provided, a description and analysis of the agency's current
1686	performance of the service, and a rationale documenting how
1687	providing the service in an alternative setting would be in the
1688	best interest of the state, the agency, and its clients.
1689	2.  A cost-benefit analysis documenting the estimated
1690	specific direct and indirect costs, savings, performance
1691	improvements, risks, and qualitative and quantitative benefits
1692	involved in or resulting from providing the service. The cost-
1693	benefit analysis must include a detailed plan and timeline
1694	identifying all actions that must be implemented to realize
1695	expected benefits.  The Secretary of the Agency for Health Care
1696	Administration shall verify that all costs, savings, and
1697	benefits are valid and achievable.
1698	(14)(15)(a)  The agency shall operate the Comprehensive
1699	Assessment and Review for Long-Term Care Services (CARES)
1700	nursing facility preadmission screening program to ensure that
1701	Medicaid payment for nursing facility care is made only for
1702	individuals whose conditions require such care and to ensure
1703	that long-term care services are provided in the setting most
1704	appropriate to the needs of the person and in the most
1705	economical manner possible. The CARES program shall also ensure
1706	that individuals participating in Medicaid home and community-
1707	based waiver programs meet criteria for those programs,
1708	consistent with approved federal waivers.
1709	(b)  The agency shall operate the CARES program through an
1710	interagency agreement with the Department of Elderly Affairs.
1711	The agency, in consultation with the Department of Elderly
1712	Affairs, may contract for any function or activity of the CARES
1713	program, including any function or activity required by 42
1714	C.F.R. part 483.20, relating to preadmission screening and
1715	resident review.
1716	(c)  Prior to making payment for nursing facility services
1717	for a Medicaid recipient, the agency must verify that the
1718	nursing facility preadmission screening program has determined
1719	that the individual requires nursing facility care and that the
1720	individual cannot be safely served in community-based programs.
1721	The nursing facility preadmission screening program shall refer
1722	a Medicaid recipient to a community-based program if the
1723	individual could be safely served at a lower cost and the
1724	recipient chooses to participate in such program.     (d)  For the
1725	purpose of initiating immediate prescreening and diversion
1726	assistance for individuals residing in nursing homes and in
1727	order to make families aware of alternative long-term care
1728	resources so that they may choose a more cost-effective setting
1729	for long-term placement, CARES staff shall conduct an assessment
1730	and review of a sample of individuals whose nursing home stay is
1731	expected to exceed 20 days, regardless of the initial funding
1732	source for the nursing home placement. CARES staff shall provide
1733	counseling and referral services to these individuals regarding
1734	choosing appropriate long-term care alternatives. This paragraph
1735	does not apply to continuing care facilities licensed under
1736	chapter 651 or to retirement communities that provide a
1737	combination of nursing home, independent living, and other long-
1738	term care services.
1739	(e)  By January 15 of each year, the agency shall submit a
1740	report to the Legislature and the Office of Long-Term-Care
1741	Policy describing the operations of the CARES program. The
1742	report must describe:
1743	1.  Rate of diversion to community alternative programs;
1744	2.  CARES program staffing needs to achieve additional
1745	diversions;
1746	3.  Reasons the program is unable to place individuals in
1747	less restrictive settings when such individuals desired such
1748	services and could have been served in such settings;
1749	4.  Barriers to appropriate placement, including barriers
1750	due to policies or operations of other agencies or state-funded
1751	programs; and
1752	5.  Statutory changes necessary to ensure that individuals
1753	in need of long-term care services receive care in the least
1754	restrictive environment.
1755	(f)  The Department of Elderly Affairs shall track
1756	individuals over time who are assessed under the CARES program
1757	and who are diverted from nursing home placement. By January 15
1758	of each year, the department shall submit to the Legislature and
1759	the Office of Long-Term-Care Policy a longitudinal study of the
1760	individuals who are diverted from nursing home placement. The
1761	study must include:
1762	1.  The demographic characteristics of the individuals
1763	assessed and diverted from nursing home placement, including,
1764	but not limited to, age, race, gender, frailty, caregiver
1765	status, living arrangements, and geographic location;
1766	2.  A summary of community services provided to individuals
1767	for 1 year after assessment and diversion;
1768	3.  A summary of inpatient hospital admissions for
1769	individuals who have been diverted; and
1770	4.  A summary of the length of time between diversion and
1771	subsequent entry into a nursing home or death.
1772	(g)  By July 1, 2005, the department and the Agency for
1773	Health Care Administration shall report to the President of the
1774	Senate and the Speaker of the House of Representatives regarding
1775	the impact to the state of modifying level-of-care criteria to
1776	eliminate the Intermediate II level of care.
1777	(15)(16)(a)  The agency shall identify health care
1778	utilization and price patterns within the Medicaid program which
1779	are not cost-effective or medically appropriate and assess the
1780	effectiveness of new or alternate methods of providing and
1781	monitoring service, and may implement such methods as it
1782	considers appropriate. Such methods may include disease
1783	management initiatives, an integrated and systematic approach
1784	for managing the health care needs of recipients who are at risk
1785	of or diagnosed with a specific disease by using best practices,
1786	prevention strategies, clinical-practice improvement, clinical
1787	interventions and protocols, outcomes research, information
1788	technology, and other tools and resources to reduce overall
1789	costs and improve measurable outcomes.
1790	(b)  The responsibility of the agency under this subsection
1791	shall include the development of capabilities to identify actual
1792	and optimal practice patterns; patient and provider educational
1793	initiatives; methods for determining patient compliance with
1794	prescribed treatments; fraud, waste, and abuse prevention and
1795	detection programs; and beneficiary case management programs.
1796	1.  The practice pattern identification program shall
1797	evaluate practitioner prescribing patterns based on national and
1798	regional practice guidelines, comparing practitioners to their
1799	peer groups. The agency and its Drug Utilization Review Board
1800	shall consult with the Department of Health and a panel of
1801	practicing health care professionals consisting of the
1802	following: the Speaker of the House of Representatives and the
1803	President of the Senate shall each appoint three physicians
1804	licensed under chapter 458 or chapter 459; and the Governor
1805	shall appoint two pharmacists licensed under chapter 465 and one
1806	dentist licensed under chapter 466 who is an oral surgeon. Terms
1807	of the panel members shall expire at the discretion of the
1808	appointing official. The panel shall begin its work by August 1,
1809	1999, regardless of the number of appointments made by that
1810	date. The advisory panel shall be responsible for evaluating
1811	treatment guidelines and recommending ways to incorporate their
1812	use in the practice pattern identification program.
1813	Practitioners who are prescribing inappropriately or
1814	inefficiently, as determined by the agency, may have their
1815	prescribing of certain drugs subject to prior authorization or
1816	may be terminated from all participation in the Medicaid
1817	program.
1818	2.  The agency shall also develop educational interventions
1819	designed to promote the proper use of medications by providers
1820	and beneficiaries.
1821	3.  The agency shall implement a pharmacy fraud, waste, and
1822	abuse initiative that may include a surety bond or letter of
1823	credit requirement for participating pharmacies, enhanced
1824	provider auditing practices, the use of additional fraud and
1825	abuse software, recipient management programs for beneficiaries
1826	inappropriately using their benefits, and other steps that will
1827	eliminate provider and recipient fraud, waste, and abuse. The
1828	initiative shall address enforcement efforts to reduce the
1829	number and use of counterfeit prescriptions.
1830	4.  By September 30, 2002, the agency shall contract with
1831	an entity in the state to implement a wireless handheld clinical
1832	pharmacology drug information database for practitioners. The
1833	initiative shall be designed to enhance the agency's efforts to
1834	reduce fraud, abuse, and errors in the prescription drug benefit
1835	program and to otherwise further the intent of this paragraph.
1836	5.  By September 30, 2005, the agency shall contract with
1837	an entity to design a database of clinical utilization
1838	information or electronic medical records for Medicaid
1839	providers. This system must be web-based and allow providers to
1840	review on a real-time basis the utilization of Medicaid
1841	services, including, but not limited to, physician office
1842	visits, inpatient and outpatient hospitalizations, laboratory
1843	and pathology services, radiological and other imaging services,
1844	dental care, and patterns of dispensing prescription drugs in
1845	order to coordinate care and identify potential fraud and abuse.
1846	6.5.  The agency may apply for any federal waivers needed
1847	to implement this paragraph.
1848	(16)(17)  An entity contracting on a prepaid or fixed-sum
1849	basis shall, in addition to meeting any applicable statutory
1850	surplus requirements, also maintain at all times in the form of
1851	cash, investments that mature in less than 180 days allowable as
1852	admitted assets by the Office of Insurance Regulation, and
1853	restricted funds or deposits controlled by the agency or the
1854	Office of Insurance Regulation, a surplus amount equal to one-
1855	and-one-half times the entity's monthly Medicaid prepaid
1856	revenues. As used in this subsection, the term "surplus" means
1857	the entity's total assets minus total liabilities. If an
1858	entity's surplus falls below an amount equal to one-and-one-half
1859	times the entity's monthly Medicaid prepaid revenues, the agency
1860	shall prohibit the entity from engaging in marketing and
1861	preenrollment activities, shall cease to process new
1862	enrollments, and shall not renew the entity's contract until the
1863	required balance is achieved. The requirements of this
1864	subsection do not apply:
1865	(a)  Where a public entity agrees to fund any deficit
1866	incurred by the contracting entity; or
1867	(b)  Where the entity's performance and obligations are
1868	guaranteed in writing by a guaranteeing organization which:
1869	1.  Has been in operation for at least 5 years and has
1870	assets in excess of $50 million; or
1871	2.  Submits a written guarantee acceptable to the agency
1872	which is irrevocable during the term of the contracting entity's
1873	contract with the agency and, upon termination of the contract,
1874	until the agency receives proof of satisfaction of all
1875	outstanding obligations incurred under the contract.
1876	(17)(18)(a)  The agency may require an entity contracting
1877	on a prepaid or fixed-sum basis to establish a restricted
1878	insolvency protection account with a federally guaranteed
1879	financial institution licensed to do business in this state. The
1880	entity shall deposit into that account 5 percent of the
1881	capitation payments made by the agency each month until a
1882	maximum total of 2 percent of the total current contract amount
1883	is reached. The restricted insolvency protection account may be
1884	drawn upon with the authorized signatures of two persons
1885	designated by the entity and two representatives of the agency.
1886	If the agency finds that the entity is insolvent, the agency may
1887	draw upon the account solely with the two authorized signatures
1888	of representatives of the agency, and the funds may be disbursed
1889	to meet financial obligations incurred by the entity under the
1890	prepaid contract. If the contract is terminated, expired, or not
1891	continued, the account balance must be released by the agency to
1892	the entity upon receipt of proof of satisfaction of all
1893	outstanding obligations incurred under this contract.
1894	(b)  The agency may waive the insolvency protection account
1895	requirement in writing when evidence is on file with the agency
1896	of adequate insolvency insurance and reinsurance that will
1897	protect enrollees if the entity becomes unable to meet its
1898	obligations.
1899	(18)(19)  An entity that contracts with the agency on a
1900	prepaid or fixed-sum basis for the provision of Medicaid
1901	services shall reimburse any hospital or physician that is
1902	outside the entity's authorized geographic service area as
1903	specified in its contract with the agency, and that provides
1904	services authorized by the entity to its members, at a rate
1905	negotiated with the hospital or physician for the provision of
1906	services or according to the lesser of the following:
1907	(a)  The usual and customary charges made to the general
1908	public by the hospital or physician; or
1909	(b)  The Florida Medicaid reimbursement rate established
1910	for the hospital or physician.
1911	(19)(20)  When a merger or acquisition of a Medicaid
1912	prepaid contractor has been approved by the Office of Insurance
1913	Regulation pursuant to s. 628.4615, the agency shall approve the
1914	assignment or transfer of the appropriate Medicaid prepaid
1915	contract upon request of the surviving entity of the merger or
1916	acquisition if the contractor and the other entity have been in
1917	good standing with the agency for the most recent 12-month
1918	period, unless the agency determines that the assignment or
1919	transfer would be detrimental to the Medicaid recipients or the
1920	Medicaid program. To be in good standing, an entity must not
1921	have failed accreditation or committed any material violation of
1922	the requirements of s. 641.52 and must meet the Medicaid
1923	contract requirements. For purposes of this section, a merger or
1924	acquisition means a change in controlling interest of an entity,
1925	including an asset or stock purchase.
1926	(20)(21)  Any entity contracting with the agency pursuant
1927	to this section to provide health care services to Medicaid
1928	recipients is prohibited from engaging in any of the following
1929	practices or activities:
1930	(a)  Practices that are discriminatory, including, but not
1931	limited to, attempts to discourage participation on the basis of
1932	actual or perceived health status.
1933	(b)  Activities that could mislead or confuse recipients,
1934	or misrepresent the organization, its marketing representatives,
1935	or the agency. Violations of this paragraph include, but are not
1936	limited to:
1937	1.  False or misleading claims that marketing
1938	representatives are employees or representatives of the state or
1939	county, or of anyone other than the entity or the organization
1940	by whom they are reimbursed.
1941	2.  False or misleading claims that the entity is
1942	recommended or endorsed by any state or county agency, or by any
1943	other organization which has not certified its endorsement in
1944	writing to the entity.
1945	3.  False or misleading claims that the state or county
1946	recommends that a Medicaid recipient enroll with an entity.
1947	4.  Claims that a Medicaid recipient will lose benefits
1948	under the Medicaid program, or any other health or welfare
1949	benefits to which the recipient is legally entitled, if the
1950	recipient does not enroll with the entity.
1951	(c)  Granting or offering of any monetary or other valuable
1952	consideration for enrollment, except as authorized by subsection
1953	(24).
1954	(d)  Door-to-door solicitation of recipients who have not
1955	contacted the entity or who have not invited the entity to make
1956	a presentation.
1957	(e)  Solicitation of Medicaid recipients by marketing
1958	representatives stationed in state offices unless approved and
1959	supervised by the agency or its agent and approved by the
1960	affected state agency when solicitation occurs in an office of
1961	the state agency. The agency shall ensure that marketing
1962	representatives stationed in state offices shall market their
1963	managed care plans to Medicaid recipients only in designated
1964	areas and in such a way as to not interfere with the recipients'
1965	activities in the state office.
1966	(f)  Enrollment of Medicaid recipients.
1967	(21)(22)  The agency may impose a fine for a violation of
1968	this section or the contract with the agency by a person or
1969	entity that is under contract with the agency. With respect to
1970	any nonwillful violation, such fine shall not exceed $2,500 per
1971	violation. In no event shall such fine exceed an aggregate
1972	amount of $10,000 for all nonwillful violations arising out of
1973	the same action. With respect to any knowing and willful
1974	violation of this section or the contract with the agency, the
1975	agency may impose a fine upon the entity in an amount not to
1976	exceed $20,000 for each such violation. In no event shall such
1977	fine exceed an aggregate amount of $100,000 for all knowing and
1978	willful violations arising out of the same action.
1979	(22)(23)  A health maintenance organization or a person or
1980	entity exempt from chapter 641 that is under contract with the
1981	agency for the provision of health care services to Medicaid
1982	recipients may not use or distribute marketing materials used to
1983	solicit Medicaid recipients, unless such materials have been
1984	approved by the agency. The provisions of this subsection do not
1985	apply to general advertising and marketing materials used by a
1986	health maintenance organization to solicit both non-Medicaid
1987	subscribers and Medicaid recipients.
1988	(23)(24)  Upon approval by the agency, health maintenance
1989	organizations and persons or entities exempt from chapter 641
1990	that are under contract with the agency for the provision of
1991	health care services to Medicaid recipients may be permitted
1992	within the capitation rate to provide additional health benefits
1993	that the agency has found are of high quality, are practicably
1994	available, provide reasonable value to the recipient, and are
1995	provided at no additional cost to the state.
1996	(24)(25)  The agency shall utilize the statewide health
1997	maintenance organization complaint hotline for the purpose of
1998	investigating and resolving Medicaid and prepaid health plan
1999	complaints, maintaining a record of complaints and confirmed
2000	problems, and receiving disenrollment requests made by
2001	recipients.
2002	(25)(26)  The agency shall require the publication of the
2003	health maintenance organization's and the prepaid health plan's
2004	consumer services telephone numbers and the "800" telephone
2005	number of the statewide health maintenance organization
2006	complaint hotline on each Medicaid identification card issued by
2007	a health maintenance organization or prepaid health plan
2008	contracting with the agency to serve Medicaid recipients and on
2009	each subscriber handbook issued to a Medicaid recipient.
2010	(26)(27)  The agency shall establish a health care quality
2011	improvement system for those entities contracting with the
2012	agency pursuant to this section, incorporating all the standards
2013	and guidelines developed by the Medicaid Bureau of the Health
2014	Care Financing Administration as a part of the quality assurance
2015	reform initiative. The system shall include, but need not be
2016	limited to, the following:
2017	(a)  Guidelines for internal quality assurance programs,
2018	including standards for:
2019	1.  Written quality assurance program descriptions.
2020	2.  Responsibilities of the governing body for monitoring,
2021	evaluating, and making improvements to care.
2022	3.  An active quality assurance committee.
2023	4.  Quality assurance program supervision.
2024	5.  Requiring the program to have adequate resources to
2025	effectively carry out its specified activities.
2026	6.  Provider participation in the quality assurance
2027	program.
2028	7.  Delegation of quality assurance program activities.
2029	8.  Credentialing and recredentialing.
2030	9.  Enrollee rights and responsibilities.
2031	10.  Availability and accessibility to services and care.
2032	11.  Ambulatory care facilities.
2033	12.  Accessibility and availability of medical records, as
2034	well as proper recordkeeping and process for record review.
2035	13.  Utilization review.
2036	14.  A continuity of care system.
2037	15.  Quality assurance program documentation.
2038	16.  Coordination of quality assurance activity with other
2039	management activity.
2040	17.  Delivering care to pregnant women and infants; to
2041	elderly and disabled recipients, especially those who are at
2042	risk of institutional placement; to persons with developmental
2043	disabilities; and to adults who have chronic, high-cost medical
2044	conditions.
2045	(b)  Guidelines which require the entities to conduct
2046	quality-of-care studies which:
2047	1.  Target specific conditions and specific health service
2048	delivery issues for focused monitoring and evaluation.
2049	2.  Use clinical care standards or practice guidelines to
2050	objectively evaluate the care the entity delivers or fails to
2051	deliver for the targeted clinical conditions and health services
2052	delivery issues.
2053	3.  Use quality indicators derived from the clinical care
2054	standards or practice guidelines to screen and monitor care and
2055	services delivered.
2056	(c)  Guidelines for external quality review of each
2057	contractor which require: focused studies of patterns of care;
2058	individual care review in specific situations; and followup
2059	activities on previous pattern-of-care study findings and
2060	individual-care-review findings. In designing the external
2061	quality review function and determining how it is to operate as
2062	part of the state's overall quality improvement system, the
2063	agency shall construct its external quality review organization
2064	and entity contracts to address each of the following:
2065	1.  Delineating the role of the external quality review
2066	organization.
2067	2.  Length of the external quality review organization
2068	contract with the state.
2069	3.  Participation of the contracting entities in designing
2070	external quality review organization review activities.
2071	4.  Potential variation in the type of clinical conditions
2072	and health services delivery issues to be studied at each plan.
2073	5.  Determining the number of focused pattern-of-care
2074	studies to be conducted for each plan.
2075	6.  Methods for implementing focused studies.
2076	7.  Individual care review.
2077	8.  Followup activities.
2078	(27)(28)  In order to ensure that children receive health
2079	care services for which an entity has already been compensated,
2080	an entity contracting with the agency pursuant to this section
2081	shall achieve an annual Early and Periodic Screening, Diagnosis,
2082	and Treatment (EPSDT) Service screening rate of at least 60
2083	percent for those recipients continuously enrolled for at least
2084	8 months. The agency shall develop a method by which the EPSDT
2085	screening rate shall be calculated. For any entity which does
2086	not achieve the annual 60 percent rate, the entity must submit a
2087	corrective action plan for the agency's approval. If the entity
2088	does not meet the standard established in the corrective action
2089	plan during the specified timeframe, the agency is authorized to
2090	impose appropriate contract sanctions. At least annually, the
2091	agency shall publicly release the EPSDT Services screening rates
2092	of each entity it has contracted with on a prepaid basis to
2093	serve Medicaid recipients.
2094	(28)(29)  The agency shall perform enrollments and
2095	disenrollments for Medicaid recipients who are eligible for
2096	MediPass or managed care plans. Notwithstanding the prohibition
2097	contained in paragraph (20)(21)(f), managed care plans may
2098	perform preenrollments of Medicaid recipients under the
2099	supervision of the agency or its agents. For the purposes of
2100	this section, "preenrollment" means the provision of marketing
2101	and educational materials to a Medicaid recipient and assistance
2102	in completing the application forms, but shall not include
2103	actual enrollment into a managed care plan. An application for
2104	enrollment shall not be deemed complete until the agency or its
2105	agent verifies that the recipient made an informed, voluntary
2106	choice. The agency, in cooperation with the Department of
2107	Children and Family Services, may test new marketing initiatives
2108	to inform Medicaid recipients about their managed care options
2109	at selected sites. The agency shall report to the Legislature on
2110	the effectiveness of such initiatives. The agency may contract
2111	with a third party to perform managed care plan and MediPass
2112	enrollment and disenrollment services for Medicaid recipients
2113	and is authorized to adopt rules to implement such services. The
2114	agency may adjust the capitation rate only to cover the costs of
2115	a third-party enrollment and disenrollment contract, and for
2116	agency supervision and management of the managed care plan
2117	enrollment and disenrollment contract.
2118	(29)(30)  Any lists of providers made available to Medicaid
2119	recipients, MediPass enrollees, or managed care plan enrollees
2120	shall be arranged alphabetically showing the provider's name and
2121	specialty and, separately, by specialty in alphabetical order.
2122	(30)(31)  The agency shall establish an enhanced managed
2123	care quality assurance oversight function, to include at least
2124	the following components:
2125	(a)  At least quarterly analysis and followup, including
2126	sanctions as appropriate, of managed care participant
2127	utilization of services.
2128	(b)  At least quarterly analysis and followup, including
2129	sanctions as appropriate, of quality findings of the Medicaid
2130	peer review organization and other external quality assurance
2131	programs.
2132	(c)  At least quarterly analysis and followup, including
2133	sanctions as appropriate, of the fiscal viability of managed
2134	care plans.
2135	(d)  At least quarterly analysis and followup, including
2136	sanctions as appropriate, of managed care participant
2137	satisfaction and disenrollment surveys.
2138	(e)  The agency shall conduct regular and ongoing Medicaid
2139	recipient satisfaction surveys.
2140
2141	The analyses and followup activities conducted by the agency
2142	under its enhanced managed care quality assurance oversight
2143	function shall not duplicate the activities of accreditation
2144	reviewers for entities regulated under part III of chapter 641,
2145	but may include a review of the finding of such reviewers.
2146	(31)(32)  Each managed care plan that is under contract
2147	with the agency to provide health care services to Medicaid
2148	recipients shall annually conduct a background check with the
2149	Florida Department of Law Enforcement of all persons with
2150	ownership interest of 5 percent or more or executive management
2151	responsibility for the managed care plan and shall submit to the
2152	agency information concerning any such person who has been found
2153	guilty of, regardless of adjudication, or has entered a plea of
2154	nolo contendere or guilty to, any of the offenses listed in s.
2155	435.03.
2156	(32)(33)  The agency shall, by rule, develop a process
2157	whereby a Medicaid managed care plan enrollee who wishes to
2158	enter hospice care may be disenrolled from the managed care plan
2159	within 24 hours after contacting the agency regarding such
2160	request. The agency rule shall include a methodology for the
2161	agency to recoup managed care plan payments on a pro rata basis
2162	if payment has been made for the enrollment month when
2163	disenrollment occurs.
2164	(33)(34)  The agency and entities that which contract with
2165	the agency to provide health care services to Medicaid
2166	recipients under this section or ss. 409.91211 and s. 409.9122
2167	must comply with the provisions of s. 641.513 in providing
2168	emergency services and care to Medicaid recipients and MediPass
2169	recipients. Where feasible, safe, and cost-effective, the agency
2170	shall encourage hospitals, emergency medical services providers,
2171	and other public and private health care providers to work
2172	together in their local communities to enter into agreements or
2173	arrangements to ensure access to alternatives to emergency
2174	services and care for those Medicaid recipients who need
2175	nonemergent care. The agency shall coordinate with hospitals,
2176	emergency medical services providers, private health plans,
2177	capitated managed care networks as established in s. 409.91211,
2178	and other public and private health care providers to implement
2179	the provisions of ss. 395.1041(7), 409.91255(3)(g), 627.6405,
2180	and 641.31097 to develop and implement emergency department
2181	diversion programs for Medicaid recipients.
2182	(34)(35)  All entities providing health care services to
2183	Medicaid recipients shall make available, and encourage all
2184	pregnant women and mothers with infants to receive, and provide
2185	documentation in the medical records to reflect, the following:
2186	(a)  Healthy Start prenatal or infant screening.
2187	(b)  Healthy Start care coordination, when screening or
2188	other factors indicate need.
2189	(c)  Healthy Start enhanced services in accordance with the
2190	prenatal or infant screening results.
2191	(d)  Immunizations in accordance with recommendations of
2192	the Advisory Committee on Immunization Practices of the United
2193	States Public Health Service and the American Academy of
2194	Pediatrics, as appropriate.
2195	(e)  Counseling and services for family planning to all
2196	women and their partners.
2197	(f)  A scheduled postpartum visit for the purpose of
2198	voluntary family planning, to include discussion of all methods
2199	of contraception, as appropriate.
2200	(g)  Referral to the Special Supplemental Nutrition Program
2201	for Women, Infants, and Children (WIC).
2202	(35)(36)  Any entity that provides Medicaid prepaid health
2203	plan services shall ensure the appropriate coordination of
2204	health care services with an assisted living facility in cases
2205	where a Medicaid recipient is both a member of the entity's
2206	prepaid health plan and a resident of the assisted living
2207	facility. If the entity is at risk for Medicaid targeted case
2208	management and behavioral health services, the entity shall
2209	inform the assisted living facility of the procedures to follow
2210	should an emergent condition arise.
2211	(36)(37)  The agency may seek and implement federal waivers
2212	necessary to provide for cost-effective purchasing of home
2213	health services, private duty nursing services, transportation,
2214	independent laboratory services, and durable medical equipment
2215	and supplies through competitive bidding pursuant to s. 287.057.
2216	The agency may request appropriate waivers from the federal
2217	Health Care Financing Administration in order to competitively
2218	bid such services. The agency may exclude providers not selected
2219	through the bidding process from the Medicaid provider network.
2220	(37)(38)  The agency shall enter into agreements with not-
2221	for-profit organizations based in this state for the purpose of
2222	providing vision screening.
2223	(38)(39)(a)  The agency shall implement a Medicaid
2224	prescribed-drug spending-control program that includes the
2225	following components:
2226	1.  Medicaid prescribed-drug coverage for brand-name drugs
2227	for adult Medicaid recipients is limited to the dispensing of
2228	four brand-name drugs per month per recipient. Children are
2229	exempt from this restriction. Antiretroviral agents are excluded
2230	from this limitation. No requirements for prior authorization or
2231	other restrictions on medications used to treat mental illnesses
2232	such as schizophrenia, severe depression, or bipolar disorder
2233	may be imposed on Medicaid recipients. Medications that will be
2234	available without restriction for persons with mental illnesses
2235	include atypical antipsychotic medications, conventional
2236	antipsychotic medications, selective serotonin reuptake
2237	inhibitors, and other medications used for the treatment of
2238	serious mental illnesses. The agency shall also limit the amount
2239	of a prescribed drug dispensed to no more than a 34-day supply.
2240	The agency shall continue to provide unlimited generic drugs,
2241	contraceptive drugs and items, and diabetic supplies. Although a
2242	drug may be included on the preferred drug formulary, it would
2243	not be exempt from the four-brand limit. The agency may
2244	authorize exceptions to the brand-name-drug restriction based
2245	upon the treatment needs of the patients, only when such
2246	exceptions are based on prior consultation provided by the
2247	agency or an agency contractor, but the agency must establish
2248	procedures to ensure that:
2249	a.  There will be a response to a request for prior
2250	consultation by telephone or other telecommunication device
2251	within 24 hours after receipt of a request for prior
2252	consultation;
2253	b.  A 72-hour supply of the drug prescribed will be
2254	provided in an emergency or when the agency does not provide a
2255	response within 24 hours as required by sub-subparagraph a.; and
2256	c.  Except for the exception for nursing home residents and
2257	other institutionalized adults and except for drugs on the
2258	restricted formulary for which prior authorization may be sought
2259	by an institutional or community pharmacy, prior authorization
2260	for an exception to the brand-name-drug restriction is sought by
2261	the prescriber and not by the pharmacy. When prior authorization
2262	is granted for a patient in an institutional setting beyond the
2263	brand-name-drug restriction, such approval is authorized for 12
2264	months and monthly prior authorization is not required for that
2265	patient.
2266	2.  Reimbursement to pharmacies for Medicaid prescribed
2267	drugs shall be set at the lesser of: the average wholesale price
2268	(AWP) minus 15.4 percent, the wholesaler acquisition cost (WAC)
2269	plus 5.75 percent, the federal upper limit (FUL), the state
2270	maximum allowable cost (SMAC), or the usual and customary (UAC)
2271	charge billed by the provider.
2272	3.  The agency shall develop and implement a process for
2273	managing the drug therapies of Medicaid recipients who are using
2274	significant numbers of prescribed drugs each month. The
2275	management process may include, but is not limited to,
2276	comprehensive, physician-directed medical-record reviews, claims
2277	analyses, and case evaluations to determine the medical
2278	necessity and appropriateness of a patient's treatment plan and
2279	drug therapies. The agency may contract with a private
2280	organization to provide drug-program-management services. The
2281	Medicaid drug benefit management program shall include
2282	initiatives to manage drug therapies for HIV/AIDS patients,
2283	patients using 20 or more unique prescriptions in a 180-day
2284	period, and the top 1,000 patients in annual spending. The
2285	agency shall enroll any Medicaid recipient in the drug benefit
2286	management program if he or she meets the specifications of this
2287	provision and is not enrolled in a Medicaid health maintenance
2288	organization.
2289	4.  The agency may limit the size of its pharmacy network
2290	based on need, competitive bidding, price negotiations,
2291	credentialing, or similar criteria. The agency shall give
2292	special consideration to rural areas in determining the size and
2293	location of pharmacies included in the Medicaid pharmacy
2294	network. A pharmacy credentialing process may include criteria
2295	such as a pharmacy's full-service status, location, size,
2296	patient educational programs, patient consultation, disease-
2297	management services, and other characteristics. The agency may
2298	impose a moratorium on Medicaid pharmacy enrollment when it is
2299	determined that it has a sufficient number of Medicaid-
2300	participating providers.
2301	5.  The agency shall develop and implement a program that
2302	requires Medicaid practitioners who prescribe drugs to use a
2303	counterfeit-proof prescription pad for Medicaid prescriptions.
2304	The agency shall require the use of standardized counterfeit-
2305	proof prescription pads by Medicaid-participating prescribers or
2306	prescribers who write prescriptions for Medicaid recipients. The
2307	agency may implement the program in targeted geographic areas or
2308	statewide.
2309	6.  The agency may enter into arrangements that require
2310	manufacturers of generic drugs prescribed to Medicaid recipients
2311	to provide rebates of at least 15.1 percent of the average
2312	manufacturer price for the manufacturer's generic products.
2313	These arrangements shall require that if a generic-drug
2314	manufacturer pays federal rebates for Medicaid-reimbursed drugs
2315	at a level below 15.1 percent, the manufacturer must provide a
2316	supplemental rebate to the state in an amount necessary to
2317	achieve a 15.1-percent rebate level.
2318	7.  The agency may establish a preferred drug formulary in
2319	accordance with 42 U.S.C. s. 1396r-8, and, pursuant to the
2320	establishment of such formulary, it is authorized to negotiate
2321	supplemental rebates from manufacturers that are in addition to
2322	those required by Title XIX of the Social Security Act and at no
2323	less than 14 percent of the average manufacturer price as
2324	defined in 42 U.S.C. s. 1936 on the last day of a quarter unless
2325	the federal or supplemental rebate, or both, equals or exceeds
2326	29 percent. There is no upper limit on the supplemental rebates
2327	the agency may negotiate. The agency may determine that specific
2328	products, brand-name or generic, are competitive at lower rebate
2329	percentages. Agreement to pay the minimum supplemental rebate
2330	percentage will guarantee a manufacturer that the Medicaid
2331	Pharmaceutical and Therapeutics Committee will consider a
2332	product for inclusion on the preferred drug formulary. However,
2333	a pharmaceutical manufacturer is not guaranteed placement on the
2334	formulary by simply paying the minimum supplemental rebate.
2335	Agency decisions will be made on the clinical efficacy of a drug
2336	and recommendations of the Medicaid Pharmaceutical and
2337	Therapeutics Committee, as well as the price of competing
2338	products minus federal and state rebates. The agency is
2339	authorized to contract with an outside agency or contractor to
2340	conduct negotiations for supplemental rebates. For the purposes
2341	of this section, the term "supplemental rebates" means cash
2342	rebates. Effective July 1, 2004, value-added programs as a
2343	substitution for supplemental rebates are prohibited. The agency
2344	is authorized to seek any federal waivers to implement this
2345	initiative.
2346	8.  The agency shall establish an advisory committee for
2347	the purposes of studying the feasibility of using a restricted
2348	drug formulary for nursing home residents and other
2349	institutionalized adults. The committee shall be comprised of
2350	seven members appointed by the Secretary of Health Care
2351	Administration. The committee members shall include two
2352	physicians licensed under chapter 458 or chapter 459; three
2353	pharmacists licensed under chapter 465 and appointed from a list
2354	of recommendations provided by the Florida Long-Term Care
2355	Pharmacy Alliance; and two pharmacists licensed under chapter
2356	465.
2357	9.  The Agency for Health Care Administration shall expand
2358	home delivery of pharmacy products. To assist Medicaid patients
2359	in securing their prescriptions and reduce program costs, the
2360	agency shall expand its current mail-order-pharmacy diabetes-
2361	supply program to include all generic and brand-name drugs used
2362	by Medicaid patients with diabetes. Medicaid recipients in the
2363	current program may obtain nondiabetes drugs on a voluntary
2364	basis. This initiative is limited to the geographic area covered
2365	by the current contract. The agency may seek and implement any
2366	federal waivers necessary to implement this subparagraph.
2367	10.  The agency shall limit to one dose per month any drug
2368	prescribed to treat erectile dysfunction.
2369	11.a.  The agency shall implement a Medicaid behavioral
2370	drug management system. The agency may contract with a vendor
2371	that has experience in operating behavioral drug management
2372	systems to implement this program. The agency is authorized to
2373	seek federal waivers to implement this program.
2374	b.  The agency, in conjunction with the Department of
2375	Children and Family Services, may implement the Medicaid
2376	behavioral drug management system that is designed to improve
2377	the quality of care and behavioral health prescribing practices
2378	based on best practice guidelines, improve patient adherence to
2379	medication plans, reduce clinical risk, and lower prescribed
2380	drug costs and the rate of inappropriate spending on Medicaid
2381	behavioral drugs. The program shall include the following
2382	elements:
2383	(I)  Provide for the development and adoption of best
2384	practice guidelines for behavioral health-related drugs such as
2385	antipsychotics, antidepressants, and medications for treating
2386	bipolar disorders and other behavioral conditions; translate
2387	them into practice; review behavioral health prescribers and
2388	compare their prescribing patterns to a number of indicators
2389	that are based on national standards; and determine deviations
2390	from best practice guidelines.
2391	(II)  Implement processes for providing feedback to and
2392	educating prescribers using best practice educational materials
2393	and peer-to-peer consultation.
2394	(III)  Assess Medicaid beneficiaries who are outliers in
2395	their use of behavioral health drugs with regard to the numbers
2396	and types of drugs taken, drug dosages, combination drug
2397	therapies, and other indicators of improper use of behavioral
2398	health drugs.
2399	(IV)  Alert prescribers to patients who fail to refill
2400	prescriptions in a timely fashion, are prescribed multiple same-
2401	class behavioral health drugs, and may have other potential
2402	medication problems.
2403	(V)  Track spending trends for behavioral health drugs and
2404	deviation from best practice guidelines.
2405	(VI)  Use educational and technological approaches to
2406	promote best practices, educate consumers, and train prescribers
2407	in the use of practice guidelines.
2408	(VII)  Disseminate electronic and published materials.
2409	(VIII)  Hold statewide and regional conferences.
2410	(IX)  Implement a disease management program with a model
2411	quality-based medication component for severely mentally ill
2412	individuals and emotionally disturbed children who are high
2413	users of care.
2414	c.  If the agency is unable to negotiate a contract with
2415	one or more manufacturers to finance and guarantee savings
2416	associated with a behavioral drug management program by
2417	September 1, 2004, the four-brand drug limit and preferred drug
2418	list prior-authorization requirements shall apply to mental
2419	health-related drugs, notwithstanding any provision in
2420	subparagraph 1. The agency is authorized to seek federal waivers
2421	to implement this policy.
2422	12.a.  The agency shall implement a Medicaid prescription-
2423	drug-management system. The agency may contract with a vendor
2424	that has experience in operating prescription-drug-management
2425	systems in order to implement this system. Any management system
2426	that is implemented in accordance with this subparagraph must
2427	rely on cooperation between physicians, physician assistants,
2428	advanced registered nurse practitioners, and pharmacists to
2429	determine appropriate practice patterns and clinical guidelines
2430	to improve the prescribing, dispensing, and use of drugs in the
2431	Medicaid program. The agency may seek federal waivers to
2432	implement this program.
2433	b.  The drug-management system must be designed to improve
2434	the quality of care and prescribing practices based on best-
2435	practice guidelines, improve patient adherence to medication
2436	plans, reduce clinical risk, and lower prescribed drug costs and
2437	the rate of inappropriate spending on Medicaid prescription
2438	drugs. The program must:
2439	(I)  Provide for the development and adoption of best-
2440	practice guidelines for the prescribing and use of drugs in the
2441	Medicaid program, including translating best-practice guidelines
2442	into practice; reviewing prescriber patterns and comparing them
2443	to indicators that are based on national standards and practice
2444	patterns of clinical peers in their community, statewide, and
2445	nationally; and determine deviations from best-practice
2446	guidelines.
2447	(II)  Implement processes for providing feedback to and
2448	educating prescribers using best-practice educational materials
2449	and peer-to-peer consultation.
2450	(III)  Assess Medicaid recipients who are outliers in their
2451	use of a single or multiple prescription drugs with regard to
2452	the numbers and types of drugs taken, drug dosages, combination
2453	drug therapies, and other indicators of improper use of
2454	prescription drugs.
2455	(IV)  Alert prescribers to patients who fail to refill
2456	prescriptions in a timely fashion, are prescribed multiple drugs
2457	that may be redundant or contraindicated, or may have other
2458	potential medication problems.
2459	(V)  Track spending trends for prescription drugs and
2460	deviation from best practice guidelines.
2461	(VI)  Use educational and technological approaches to
2462	promote best practices, educate consumers, and train prescribers
2463	in the use of practice guidelines.
2464	(VII)  Disseminate electronic and published materials.
2465	(VIII)  Hold statewide and regional conferences.
2466	(IX)  Implement disease-management programs in cooperation
2467	with physicians and pharmacists, along with a model quality-
2468	based medication component for individuals having chronic
2469	medical conditions.
2470	13.12.  The agency is authorized to contract for drug
2471	rebate administration, including, but not limited to,
2472	calculating rebate amounts, invoicing manufacturers, negotiating
2473	disputes with manufacturers, and maintaining a database of
2474	rebate collections.
2475	14.13.  The agency may specify the preferred daily dosing
2476	form or strength for the purpose of promoting best practices
2477	with regard to the prescribing of certain drugs as specified in
2478	the General Appropriations Act and ensuring cost-effective
2479	prescribing practices.
2480	15.14.  The agency may require prior authorization for the
2481	off-label use of Medicaid-covered prescribed drugs as specified
2482	in the General Appropriations Act. The agency may, but is not
2483	required to, preauthorize the use of a product for an indication
2484	not in the approved labeling. Prior authorization may require
2485	the prescribing professional to provide information about the
2486	rationale and supporting medical evidence for the off-label use
2487	of a drug.
2488	16.15.  The agency shall implement a return and reuse
2489	program for drugs dispensed by pharmacies to institutional
2490	recipients, which includes payment of a $5 restocking fee for
2491	the implementation and operation of the program. The return and
2492	reuse program shall be implemented electronically and in a
2493	manner that promotes efficiency. The program must permit a
2494	pharmacy to exclude drugs from the program if it is not
2495	practical or cost-effective for the drug to be included and must
2496	provide for the return to inventory of drugs that cannot be
2497	credited or returned in a cost-effective manner. The agency
2498	shall determine if the program has reduced the amount of
2499	Medicaid prescription drugs which are destroyed on an annual
2500	basis and if there are additional ways to ensure more
2501	prescription drugs are not destroyed which could safely be
2502	reused. The agency's conclusion and recommendations shall be
2503	reported to the Legislature by December 1, 2005.
2504	(b)  The agency shall implement this subsection to the
2505	extent that funds are appropriated to administer the Medicaid
2506	prescribed-drug spending-control program. The agency may
2507	contract all or any part of this program to private
2508	organizations.
2509	(c)  The agency shall submit quarterly reports to the
2510	Governor, the President of the Senate, and the Speaker of the
2511	House of Representatives which must include, but need not be
2512	limited to, the progress made in implementing this subsection
2513	and its effect on Medicaid prescribed-drug expenditures.
2514	(39)(40)  Notwithstanding the provisions of chapter 287,
2515	the agency may, at its discretion, renew a contract or contracts
2516	for fiscal intermediary services one or more times for such
2517	periods as the agency may decide; however, all such renewals may
2518	not combine to exceed a total period longer than the term of the
2519	original contract.
2520	(40)(41)  The agency shall provide for the development of a
2521	demonstration project by establishment in Miami-Dade County of a
2522	long-term-care facility licensed pursuant to chapter 395 to
2523	improve access to health care for a predominantly minority,
2524	medically underserved, and medically complex population and to
2525	evaluate alternatives to nursing home care and general acute
2526	care for such population. Such project is to be located in a
2527	health care condominium and colocated with licensed facilities
2528	providing a continuum of care. The establishment of this project
2529	is not subject to the provisions of s. 408.036 or s. 408.039.
2530	The agency shall report its findings to the Governor, the
2531	President of the Senate, and the Speaker of the House of
2532	Representatives by January 1, 2003.
2533	(41)(42)  The agency shall develop and implement a
2534	utilization management program for Medicaid-eligible recipients
2535	for the management of occupational, physical, respiratory, and
2536	speech therapies. The agency shall establish a utilization
2537	program that may require prior authorization in order to ensure
2538	medically necessary and cost-effective treatments. The program
2539	shall be operated in accordance with a federally approved waiver
2540	program or state plan amendment. The agency may seek a federal
2541	waiver or state plan amendment to implement this program. The
2542	agency may also competitively procure these services from an
2543	outside vendor on a regional or statewide basis.
2544	(42)(43)  The agency may contract on a prepaid or fixed-sum
2545	basis with appropriately licensed prepaid dental health plans to
2546	provide dental services.
2547	(43)(44)  The Agency for Health Care Administration shall
2548	ensure that any Medicaid managed care plan as defined in s.
2549	409.9122(2)(h), whether paid on a capitated basis or a shared
2550	savings basis, is cost-effective. For purposes of this
2551	subsection, the term "cost-effective" means that a network's
2552	per-member, per-month costs to the state, including, but not
2553	limited to, fee-for-service costs, administrative costs, and
2554	case-management fees, must be no greater than the state's costs
2555	associated with contracts for Medicaid services established
2556	under subsection (3), which shall be actuarially adjusted for
2557	case mix, model, and service area. The agency shall conduct
2558	actuarially sound audits adjusted for case mix and model in
2559	order to ensure such cost-effectiveness and shall publish the
2560	audit results on its Internet website and submit the audit
2561	results annually to the Governor, the President of the Senate,
2562	and the Speaker of the House of Representatives no later than
2563	December 31 of each year. Contracts established pursuant to this
2564	subsection which are not cost-effective may not be renewed.
2565	(44)(45)  Subject to the availability of funds, the agency
2566	shall mandate a recipient's participation in a provider lock-in
2567	program, when appropriate, if a recipient is found by the agency
2568	to have used Medicaid goods or services at a frequency or amount
2569	not medically necessary, limiting the receipt of goods or
2570	services to medically necessary providers after the 21-day
2571	appeal process has ended, for a period of not less than 1 year.
2572	The lock-in programs shall include, but are not limited to,
2573	pharmacies, medical doctors, and infusion clinics. The
2574	limitation does not apply to emergency services and care
2575	provided to the recipient in a hospital emergency department.
2576	The agency shall seek any federal waivers necessary to implement
2577	this subsection. The agency shall adopt any rules necessary to
2578	comply with or administer this subsection.
2579	(45)(46)  The agency shall seek a federal waiver for
2580	permission to terminate the eligibility of a Medicaid recipient
2581	who has been found to have committed fraud, through judicial or
2582	administrative determination, two times in a period of 5 years.
2583	(46)(47)  The agency shall conduct a study of available
2584	electronic systems for the purpose of verifying the identity and
2585	eligibility of a Medicaid recipient. The agency shall recommend
2586	to the Legislature a plan to implement an electronic
2587	verification system for Medicaid recipients by January 31, 2005.
2588	(47)(48)  A provider is not entitled to enrollment in the
2589	Medicaid provider network. The agency may implement a Medicaid
2590	fee-for-service provider network controls, including, but not
2591	limited to, competitive procurement and provider credentialing.
2592	If a credentialing process is used, the agency may limit its
2593	provider network based upon the following considerations:
2594	beneficiary access to care, provider availability, provider
2595	quality standards and quality assurance processes, cultural
2596	competency, demographic characteristics of beneficiaries,
2597	practice standards, service wait times, provider turnover,
2598	provider licensure and accreditation history, program integrity
2599	history, peer review, Medicaid policy and billing compliance
2600	records, clinical and medical record audit findings, and such
2601	other areas that are considered necessary by the agency to
2602	ensure the integrity of the program.
2603	(48)(49)  The agency shall contract with established
2604	minority physician networks that provide services to
2605	historically underserved minority patients. The networks must
2606	provide cost-effective Medicaid services, comply with the
2607	requirements to be a MediPass provider, and provide their
2608	primary care physicians with access to data and other management
2609	tools necessary to assist them in ensuring the appropriate use
2610	of services, including inpatient hospital services and
2611	pharmaceuticals.
2612	(a)  The agency shall provide for the development and
2613	expansion of minority physician networks in each service area to
2614	provide services to Medicaid recipients who are eligible to
2615	participate under federal law and rules.
2616	(b)  The agency shall reimburse each minority physician
2617	network as a fee-for-service provider, including the case
2618	management fee for primary care, or as a capitated rate provider
2619	for Medicaid services. Any savings shall be shared with the
2620	minority physician networks pursuant to the contract.
2621	(c)  For purposes of this subsection, the term "cost-
2622	effective" means that a network's per-member, per-month costs to
2623	the state, including, but not limited to, fee-for-service costs,
2624	administrative costs, and case-management fees, must be no
2625	greater than the state's costs associated with contracts for
2626	Medicaid services established under subsection (3), which shall
2627	be actuarially adjusted for case mix, model, and service area.
2628	The agency shall conduct actuarially sound audits adjusted for
2629	case mix and model in order to ensure such cost-effectiveness
2630	and shall publish the audit results on its Internet website and
2631	submit the audit results annually to the Governor, the President
2632	of the Senate, and the Speaker of the House of Representatives
2633	no later than December 31. Contracts established pursuant to
2634	this subsection which are not cost-effective may not be renewed.
2635	(d)  The agency may apply for any federal waivers needed to
2636	implement this subsection.
2637	(50)  To the extent permitted by federal law and as allowed
2638	under s. 409.906, the agency shall provide reimbursement for
2639	emergency mental health care services for Medicaid recipients in
2640	crisis-stabilization facilities licensed under s. 394.875 as
2641	long as those services are less expensive than the same services
2642	provided in a hospital setting.
2643	Section 4.  Paragraphs (a) and (j) of subsection (2) of
2644	section 409.9122, Florida Statutes, are amended to read:
2645	409.9122  Mandatory Medicaid managed care enrollment;
2646	programs and procedures.--
2647	(2)(a)  The agency shall enroll in a managed care plan or
2648	MediPass all Medicaid recipients, except those Medicaid
2649	recipients who are: in an institution; enrolled in the Medicaid
2650	medically needy program; or eligible for both Medicaid and
2651	Medicare. Upon enrollment, individuals will be able to change
2652	their managed care option during the 90-day opt out period
2653	required by federal Medicaid regulations. The agency is
2654	authorized to seek the necessary Medicaid state plan amendment
2655	to implement this policy. However, to the extent permitted by
2656	federal law, the agency may enroll in a managed care plan or
2657	MediPass a Medicaid recipient who is exempt from mandatory
2658	managed care enrollment, provided that:
2659	1.  The recipient's decision to enroll in a managed care
2660	plan or MediPass is voluntary;
2661	2.  If the recipient chooses to enroll in a managed care
2662	plan, the agency has determined that the managed care plan
2663	provides specific programs and services which address the
2664	special health needs of the recipient; and
2665	3.  The agency receives any necessary waivers from the
2666	federal Centers for Medicare and Medicaid Services Health Care
2667	Financing Administration.
2668
2669	The agency shall develop rules to establish policies by which
2670	exceptions to the mandatory managed care enrollment requirement
2671	may be made on a case-by-case basis. The rules shall include the
2672	specific criteria to be applied when making a determination as
2673	to whether to exempt a recipient from mandatory enrollment in a
2674	managed care plan or MediPass. School districts participating in
2675	the certified school match program pursuant to ss. 409.908(21)
2676	and 1011.70 shall be reimbursed by Medicaid, subject to the
2677	limitations of s. 1011.70(1), for a Medicaid-eligible child
2678	participating in the services as authorized in s. 1011.70, as
2679	provided for in s. 409.9071, regardless of whether the child is
2680	enrolled in MediPass or a managed care plan. Managed care plans
2681	shall make a good faith effort to execute agreements with school
2682	districts regarding the coordinated provision of services
2683	authorized under s. 1011.70. County health departments
2684	delivering school-based services pursuant to ss. 381.0056 and
2685	381.0057 shall be reimbursed by Medicaid for the federal share
2686	for a Medicaid-eligible child who receives Medicaid-covered
2687	services in a school setting, regardless of whether the child is
2688	enrolled in MediPass or a managed care plan. Managed care plans
2689	shall make a good faith effort to execute agreements with county
2690	health departments regarding the coordinated provision of
2691	services to a Medicaid-eligible child. To ensure continuity of
2692	care for Medicaid patients, the agency, the Department of
2693	Health, and the Department of Education shall develop procedures
2694	for ensuring that a student's managed care plan or MediPass
2695	provider receives information relating to services provided in
2696	accordance with ss. 381.0056, 381.0057, 409.9071, and 1011.70.
2697	(j)  The agency shall apply for a federal waiver from the
2698	Centers for Medicare and Medicaid Services Health Care Financing
2699	Administration to lock eligible Medicaid recipients into a
2700	managed care plan or MediPass for 12 months after an open
2701	enrollment period. After 12 months' enrollment, a recipient may
2702	select another managed care plan or MediPass provider. However,
2703	nothing shall prevent a Medicaid recipient from changing primary
2704	care providers within the managed care plan or MediPass program
2705	during the 12-month period.
2706	Section 5.  Subsection (2) of section 409.913, Florida
2707	Statutes, is amended, and subsection (36) is added to that
2708	section, to read:
2709	409.913  Oversight of the integrity of the Medicaid
2710	program.--The agency shall operate a program to oversee the
2711	activities of Florida Medicaid recipients, and providers and
2712	their representatives, to ensure that fraudulent and abusive
2713	behavior and neglect of recipients occur to the minimum extent
2714	possible, and to recover overpayments and impose sanctions as
2715	appropriate. Beginning January 1, 2003, and each year
2716	thereafter, the agency and the Medicaid Fraud Control Unit of
2717	the Department of Legal Affairs shall submit a joint report to
2718	the Legislature documenting the effectiveness of the state's
2719	efforts to control Medicaid fraud and abuse and to recover
2720	Medicaid overpayments during the previous fiscal year. The
2721	report must describe the number of cases opened and investigated
2722	each year; the sources of the cases opened; the disposition of
2723	the cases closed each year; the amount of overpayments alleged
2724	in preliminary and final audit letters; the number and amount of
2725	fines or penalties imposed; any reductions in overpayment
2726	amounts negotiated in settlement agreements or by other means;
2727	the amount of final agency determinations of overpayments; the
2728	amount deducted from federal claiming as a result of
2729	overpayments; the amount of overpayments recovered each year;
2730	the amount of cost of investigation recovered each year; the
2731	average length of time to collect from the time the case was
2732	opened until the overpayment is paid in full; the amount
2733	determined as uncollectible and the portion of the uncollectible
2734	amount subsequently reclaimed from the Federal Government; the
2735	number of providers, by type, that are terminated from
2736	participation in the Medicaid program as a result of fraud and
2737	abuse; and all costs associated with discovering and prosecuting
2738	cases of Medicaid overpayments and making recoveries in such
2739	cases. The report must also document actions taken to prevent
2740	overpayments and the number of providers prevented from
2741	enrolling in or reenrolling in the Medicaid program as a result
2742	of documented Medicaid fraud and abuse and must recommend
2743	changes necessary to prevent or recover overpayments.
2744	(2)  The agency shall conduct, or cause to be conducted by
2745	contract or otherwise, reviews, investigations, analyses,
2746	audits, or any combination thereof, to determine possible fraud,
2747	abuse, overpayment, or recipient neglect in the Medicaid program
2748	and shall report the findings of any overpayments in audit
2749	reports as appropriate. At least 5 percent of all audits shall
2750	be conducted on a random basis.
2751	(36)  The agency shall provide to each Medicaid recipient
2752	or his or her representative an explanation of benefits in the
2753	form of a letter that is mailed to the most recent address of
2754	the recipient on the record with the Department of Children and
2755	Family Services. The explanation of benefits must include the
2756	patient's name, the name of the health care provider and the
2757	address of the location where the service was provided, a
2758	description of all services billed to Medicaid in terminology
2759	that should be understood by a reasonable person, and
2760	information on how to report inappropriate or incorrect billing
2761	to the agency or other law enforcement entities for review or
2762	investigation.
2763	Section 6.  The Agency for Health Care Administration shall
2764	submit to the Legislature by January 15, 2006, recommendations
2765	to ensure that Medicaid is the payer of last resort as required
2766	by section 409.910, Florida Statutes. The report must identify
2767	the public and private entities that are liable for primary
2768	payment of health care services and recommend methods to improve
2769	enforcement of third-party liability responsibility and
2770	repayment of benefits to the state Medicaid program. The report
2771	must estimate the potential recoveries that may be achieved
2772	through third-party liability efforts if administrative and
2773	legal barriers are removed. The report must recommend whether
2774	modifications to the agency's contingency-fee contract for
2775	third-party liability could enhance third-party liability for
2776	benefits provided to Medicaid recipients.
2777	Section 7.  By January 15, 2006, the Office of Program
2778	Policy Analysis and Government Accountability shall submit to
2779	the Legislature a study of the long-term care community
2780	diversion pilot project authorized under ss. 430.701-430.709.
2781	The study may be conducted by Office of Program Policy Analysis
2782	and Government Accountability staff or by a consultant obtained
2783	through a competitive bid. The study must use a statistically-
2784	valid methodology to assess the percent of persons served in the
2785	project over a 2-year period who would have required Medicaid
2786	nursing home services without the diversion services, which
2787	services are most frequently used, and which services are least
2788	frequently used. The study must determine whether the project is
2789	cost-effective or is an expansion of the Medicaid program
2790	because a preponderance of the project enrollees would not have
2791	required Medicaid nursing home services within a 2-year period
2792	regardless of the availability of the project or that the
2793	enrollees could have been safely served through another Medicaid
2794	program at a lower cost to the state.
2795	Section 8.  The Agency for Health Care Administration shall
2796	identify how many individuals in the long-term care diversion
2797	programs who receive care at home have a patient-responsibility
2798	payment associated with their participation in the diversion
2799	program. If no system is available to assess this information,
2800	the agency shall determine the cost of creating a system to
2801	identify and collect these payments and whether the cost of
2802	developing a system for this purpose is offset by the amount of
2803	patient-responsibility payments which could be collected with
2804	the system. The agency shall report this information to the
2805	Legislature by December 1, 2005.
2806	Section 9.  The sums of $431,121 in recurring funds and
2807	$1,305 in nonrecurring funds from the General Revenue Fund and
2808	$432,426 in recurring funds from the Administrative Trust Fund
2809	are appropriated to the Agency for Health Care Administration
2810	and one full-time equivalent position is authorized for the
2811	purpose of contracting with a vendor to monitor and evaluate the
2812	clinical practice patterns of providers and provide information
2813	to improve patient care and reduce utilization as established in
2814	section 3 during the 2005-2006 fiscal year.
2815	Section 10.  The sums of $1,100,000 in recurring funds from
2816	the General Revenue Fund and $1,100,000 in recurring funds from
2817	the Administrative Trust Fund are appropriated to the Agency for
2818	Health Care Administration for the purpose of contracting with a
2819	vendor to design a web-based database to allow providers to
2820	review real-time utilization of Medicaid services in order to
2821	coordinate care and identify potential fraud and abuse as
2822	established in section 3 during the 2005-2006 fiscal year.
2823	Section 11.  The sums of $4,427,897 in recurring funds and
2824	$7,571,635 in nonrecurring funds from the General Revenue Fund
2825	and $5,237,032 in recurring funds and $7,562,500 in nonrecurring
2826	funds from the Administrative Trust Fund are appropriated to the
2827	Agency for Health Care Administration and seven full-time
2828	equivalent positions are authorized for the purpose of
2829	developing infrastructure and administrative resources necessary
2830	to develop the capitated managed care pilot program established
2831	in section 2 and for purposes of integrated managed long-term
2832	care services, the reimbursement business case, emergency room
2833	diversion, drug management, destroying drug reports, and
2834	explanations of benefits during the 2005-2006 fiscal year.
2835	Section 12.  The sums of $845,223 in recurring funds from
2836	the General Revenue Fund and $2,324,224 in recurring funds from
2837	the Administrative Trust Fund and the sums of $3,935 in
2838	nonrecurring funds from the General Revenue Fund and $3,934 in
2839	nonrecurring funds from the Administrative Trust Fund are
2840	appropriated to the Agency for Health Care Administration and
2841	three positions are authorized for the purpose of developing a
2842	managed care encounter data information system during the 2005-
2843	2006 fiscal year.
2844	Section 13.  This act shall take effect July 1, 2005.

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