Senate Bill 1432

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    Florida Senate - 1998                                  SB 1432

    By Senator Brown-Waite





    10-890A-98

  1                      A bill to be entitled

  2         An act relating to the delivery of health care

  3         services; redesignating part III of ch. 641,

  4         F.S., as part IV, and creating a new part III

  5         of ch. 641, F.S., the "Provider-Sponsored

  6         Organization Act"; providing legislative

  7         findings and purposes with respect to certain

  8         federal requirements for authorizing

  9         provider-sponsored organizations in this state

10         to provide health care coverage to Medicare

11         beneficiaries under the Medicare Choice plan;

12         providing definitions; exempting

13         provider-sponsored organizations from certain

14         provisions of the Florida Insurance Code;

15         requiring the incorporation of any

16         provider-sponsored organization doing business

17         in this state; prohibiting a provider-sponsored

18         organization from transacting insurance

19         business other than the offering of Medicare

20         Choice plans; providing for determining the

21         types of activities that require licensure by

22         the Department of Insurance; requiring that a

23         provider-sponsored organization obtain a

24         certificate of authority from the department;

25         specifying conditions precedent to issuance or

26         maintenance of a certificate of authority;

27         providing surplus requirements for a

28         provider-sponsored organization that offers the

29         Medicare Choice plan; requiring that a

30         provider-sponsored organization deposit a

31         specified amount into the Rehabilitation

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  1         Administrative Expense Fund of the Department

  2         of Insurance; requiring that a

  3         provider-sponsored organization maintain a

  4         valid health care provider certificate;

  5         specifying circumstances under which the

  6         department may suspend a provider-sponsored

  7         organization's authority to enroll new

  8         subscribers; providing contract requirements;

  9         authorizing the department to impose

10         administrative penalties in lieu of suspension

11         or revocation of a certificate; providing

12         requirements for any acquisition, merger, or

13         consolidation of a provider-sponsored

14         organization; requiring that a

15         provider-sponsored organization file an annual

16         report; providing penalties; requiring

17         examinations by the department; providing for

18         civil remedies and injunctive relief; providing

19         for the payment of a judgment by a

20         provider-sponsored organization; specifying the

21         delinquency proceedings that are the sole means

22         of liquidating, reorganizing, rehabilitating,

23         or conserving a provider-sponsored

24         organization; providing filing fees; providing

25         for the application of other laws; authorizing

26         the Division of Insurance Fraud of the

27         department to investigate violations of part

28         III of ch. 641, F.S.; prohibiting certain

29         unfair practices in a provider-sponsored

30         contract with respect to exposure to the human

31         immunodeficiency virus infection and related

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  1         matters; providing requirements for contracts

  2         and advertisements used by a provider-sponsored

  3         organization; providing marketing standards and

  4         requirements; providing requirements for

  5         provider-sponsored contracts, certificates, and

  6         member handbooks; requiring a

  7         provider-sponsored organization to make certain

  8         disclosures to prospective enrollees; requiring

  9         coverage for mammograms; providing requirements

10         with respect to the treatment of breast cancer

11         and followup care; providing requirements for

12         contracts between a provider-sponsored

13         organization and a provider of health care

14         services; prohibiting a provider-sponsored

15         organization from using certain words

16         descriptive of the insurance business;

17         providing requirements for assets, liabilities,

18         and investments of a provider-sponsored

19         organization; requiring the Department of

20         Insurance to adopt rules; providing certain

21         limitations on the payment of dividends by a

22         provider-sponsored organization; specifying

23         prohibited activities; providing penalties;

24         requiring that an agent who solicits contracts

25         and performs other activities be licensed and

26         appointed as a health insurance agent;

27         prohibiting certain unfair methods of

28         competition and unfair or deceptive acts or

29         practices; authorizing the department to

30         conduct examinations and investigations;

31         providing for administrative hearings;

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  1         authorizing the department to issue cease and

  2         desist orders and impose penalties; providing

  3         for appeals of a department order; providing

  4         penalties for violating a cease and desist

  5         order; providing that an action by the

  6         department does not abrogate the right to other

  7         relief; amending s. 641.227, F.S.; providing

  8         for deposits into the Rehabilitation

  9         Administrative Expense Fund by a

10         provider-sponsored organization; providing for

11         reimbursements; amending s. 641.316, F.S.,

12         relating to fiscal intermediary services;

13         providing for application to provider-sponsored

14         organizations; amending ss. 641.47, 641.48,

15         641.49, 641.495, F.S., relating to definitions,

16         purpose and application, and certification

17         requirements; providing for certain provisions

18         regulating health care services to apply to

19         provider-sponsored organizations; amending s.

20         641.51, F.S.; providing requirements for

21         provider-sponsored organizations in requiring

22         second medical opinions; amending s. 641.512,

23         F.S.; requiring that a provider-sponsored

24         organization obtain accreditation; amending s.

25         641.513, F.S.; providing requirements for

26         provider-sponsored organizations in providing

27         emergency services and care; amending s.

28         641.515, F.S.; authorizing the Agency for

29         Health Care Administration to adopt rules with

30         respect to services performed for a

31         provider-sponsored organization; amending s.

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  1         641.54, F.S.; providing requirements for a

  2         provider-sponsored organization in making

  3         referrals; amending s. 641.59, F.S.; providing

  4         requirements for psychotherapeutic services;

  5         amending s. 641.60, F.S.; providing for a

  6         managed care program to include a

  7         provider-sponsored organization for purposes of

  8         the Statewide Managed Care Ombudsman Committee;

  9         providing an effective date.

10

11  Be It Enacted by the Legislature of the State of Florida:

12

13         Section 1.  The Division of Statutory Revision is

14  requested to redesignate part III of chapter 641, Florida

15  Statutes, as part IV of that chapter, and a new part III of

16  chapter 641, Florida Statutes, consisting of sections

17  641.4601, 641.4602, 641.4603, 641.4604, 641.4605, 641.4606,

18  641.4607, 641.4608, 641.4609, 641.4610, 641.4611, 641.4612,

19  641.4613, 641.4614, 641.4615, 641.4616, 641.4617, 641.4618,

20  641.4619, 641.4620, 641.4621, 641.4622, 641.4623, 641.4624,

21  641.4625, 641.4626, 641.4627, 641.4628, 641.4629, 641.4630,

22  641.4631, 641.4632, 641.4633, 641.4634, 641.4635, 641.4636,

23  641.4637, 641.4638, 641.4639, 641.4640, 641.4641, 641.4642,

24  641.4643, 641.4644, 641.4645, 641.4646, 641.4647, and

25  641.4648, Florida Statutes, is created to read:

26         Section 641.4601  Short title.--This part may be cited

27  as the "Provider-Sponsored Organization Act."

28         Section 641.4602  Declaration of legislative findings

29  and purposes.--

30         (1)  The Legislature finds that a major restructuring

31  of health care has taken place which has changed the way in

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  1  which health care services are paid for and delivered. Today,

  2  the emphasis is on providing cost-conscious health care

  3  services through managed care. The Legislature recognizes that

  4  alternative methods for the delivery of health care are needed

  5  to promote competition and increase patients' choices.

  6         (2)  The Legislature recognizes that the United States

  7  Congress has enacted legislation that allows

  8  provider-sponsored organizations to provide coordinated-care

  9  plans to Medicare enrollees through the Medicare Choice

10  program. The federal legislation requires any organization

11  that offers a Medicare Choice plan to be organized under state

12  law as an entity eligible to offer health-benefit coverage in

13  the state in which it offers a Medicare Choice plan.

14         (3)  The Legislature finds that these plans, when

15  properly operated, will enhance the quality of controls,

16  ensuring that the provider has control over medical

17  decisionmaking while emphasizing effective cost and quality

18  control.

19         (4)  Therefore, it is the policy of this state:

20         (a)  To eliminate legal barriers to the organization,

21  promotion, and expansion of provider-sponsored organizations

22  that offer Medicare Choice plans in order to encourage the

23  development of valuable options for the Medicare beneficiaries

24  of this state.

25         (b)  Not to extend insurance regulation or onerous

26  reporting requirements to hospitals, physicians, single or

27  multiple-specialty groups, other licensed providers, or any

28  combination of such entities when contracting with entities

29  licensed under chapter 627 or part I or when contracting with

30  plans qualified and created under the Employee Retirement

31  Income Security Act of 1974.

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  1         (c)  To recognize that comprehensive provider-sponsored

  2  organizations are exempt from the insurance laws of this state

  3  except in the manner and to the extent set forth in this part.

  4         641.4603  Definitions.--As used in this part, the term:

  5         (1)  "Affiliation" means a relationship between

  6  providers in which, through contract, ownership, or otherwise:

  7         (a)  One provider, directly or indirectly, controls, is

  8  controlled by, or is under common control with the other;

  9         (b)  Both providers are part of a controlled group of

10  corporations under s. 1563 of the Internal Revenue Code of

11  1986;

12         (c)  Each provider is a participant in a lawful

13  combination under which each provider shares substantial

14  financial risk in connection with the organization's

15  operations; or

16         (d)  Both providers are part of an affiliated service

17  group under s. 414 of the Internal Revenue Code of 1986.

18         (2)  "Agency" means the Agency for Health Care

19  Administration.

20         (3)  "Comprehensive health care services" means

21  services, medical equipment, and supplies required under the

22  Medicare Choice program.

23         (4)  "Copayment" means a specific dollar amount that

24  the subscriber must pay upon receipt of covered health care

25  services as required or authorized under the Medicare Choice

26  program.

27         (5)  "Department" means the Department of Insurance.

28         (6)  "Emergency medical condition" means:

29         (a)  A medical condition that manifests itself by acute

30  symptoms of sufficient severity, which may include severe pain

31  or other acute symptoms, such that the absence of immediate

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  1  medical attention could reasonably be expected to result in

  2  any of the following:

  3         1.  Serious jeopardy to the health of a patient,

  4  including a pregnant woman or a fetus.

  5         2.  Serious impairment of bodily functions.

  6         3.  Serious dysfunction of any bodily organ or part.

  7         (b)  With respect to a pregnant woman:

  8         1.  That there is inadequate time to effect safe

  9  transfer to another hospital prior to delivery;

10         2.  That a transfer may pose a threat to the health and

11  safety of the patient or fetus; or

12         3.  That there is evidence of the onset and persistence

13  of uterine contractions or rupture of the membranes.

14         (7)  "Emergency services and care" means medical

15  screening, examination, and evaluation by a physician, or, to

16  the extent permitted by applicable law, by other appropriate

17  personnel under the supervision of a physician, to determine

18  if an emergency medical condition exists and, if it does, the

19  care, treatment, or surgery for a covered service by a

20  physician necessary to relieve or eliminate the emergency

21  medical condition, within the service capability of a

22  hospital.

23         (8)  "Entity" means any legal entity with continuing

24  existence, including, but not limited to, a corporation,

25  association, trust, or partnership.

26         (9)  "Geographic area" means the county or counties, or

27  any portion of a county or counties, within which the

28  organization provides or arranges for comprehensive health

29  care services to be available to its subscribers.

30

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  1         (10)  "Provider-sponsored contract" means any contract

  2  entered into by a provider-sponsored organization that serves

  3  Medicare Choice beneficiaries.

  4         (11)  "Provider-sponsored organization" means any

  5  organization authorized under this part which:

  6         (a)  Is established, organized, and operated by a

  7  health care provider or group of affiliated health care

  8  providers;

  9         (b)  Provides a substantial proportion of the health

10  care items and services specified in the Medicare Choice

11  contract, as defined by the Secretary of the United States

12  Department of Health and Human Services, directly through the

13  provider or affiliated group of providers; and

14         (c)  Shares, with respect to its affiliated providers,

15  directly or indirectly, substantial financial risk in the

16  provision of such items and services and has at least a

17  majority financial interest in the entity.

18

19  The term "substantial proportion" shall be defined by the

20  Secretary of the United States Department of Health and Human

21  Services after having taken into account the need for such an

22  organization to assume responsibility for providing

23  significantly more than the majority of the items and services

24  under the Medicare Choice contract through its own affiliated

25  providers and the remainder of the items and services under

26  such contract through providers with which the organization

27  has an agreement to provide such items and services.

28  Consideration will also be given to the need for the

29  organization to provide a limited proportion of the items and

30  services under the contract through entities that are neither

31  affiliated with nor have an agreement with the organization.

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  1  Additionally, some variation in the definition of substantial

  2  proportion may be allowed based upon relevant differences

  3  among the organizations, such as their location in an urban or

  4  rural area.

  5         (12)  "Insolvent" or "insolvency" means that all the

  6  statutory assets of the provider-sponsored organization, if

  7  made immediately available, would not be sufficient to

  8  discharge all of its liabilities or that the

  9  provider-sponsored organization is unable to pay its debts as

10  they become due in the usual course of business.

11         (13)  "Provider" means any physician, hospital, or

12  other institution, organization, or person that furnishes

13  health care services and is licensed or otherwise authorized

14  to practice in the state.

15         (14)  "Reporting period" means the annual accounting

16  period or any part thereof or the fiscal year of the

17  provider-sponsored organization.

18         (15)  "Statutory accounting principles" means generally

19  accepted accounting principles, except as modified by this

20  part.

21         (16)  "Subscriber" means a Medicare Choice enrollee who

22  is eligible for coverage as a Medicare beneficiary.

23         (17)  "Surplus" means total assets in excess of total

24  liabilities as determined by the federal rules on solvency

25  standards established by the Secretary of the United States

26  Department of Health and Human Services pursuant to s. 1856(a)

27  of the Balanced Budget of 1997, for provider-sponsored

28  organizations that offer the Medicare Choice plan.

29         641.4604  Applicability of other laws.--Except as

30  provided in this part, provider-sponsored organizations shall

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  1  be governed by this part and part IV and are exempt from all

  2  other provisions of the Florida Insurance Code.

  3         641.4605  Incorporation required.--On or after October

  4  1, 1998, any entity that has not yet obtained a certificate of

  5  authority to operate a provider-sponsored organization in this

  6  state shall be incorporated or shall be a division of a

  7  corporation formed under chapter 607 or chapter 617 or shall

  8  be a public entity that is organized as a political

  9  subdivision. In the case of a division of a corporation, the

10  financial requirements of this part apply to the entire

11  corporation.

12         641.4606  Insurance business not authorized.--The

13  Florida Insurance Code or this part do not authorize any

14  provider-sponsored organization to transact any insurance

15  business other than to offer Medicare Choice plans pursuant to

16  s. 1855 of the Balanced Budget Act of 1997. In determining the

17  type of activities by a provider-sponsored organization which

18  require licensure by the department, the following shall

19  apply:

20         (1)  A provider-sponsored organization as defined in

21  this part, a hospital, a physician licensed under chapter 458

22  or chapter 459, a single specialty group of physicians, a

23  multispecialty group of physicians, other licensed providers,

24  or any combination of the foregoing, when contracting with a

25  self-insured employer to provide health care benefits to its

26  employees, when contracting with a health maintenance

27  organization licensed under part I or a provider-sponsored

28  organization licensed under this part, or when contracting

29  with an insurer, are exempt from the requirements of this

30  chapter and chapter 627.

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  1         (2)  In all of the arrangements enumerated in

  2  subsection (1), the provider group is not subject to

  3  regulation by the department because there is no contractual

  4  obligation to the employees covered under the self-insured

  5  agreement or under the agreement with the health maintenance

  6  organization, the provider-sponsored organization, or the

  7  insurer. The contractual relationship exists only between the

  8  provider group and the self-insured employer, the licensed

  9  health maintenance organization, the provider-sponsored

10  organization, or the insurer, which entity continues to bear

11  full and direct responsibility to the individual with no

12  transfer of risk. If the provider group fails to perform, the

13  employer, health maintenance organization, provider-sponsored

14  organization, or insurer still retains the risk to either

15  provide or pay for health care services.

16         (3)  The department has regulatory jurisdiction when

17  any health care provider group becomes the ultimate

18  risk-bearer and is directly obligated to individuals to

19  provide, arrange, or pay for health care services. In these

20  situations, the provider group must be appropriately licensed

21  as a health maintenance organization, a provider-sponsored

22  organization, or an insurance company.

23         641.4607  Application for certificate.--Before any

24  entity may operate a provider-sponsored organization, it must

25  obtain a certificate of authority from the department. The

26  department shall accept and shall immediately begin its review

27  of an application for a certificate of authority anytime after

28  an organization has filed an application for a health care

29  provider certificate pursuant to part IV.  However, the

30  department may not issue a certificate of authority to any

31  applicant that does not possess a valid health care provider

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  1  certificate issued by the agency. Each application for a

  2  certificate must be on a form prescribed by the department,

  3  must be verified by the oath of two officers of the

  4  corporation and properly notarized, and must be accompanied

  5  by:

  6         (1)  A copy of the articles of incorporation and all

  7  amendments thereto;

  8         (2)  A copy of the bylaws, rules, and regulations, or

  9  similar document, if any, regulating the conduct of the

10  affairs of the applicant;

11         (3)  A list of the names, addresses, and official

12  capacities of the persons who are to be responsible for

13  conducting the affairs of the provider-sponsored organization,

14  including all officers, directors, and owners of in excess of

15  5 percent of the common stock of the corporation. Each such

16  person must fully disclose to the department and to the

17  directors of the provider-sponsored organization the extent

18  and nature of any contract or arrangement between him or her

19  and the provider-sponsored organization, including any

20  possible conflict of interest;

21         (4)  A complete biographical statement on forms

22  prescribed by the department, and an independent investigation

23  report and fingerprints obtained pursuant to chapter 624, of

24  each individual listed in subsection (3);

25         (5)  A statement generally describing the

26  provider-sponsored organization, its operations, and its

27  grievance procedures;

28         (6)  A statement describing with reasonable certainty

29  the geographic area or areas to be served by the

30  provider-sponsored organization;

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  1         (7)  An audited financial statement prepared on the

  2  basis of statutory accounting principles and certified by an

  3  independent certified public accountant, except that surplus

  4  notes that are acceptable to the department and meet the

  5  requirements of this part shall be included in the calculation

  6  of surplus; and

  7         (8)  Any additional data, financial statements, or

  8  other pertinent information required by the department with

  9  respect to determining whether the applicant can provide the

10  services to be offered, including a comprehensive feasibility

11  study, performed by a certified actuary in conjunction with a

12  certified public accountant. The feasibility study must cover

13  a period of 3 years or the period ending on the date that the

14  provider-sponsored organization projects that it will have

15  been profitable for 12 consecutive months, whichever period is

16  longer.

17         641.4608  Conditions precedent to issuance or

18  maintenance of certificate of authority; effect of bankruptcy

19  proceedings.--

20         (1)  As a condition precedent to the issuance or

21  maintenance of a certificate of authority, a

22  provider-sponsored organization must file or have on file with

23  the department:

24         (a)  An acknowledgment that a delinquency proceeding

25  pursuant to part I of chapter 631 or supervision by the

26  department pursuant to ss. 624.80-624.87 constitutes the sole

27  and exclusive method for the liquidation, rehabilitation,

28  reorganization, or conservation of a provider-sponsored

29  organization.

30         (b)  A waiver of any right to file or be subject to a

31  bankruptcy proceeding.

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  1         (2)  The commencement of a bankruptcy proceeding either

  2  by or against a provider-sponsored organization shall, by

  3  operation of law:

  4         (a)  Terminate the provider-sponsored organization's

  5  certificate of authority.

  6         (b)  Vest in the department for the use and benefit of

  7  the subscribers of the provider-sponsored organization the

  8  title to any deposits of the insurer held by the department.

  9

10  If the proceeding is initiated by a party other than the

11  provider-sponsored organization, the operation of subsection

12  (2) shall be stayed for 60 days following the date of

13  commencement of the proceeding.

14         641.4609  Issuance of certificate of authority.--The

15  department shall, within 90 days after receipt, issue a

16  certificate of authority to any entity filing a completed

17  application in conformity with s. 641.4607, upon payment of

18  the prescribed fees and upon the department's being satisfied

19  that:

20         (1)  As a condition precedent to the issuance of any

21  certificate, the entity has obtained a health care provider

22  certificate from the agency pursuant to part IV.

23         (2)  The provider-sponsored organization is actuarially

24  sound.

25         (3)  The entity has met the applicable requirements

26  specified in s. 641.4611.

27         (4)  The procedures for offering comprehensive health

28  care services and offering and terminating contracts to

29  subscribers will not unfairly discriminate on the basis of

30  age, sex, race, health, or economic status.

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  1         (5)  The entity furnishes evidence of adequate

  2  insurance coverage or an adequate plan for self-insurance to

  3  respond to claims for injuries arising out of the furnishing

  4  of comprehensive health care.

  5         (6)  The ownership, control, and management of the

  6  entity is competent and trustworthy and possesses managerial

  7  experience sufficient to make the proposed operation of the

  8  provider-sponsored organization beneficial to the subscribers.

  9  The department may not grant or continue authority to transact

10  the business of a provider-sponsored organization in this

11  state at any time during which the department has good reason

12  to believe that the ownership, control, or management of the

13  organization includes:

14         (a)  Any person:

15         1.  Who is incompetent or untrustworthy;

16         2.  Who is so lacking in expertise as to make the

17  operation of the provider-sponsored organization hazardous to

18  potential and existing subscribers;

19         3.  Who is so lacking in experience, ability, and

20  standing with respect to a provider-sponsored organization as

21  to jeopardize the reasonable promise of successful operation;

22         4.  Who is affiliated, directly or indirectly, through

23  ownership, control, reinsurance transactions, or other

24  business relations, with any person whose business operations

25  are or have been marked by business practices or conduct that

26  is detrimental to the public, stockholders, investors, or

27  creditors; or

28         5.  Whose business operations are or have been marked

29  by business practices or conduct that is detrimental to the

30  public, stockholders, investors, or creditors.

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  1         (b)  Any person, including any stock subscriber,

  2  stockholder, or incorporator, who exercises or has the ability

  3  to exercise effective control of the organization, or who

  4  influences or has the ability to influence the transaction of

  5  the business of the provider-sponsored organization, who does

  6  not possess the financial standing and business experience for

  7  the successful operation of the provider-sponsored

  8  organization.

  9         (c)  Any person, including any stock subscriber,

10  stockholder, or incorporator, who exercises or has the ability

11  to exercise effective control of the organization, or who

12  influences or has the ability to influence the transaction of

13  the business of the provider-sponsored organization, who has

14  been found guilty of, or has pled guilty or no contest to, any

15  felony or crime punishable by imprisonment of 1 year or more

16  under the laws of the United States or any state thereof or

17  under the laws of any other country, which felony or crime

18  involves moral turpitude, without regard to whether a judgment

19  or conviction has been entered by the court having

20  jurisdiction in such case. However, in the case of a

21  provider-sponsored organization operating under a subsisting

22  certificate of authority, the provider-sponsored organization

23  shall remove any such person immediately upon discovery of the

24  conditions set forth in this paragraph when applicable to such

25  person or under the order of the department, and the failure

26  to so act by the organization is grounds for revocation or

27  suspension of the provider-sponsored organization's

28  certificate of authority.

29         (d)  Any person, including any stock subscriber,

30  stockholder, or incorporator, who exercises or has the ability

31  to exercise effective control of the organization, or who

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  1  influences or has the ability to influence the transaction of

  2  the business of the provider-sponsored organization, who is

  3  now or has in the past been affiliated, directly or

  4  indirectly, through ownership interest of 10 percent or more,

  5  control, or reinsurance transactions, with any business,

  6  corporation, or other entity that has been found guilty of or

  7  has pleaded guilty or nolo contendere to any felony or crime

  8  punishable by imprisonment for 1 year or more under the laws

  9  of the United States, any state, or any other country,

10  regardless of adjudication. In the case of a

11  provider-sponsored organization operating under a subsisting

12  certificate of authority, the provider-sponsored organization

13  shall immediately remove such person or immediately notify the

14  department of such person upon discovery of the conditions set

15  forth in this paragraph or upon order of the department. The

16  failure to remove such person, provide such notice, or comply

17  with such order constitutes grounds for suspension or

18  revocation of the provider-sponsored organization's

19  certificate of authority.

20         (7)  The entity has a blanket fidelity bond in the

21  amount of $100,000, issued by a licensed insurance carrier in

22  this state, which will reimburse the entity in the event that

23  anyone handling the funds of the entity either misappropriates

24  or absconds with the funds. All employees handling the funds

25  shall be covered by the blanket fidelity bond. An agent

26  licensed under the Florida Insurance Code may either directly

27  or indirectly represent the provider-sponsored organization in

28  the solicitation, negotiation, effectuation, procurement,

29  receipt, delivery, or forwarding of any provider-sponsored

30  organization subscriber's contract or collect or forward any

31  consideration paid by the subscriber to the provider-sponsored

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  1  organization, and the licensed agent is not required to post

  2  the bond required by this subsection.

  3         (8)  The provider-sponsored organization has a

  4  grievance procedure that will facilitate the resolution of

  5  subscriber grievances and that includes both formal and

  6  informal steps available within the organization.

  7         641.4610  Continued eligibility for certificate of

  8  authority.--In order to maintain its eligibility for a

  9  certificate of authority, a provider-sponsored organization

10  must continue to meet all conditions required to be met under

11  this part and the rules adopted under this part for the

12  initial application for and issuance of its certificate of

13  authority under s. 641.4609.

14         641.4611  Surplus requirements.--Surplus requirements

15  for provider-sponsored organizations offering the Medicare

16  Choice plan must be consistent with the federal rules on

17  solvency standards established by the Secretary of the United

18  States Department of Health and Human Services pursuant to s.

19  1856(a) of the Balanced Budget Act of 1997.

20         641.4612  Rehabilitation Administrative Expense Fund.--

21         (1)  The department may not issue or permit to exist a

22  certificate of authority to operate a provider-sponsored

23  organization in this state unless the organization has

24  deposited with the department $10,000 in cash for use in the

25  Rehabilitation Administrative Expense Fund as established in

26  s. 641.227.

27         (2)  Upon successful rehabilitation of a

28  provider-sponsored organization, the organization shall

29  reimburse the fund for the amount of expenses incurred by the

30  department during the court-ordered rehabilitation period.

31

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  1         (3)  If a court of competent jurisdiction orders

  2  liquidation of a provider-sponsored organization, the fund

  3  shall be reimbursed for expenses incurred by the department as

  4  provided for in chapter 631.

  5         (4)  Each deposit made under this section shall be

  6  allowed as an asset for purposes of determining the financial

  7  condition of the provider-sponsored organization. The deposit

  8  shall be refunded to the organization only when the

  9  organization both ceases operation as a provider-sponsored

10  organization and no longer holds a subsisting certificate of

11  authority.

12         641.4613  Revocation or cancellation of certificate of

13  authority; suspension of enrollment of new subscribers; terms

14  of suspension.--

15         (1)  The maintenance of a valid and current health care

16  provider certificate issued pursuant to part IV is a condition

17  of the maintenance of a valid and current certificate of

18  authority issued by the department to operate a

19  provider-sponsored organization. Denial or revocation of a

20  health care provider certificate shall be deemed to be an

21  automatic and immediate cancellation of a provider-sponsored

22  organization's certificate of authority. At the discretion of

23  the department, nonrenewal of a health care provider

24  certificate may be deemed to be an automatic and immediate

25  cancellation of a provider-sponsored organization's

26  certificate of authority if the agency notifies the

27  department, in writing, that the health care provider

28  certificate will not be renewed.

29         (2)  The department may suspend the authority of a

30  provider-sponsored organization to enroll new subscribers or

31  revoke any certificate issued to a provider-sponsored

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  1  organization, or order compliance within 30 days, if it finds

  2  that any of the following conditions exists:

  3         (a)  The organization is not operating in compliance

  4  with this part.

  5         (b)  The plan is no longer actuarially sound or the

  6  organization does not have the minimum surplus as required by

  7  rules governing provider-sponsored organizations established

  8  by the Secretary of United States Department of Health and

  9  Human Services pursuant to s. 1856(a) of the Balanced Budget

10  Act of 1997.

11         (c)  The organization has advertised, merchandised, or

12  attempted to merchandise its services in such a manner as to

13  misrepresent its service or capacity for service or has

14  engaged in deceptive, misleading, or unfair practices with

15  respect to advertising or merchandising.

16         (d)  The organization is insolvent.

17         (3)  Whenever the financial condition of the

18  provider-sponsored organization is such that, if not modified

19  or corrected, its continued operation would result in

20  impairment or insolvency, the department may order the

21  provider-sponsored organization to file with the department

22  and implement a corrective-action plan designed to do one or

23  more of the following:

24         (a)  Reduce the total amount of present potential

25  liability for benefits by reinsurance or other means.

26         (b)  Reduce the volume of new business being accepted.

27         (c)  Reduce the expenses of the provider-sponsored

28  organization by specified methods.

29         (d)  Suspend or limit the writing of new business for a

30  period of time.

31

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  1         (e)  Require an increase in the provider-sponsored

  2  organization's net worth which increase is not inconsistent

  3  with the standards established by the Secretary of the United

  4  States Department of Health and Human Services pursuant to s.

  5  1856(a) of the Balanced Budget Act of 1997.

  6

  7  If the provider-sponsored organization fails to submit a plan

  8  within 30 days after the department's order or submits a plan

  9  that is insufficient to correct the provider-sponsored

10  organization's financial condition, the department may order

11  the provider-sponsored organization to implement one or more

12  of the corrective actions listed in this subsection.

13         (4)  The department shall, in its order suspending the

14  authority of a provider-sponsored organization to enroll new

15  subscribers, specify the period during which the suspension is

16  to be in effect and the conditions, if any, which must be met

17  by the provider-sponsored organization prior to reinstatement

18  of its authority to enroll new subscribers. The order of

19  suspension is subject to rescission or modification by further

20  order of the department prior to the expiration of the

21  suspension period. Reinstatement may not be made unless

22  requested by the provider-sponsored organization. However, the

23  department may not grant reinstatement if it finds that the

24  circumstances for which the suspension occurred still exist or

25  are likely to recur.

26         (5)  The department shall calculate and publish at

27  least annually the medical loss ratios of all licensed

28  provider-sponsored organizations. The publication must include

29  an explanation of what the medical loss ratio means and shall

30  disclose that the medical loss ratio is not a direct measure

31

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  1  of quality but must be looked at along with patient

  2  satisfaction and other standards that define quality.

  3         641.4614  Administrative, provider, and management

  4  contracts.--

  5         (1)  The department may require a provider-sponsored

  6  organization to submit to the department any contract for

  7  administrative services or contract-management services or any

  8  contract with an affiliated entity.

  9         (2)  After review of a contract, the department may

10  order the provider-sponsored organization to cancel the

11  contract in accordance with the terms of the contract and

12  applicable law if it determines that the fees to be paid by

13  the provider-sponsored organization under the contract are so

14  unreasonably high as compared with similar contracts entered

15  into by the provider-sponsored organization, or as compared

16  with similar contracts entered into by other

17  provider-sponsored organizations in similar circumstances,

18  that the contract is detrimental to the subscribers,

19  stockholders, investors, or creditors of the

20  provider-sponsored organization.

21         (3)  All contracts for administrative services,

22  management services, and provider services, other than

23  individual physician contracts and contracts with affiliated

24  entities entered into or renewed by a provider-sponsored

25  organization on or after October 1, 1998, must contain a

26  provision that the contract shall be canceled upon issuance of

27  an order by the department pursuant to this section.

28         641.4615  Contract providers.--Each provider-sponsored

29  organization shall file, upon the request of the department,

30  financial statements for all contract providers of

31  comprehensive health care services who have assumed, through

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  1  capitation or other means, more than 10 percent of the health

  2  care risks of the provider-sponsored organization. However,

  3  this section does not apply to any individual physician.

  4         641.4616  Administrative penalty in lieu of suspension

  5  or revocation.--If the department finds that one or more

  6  grounds exist for the revocation or suspension of a

  7  certificate issued under this part, the department may, in

  8  lieu of revocation or suspension, impose a fine upon the

  9  provider-sponsored organization. With respect to any

10  nonwillful violation, the fine may not exceed $2,500 per

11  violation. Such fines may not exceed an aggregate amount of

12  $25,000 for all nonwillful violations arising out of the same

13  action. With respect to any knowing and willful violation of a

14  lawful order or rule of the department or a provision of this

15  part, the department may impose upon the organization a fine

16  in an amount not to exceed $20,000 for each such violation.

17  Such fines may not exceed an aggregate amount of $250,000 for

18  all knowing and willful violations arising out of the same

19  action. The department shall adopt by rule by January 1, 1999,

20  penalty categories that specify varying ranges of monetary

21  fines for willful violations and for nonwillful violations.

22         641.4617  Acquisition, merger, or consolidation.--Each

23  acquisition of a provider-sponsored organization is subject to

24  s. 628.4615. However, in the case of a provider-sponsored

25  organization organized as a for-profit corporation, s. 628.451

26  governs with respect to any merger or consolidation, and, in

27  the case of a provider-sponsored organization organized as a

28  not-for-profit corporation, s. 628.471 governs with respect to

29  any merger or consolidation.

30         641.4618  Annual report.--

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  1         (1)  Each provider-sponsored organization shall,

  2  annually within 3 months after the end of its fiscal year, or

  3  within an extension of time granted by the department for good

  4  cause, in a form prescribed by the department, file a report

  5  with the department, verified by the oath of two officers of

  6  the organization or, if not a corporation, of two persons who

  7  are principal managing directors of the affairs of the

  8  organization, properly notarized, showing its condition on the

  9  last day of the immediately preceding reporting period. The

10  report must include:

11         (a)  A financial statement of the organization filed on

12  a computer diskette using a format acceptable to the

13  department;

14         (b)  A financial statement of the organization filed on

15  forms acceptable to the department;

16         (c)  An audited financial statement of the

17  organization, including its balance sheet and a statement of

18  operations for the preceding year certified by an independent

19  certified public accountant, prepared in accordance with

20  statutory accounting principles;

21         (d)  The number of provider-sponsored contracts issued

22  and outstanding and the number of provider-sponsored contracts

23  terminated;

24         (e)  The number and amount of damage claims for medical

25  injury initiated against the provider-sponsored organization

26  and any of the providers engaged by it during the reporting

27  year, broken down into claims with and without formal legal

28  process, and the disposition, if any, of each such claim;

29         (f)  An actuarial certification that:

30         1.  The provider-sponsored organization is actuarially

31  sound, which certification shall consider the premiums,

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  1  benefits, and expenses of, and any other funds available for

  2  the payment of obligations of, the organization; and

  3         2.  Claims incurred but not reported and claims

  4  reported but not fully paid have been adequately provided for;

  5  and

  6         (g)  Any other information relating to the performance

  7  of provider-sponsored organizations which is required by the

  8  department.

  9         (2)  Each provider-sponsored organization shall file

10  quarterly, within 45 days after each of its quarterly

11  reporting periods, an unaudited financial statement of the

12  organization as described in paragraphs (1)(a) and (b). The

13  quarterly report shall be verified by the oath of two officers

14  of the organization, properly notarized.

15         (3)  Any provider-sponsored organization that neglects

16  to file an annual report or quarterly report in the form and

17  within the time required by this section shall forfeit up to

18  $1,000 for each day for the first 10 days during which the

19  neglect continues and shall forfeit up to $2,000 for each day

20  after the first 10 days during which the neglect continues.

21  Upon notice by the department, the organization's authority to

22  enroll new subscribers or to do business in this state shall

23  cease while such default continues. The department shall

24  deposit all sums collected by it under this section to the

25  credit of the Insurance Commissioner's Regulatory Trust Fund.

26  The department may not collect more than $100,000 for each

27  report.

28         (4)  Each authorized provider-sponsored organization

29  shall retain an independent certified public accountant,

30  hereinafter referred to as a "CPA," who agrees by written

31

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  1  contract with the provider-sponsored organization to comply

  2  with this part. The contract must state:

  3         (a)  The CPA shall provide to the provider-sponsored

  4  organization audited financial statements consistent with this

  5  part.

  6         (b)  Any determination by the CPA that the

  7  provider-sponsored organization does not meet minimum surplus

  8  requirements as set forth in rules governing

  9  provider-sponsored organizations adopted by the United States

10  Department of Health and Human Services pursuant to s. 1856(a)

11  of the Balanced Budget Act of 1997 shall be stated by the CPA,

12  in writing, in the audited financial statement.

13         (c)  The completed work papers and any written

14  communications between the CPA firm and the provider-sponsored

15  organization which relate to the audit of the

16  provider-sponsored organization shall be made available for

17  review on a visual-inspection-only basis by the department at

18  the offices of the provider-sponsored organization, at the

19  department, or at any other reasonable place mutually agreed

20  to between the department and the provider-sponsored

21  organization. The CPA must retain the work papers and written

22  communications for review for at least 6 years.

23         (5)  To facilitate uniformity in financial statements

24  and to facilitate department analysis, the department may by

25  rule adopt the form for financial statements of a

26  provider-sponsored organization, including supplements, as

27  approved by the National Association of Insurance

28  Commissioners in 1995, and may adopt subsequent amendments

29  thereto if the methodology remains substantially consistent,

30  and may by rule require each provider-sponsored organization

31  to submit to the department all or part of the information

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  1  contained in the annual statement in a computer-readable form

  2  compatible with the electronic data processing system

  3  specified by the department.

  4         641.4619  Examination by the department.--

  5         (1)  The department shall examine the affairs,

  6  transactions, accounts, business records, and assets of any

  7  provider-sponsored organization as often as it deems necessary

  8  for the protection of the Medicare beneficiaries of this

  9  state, but not less frequently than once every 3 years. In

10  lieu of making its own financial examination, the department

11  may accept an independent certified public accountant's audit

12  report prepared on a statutory accounting basis consistent

13  with this part. However, except when the medical records are

14  requested and copies furnished pursuant to s. 455.667, medical

15  records of individuals and records of physicians providing

16  services under contract to the provider-sponsored organization

17  are not subject to audit, although they may be subject to

18  subpoena by court order upon a showing of good cause. For the

19  purpose of examinations, the department may administer oaths

20  to and examine the officers and agents of a provider-sponsored

21  organization concerning its business and affairs. The

22  examination of each provider-sponsored organization by the

23  department is subject to the same terms and conditions that

24  apply to insurers under chapter 624. Expenses of all

25  examinations may not exceed a maximum of $20,000 for any

26  1-year period. Any rehabilitation, liquidation, conservation,

27  or dissolution of a provider-sponsored organization shall be

28  conducted under the supervision of the department, which shall

29  have all powers with respect to the provider-sponsored

30  organization granted to the department under the laws

31

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  1  governing the rehabilitation, liquidation, reorganization,

  2  conservation, or dissolution of life insurance companies.

  3         (2)  The department may contract, at reasonable fees

  4  for work performed, with qualified, impartial outside sources

  5  to perform audits or examinations or portions thereof

  6  pertaining to the qualification of an entity for issuance of a

  7  certificate of authority or to determine continued compliance

  8  with the requirements of this part. Any contracted assistance

  9  shall be under the direct supervision of the department. The

10  results of any contracted assistance are subject to the review

11  of, and approval, disapproval, or modification by, the

12  department.

13         641.4620  Civil remedy.--In any civil action brought to

14  enforce the terms and conditions of a provider-sponsored

15  contract, the prevailing party may recover reasonable

16  attorney's fees and court costs. This section does not

17  authorize a civil action against the department, its

18  employees, or the director of the agency.

19         641.4621  Injunction.--In addition to the penalties and

20  other enforcement provisions of this part, the department is

21  vested with the power to seek both temporary and permanent

22  injunctive relief when:

23         (1)  A provider-sponsored organization is being

24  operated by any person or entity without a subsisting

25  certificate of authority, unless a waiver has been granted by

26  the Secretary of the United States Department of Health and

27  Human Services pursuant to s. 1855(a)(2) of the Balanced

28  Budget Act of 1997.

29         (2)  Any person, entity, or provider-sponsored

30  organization has engaged in any activity prohibited by this

31  part or any rule adopted under this part.

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  1         (3)  Any provider-sponsored organization, person, or

  2  entity is renewing, issuing, or delivering a

  3  provider-sponsored contract or contracts without a subsisting

  4  certificate of authority, unless a waiver has been granted by

  5  the Secretary of the United States Department of Health and

  6  Human Services under s. 1855(a)(2) of the Balanced Budget Act

  7  of 1997.

  8

  9  The department's authority to seek injunctive relief is not

10  conditioned on the department conducting any proceeding

11  pursuant to chapter 120.

12         641.4622  Payment of judgment by provider-sponsored

13  organization.--Except as otherwise ordered by the court or

14  mutually agreed-upon by the parties, each judgment or decree

15  entered in any of the courts of this state against any

16  provider-sponsored organization for the recovery of money

17  shall be fully satisfied within 60 days after the entry

18  thereof or, in the case of an appeal from such judgment or

19  decree, within 60 days after the affirmance of the judgment or

20  decree by the appellate court.

21         641.4623  Liquidation, rehabilitation, reorganization,

22  and conservation; exclusive methods of remedy.--A delinquency

23  proceeding under part I of chapter 631 or supervision by the

24  department under ss. 624.80-624.87 constitute the sole and

25  exclusive means of liquidating, reorganizing, rehabilitating,

26  or conserving a provider-sponsored organization.

27         641.4624  Fees.--Each provider-sponsored organization

28  shall pay to the department the following fees:

29         (1)  For filing a copy of its application for a

30  certificate of authority or amendment thereto, a nonrefundable

31  fee in the amount of $1,000.

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  1         (2)  For filing each annual report, which must be filed

  2  on computer diskettes, $150.

  3         641.4625  Construction and relationship to other

  4  laws.--

  5         (1)  Each provider-sponsored organization shall accept

  6  the standard health claim form prescribed pursuant to s.

  7  627.647.

  8         (2)  Except as provided in this part, the Florida

  9  Insurance Code does not apply to provider-sponsored

10  organizations certificated under this part, and

11  provider-sponsored organizations certificated under this part

12  are not subject to part I or part II. Any person, entity, or

13  provider-sponsored organization operating without a subsisting

14  certificate of authority in violation of this part or rules

15  adopted under this part, or renewing, issuing, or delivering

16  provider-sponsored contracts without a subsisting certificate

17  of authority in violation of this part or rules adopted under

18  this part, in addition to being subject to the provisions of

19  this part is subject to the provisions of the Florida

20  Insurance Code as defined in s. 624.01, unless a waiver has

21  been granted by the Secretary of the United States Department

22  of Health and Human Services under s. 1855(a)(2) of the

23  Balanced Budget Act of 1997.

24         (3)  The solicitation of subscribers by a

25  provider-sponsored organization or its representatives does

26  not violate any provisions of law relating to solicitation or

27  advertising by health professionals if the provider-sponsored

28  organization is operating pursuant to a subsisting certificate

29  of authority or operating pursuant to a waiver granted by the

30  Secretary of the United States Department of Health and Human

31

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  1  Services under s. 1855(a)(2) of the Balanced Budget Act of

  2  1997.

  3         (4)  The Division of Insurance Fraud of the department

  4  is vested with all powers granted to it under the Florida

  5  Insurance Code with respect to investigating any violation of

  6  this part.

  7         (5)  Each provider-sponsored organization must comply

  8  with s. 627.4301.

  9         641.4626  Human immunodeficiency virus infection and

10  acquired immune deficiency syndrome for contract purposes.--

11         (1)  PURPOSE.--The purpose of this section is to

12  prohibit unfair practices in a provider-sponsored contract

13  with respect to exposure to the human immunodeficiency virus

14  infection and related matters, and thereby to reduce the

15  possibility that a provider-sponsored organization subscriber

16  or applicant may suffer unfair discrimination when subscribing

17  to or applying for the contractual services of a

18  provider-sponsored organization.

19         (2)  SCOPE.--This section applies to all

20  provider-sponsored contracts that are issued in this state or

21  that are issued outside this state but cover residents of this

22  state to the extent that the provisions of this section are

23  not inconsistent with the rules established by the Secretary

24  of the United States Department of Health and Human Services

25  for the Medicare Choice program. This section does not

26  prohibit a provider-sponsored organization from contesting a

27  contract or claim to the extent allowed by law.

28         (3)  DEFINITIONS.--As used in this section, the term:

29         (a)  "AIDS" means acquired immune deficiency syndrome.

30         (b)  "ARC" means AIDS-related complex.

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  1         (c)  "HIV" means human immunodeficiency virus

  2  identified as the causative agent of AIDS.

  3         (4)  USE OF MEDICAL TESTS.--

  4         (a)  With respect to the issuance of or the

  5  underwriting of a provider-sponsored contract regarding

  6  exposure to the HIV infection and sickness or medical

  7  conditions derived from such infection, a provider-sponsored

  8  organization may use only medical tests that are reliable

  9  predictors of risk. A test that is recommended by the Centers

10  for Disease Control or by the federal Food and Drug

11  Administration is deemed to be reliable for the purposes of

12  this section. A test that is rejected or not recommended by

13  the Centers for Disease Control or the federal Food and Drug

14  Administration is not a reliable test for the purposes of this

15  section. If a specific test recommended by the Centers for

16  Disease Control or by the federal Food and Drug Administration

17  indicates the existence or potential existence of exposure to

18  the HIV infection or a sickness or medical condition related

19  to the HIV infection, before relying on a single test result

20  to deny or limit coverage or to rate the coverage the

21  provider-sponsored organization shall follow the applicable

22  test protocol recommended by the Centers for Disease Control

23  or by the federal Food and Drug Administration and shall use

24  any applicable followup tests or series of tests that are

25  recommended by the Centers for Disease Control or by the

26  federal Food and Drug Administration to confirm the

27  indication.

28         (b)  Prior to testing, the provider-sponsored

29  organization must disclose its intent to test the person for

30  the HIV infection or for a specific sickness or medical

31  condition derived therefrom and must obtain the person's

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  1  written informed consent to administer the test. Written

  2  informed consent includes a fair explanation of the test,

  3  including its purpose, potential uses, and limitations, and

  4  the meaning of its results and the right to confidential

  5  treatment of information. Use of a form approved by the

  6  department raises a conclusive presumption of informed

  7  consent.

  8         (c)  An applicant shall be notified of a positive test

  9  result by a physician designated by the applicant or, in the

10  absence of such designation, by the Department of Health. Such

11  notification must include:

12         1.  Face-to-face posttest counseling on the meaning of

13  the test results, the possible need for additional testing,

14  and the need to eliminate behavior that might spread the

15  disease to others.

16         2.  The availability in the geographic area of any

17  appropriate health care services, including mental health

18  care, and appropriate social and support services.

19         3.  The benefits of locating and counseling any

20  individual by whom the infected individual may have been

21  exposed to human immunodeficiency virus and any individual

22  whom the infected individual may have exposed to the virus.

23         4.  The availability, if any, of the services of public

24  health authorities with respect to locating and counseling any

25  individual described in subparagraph 3.

26         (d)  A medical test for exposure to the HIV infection

27  or for a sickness or medical condition derived from such

28  infection shall only be required of or given to a person if

29  the test is required or given to all subscribers or applicants

30  or if the decision to require the test is based on the

31  person's medical history.

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  1         (e)  A provider-sponsored organization may inquire

  2  whether a person has been tested positive for exposure to the

  3  HIV infection or diagnosed as having AIDS or ARC caused by the

  4  HIV infection or other sickness or medical condition derived

  5  from such infection. A provider-sponsored organization may not

  6  inquire whether a person has been tested for or has received a

  7  negative result from a specific test for exposure to the HIV

  8  infection or for a sickness or medical condition derived from

  9  such infection.

10         (f)  A provider-sponsored organization shall maintain

11  strict confidentiality concerning any medical test results

12  with respect to an HIV infection or a specific sickness or

13  medical condition derived from such infection. Information

14  regarding specific test results may not be disclosed outside

15  the provider-sponsored organization, its employees, its

16  marketing representatives, or its insurance affiliates, except

17  to the person tested and to persons designated in writing by

18  the person tested. Specific test results may not be furnished

19  to any data bank of the insurance industry or

20  provider-sponsored organization if a review of the information

21  would identify the individual tested or the specific test

22  results.

23         (g)  An insurer or insurance support organization may

24  not use a laboratory for processing HIV-related tests unless

25  the laboratory is certified by the United States Department of

26  Health and Human Services under the Clinical Laboratories

27  Improvement Act of 1967, permitting testing of specimens

28  obtained in interstate commerce, and unless the laboratory

29  subjects itself to ongoing proficiency testing by the College

30  of American Pathologists, the American Association of Bio

31  Analysts, or an equivalent program approved by the Centers for

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  1  Disease Control of the United States Department of Health and

  2  Human Services.

  3         (5)  RESTRICTIONS ON CONTRACT EXCLUSIONS AND

  4  LIMITATIONS.--

  5         (a)  A provider-sponsored contract may not exclude

  6  coverage of an individual because of a positive test result

  7  for exposure to the HIV infection or a specific sickness or

  8  medical condition derived from such infection, either as a

  9  condition for or subsequent to the issuance of the contract.

10  However, this paragraph does not apply to a person who applies

11  for enrollment if individual underwriting is otherwise allowed

12  by law.

13         (b)  A provider-sponsored contract may not exclude or

14  limit coverage for exposure to the HIV infection or a specific

15  sickness or medical condition derived from such infection,

16  except as provided in a preexisting condition clause.

17         641.4627  Language used in contracts and

18  advertisements; translations.--

19         (1)(a)  Each contract or form used by a

20  provider-sponsored organization must be printed in English.

21         (b)  If the negotiations by a provider-sponsored

22  organization with a member leading up to the effectuation of a

23  provider-sponsored contract are conducted in a language other

24  than English, the provider-sponsored organization shall supply

25  to the member a written translation of the contract, which

26  translation accurately reflects the substance of the contract

27  and is in the language used to negotiate the contract. The

28  written translation must be affixed to and shall become a part

29  of the contract or form.

30         (2)  The text of each advertisement by a

31  provider-sponsored organization, if printed or broadcast in a

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  1  language other than English, shall also be available in

  2  English and shall be furnished to the department upon request.

  3  As used in this subsection, the term "advertisement" means any

  4  advertisement, circular, pamphlet, brochure, or other printed

  5  material that discloses or disseminates advertising material

  6  or information by a provider-sponsored organization to

  7  prospective or existing subscribers and includes any radio or

  8  television transmittal of an advertisement or information.

  9         641.4628  Standards for marketing to persons eligible

10  for Medicare.--

11         (1)  Each provider-sponsored organization that markets

12  its coverage to Medicare participants or persons eligible for

13  Medicare in this state, directly or through its agents, shall:

14         (a)  Establish marketing procedures to assure that any

15  comparison of benefits between Medicare or any other

16  provider-sponsored organization that offers such coverage by

17  its agents will be fair and accurate.

18         (b)  Establish marketing procedures to assure proper

19  notification to the Medicare participant of enrollment or

20  disenrollment from the provider-sponsored organization. Such

21  notification shall be made in a timely manner.

22         (c)  Display prominently by type, stamp, or other

23  appropriate means, on the first page of the application and

24  contract, the following:

25         "Notice to buyer:  When you enroll in this

26         provider-sponsored organization, you will be

27         disenrolled from Medicare. The buyer should be

28         aware that in order to receive payment or

29         coverage for services, such services must be

30         rendered by physicians, hospitals, and other

31         health care providers designated by the

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  1         provider-sponsored organization. If the

  2         services are rendered by a nonparticipating

  3         physician, hospital, or other health care

  4         provider, the purchaser may be liable for

  5         payment for such services except in very

  6         limited circumstances."

  7         (d)  Inquire and otherwise make every reasonable effort

  8  to identify whether a prospective Medicare participant has

  9  previously been enrolled in either the same provider-sponsored

10  organization as a Medicare participant or in another

11  provider-sponsored organization as a Medicare participant.

12         (2)  In addition to the practices prohibited in s.

13  641.4642:

14         (a)  A provider-sponsored organization or a person who

15  represents such provider-sponsored organization may not employ

16  any method of marketing which has the effect of or tends to

17  induce the purchase of health care plans through fraud,

18  deceit, force, fright, threat whether explicit or implied,

19  intimidation, harassment, or undue pressure to purchase or

20  recommend the purchase of a provider-sponsored contract.

21         (b)  A participating provider, employee, or agent of

22  such participating provider may not be an agent for or conduct

23  any sales activities for a provider-sponsored organization

24  with whom the provider, employee, or agent has a provider

25  contract.

26         641.4629  Provider-sponsored contracts.--

27         (1)  Any entity issued a certificate and otherwise in

28  compliance with this part may enter into contracts in this

29  state to provide Medicare Choice benefits to subscribers in

30  exchange for a premium payment. Each subscriber shall be given

31  a copy of the applicable provider-sponsored contract,

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  1  certificate, or member handbook. Whichever document is

  2  provided to a subscriber must contain all of the provisions

  3  and disclosures required by this section.

  4         (2)  Each provider-sponsored contract, certificate, or

  5  member handbook must clearly state all of the services to

  6  which a subscriber is entitled under the Medicare Choice

  7  contract and must include a clear and understandable statement

  8  of any limitations on the services or kinds of services to be

  9  provided, including any copayment feature or schedule of

10  benefits required by the contract. The contract, certificate,

11  or member handbook must also state where and in what manner

12  the comprehensive health care services may be obtained.

13         (3)  Each subscriber shall receive a clear and

14  understandable description of the method of the

15  provider-sponsored organization for resolving subscriber

16  grievances, and the method must be set forth in the contract,

17  certificate, or member handbook. The organization shall also

18  furnish, at the time of initial enrollment and when necessary

19  due to substantial changes in the grievance process, a

20  separate and additional communication notifying each Medicare

21  Choice subscriber of his or her rights and responsibilities

22  under the grievance process.

23         (4)  A provider-sponsored organization may coordinate

24  benefits on the same basis as an insurer under s. 627.4235.

25         (5)  A provider-sponsored organization that provides

26  medical benefits or payments to a subscriber who suffers

27  injury, disease, or illness by virtue of the negligent act or

28  omission of a third party is entitled to reimbursement from

29  the subscriber in accordance with s. 768.76(4).

30         (6)  A person other than the applicant may not alter

31  any written application for any provider-sponsored contract

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  1  without the applicant's written consent, except that

  2  insertions may be made by the provider-sponsored organization,

  3  for administrative purposes only, in such manner as to

  4  indicate clearly that such insertions are not to be ascribed

  5  to the applicant.

  6         (7)  A contract may not contain any waiver of rights or

  7  benefits provided to or available to subscribers under the

  8  provisions of any law or rule applicable to provider-sponsored

  9  organizations.

10         (8)  Each Medicare Choice contract, certificate, or

11  member handbook must state that emergency services and care

12  shall be provided without prior notification to and approval

13  of the organization to subscribers in emergency situations

14  that do not permit treatment through the provider-sponsored

15  organization's providers. Not less than 75 percent of the

16  reasonable charges for covered services and supplies shall be

17  paid by the organization, up to the subscriber contract

18  benefit limits. Payment also may be subject to additional

19  applicable copayment provisions, not to exceed $100 per claim,

20  if not inconsistent with federal rules established by the

21  Secretary of the United States Department of Health and Human

22  Services governing Medicare Choice benefits. The Medicare

23  Choice contract, certificate, or member handbook must define

24  the terms "emergency services and care" and "emergency medical

25  condition" as specified in s. 641.4603(6) and (7), must

26  describe the procedures by which the provider-sponsored

27  organization determines whether the services qualify for

28  reimbursement as emergency services and care, and must contain

29  specific examples of what constitutes an emergency. In

30  providing for emergency services and care as a covered

31

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  1  service, a provider-sponsored organization shall be governed

  2  by s. 641.513.

  3         (9)  In addition to the requirements of this section,

  4  and if not inconsistent with the rules established by the

  5  Secretary of the United States Department of Health and Human

  6  Services for the Medicare Choice program, with respect to a

  7  person who is entitled to have payments for health care costs

  8  made under Medicare, Title XVIII of the Social Security Act,

  9  parts A or B:

10         (a)  The provider-sponsored organization shall mail or

11  deliver notification to the Medicare beneficiary of the date

12  of enrollment in the provider-sponsored organization within 10

13  days after receiving notification of enrollment approval from

14  the Health Care Financing Administration. When a Medicare

15  beneficiary who is a subscriber of the provider-sponsored

16  organization requests disenrollment from the organization, the

17  organization shall mail or deliver to the beneficiary notice

18  of the effective date of the disenrollment within 10 days

19  after receipt of the written disenrollment request. The

20  provider-sponsored organization shall forward the

21  disenrollment request to the Health Care Financing

22  Administration in a timely manner so as to effectuate the next

23  available disenrollment date, as prescribed by the federal

24  agency.

25         (b)  The provider-sponsored contract, certificate, or

26  member handbook shall be delivered to the subscriber no later

27  than the earlier of 10 working days after the

28  provider-sponsored organization and the Health Care Financing

29  Administration approve the subscriber's enrollment application

30  or the effective date of coverage of the subscriber under the

31  provider-sponsored contract. However, if notice from the

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  1  Health Care Financing Administration of its approval of the

  2  subscriber's enrollment application is received by the

  3  provider-sponsored organization after the effective coverage

  4  date prescribed by the Health Care Financing Administration,

  5  the provider-sponsored organization shall deliver the

  6  contract, certificate, or member handbook to the subscriber

  7  within 10 days after receiving such notice. When a Medicare

  8  recipient is enrolled in a provider-sponsored organization

  9  program, the contract, certificate, or member handbook shall

10  be accompanied by an identification sticker with instruction

11  to the Medicare beneficiary to place the sticker on the

12  Medicare identification card.

13         (10)  Each provider-sponsored organization that

14  provides for inpatient and outpatient services by allopathic

15  hospitals shall provide, as an option of the subscriber,

16  similar inpatient and outpatient services by hospitals

17  accredited by the American Osteopathic Association when such

18  services are available in the same service area of the

19  provider-sponsored organization and the osteopathic hospital

20  agrees to provide the services specified in this part. As a

21  condition precedent to providing osteopathic inpatient and

22  outpatient services through an osteopathic hospital that has

23  not entered into a written contract with the

24  provider-sponsored organization, the provider-sponsored

25  organization may require the subscriber who receives

26  osteopathic services to release the provider-sponsored

27  organization from any liability arising from any act of

28  omission or commission constituting malpractice in the

29  delivery of osteopathic care from that hospital. The

30  osteopathic hospital that provides the inpatient and

31  outpatient services for the provider-sponsored organization

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  1  shall charge rates that do not exceed the osteopathic

  2  hospital's usual and customary rates, less the average

  3  discount provided by allopathic hospitals providing the

  4  services in the same service area of the provider-sponsored

  5  organization.

  6         (11)  To the extent that this section is not

  7  inconsistent, pursuant to s. 1856(b)(3) of the Balanced Budget

  8  Act of 1997, with the rules established by the Secretary of

  9  the United States Department of Health and Human Services for

10  the Medicare Choice program:

11         (a)  A provider-sponsored contract that provides

12  coverage, benefits, or services for breast cancer treatment

13  may not limit inpatient hospital coverage for mastectomies to

14  any period that is less than that determined by the treating

15  physician under contract with the provider-sponsored

16  organization to be medically necessary in accordance with

17  prevailing medical standards and after consultation with the

18  covered patient. Such contract must also provide coverage for

19  outpatient postsurgical followup care in keeping with

20  prevailing medical standards by a licensed health care

21  professional under contract with the provider-sponsored

22  organization qualified to provide postsurgical mastectomy

23  care. The treating physician under contract with the

24  provider-sponsored organization, after consultation with the

25  covered patient, may choose that the outpatient care be

26  provided at the most medically appropriate setting, which may

27  include the hospital, treating physician's office, outpatient

28  center, or home of the covered patient.

29         (b)  A provider-sponsored organization subject to this

30  subsection may not:

31

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  1         1.  Deny to a covered person eligibility, or continued

  2  eligibility, to enroll or to renew coverage under the terms of

  3  the contract for the purpose of avoiding the requirements of

  4  this subsection;

  5         2.  Provide monetary payments or rebates to a covered

  6  patient to accept less than the minimum protections available

  7  under this subsection;

  8         3.  Penalize or otherwise reduce or limit the

  9  reimbursement of an attending provider solely because the

10  attending provider provided care to a covered patient under

11  this subsection;

12         4.  Provide incentives, monetary or otherwise, to an

13  attending provider solely to induce the provider to provide

14  care to a covered patient in a manner inconsistent with this

15  subsection; or

16         5.  Subject to the other provisions of this subsection,

17  restrict benefits for any portion of a period within a

18  hospital length of stay or for outpatient care as required by

19  this subsection in a manner that is less favorable than the

20  benefits provided for any preceding portion of such stay or

21  for preceding outpatient care.

22         (c)1.  This subsection does not require a covered

23  patient to have the mastectomy in the hospital or stay in the

24  hospital for a fixed period of time following the mastectomy.

25         2.  This subsection does not prevent a contract from

26  imposing deductibles, coinsurance, or other cost-sharing in

27  relation to benefits pursuant to this subsection, except that

28  such cost-sharing may not exceed cost-sharing with other

29  benefits.

30         (d)  Except as provided in paragraph (b), this

31  subsection does not affect any agreement between a

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  1  provider-sponsored organization and a hospital or other health

  2  care provider with respect to reimbursement for health care

  3  services provided, rate negotiations with providers, or

  4  capitation of providers, and does not prohibit appropriate

  5  utilization review or case management by the

  6  provider-sponsored organization.

  7         (e)  As used in this subsection, the term "mastectomy"

  8  means the removal of all or part of the breast for medically

  9  necessary reasons as determined by a licensed physician.

10         (12)  To the extent that this section is not

11  inconsistent, pursuant to s. 1856(b)(3) of the Balanced Budget

12  Act of 1997, with the rules established by the Secretary of

13  the United States Department of Health and Human Services for

14  the Medicare Choice program, a provider-sponsored contract

15  that provides coverage for mastectomies must also provide

16  coverage for prosthetic devices and breast reconstructive

17  surgery incident to the mastectomy. As used in this

18  subsection, the term "breast reconstructive surgery" means

19  surgery to reestablish symmetry between the two breasts. Such

20  surgery must be in a manner chosen by the treating physician

21  under contract with the provider-sponsored organization,

22  consistent with prevailing medical standards, and in

23  consultation with the patient. The provider-sponsored

24  organization may charge an appropriate additional premium for

25  the coverage required by this subsection. The coverage for

26  prosthetic devices and breast reconstructive surgery is

27  subject to any deductible and coinsurance conditions.

28         641.4630  Provider-sponsored organization; disclosure

29  of terms and conditions of plan.--Each provider-sponsored

30  organization shall provide prospective enrollees with written

31  information about the terms and conditions of the plan so that

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  1  the prospective enrollees can make informed decisions about

  2  accepting a managed-care system of health care delivery.

  3  However, information about where, in what manner, and from

  4  whom the comprehensive health care services or specific health

  5  care services can be obtained need be disclosed only upon

  6  request by the prospective enrollee. All marketing materials

  7  distributed by the provider-sponsored organization must

  8  contain a notice in boldfaced type which states that the

  9  information required under this section is available to the

10  prospective enrollee upon request.

11         641.4631  Coverage for mammograms.--

12         (1)  To the extent that this section is not

13  inconsistent, pursuant to s.1856(b)(3) of the Balanced Budget

14  Act of 1997, with the rules established by the Secretary of

15  the United States Department of Health and Human Services for

16  the Medicare Choice program, each provider-sponsored contract

17  issued or renewed on or after October 1, 1998, must provide

18  coverage for at least the following:

19         (a)  A baseline mammogram for any woman who is 35 years

20  of age or older, but younger than 40 years of age.

21         (b)  A mammogram every 2 years for any woman who is 40

22  years of age or older, but younger than 50 years of age, or

23  more frequently based on the patient's physician's

24  recommendations.

25         (c)  A mammogram every year for any woman who is 50

26  years of age or older.

27         (d)  One or more mammograms a year, based upon a

28  physician's recommendation for any woman who is at risk for

29  breast cancer because of a personal or family history of

30  breast cancer; because of having a history of biopsy-proven

31  benign breast disease; because of having a mother, sister, or

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  1  daughter who has had breast cancer; or because a woman has not

  2  given birth before the age of 30.

  3         (2)  The coverage required by this section is subject

  4  to the deductible and copayment provisions applicable to

  5  outpatient visits, and is also subject to all other terms and

  6  conditions applicable to other benefits. A provider-sponsored

  7  organization shall make available to the subscriber as part of

  8  the application, for an appropriate additional premium, the

  9  coverage required in this section without such coverage being

10  subject to any deductible or copayment provisions in the

11  contract.

12         641.4632  Requirements with respect to breast cancer

13  and routine followup care.--To the extent that this section is

14  not inconsistent, pursuant to s. 1856(b)(3) of the Balanced

15  Budget Act of 1997, with the rules established by the

16  Secretary of the United States Department of Health and Human

17  Services for the Medicare Choice program, routine followup

18  care to determine whether a breast cancer has recurred in a

19  person who has been previously determined to be free of breast

20  cancer does not constitute medical advice, diagnosis, care, or

21  treatment for purposes of determining preexisting conditions

22  unless evidence of breast cancer is found during or as a

23  result of the followup care.

24         641.4633  Provider contracts.--

25         (1)  Whenever a contract exists between a

26  provider-sponsored organization and a provider, and the

27  organization fails to meet its obligations to pay fees for

28  services already rendered to a subscriber, the

29  provider-sponsored organization is liable for such fee or fees

30  rather than the subscriber, and the contract must so state.

31

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  1         (2)  A subscriber of a provider-sponsored organization

  2  is not liable to any provider of health care services for any

  3  services covered by the provider-sponsored organization.

  4         (3)  A provider of services or any representative of

  5  such provider may not collect or attempt to collect from a

  6  subscriber any money for services covered by the

  7  provider-sponsored organization and a provider or

  8  representative of such provider may not maintain any action at

  9  law against a subscriber to collect money owed to such

10  provider by the provider-sponsored organization.

11         (4)  Each contract between a provider-sponsored

12  organization and a provider of health care services must be in

13  writing and contain a provision that the subscriber is not

14  liable to the provider for any services covered by the

15  subscriber's contract with the provider-sponsored

16  organization.

17         (5)  This section does not apply to the amount of any

18  deductible or copayment which is not covered by the contract

19  of the provider-sponsored organization.

20         (6)(a)  Each provider contract must specify that:

21         1.  The provider shall provide 60 days' advance written

22  notice to the provider-sponsored organization and the

23  department before canceling the contract with the

24  provider-sponsored organization for any reason; and

25         2.  Nonpayment for goods or services rendered by the

26  provider to the provider-sponsored organization is not a valid

27  reason for avoiding the 60-day advance notice of cancellation.

28         (b)  Each contract must specify that the

29  provider-sponsored organization will provide 60 days' advance

30  written notice to the provider and the department before

31  canceling, without cause, the contract with the provider,

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  1  except in a case in which a patient's health is subject to

  2  imminent danger or a physician's ability to practice medicine

  3  is effectively impaired by an action by the Board of Medicine

  4  or other governmental agency.

  5         (7)  Upon receipt by the provider-sponsored

  6  organization of a 60-day cancellation notice, the

  7  provider-sponsored organization may, if requested by the

  8  provider, terminate the contract in less than 60 days if the

  9  provider-sponsored organization is not financially impaired or

10  insolvent.

11         (8)  A contract between a provider-sponsored

12  organization and a provider of health care services may not

13  contain any provision that restricts the provider's ability to

14  communicate information to the provider's patient regarding

15  medical care or treatment options for the patient when the

16  provider deems knowledge of such information by the patient to

17  be in the best interest of the health of the patient.

18         641.4634  Certain words prohibited in name of

19  organization.--

20         (1)  An entity certificated as a provider-sponsored

21  organization, other than a licensed insurer insofar as its

22  name is concerned, may not use in its name, contracts, or

23  literature any of the words "insurance," "casualty," "surety,"

24  or "mutual," or any other words descriptive of the insurance,

25  casualty, or surety business or deceptively similar to the

26  name or description of any insurance or surety corporation

27  doing business in the state.

28         (2)  A person, entity, or health care plan that is not

29  certificated under this part may not use in its name, logo,

30  contracts, or literature the phrase "provider-sponsored

31  organization" or the initials "PSO"; imply, directly or

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  1  indirectly, that it is a provider-sponsored organization; or

  2  hold itself out to be a provider-sponsored organization.

  3         641.4635  Assets, liabilities, and

  4  investments.--Assets, liabilities, and investments for

  5  provider-sponsored organizations that offer the Medicare

  6  Choice plan must be consistent with the federal rules on

  7  solvency standards established by the Secretary of the United

  8  States Department of Health and Human Services pursuant to s.

  9  1856(a) of the Balanced Budget Act of 1997.

10         641.4636  Adoption of rules; penalty for

11  violation.--The department shall adopt rules necessary to

12  carry out the provisions of this part which must be consistent

13  with the federal rules for the Medicare Choice plan

14  established by the Secretary of the United States Department

15  of Health and Human Services pursuant to the Balanced Budget

16  Act of 1997. An entity that violates a rule adopted under this

17  section is subject to s. 641.4613.

18         641.4637  Dividends.--

19         (1)  A provider-sponsored organization may not pay any

20  dividend or distribute cash or other property to stockholders

21  except out of that part of its available and accumulated

22  surplus funds which is derived from realized net operating

23  profits on its business and net realized capital gains.

24  Dividend payments or distributions to stockholders may not

25  exceed 10 percent of such surplus in any one year unless

26  otherwise approved by the department. In addition to such

27  limited payments, a provider-sponsored organization may make

28  dividend payments or distributions out of the organization's

29  entire net operating profits and realized net capital gains

30  derived during the immediately preceding calendar or fiscal

31  year, as applicable.

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  1         (2)  The department may not approve a dividend or

  2  distribution in excess of the maximum amount allowed in

  3  subsection (1) unless it determines that the distribution or

  4  dividend does not jeopardize the financial condition of the

  5  provider-sponsored organization.

  6         (3)  Any director of a provider-sponsored organization

  7  who knowingly votes for or concurs in the declaration or

  8  payment of a dividend to stockholders when such declaration or

  9  payment violates this section commits a misdemeanor of the

10  second degree, punishable as provided in s. 775.082 or s.

11  775.083, and is jointly and severally liable, together with

12  other such directors likewise voting for or concurring, for

13  any loss thereby sustained by creditors of the

14  provider-sponsored organization to the extent of such

15  dividend.

16         (4)  Any stockholder who receives such an illegal

17  dividend is liable in the amount thereof to the

18  provider-sponsored organization.

19         (5)  The department may revoke or suspend the

20  certificate of authority of a provider-sponsored organization

21  that has declared or paid an illegal dividend.

22         641.4638  Prohibited activities; penalties.--

23         (1)  Any person or entity that knowingly renews,

24  issues, or delivers any provider-sponsored contract without

25  first obtaining and thereafter maintaining a certificate of

26  authority, unless a waiver has been granted by the Secretary

27  of the United States Department of Health and Human Services

28  pursuant to s. 1855(a)(2) of the Balanced Budget Act of 1997,

29  commits a felony of the third degree, punishable as provided

30  in s. 775.082, s. 775.083, or s. 775.084.

31

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  1         (2)  Except as provided in subsection (1), any person,

  2  entity, or provider-sponsored organization that knowingly

  3  violates this part commits a misdemeanor of the first degree,

  4  punishable as provided in s. 775.082 or s. 775.083.

  5         (3)  Any agent or representative, solicitor, examining

  6  physician, applicant, or other person who knowingly makes any

  7  false and fraudulent statement or representation in, or with

  8  reference to, any application or negotiation for coverage by a

  9  provider-sponsored organization, in addition to any other

10  penalty provided by law, commits a misdemeanor of the first

11  degree, punishable as provided in s. 775.082 or s. 775.083.

12         (4)  Any agent, representative, solicitor, collector,

13  or other person who, while acting on behalf of a

14  provider-sponsored organization, receives or collects its

15  funds or premium payments and fails to satisfactorily account

16  for or turn over, when required, all such funds or payments,

17  in addition to the other penalties provided for by law,

18  commits a misdemeanor of the second degree, punishable as

19  provided in s. 775.082 or s. 775.083.

20         (5)  Any person who, without authority granted by a

21  provider-sponsored organization, collects or secures cash

22  advances, premium payments, or other funds owing to the

23  provider-sponsored organization or otherwise conducts the

24  business of a provider-sponsored organization without its

25  authority, in addition to the other penalties provided for by

26  law, commits a misdemeanor of the second degree, punishable as

27  provided in s. 775.082 or s. 775.083.

28         641.4639  Order to discontinue certain

29  advertising.--If, in the opinion of the department, any

30  advertisement by a provider-sponsored organization violates

31  this part, the department may enter an immediate order

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  1  requiring that the use of the advertisement be discontinued.

  2  If requested by the provider-sponsored organization, the

  3  department shall conduct a hearing within 10 days after the

  4  entry of such order. If, after the hearing or by agreement

  5  with the provider-sponsored organization, a final

  6  determination is made that the advertising did in fact violate

  7  this part, the department may, in lieu of revoking the

  8  certificate of authority, require the organization to publish

  9  a corrective advertisement, impose an administrative penalty

10  of up to $10,000, and, in the case of an initial solicitation,

11  require that the provider-sponsored organization, prior to

12  accepting any application received in response to the

13  advertisement, provide an acceptable clarification of the

14  advertisement to each individual applicant.

15         641.4640  Agent licensing and appointment required;

16  exceptions.--

17         (1)  With respect to a provider-sponsored contract, a

18  person may not, unless licensed and appointed as a health

19  insurance agent in accordance with the applicable provisions

20  of the Florida Insurance Code:

21         (a)  Solicit contracts or procure applications; or

22         (b)  Engage or hold himself or herself out as engaging

23  in the business of analyzing or abstracting provider-sponsored

24  contracts or of counseling, advising, or giving opinions to

25  persons relative to such contracts other than as a consulting

26  actuary advising a provider-sponsored organization or as a

27  salaried and bona fide full-time employee so counseling and

28  advising his or her employer relative to coverage for the

29  employer and his or her employees.

30         (2)  All qualifications, disciplinary provisions,

31  licensing and appointment procedures, fees, and related

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  1  matters contained in the Florida Insurance Code which apply to

  2  the licensing and appointment of health insurance agents by

  3  insurers apply to provider-sponsored organizations and to

  4  persons licensed or appointed by the provider-sponsored

  5  organization as its agents.

  6         (3)  An examination, license, or appointment is not

  7  required of any regular salaried officer or employee of a

  8  provider-sponsored organization who devotes substantially all

  9  of his or her services to activities other than the

10  solicitation of provider-sponsored contracts from the public

11  and who does not receive a commission or other compensation

12  that is directly dependent upon the solicitation of such

13  contracts.

14         (4)  Each agent and provider-sponsored organization

15  must comply with and be subject to the applicable provisions

16  of ss. 409.912(18) and 641.4640, and each company or entity

17  that appoints agents must comply with s. 626.451 when

18  marketing for any provider-sponsored organization licensed

19  under this part.

20         641.4641  Unfair methods of competition and unfair or

21  deceptive acts or practices prohibited.--A person, entity, or

22  provider-sponsored organization may not engage in this state

23  in any trade practice that is defined in this part as, or

24  determined pursuant to s. 641.4643 to be, an unfair method of

25  competition or an unfair or deceptive act or practice that

26  involves the business of a provider-sponsored organization.

27         641.4642  Unfair methods of competition and unfair or

28  deceptive acts or practices defined.--The following acts are

29  unfair methods of competition and unfair or deceptive acts or

30  practices:

31

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  1         (1)  MISREPRESENTATION AND FALSE ADVERTISING OF

  2  PROVIDER-SPONSORED CONTRACTS.--Knowingly making, issuing, or

  3  circulating, or causing to be made, issued, or circulated, any

  4  estimate, illustration, circular, statement, sales

  5  presentation, omission, or comparison that:

  6         (a)  Misrepresents the benefits, advantages,

  7  conditions, or terms of any provider-sponsored contract.

  8         (b)  Is misleading or is a misrepresentation as to the

  9  financial condition of any person.

10         (c)  Uses any name or title of any contract which

11  misrepresents the true nature of the contract.

12         (d)  Is a misrepresentation for the purpose of

13  inducing, or tending to induce, the lapse, forfeiture,

14  exchange, conversion, or surrender of any provider-sponsored

15  contract under the Medicare Choice program.

16         (e)  Misrepresents the benefits, nature,

17  characteristics, uses, standard, quantity, quality, cost,

18  rate, scope, source, or geographic origin or location of any

19  goods or services available from or provided by, directly or

20  indirectly, any provider-sponsored organization.

21         (f)  Misrepresents the affiliation, connection, or

22  association of any goods, services, or business establishment.

23         (g)  Advertises goods or services with intent not to

24  sell them as advertised.

25         (h)  Disparages the goods, services, or business of

26  another person by any false or misleading representation.

27         (i)  Misrepresents the sponsorship, endorsement,

28  approval, or certification of goods or services.

29         (j)  Uses an advertising format that, by virtue of the

30  design, location, or size of printed matter, is deceptive or

31

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  1  misleading or that would be deceptive or misleading to any

  2  reasonable person.

  3         (k)  Offers to provide a service that the

  4  provider-sponsored organization is unable to provide.

  5         (l)  Misrepresents the availability of a service

  6  provided by the provider-sponsored organization, either

  7  directly or indirectly, including the availability of the

  8  service as to location.

  9         (2)  FALSE INFORMATION AND ADVERTISING

10  GENERALLY.--Knowingly making, publishing, disseminating,

11  circulating, or placing before the public, or causing,

12  directly or indirectly, to be made, published, disseminated,

13  circulated, or placed before the public:

14         (a)  In a newspaper, magazine, or other publication;

15         (b)  In the form of a notice, circular, pamphlet,

16  letter, or poster;

17         (c)  Over any radio or television station; or

18         (d)  In any other way,

19

20  an advertisement, announcement, or statement that contains any

21  assertion, representation, or statement with respect to the

22  business of the provider-sponsored organization which is

23  untrue, deceptive, or misleading.

24         (3)  DEFAMATION.--Knowingly making, publishing,

25  disseminating, or circulating, directly or indirectly, or

26  aiding, abetting, or encouraging the making, publishing,

27  disseminating, or circulating of, any oral or written

28  statement, or any pamphlet, circular, article, or literature,

29  that is false or maliciously critical of any person and that

30  is calculated to injure such person.

31         (4)  FALSE STATEMENTS AND ENTRIES.--

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  1         (a)  Knowingly:

  2         1.  Filing with any supervisory or other public

  3  official;

  4         2.  Making, publishing, disseminating, or circulating;

  5         3.  Delivering to any person;

  6         4.  Placing before the public; or

  7         5.  Causing, directly or indirectly, to be made,

  8  published, disseminated, circulated, or delivered to any

  9  person, or place before the public,

10

11  any material false statement.

12         (b)  Knowingly making any false entry of a material

13  fact in any book, report, or statement of any person.

14         (5)  UNFAIR CLAIM-SETTLEMENT PRACTICES.--

15         (a)  Attempting to settle claims on the basis of an

16  application or any other material document that was altered

17  without notice to, or knowledge or consent of, the subscriber

18  or group of subscribers to a provider-sponsored organization.

19         (b)  Making a material misrepresentation to the

20  subscriber for the purpose and with the intent of effecting

21  settlement of claims, loss, or damage under a

22  provider-sponsored contract on less favorable terms than those

23  provided in, and contemplated by, the contract.

24         (c)  Committing or performing with such frequency as to

25  indicate a general business practice any of the following:

26         1.  Failing to adopt and implement standards for the

27  proper investigation of claims.

28         2.  Misrepresenting pertinent facts or contract

29  provisions relating to coverage at issue.

30         3.  Failing to acknowledge and act promptly upon

31  communications with respect to claims.

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  1         4.  Denying of claims without conducting reasonable

  2  investigations based upon available information.

  3         5.  Failing to affirm or deny coverage of claims upon

  4  written request of the subscriber within a reasonable time,

  5  which may not exceed 30 days after a claim or proof-of-loss

  6  statements have been completed and documents pertinent to the

  7  claim have been requested in a timely manner and received by

  8  the provider-sponsored organization.

  9         6.  Failing to promptly provide a reasonable

10  explanation in writing to the subscriber of the basis in the

11  provider-sponsored contract which relates to the facts or

12  applicable law for denying a claim or offering a compromise

13  settlement.

14         7.  Failing to provide, upon written request of a

15  subscriber, an itemized statement verifying that services and

16  supplies were furnished, if such statement is necessary for

17  submitting other insurance claims covered by individual

18  specified disease or limited benefit policies. However the

19  organization may charge a reasonable fee to cover the cost of

20  preparing such statement.

21         8.  Failing to provide any subscriber with services,

22  care, or treatment contracted-for pursuant to any

23  provider-sponsored contract without a reasonable basis for

24  believing that a legitimate defense exists for not providing

25  such services, care, or treatment. To the extent that a

26  national disaster, war, riot, civil insurrection, epidemic, or

27  any other emergency or similar event not within the control of

28  the provider-sponsored organization results in the inability

29  of the facilities, personnel, or financial resources of the

30  provider-sponsored organization to provide or arrange for

31  provision of a health service in accordance with requirements

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  1  of this part, the provider-sponsored organization is required

  2  only to make a good-faith effort to provide or arrange for

  3  provision of the service, taking into account the impact of

  4  the event. For the purposes of this paragraph, an event is not

  5  within the control of the provider-sponsored organization if

  6  the provider-sponsored organization cannot exercise influence

  7  or dominion over its occurrence.

  8         (6)  FAILURE TO MAINTAIN COMPLAINT-HANDLING

  9  PROCEDURES.--Failure of any person to maintain a complete

10  record of all the complaints received since the date of the

11  most recent examination of the provider-sponsored organization

12  by the department. For the purposes of this subsection, the

13  term "complaint" means any written communication primarily

14  expressing a grievance and requesting a remedy to the

15  grievance.

16         (7)  OPERATING WITHOUT A SUBSISTING CERTIFICATE OF

17  AUTHORITY.--Operating a provider-sponsored organization by any

18  person or entity without a subsisting certificate of authority

19  or renewal, issuance, or delivery of any provider-sponsored

20  contract by a provider-sponsored organization, person, or

21  entity without a subsisting certificate of authority, unless a

22  waiver has been granted by the Secretary of the United States

23  Department of Health and Human Services under s. 1855(a)(2) of

24  the Balanced Budget Act of 1997.

25         (8)  MISREPRESENTATION IN PROVIDER-SPONSORED

26  ORGANIZATION APPLICATIONS.--Knowingly making false or

27  fraudulent statements or representations on, or relative to,

28  an application for a provider-sponsored contract for the

29  purpose of obtaining a fee, commission, money, or other

30  benefits from any agent, representative, or broker of a

31  provider-sponsored organization or any individual.

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  1         (9)  TWISTING.--Knowingly making any misleading

  2  representations or incomplete or fraudulent comparisons of any

  3  provider-sponsored contracts or provider-sponsored

  4  organizations or of any insurance policies or insurers for the

  5  purpose of inducing, or intending to induce, any person to

  6  lapse, forfeit, surrender, terminate, retain, pledge, assign,

  7  borrow on, or convert any insurance policy or

  8  provider-sponsored contract or to take out a

  9  provider-sponsored contract or policy of insurance in another

10  provider-sponsored organization or insurer.

11         (10)  ILLEGAL DEALINGS IN PREMIUMS; EXCESS OR REDUCED

12  CHARGES FOR PROVIDER-SPONSORED COVERAGE.--

13         (a)  Knowingly collecting any sum as a premium or

14  charge for provider-sponsored coverage that is not then

15  provided or is not in due course to be provided, subject to

16  acceptance of the risk by the provider-sponsored organization,

17  by a provider-sponsored contract issued by a

18  provider-sponsored organization as permitted by this part.

19         (b)  Knowingly collecting as a premium or charge for

20  provider-sponsored coverage any sum in excess of or less than

21  the premium or charge applicable to provider-sponsored

22  coverage.

23         (11)  FALSE CLAIMS; OBTAINING OR RETAINING MONEY

24  DISHONESTLY.--Knowingly presenting or causing to be presented

25  to any provider-sponsored organization, by any agent or

26  representative, physician, claimant, or other person, a false

27  claim for payment.

28         (12)  PROHIBITED DISCRIMINATORY PRACTICES.--Refusing to

29  provide services or care to a subscriber solely because

30  medical services may be or have been sought for injuries

31  resulting from an assault, battery, sexual assault, sexual

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  1  battery, or any other offense by a family or household member,

  2  as defined in s. 741.28(2), or by another who is or was

  3  residing in the same dwelling unit.

  4         (13)  MISREPRESENTATION IN PROVIDER-SPONSORED

  5  ORGANIZATION; AVAILABILITY OF PROVIDERS.--Knowingly misleading

  6  a potential enrollee as to the availability of providers.

  7         641.4643  General powers and duties of the

  8  department.--In addition to the powers and duties set forth in

  9  s. 624.307, the department may examine and investigate the

10  affairs of every person, entity, or provider-sponsored

11  organization in order to determine whether the person, entity,

12  or provider-sponsored organization is operating in accordance

13  with this part or has been or is engaged in any unfair method

14  of competition or in any unfair or deceptive act or practice

15  prohibited by s. 641.4641.

16         641.4644  Defined unfair practices; hearings,

17  witnesses, appearances, production of books, and service of

18  process.--

19         (1)  Whenever the department has reason to believe that

20  any person, entity, or provider-sponsored organization has

21  engaged, or is engaging, in this state in any unfair method of

22  competition or any unfair or deceptive act or practice as

23  defined in s. 461.4642 or is operating a provider-sponsored

24  organization without a certificate of authority as required by

25  this part, unless a waiver has been granted by the Secretary

26  of the United States Department of Health and Human Services

27  under s. 1855(a)(2) of the Balanced Budget Act of 1997, and

28  that a proceeding by the department with respect to any such

29  activity would be in the interest of the public, the

30  department shall conduct or cause to have conducted a hearing

31  in accordance with chapter 120.

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  1         (2)  The department, a duly empowered hearing officer,

  2  or an administrative law judge shall, during the conduct of

  3  such hearing, have those powers enumerated in s. 120.569.

  4  However, the penalty for failing to comply with a subpoena or

  5  with an order directing discovery is limited to a fine not to

  6  exceed $1,000 per violation.

  7         (3)  Statements of charges, notices, and orders under

  8  this part may be served by anyone duly authorized by the

  9  department, either in the manner provided by law for service

10  of process in civil actions or by certifying and mailing a

11  copy thereof to the person, entity, or provider-sponsored

12  organization affected by the statement, notice, order, or

13  other process at her or his or its residence or principal

14  office or place of business. The verified return by the person

15  so serving such statement, notice, order, or other process,

16  setting forth the manner of the service, is proof of service,

17  and the return postcard receipt for such statement, notice,

18  order, or other process, certified and mailed as required, is

19  proof of service.

20         641.4645  Cease and desist and penalty orders.--After

21  the hearing provided in s. 641.4644, the department shall

22  enter a final order in accordance with s. 120.569. If it is

23  determined that the person, entity, or provider-sponsored

24  organization charged has engaged in an unfair or deceptive act

25  or practice or the unlawful operation of a provider-sponsored

26  organization without a subsisting certificate of authority,

27  the department shall also issue an order requiring the

28  violator to cease and desist from engaging in such method of

29  competition, act, or practice or unlawful operation of a

30  provider-sponsored organization. Further, if the act or

31  practice constitutes a violation of s. 641.4642 or s.

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  1  641.4644, the department may, at its discretion, order any one

  2  or more of the following:

  3         (1)  Suspension or revocation of the provider-sponsored

  4  organization's certificate of authority if it knew, or

  5  reasonably should have known, it was in violation of this

  6  part.

  7         (2)  If it is determined that the person or entity

  8  charged has engaged in the business of operating a

  9  provider-sponsored organization without a certificate of

10  authority, unless a waiver has been granted by the Secretary

11  of the United States Department of Health and Human Services

12  under s. 1855(a)(2) of the Balanced Budget Act of 1997, an

13  administrative penalty, which may not exceed $1,000 for each

14  provider-sponsored contract offered or effectuated.

15         641.4646  Appeals from the department.--Any person,

16  entity, or provider-sponsored organization that is subject to

17  an order of the department under s. 641.4645 or s. 641.4647

18  may obtain a review of the order by filing an appeal therefrom

19  in accordance with the procedures for appeal under s. 120.68.

20         641.4647  Penalty for violating cease and desist

21  orders.--Any person, entity, or provider-sponsored

22  organization that violates a cease and desist order of the

23  department under s. 641.4645 while such order is in effect,

24  after notice and hearing as provided in s. 641.4644, is

25  subject, at the discretion of the department, to any one or

26  more of the following:

27         (1)  A monetary penalty of not more than $200,000 as to

28  all matters determined in the hearing.

29         (2)  Suspension or revocation of the provider-sponsored

30  organization's certificate of authority.

31

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  1         641.4648  Civil liability.--The provisions of this part

  2  are cumulative to rights under the general civil and common

  3  law, and an action by the department does not abrogate any

  4  right to damages or other relief in any court.

  5         Section 2.  Section 641.227, Florida Statutes, is

  6  amended to read:

  7         641.227  Rehabilitation Administrative Expense Fund.--

  8         (1)  The department may shall not issue or permit to

  9  exist a certificate of authority to operate a health

10  maintenance organization or provider-sponsored organization in

11  this state unless the organization has deposited with the

12  department $10,000 in cash for use in the Rehabilitation

13  Administrative Expense Fund as established in subsection (2).

14         (2)  The department shall maintain all deposits

15  received under this section and all income from such deposits

16  in trust in an account titled "Rehabilitation Administrative

17  Expense Fund."  The fund shall be administered by the

18  department and shall be used for the purpose of payment of the

19  administrative expenses of the department during any

20  rehabilitation of a health maintenance organization or

21  provider-sponsored organization, when rehabilitation is

22  ordered by a court of competent jurisdiction.

23         (3)  Upon successful rehabilitation of a health

24  maintenance organization or provider-sponsored organization,

25  the organization shall reimburse the fund for the amount of

26  expenses incurred by the department during the court-ordered

27  rehabilitation period.

28         (4)  If a court of competent jurisdiction orders

29  liquidation of a health maintenance organization or

30  provider-sponsored organization, the fund shall be reimbursed

31

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  1  for expenses incurred by the department as provided for in

  2  chapter 631.

  3         (5)  Each deposit made under this section shall be

  4  allowed as an asset for purposes of determination of the

  5  financial condition of the health maintenance organization or

  6  provider-sponsored organization.  The deposit shall be

  7  refunded to the organization only when the organization both

  8  ceases operation as a health maintenance organization or

  9  provider-sponsored organization and no longer holds a

10  subsisting certificate of authority.

11         Section 3.  Paragraph (b) of subsection (2) and

12  subsection (5) of section 641.316, Florida Statutes, are

13  amended to read:

14         641.316  Fiscal intermediary services.--

15         (2)

16         (b)  The term "fiscal intermediary services

17  organization" means a person or entity that which performs

18  fiduciary or fiscal intermediary services to health care

19  professionals who contract with health maintenance

20  organizations or provider-sponsored organizations other than a

21  fiscal intermediary services organization owned, operated, or

22  controlled by a hospital licensed under chapter 395, an

23  insurer licensed under chapter 624, a third-party

24  administrator licensed under chapter 626, a prepaid limited

25  health organization licensed under chapter 636, a health

26  maintenance organization licensed under this chapter, or a

27  provider-sponsored organization licensed under this chapter,

28  or physician group practices as defined in s. 455.236(3)(f).

29         (5)  Any fiscal intermediary services organization,

30  other than a fiscal intermediary services organization owned,

31  operated, or controlled by a hospital licensed under chapter

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  1  395, an insurer licensed under chapter 624, a third-party

  2  administrator licensed under chapter 626, a prepaid limited

  3  health organization licensed under chapter 636, a health

  4  maintenance organization licensed under this chapter, a

  5  provider-sponsored organization licensed under this chapter,

  6  or physician group practices as defined in s. 455.236(3)(f),

  7  must register with the department and meet the requirements of

  8  this section. In order to register as a fiscal intermediary

  9  services organization, the organization must comply with ss.

10  641.21(1)(c) and (d) and 641.22(6). Should the department

11  determine that the fiscal intermediary services organization

12  does not meet the requirements of this section, the

13  registration shall be denied. In the event that the registrant

14  fails to maintain compliance with the provisions of this

15  section, the department may revoke or suspend the

16  registration. In lieu of revocation or suspension of the

17  registration, the department may levy an administrative

18  penalty in accordance with s. 641.25.

19         Section 4.  A provider-sponsored organization is exempt

20  from section 455.654, Florida Statutes, for the provision of

21  health care services to enrollees of a Medicare Choice plan.

22         Section 5.  Subsections (9), (10), (11), (13), and (16)

23  of section 641.47, Florida Statutes, are amended to read:

24         641.47  Definitions.--As used in this part, the term:

25         (9)  "Geographic area" means the county or counties, or

26  any portion of a county or counties, within which the health

27  maintenance organization or provider-sponsored organization

28  provides or arranges for comprehensive health care services to

29  be available to its subscribers.

30

31

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  1         (10)  "Grievance" means a written complaint submitted

  2  by or on behalf of a subscriber to an organization or a state

  3  agency regarding the:

  4         (a)  Availability, coverage for the delivery, or

  5  quality of health care services, including a complaint

  6  regarding an adverse determination made pursuant to

  7  utilization review;

  8         (b)  Claims payment, handling, or reimbursement for

  9  health care services; or

10         (c)  Matters pertaining to the contractual relationship

11  between a subscriber and an organization.

12

13  A grievance does not include a written complaint submitted by

14  or on behalf of a subscriber eligible for a grievance and

15  appeals procedure provided by an organization pursuant to

16  contract with the Federal Government under Title XVIII of the

17  Social Security Act which is governed by the rules established

18  by the Secretary of the United States Department of Health and

19  Human Services under the Balanced Budget Act of 1997, as it

20  applies to provider-sponsored organizations that offer

21  Medicare Choice plans.

22         (11)  "Health care services" means:

23         (a)  Comprehensive health care services, as defined in

24  s. 641.19, when applicable to a health maintenance

25  organization.

26         (b)  The benefit package for Medicare beneficiaries

27  established by the Federal Government, when applicable to a

28  provider-sponsored organization., and means

29         (c)  Basic services, as defined in s. 641.402, when

30  applicable to a prepaid health clinic.

31

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  1         (13)  "Organization" means any health maintenance

  2  organization as defined in s. 641.19, any provider-sponsored

  3  organization as defined in s. 641.4603, and any prepaid health

  4  clinic as defined in s. 641.402.

  5         (16)  "Subscriber" means an individual who has

  6  contracted, or on whose behalf a contract has been entered

  7  into, with a health maintenance organization for health care

  8  services. In the case of a provider-sponsored organization as

  9  defined in s. 641.4603, the term also means a Medicare

10  beneficiary.

11         Section 6.  Section 641.48, Florida Statutes, is

12  amended to read:

13         641.48  Purpose and application of part.--The purpose

14  of this part is to ensure that health maintenance

15  organizations, provider-sponsored organizations, and prepaid

16  health clinics deliver high-quality health care to their

17  subscribers.  To achieve this purpose, this part requires all

18  such organizations to obtain a health care provider

19  certificate from the agency as a condition precedent to

20  obtaining a certificate of authority to do business in Florida

21  from the Department of Insurance, under part I, or part II, or

22  part III of this chapter.

23         Section 7.  Section 641.49, Florida Statutes, is

24  amended to read:

25         641.49  Certification of health maintenance

26  organization, provider-sponsored organization, and prepaid

27  health clinic as health care providers; application

28  procedure.--

29         (1)  A No person or governmental unit may not shall

30  establish, conduct, or maintain a health maintenance

31  organization, a provider-sponsored organization, or a prepaid

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  1  health clinic in this state without first obtaining a health

  2  care provider certificate under this part.

  3         (2)  The Department of Insurance may shall not issue a

  4  certificate of authority under part I, or part II, or part III

  5  of this chapter to any applicant that which does not possess a

  6  valid health care provider certificate issued by the agency

  7  under this part.

  8         (3)  Each application for a health care provider

  9  certificate must shall be on a form prescribed by the agency.

10  The following information and documents shall be submitted by

11  an applicant and maintained, after certification under this

12  part, by each organization and shall be available for

13  inspection or examination by the agency at the offices of an

14  organization at any time during regular business hours.  The

15  agency shall give reasonable notice to an organization prior

16  to any onsite inspection or examination of its records or

17  premises conducted under this section.  The agency may require

18  that the following information or documents be submitted with

19  the application:

20         (a)  A copy of the articles of incorporation and all

21  amendments to the articles.

22         (b)  A copy of the bylaws, rules and regulations, or

23  similar form of document, if any, regulating the conduct of

24  the affairs of the applicant or organization.

25         (c)  A list of the names, addresses, and official

26  capacities with the applicant or organization of the persons

27  who are to be responsible for the conduct of the affairs of

28  the applicant or organization, including all officers and

29  directors of the corporation.  Such persons shall fully

30  disclose to the agency and the directors of the applicant or

31  organization the extent and nature of any contracts or

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  1  arrangements between them and the applicant or organization,

  2  including any possible conflicts of interest.

  3         (d)  The name and address of the applicant and the name

  4  by which the applicant or organization is to be known.

  5         (e)  A statement generally describing the applicant or

  6  organization and its operations.

  7         (f)  A copy of the form for each group and individual

  8  contract, certificate, subscriber handbook, and any other

  9  similar documents issued to subscribers.

10         (g)  A statement describing the manner in which health

11  care services shall be regularly available.

12         (h)  A statement that the applicant has an established

13  network of health care providers which is capable of providing

14  the health care services that are to be offered by the

15  organization.

16         (i)  The locations at which health care services shall

17  be regularly available to subscribers.

18         (j)  The type of health care personnel engaged to

19  provide the health care services and the quantity of the

20  personnel of each type.

21         (k)  A statement giving the present and projected

22  number of subscribers to be enrolled yearly for the next 3

23  years.

24         (l)  A statement indicating the source of emergency

25  services and care on a 24-hour basis.

26         (m)  A statement that the physicians employed by the

27  applicant have been formally organized as a medical staff and

28  that the applicant's governing body has designated a chief of

29  medical staff.

30         (n)  A statement describing the manner in which the

31  applicant or organization assures the maintenance of a medical

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  1  records system in accordance with accepted medical records'

  2  standards and practices.

  3         (o)  If general anesthesia is to be administered in a

  4  facility not licensed by the agency, a copy of architectural

  5  plans that meet the requirements for institutional occupancy

  6  (NFPA 101 Life Safety Code, current edition as adopted by the

  7  State Fire Marshal).

  8         (p)  A description of the applicant's or organization's

  9  internal quality assurance program, including committee

10  structure, as required under s. 641.51.

11         (q)  A description and supporting documentation

12  concerning how the applicant or health maintenance

13  organization will comply with internal risk management program

14  requirements under s. 641.55.

15         (r)  An explanation of how coverage for emergency

16  services and care is to be effected outside the applicant's or

17  health maintenance organization's stated geographic area.

18         (s)  A statement and map describing with reasonable

19  accuracy the specific geographic area to be served.

20         (t)  A nonrefundable application fee of $1,000.

21         (u)  Such additional information as the agency may

22  reasonably require.

23         Section 8.  Subsections (1) and (3) of section 641.495,

24  Florida Statutes, are amended to read:

25         641.495  Requirements for issuance and maintenance of

26  certificate.--

27         (1)  The agency shall, within 90 days after receipt,

28  issue a health care provider certificate to an applicant

29  filing a completed application in conformity with ss. 641.48

30  and 641.49, upon payment of the prescribed fee, and upon the

31  agency's being satisfied that the applicant has the ability to

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  1  provide quality of care consistent with the prevailing

  2  professional standards of care and which applicant otherwise

  3  meets the requirements of this part.

  4         (3)  The organization shall demonstrate its capability

  5  to provide health care services in the geographic area that it

  6  proposes to service.  In addition, each health maintenance

  7  organization or provider-sponsored organization shall notify

  8  the agency of its intent to expand its geographic area at

  9  least 60 days prior to the date it plans to begin providing

10  health care services in the new area.  Prior to the date the

11  health maintenance organization or provider-sponsored

12  organization begins enrolling members in the new area, it must

13  submit a notarized affidavit, signed by two officers of the

14  organization who have the authority to legally bind the

15  organization, to the agency describing and affirming its

16  existing and projected capability to provide health care

17  services to its projected number of subscribers in the new

18  area.  The notarized affidavit shall further assure that, 15

19  days prior to providing health care services in the new area,

20  the health maintenance organization or provider-sponsored

21  organization shall be able, through documentation or

22  otherwise, to demonstrate that it shall be capable of

23  providing services to its projected subscribers for at least

24  the first 60 days of operation. If the agency determines that

25  the organization is not capable of providing health care

26  services to its projected number of subscribers in the new

27  area, the agency may issue an order as required under chapter

28  120 prohibiting the organization from expanding into the new

29  area. In any proceeding under chapter 120, the agency shall

30  have the burden of establishing that the organization is not

31

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  1  capable of providing health care services to its projected

  2  number of subscribers in the new area.

  3         Section 9.  Paragraph (c) of subsection (4) of section

  4  641.51, Florida Statutes, is amended to read:

  5         641.51  Quality assurance program; second medical

  6  opinion requirement.--

  7         (4)

  8         (c)  For second opinions provided by contract

  9  physicians the organization is prohibited from charging a fee

10  to the subscriber in an amount in excess of the subscriber

11  fees established by contract for referral contract physicians.

12  The organization shall pay the amount of all charges, which

13  are usual, reasonable, and customary in the community, for

14  second opinion services performed by a physician not under

15  contract with the organization, but may require the subscriber

16  to be responsible for up to 40 percent of such amount. The

17  organization may require that any tests deemed necessary by a

18  noncontract physician shall be conducted by the organization.

19  The organization may deny reimbursement rights granted under

20  this section in the event the subscriber seeks in excess of

21  three such referrals per year if such subsequent referral

22  costs are deemed by the organization to be evidence that the

23  subscriber has unreasonably overutilized the second opinion

24  privilege.  A subscriber thus denied reimbursement under this

25  section shall have recourse to grievance procedures as

26  specified in ss. 408.7056, 641.495, and 641.511. The

27  organization's physician's professional judgment concerning

28  the treatment of a subscriber derived after review of a second

29  opinion shall be controlling as to the treatment obligations

30  of the health maintenance organization or provider-sponsored

31  organization. Treatment not authorized by the health

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  1  maintenance organization or provider-sponsored organization

  2  shall be at the subscriber's expense.

  3         Section 10.  Section 641.512, Florida Statutes, is

  4  amended to read:

  5         641.512  Accreditation and external quality assurance

  6  assessment.--

  7         (1)(a)  To promote the quality of health care services

  8  provided by health maintenance organizations,

  9  provider-sponsored organizations, and prepaid health clinics

10  in this state, the department shall require each health

11  maintenance organization, provider-sponsored organizations,

12  and prepaid health clinic to be accredited within 1 year after

13  of the organization's receipt of its certificate of authority

14  and to maintain accreditation by an accreditation organization

15  approved by the department, as a condition of doing business

16  in the state.

17         (b)  If an In the event that no accreditation

18  organization is not can be approved by the department, the

19  department shall require each health maintenance organization,

20  provider-sponsored organization, and prepaid health clinic to

21  have an external quality assurance assessment performed by a

22  review organization approved by the department, as a condition

23  of doing business in the state.  The assessment shall be

24  conducted within 1 year after of the organization's receipt of

25  its certificate of authority and every 2 years thereafter, or

26  when the department deems additional assessments necessary.

27         (2)  The accreditation or review organization must have

28  nationally recognized experience in the activities of a health

29  maintenance organization or a provider-sponsored organization

30  activities and in the appraisal of medical practice and

31  quality assurance in the setting of a health maintenance

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  1  organization or a provider-sponsored organization setting. The

  2  accreditation or review organization may shall not currently

  3  be involved in the operation of the health maintenance

  4  organization, provider-sponsored organization, or prepaid

  5  health clinic, or nor in the delivery of health care services

  6  to its subscribers.  The accreditation or review organization

  7  may shall not have contracted or conducted consultations

  8  within the last 2 years for other than accreditation purposes

  9  of the health maintenance organization, provider-sponsored

10  organization, or prepaid health clinic seeking accreditation

11  or under quality assurance assessment.

12         (3)  A representative of the department shall accompany

13  the accreditation or review organization throughout the

14  accreditation or assessment process, but may shall not

15  participate in the final accreditation or assessment

16  determination.  The accreditation or review organization shall

17  monitor and evaluate the quality and appropriateness of

18  patient care, the organization's pursuance of opportunities to

19  improve patient care and resolve identified problems, and the

20  effectiveness of the internal quality assurance program

21  required for the certification of a health maintenance

22  organization, a provider-sponsored organization, or a and

23  prepaid health clinic certification pursuant to s.

24  641.49(3)(p) s. 641.49(3)(o).

25         (4)  The accreditation or assessment process shall

26  include a review of:

27         (a)  All documentation necessary to determine the

28  current professional credentials of employed health care

29  providers or physicians providing service under contract to

30  the health maintenance organization, provider-sponsored

31  organization, or prepaid health clinic.

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  1         (b)  At least a representative sample of not fewer than

  2  50 medical records of individual subscribers.  When selecting

  3  a sample, any and all medical records may be subject to

  4  review.  The sample of medical records shall be representative

  5  of all subscribers' records.

  6         (5)  Every organization shall submit its books,

  7  documentations, and medical records and take appropriate

  8  action as may be necessary to facilitate the accreditation or

  9  assessment process.

10         (6)  The accreditation or review organization shall

11  issue a written report of its findings to the board of

12  directors of the health maintenance organization, the

13  provider-sponsored organization, organization's or the prepaid

14  health clinic clinic's board of directors.  A copy of the

15  report shall be submitted to the department by the

16  organization within 30 business days after of its receipt by

17  the health maintenance organization, provider-sponsored

18  organization, or prepaid health clinic.

19         (7)  The expenses of the accreditation or assessment

20  process of each organization, including any expenses incurred

21  pursuant to this section, shall be paid by the organization.

22         Section 11.  Section 641.513, Florida Statutes, is

23  amended to read:

24         641.513  Requirements for providing emergency services

25  and care.--

26         (1)  In providing for emergency services and care as a

27  covered service, a health maintenance organization or a

28  provider-sponsored organization may not:

29         (a)  Require prior authorization for the receipt of

30  prehospital transport or treatment or for emergency services

31  and care.

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  1         (b)  Indicate that emergencies are covered only if care

  2  is secured within a certain period of time.

  3         (c)  Use terms such as "life threatening" or "bona

  4  fide" to qualify the kind of emergency that is covered.

  5         (d)  Deny payment based on the subscriber's failure to

  6  notify the health maintenance organization or

  7  provider-sponsored organization in advance of seeking

  8  treatment or within a certain period of time after the care is

  9  given.

10         (2)  Prehospital and hospital-based trauma services and

11  emergency services and care must be provided to a subscriber

12  of a health maintenance organization or provider-sponsored

13  organization as required under ss. 395.1041, 395.4045, and

14  401.45.

15         (3)(a)  When a subscriber is present at a hospital

16  seeking emergency services and care, the determination as to

17  whether an emergency medical condition, as defined in s.

18  641.47 exists shall be made, for the purposes of treatment, by

19  a physician of the hospital or, to the extent permitted by

20  applicable law, by other appropriate licensed professional

21  hospital personnel under the supervision of the hospital

22  physician.  The physician or the appropriate personnel shall

23  indicate in the patient's chart the results of the screening,

24  examination, and evaluation.  The health maintenance

25  organization or provider-sponsored organization shall

26  compensate the provider for the screening, evaluation, and

27  examination that is reasonably calculated to assist the health

28  care provider in arriving at a determination as to whether the

29  patient's condition is an emergency medical condition.  The

30  health maintenance organization or provider-sponsored

31  organization shall compensate the provider for emergency

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  1  services and care.  If a determination is made that an

  2  emergency medical condition does not exist, payment for

  3  services rendered subsequent to that determination is governed

  4  by the contract under which the subscriber is covered.

  5         (b)  If a determination has been made that an emergency

  6  medical condition exists and the subscriber has notified the

  7  hospital, or the hospital emergency personnel otherwise have

  8  knowledge that the patient is a subscriber of the health

  9  maintenance organization or provider-sponsored organization,

10  the hospital must make a reasonable attempt to notify the

11  subscriber's primary care physician, if known, or the health

12  maintenance organization or provider-sponsored organization,

13  if the health maintenance organization or provider-sponsored

14  organization had previously requested in writing that the

15  notification be made directly to the health maintenance

16  organization or provider-sponsored organization, of the

17  existence of the emergency medical condition.  If the primary

18  care physician is not known, or has not been contacted, the

19  hospital must:

20         1.  Notify the health maintenance organization or

21  provider-sponsored organization as soon as possible prior to

22  discharge of the subscriber from the emergency care area; or

23         2.  Notify the health maintenance organization or

24  provider-sponsored organization within 24 hours or on the next

25  business day after admission of the subscriber as an inpatient

26  to the hospital.

27

28  If notification required by this paragraph is not

29  accomplished, the hospital must document its attempts to

30  notify the health maintenance organization or

31  provider-sponsored organization of the circumstances that

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  1  precluded attempts to notify the health maintenance

  2  organization or provider-sponsored organization.  A health

  3  maintenance organization or provider-sponsored organization

  4  may not deny payment for emergency services and care based on

  5  a hospital's failure to comply with the notification

  6  requirements of this paragraph. Nothing in This paragraph does

  7  not shall alter any contractual responsibility of a subscriber

  8  to make contact with the health maintenance organization or

  9  provider-sponsored organization subsequent to receiving

10  treatment for the emergency medical condition.

11         (c)  If the subscriber's primary care physician

12  responds to the notification, the hospital physician and the

13  primary care physician may discuss the appropriate care and

14  treatment of the subscriber.  The health maintenance

15  organization or provider-sponsored organization may have a

16  member of the hospital staff with whom it has a contract

17  participate in the treatment of the subscriber within the

18  scope of the physician's hospital staff privileges.  The

19  subscriber may be transferred, in accordance with state and

20  federal law, to a hospital that has a contract with the health

21  maintenance organization or provider-sponsored organization

22  and has the service capability to treat the subscriber's

23  emergency medical condition. Notwithstanding any other state

24  law, a hospital may request and collect insurance or financial

25  information from a patient in accordance with federal law,

26  which is necessary to determine if the patient is a subscriber

27  of a health maintenance organization or provider-sponsored

28  organization, if emergency services and care are not delayed.

29         (4)  A subscriber may be charged a reasonable

30  copayment, as provided in s. 641.31(12), for the use of an

31  emergency room.

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  1         (5)  Reimbursement for services pursuant to this

  2  section by a provider who does not have a contract with the

  3  health maintenance organization or provider-sponsored

  4  organization shall be the lesser of:

  5         (a)  The provider's charges;

  6         (b)  The usual and customary provider charges for

  7  similar services in the community where the services were

  8  provided; or

  9         (c)  The charge mutually agreed to by the health

10  maintenance organization or provider-sponsored organization

11  and the provider within 60 days after of the submittal of the

12  claim.

13

14  Such reimbursement shall be net of any applicable copayment

15  authorized pursuant to subsection (4).

16         (6)  Reimbursement for services under this section

17  provided to subscribers who are Medicaid recipients by a

18  provider for whom no contract exists between the provider and

19  the health maintenance organization or provider-sponsored

20  organization shall be the lesser of:

21         (a)  The provider's charges;

22         (b)  The usual and customary provider charges for

23  similar services in the community where the services were

24  provided;

25         (c)  The charge mutually agreed to by the entity and

26  the provider within 60 days after submittal of the claim; or

27         (d)  The Medicaid rate.

28         Section 12.  Subsection (4) of section 641.515, Florida

29  Statutes, is amended to read:

30         641.515  Investigation by the agency.--

31

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  1         (4)  The agency shall adopt promulgate rules imposing

  2  upon physicians and hospitals performing services for a health

  3  maintenance organization or provider-sponsored organization

  4  standards of care generally applicable to physicians and

  5  hospitals.

  6         Section 13.  Subsections (1) and (2) of section 641.54,

  7  Florida Statutes, are amended to read:

  8         641.54  Information disclosure.--

  9         (1)  Every health maintenance organization or

10  provider-sponsored organization shall maintain a current list,

11  by geographic area, of all hospitals that which are routinely

12  and regularly used by the organization, indicating to which

13  hospitals the organization may refer particular subscribers

14  for nonemergency services.  The list shall also include all

15  physicians under the organization's direct employ or who are

16  under contract or other arrangement with the organization to

17  provide health care services to subscribers.  The list shall

18  contain the following information for each physician:

19         (a)  Name.

20         (b)  Office location.

21         (c)  Medical area or areas of specialty.

22         (d)  Board certification or eligibility in any area.

23         (e)  License number.

24         (2)  The list shall be made available, upon request, to

25  the department.  The list shall also be made available, upon

26  request:

27         (a)  With respect to negotiation, application, or

28  effectuation of a group health maintenance contract, to the

29  employer or other person who will hold the contract on behalf

30  of the subscriber group.  The list may be restricted to

31

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  1  include only physicians and hospitals in the group's

  2  geographic area.

  3         (b)  With respect to an individual health maintenance

  4  contract or any contract offered to a person who is entitled

  5  to have payments for health care costs made under Medicare, to

  6  the person considering or making application to, or under

  7  contract with, the health maintenance organization or

  8  provider-sponsored organization.  The list may be restricted

  9  to include only physicians and hospitals in the person's

10  geographic area.

11         Section 14.  Section 641.59, Florida Statutes, is

12  amended to read:

13         641.59  Psychotherapeutic services; records and

14  reports.--A health maintenance organization,

15  provider-sponsored organization, or prepaid health clinic, as

16  defined in this chapter, must maintain strict confidentiality

17  against unauthorized or inadvertent disclosure of confidential

18  information to persons inside or outside the health

19  maintenance organization, provider-sponsored organization, or

20  prepaid health clinic regarding psychotherapeutic services

21  provided to subscribers by psychotherapists licensed under

22  chapter 490 or chapter 491 and psychotherapeutic records and

23  reports related to the services. A report, in lieu of records,

24  may be submitted by a psychotherapist in support of the

25  services. Such report must include clear statements

26  summarizing the subscriber's presenting symptoms, what

27  transpired in any provided therapy, what progress, if any, was

28  made by the subscriber, and results obtained. However, the

29  health maintenance organization, provider-sponsored

30  organization, or prepaid health clinic may require the records

31  upon which the report is based, if the report does not contain

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  1  sufficient information supporting the services. A

  2  psychotherapist submitting records in support of services may

  3  obscure portions to conceal the names, identities, or

  4  identifying information of people other than the subscriber if

  5  this information is unnecessary to utilization review, quality

  6  management, discharge planning, case management, or claims

  7  processing conducted by the health maintenance organization,

  8  provider-sponsored organization, or prepaid health clinic. A

  9  health maintenance organization, provider-sponsored

10  organization, or prepaid health clinic may provide aggregate

11  data that which does not disclose subscriber identities or

12  identities of other persons to entities such as payors,

13  sponsors, researchers, and accreditation bodies.

14         Section 15.  Paragraph (f) of subsection (1) of section

15  641.60, Florida Statutes, is amended to read:

16         641.60  Statewide Managed Care Ombudsman Committee.--

17         (1)  As used in ss. 641.60-641.75:

18         (f)  "Managed care program" means a health care

19  delivery system that emphasizes primary care and integrates

20  the financing and delivery of services to enrolled individuals

21  through arrangements with selected providers, formal quality

22  assurance and utilization review, and financial incentives for

23  enrollees to use the program's providers.  Such a health care

24  delivery system may include arrangements in which providers

25  receive prepaid set payments to coordinate and deliver all

26  inpatient and outpatient services to enrollees or arrangements

27  in which providers receive a case management fee to coordinate

28  services and are reimbursed on a fee-for-service basis for the

29  services they provide.  A managed care program may include a

30  state-licensed health maintenance organization, a

31  provider-sponsored organization, a Medicaid prepaid health

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






    Florida Senate - 1998                                  SB 1432
    10-890A-98




  1  plan, a Medicaid primary care case management program, or

  2  other similar program.

  3         Section 16.  This act shall take effect October 1,

  4  1998.

  5

  6            *****************************************

  7                          SENATE SUMMARY

  8    Creates the "Provider-Sponsored Organization Act" within
      ch. 641, F.S. Authorizes provider-sponsored organizations
  9    to do business in this state and offer health care
      coverage to Medicare beneficiaries under the federal
10    Medicare Choice plan. Provides for the regulation of
      provider-sponsored organizations by the Department of
11    Insurance in a manner similar to the regulation of health
      maintenance organizations. Requires that the department
12    issue certificates of authority to qualified
      provider-sponsored organizations. Requires that a
13    provider-sponsored organization maintain certification as
      a health care provider. Authorizes the department to
14    conduct inspections, issue cease and desist orders, and
      impose penalties. Provides requirements for a
15    provider-sponsored organization in marketing its services
      and in soliciting subscribers. Prohibits certain unfair
16    and deceptive trade practices and acts. Provides
      penalties. Authorizes the department to adopt rules. (See
17    bill for details.)

18

19

20

21

22

23

24

25

26

27

28

29

30

31

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