Senate Bill sb2182
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Florida Senate - 2007 SB 2182
By Senator Bennett
21-1520-07
1 A bill to be entitled
2 An act relating to managed health care
3 entities; amending s. 409.912, F.S.;
4 authorizing the Agency for Health Care
5 Administration to contract with certified
6 health maintenance organizations if the health
7 maintenance organizations meet certain
8 requirements; providing that provider service
9 networks not operated by a hospital are not
10 exempt from certain financial requirements;
11 requiring such provider service networks to
12 comply with certain financial requirements
13 before a specified date; requiring minority
14 physician networks to comply by a specified
15 date with certain financial requirements based
16 upon when each network was approved for
17 designation or expansion; restricting the
18 agency's ability to contract with certain
19 managed care plans under certain conditions;
20 defining the terms "mandatory Medicaid managed
21 care enrollment," "managed care plan," and
22 "assignment"; providing certain limitations
23 regarding contracts with managed care plans for
24 assignments of Medicaid recipients; amending s.
25 409.91211, F.S.; requiring certain provider
26 service networks to meet certain financial
27 requirements based upon when the network was
28 approved by the agency for designation;
29 amending s. 641.225, F.S.; requiring health
30 maintenance organizations to maintain a
31 specified minimum surplus; amending s.
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Florida Senate - 2007 SB 2182
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1 641.2261, F.S.; requiring Medicaid provider
2 service networks to meet certain solvency
3 requirements based upon certain criteria;
4 providing an effective date.
5
6 Be It Enacted by the Legislature of the State of Florida:
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8 Section 1. Subsection (3), paragraph (d) of subsection
9 (4), and paragraph (a) of subsection (49) of section 409.912,
10 Florida Statutes, are amended, and subsection (53) is added to
11 that section, to read:
12 409.912 Cost-effective purchasing of health care.--The
13 agency shall purchase goods and services for Medicaid
14 recipients in the most cost-effective manner consistent with
15 the delivery of quality medical care. To ensure that medical
16 services are effectively utilized, the agency may, in any
17 case, require a confirmation or second physician's opinion of
18 the correct diagnosis for purposes of authorizing future
19 services under the Medicaid program. This section does not
20 restrict access to emergency services or poststabilization
21 care services as defined in 42 C.F.R. part 438.114. Such
22 confirmation or second opinion shall be rendered in a manner
23 approved by the agency. The agency shall maximize the use of
24 prepaid per capita and prepaid aggregate fixed-sum basis
25 services when appropriate and other alternative service
26 delivery and reimbursement methodologies, including
27 competitive bidding pursuant to s. 287.057, designed to
28 facilitate the cost-effective purchase of a case-managed
29 continuum of care. The agency shall also require providers to
30 minimize the exposure of recipients to the need for acute
31 inpatient, custodial, and other institutional care and the
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Florida Senate - 2007 SB 2182
21-1520-07
1 inappropriate or unnecessary use of high-cost services. The
2 agency shall contract with a vendor to monitor and evaluate
3 the clinical practice patterns of providers in order to
4 identify trends that are outside the normal practice patterns
5 of a provider's professional peers or the national guidelines
6 of a provider's professional association. The vendor must be
7 able to provide information and counseling to a provider whose
8 practice patterns are outside the norms, in consultation with
9 the agency, to improve patient care and reduce inappropriate
10 utilization. The agency may mandate prior authorization, drug
11 therapy management, or disease management participation for
12 certain populations of Medicaid beneficiaries, certain drug
13 classes, or particular drugs to prevent fraud, abuse, overuse,
14 and possible dangerous drug interactions. The Pharmaceutical
15 and Therapeutics Committee shall make recommendations to the
16 agency on drugs for which prior authorization is required. The
17 agency shall inform the Pharmaceutical and Therapeutics
18 Committee of its decisions regarding drugs subject to prior
19 authorization. The agency is authorized to limit the entities
20 it contracts with or enrolls as Medicaid providers by
21 developing a provider network through provider credentialing.
22 The agency may competitively bid single-source-provider
23 contracts if procurement of goods or services results in
24 demonstrated cost savings to the state without limiting access
25 to care. The agency may limit its network based on the
26 assessment of beneficiary access to care, provider
27 availability, provider quality standards, time and distance
28 standards for access to care, the cultural competence of the
29 provider network, demographic characteristics of Medicaid
30 beneficiaries, practice and provider-to-beneficiary standards,
31 appointment wait times, beneficiary use of services, provider
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Florida Senate - 2007 SB 2182
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1 turnover, provider profiling, provider licensure history,
2 previous program integrity investigations and findings, peer
3 review, provider Medicaid policy and billing compliance
4 records, clinical and medical record audits, and other
5 factors. Providers shall not be entitled to enrollment in the
6 Medicaid provider network. The agency shall determine
7 instances in which allowing Medicaid beneficiaries to purchase
8 durable medical equipment and other goods is less expensive to
9 the Medicaid program than long-term rental of the equipment or
10 goods. The agency may establish rules to facilitate purchases
11 in lieu of long-term rentals in order to protect against fraud
12 and abuse in the Medicaid program as defined in s. 409.913.
13 The agency may seek federal waivers necessary to administer
14 these policies.
15 (3) The agency may contract with health maintenance
16 organizations certified pursuant to part I of chapter 641 for
17 the provision of services to recipients if, for all
18 applications approved after July 1, 2007, the health
19 maintenance organization has demonstrated to the agency that
20 it has a successful record of providing comprehensive health
21 insurance coverage in this state for at least 3 years and has
22 successfully contracted with this state or another state to
23 provide comprehensive Medicaid services on a prepaid capitated
24 basis for at least 3 years, or has successful experience
25 providing comprehensive prepaid services in any state for a
26 state child health insurance program or Medicare members for
27 at least 3 years.
28 (4) The agency may contract with:
29 (d) A provider service network, which may be
30 reimbursed on a fee-for-service or prepaid basis. A provider
31 service network that which is reimbursed by the agency on a
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1 prepaid basis is shall be exempt from parts I and III of
2 chapter 641, but must comply with the solvency requirements in
3 s. 641.2261(2) and meet appropriate financial reserve, quality
4 assurance, and patient rights requirements as established by
5 the agency, except that provider service networks not operated
6 by a hospital which have been approved for such status after
7 July 1, 2007, are not exempt from the surplus and other
8 financial requirements of part I of chapter 641. Provider
9 service networks not operated by a hospital which were
10 approved on or before July 1, 2007, shall be required by the
11 agency to comply with the surplus and other financial
12 requirements of part I of chapter 641 before July 1, 2010.
13 Medicaid recipients assigned to a provider service network
14 shall be chosen equally from those who would otherwise have
15 been assigned to prepaid plans and MediPass. The agency is
16 authorized to seek federal Medicaid waivers as necessary to
17 implement the provisions of this section. Any contract
18 previously awarded to a provider service network operated by a
19 hospital pursuant to this subsection shall remain in effect
20 for a period of 3 years following the current contract
21 expiration date, regardless of any contractual provisions to
22 the contrary. A provider service network is a network
23 established or organized and operated by a health care
24 provider, or group of affiliated health care providers,
25 including minority physician networks and emergency room
26 diversion programs that meet the requirements of s. 409.91211,
27 which provides a substantial proportion of the health care
28 items and services under a contract directly through the
29 provider or affiliated group of providers and may make
30 arrangements with physicians or other health care
31 professionals, health care institutions, or any combination of
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1 such individuals or institutions to assume all or part of the
2 financial risk on a prospective basis for the provision of
3 basic health services by the physicians, by other health
4 professionals, or through the institutions. The health care
5 providers must have a controlling interest in the governing
6 body of the provider service network organization.
7 (49) The agency shall contract with established
8 minority physician networks that provide services to
9 historically underserved minority patients. The networks must
10 provide cost-effective Medicaid services, comply with the
11 requirements to be a MediPass provider, and provide their
12 primary care physicians with access to data and other
13 management tools necessary to assist them in ensuring the
14 appropriate use of services, including inpatient hospital
15 services and pharmaceuticals.
16 (a) The agency shall provide for the development and
17 expansion of minority physician networks in each service area
18 to provide services to Medicaid recipients who are eligible to
19 participate under federal law and rules. The agency shall
20 further require that each minority physician network that has
21 been approved for designation or expansion after July 1, 2007,
22 meet the requirements of part I of chapter 641 as a condition
23 of such designation or expansion. Minority physician networks
24 that were approved on or before July 1, 2007, shall be
25 required by the agency to comply with the surplus and other
26 financial requirements of part I of chapter 641 before July 1,
27 2010.
28 (53)(a) The agency may not enter into a contract with
29 a managed care plan that is eligible to receive an assignment
30 of Medicaid recipients which is to be effective in any county
31 if such contract would cause the county to contain fewer than
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1 35,000 recipients subject to mandatory Medicaid managed care
2 enrollment per each managed care plan eligible to receive an
3 assignment of Medicaid recipients residing in the county. For
4 purposes of this subsection, the term "mandatory Medicaid
5 managed care enrollment" has the same meaning as in s.
6 409.9122, and the terms "managed care plan" and "assignment"
7 have the same meaning as in s. 409.9122(2)(f), except that,
8 for purposes of this subsection, the term "managed care plan"
9 does not include a Children's Medical Services Network that is
10 contracted under paragraph (4)(i) or an entity that is
11 contracted to provide integrated long-term care services under
12 subsection (5).
13 (b) A contract in effect before July 1, 2007, is not
14 rendered invalid by paragraph (a) and may be renewed
15 notwithstanding paragraph (a). However, paragraph (a) applies
16 if such contract terminates or lapses after July 1, 2007.
17 (c) Paragraph (a) does not apply in a county that does
18 not contain managed care plans that are eligible to receive an
19 assignment of Medicaid recipients residing in the county.
20 Section 2. Paragraph (e) of subsection (3) of section
21 409.91211, Florida Statutes, is amended to read:
22 409.91211 Medicaid managed care pilot program.--
23 (3) The agency shall have the following powers,
24 duties, and responsibilities with respect to the pilot
25 program:
26 (e) To implement policies and guidelines for phasing
27 in financial risk for approved provider service networks over
28 a 3-year period. These policies and guidelines must include an
29 option for a provider service network to be paid
30 fee-for-service rates. For any provider service network
31 established in a managed care pilot area, the option to be
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1 paid fee-for-service rates shall include a savings-settlement
2 mechanism that is consistent with s. 409.912(44). This model
3 shall be converted to a risk-adjusted capitated rate no later
4 than the beginning of the fourth year of operation, and may be
5 converted earlier at the option of the provider service
6 network. For a provider service network not operated by a
7 hospital which is approved by the agency for designation after
8 July 1, 2007, the applicant shall meet the initial surplus and
9 other financial requirements of chapter 641. Provider service
10 networks not operated by a hospital which were approved on or
11 before July 1, 2007, shall be required by the agency to comply
12 with the surplus and other financial requirements of part I of
13 chapter 641 before July 1, 2010. Federally qualified health
14 centers may be offered an opportunity to accept or decline a
15 contract to participate in any provider network for prepaid
16 primary care services.
17 Section 3. Subsections (1), (2), and (6) of section
18 641.225, Florida Statutes, are amended to read:
19 641.225 Surplus requirements.--
20 (1)(a) Until July 1, 2010, each health maintenance
21 organization receiving a certificate of authority on or before
22 July 1, 2007, shall at all times maintain a minimum surplus in
23 an amount that is the greater of $1.5 million $1,500,000, or
24 10 percent of total liabilities, or 2 percent of total
25 annualized premium.
26 (b) After June 30, 2010, each health maintenance
27 organization receiving a certificate of authority on or before
28 July 1, 2007, shall at all times maintain a minimum surplus in
29 the amount of $5 million, 10 percent of total liabilities, or
30 2 percent of total annualized premium, whichever is greater.
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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.--
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1 (2) The solvency requirements of this part in 42
2 C.F.R. s. 422.350, subpart H, and the solvency requirements
3 established in approved federal waivers pursuant to chapter
4 409 apply to a Medicaid provider service network not operated
5 by a hospital licensed under chapter 395 if the network was
6 approved for designation as a provider service network under
7 chapter 409 after July 1, 2007. The solvency requirements of
8 this part must be applied on or before July 1, 2010, to
9 provider service networks not operated by a hospital which
10 were approved for designation on or before July 1, 2007. If at
11 any time the solvency requirements of subpart H of 42 C.F.R.
12 422.350 and the solvency requirements established in approved
13 federal waivers under chapter 409 exceed the requirements of
14 this part, the federal requirements apply to provider service
15 networks not operated by a hospital licensed under chapter
16 395. The solvency requirements of subpart H of 42 C.F.R.
17 422.350 and the solvency requirements established in approved
18 federal waivers under chapter 409, rather than the solvency
19 requirements of this part, apply to a Medicaid provider
20 service network operated by a hospital licensed under chapter
21 395. rather than the solvency requirements of this part.
22 Section 5. This act shall take effect upon becoming a
23 law.
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2 SENATE SUMMARY
3 Authorizes the Agency for Health Care Administration to
contract with certain health maintenance organizations if
4 the health maintenance organizations meet certain
requirements. Provides that certain provider service
5 networks are not exempt from certain financial
requirements. Requires such provider service networks to
6 comply with certain financial requirements before a
specified date. Requires minority physician networks to
7 comply by a specified date with certain financial
requirements based upon certain factors. Restricts the
8 agency's ability to contract with certain managed care
plans under certain conditions. Requires certain provider
9 service networks to meet certain financial requirements
based upon specific criteria. Requires health maintenance
10 organizations to maintain a specified minimum surplus.
Requires Medicaid provider service networks to meet
11 certain solvency requirements based upon certain
criteria.
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