Florida Senate - 2026 SB 1760
By Senator Brodeur
10-01582-26 20261760__
1 A bill to be entitled
2 An act relating to health care coverage; amending s.
3 1.01, F.S.; defining the term “Joint Legislative
4 Committee on Medicaid Oversight”; creating s. 11.405,
5 F.S.; establishing the Joint Legislative Committee on
6 Medicaid Oversight for specified purposes; providing
7 for membership, subcommittees, and meetings of the
8 committee; specifying duties of the committee;
9 requiring the Auditor General and the Agency for
10 Health Care Administration to enter into a data
11 sharing agreement by a specified date; requiring the
12 Auditor General to assist the committee; requiring
13 that the committee be given access to certain records,
14 papers, and documents; authorizing the committee to
15 compel testimony and evidence according to specified
16 provisions; providing for additional powers of the
17 committee; providing that certain joint rules of the
18 Legislature apply to the proceedings of the committee;
19 requiring the agency to notify the committee of
20 certain changes and provide a report of specified
21 information to the committee; requiring the agency to
22 submit a copy of certain reports to the committee;
23 amending s. 409.962, F.S.; defining the terms
24 “affiliate” and “control”; amending s. 409.967, F.S.;
25 revising encounter data reporting requirements for
26 prepaid Medicaid plans; requiring the agency’s
27 analysis of such encounter data to include
28 identification of specified occurrences; requiring the
29 agency to use such analysis in setting managed care
30 plan capitation rates; requiring that managed care
31 plan contracts require any third-party administrative
32 entity contracted with the plan to adhere to specified
33 requirements; revising the income sharing ratios used
34 to calculate the achieved savings rebate; specifying
35 additional types of payments which may not be included
36 in calculating income for purposes of the achieved
37 savings rebate; requiring, rather than authorizing,
38 the agency to calculate the medical loss ratio for all
39 managed care plans under certain circumstances;
40 revising requirements for the calculation of medical
41 loss ratios; requiring the agency to report medical
42 loss ratios quarterly and annually for each managed
43 care plan to the Governor and the Legislature within a
44 specified timeframe; requiring the agency to ensure
45 oversight of affiliated entities and related parties
46 paid by managed care plans; requiring the agency to
47 examine specified records and data related to such
48 entities and parties; requiring the agency to consider
49 certain data and findings when developing managed care
50 plan capitation rates; creating s. 409.9675, F.S.;
51 requiring managed care plans to report to the agency
52 and the Office of Insurance Regulation the existence
53 of and specified details relating to certain
54 affiliations by a specified date and annually
55 thereafter; requiring managed care plans to report any
56 change in such information to the agency and the
57 office in writing within a specified timeframe;
58 requiring the agency to calculate, analyze, and
59 publicly report on the agency’s website an assessment
60 of affiliated entity payment transactions in the
61 Medicaid program and certain administrative costs by a
62 specified date and annually thereafter; providing
63 requirements for the assessment; amending s. 626.8825,
64 F.S.; defining the term “affiliated manufacturer”;
65 revising requirements for contracts between a pharmacy
66 benefit manager and a pharmacy benefits plan or
67 program and a participating pharmacy; revising the
68 frequency of and deadlines for certain reports
69 pharmacy benefit managers are required to submit to
70 the office; amending s. 626.8827, F.S.; revising and
71 specifying additional practices pharmacy benefit
72 managers are prohibited from engaging in; providing an
73 effective date.
74
75 Be It Enacted by the Legislature of the State of Florida:
76
77 Section 1. Subsection (20) is added to section 1.01,
78 Florida Statutes, to read:
79 1.01 Definitions.—In construing these statutes and each and
80 every word, phrase, or part hereof, where the context will
81 permit:
82 (20) The term “Joint Legislative Committee on Medicaid
83 Oversight” means a committee or committees designated by joint
84 rule of the Legislature, by the President of the Senate or the
85 Speaker of the House of Representatives, or by agreement between
86 the President of the Senate and the Speaker of the House of
87 Representatives.
88 Section 2. Section 11.405, Florida Statutes, is created to
89 read:
90 11.405 Joint Legislative Committee on Medicaid Oversight.
91 The Joint Legislative Committee on Medicaid Oversight is created
92 to ensure that the state Medicaid program is operating in
93 accordance with the Legislature’s intent and to promote
94 transparency and efficiency in government spending.
95 (1) MEMBERSHIP; SUBCOMMITTEES; MEETINGS.—
96 (a) The committee shall be composed of five members of the
97 Senate appointed by the President of the Senate and five members
98 of the House of Representatives appointed by the Speaker of the
99 House of Representatives, with each member serving a 2-year
100 term. The chair and vice chair shall be appointed for 1-year
101 terms, with the appointments alternating between the President
102 of the Senate and the Speaker of the House of Representatives.
103 The chair and vice chair may not be members of the same house of
104 the Legislature. If both the chair and vice chair are absent at
105 any meeting, the members present must elect a temporary chair by
106 a majority vote.
107 (b) Members shall serve without compensation but may be
108 reimbursed for per diem and travel expenses pursuant to s.
109 112.061.
110 (c) The chair may establish subcommittees as needed to
111 fulfill the committee’s duties.
112 (d) The committee shall convene at least twice a year, and
113 as often as necessary to conduct its business as required under
114 this section. Meetings may be held through teleconference or
115 other electronic means.
116 (2) COMMITTEE DUTIES.—
117 (a) The committee shall evaluate all aspects of the state
118 Medicaid program related to program financing, quality of care
119 and health outcomes, administrative functions, and operational
120 functions to ensure that the program is providing transparency
121 in the provision of health care plans and providers, ensuring
122 Medicaid recipients have access to quality health care services,
123 and providing stability to the state’s budget through a health
124 care delivery system designed to contain costs.
125 (b) The committee shall identify and recommend policies
126 that limit Medicaid spending growth while improving health care
127 outcomes for Medicaid recipients. In developing its
128 recommendations, the committee shall do all of the following:
129 1. Evaluate legislation for its long-term impact on the
130 state Medicaid program.
131 2. Review data submitted to the agency by the Medicaid
132 managed care plans pursuant to statutory and contract
133 requirements, including, but not limited to, timeliness of
134 provider credentialing, timely payment of claims, rate of claim
135 denials, prior authorizations for services, and consumer
136 complaints.
137 3. Review the Medicaid managed care plans’ encounter data,
138 financial data, and audits and the data used to calculate the
139 plans’ achieved savings rebates and medical loss ratios.
140 4. Review data related to health outcomes of Medicaid
141 recipients, including, but not limited to, Health Effectiveness
142 Data and Information Set measures developed by the National
143 Committee for Quality Assurance for each Medicaid managed care
144 plan, each Medicaid managed care plan’s performance improvement
145 projects, and outcome data related to all quality goals included
146 in the Medicaid managed care organization contracts to improve
147 quality for recipients.
148 5. Identify any areas for improvement in statute and rule
149 relating to the state Medicaid program.
150 6. Develop a plan of action for the future of the state
151 Medicaid program.
152 (c) The committee may submit periodic reports, including
153 recommendations, to the Legislature on issues related to the
154 state Medicaid program and any affiliated programs.
155 (3) COOPERATION.—
156 (a) The Auditor General and the Agency for Health Care
157 Administration shall enter into and maintain a data sharing
158 agreement by July 1, 2026, to ensure the committee has full
159 access to all data needed to fulfill its responsibilities.
160 (b) The Auditor General shall assist the committee in its
161 work by providing credentialed professional staff or consulting
162 services, including, but not limited to, an actuary not
163 associated with the state Medicaid program or any Medicaid
164 managed care organization who currently has a contract with the
165 state.
166 (c) The committee, in the course of its official duties,
167 must be given access to any relevant record, paper, or document
168 in possession of a state agency, any political subdivision of
169 the state, or any entity engaged in business or under contract
170 with a state agency, and may compel the attendance and testimony
171 of any state official or employee before the committee or secure
172 any evidence as provided in s. 11.143. The committee shall also
173 have any other powers conferred on it by joint rules of the
174 Senate and the House of Representatives, and any joint rules of
175 the Senate and the House of Representatives applicable to joint
176 legislative committees apply to the proceedings of the committee
177 under this section.
178 (4) AGENCY REPORTS.—
179 (a) Before implementing any change to the Medicaid managed
180 care capitation rates, the Agency for Health Care Administration
181 shall notify the committee of the change and appear before the
182 committee to provide a report detailing the managed care
183 capitation rates and administrative costs built into the
184 capitation rates. The report must include the agency’s
185 historical and projected Medicaid program expenditure and
186 utilization trend rates by Medicaid program and service category
187 for the rate year, an explanation of how the trend rates were
188 calculated, and the policy decisions that were included in
189 setting the capitation rates.
190 (b) If the Agency for Health Care Administration or any
191 division within the agency is required by law to report to the
192 Legislature or to any legislative committee or subcommittee on
193 matters relating to the state Medicaid program, the agency must
194 also submit a copy of the report to the committee.
195 Section 3. Present subsections (2) through (5) and (6)
196 through (18) of section 409.962, Florida Statutes, are
197 redesignated as subsections (3) through (6) and (8) through
198 (20), respectively, and new subsections (2) and (7) are added to
199 that section, to read:
200 409.962 Definitions.—As used in this part, except as
201 otherwise specifically provided, the term:
202 (2) “Affiliate,” including the terms “affiliated with” and
203 “affiliation,” means a person, as construed in s. 1.01(3), who:
204 (a) Directly or indirectly, through one or more
205 intermediaries, controls, is controlled by, or is under common
206 control with a specified entity or person, including parent and
207 subsidiary entities; or
208 (b) Is deemed a “related party” according to the standards
209 adopted by the Financial Accounting Standards Board.
210 (7) “Control,” including the terms “controlling,”
211 “controlled by,” and “under common control with,” means the
212 possession, direct or indirect, of the power to direct or cause
213 the direction of the management and policies of a person,
214 whether through the ownership or voting securities, by contract
215 other than a commercial contract for goods or nonmanagement
216 services, or otherwise, unless the power is the result of an
217 official position with or corporate office held by the person.
218 This definition applies regardless of whether such power is
219 affirmative or negative or whether such power is actually used.
220 Control is presumed to exist, but is not limited to, when any
221 affiliate or person, as construed in s. 1.01(3):
222 (a) Directly or indirectly owns, controls, holds the power
223 to vote, or holds proxies representing 10 percent or more of any
224 class of the voting securities of any other person.
225 (b) Shares common ownership with any person, has an
226 investor or is a holder of an ownership interest in any person,
227 exercises control in any manner over the election of a majority
228 of the directors or of individuals exercising similar functions
229 of any person, has the power to exercise controlling influence
230 over the management of any person, or serves as a working
231 majority of the board of directors, managers, or the officers of
232 a person, who is:
233 1. A provider or a member of a provider group or group
234 practice as defined in s. 456.053 under the managed care plan;
235 or
236 2. A person responsible for providing any pharmacy
237 services, pharmaceuticals, diagnostics, care coordination, care
238 delivery, health care services, medical equipment,
239 administrative services, or financial services under the managed
240 care plan.
241 Section 4. Subsections (1) and (2), paragraphs (f), (g),
242 and (h) of subsection (3), and subsection (4) of section
243 409.967, Florida Statutes, are amended, and subsection (5) is
244 added to that section, to read:
245 409.967 Managed care plan accountability.—
246 (1) CONTRACT PROCUREMENT PROCESS.—Beginning with the
247 contract procurement process initiated during the 2023 calendar
248 year, the agency shall establish a 6-year contract with each
249 managed care plan selected through the procurement process
250 described in s. 409.966. A plan contract may not be renewed;
251 however, the agency may extend the term of a plan contract to
252 cover any delays during the transition to a new plan. The agency
253 shall extend until December 31, 2024, the term of existing plan
254 contracts awarded pursuant to the invitation to negotiate
255 published in July 2017.
256 (2) CONTRACT REQUIREMENTS.—The agency shall establish such
257 contract requirements as are necessary for the operation of the
258 statewide managed care program. In addition to any other
259 provisions the agency may deem necessary, the contract must
260 require:
261 (a) Physician compensation.—Managed care plans are expected
262 to coordinate care, manage chronic disease, and prevent the need
263 for more costly services. Effective care management should
264 enable plans to redirect available resources and increase
265 compensation for physicians. Plans achieve this performance
266 standard when physician payment rates equal or exceed Medicare
267 rates for similar services. The agency may impose fines or other
268 sanctions on a plan that fails to meet this performance standard
269 after 2 years of continuous operation.
270 (b) Emergency services.—Managed care plans shall pay for
271 services required by ss. 395.1041 and 401.45 and rendered by a
272 noncontracted provider. The plans must comply with s. 641.3155.
273 Reimbursement for services under this paragraph is the lesser
274 of:
275 1. The provider’s charges;
276 2. The usual and customary provider charges for similar
277 services in the community where the services were provided;
278 3. The charge mutually agreed to by the entity and the
279 provider within 60 days after submittal of the claim; or
280 4. The Medicaid rate, which, for the purposes of this
281 paragraph, means the amount the provider would collect from the
282 agency on a fee-for-service basis, less any amounts for the
283 indirect costs of medical education and the direct costs of
284 graduate medical education that are otherwise included in the
285 agency’s fee-for-service payment, as required under 42 U.S.C. s.
286 1396u-2(b)(2)(D). For the purpose of establishing the amounts
287 specified in this subparagraph, the agency shall publish on its
288 website annually, or more frequently as needed, the applicable
289 fee-for-service fee schedules and their effective dates, less
290 any amounts for indirect costs of medical education and direct
291 costs of graduate medical education that are otherwise included
292 in the agency’s fee-for-service payments.
293 (c) Access.—
294 1. The agency shall establish specific standards for the
295 number, type, and regional distribution of providers in managed
296 care plan networks to ensure access to care for both adults and
297 children. Each plan must maintain a regionwide network of
298 providers in sufficient numbers to meet the access standards for
299 specific medical services for all recipients enrolled in the
300 plan. The exclusive use of mail-order pharmacies may not be
301 sufficient to meet network access standards. Consistent with the
302 standards established by the agency, provider networks may
303 include providers located outside the region. Each plan shall
304 establish and maintain an accurate and complete electronic
305 database of contracted providers, including information about
306 licensure or registration, locations and hours of operation,
307 specialty credentials and other certifications, specific
308 performance indicators, and such other information as the agency
309 deems necessary. The database must be available online to both
310 the agency and the public and have the capability to compare the
311 availability of providers to network adequacy standards and to
312 accept and display feedback from each provider’s patients. Each
313 plan shall submit quarterly reports to the agency identifying
314 the number of enrollees assigned to each primary care provider.
315 The agency shall conduct, or contract for, systematic and
316 continuous testing of the provider network databases maintained
317 by each plan to confirm accuracy, confirm that behavioral health
318 providers are accepting enrollees, and confirm that enrollees
319 have access to behavioral health services.
320 2. Each managed care plan must publish any prescribed drug
321 formulary or preferred drug list on the plan’s website in a
322 manner that is accessible to and searchable by enrollees and
323 providers. The plan must update the list within 24 hours after
324 making a change. Each plan must ensure that the prior
325 authorization process for prescribed drugs is readily accessible
326 to health care providers, including posting appropriate contact
327 information on its website and providing timely responses to
328 providers. For Medicaid recipients diagnosed with hemophilia who
329 have been prescribed anti-hemophilic-factor replacement
330 products, the agency shall provide for those products and
331 hemophilia overlay services through the agency’s hemophilia
332 disease management program.
333 3. Managed care plans, and their fiscal agents or
334 intermediaries, must accept prior authorization requests for any
335 service electronically.
336 4. Managed care plans serving children in the care and
337 custody of the Department of Children and Families must maintain
338 complete medical, dental, and behavioral health encounter
339 information and participate in making such information available
340 to the department or the applicable contracted community-based
341 care lead agency for use in providing comprehensive and
342 coordinated case management. The agency and the department shall
343 establish an interagency agreement to provide guidance for the
344 format, confidentiality, recipient, scope, and method of
345 information to be made available and the deadlines for
346 submission of the data. The scope of information available to
347 the department shall be the data that managed care plans are
348 required to submit to the agency. The agency shall determine the
349 plan’s compliance with standards for access to medical, dental,
350 and behavioral health services; the use of medications; and
351 follow-up followup on all medically necessary services
352 recommended as a result of early and periodic screening,
353 diagnosis, and treatment.
354 (d) Quality care.—Managed care plans shall provide, or
355 contract for the provision of, care coordination to facilitate
356 the appropriate delivery of behavioral health care services in
357 the least restrictive setting with treatment and recovery
358 capabilities that address the needs of the patient. Services
359 shall be provided in a manner that integrates behavioral health
360 services and primary care. Plans shall be required to achieve
361 specific behavioral health outcome standards, established by the
362 agency in consultation with the department.
363 (e) Encounter data.—The agency shall maintain and operate a
364 Medicaid Encounter Data System to collect, process, store, and
365 report on covered services provided to all Medicaid recipients
366 enrolled in prepaid plans.
367 1. Each prepaid plan must comply with the agency’s
368 reporting requirements for the Medicaid Encounter Data System.
369 Prepaid plans must submit encounter data, including data on
370 encounters for which payment was denied and encounters for which
371 a health care provider was reimbursed by the plan on a capitated
372 basis, electronically in a format that complies with the Health
373 Insurance Portability and Accountability Act provisions for
374 electronic claims and in accordance with deadlines established
375 by the agency. Prepaid plans must certify that the data reported
376 is accurate and complete.
377 2. The agency is responsible for validating the data
378 submitted by the plans. The agency shall develop methods and
379 protocols for ongoing analysis of the encounter data that
380 adjusts for differences in characteristics of prepaid plan
381 enrollees to allow comparison of service utilization among plans
382 and against expected levels of use. The analysis shall be used
383 to identify possible cases of overspending on administrative
384 costs, payments by plans in excess of market rates, systemic
385 underutilization or denials of claims and inappropriate service
386 utilization such as higher-than-expected emergency department
387 encounters, and potential managed care plan fraud, waste, and
388 abuse. The analysis shall provide periodic feedback to the plans
389 and enable the agency to establish corrective action plans when
390 necessary. One of the focus areas for the analysis shall be the
391 use of prescription drugs. The analysis shall be used in managed
392 care plan capitation rate-setting processes provided under this
393 part.
394 3. The agency shall make encounter data available to those
395 plans accepting enrollees who are assigned to them from other
396 plans leaving a region.
397 4. The agency shall annually produce a report entitled
398 “Analysis of Potentially Preventable Health Care Events of
399 Florida Medicaid Enrollees.” The report must include, but need
400 not be limited to, an analysis of the potentially preventable
401 hospital emergency department visits, hospital admissions, and
402 hospital readmissions that occurred during the previous state
403 fiscal year which may have been prevented with better access to
404 primary care, improved medication management, or better
405 coordination of care, reported by age, eligibility group,
406 managed care plan, and region, including conditions contributing
407 to each potentially preventable event or category of potentially
408 preventable events. The agency may include any other data or
409 analysis parameters to augment the report which it deems
410 pertinent to the analysis. The report must demonstrate trends
411 using applicable historical data. The agency shall submit the
412 report to the Governor, the President of the Senate, and the
413 Speaker of the House of Representatives by October 1, 2024, and
414 each October 1 thereafter. The agency may contract with a third
415 party vendor to produce the report required under this
416 subparagraph.
417 (f) Continuous improvement.—The agency shall establish
418 specific performance standards and expected milestones or
419 timelines for improving performance over the term of the
420 contract.
421 1. Each managed care plan shall establish an internal
422 health care quality improvement system, including enrollee
423 satisfaction and disenrollment surveys. The quality improvement
424 system must include incentives and disincentives for network
425 providers.
426 2. Each managed care plan must collect and report the
427 Healthcare Effectiveness Data and Information Set (HEDIS)
428 measures, the federal Core Set of Children’s Health Care Quality
429 measures, and the federal Core Set of Adult Health Care Quality
430 Measures, as specified by the agency. Each plan must collect and
431 report the Adult Core Set behavioral health measures beginning
432 with data reports for the 2025 calendar year. Each plan must
433 stratify reported measures by age, sex, race, ethnicity, primary
434 language, and whether the enrollee received a Social Security
435 Administration determination of disability for purposes of
436 Supplemental Security Income beginning with data reports for the
437 2026 calendar year. A plan’s performance on these measures must
438 be published on the plan’s website in a manner that allows
439 recipients to reliably compare the performance of plans. The
440 agency shall use the measures as a tool to monitor plan
441 performance.
442 3. Each managed care plan must be accredited by the
443 National Committee for Quality Assurance, the Joint Commission,
444 or another nationally recognized accrediting body, or have
445 initiated the accreditation process, within 1 year after the
446 contract is executed. For any plan not accredited within 18
447 months after executing the contract, the agency shall suspend
448 automatic assignment under ss. 409.977 and 409.984.
449 (g) Program integrity.—Each managed care plan shall
450 establish program integrity functions and activities to reduce
451 the incidence of fraud and abuse, including, at a minimum:
452 1. A provider credentialing system and ongoing provider
453 monitoring, including maintenance of written provider
454 credentialing policies and procedures which comply with federal
455 and agency guidelines;
456 2. An effective prepayment and postpayment review process
457 including, but not limited to, data analysis, system editing,
458 and auditing of network providers;
459 3. Procedures for reporting instances of fraud and abuse
460 pursuant to chapter 641;
461 4. Administrative and management arrangements or
462 procedures, including a mandatory compliance plan, designed to
463 prevent fraud and abuse; and
464 5. Designation of a program integrity compliance officer.
465 (h) Grievance resolution.—Consistent with federal law, each
466 managed care plan shall establish and the agency shall approve
467 an internal process for reviewing and responding to grievances
468 from enrollees. Each plan shall submit quarterly reports on the
469 number, description, and outcome of grievances filed by
470 enrollees.
471 (i) Penalties.—
472 1. Withdrawal and enrollment reduction.—Managed care plans
473 that reduce enrollment levels or leave a region before the end
474 of the contract term must reimburse the agency for the cost of
475 enrollment changes and other transition activities. If more than
476 one plan leaves a region at the same time, costs must be shared
477 by the departing plans proportionate to their enrollments. In
478 addition to the payment of costs, departing provider services
479 networks must pay a per-enrollee penalty of up to 3 months’
480 payment and continue to provide services to the enrollee for 90
481 days or until the enrollee is enrolled in another plan,
482 whichever occurs first. In addition to payment of costs, all
483 other departing plans must pay a penalty of 25 percent of that
484 portion of the minimum surplus maintained pursuant to s.
485 641.225(1) which is attributable to the provision of coverage to
486 Medicaid enrollees. Plans shall provide at least 180 days’
487 notice to the agency before withdrawing from a region. If a
488 managed care plan leaves a region before the end of the contract
489 term, the agency shall terminate all contracts with that plan in
490 other regions pursuant to the termination procedures in
491 subparagraph 3.
492 2. Encounter data.—If a plan fails to comply with the
493 encounter data reporting requirements of this section for 30
494 days, the agency must assess a fine of $5,000 per day for each
495 day of noncompliance beginning on the 31st day. On the 31st day,
496 the agency must notify the plan that the agency will initiate
497 contract termination procedures on the 90th day unless the plan
498 comes into compliance before that date.
499 3. Termination.—If the agency terminates more than one
500 regional contract with the same managed care plan due to
501 noncompliance with the requirements of this section, the agency
502 shall terminate all the regional contracts held by that plan.
503 When terminating multiple contracts, the agency must develop a
504 plan to provide for the transition of enrollees to other plans,
505 and phase in the terminations over a time period sufficient to
506 ensure a smooth transition.
507 (j) Prompt payment.—Managed care plans shall comply with
508 ss. 641.315, 641.3155, and 641.513.
509 (k) Electronic claims.—Managed care plans, and their fiscal
510 agents or intermediaries, shall accept electronic claims in
511 compliance with federal standards.
512 (l) Fair payment.—Provider service networks must ensure
513 that no entity licensed under chapter 395 with a controlling
514 interest in the network charges a Medicaid managed care plan
515 more than the amount paid to that provider by the provider
516 service network for the same service.
517 (m) Itemized payment.—Any claims payment to a provider by a
518 managed care plan, or by a fiscal agent or intermediary of the
519 plan, must be accompanied by an itemized accounting of the
520 individual claims included in the payment including, but not
521 limited to, the enrollee’s name, the date of service, the
522 procedure code, the amount of reimbursement, and the
523 identification of the plan on whose behalf the payment is made.
524 (n) Provider dispute resolution.—Disputes between a plan
525 and a provider may be resolved as described in s. 408.7057.
526 (o) Transparency.—Managed care plans shall comply with ss.
527 627.6385(3) and 641.54(7).
528 (p) Third-party administrators.—The agency′s contract with
529 a managed care plan must require that any third-party
530 administrative entity contracted by the plan adheres to all
531 pertinent requirements of the Medicaid program placed on the
532 plan under the plan′s contract with the agency.
533 (3) ACHIEVED SAVINGS REBATE.—
534 (f) Achieved savings rebates validated by the certified
535 public accountant are due within 30 days after the report is
536 submitted. Except as provided in paragraph (h), the achieved
537 savings rebate is established by determining pretax income as a
538 percentage of revenues and applying the following income sharing
539 ratios:
540 1. One hundred percent of income up to and including 3 5
541 percent of revenue shall be retained by the plan.
542 2. Thirty Fifty percent of income above 3 5 percent and up
543 to 10 percent shall be retained by the plan, and the other 70 50
544 percent shall be refunded to the state and adjusted for the
545 Federal Medical Assistance Percentages. The state share shall be
546 transferred to the General Revenue Fund, unallocated, and the
547 federal share shall be transferred to the Medical Care Trust
548 Fund, unallocated.
549 3. One hundred percent of income above 10 percent of
550 revenue shall be refunded to the state and adjusted for the
551 Federal Medical Assistance Percentages. The state share shall be
552 transferred to the General Revenue Fund, unallocated, and the
553 federal share shall be transferred to the Medical Care Trust
554 Fund, unallocated.
555 (g) A plan that exceeds agency-defined quality measures in
556 the reporting period may retain an additional 1 percent of
557 revenue. For the purpose of this paragraph, the quality measures
558 must include plan performance for preventing or managing
559 complex, chronic conditions that are associated with an elevated
560 likelihood of requiring high-cost medical treatments.
561 (h) The following may not be included as allowable expenses
562 in calculating income for determining the achieved savings
563 rebate:
564 1. Payment of achieved savings rebates.
565 2. Any financial incentive payments made to the plan
566 outside of the capitation rate.
567 3. Any financial disincentive payments levied by the state
568 or Federal Government.
569 4. Expenses associated with any lobbying or political
570 activities.
571 5. The cash value or equivalent cash value of bonuses of
572 any type paid or awarded to the plan’s executive staff, other
573 than base salary.
574 6. Reserves and reserve accounts.
575 7. Administrative costs, including, but not limited to,
576 reinsurance expenses, interest payments, depreciation expenses,
577 bad debt expenses, and outstanding claims expenses in excess of
578 actuarially sound maximum amounts set by the agency.
579 8. Payments to affiliated entities as defined in s. 409.962
580 in excess of market rates.
581
582 The agency shall consider these and other factors in developing
583 contracts that establish shared savings arrangements.
584 (4) MEDICAL LOSS RATIOS RATIO.—
585 (a) If required by federal regulations or as a condition of
586 a waiver, the agency must may calculate a medical loss ratios
587 ratio for all managed care plans contracted with the agency
588 under this part. The calculations must calculation shall use
589 uniform financial data collected from all plans and shall be
590 computed for each plan on a statewide basis. If a plan
591 participates in the managed medical assistance program, the
592 long-term care managed care program, or the pilot program for
593 individuals with developmental disabilities, the agency must
594 calculate medical loss ratios for the plan’s participation in
595 each program separately and, if the plan participates in more
596 than one of these programs, for the plan’s overall participation
597 in statewide Medicaid managed care. The method for calculating
598 the medical loss ratio shall meet the following criteria:
599 (a) Except as provided in paragraphs (b) and (c), Medical
600 loss ratios must be calculated and expenditures must shall be
601 classified in a manner consistent with 42 C.F.R. part 438 45
602 C.F.R. part 158.
603 (b) The agency shall report medical loss ratios quarterly
604 and annually for each managed care plan contracted with the
605 agency under this part to the Governor, the President of the
606 Senate, and the Speaker of the House of Representatives no later
607 than 6 months after the end of each such period Funds provided
608 by plans to graduate medical education institutions to
609 underwrite the costs of residency positions shall be classified
610 as medical expenditures, provided the funding is sufficient to
611 sustain the positions for the number of years necessary to
612 complete the residency requirements and the residency positions
613 funded by the plans are active providers of care to Medicaid and
614 uninsured patients.
615 (c) Before final determination of the medical loss ratio
616 for any period, a plan may contribute to a designated state
617 trust fund for the purpose of supporting Medicaid and indigent
618 care and have the contribution counted as a medical expenditure
619 for the period. Funds contributed for this purpose shall be
620 deposited into the Grants and Donations Trust Fund.
621 (5) AFFILIATED ENTITIES AND RELATED PARTIES.—
622 (a) The agency shall ensure oversight of affiliated
623 entities and related parties paid by managed care plans under
624 this part, including, but not limited to, examining financial
625 records and self-referral data of any managed care plan
626 providing services within the statewide managed care program
627 which uses affiliated entities and related parties.
628 (b) The agency shall consider data examined under paragraph
629 (a) and the findings of the annual assessment required under s.
630 409.9675(4) when developing managed care plan capitation rates
631 under this part.
632 Section 5. Section 409.9675, Florida Statutes, is created
633 to read:
634 409.9675 Affiliated entities and controlling interests;
635 reports required.—
636 (1) Each managed care plan contracted by the agency under
637 this part shall report all of the following by March 31, 2027,
638 for the prior calendar year, and annually thereafter, to the
639 agency and the Office of Insurance Regulation in the manner
640 prescribed by the agency:
641 (a) Any person controlled by or affiliated with the managed
642 care plan, including, but not limited to, any provider, provider
643 group, group practice defined in s. 456.053(3), or person
644 responsible for providing any pharmacy services,
645 pharmaceuticals, diagnostics, care coordination, care delivery,
646 health care services, medical equipment, administrative
647 services, or financial services for, to, or on behalf of the
648 managed care plan.
649 (b) Any affiliation of any kind or nature with any person
650 which has, either directly or indirectly through one or more
651 intermediaries, an investment or ownership interest representing
652 10 percent or more, shares common ownership with, or has an
653 investor or a holder of an ownership interest representing 10
654 percent or more with any person providing pharmacy services,
655 diagnostics, care coordination, care delivery, health care
656 services, medical equipment, administrative services, or
657 financial services for, to, or on behalf of the managed care
658 plan.
659 (2) For any affiliation reported by a managed care plan
660 under subsection (1), the report must include all of the
661 following:
662 (a) The percentage of ownership or control of any person or
663 affiliate with whom the managed care plan has had business
664 transactions totaling in the aggregate more than $25,000 during
665 the prior 12-month period in the annual achieved savings rebate
666 financial reporting required under s. 409.967(3) and
667 identification of the specific contract or contracts involved in
668 such business transactions.
669 (b) Any significant business transactions between the
670 managed care plan and any affiliated person during the 12-month
671 period in the annual achieved savings rebate financial reporting
672 required under s. 409.967(3).
673 (3) Each managed care plan shall report any change in
674 information required by subsection (1) to the agency and the
675 Office of Insurance Regulation in writing within 60 days after
676 the change occurs.
677 (4) By December 31, 2026, and annually thereafter, the
678 agency shall calculate, analyze, and publicly report on the
679 agency’s website an assessment of affiliated entity payment
680 transactions in the Medicaid program for medical benefit and
681 administrative costs as reported for purposes of the achieved
682 savings rebate. The baseline assessment, at a minimum, must
683 include achieved savings rebate transactions for the years 2021,
684 2022, and 2023; the amount and associated percentage of
685 affiliated entity payments within the medical loss ratio; and
686 the payment deviation percentages and associated amounts at the
687 Healthcare Common Procedure Coding System level for affiliated
688 entities as compared to nonaffiliated entities. The assessment
689 must also compare payment amounts for value-based or alternative
690 payment arrangements.
691 Section 6. Present paragraphs (b) through (x) of subsection
692 (1) of section 626.8825, Florida Statutes, are redesignated as
693 paragraphs (c) through (y), respectively, a new paragraph (b) is
694 added to that subsection, and paragraph (g) of subsection (2)
695 and paragraphs (c) and (h) of subsection (3) of that section are
696 amended, to read:
697 626.8825 Pharmacy benefit manager transparency and
698 accountability.—
699 (1) DEFINITIONS.—As used in this section, the term:
700 (b) “Affiliated manufacturer” means a prescription drug
701 manufacturer permitted under part I of chapter 499, or an entity
702 that contracts with a prescription drug manufacturer or
703 nonresident prescription drug manufacturer permitted under part
704 I of chapter 499 or an affiliate thereof for the promotion and
705 marketing of prescription drugs, which prescription drug
706 manufacturer or contracting entity directly or indirectly
707 through one or more intermediaries:
708 1. Has an investment or ownership interest in a pharmacy
709 benefit manager holding a certificate of authority issued under
710 this part;
711 2. Shares common ownership with a pharmacy benefit manager
712 holding a certificate of authority issued under this part; or
713 3. Has an investor or a holder of an ownership interest
714 which is a pharmacy benefit manager holding a certificate of
715 authority issued under this part.
716 (2) CONTRACTS BETWEEN A PHARMACY BENEFIT MANAGER AND A
717 PHARMACY BENEFITS PLAN OR PROGRAM.—In addition to any other
718 requirements in the Florida Insurance Code, all contractual
719 arrangements executed, amended, adjusted, or renewed on or after
720 July 1, 2023, which are applicable to pharmacy benefits covered
721 on or after January 1, 2024, between a pharmacy benefit manager
722 and a pharmacy benefits plan or program must include, in
723 substantial form, terms that ensure compliance with all of the
724 following requirements and that, except to the extent not
725 allowed by law, shall supersede any contractual terms to the
726 contrary:
727 (g) Prohibit a pharmacy benefit manager from instituting a
728 network that requires a pharmacy to meet accreditation standards
729 inconsistent with or more stringent than applicable federal and
730 state requirements for licensure and operation as a pharmacy in
731 this state. However, a pharmacy benefit manager may specify
732 additional specialty networks that require enhanced standards
733 related to the safety and competency necessary to meet the
734 United States Food and Drug Administration’s limited
735 distribution requirements for dispensing any drug that, on a
736 drug-by-drug basis, requires extraordinary special handling,
737 provider coordination, or clinical care or monitoring when such
738 extraordinary requirements cannot be met by a retail pharmacy.
739 For purposes of this paragraph, drugs requiring extraordinary
740 special handling are limited to drugs that are subject to a risk
741 evaluation and mitigation strategy approved by the United States
742 Food and Drug Administration and that:
743 1. Require special certification of a health care provider
744 to prescribe, receive, dispense, or administer; or
745 2. Require special handling due to the molecular complexity
746 or cytotoxic properties of the biologic or biosimilar product or
747 drug.
748
749 For participation in a specialty network, a pharmacy benefit
750 manager may not deny require a pharmacy to meet requirements for
751 participation if the pharmacy can beyond those necessary to
752 demonstrate the pharmacy’s ability to dispense the drug in
753 accordance with the United States Food and Drug Administration’s
754 approved manufacturer labeling.
755 (3) CONTRACTS BETWEEN A PHARMACY BENEFIT MANAGER AND A
756 PARTICIPATING PHARMACY.—In addition to other requirements in the
757 Florida Insurance Code, a participation contract executed,
758 amended, adjusted, or renewed on or after July 1, 2023, that
759 applies to pharmacist services on or after January 1, 2024,
760 between a pharmacy benefit manager and one or more pharmacies or
761 pharmacists, must include, in substantial form, terms that
762 ensure compliance with all of the following requirements, and
763 that, except to the extent not allowed by law, shall supersede
764 any contractual terms in the participation contract to the
765 contrary:
766 (c) A prohibition of financial clawbacks, reconciliation
767 offsets, or offsets to adjudicated claims. A pharmacy benefit
768 manager may not charge, withhold, offset, or recoup any direct
769 or indirect remuneration fees, dispensing fees, brand name or
770 generic effective rate adjustments through reconciliation, or
771 any other monetary charge, withholding, or recoupments as
772 related to discounts, multiple network reconciliation offsets,
773 adjudication transaction fees, and any other instance when an
774 amount a fee may be recouped from a pharmacy if such action
775 would result in a reduction in the amount paid to the pharmacy
776 or pharmacist. This prohibition does not apply to:
777 1. Any incentive payments provided by the pharmacy benefit
778 manager to a network pharmacy for meeting or exceeding
779 predefined quality measures, such as Healthcare Effectiveness
780 Data and Information Set measures; recoupment due to an
781 erroneous claim, fraud, waste, or abuse; a claim adjudicated in
782 error; a maximum allowable cost appeal pricing adjustment; or an
783 adjustment made as part of a pharmacy audit pursuant to s.
784 624.491.
785 2. Any recoupment that is returned to the state for
786 programs in chapter 409 or the state group insurance program in
787 s. 110.123.
788 (h) The pharmacy benefit manager shall provide a reasonable
789 administrative appeal procedure to allow a pharmacy or
790 pharmacist to challenge the maximum allowable cost pricing
791 information and the reimbursement made under the maximum
792 allowable cost as defined in s. 627.64741 for a specific drug as
793 being below the acquisition cost available to the challenging
794 pharmacy or pharmacist.
795 1. The administrative appeal procedure must include a
796 telephone number and e-mail address, or a website, for the
797 purpose of submitting the administrative appeal. The appeal may
798 be submitted by the pharmacy or an agent of the pharmacy
799 directly to the pharmacy benefit manager or through a pharmacy
800 service administration organization. The administrative appeal
801 process must allow a pharmacy or pharmacist the option to submit
802 an electronic spreadsheet or similar electronic document
803 containing a consolidated administrative appeal representing
804 multiple adjudicated claims that share the same drug and day
805 supply and have a date of service occurring within the same
806 calendar month. The pharmacy or pharmacist must be given at
807 least 30 business days after a maximum allowable cost update or
808 after an adjudication for an electronic claim or reimbursement
809 for a nonelectronic claim to file the administrative appeal.
810 2. The pharmacy benefit manager must respond to the
811 administrative appeal within 30 business days after receipt of
812 the appeal.
813 3. If the appeal is upheld, the pharmacy benefit manager
814 must:
815 a. Update the maximum allowable cost pricing information to
816 at least the acquisition cost available to the pharmacy;
817 b. Permit the pharmacy or pharmacist to reverse and rebill
818 the claim in question;
819 c. Provide to the pharmacy or pharmacist the national drug
820 code on which the increase or change is based; and
821 d. Make the increase or change effective for each similarly
822 situated pharmacy or pharmacist who is subject to the applicable
823 maximum allowable cost pricing information.
824 4. If the appeal is denied, the pharmacy benefit manager
825 must provide to the pharmacy or pharmacist the national drug
826 code and the name of the national or regional pharmaceutical
827 wholesalers operating in this state which have the drug
828 currently in stock at a price below the maximum allowable cost
829 pricing information.
830 5. Beginning August 15, 2026 Every 90 days, a pharmacy
831 benefit manager shall report to the office the total number of
832 appeals received and denied in the preceding quarter 90-day
833 period, with an explanation or reason for each denial, for each
834 specific drug for which an appeal was submitted pursuant to this
835 paragraph. The deadlines for each filing are March 1 for the
836 preceding year′s 4th quarter; May 15 for each year′s first
837 quarter; August 15 for each year′s second quarter; and November
838 15 for each year′s third quarter.
839 Section 7. Subsection (7) of section 626.8827, Florida
840 Statutes, is amended, and subsections (8) through (11) are added
841 to that section, to read:
842 626.8827 Pharmacy benefit manager prohibited practices.—In
843 addition to other prohibitions in this part, a pharmacy benefit
844 manager may not do any of the following:
845 (7) Fail to comply with the requirements in s. 624.491 or
846 s. 626.8825, or breach contractual terms required under s.
847 626.8825.
848 (8) Prohibit or restrict a pharmacy from declining to
849 dispense a drug if the reimbursement rate for the drug is less
850 than the actual acquisition cost to the pharmacy.
851 (9) Fail to reimburse a pharmacy or pharmacist a minimum
852 dispensing fee. The minimum dispensing fee must be an amount no
853 less than $10.24. The minimum dispensing fee set forth in this
854 subsection automatically adjusts every January 1 in an amount
855 equal to the average percentage change in the Consumer Price
856 Index for medical care for all urban consumers over the
857 immediately preceding 12-month period. The office may revise the
858 minimum dispensing fee upon reasonably determining that the
859 current minimum dispensing fee provides excessive or inadequate
860 payments to pharmacies when compared with such payments made in
861 other states, provided that any adjustment by the office does
862 not result in a dispensing fee less than the current Florida
863 Medicaid dispensing fee for covered outpatient prescription
864 drugs.
865 (10) Reimburse a pharmacy less than it reimburses an
866 affiliate pharmacy.
867 (11) Maintain an ownership interest, investment interest,
868 or common ownership with an affiliated manufacturer, or share
869 any investor or holder of an ownership interest with an
870 affiliated manufacturer.
871 Section 8. This act shall take effect July 1, 2026.