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:

 7  

 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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    Florida Senate - 2007                                  SB 2182
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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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    Florida Senate - 2007                                  SB 2182
    21-1520-07




 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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    Florida Senate - 2007                                  SB 2182
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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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    Florida Senate - 2007                                  SB 2182
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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.

31  

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    Florida Senate - 2007                                  SB 2182
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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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    Florida Senate - 2007                                  SB 2182
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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  

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    Florida Senate - 2007                                  SB 2182
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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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    Florida Senate - 2007                                  SB 2182
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 1            *****************************************

 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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