HB 703

1
A bill to be entitled
2An act relating to Medicaid; providing a purpose;
3providing definitions; requiring each managed care
4organization to certify to the Agency for Health Care
5Administration its medical loss ratio and the medical loss
6ratio for its subcontractors; providing requirements for
7the reporting of the medical loss ratios; requiring the
8managed care organization to pay a certain amount to the
9agency if the certified medical loss ratio is less than a
10specified ratio; requiring the agency to adopt rules;
11requiring that fines collected supplement the agency's
12Medicaid budget; providing that the requirements and
13penalties imposed are assigned in full to any parent
14corporation, subsequent owner, or successor in interest of
15the managed care organization; providing an effective
16date.
17
18Be It Enacted by the Legislature of the State of Florida:
19
20     Section 1.  (1)  The purpose of this section is to ensure
21that a managed care organization that contracts to provide
22services for Medicaid beneficiaries in this state expend at
23least 85 percent of the total revenue it receives from monthly
24premiums 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
27Administration.
28     (b)  "Medical loss ratio" means the ratio of total revenue
29from monthly premium payments received from the agency by a
30managed care organization and expended for direct health care
31benefits to the total amount of such payments expended for any
32other purpose. Costs and expenditures that are not related to
33direct health care benefits include, but are not limited to,
34profit, salaries, bonuses, and administration and operating
35expenses, including expenses relating to prior authorization or
36other utilization review regarding the provision of direct
37health care benefits.
38     (c)  "Managed care organization" means a health maintenance
39organization or prepaid health plan providing goods and services
40under s. 409.912, Florida Statutes.
41     (3)  If a managed care organization enrolls Medicaid
42beneficiaries under the pilot program established in s.
43409.91211, Florida Statutes, the pilot program and nonpilot
44program portions of the organization's health care financing and
45delivery system shall be considered separate and distinct
46managed care organizations for purposes of this section.
47     (4)  Beginning December 15, 2010, and each quarter
48thereafter, each managed care organization shall certify to the
49agency its medical loss ratio and the medical loss ratio of each
50of its subcontractors. The medical loss ratio for behavioral
51health shall be reported separately by each managed care
52organization.
53     (5)  If any medical loss ratio certified to the agency
54under subsection (4) is less than 85 to 15, the managed care
55organization and its subcontractors shall immediately pay to the
56agency an amount equal to the difference between 85 percent of
57total revenue from their monthly premium payments and their
58corresponding expenditures for direct health care benefits for
59the relevant quarter.
60     (6)  The agency shall adopt rules to administer this
61section, including, but not limited to, a schedule of sanctions
62for any violation of the 85-to-15 requirements set forth in this
63section. Any fines collected shall be used to supplement the
64agency's Medicaid budget and do not revert to the General
65Revenue Fund.
66     (7)  All requirements of this section and penalties imposed
67pursuant to this section against a managed care organization
68shall be assigned in full to any parent corporation, subsequent
69owner, or subsequent successor in interest of the managed care
70organization.
71     Section 2.  This act shall take effect July 1, 2010.


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