Senate Bill 1432c3
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Florida Senate - 1998 CS for CS for CS for SB 1432
By the Committees on Ways and Means, Health Care, Banking and
Insurance and Senator Brown-Waite
301-2173-98
1 A bill to be entitled
2 An act relating to the delivery of health care
3 services; amending s. 409.912, F.S.; directing
4 the Agency for Health Care Administration to
5 establish an outpatient specialty services
6 pilot project; providing definitions; providing
7 criteria for participation; requiring an
8 evaluation and a report to the Governor and
9 Legislature; creating s. 624.1291, F.S.;
10 providing an exemption from the Insurance Code
11 for certain health care services; creating part
12 IV of ch. 641, F.S., the
13 "Provider-Sponsored-Organization Act";
14 providing legislative findings and purposes
15 with respect to certain federal requirements
16 for authorizing provider-sponsored
17 organizations in this state to provide health
18 care coverage to Medicare beneficiaries under
19 the Medicare Choice plan; providing
20 definitions; prohibiting a provider-sponsored
21 organization from transacting insurance
22 business other than the offering of Medicare
23 Choice plans; providing applicability of parts
24 I and III of ch. 641, F.S., to
25 provider-sponsored organizations; providing
26 exceptions; amending s. 641.227, F.S.;
27 providing for deposits into the Rehabilitation
28 Administrative Expense Fund by a
29 provider-sponsored organization; providing for
30 reimbursements; amending s. 641.316, F.S.,
31 relating to fiscal intermediary services;
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1 providing for an exemption from s. 455.654,
2 F.S., to provider-sponsored organizations,
3 relating to financial arrangements; providing
4 an appropriation; providing an effective date.
5
6 Be It Enacted by the Legislature of the State of Florida:
7
8 Section 1. Subsection (34) is added to section
9 409.912, Florida Statutes, to read:
10 409.912 Cost-effective purchasing of health care.--The
11 agency shall purchase goods and services for Medicaid
12 recipients in the most cost-effective manner consistent with
13 the delivery of quality medical care. The agency shall
14 maximize the use of prepaid per capita and prepaid aggregate
15 fixed-sum basis services when appropriate and other
16 alternative service delivery and reimbursement methodologies,
17 including competitive bidding pursuant to s. 287.057, designed
18 to facilitate the cost-effective purchase of a case-managed
19 continuum of care. The agency shall also require providers to
20 minimize the exposure of recipients to the need for acute
21 inpatient, custodial, and other institutional care and the
22 inappropriate or unnecessary use of high-cost services.
23 (34) The Agency for Health Care Administration is
24 directed to issue a request for proposal or intent to
25 negotiate to implement on a demonstration basis an outpatient
26 specialty services pilot project in a rural and urban county
27 in the state. As used in this subsection, the term
28 "outpatient specialty services" means clinical laboratory,
29 diagnostic imaging, and specified home medical services to
30 include durable medical equipment, prosthetics and orthotics,
31 and infusion therapy.
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1 (a) The entity that is awarded the contract to provide
2 Medicaid managed care outpatient specialty services must, at a
3 minimum, meet the following criteria:
4 1. The entity must be licensed by the Department of
5 Insurance under part II of chapter 641.
6 2. The entity must be experienced in providing
7 outpatient specialty services.
8 3. The entity must demonstrate to the satisfaction of
9 the agency that it provides high-quality services to its
10 patients.
11 4. The entity must demonstrate that it has in place a
12 complaints and grievance process to assist Medicaid recipients
13 enrolled in the pilot managed care program to resolve
14 complaints and grievances.
15 (b) The pilot managed care program shall operate for a
16 period of 3 years. The objective of the pilot program shall
17 be to determine the cost-effectiveness and effects on
18 utilization, access, and quality of providing outpatient
19 specialty services to Medicaid recipients on a prepaid,
20 capitated basis.
21 (c) The agency shall conduct a quality-assurance
22 review of the prepaid health clinic each year that the
23 demonstration program is in effect. The prepaid health clinic
24 is responsible for all expenses incurred by the agency in
25 conducting a quality assurance review.
26 (d) The entity that is awarded the contract to provide
27 outpatient specialty services to Medicaid recipients shall
28 report data required by the agency in a format specified by
29 the agency, for the purpose of conducting the evaluation
30 required in paragraph (e).
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1 (e) The agency shall conduct an evaluation of the
2 pilot managed care program and report its findings to the
3 Governor and the Legislature by no later than January 1, 2001.
4 (f) Nothing in this subsection is intended to conflict
5 with the provision of the 1997-1998 General Appropriations Act
6 which authorizes competitive bidding for Medicaid home health,
7 clinical laboratory, or x-ray services.
8 Section 2. Section 624.1291, Florida Statutes, is
9 created to read:
10 624.1291 Certain health care services; exemption from
11 code.--Any person who enters into a contract or agreement with
12 an authorized insurer, or with a health maintenance
13 organization or provider sponsored organization that has
14 obtained a certificate of authority pursuant to chapter 641,
15 to provide health care services to persons insured under a
16 health insurance policy, health maintenance organization
17 contract, or provider-sponsored-organization contract shall
18 not be deemed to be an insurer and shall not be subject to the
19 provisions of this code, regardless of any risk assumed under
20 the contract or agreement, provided that:
21 (1) The authorized insurer, health maintenance
22 organization, or provider-sponsored organization remains
23 contractually liable to the insured to the full extent
24 provided in the policy or contract with the insured;
25 (2) The person does not receive any premium payment or
26 per-capita fee from the insured other than fees for services
27 not covered under the insured's policy or contract, such as
28 deductible amounts, co-payments, or charges in excess of
29 policy or contract limits which are otherwise allowed to be
30 collected; and
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1 (3) Any person who is an administrator as defined in
2 s. 626.88 must meet the requirements of part VII of chapter
3 626, and any person who is performing fiscal intermediary
4 services as defined in s. 641.316 must meet the requirements
5 of that section.
6 Section 3. Part IV of chapter 641, Florida Statutes,
7 consisting of sections 641.801, 641.802, 641.803, 641.804,
8 641.805, and 641.806, Florida Statutes, is created to read:
9 641.801 Short title.--This part may be cited as the
10 "Provider-Sponsored-Organization Act."
11 641.802 Declaration of legislative findings and
12 purposes.--
13 (1) The Legislature finds that a major restructuring
14 of health care has taken place which has changed the way in
15 which health care services are paid for and delivered and that
16 today the emphasis is on providing cost-conscious health care
17 services through managed care. The Legislature recognizes that
18 alternative methods for the delivery of health care are needed
19 to promote competition and increase patients' choices.
20 (2) The Legislature finds that the United States
21 Congress has enacted legislation that allows
22 provider-sponsored organizations to provide coordinated-care
23 plans to Medicare enrollees through the Medicare Choice
24 program. The federal legislation requires any organization
25 that offers a Medicare Choice plan to be organized and
26 licensed under state law as a risk-bearing entity eligible to
27 offer health-benefit coverage in the state in which it offers
28 a Medicare Choice plan.
29 (3) The Legislature finds that these plans, when
30 properly operated, emphasize cost and quality controls while
31 ensuring that the provider has control over medical decisions.
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1 (4) The Legislature declares that it is the policy of
2 this state:
3 (a) To eliminate legal barriers to the organization,
4 promotion, and expansion of provider-sponsored organizations
5 that offer Medicare Choice plans in order to encourage the
6 development of valuable options for the Medicare beneficiaries
7 of this state.
8 (b) To recognize that comprehensive provider-sponsored
9 organizations are exempt from the insurance laws of this state
10 except in the manner and to the extent set forth in this part.
11 641.803 Definitions.--As used in this part, the term:
12 (1) "Affiliation" means a relationship between
13 providers in which, through contract, ownership, or otherwise:
14 (a) One provider directly or indirectly controls, is
15 controlled by, or is under common control with the other;
16 (b) Both providers are part of a controlled group of
17 corporations under s. 1563 of the Internal Revenue Code of
18 1986;
19 (c) Each provider is a participant in a lawful
20 combination under which each provider shares substantial
21 financial risk in connection with the organization's
22 operations; or
23 (d) Both providers are part of an affiliated service
24 group under s. 414 of the Internal Revenue Code of 1986.
25 (2) "Comprehensive health care services" means
26 services, medical equipment, and supplies required under the
27 Medicare Choice program.
28 (3) "Copayment" means a specific dollar amount that
29 the subscriber must pay upon receipt of covered health care
30 services as required or authorized under the Medicare Choice
31 program.
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1 (4) "Medicare Choice" means the Medicare+Choice plan
2 established under the federal Balanced Budget Act of 1997, and
3 as provided for under part IV of chapter 641, the Provider
4 Sponsored Organization Act.
5 (5) "Provider-sponsored contract" means any contract
6 entered into by a provider-sponsored organization that serves
7 Medicare Choice beneficiaries.
8 (6) "Provider-sponsored organization" means any
9 organization authorized under this part which:
10 (a) Is established, organized, and operated by a
11 health care provider or group of affiliated health care
12 providers;
13 (b) Provides a substantial proportion of the health
14 care items and services specified in the Medicare Choice
15 contract, as defined by the Secretary of the United States
16 Department of Health and Human Services, directly through the
17 provider or affiliated group of providers; and
18 (c) Shares, with respect to its affiliated providers,
19 directly or indirectly, substantial financial risk in the
20 provision of such items and services and has at least a
21 majority financial interest in the entity.
22
23 As used in this subsection, the term "substantial proportion"
24 has the meaning ascribed by the Secretary of the United States
25 Department of Health and Human Services after having taken
26 into account the need for such an organization to assume
27 responsibility for providing significantly more than the
28 majority of the items and services under the Medicare Choice
29 contract through its own affiliated providers and the
30 remainder of the items and services under such contract
31 through providers with which the organization has an agreement
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1 to provide such items and services. Consideration will also be
2 given to the need for the organization to provide a limited
3 proportion of the items and services under the contract
4 through entities that are neither affiliated with nor have an
5 agreement with the organization.
6 (7) "Subscriber" means a Medicare Choice enrollee who
7 is eligible for coverage as a Medicare beneficiary.
8 (8) "Surplus" means total assets in excess of total
9 liabilities as determined by the federal rules on solvency
10 standards established by the Secretary of the United States
11 Department of Health and Human Services pursuant to s. 1856(a)
12 of the Balanced Budget of 1997, for provider-sponsored
13 organizations that offer the Medicare Choice plan.
14 641.804 Applicability of other laws.--Except as
15 provided in this part, provider-sponsored organizations shall
16 be governed by this part and are exempt from all other
17 provisions of the Florida Insurance Code.
18 641.805 Insurance business not authorized.--Neither
19 the Florida Insurance Code nor this part authorize any
20 provider-sponsored organization to transact any insurance
21 business other than to offer Medicare Choice plans pursuant to
22 s. 1855 of the Balanced Budget Act of 1997.
23 641.806 Applicability of parts I and III;
24 exceptions.--The provisions of parts I and III of this chapter
25 apply to provider-sponsored organizations to the same extent
26 that such sections apply to health maintenance organizations,
27 except that:
28 (1) The definitions used in this part control to the
29 extent of any conflict with the definitions used in s. 641.19.
30 (2) The certificate of authority, application for
31 certificate, and all other forms issued or prescribed by the
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1 department pursuant to this part shall refer to a
2 "provider-sponsored organization" rather than a "health
3 maintenance organization."
4 (3) Such provisions do not apply to the extent of any
5 conflict with ss. 1855 and 1856 of the Balanced Budget Act of
6 1997 and rules and regulations adopted by the Secretary of the
7 United States Department of Health and Human Services
8 including, but not limited to, requirements related to
9 surplus, net worth, assets, liabilities, investments,
10 provider-sponsored-organization contracts, payment of
11 benefits, and procedures for grievances and appeals.
12 (4) Such provisions do not apply to the extent of any
13 waiver granted by the Secretary of the United States
14 Department of Health and Human Services under s. 1856(a)(2) of
15 the Balanced Budget Act of 1997.
16 (5) Such provisions do not apply to the extent that
17 they are unrelated to, or inconsistent with, the limited
18 authority of provider-sponsored organizations to offer only
19 Medicare Choice plans.
20 (6) Section 641.228, related to the Florida Health
21 Maintenance Organization Consumer Assistance Plan, does not
22 apply.
23 (7) Such provisions do not preclude a
24 provider-sponsored organization from contracting with one or
25 more companies to provide all necessary administrative and
26 management services.
27 Section 4. Section 641.227, Florida Statutes, is
28 amended to read:
29 641.227 Rehabilitation Administrative Expense Fund.--
30 (1) The department may shall not issue or permit to
31 exist a certificate of authority to operate a health
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1 maintenance organization or provider-sponsored organization in
2 this state unless the organization has deposited with the
3 department $10,000 in cash for use in the Rehabilitation
4 Administrative Expense Fund as established in subsection (2).
5 (2) The department shall maintain all deposits
6 received under this section and all income from such deposits
7 in trust in an account titled "Rehabilitation Administrative
8 Expense Fund." The fund shall be administered by the
9 department and shall be used for the purpose of payment of the
10 administrative expenses of the department during any
11 rehabilitation of a health maintenance organization or
12 provider-sponsored organization, when rehabilitation is
13 ordered by a court of competent jurisdiction.
14 (3) Upon successful rehabilitation of a health
15 maintenance organization or provider-sponsored organization,
16 the organization shall reimburse the fund for the amount of
17 expenses incurred by the department during the court-ordered
18 rehabilitation period.
19 (4) If a court of competent jurisdiction orders
20 liquidation of a health maintenance organization or
21 provider-sponsored organization, the fund shall be reimbursed
22 for expenses incurred by the department as provided for in
23 chapter 631.
24 (5) Each deposit made under this section shall be
25 allowed as an asset for purposes of determination of the
26 financial condition of the health maintenance organization or
27 provider-sponsored organization. The deposit shall be
28 refunded to the organization only when the organization both
29 ceases operation as a health maintenance organization or
30 provider-sponsored organization and no longer holds a
31 subsisting certificate of authority.
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1 Section 5. Paragraph (b) of subsection (2) and
2 subsection (5) of section 641.316, Florida Statutes, are
3 amended to read:
4 641.316 Fiscal intermediary services.--
5 (1) It is the intent of the Legislature, through the
6 adoption of this section, to ensure the financial soundness of
7 fiscal intermediary services organizations established to
8 develop, manage, and administer the business affairs of health
9 care professional providers such as medical doctors, doctors
10 of osteopathy, doctors of chiropractic, doctors of podiatric
11 medicine, doctors of dentistry, or other health professionals
12 regulated by the Department of Health.
13 (2)(a) The term "fiduciary" or "fiscal intermediary
14 services" means reimbursements received or collected on behalf
15 of health care professionals for services rendered, patient
16 and provider accounting, financial reporting and auditing,
17 receipts and collections management, compensation and
18 reimbursement disbursement services, or other related
19 fiduciary services pursuant to health care professional
20 contracts with health maintenance organizations.
21 (b) The term "fiscal intermediary services
22 organization" means a person or entity that which performs
23 fiduciary or fiscal intermediary services to health care
24 professionals who contract with health maintenance
25 organizations or provider-sponsored organizations other than a
26 fiscal intermediary services organization owned, operated, or
27 controlled by a hospital licensed under chapter 395, an
28 insurer licensed under chapter 624, a third-party
29 administrator licensed under chapter 626, a prepaid limited
30 health organization licensed under chapter 636, a health
31 maintenance organization licensed under this chapter, a
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1 provider-sponsored organization licensed under this chapter,
2 or physician group practices as defined in s. 455.236(3)(f).
3 (3) A fiscal intermediary services organization which
4 is operated for the purpose of acquiring and administering
5 provider contracts with managed care plans for professional
6 health care services, including, but not limited to, medical,
7 surgical, chiropractic, dental, and podiatric care, and which
8 performs fiduciary or fiscal intermediary services shall be
9 required to secure and maintain a fidelity bond in the minimum
10 amount of $10 million. This requirement shall apply to all
11 persons or entities engaged in the business of providing
12 fiduciary or fiscal intermediary services to any contracted
13 provider or provider panel. The fidelity bond shall provide
14 coverage against misappropriation of funds by the fiscal
15 intermediary or its officers, agents, or employees; must be
16 posted with the department for the benefit of managed care
17 plans, subscribers, and providers; and must be on a form
18 approved by the department. The fidelity bond must be
19 maintained and remain unimpaired as long as the fiscal
20 intermediary services organization continues in business in
21 this state and until the termination of its registration.
22 (4) A fiscal intermediary services organization may
23 not collect from the subscriber any payment other than the
24 copayment or deductible specified in the subscriber agreement.
25 (5) Any fiscal intermediary services organization,
26 other than a fiscal intermediary services organization owned,
27 operated, or controlled by a hospital licensed under chapter
28 395, an insurer licensed under chapter 624, a third-party
29 administrator licensed under chapter 626, a prepaid limited
30 health organization licensed under chapter 636, a health
31 maintenance organization licensed under this chapter, a
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1 provider-sponsored organization licensed under this chapter,
2 or physician group practices as defined in s. 455.236(3)(f),
3 must register with the department and meet the requirements of
4 this section. In order to register as a fiscal intermediary
5 services organization, the organization must comply with ss.
6 641.21(1)(c) and (d) and 641.22(6). Should the department
7 determine that the fiscal intermediary services organization
8 does not meet the requirements of this section, the
9 registration shall be denied. In the event that the registrant
10 fails to maintain compliance with the provisions of this
11 section, the department may revoke or suspend the
12 registration. In lieu of revocation or suspension of the
13 registration, the department may levy an administrative
14 penalty in accordance with s. 641.25.
15 (6) The department shall promulgate rules necessary to
16 implement the provisions of this section.
17 Section 6. A provider-sponsored organization is exempt
18 from section 455.654, Florida Statutes, for the provision of
19 health care services to enrollees of a Medicare Choice plan.
20 Section 7. There is hereby appropriated the sum of
21 $188,659 from the Health Care Trust Fund to fund four
22 positions in the Agency for Health Care Administration to
23 implement the provisions of this act.
24 Section 8. This act shall take effect October 1, 1998.
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26 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
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29 Appropriation of $188,659 from the Health Care Trust Fund and
4 positions are provided to the Agency for Health Care
30 Administration to implement the provisions of this bill.
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