Florida Senate - 2026 CS for CS for SB 1760
By the Committees on Appropriations; and Health Policy; and
Senators Brodeur, Gaetz, Rouson, Massullo, Garcia, and Harrell
576-03338-26 20261760c2
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 authorizing the committee to submit periodic reports
10 to the Legislature; requiring the Auditor General and
11 the Agency for Health Care Administration to enter
12 into and maintain a data sharing agreement for a
13 certain purpose by a specified date; requiring the
14 Auditor General to assist the committee by providing
15 certain staff or consulting services; requiring state
16 agencies, political subdivisions of the state, and
17 entities contracted with state agencies to give the
18 committee access to certain records, papers, and
19 documents; authorizing the committee to compel
20 testimony and evidence according to specified
21 provisions; providing for additional powers of the
22 committee; providing that certain joint rules of the
23 Legislature apply to the proceedings of the committee;
24 requiring the agency to notify the committee of
25 certain changes and provide a report containing
26 specified information to the committee; requiring the
27 agency to submit a copy of certain reports to the
28 committee; amending s. 409.962, F.S.; defining terms;
29 amending s. 409.967, F.S.; revising encounter data
30 reporting requirements for prepaid Medicaid plans;
31 requiring that the agency’s analysis of such encounter
32 data include identification of specified occurrences;
33 requiring the agency to use such analysis in setting
34 managed care plan capitation rates; requiring that
35 managed care plan contracts require any third-party
36 administrative entity contracted with the plan to
37 adhere to specified requirements; specifying
38 additional types of payments which may not be included
39 in calculating income for purposes of the achieved
40 savings rebate; requiring, rather than authorizing,
41 the agency to calculate the medical loss ratio for all
42 managed care plans under certain circumstances;
43 revising requirements for the calculation of medical
44 loss ratios; requiring the agency to report medical
45 loss ratios quarterly and annually for each managed
46 care plan to the Governor and the Legislature within a
47 specified timeframe; requiring the agency to ensure
48 oversight of affiliated entities and related parties
49 paid by managed care plans; requiring the agency to
50 examine specified records and data related to such
51 entities and parties; requiring the agency to consider
52 certain data and findings when developing managed care
53 plan capitation rates; revising the income sharing
54 ratios used to calculate the achieved savings rebate
55 beginning on a specified date; creating s. 409.9675,
56 F.S.; requiring managed care plans to report to the
57 agency and the Office of Insurance Regulation the
58 existence of and specified details relating to certain
59 affiliations by a specified date and annually
60 thereafter; requiring managed care plans to report any
61 change in such information to the agency and the
62 office in writing within a specified timeframe;
63 requiring the agency to calculate, analyze, and
64 publicly report on the agency’s website an assessment
65 of affiliated entity payment transactions in the
66 Medicaid program and certain administrative costs by a
67 specified date and annually thereafter; providing
68 requirements for the assessment; amending s. 626.8825,
69 F.S.; defining the term “affiliated manufacturer”;
70 revising the definition of the term “pharmacy benefits
71 plan or program”; revising requirements for contracts
72 between a pharmacy benefit manager and a participating
73 pharmacy; revising the frequency of and deadlines for
74 certain reports pharmacy benefit managers are required
75 to submit to the office beginning on a specified date;
76 amending s. 626.8827, F.S.; revising and specifying
77 additional practices pharmacy benefit managers are
78 prohibited from engaging in; amending s. 627.42392,
79 F.S.; conforming a cross-reference; providing
80 effective dates.
81
82 Be It Enacted by the Legislature of the State of Florida:
83
84 Section 1. Effective upon this act becoming a law,
85 subsection (20) is added to section 1.01, Florida Statutes, to
86 read:
87 1.01 Definitions.—In construing these statutes and each and
88 every word, phrase, or part hereof, where the context will
89 permit:
90 (20) The term “Joint Legislative Committee on Medicaid
91 Oversight” means a committee or committees designated by joint
92 rule of the Legislature, by the President of the Senate or the
93 Speaker of the House of Representatives, or by agreement between
94 the President of the Senate and the Speaker of the House of
95 Representatives.
96 Section 2. Effective upon this act becoming a law, section
97 11.405, Florida Statutes, is created to read:
98 11.405 Joint Legislative Committee on Medicaid Oversight.
99 The Joint Legislative Committee on Medicaid Oversight is created
100 to ensure that the state Medicaid program is operating in
101 accordance with the Legislature’s intent and to promote
102 transparency and efficiency in government spending.
103 (1) MEMBERSHIP; SUBCOMMITTEES; MEETINGS.—
104 (a) The committee shall be composed of five members of the
105 Senate appointed by the President of the Senate and five members
106 of the House of Representatives appointed by the Speaker of the
107 House of Representatives, with each member serving a 2-year
108 term. The chair and vice chair shall each be appointed for 1
109 year terms, with the appointments alternating between the
110 President of the Senate and the Speaker of the House of
111 Representatives. The chair and vice chair may not be members of
112 the same house of the Legislature. If both the chair and vice
113 chair are absent from any meeting, the members present must
114 elect a temporary chair by a majority vote.
115 (b) Members shall serve without compensation but may be
116 reimbursed for per diem and travel expenses pursuant to s.
117 112.061.
118 (c) The chair may establish subcommittees as needed to
119 fulfill the committee’s duties.
120 (d) The committee shall convene at least twice a year, and
121 as often as necessary to conduct its business as required under
122 this section. Meetings may be held through teleconference or
123 other electronic means.
124 (2) COMMITTEE DUTIES.—
125 (a) The committee shall evaluate all aspects of the state
126 Medicaid program related to program financing, quality of care
127 and health outcomes, administrative functions, and operational
128 functions to ensure that the program is providing transparency
129 in the provision of health care plans and providers, ensuring
130 Medicaid recipients have access to quality health care services
131 and providing stability to the state’s budget through a health
132 care delivery system designed to contain costs.
133 (b) The committee shall identify and recommend policies
134 that limit Medicaid spending growth while improving health care
135 outcomes for Medicaid recipients. In developing its
136 recommendations, the committee shall do all of the following:
137 1. Evaluate legislation for its long-term impact on the
138 state Medicaid program.
139 2. Review data submitted to the Agency for Health Care
140 Administration by the Medicaid managed care plans pursuant to
141 statutory and contract requirements, including, but not limited
142 to, timeliness of provider credentialing, timely payment of
143 claims, rate of claim denials, prior authorizations for
144 services, and consumer complaints.
145 3. Review the Medicaid managed care plans’ encounter data,
146 financial data, and audits and the data used to calculate the
147 plans’ achieved savings rebates and medical loss ratios.
148 4. Review data related to health outcomes of Medicaid
149 recipients, including, but not limited to, Healthcare
150 Effectiveness Data and Information Set measures developed by the
151 National Committee for Quality Assurance, for each Medicaid
152 managed care plan, each Medicaid managed care plan’s performance
153 improvement projects, and outcome data related to all quality
154 goals included in the Medicaid managed care organization
155 contracts to improve quality for recipients.
156 5. Identify any areas for improvement in the laws and rules
157 relating to the state Medicaid program.
158 6. Develop a plan of action for the future of the state
159 Medicaid program.
160 (c) The committee may submit periodic reports, including
161 recommendations, to the Legislature on issues related to the
162 state Medicaid program and any affiliated programs.
163 (3) COOPERATION.—
164 (a) The Auditor General and the Agency for Health Care
165 Administration shall enter into and maintain a data sharing
166 agreement by July 1, 2026, to ensure the committee has full
167 access to all data needed to fulfill its responsibilities.
168 (b) The Auditor General shall assist the committee in its
169 work by providing credentialed professional staff or consulting
170 services, including, but not limited to, an actuary not
171 associated with the state Medicaid program or any Medicaid
172 managed care organization who currently has a contract with the
173 state.
174 (c) The committee, in the course of its official duties,
175 must be given access to any relevant record, paper, or document
176 in possession of a state agency, any political subdivision of
177 the state, or any entity engaged in business or under contract
178 with a state agency, and may compel the attendance and testimony
179 of any state official or employee before the committee or secure
180 any evidence as provided in s. 11.143. The committee may also
181 have any other powers conferred on it by joint rules of the
182 Senate and the House of Representatives, and any joint rules of
183 the Senate and the House of Representatives applicable to joint
184 legislative committees apply to the proceedings of the committee
185 under this section.
186 (4) AGENCY REPORTS.—
187 (a) Before implementing any change to the Medicaid managed
188 care capitation rates, the Agency for Health Care Administration
189 shall notify the committee of the change and appear before the
190 committee to provide a report detailing the managed care
191 capitation rates and administrative costs built into the
192 capitation rates. The report must include the agency’s
193 historical and projected Medicaid program expenditure and
194 utilization trend rates by Medicaid program and service category
195 for the rate year, an explanation of the manner in which the
196 trend rates were calculated, and the policy decisions that were
197 included in setting the capitation rates.
198 (b) If the Agency for Health Care Administration or any
199 division within the agency is required by law to report to the
200 Legislature or to any legislative committee or subcommittee on
201 matters relating to the state Medicaid program, the agency must
202 also submit a copy of the report to the committee.
203 Section 3. Present subsections (2) through (5), (6) through
204 (10), and (11) through (18) of section 409.962, Florida
205 Statutes, are redesignated as subsections (3) through (6), (8)
206 through (12), and (14) through (21), respectively, and new
207 subsections (2), (7), and (13) are added to that section, to
208 read:
209 409.962 Definitions.—As used in this part, except as
210 otherwise specifically provided, the term:
211 (2) “Affiliate,” including the terms “affiliated with” and
212 “affiliation,” means a person, as construed in s. 1.01(3), who:
213 (a) Directly or indirectly, through one or more
214 intermediaries, controls, is controlled by, or is under common
215 control with a specified entity or person, including parent and
216 subsidiary entities; or
217 (b) Is deemed a “related party” according to the standards
218 adopted by the Financial Accounting Standards Board.
219 (7) “Control,” including the terms “controlling,”
220 “controlled by,” and “under common control with,” means the
221 possession, direct or indirect, of the power to direct or cause
222 the direction of the management and policies of a person,
223 whether through the ownership or voting securities, by contract
224 other than a commercial contract for goods or nonmanagement
225 services, or otherwise, unless the power is the result of an
226 official position with or corporate office held by the person.
227 This definition applies regardless of whether such power is
228 affirmative or negative or whether such power is actually used.
229 Control is presumed to exist, but is not limited to, when any
230 affiliate or person, as construed in s. 1.01(3):
231 (a) Directly or indirectly owns, controls, holds the power
232 to vote, or holds proxies representing 10 percent or more of any
233 class of the voting securities of any other person.
234 (b) Shares common ownership with any person; has an
235 investor or is a holder of an ownership interest in any person;
236 exercises control in any manner over the election of a majority
237 of the directors or of individuals exercising similar functions
238 of any person; has the power to exercise controlling influence
239 over the management of any person; or serves as a working
240 majority of the board of directors, the managers, or the
241 officers of a person, who is:
242 1. A provider or a member of a provider group or group
243 practice as defined in s. 456.053(3) under the managed care
244 plan; or
245 2. A person responsible for providing any pharmacy
246 services, pharmaceuticals, diagnostics, care coordination, care
247 delivery, health care services, medical equipment,
248 administrative services, or financial services under the managed
249 care plan.
250 (13) “Market rate” means the price that a willing buyer
251 will pay and a willing seller will accept in an arm’s-length
252 transaction which is beneficial to both parties.
253 Section 4. Subsections (1) and (2), paragraph (h) of
254 subsection (3), and subsection (4) of section 409.967, Florida
255 Statutes, are amended, and subsection (5) is added to that
256 section, to read:
257 409.967 Managed care plan accountability.—
258 (1) CONTRACT PROCUREMENT PROCESS.—Beginning with the
259 contract procurement process initiated during the 2023 calendar
260 year, the agency shall establish a 6-year contract with each
261 managed care plan selected through the procurement process
262 described in s. 409.966. A plan contract may not be renewed;
263 however, the agency may extend the term of a plan contract to
264 cover any delays during the transition to a new plan. The agency
265 shall extend until December 31, 2024, the term of existing plan
266 contracts awarded pursuant to the invitation to negotiate
267 published in July 2017.
268 (2) CONTRACT REQUIREMENTS.—The agency shall establish such
269 contract requirements as are necessary for the operation of the
270 statewide managed care program. In addition to any other
271 provisions the agency may deem necessary, the contract must
272 require:
273 (a) Physician compensation.—Managed care plans are expected
274 to coordinate care, manage chronic disease, and prevent the need
275 for more costly services. Effective care management should
276 enable plans to redirect available resources and increase
277 compensation for physicians. Plans achieve this performance
278 standard when physician payment rates equal or exceed Medicare
279 rates for similar services. The agency may impose fines or other
280 sanctions on a plan that fails to meet this performance standard
281 after 2 years of continuous operation.
282 (b) Emergency services.—Managed care plans shall pay for
283 services required by ss. 395.1041 and 401.45 and rendered by a
284 noncontracted provider. The plans must comply with s. 641.3155.
285 Reimbursement for services under this paragraph is the lesser
286 of:
287 1. The provider’s charges;
288 2. The usual and customary provider charges for similar
289 services in the community where the services were provided;
290 3. The charge mutually agreed to by the entity and the
291 provider within 60 days after submittal of the claim; or
292 4. The Medicaid rate, which, for the purposes of this
293 paragraph, means the amount the provider would collect from the
294 agency on a fee-for-service basis, less any amounts for the
295 indirect costs of medical education and the direct costs of
296 graduate medical education that are otherwise included in the
297 agency’s fee-for-service payment, as required under 42 U.S.C. s.
298 1396u-2(b)(2)(D). For the purpose of establishing the amounts
299 specified in this subparagraph, the agency shall publish on its
300 website annually, or more frequently as needed, the applicable
301 fee-for-service fee schedules and their effective dates, less
302 any amounts for indirect costs of medical education and direct
303 costs of graduate medical education that are otherwise included
304 in the agency’s fee-for-service payments.
305 (c) Access.—
306 1. The agency shall establish specific standards for the
307 number, type, and regional distribution of providers in managed
308 care plan networks to ensure access to care for both adults and
309 children. Each plan must maintain a regionwide network of
310 providers in sufficient numbers to meet the access standards for
311 specific medical services for all recipients enrolled in the
312 plan. The exclusive use of mail-order pharmacies may not be
313 sufficient to meet network access standards. Consistent with the
314 standards established by the agency, provider networks may
315 include providers located outside the region. Each plan shall
316 establish and maintain an accurate and complete electronic
317 database of contracted providers, including information about
318 licensure or registration, locations and hours of operation,
319 specialty credentials and other certifications, specific
320 performance indicators, and such other information as the agency
321 deems necessary. The database must be available online to both
322 the agency and the public and have the capability to compare the
323 availability of providers to network adequacy standards and to
324 accept and display feedback from each provider’s patients. Each
325 plan shall submit quarterly reports to the agency identifying
326 the number of enrollees assigned to each primary care provider.
327 The agency shall conduct, or contract for, systematic and
328 continuous testing of the provider network databases maintained
329 by each plan to confirm accuracy, confirm that behavioral health
330 providers are accepting enrollees, and confirm that enrollees
331 have access to behavioral health services.
332 2. Each managed care plan must publish any prescribed drug
333 formulary or preferred drug list on the plan’s website in a
334 manner that is accessible to and searchable by enrollees and
335 providers. The plan must update the list within 24 hours after
336 making a change. Each plan must ensure that the prior
337 authorization process for prescribed drugs is readily accessible
338 to health care providers, including posting appropriate contact
339 information on its website and providing timely responses to
340 providers. For Medicaid recipients diagnosed with hemophilia who
341 have been prescribed anti-hemophilic-factor replacement
342 products, the agency shall provide for those products and
343 hemophilia overlay services through the agency’s hemophilia
344 disease management program.
345 3. Managed care plans, and their fiscal agents or
346 intermediaries, must accept prior authorization requests for any
347 service electronically.
348 4. Managed care plans serving children in the care and
349 custody of the Department of Children and Families must maintain
350 complete medical, dental, and behavioral health encounter
351 information and participate in making such information available
352 to the department or the applicable contracted community-based
353 care lead agency for use in providing comprehensive and
354 coordinated case management. The agency and the department shall
355 establish an interagency agreement to provide guidance for the
356 format, confidentiality, recipient, scope, and method of
357 information to be made available and the deadlines for
358 submission of the data. The scope of information available to
359 the department shall be the data that managed care plans are
360 required to submit to the agency. The agency shall determine the
361 plan’s compliance with standards for access to medical, dental,
362 and behavioral health services; the use of medications; and
363 follow-up followup on all medically necessary services
364 recommended as a result of early and periodic screening,
365 diagnosis, and treatment.
366 (d) Quality care.—Managed care plans shall provide, or
367 contract for the provision of, care coordination to facilitate
368 the appropriate delivery of behavioral health care services in
369 the least restrictive setting with treatment and recovery
370 capabilities that address the needs of the patient. Services
371 shall be provided in a manner that integrates behavioral health
372 services and primary care. Plans shall be required to achieve
373 specific behavioral health outcome standards, established by the
374 agency in consultation with the department.
375 (e) Encounter data.—The agency shall maintain and operate a
376 Medicaid Encounter Data System to collect, process, store, and
377 report on covered services provided to all Medicaid recipients
378 enrolled in prepaid plans.
379 1. Each prepaid plan must comply with the agency’s
380 reporting requirements for the Medicaid Encounter Data System.
381 Prepaid plans must submit encounter data, including data on
382 encounters for which payment was denied and encounters for which
383 a health care provider was reimbursed by the plan on a capitated
384 basis, electronically in a format that complies with the Health
385 Insurance Portability and Accountability Act provisions for
386 electronic claims and in accordance with deadlines established
387 by the agency. Prepaid plans must certify that the data reported
388 is accurate and complete.
389 2. The agency is responsible for validating the data
390 submitted by the plans. The agency shall develop methods and
391 protocols for ongoing analysis of the encounter data that
392 adjusts for differences in characteristics of prepaid plan
393 enrollees to allow comparison of service utilization among plans
394 and against expected levels of use. The analysis shall be used
395 to identify possible cases of overspending on administrative
396 costs, payments by plans in excess of market rates, systemic
397 underutilization or denials of claims and inappropriate service
398 utilization such as higher-than-expected emergency department
399 encounters, and potential managed care plan fraud, waste, and
400 abuse. The analysis shall provide periodic feedback to the plans
401 and enable the agency to establish corrective action plans when
402 necessary. One of the focus areas for the analysis shall be the
403 use of prescription drugs. The analysis shall be used in managed
404 care plan capitation rate-setting processes provided under this
405 part.
406 3. The agency shall make encounter data available to those
407 plans accepting enrollees who are assigned to them from other
408 plans leaving a region.
409 4. The agency shall annually produce a report entitled
410 “Analysis of Potentially Preventable Health Care Events of
411 Florida Medicaid Enrollees.” The report must include, but need
412 not be limited to, an analysis of the potentially preventable
413 hospital emergency department visits, hospital admissions, and
414 hospital readmissions that occurred during the previous state
415 fiscal year which may have been prevented with better access to
416 primary care, improved medication management, or better
417 coordination of care, reported by age, eligibility group,
418 managed care plan, and region, including conditions contributing
419 to each potentially preventable event or category of potentially
420 preventable events. The agency may include any other data or
421 analysis parameters to augment the report which it deems
422 pertinent to the analysis. The report must demonstrate trends
423 using applicable historical data. The agency shall submit the
424 report to the Governor, the President of the Senate, and the
425 Speaker of the House of Representatives by October 1, 2024, and
426 each October 1 thereafter. The agency may contract with a third
427 party vendor to produce the report required under this
428 subparagraph.
429 (f) Continuous improvement.—The agency shall establish
430 specific performance standards and expected milestones or
431 timelines for improving performance over the term of the
432 contract.
433 1. Each managed care plan shall establish an internal
434 health care quality improvement system, including enrollee
435 satisfaction and disenrollment surveys. The quality improvement
436 system must include incentives and disincentives for network
437 providers.
438 2. Each managed care plan must collect and report the
439 Healthcare Effectiveness Data and Information Set (HEDIS)
440 measures, the federal Core Set of Children’s Health Care Quality
441 measures, and the federal Core Set of Adult Health Care Quality
442 Measures, as specified by the agency. Each plan must collect and
443 report the Adult Core Set behavioral health measures beginning
444 with data reports for the 2025 calendar year. Each plan must
445 stratify reported measures by age, sex, race, ethnicity, primary
446 language, and whether the enrollee received a Social Security
447 Administration determination of disability for purposes of
448 Supplemental Security Income beginning with data reports for the
449 2026 calendar year. A plan’s performance on these measures must
450 be published on the plan’s website in a manner that allows
451 recipients to reliably compare the performance of plans. The
452 agency shall use the measures as a tool to monitor plan
453 performance.
454 3. Each managed care plan must be accredited by the
455 National Committee for Quality Assurance, the Joint Commission,
456 or another nationally recognized accrediting body, or have
457 initiated the accreditation process, within 1 year after the
458 contract is executed. For any plan not accredited within 18
459 months after executing the contract, the agency shall suspend
460 automatic assignment under ss. 409.977 and 409.984.
461 (g) Program integrity.—Each managed care plan shall
462 establish program integrity functions and activities to reduce
463 the incidence of fraud and abuse, including, at a minimum:
464 1. A provider credentialing system and ongoing provider
465 monitoring, including maintenance of written provider
466 credentialing policies and procedures which comply with federal
467 and agency guidelines;
468 2. An effective prepayment and postpayment review process
469 including, but not limited to, data analysis, system editing,
470 and auditing of network providers;
471 3. Procedures for reporting instances of fraud and abuse
472 pursuant to chapter 641;
473 4. Administrative and management arrangements or
474 procedures, including a mandatory compliance plan, designed to
475 prevent fraud and abuse; and
476 5. Designation of a program integrity compliance officer.
477 (h) Grievance resolution.—Consistent with federal law, each
478 managed care plan shall establish and the agency shall approve
479 an internal process for reviewing and responding to grievances
480 from enrollees. Each plan shall submit quarterly reports on the
481 number, description, and outcome of grievances filed by
482 enrollees.
483 (i) Penalties.—
484 1. Withdrawal and enrollment reduction.—Managed care plans
485 that reduce enrollment levels or leave a region before the end
486 of the contract term must reimburse the agency for the cost of
487 enrollment changes and other transition activities. If more than
488 one plan leaves a region at the same time, costs must be shared
489 by the departing plans proportionate to their enrollments. In
490 addition to the payment of costs, departing provider services
491 networks must pay a per-enrollee penalty of up to 3 months’
492 payment and continue to provide services to the enrollee for 90
493 days or until the enrollee is enrolled in another plan,
494 whichever occurs first. In addition to payment of costs, all
495 other departing plans must pay a penalty of 25 percent of that
496 portion of the minimum surplus maintained pursuant to s.
497 641.225(1) which is attributable to the provision of coverage to
498 Medicaid enrollees. Plans shall provide at least 180 days’
499 notice to the agency before withdrawing from a region. If a
500 managed care plan leaves a region before the end of the contract
501 term, the agency shall terminate all contracts with that plan in
502 other regions pursuant to the termination procedures in
503 subparagraph 3.
504 2. Encounter data.—If a plan fails to comply with the
505 encounter data reporting requirements of this section for 30
506 days, the agency must assess a fine of $5,000 per day for each
507 day of noncompliance beginning on the 31st day. On the 31st day,
508 the agency must notify the plan that the agency will initiate
509 contract termination procedures on the 90th day unless the plan
510 comes into compliance before that date.
511 3. Termination.—If the agency terminates more than one
512 regional contract with the same managed care plan due to
513 noncompliance with the requirements of this section, the agency
514 shall terminate all the regional contracts held by that plan.
515 When terminating multiple contracts, the agency must develop a
516 plan to provide for the transition of enrollees to other plans,
517 and phase in the terminations over a time period sufficient to
518 ensure a smooth transition.
519 (j) Prompt payment.—Managed care plans shall comply with
520 ss. 641.315, 641.3155, and 641.513.
521 (k) Electronic claims.—Managed care plans, and their fiscal
522 agents or intermediaries, shall accept electronic claims in
523 compliance with federal standards.
524 (l) Fair payment.—Provider service networks must ensure
525 that no entity licensed under chapter 395 with a controlling
526 interest in the network charges a Medicaid managed care plan
527 more than the amount paid to that provider by the provider
528 service network for the same service.
529 (m) Itemized payment.—Any claims payment to a provider by a
530 managed care plan, or by a fiscal agent or intermediary of the
531 plan, must be accompanied by an itemized accounting of the
532 individual claims included in the payment including, but not
533 limited to, the enrollee’s name, the date of service, the
534 procedure code, the amount of reimbursement, and the
535 identification of the plan on whose behalf the payment is made.
536 (n) Provider dispute resolution.—Disputes between a plan
537 and a provider may be resolved as described in s. 408.7057.
538 (o) Transparency.—Managed care plans shall comply with ss.
539 627.6385(3) and 641.54(7).
540 (p) Third-party administrators.—The agency′s contract with
541 a managed care plan must require that any third-party
542 administrative entity contracted by the plan adheres to all
543 pertinent requirements of the Medicaid program placed on the
544 plan under the plan′s contract with the agency.
545 (3) ACHIEVED SAVINGS REBATE.—
546 (h) The following may not be included as allowable expenses
547 in calculating income for determining the achieved savings
548 rebate:
549 1. Payment of achieved savings rebates.
550 2. Any financial incentive payments made to the plan
551 outside of the capitation rate.
552 3. Any financial disincentive payments levied by the state
553 or Federal Government.
554 4. Expenses associated with any lobbying or political
555 activities.
556 5. The cash value or equivalent cash value of bonuses of
557 any type paid or awarded to the plan’s executive staff, other
558 than base salary.
559 6. Reserves and reserve accounts.
560 7. Administrative costs, including, but not limited to,
561 reinsurance expenses, interest payments, depreciation expenses,
562 bad debt expenses, and outstanding claims expenses in excess of
563 actuarially sound maximum amounts set by the agency.
564 8. Payments to affiliates as defined in s. 409.962 in
565 excess of market rates.
566
567 The agency shall consider these and other factors in developing
568 contracts that establish shared savings arrangements.
569 (4) MEDICAL LOSS RATIOS RATIO.—
570 (a) If required by federal regulations or as a condition of
571 a waiver, the agency must may calculate a medical loss ratios
572 ratio for all managed care plans contracted with the agency
573 under this part. The calculations must calculation shall use
574 uniform financial data collected from all plans and shall be
575 computed for each plan on a statewide basis. If a plan
576 participates in the managed medical assistance program, the
577 long-term care managed care program, or the pilot program for
578 individuals with developmental disabilities, the agency must
579 calculate medical loss ratios for the plan’s participation in
580 each program separately and, if the plan participates in more
581 than one of these programs, for the plan’s overall participation
582 in statewide Medicaid managed care. Medical loss ratios must be
583 calculated and The method for calculating the medical loss ratio
584 shall meet the following criteria:
585 (a) Except as provided in paragraphs (b) and (c),
586 expenditures must shall be classified in a manner consistent
587 with 42 C.F.R. part 438 45 C.F.R. part 158.
588 (b) The agency shall report medical loss ratios quarterly
589 and annually for each managed care plan contracted with the
590 agency under this part to the Governor, the President of the
591 Senate, and the Speaker of the House of Representatives no later
592 than 6 months after the end of each such period Funds provided
593 by plans to graduate medical education institutions to
594 underwrite the costs of residency positions shall be classified
595 as medical expenditures, provided the funding is sufficient to
596 sustain the positions for the number of years necessary to
597 complete the residency requirements and the residency positions
598 funded by the plans are active providers of care to Medicaid and
599 uninsured patients.
600 (c) Before final determination of the medical loss ratio
601 for any period, a plan may contribute to a designated state
602 trust fund for the purpose of supporting Medicaid and indigent
603 care and have the contribution counted as a medical expenditure
604 for the period. Funds contributed for this purpose shall be
605 deposited into the Grants and Donations Trust Fund.
606 (5) AFFILIATED ENTITIES AND RELATED PARTIES.—
607 (a) The agency shall ensure oversight of affiliated
608 entities and related parties paid by managed care plans under
609 this part, including, but not limited to, examining financial
610 records and self-referral data of any managed care plan
611 providing services within the statewide managed care program
612 which uses affiliated entities and related parties.
613 (b) The agency shall consider data examined under paragraph
614 (a) and the findings of the annual assessment required under s.
615 409.9675(4) when developing managed care plan capitation rates
616 under this part.
617 Section 5. Effective January 1, 2027, paragraph (f) of
618 subsection (3) of section 409.967, Florida Statutes, is amended,
619 and paragraph (g) of that subsection is republished, to read:
620 409.967 Managed care plan accountability.—
621 (3) ACHIEVED SAVINGS REBATE.—
622 (f) Achieved savings rebates validated by the certified
623 public accountant are due within 30 days after the report is
624 submitted. Except as provided in paragraph (h), the achieved
625 savings rebate is established by determining pretax income as a
626 percentage of revenues and applying the following income sharing
627 ratios:
628 1. One hundred percent of income up to and including 3 5
629 percent of revenue shall be retained by the plan.
630 2. Thirty Fifty percent of income above 3 5 percent and up
631 to 10 percent shall be retained by the plan, and the other 70 50
632 percent shall be refunded to the state and adjusted for the
633 Federal Medical Assistance Percentages. The state share shall be
634 transferred to the General Revenue Fund, unallocated, and the
635 federal share shall be transferred to the Medical Care Trust
636 Fund, unallocated.
637 3. One hundred percent of income above 10 percent of
638 revenue shall be refunded to the state and adjusted for the
639 Federal Medical Assistance Percentages. The state share shall be
640 transferred to the General Revenue Fund, unallocated, and the
641 federal share shall be transferred to the Medical Care Trust
642 Fund, unallocated.
643 (g) A plan that exceeds agency-defined quality measures in
644 the reporting period may retain an additional 1 percent of
645 revenue. For the purpose of this paragraph, the quality measures
646 must include plan performance for preventing or managing
647 complex, chronic conditions that are associated with an elevated
648 likelihood of requiring high-cost medical treatments.
649 Section 6. Section 409.9675, Florida Statutes, is created
650 to read:
651 409.9675 Affiliated entities and controlling interests;
652 reports required.—
653 (1) Each managed care plan contracted by the agency under
654 this part shall report all of the following by March 31, 2027,
655 for the prior calendar year, and annually thereafter, to the
656 agency and the Office of Insurance Regulation in a manner
657 prescribed by the agency:
658 (a) Any person controlled by or affiliated with the managed
659 care plan, including, but not limited to, any provider, provider
660 group, group practice defined in s. 456.053(3), or person
661 responsible for providing any pharmacy services,
662 pharmaceuticals, diagnostics, care coordination, care delivery,
663 health care services, medical equipment, administrative
664 services, or financial services for, to, or on behalf of the
665 managed care plan.
666 (b) Any affiliation of any kind or nature with any person
667 who has, either directly or indirectly through one or more
668 intermediaries, an investment or ownership interest representing
669 10 percent or more, shares common ownership with, or has an
670 investor or a holder of an ownership interest representing 10
671 percent or more with any person providing pharmacy services,
672 diagnostics, care coordination, care delivery, health care
673 services, medical equipment, administrative services, or
674 financial services for, to, or on behalf of the managed care
675 plan.
676 (2) For any affiliation reported by a managed care plan
677 under subsection (1), the report must include all of the
678 following:
679 (a) The percentage of ownership or control of any person or
680 affiliate with whom the managed care plan has had business
681 transactions totaling in the aggregate more than $25,000 during
682 the prior 12-month period in the annual achieved savings rebate
683 financial reporting required under s. 409.967(3) and
684 identification of the specific contract or contracts involved in
685 such business transactions.
686 (b) Any significant business transactions between the
687 managed care plan and any affiliated person during the 12-month
688 period in the annual achieved savings rebate financial reporting
689 required under s. 409.967(3).
690 (3) Each managed care plan shall report any change in
691 information required by subsection (1) to the agency and the
692 Office of Insurance Regulation in writing within 60 days after
693 the change occurs.
694 (4) By December 31, 2026, and annually thereafter, the
695 agency shall calculate, analyze, and publicly report on the
696 agency’s website an assessment of affiliated entity payment
697 transactions in the Medicaid program for medical benefit and
698 administrative costs as reported for purposes of the achieved
699 savings rebate. The baseline assessment, at a minimum, must
700 include achieved savings rebate transactions for the years 2021,
701 2022, and 2023; the amount and associated percentage of
702 affiliated entity payments within the medical loss ratio; and
703 the payment deviation percentages and associated amounts at the
704 Healthcare Common Procedure Coding System level for affiliated
705 entities as compared to nonaffiliated entities. The assessment
706 must also compare payment amounts for value-based or alternative
707 payment arrangements.
708 Section 7. Present paragraphs (b) through (x) of subsection
709 (1) of section 626.8825, Florida Statutes, are redesignated as
710 paragraphs (c) through (z), respectively, a new paragraph (b) is
711 added to that subsection, and present paragraph (u) of
712 subsection (1) and paragraphs (c) and (h) of subsection (3) of
713 that section are amended, to read:
714 626.8825 Pharmacy benefit manager transparency and
715 accountability.—
716 (1) DEFINITIONS.—As used in this section, the term:
717 (b) “Affiliated manufacturer” means a prescription drug
718 manufacturer permitted under chapter 499 or a private label
719 distributor as defined in 21 C.F.R. s. 207.1 which directly or
720 indirectly through one or more intermediaries:
721 1. Has an investment or ownership interest in a pharmacy
722 benefit manager holding a certificate of authority issued under
723 this part;
724 2. Shares common ownership with a pharmacy benefit manager
725 holding a certificate of authority issued under this part; or
726 3. Has an investor or a holder of an ownership interest
727 which is a pharmacy benefit manager holding a certificate of
728 authority issued under this part.
729 (v)(u) “Pharmacy benefits plan or program” means a plan or
730 program that pays for, reimburses, covers the cost of, or
731 provides access to discounts on pharmacist services provided by
732 one or more pharmacies to covered persons who reside in, are
733 employed by, or receive pharmacist services from this state.
734 1. The term includes, but is not limited to, health
735 maintenance organizations, health insurers, self-insured
736 employer health plans, discount card programs, and government
737 funded health plans, including the Statewide Medicaid Managed
738 Care program established pursuant to part IV of chapter 409 and
739 the state group insurance program pursuant to part I of chapter
740 110.
741 2. The term excludes such a plan or program under s. 430.84
742 or chapter 440.
743 (3) CONTRACTS BETWEEN A PHARMACY BENEFIT MANAGER AND A
744 PARTICIPATING PHARMACY.—In addition to other requirements in the
745 Florida Insurance Code, a participation contract executed,
746 amended, adjusted, or renewed on or after July 1, 2023, that
747 applies to pharmacist services on or after January 1, 2024,
748 between a pharmacy benefit manager and one or more pharmacies or
749 pharmacists, must include, in substantial form, terms that
750 ensure compliance with all of the following requirements, and
751 that, except to the extent not allowed by law, shall supersede
752 any contractual terms in the participation contract to the
753 contrary:
754 (c) A prohibition of financial clawbacks, reconciliation
755 offsets, or offsets to adjudicated claims. A pharmacy benefit
756 manager may not charge, withhold, offset, or recoup any direct
757 or indirect remuneration fees, dispensing fees, brand name or
758 generic effective rate adjustments through reconciliation, or
759 any other monetary charge, withholding, or recoupments as
760 related to discounts, multiple network reconciliation offsets,
761 adjudication transaction fees, and any other instance when an
762 amount a fee may be recouped from a pharmacy if such action
763 would result in a reduction in the amount paid to the pharmacy
764 or pharmacist. This prohibition does not apply to:
765 1. Any incentive payments provided by the pharmacy benefit
766 manager to a network pharmacy for meeting or exceeding
767 predefined quality measures, such as Healthcare Effectiveness
768 Data and Information Set measures; recoupment due to an
769 erroneous claim, fraud, waste, or abuse; a claim adjudicated in
770 error; a maximum allowable cost appeal pricing adjustment; or an
771 adjustment made as part of a pharmacy audit pursuant to s.
772 624.491.
773 2. Any recoupment that is returned to the state for
774 programs in chapter 409 or the state group insurance program in
775 s. 110.123.
776 (h) The pharmacy benefit manager shall provide a reasonable
777 administrative appeal procedure to allow a pharmacy or
778 pharmacist to challenge the maximum allowable cost pricing
779 information and the reimbursement made under the maximum
780 allowable cost as defined in s. 627.64741 for a specific drug as
781 being below the acquisition cost available to the challenging
782 pharmacy or pharmacist.
783 1. The administrative appeal procedure must include a
784 telephone number and e-mail address, or a website, for the
785 purpose of submitting the administrative appeal. The appeal may
786 be submitted by the pharmacy or an agent of the pharmacy
787 directly to the pharmacy benefit manager or through a pharmacy
788 service administration organization. The administrative appeal
789 process must allow a pharmacy or pharmacist the option to submit
790 an electronic spreadsheet or similar electronic document
791 containing a consolidated administrative appeal representing
792 multiple adjudicated claims that share the same drug and day
793 supply and have a date of service occurring within the same
794 calendar month. The pharmacy or pharmacist must be given at
795 least 30 business days after a maximum allowable cost update or
796 after an adjudication for an electronic claim or reimbursement
797 for a nonelectronic claim to file the administrative appeal.
798 2. The pharmacy benefit manager must respond to the
799 administrative appeal within 30 business days after receipt of
800 the appeal.
801 3. If the appeal is upheld, the pharmacy benefit manager
802 must:
803 a. Update the maximum allowable cost pricing information to
804 at least the acquisition cost available to the pharmacy;
805 b. Permit the pharmacy or pharmacist to reverse and rebill
806 the claim in question;
807 c. Provide to the pharmacy or pharmacist the national drug
808 code on which the increase or change is based; and
809 d. Make the increase or change effective for each similarly
810 situated pharmacy or pharmacist who is subject to the applicable
811 maximum allowable cost pricing information.
812 4. If the appeal is denied, the pharmacy benefit manager
813 must provide to the pharmacy or pharmacist the national drug
814 code and the name of the national or regional pharmaceutical
815 wholesalers operating in this state which have the drug
816 currently in stock at a price below the maximum allowable cost
817 pricing information.
818 5. Beginning August 15, 2026 Every 90 days, a pharmacy
819 benefit manager shall report to the office the total number of
820 appeals received and denied in the preceding quarter 90-day
821 period, with an explanation or reason for each denial, for each
822 specific drug for which an appeal was submitted pursuant to this
823 paragraph. The deadlines for each filing are March 1 for the
824 preceding year′s fourth quarter; May 15 for the year′s first
825 quarter; August 15 for the year′s second quarter; and November
826 15 for the year′s third quarter.
827 Section 8. Subsection (7) of section 626.8827, Florida
828 Statutes, is amended, and subsections (8), (9), and (10) are
829 added to that section, to read:
830 626.8827 Pharmacy benefit manager prohibited practices.—In
831 addition to other prohibitions in this part, a pharmacy benefit
832 manager may not do any of the following:
833 (7) Fail to comply with the requirements in s. 624.491 or
834 s. 626.8825, or breach contractual terms required under s.
835 626.8825.
836 (8) Prohibit or restrict a pharmacy from declining to
837 dispense a drug if the reimbursement rate for the drug is less
838 than the actual acquisition cost to the pharmacy.
839 (9) Reimburse a pharmacy less than it reimburses an
840 affiliate pharmacy.
841 (10) Maintain an ownership interest, investment interest,
842 or common ownership with an affiliated manufacturer, or share
843 any investor or holder of an ownership interest with an
844 affiliated manufacturer.
845 Section 9. Subsection (1) of section 627.42392, Florida
846 Statutes, is amended to read:
847 627.42392 Prior authorization.—
848 (1) As used in this section, the term “health insurer”
849 means an authorized insurer offering health insurance as defined
850 in s. 624.603, a managed care plan as defined in s. 409.962 s.
851 409.962(10), or a health maintenance organization as defined in
852 s. 641.19(12).
853 Section 10. Except as otherwise provided in this act and
854 except for this section, which shall take effect upon this act
855 becoming a law, this act shall take effect July 1, 2026.