Florida Senate - 2007 COMMITTEE AMENDMENT
Bill No. SB 2182
Barcode 293894
CHAMBER ACTION
Senate House
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11 The Committee on Health Policy (Saunders) recommended the
12 following amendment:
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14 Senate Amendment (with title amendment)
15 On page 5, line 6, through
16 page 11, line 21, delete those lines
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18 and insert: by a hospital or the Department of Health which
19 have been approved for such status after July 1, 2007, are not
20 exempt from the surplus and other financial requirements of
21 part I of chapter 641. Provider service networks not operated
22 by a hospital or the Department of Health which were approved
23 on or before July 1, 2007, shall be required by the agency to
24 comply with the surplus and other financial requirements of
25 part I of chapter 641 before July 1, 2010. For provider
26 service networks not operated by a hospital or the Department
27 of Health which seek compliance with this paragraph, the
28 minimum surplus amount is the greater of $3 million, 10
29 percent of total liabilities, or 2 percent of total annualized
30 premium, notwithstanding part I of chapter 641. Medicaid
31 recipients assigned to a provider service network shall be
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Florida Senate - 2007 COMMITTEE AMENDMENT
Bill No. SB 2182
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1 chosen equally from those who would otherwise have been
2 assigned to prepaid plans and MediPass. The agency is
3 authorized to seek federal Medicaid waivers as necessary to
4 implement the provisions of this section. Any contract
5 previously awarded to a provider service network operated by a
6 hospital pursuant to this subsection shall remain in effect
7 for a period of 3 years following the current contract
8 expiration date, regardless of any contractual provisions to
9 the contrary. A provider service network is a network
10 established or organized and operated by a health care
11 provider, or group of affiliated health care providers,
12 including minority physician networks and emergency room
13 diversion programs that meet the requirements of s. 409.91211,
14 which provides a substantial proportion of the health care
15 items and services under a contract directly through the
16 provider or affiliated group of providers and may make
17 arrangements with physicians or other health care
18 professionals, health care institutions, or any combination of
19 such individuals or institutions to assume all or part of the
20 financial risk on a prospective basis for the provision of
21 basic health services by the physicians, by other health
22 professionals, or through the institutions. The health care
23 providers must have a controlling interest in the governing
24 body of the provider service network organization.
25 (49) The agency shall contract with established
26 minority physician networks that provide services to
27 historically underserved minority patients. The networks must
28 provide cost-effective Medicaid services, comply with the
29 requirements to be a MediPass provider, and provide their
30 primary care physicians with access to data and other
31 management tools necessary to assist them in ensuring the
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Florida Senate - 2007 COMMITTEE AMENDMENT
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1 appropriate use of services, including inpatient hospital
2 services and pharmaceuticals.
3 (a) The agency shall provide for the development and
4 expansion of minority physician networks in each service area
5 to provide services to Medicaid recipients who are eligible to
6 participate under federal law and rules. The agency shall
7 further require that each minority physician network that has
8 been approved for designation or expansion after July 1, 2007,
9 meet the requirements of part I of chapter 641 as a condition
10 of such designation or expansion. Minority physician networks
11 that were approved on or before July 1, 2007, shall be
12 required by the agency to comply with the surplus and other
13 financial requirements of part I of chapter 641 before July 1,
14 2010. For minority physician networks that seek compliance
15 with this paragraph, the minimum surplus amount is the greater
16 of $3 million, 10 percent of total liabilities, or 2 percent
17 of total annualized premium, notwithstanding part I of chapter
18 641.
19 (53)(a) The agency may not enter into a contract with
20 a managed care plan that is eligible to receive an assignment
21 of Medicaid recipients which is to be effective in any county
22 if such contract would cause the county to contain fewer than
23 20,000 recipients subject to mandatory Medicaid managed care
24 enrollment per each managed care plan eligible to receive an
25 assignment of Medicaid recipients residing in the county. For
26 purposes of this subsection, the term "mandatory Medicaid
27 managed care enrollment" has the same meaning as in s.
28 409.9122, and the terms "managed care plan" and "assignment"
29 have the same meaning as in s. 409.9122(2)(f), except that,
30 for purposes of this subsection, the term "managed care plan"
31 does not include a Children's Medical Services Network that is
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Florida Senate - 2007 COMMITTEE AMENDMENT
Bill No. SB 2182
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1 contracted under paragraph (4)(i) or an entity that is
2 contracted to provide integrated long-term care services under
3 subsection (5).
4 (b) A contract in effect before July 1, 2007, is not
5 rendered invalid by paragraph (a) and may be renewed
6 notwithstanding paragraph (a). However, paragraph (a) applies
7 if such contract terminates or lapses after July 1, 2007.
8 (c) Paragraph (a) does not apply in a county
9 containing fewer than two managed care plans eligible to
10 receive assignments of Medicaid recipients residing in the
11 county. This subsection does not prohibit the agency from
12 contracting with at least two managed care plans per county
13 which could otherwise be certified to contract for Medicaid
14 services.
15 Section 2. Paragraph (e) of subsection (3) of section
16 409.91211, Florida Statutes, is amended to read:
17 409.91211 Medicaid managed care pilot program.--
18 (3) The agency shall have the following powers,
19 duties, and responsibilities with respect to the pilot
20 program:
21 (e) To implement policies and guidelines for phasing
22 in financial risk for approved provider service networks over
23 a 3-year period. These policies and guidelines must include an
24 option for a provider service network to be paid
25 fee-for-service rates. For any provider service network
26 established in a managed care pilot area, the option to be
27 paid fee-for-service rates shall include a savings-settlement
28 mechanism that is consistent with s. 409.912(44). This model
29 shall be converted to a risk-adjusted capitated rate no later
30 than the beginning of the fourth year of operation, and may be
31 converted earlier at the option of the provider service
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1 network. For a provider service network not operated by a
2 hospital or the Department of Health which is approved by the
3 agency for designation after July 1, 2007, the applicant shall
4 meet the initial surplus and other financial requirements of
5 chapter 641. Provider service networks not operated by a
6 hospital or the Department of Health which were approved on or
7 before July 1, 2007, shall be required by the agency to comply
8 with the surplus and other financial requirements of part I of
9 chapter 641 before July 1, 2010. For provider service networks
10 not operated by a hospital or the Department of Health which
11 seek compliance with this paragraph, the minimum surplus
12 amount is the greater of $3 million, 10 percent of total
13 liabilities, or 2 percent of total annualized premium,
14 notwithstanding part I of chapter 641. Federally qualified
15 health centers may be offered an opportunity to accept or
16 decline a contract to participate in any provider network for
17 prepaid primary care services.
18 Section 3. Subsections (1), (2), and (6) of section
19 641.225, Florida Statutes, are amended to read:
20 641.225 Surplus requirements.--
21 (1)(a) Until July 1, 2010, each health maintenance
22 organization receiving a certificate of authority on or before
23 July 1, 2007, shall at all times maintain a minimum surplus in
24 an amount that is the greater of $1.5 million $1,500,000, or
25 10 percent of total liabilities, or 2 percent of total
26 annualized premium.
27 (b) After June 30, 2010, each health maintenance
28 organization receiving a certificate of authority on or before
29 July 1, 2007, shall at all times maintain a minimum surplus in
30 the amount of $5 million, 10 percent of total liabilities, or
31 2 percent of total annualized premium, whichever is greater.
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Florida Senate - 2007 COMMITTEE AMENDMENT
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1 (c) Each health maintenance organization receiving a
2 certificate of authority after July 1, 2007, shall at all
3 times maintain a minimum surplus in the amount of $5 million,
4 10 percent of total liabilities, or 2 percent of total
5 annualized premium, whichever is greater.
6 (2) The office shall not issue a certificate of
7 authority, except as provided in subsection (3), unless the
8 health maintenance organization has a minimum surplus in an
9 amount that which is the greater of:
10 (a) Ten percent of their total liabilities based on
11 their startup projection as set forth in this part;
12 (b) Two percent of their total projected premiums
13 based on their startup projection as set forth in this part;
14 or
15 (c) Five million dollars $1,500,000, plus all startup
16 losses, excluding profits, projected to be incurred on their
17 startup projection until the projection reflects statutory net
18 profits for 12 consecutive months.
19 (6) In lieu of having any minimum surplus, the health
20 maintenance organization may provide a written guarantee to
21 assure payment of covered subscriber claims and all other
22 liabilities of the health maintenance organization, provided
23 that the written guarantee is made by a guaranteeing
24 organization which:
25 (a) Has been in operation for 5 years or more and has
26 a surplus, not including land, buildings, and equipment, of
27 the greater of $5 million $2 million or 2 times the minimum
28 surplus requirements of the health maintenance organization.
29 In any determination of the financial condition of the
30 guaranteeing organization, the definitions of assets,
31 liabilities, and surplus set forth in this part shall apply,
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1 except that investments in or loans to any organizations
2 guaranteed by the guaranteeing organization shall be excluded
3 from surplus. If the guaranteeing organization is sponsoring
4 more than one organization, the surplus requirement shall be
5 increased by a multiple equal to the number of such
6 organizations.
7 (b) Submits a guarantee that is approved by the office
8 as meeting the requirements of this part, provided that the
9 written guarantee contains a provision which requires that the
10 guarantee be irrevocable unless the guaranteeing organization
11 can demonstrate to the office that the cancellation of the
12 guarantee will not result in the insolvency of the health
13 maintenance organization and the office approves cancellation
14 of the guarantee.
15 (c) Initially submits its audited financial
16 statements, certified by an independent certified public
17 accountant, prepared in accordance with generally accepted
18 accounting principles, covering its two most current annual
19 accounting periods.
20 (d) Submits annually, within 3 months after the end of
21 its fiscal year, an audited financial statement certified by
22 an independent certified public accountant, prepared in
23 accordance with generally accepted accounting principles. The
24 office may, as it deems necessary, require quarterly financial
25 statements from the guaranteeing organization.
26 Section 4. Subsection (2) of section 641.2261, Florida
27 Statutes, is amended to read:
28 641.2261 Application of solvency requirements to
29 provider-sponsored organizations and Medicaid provider service
30 networks.--
31 (2) The solvency requirements of this part in 42
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Florida Senate - 2007 COMMITTEE AMENDMENT
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1 C.F.R. s. 422.350, subpart H, and the solvency requirements
2 established in approved federal waivers pursuant to chapter
3 409 apply to a Medicaid provider service network not operated
4 by the Department of Health or a hospital licensed under
5 chapter 395 if the network was approved for designation as a
6 provider service network under chapter 409 after July 1, 2007.
7 The solvency requirements of this part must be applied on or
8 before July 1, 2010, to provider service networks not operated
9 by the Department of Health or a hospital which were approved
10 for designation on or before July 1, 2007. If at any time the
11 solvency requirements of subpart H of 42 C.F.R. 422.350 and
12 the solvency requirements established in approved federal
13 waivers under chapter 409 exceed the requirements of this
14 part, the federal requirements apply to provider service
15 networks not operated by the Department of Health or a
16 hospital licensed under chapter 395. The solvency requirements
17 of subpart H of 42 C.F.R. 422.350 and the solvency
18 requirements established in approved federal waivers under
19 chapter 409, rather than the solvency requirements of this
20 part, apply to a Medicaid provider service network operated by
21 a hospital licensed under chapter 395. rather than the
22 solvency requirements of this part.
23 Section 5. The Office of Insurance Regulation shall
24 develop a plan to implement a Risk-Based-Capital (RBC) method
25 of ensuring the financial stability and solvency of
26 organizations regulated by part I of chapter 641, Florida
27 Statutes, based on the recommendations of the National
28 Association of Insurance Commissioners contained in its
29 Risk-Based Capital (RBC) for Health Organizations Model Act,
30 except that no less than $5 million shall be required of
31 health maintenance organizations for minimum surplus. The plan
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1 must ensure that such standards are phased in and fully in
2 effect by July 1, 2011. The office shall develop and submit
3 the RBC implementation plan, including implementing
4 legislation, to the President of the Senate, the Speaker of
5 the House of Representatives, the Governor, and the Chief
6 Financial Officer no later than January 1, 2008.
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8 (Redesignate subsequent sections.)
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11 ================ T I T L E A M E N D M E N T ===============
12 And the title is amended as follows:
13 On page 1, line 9, through
14 page 2, line 3, delete those lines
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16 and insert:
17 networks not operated by a hospital or the
18 Department of Health are not exempt from
19 certain financial requirements; requiring such
20 provider service networks to comply with
21 certain financial requirements before a
22 specified date; specifying minimum surplus
23 amounts for such provider networks under
24 certain circumstances; requiring minority
25 physician networks to comply by a specified
26 date with certain financial requirements based
27 upon when each network was approved for
28 designation or expansion; specifying minimum
29 surplus amounts for minority physician networks
30 under certain circumstances; restricting the
31 agency's ability to contract with certain
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1 managed care plans under certain conditions;
2 defining the terms "mandatory Medicaid managed
3 care enrollment," "managed care plan," and
4 "assignment"; providing certain limitations
5 regarding contracts with managed care plans for
6 assignments of Medicaid recipients; amending s.
7 409.91211, F.S.; requiring certain provider
8 service networks to meet certain financial
9 requirements based upon when the network was
10 approved by the agency for designation;
11 specifying minimum surplus amounts for such
12 provider service networks under certain
13 circumstances; amending s. 641.225, F.S.;
14 requiring health maintenance organizations to
15 maintain a specified minimum surplus; amending
16 s. 641.2261, F.S.; requiring Medicaid provider
17 service networks to meet certain solvency
18 requirements based upon certain criteria;
19 requiring the Office of Insurance Regulation to
20 develop a plan for a "Risk-Based-Capital"
21 method concerning solvency of certain health
22 maintenance organizations; specifying
23 requirements concerning the contents of the
24 plan; requiring the office to submit the plan,
25 including implementing legislation, to the
26 President of the Senate, the Speaker of the
27 House of Representatives, the Governor, and the
28 Chief Financial Officer by a time certain;
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