HB 899

1	A bill to be entitled
2	An act relating to managed care; amending s. 409.912,
3	F.S.; requiring health maintenance organizations to meet
4	certain standards before entering into a contract with the
5	Agency for Health Care Administration; requiring certain
6	provider service networks and minority physician networks
7	to comply with the surplus and financial requirements of
8	pt. I of ch. 641, F.S.; prohibiting the agency from
9	entering into contracts with managed care plans under
10	certain circumstances; providing exceptions; amending s.
11	409.91211, F.S.; requiring new applicants for provider
12	service network contracts to meet the financial
13	requirements of pt. I of ch. 641, F.S.; amending s.
14	641.225, F.S.; increasing the minimum surplus requirements
15	for new applicants for health maintenance organization
16	licensure; amending s. 641.2261, F.S.; providing
17	applicability of solvency requirements of pt. I of ch.
18	641, F.S.; providing an effective date.
19
20	Be It Enacted by the Legislature of the State of Florida:
21
22	Section 1.  Subsection (3), paragraph (d) of subsection
23	(4), and paragraph (a) of subsection (49) of section 409.912,
24	Florida Statutes, are amended, and subsection (53) is added to
25	that section, to read:
26	409.912  Cost-effective purchasing of health care.--The
27	agency shall purchase goods and services for Medicaid recipients
28	in the most cost-effective manner consistent with the delivery
29	of quality medical care. To ensure that medical services are
30	effectively utilized, the agency may, in any case, require a
31	confirmation or second physician's opinion of the correct
32	diagnosis for purposes of authorizing future services under the
33	Medicaid program. This section does not restrict access to
34	emergency services or poststabilization care services as defined
35	in 42 C.F.R. part 438.114. Such confirmation or second opinion
36	shall be rendered in a manner approved by the agency. The agency
37	shall maximize the use of prepaid per capita and prepaid
38	aggregate fixed-sum basis services when appropriate and other
39	alternative service delivery and reimbursement methodologies,
40	including competitive bidding pursuant to s. 287.057, designed
41	to facilitate the cost-effective purchase of a case-managed
42	continuum of care. The agency shall also require providers to
43	minimize the exposure of recipients to the need for acute
44	inpatient, custodial, and other institutional care and the
45	inappropriate or unnecessary use of high-cost services. The
46	agency shall contract with a vendor to monitor and evaluate the
47	clinical practice patterns of providers in order to identify
48	trends that are outside the normal practice patterns of a
49	provider's professional peers or the national guidelines of a
50	provider's professional association. The vendor must be able to
51	provide information and counseling to a provider whose practice
52	patterns are outside the norms, in consultation with the agency,
53	to improve patient care and reduce inappropriate utilization.
54	The agency may mandate prior authorization, drug therapy
55	management, or disease management participation for certain
56	populations of Medicaid beneficiaries, certain drug classes, or
57	particular drugs to prevent fraud, abuse, overuse, and possible
58	dangerous drug interactions. The Pharmaceutical and Therapeutics
59	Committee shall make recommendations to the agency on drugs for
60	which prior authorization is required. The agency shall inform
61	the Pharmaceutical and Therapeutics Committee of its decisions
62	regarding drugs subject to prior authorization. The agency is
63	authorized to limit the entities it contracts with or enrolls as
64	Medicaid providers by developing a provider network through
65	provider credentialing. The agency may competitively bid single-
66	source-provider contracts if procurement of goods or services
67	results in demonstrated cost savings to the state without
68	limiting access to care. The agency may limit its network based
69	on the assessment of beneficiary access to care, provider
70	availability, provider quality standards, time and distance
71	standards for access to care, the cultural competence of the
72	provider network, demographic characteristics of Medicaid
73	beneficiaries, practice and provider-to-beneficiary standards,
74	appointment wait times, beneficiary use of services, provider
75	turnover, provider profiling, provider licensure history,
76	previous program integrity investigations and findings, peer
77	review, provider Medicaid policy and billing compliance records,
78	clinical and medical record audits, and other factors. Providers
79	shall not be entitled to enrollment in the Medicaid provider
80	network. The agency shall determine instances in which allowing
81	Medicaid beneficiaries to purchase durable medical equipment and
82	other goods is less expensive to the Medicaid program than long-
83	term rental of the equipment or goods. The agency may establish
84	rules to facilitate purchases in lieu of long-term rentals in
85	order to protect against fraud and abuse in the Medicaid program
86	as defined in s. 409.913. The agency may seek federal waivers
87	necessary to administer these policies.
88	(3)  The agency may contract with health maintenance
89	organizations certified pursuant to part I of chapter 641 for
90	the provision of services to recipients. As a condition of
91	approval for applications submitted after July 1, 2007, a health
92	maintenance organization shall demonstrate to the agency that it
93	has a record of success in providing comprehensive health
94	insurance coverage in this state for at least 3 years, has
95	contracted with this state or another state to provide
96	comprehensive Medicaid services on a prepaid capitated basis for
97	at least 3 years, or has been successful in providing
98	comprehensive prepaid services to state child health insurance
99	program members or Medicare members in this state or another
100	state for at least 3 years.
101	(4)  The agency may contract with:
102	(d)  A provider service network, which may be reimbursed on
103	a fee-for-service or prepaid basis.
104	1.  A provider service network that which is reimbursed by
105	the agency on a prepaid basis shall be exempt from parts I and
106	III of chapter 641, but must comply with the solvency
107	requirements in s. 641.2261(2) and meet appropriate financial
108	reserve, quality assurance, and patient rights requirements as
109	established by the agency.
110	2.  A provider service network that is not operated by a
111	hospital and is approved for reimbursement pursuant to
112	subparagraph 1. after July 1, 2007, is not exempt from the
113	surplus and other financial requirements of part I of chapter
114	641.
115	3.  A provider service network that is not operated by a
116	hospital and is approved on or prior to July 1, 2007, shall be
117	required by the agency to comply with the surplus and other
118	financial requirements of part I of chapter 641 before July 1,
119	2010.
120
121	Medicaid recipients assigned to a provider service network shall
122	be chosen equally from those who would otherwise have been
123	assigned to prepaid plans and MediPass. The agency is authorized
124	to seek federal Medicaid waivers as necessary to implement the
125	provisions of this section. Any contract previously awarded to a
126	provider service network operated by a hospital pursuant to this
127	subsection shall remain in effect for a period of 3 years
128	following the current contract expiration date, regardless of
129	any contractual provisions to the contrary. A provider service
130	network is a network established or organized and operated by a
131	health care provider, or group of affiliated health care
132	providers, including minority physician networks and emergency
133	room diversion programs that meet the requirements of s.
134	409.91211, which provides a substantial proportion of the health
135	care items and services under a contract directly through the
136	provider or affiliated group of providers and may make
137	arrangements with physicians or other health care professionals,
138	health care institutions, or any combination of such individuals
139	or institutions to assume all or part of the financial risk on a
140	prospective basis for the provision of basic health services by
141	the physicians, by other health professionals, or through the
142	institutions. The health care providers must have a controlling
143	interest in the governing body of the provider service network
144	organization.
145	(49)  The agency shall contract with established minority
146	physician networks that provide services to historically
147	underserved minority patients. The networks must provide cost-
148	effective Medicaid services, comply with the requirements to be
149	a MediPass provider, and provide their primary care physicians
150	with access to data and other management tools necessary to
151	assist them in ensuring the appropriate use of services,
152	including inpatient hospital services and pharmaceuticals.
153	(a)  The agency shall provide for the development and
154	expansion of minority physician networks in each service area to
155	provide services to Medicaid recipients who are eligible to
156	participate under federal law and rules. The agency shall
157	require that each minority physician network that has been
158	approved for designation or expansion after July 1, 2007, comply
159	with the requirements of part I of chapter 641 as a condition of
160	such designation or expansion. Minority physician networks that
161	were approved on or prior to July 1, 2007, shall be required by
162	the agency to comply with the surplus and other financial
163	requirements of part I of chapter 641 before July 1, 2010.
164	(53)(a)  The agency shall not enter into a contract with a
165	managed care plan eligible to receive assignment of Medicaid
166	recipients to be effective in any county when the contract would
167	cause the county to contain fewer than 35,000 recipients subject
168	to mandatory Medicaid managed care enrollment per each managed
169	care plan eligible to receive assignment of Medicaid recipients
170	residing in the county. For purposes of this subsection, the
171	term "mandatory Medicaid managed care enrollment" shall have the
172	same meaning as described in s. 409.9122, and the terms "managed
173	care plan" and "assignment" shall have the same meaning as
174	described in s. 409.9122(2)(f), except that "managed care plan"
175	shall not include a Children's Medical Services Network
176	contracted pursuant to paragraph (4)(i) or an entity contracted
177	to provide integrated long-term care services pursuant to
178	subsection (5).
179	(b)  A contract in effect prior to July 1, 2007, shall not
180	be rendered invalid by the provisions of paragraph (a) and may
181	be renewed notwithstanding the provisions of paragraph (a).
182	However, the provisions of paragraph (a) shall apply if the
183	contract terminates or lapses after July 1, 2007.
184	(c)  Paragraph (a) shall not apply in a county containing
185	no managed care plans eligible to receive assignment of Medicaid
186	recipients residing in the county.
187	Section 2.  Paragraph (e) of subsection (3) of section
188	409.91211, Florida Statutes, is amended to read:
189	409.91211  Medicaid managed care pilot program.--
190	(3)  The agency shall have the following powers, duties,
191	and responsibilities with respect to the pilot program:
192	(e)  To implement policies and guidelines for phasing in
193	financial risk for approved provider service networks over a 3-
194	year period. These policies and guidelines must include an
195	option for a provider service network to be paid fee-for-service
196	rates. For any provider service network established in a managed
197	care pilot area, the option to be paid fee-for-service rates
198	shall include a savings-settlement mechanism that is consistent
199	with s. 409.912(44). This model shall be converted to a risk-
200	adjusted capitated rate no later than the beginning of the
201	fourth year of operation, and may be converted earlier at the
202	option of the provider service network. For a provider service
203	network not operated by a hospital that is approved by the
204	agency for designation after July 1, 2007, the applicant shall
205	meet the initial surplus and other financial requirements of
206	part I of chapter 641. Provider service networks not operated by
207	a hospital that were approved on or prior to July 1, 2007, shall
208	be required by the agency to comply with the surplus and other
209	financial requirements of part I of chapter 641 before July 1,
210	2010. Federally qualified health centers may be offered an
211	opportunity to accept or decline a contract to participate in
212	any provider network for prepaid primary care services.
213	Section 3.  Subsections (1) and (2) and paragraph (a) of
214	subsection (6) of section 641.225, Florida Statutes, are amended
215	to read:
216	641.225  Surplus requirements.--
217	(1)(a)  Prior to July 1, 2010, each health maintenance
218	organization receiving a certificate of authority on or prior to
219	July 1, 2007, shall at all times maintain a minimum surplus in
220	an amount that is equal to $1.5 million the greater of
221	$1,500,000, or 10 percent of total liabilities, or 2 percent of
222	total annualized premium, whichever is greatest.
223	(b)  After June 30, 2010, each health maintenance
224	organization receiving a certificate of authority on or prior to
225	July 1, 2007, shall at all times maintain a minimum surplus in
226	an amount that is equal to $5 million, 10 percent of total
227	liabilities, or 2 percent of total annualized premium, whichever
228	is greatest.
229	(c)  Each health maintenance organization receiving a
230	certificate of authority after July 1, 2007, shall at all times
231	maintain a minimum surplus in an amount that is equal to $5
232	million, 10 percent of total liabilities, or 2 percent of total
233	annualized premium, whichever is greatest.
234	(2)  The office shall not issue a certificate of authority,
235	except as provided in subsection (3), unless the health
236	maintenance organization has a minimum surplus in an amount
237	which is the greatest greater of:
238	(a)  Ten percent of its their total liabilities based on
239	its their startup projection as set forth in this part;
240	(b)  Two percent of its their total projected premiums
241	based on its their startup projection as set forth in this part;
242	or
243	(c)  Five million dollars $1,500,000, plus all startup
244	losses, excluding profits, projected to be incurred on its their
245	startup projection until the projection reflects statutory net
246	profits for 12 consecutive months.
247	(6)  In lieu of having any minimum surplus, the health
248	maintenance organization may provide a written guarantee to
249	assure payment of covered subscriber claims and all other
250	liabilities of the health maintenance organization, provided
251	that the written guarantee is made by a guaranteeing
252	organization which:
253	(a)  Has been in operation for 5 years or more and has a
254	surplus, not including land, buildings, and equipment, of the
255	greater of $5 $2 million or 2 times the minimum surplus
256	requirements of the health maintenance organization. In any
257	determination of the financial condition of the guaranteeing
258	organization, the definitions of assets, liabilities, and
259	surplus set forth in this part shall apply, except that
260	investments in or loans to any organizations guaranteed by the
261	guaranteeing organization shall be excluded from surplus. If the
262	guaranteeing organization is sponsoring more than one
263	organization, the surplus requirement shall be increased by a
264	multiple equal to the number of such organizations.
265	Section 4.  Subsection (2) of section 641.2261, Florida
266	Statutes, is amended to read:
267	641.2261  Application of solvency requirements to provider-
268	sponsored organizations and Medicaid provider service
269	networks.--
270	(2)  The solvency requirements of this part apply to a
271	Medicaid provider service network that is not operated by a
272	hospital licensed under chapter 395 if the network was approved
273	for designation as a provider service network under chapter 409
274	after July 1, 2007. The solvency requirements of this part shall
275	be applied on or prior to July 1, 2010, to provider service
276	networks that are not operated by a hospital and that were
277	approved for designation on or prior to July 1, 2007. If at any
278	time the solvency requirements in 42 C.F.R. s. 422.350, subpart
279	H, and the solvency requirements established in approved federal
280	waivers pursuant to chapter 409 exceed the requirements of this
281	part, the federal requirements shall apply to provider service
282	networks not operated by a hospital licensed under chapter 395.
283	The solvency requirements in 42 C.F.R. s. 422.350, subpart H,
284	and the solvency requirements established in approved federal
285	waivers pursuant to chapter 409, rather than the solvency
286	requirements of this part, apply to a Medicaid provider service
287	network operated by a hospital licensed under chapter 395 rather
288	than the solvency requirements of this part.
289	Section 5.  This act shall take effect July 1, 2007.

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