HB 703

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

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