Florida Senate - 2010 SB 1002 By Senator Lawson 6-00601-10 20101002__ 1 A bill to be entitled 2 An act relating to Medicaid; providing a purpose; 3 providing definitions; requiring each managed care 4 organization to certify to the Agency for Health Care 5 Administration its medical loss ratio and the medical 6 loss ratio for its subcontractors; providing 7 requirements for the reporting of the medical loss 8 ratios; requiring the managed care organization to pay 9 a certain amount to the agency if the certified 10 medical loss ratio is less than a specified ratio; 11 requiring the agency to adopt rules; requiring that 12 fines collected supplement the agency’s Medicaid 13 budget; providing that the requirements and penalties 14 imposed are assigned in full to any parent 15 corporation, subsequent owner, or successor in 16 interest of the managed care organization; providing 17 an effective date. 18 19 Be It Enacted by the Legislature of the State of Florida: 20 21 Section 1. (1) The purpose of this section is to ensure 22 that a managed care organization that contracts to provide 23 services for Medicaid beneficiaries in this state expend at 24 least 85 percent of the total revenue it receives from monthly 25 premiums on direct health care benefits for its enrollees. 26 (2) As used in this section, the term: 27 (a) “Agency” means the Agency for Health Care 28 Administration. 29 (b) “Medical loss ratio” means the ratio of total revenue 30 from monthly premium payments received from the agency by a 31 managed care organization and expended for direct health care 32 benefits to the total amount of such payments expended for any 33 other purpose. Costs and expenditures that are not related to 34 direct health care benefits include, but are not limited to, 35 profit, salaries, bonuses, and administration and operating 36 expenses, including expenses relating to prior authorization or 37 other utilization review regarding the provision of direct 38 health care benefits. 39 (c) “Managed care organization” means a health maintenance 40 organization or prepaid health plan providing goods and services 41 under s. 409.912, Florida Statutes. 42 (3) If a managed care organization enrolls Medicaid 43 beneficiaries under the pilot program established at s. 44 409.91211, Florida Statutes, the pilot program and nonpilot 45 program portions of the organization’s health care financing and 46 delivery system shall be considered separate and distinct 47 managed care organizations for purposes of this section. 48 (4) Beginning December 15, 2010, and each quarter 49 thereafter, each managed care organization shall certify to the 50 agency its medical loss ratio and the medical loss ratio of each 51 of its subcontractors. The medical loss ratio for behavioral 52 health shall be reported separately by each managed care 53 organization. 54 (5) If any medical loss ratio certified to the agency under 55 subsection (4) is less than 85 to 15, the managed care 56 organization and its subcontractors shall immediately pay to the 57 agency an amount equal to the difference between 85 percent of 58 total revenue from their monthly premium payments and their 59 corresponding expenditures for direct health care benefits for 60 the relevant quarter. 61 (6) The agency shall adopt rules to administer this 62 section, including, but not limited to, a schedule of sanctions 63 for any violation of the 85-to-15 requirements set forth in this 64 section. Any fines collected shall be used to supplement the 65 agency’s Medicaid budget and do not revert to the General 66 Revenue Fund. 67 (7) All requirements of this section and penalties imposed 68 pursuant to this section against a managed care organization 69 shall be assigned in full to any parent corporation, subsequent 70 owner, or subsequent successor in interest of the managed care 71 organization. 72 Section 2. This act shall take effect July 1, 2010.