Senate Bill 2472e1
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1 A bill to be entitled
2 An act relating to governmental agencies;
3 amending s. 20.41, F.S.; providing that area
4 agencies on aging are subject to ch. 119 and
5 ss. 286.011-286.012, F.S., as specified;
6 amending s. 408.05, F.S., relating to the State
7 Center for Health Statistics; requiring the
8 Agency for Health Care Administration to
9 publish health maintenance organization report
10 cards; amending s. 408.7056, F.S.; excluding
11 certain additional grievances from
12 consideration by a statewide provider and
13 subscriber assistance panel; revising the
14 membership of the panel; amending s. 627.6471,
15 F.S.; requiring preferred provider organization
16 policies which do not provide direct patient
17 access for dermatological services to conform
18 to certain requirements imposed on exclusive
19 provider organization contracts; amending s.
20 627.6645, F.S.; revising the notice
21 requirements for cancellation or nonrenewal of
22 a group health insurance policy; specifying
23 conditions under which the insurer may
24 retroactively cancel coverage due to nonpayment
25 of premium; amending s. 627.6675, F.S.;
26 revising the time limits for an employee or
27 group member to apply for an individual
28 converted policy when termination of group
29 coverage is due to failure of the employer to
30 pay the premium; revising the requirements for
31 the premium for the converted policy; allowing
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1 a group insurer to contract with another
2 insurer to issue an individual converted policy
3 under certain conditions; amending s. 641.3108,
4 F.S.; revising the notice requirements for
5 cancellation or nonrenewal of a health
6 maintenance organization contract; specifying
7 conditions under which the organization may
8 retroactively cancel coverage due to nonpayment
9 of premium; amending s. 641.3922, F.S.;
10 revising the time limits for an employee or
11 group member to apply for a converted contract
12 from a health maintenance organization when
13 termination of group coverage is due to failure
14 of the employer to pay the premium; revising
15 the requirements for the premium for the
16 converted contract; amending s. 641.31, F.S.,
17 relating to health maintenance contracts;
18 providing for a point-of-service benefit rider
19 on a health maintenance contract; providing
20 requirements; providing restrictions;
21 authorizing reasonable copayment and annual
22 deductible; providing exceptions relating to
23 subscriber liability for services received;
24 amending s. 641.3155, F.S., relating to health
25 maintenance organization provider contracts and
26 payment of claims; requiring health maintenance
27 organizations to reconcile retroactive
28 reductions of payment to specific claims;
29 requiring providers to reconcile retroactive
30 demands for underpayment or nonpayment to
31 specific claims; providing an exception;
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1 providing for the contract to specify the
2 look-back period; providing for an advisory
3 group established in the Agency for Health Care
4 Administration; requiring a report; amending s.
5 641.51, F.S.; requiring that health maintenance
6 organizations provide additional information to
7 the Agency for Health Care Administration
8 indicating quality of care; removing a
9 requirement that organizations conduct customer
10 satisfaction surveys; revising requirements for
11 preventive pediatric health care provided by
12 health maintenance organizations; amending s.
13 641.58, F.S.; providing for moneys in the
14 Health Care Trust Fund to be used for
15 additional purposes; amending s. 409.910, F.S.;
16 clarifying that the state may recover and
17 retain damages in excess of Medicaid payments
18 made under certain circumstances; providing for
19 retroactive application; providing an
20 appropriation; providing an effective date.
21
22 Be It Enacted by the Legislature of the State of Florida:
23
24 Section 1. Paragraph (a) of subsection (5) of section
25 408.05, Florida Statutes, 1998 Supplement, is amended to read:
26 408.05 State Center for Health Statistics.--
27 (5) PUBLICATIONS; REPORTS; SPECIAL STUDIES.--The
28 center shall provide for the widespread dissemination of data
29 which it collects and analyzes. The center shall have the
30 following publication, reporting, and special study functions:
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1 (a) The center shall publish and make available
2 periodically to agencies and individuals health statistics
3 publications of general interest, including HMO report cards;
4 publications providing health statistics on topical health
5 policy issues;, publications that which provide health status
6 profiles of the people in this state;, and other topical
7 health statistics publications.
8 Section 2. Subsections (2) and (11) of section
9 408.7056, Florida Statutes, 1998 Supplement, are amended to
10 read:
11 408.7056 Statewide Provider and Subscriber Assistance
12 Program.--
13 (2) The agency shall adopt and implement a program to
14 provide assistance to subscribers and providers, including
15 those whose grievances are not resolved by the managed care
16 entity to the satisfaction of the subscriber or provider. The
17 program shall consist of one or more panels that meet as often
18 as necessary to timely review, consider, and hear grievances
19 and recommend to the agency or the department any actions that
20 should be taken concerning individual cases heard by the
21 panel. The panel shall hear every grievance filed by
22 subscribers and providers on behalf of subscribers, unless the
23 grievance:
24 (a) Relates to a managed care entity's refusal to
25 accept a provider into its network of providers;
26 (b) Is part of an internal grievance in a Medicare
27 managed care entity or a reconsideration appeal through the
28 Medicare appeals process which does not involve a quality of
29 care issue;
30 (c) Is related to a health plan not regulated by the
31 state such as an administrative services organization,
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1 third-party administrator, or federal employee health benefit
2 program;
3 (d) Is related to appeals by in-plan suppliers and
4 providers, unless related to quality of care provided by the
5 plan;
6 (e) Is part of a Medicaid fair hearing pursued under
7 42 C.F.R. ss. 431.220 et seq.;
8 (f) Is the basis for an action pending in state or
9 federal court;
10 (g) Is related to an appeal by nonparticipating
11 providers, unless related to the quality of care provided to a
12 subscriber by the managed care entity and the provider is
13 involved in the care provided to the subscriber;
14 (h) Was filed before the subscriber or provider
15 completed the entire internal grievance procedure of the
16 managed care entity, the managed care entity has complied with
17 its timeframes for completing the internal grievance
18 procedure, and the circumstances described in subsection (6)
19 do not apply;
20 (i) Has been resolved to the satisfaction of the
21 subscriber or provider who filed the grievance, unless the
22 managed care entity's initial action is egregious or may be
23 indicative of a pattern of inappropriate behavior;
24 (j) Is limited to seeking damages for pain and
25 suffering, lost wages, or other incidental expenses, including
26 accrued interest on unpaid balances, court costs, and
27 transportation costs associated with a grievance procedure;
28 (k) Is limited to issues involving conduct of a health
29 care provider or facility, staff member, or employee of a
30 managed care entity which constitute grounds for disciplinary
31 action by the appropriate professional licensing board and is
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1 not indicative of a pattern of inappropriate behavior, and the
2 agency or department has reported these grievances to the
3 appropriate professional licensing board or to the health
4 facility regulation section of the agency for possible
5 investigation; or
6 (l) Is withdrawn by the subscriber or provider.
7 Failure of the subscriber or the provider to attend the
8 hearing shall be considered a withdrawal of the grievance.
9 (11) The panel shall consist of members employed by
10 the agency and members employed by the department, chosen by
11 their respective agencies; a consumer appointed by the
12 Governor; a physician appointed by the Governor, as a standing
13 member; and physicians who have expertise relevant to the case
14 to be heard, on a rotating basis. The agency may contract with
15 a medical director and a primary care physician who shall
16 provide additional technical expertise to the panel. The
17 medical director shall be selected from a health maintenance
18 organization with a current certificate of authority to
19 operate in Florida.
20 Section 3. Present subsection (5) of section 627.6471,
21 Florida Statutes, is redesignated as subsection (6) and a new
22 subsection (5) is added to that section to read:
23 627.6471 Contracts for reduced rates of payment;
24 limitations; coinsurance and deductibles.--
25 (5) Any policy issued under this section which does
26 not provide direct patient access to a dermatologist must
27 conform to the requirements of s. 627.6472(16). This
28 subsection shall not be construed to affect the amount the
29 insured or patient must pay as a deductible or coinsurance
30 amount authorized under this section.
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1 Section 4. Subsection (36) is added to section 641.31,
2 Florida Statutes, 1998 Supplement, to read:
3 641.31 Health maintenance contracts.--
4 (36)(a) Notwithstanding any other provision of this
5 part, a health maintenance organization that meets the
6 requirements of paragraph (b) may, through a point-of-service
7 rider to its contract providing comprehensive health care
8 services, include a point-of-service benefit. Under such a
9 rider, a subscriber or other covered person of the health
10 maintenance organization may choose, at the time of covered
11 service, a provider with whom the health maintenance
12 organization does not have a health maintenance organization
13 provider contract. The rider may not require a referral from
14 the health maintenance organization for the point-of-service
15 benefits.
16 (b) A health maintenance organization offering a
17 point-of-service rider under this subsection must have a valid
18 certificate of authority issued under the provisions of the
19 chapter, must have been licensed under this chapter for a
20 minimum of 3 years, and must at all times that it has riders
21 in effect maintain a minimum surplus of $5 million.
22 (c) Premiums paid in for the point-of-service riders
23 may not exceed 15 percent of total premiums for all health
24 plan products sold by the health maintenance organization
25 offering the rider. If the premiums paid for point-of-service
26 riders exceed 15 percent, the health maintenance organization
27 must notify the department and, once this fact is known, must
28 immediately cease offering such a rider until it is in
29 compliance with the rider premium cap.
30 (d) Notwithstanding the limitations of deductibles and
31 copayment provisions in this part, a point-of-service rider
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1 may require the subscriber to pay a reasonable copayment for
2 each visit for services provided by a noncontracted provider
3 chosen at the time of the service. The copayment by the
4 subscriber may either be a specific dollar amount or a
5 percentage of the reimbursable provider charges covered by the
6 contract and must be paid by the subscriber to the
7 noncontracted provider upon receipt of covered services. The
8 point-of-service rider may require that a reasonable annual
9 deductible for the expenses associated with the
10 point-of-service rider be met and may include a lifetime
11 maximum benefit amount. The rider must include the language
12 required by s. 627.6044 and must comply with copayment limits
13 described in s. 627.6471. Section 641.315(2) and (3) does not
14 apply to a point-of-service rider authorized under this
15 subsection.
16 (e) The term "point of service" may not be used by a
17 health maintenance organization except with riders permitted
18 under this section or with forms approved by the department in
19 which a point-of-service product is offered with an indemnity
20 carrier.
21 (f) A point-of-service rider must be filed and
22 approved under ss. 627.410 and 627.411.
23 Section 5. Subsection (4) is added to section
24 641.3155, Florida Statutes, 1998 Supplement, to read:
25 641.3155 Provider contracts; payment of claims.--
26 (4) Any retroactive reductions of payments or demands
27 for refund of previous overpayments which are due to
28 retroactive review-of-coverage decisions or payment levels
29 must be reconciled to specific claims unless the parties agree
30 to other reconciliation methods and terms. Any retroactive
31 demands by providers for payment due to underpayments or
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1 nonpayments for covered services must be reconciled to
2 specific claims unless the parties agree to other
3 reconciliation methods and terms. The look-back period may be
4 specified by the terms of the contract.
5 Section 6. The Director of the Agency for Health Care
6 Administration shall establish an advisory group composed of
7 eight members, with three members from health maintenance
8 organizations licensed in Florida, one representative from a
9 not-for-profit hospital, one representative from a for-profit
10 hospital, one representative who is a licensed physician, one
11 representative from the Office of the Insurance Commissioner,
12 and one representative from the Agency for Health Care
13 Administration. The advisory group shall study and make
14 recommendations concerning:
15 (1) Trends and issues relating to legislative,
16 regulatory, or private-sector solutions for timely and
17 accurate submission and payment of health claims.
18 (2) Development of electronic billing and claims
19 processing for providers and health care facilities that
20 provide for electronic processing of eligibility requests;
21 benefit verification; authorizations; precertifications;
22 business expensing of assets, including software, used for
23 electronic billing and claims processing; and claims status,
24 including use of models such as those compatible with federal
25 billing systems.
26 (3) The form and content of claims.
27 (4) Measures to reduce fraud and abuse relating to the
28 submission and payment of claims.
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30 The advisory group shall be appointed and convened by July 1,
31 1999, and shall meet in Tallahassee. Members of the advisory
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1 group shall not receive per diem or travel reimbursement. The
2 advisory group shall submit its recommendations in a report,
3 by January 1, 2000, to the President of the Senate and the
4 Speaker of the House of Representatives.
5 Section 7. Subsections (8), (9), and (10) of section
6 641.51, Florida Statutes, are amended to read:
7 641.51 Quality assurance program; second medical
8 opinion requirement.--
9 (8) Each organization shall release to the agency data
10 that which are indicators of access and quality of care. The
11 agency shall develop rules specifying data-reporting
12 requirements for these indicators. The indicators shall
13 include the following characteristics:
14 (a) They must relate to access and quality of care
15 measures.
16 (b) They must be consistent with data collected
17 pursuant to accreditation activities and standards.
18 (c) They must be consistent with frequency
19 requirements under the accreditation process.
20 (d) They must include measures of the management of
21 chronic diseases.
22 (e) They must include preventive health care for
23 adults and children.
24 (f) They must include measures of prenatal care.
25 (g) They must include measures of health checkups for
26 children.
27
28 The agency shall develop by rule a uniform format for
29 publication of the data for the public which shall contain
30 explanations of the data collected and the relevance of such
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1 data. The agency shall publish such data no less frequently
2 than every 2 years.
3 (9) Each organization shall conduct a standardized
4 customer satisfaction survey, as developed by the agency by
5 rule, of its membership at intervals specified by the agency.
6 The survey shall be consistent with surveys required by
7 accrediting organizations and may contain up to 10 additional
8 questions based on concerns specific to Florida. Survey data
9 shall be submitted to the agency, which shall make comparative
10 findings available to the public.
11 (9)(10) Each organization shall adopt recommendations
12 for preventive pediatric health care which are consistent with
13 the early periodic screening, diagnosis, and treatment
14 requirements for health checkups for children developed for
15 the Medicaid program. Each organization shall establish goals
16 to achieve 80-percent compliance by July 1, 1998, and
17 90-percent compliance by July 1, 1999, for their enrolled
18 pediatric population.
19 Section 8. Subsection (4) of section 641.58, Florida
20 Statutes, is amended to read:
21 641.58 Regulatory assessment; levy and amount; use of
22 funds; tax returns; penalty for failure to pay.--
23 (4) The moneys so received and deposited into the
24 Health Care Trust Fund shall be used to defray the expenses of
25 the agency in the discharge of its administrative and
26 regulatory powers and duties under this part, including
27 conducting an annual survey of the satisfaction of members of
28 health maintenance organizations; contracting with physician
29 consultants for the Statewide Provider and Subscriber
30 Assistance Panel; the maintaining of offices and necessary
31 supplies, essential equipment, and other materials, salaries
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1 and expenses of required personnel;, and discharging all other
2 legitimate expenses relating to the discharge of the
3 administrative and regulatory powers and duties imposed under
4 this such part.
5 Section 9. Subsections (4) and (7) of section 409.910,
6 Florida Statutes, 1998 Supplement, are amended to read:
7 409.910 Responsibility for payments on behalf of
8 Medicaid-eligible persons when other parties are liable.--
9 (4) After the department has provided medical
10 assistance under the Medicaid program, it shall seek recovery
11 of reimbursement from third-party benefits to the limit of
12 legal liability and for the full amount of third-party
13 benefits, but not in excess of the amount of medical
14 assistance paid by Medicaid, as to:
15 (a) Claims for which the department has a waiver
16 pursuant to federal law; or
17 (b) Situations in which the department learns of the
18 existence of a liable third party or in which third-party
19 benefits are discovered or become available after medical
20 assistance has been provided by Medicaid. Nothing in this
21 subsection shall limit the authority of the state or any
22 agency thereof to bring or maintain actions seeking recoveries
23 in excess of the amount paid as Medicaid benefits under
24 alternative theories of liability in conjunction with an
25 action filed pursuant to this section.
26 (7) The department shall recover the full amount of
27 all medical assistance provided by Medicaid on behalf of the
28 recipient to the full extent of third-party benefits.
29 (a) Recovery of such benefits shall be collected
30 directly from:
31 1. Any third party;
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1 2. The recipient or legal representative, if he or she
2 has received third-party benefits;
3 3. The provider of a recipient's medical services if
4 third-party benefits have been recovered by the provider;
5 notwithstanding any provision of this section, to the
6 contrary, however, no provider shall be required to refund or
7 pay to the department any amount in excess of the actual
8 third-party benefits received by the provider from a
9 third-party payor for medical services provided to the
10 recipient; or
11 4. Any person who has received the third-party
12 benefits.
13 (b) Upon receipt of any recovery or other collection
14 pursuant to this section, the department shall distribute the
15 amount collected as follows:
16 1. To itself, an amount equal to the state Medicaid
17 expenditures for the recipient plus any incentive payment made
18 in accordance with paragraph (14)(a).
19 2. To the Federal Government, the federal share of the
20 state Medicaid expenditures minus any incentive payment made
21 in accordance with paragraph (14)(a) and federal law, and
22 minus any other amount permitted by federal law to be
23 deducted.
24 3. To the recipient, after deducting any known amounts
25 owed to the department for any related medical assistance or
26 to health care providers, any remaining amount. This amount
27 shall be treated as income or resources in determining
28 eligibility for Medicaid.
29
30 The provisions of this subsection do not apply to any proceeds
31 received by the state, or any agency thereof, pursuant to a
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1 final order, judgment, or settlement agreement, in any matter
2 in which the state asserts claims brought on its own behalf,
3 and not as a subrogee of a recipient, or under other theories
4 of liability. The provisions of this subsection do not apply
5 to any proceeds received by the state, or an agency thereof,
6 pursuant to a final order, judgment, or settlement agreement,
7 in any matter in which the state asserted both claims as a
8 subrogee and additional claims, except as to those sums
9 specifically identified in the final order, judgment, or
10 settlement agreement as reimbursements to the recipient as
11 expenditures for the named recipient on the subrogation claim.
12 Section 10. The amendments to section 409.910, Florida
13 Statutes, 1998 Supplement, made by this act are intended to
14 clarify existing law and are remedial in nature. As such,
15 they are specifically made retroactive to October 1, 1990, and
16 shall apply to all causes of action arising on or after
17 October 1, 1990.
18 Section 11. Subsection (1) of section 627.6645,
19 Florida Statutes, is amended and subsection (5) is added to
20 that section to read:
21 627.6645 Notification of cancellation, expiration,
22 nonrenewal, or change in rates.--
23 (1) Every insurer delivering or issuing for delivery a
24 group health insurance policy under the provisions of this
25 part shall give the policyholder at least 45 days' advance
26 notice of cancellation, expiration, nonrenewal, or a change in
27 rates. Such notice shall be mailed to the policyholder's last
28 address as shown by the records of the insurer. However, if
29 cancellation is for nonpayment of premium, only the
30 requirements of subsection (5) this section shall not apply.
31 Upon receipt of such notice, the policyholder shall forward,
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1 as soon as practicable, the notice of expiration,
2 cancellation, or nonrenewal to each certificateholder covered
3 under the policy.
4 (5) If cancellation is due to nonpayment of premium,
5 the insurer may not retroactively cancel the policy to a date
6 prior to the date that notice of cancellation was provided to
7 the policyholder unless the insurer mails notice of
8 cancellation to the policyholder prior to 45 days after the
9 date the premium was due. Such notice must be mailed to the
10 policyholder's last address as shown by the records of the
11 insurer and may provide for a retroactive date of cancellation
12 no earlier than midnight of the date that the premium was due.
13 Section 12. Section 627.6675, Florida Statutes, 1998
14 Supplement, is amended to read:
15 627.6675 Conversion on termination of
16 eligibility.--Subject to all of the provisions of this
17 section, a group policy delivered or issued for delivery in
18 this state by an insurer or nonprofit health care services
19 plan that provides, on an expense-incurred basis, hospital,
20 surgical, or major medical expense insurance, or any
21 combination of these coverages, shall provide that an employee
22 or member whose insurance under the group policy has been
23 terminated for any reason, including discontinuance of the
24 group policy in its entirety or with respect to an insured
25 class, and who has been continuously insured under the group
26 policy, and under any group policy providing similar benefits
27 that the terminated group policy replaced, for at least 3
28 months immediately prior to termination, shall be entitled to
29 have issued to him or her by the insurer a policy or
30 certificate of health insurance, referred to in this section
31 as a "converted policy." A group insurer may meet the
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1 requirements of this section by contracting with another
2 insurer, authorized in this state, to issue an individual
3 converted policy, which policy has been approved by the
4 department under s. 627.410. An employee or member shall not
5 be entitled to a converted policy if termination of his or her
6 insurance under the group policy occurred because he or she
7 failed to pay any required contribution, or because any
8 discontinued group coverage was replaced by similar group
9 coverage within 31 days after discontinuance.
10 (1) TIME LIMIT.--Written application for the converted
11 policy shall be made and the first premium must be paid to the
12 insurer, not later than 63 days after termination of the group
13 policy. However, if termination was the result of failure to
14 pay any required premium or contribution and such nonpayment
15 of premium was due to acts of an employer or policyholder
16 other than the employee or certificateholder, written
17 application for the converted policy must be made and the
18 first premium must be paid to the insurer not later than 63
19 days after notice of termination is mailed by the insurer or
20 the employer, whichever is earlier, to the employee's or
21 certificateholder's last address as shown by the record of the
22 insurer or the employer, whichever is applicable. In such case
23 of termination due to nonpayment of premium by the employer or
24 policyholder, the premium for the converted policy may not
25 exceed the rate for the prior group coverage for the period of
26 coverage under the converted policy prior to the date notice
27 of termination is mailed to the employee or certificateholder.
28 For the period of coverage after such date, the premium for
29 the converted policy is subject to the requirements of
30 subsection (3).
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1 (2) EVIDENCE OF INSURABILITY.--The converted policy
2 shall be issued without evidence of insurability.
3 (3) CONVERSION PREMIUM; EFFECT ON PREMIUM RATES FOR
4 GROUP COVERAGE.--
5 (a) The premium for the converted policy shall be
6 determined in accordance with premium rates applicable to the
7 age and class of risk of each person to be covered under the
8 converted policy and to the type and amount of insurance
9 provided. However, the premium for the converted policy may
10 not exceed 200 percent of the standard risk rate as
11 established by the department, pursuant to this subsection.
12 (b) Actual or expected experience under converted
13 policies may be combined with such experience under group
14 policies for the purposes of determining premium and loss
15 experience and establishing premium rate levels for group
16 coverage.
17 (c) The department shall annually determine standard
18 risk rates, using reasonable actuarial techniques and
19 standards adopted by the department by rule. The standard risk
20 rates must be determined as follows:
21 1. Standard risk rates for individual coverage must be
22 determined separately for indemnity policies, preferred
23 provider/exclusive provider policies, and health maintenance
24 organization contracts.
25 2. The department shall survey insurers and health
26 maintenance organizations representing at least an 80 percent
27 market share, based on premiums earned in the state for the
28 most recent calendar year, for each of the categories
29 specified in subparagraph 1.
30 3. Standard risk rate schedules must be determined,
31 computed as the average rates charged by the carriers
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1 surveyed, giving appropriate weight to each carrier's
2 statewide market share of earned premiums.
3 4. The rate schedule shall be determined from analysis
4 of the one county with the largest market share in the state
5 of all such carriers.
6 5. The rate for other counties must be determined by
7 using the weighted average of each carrier's county factor
8 relationship to the county determined in subparagraph 4.
9 6. The rate schedule must be determined for different
10 age brackets and family size brackets.
11 (4) EFFECTIVE DATE OF COVERAGE.--The effective date of
12 the converted policy shall be the day following the
13 termination of insurance under the group policy.
14 (5) SCOPE OF COVERAGE.--The converted policy shall
15 cover the employee or member and his or her dependents who
16 were covered by the group policy on the date of termination of
17 insurance. At the option of the insurer, a separate converted
18 policy may be issued to cover any dependent.
19 (6) OPTIONAL COVERAGE.--The insurer shall not be
20 required to issue a converted policy covering any person who
21 is or could be covered by Medicare. The insurer shall not be
22 required to issue a converted policy covering a person if
23 paragraphs (a) and (b) apply to the person:
24 (a) If any of the following apply to the person:
25 1. The person is covered for similar benefits by
26 another hospital, surgical, medical, or major medical expense
27 insurance policy or hospital or medical service subscriber
28 contract or medical practice or other prepayment plan, or by
29 any other plan or program.
30 2. The person is eligible for similar benefits,
31 whether or not actually provided coverage, under any
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1 arrangement of coverage for individuals in a group, whether on
2 an insured or uninsured basis.
3 3. Similar benefits are provided for or are available
4 to the person under any state or federal law.
5 (b) If the benefits provided under the sources
6 referred to in subparagraph (a)1. or the benefits provided or
7 available under the sources referred to in subparagraphs (a)2.
8 and 3., together with the benefits provided by the converted
9 policy, would result in overinsurance according to the
10 insurer's standards. The insurer's standards must bear some
11 reasonable relationship to actual health care costs in the
12 area in which the insured lives at the time of conversion and
13 must be filed with the department prior to their use in
14 denying coverage.
15 (7) INFORMATION REQUESTED BY INSURER.--
16 (a) A converted policy may include a provision under
17 which the insurer may request information, in advance of any
18 premium due date, of any person covered thereunder as to
19 whether:
20 1. The person is covered for similar benefits by
21 another hospital, surgical, medical, or major medical expense
22 insurance policy or hospital or medical service subscriber
23 contract or medical practice or other prepayment plan or by
24 any other plan or program.
25 2. The person is covered for similar benefits under
26 any arrangement of coverage for individuals in a group,
27 whether on an insured or uninsured basis.
28 3. Similar benefits are provided for or are available
29 to the person under any state or federal law.
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1 (b) The converted policy may provide that the insurer
2 may refuse to renew the policy or the coverage of any person
3 only for one or more of the following reasons:
4 1. Either the benefits provided under the sources
5 referred to in subparagraphs (a)1. and 2. for the person or
6 the benefits provided or available under the sources referred
7 to in subparagraph (a)3. for the person, together with the
8 benefits provided by the converted policy, would result in
9 overinsurance according to the insurer's standards on file
10 with the department.
11 2. The converted policyholder fails to provide the
12 information requested pursuant to paragraph (a).
13 3. Fraud or intentional misrepresentation in applying
14 for any benefits under the converted policy.
15 4. Other reasons approved by the department.
16 (8) BENEFITS OFFERED.--
17 (a) An insurer shall not be required to issue a
18 converted policy that provides benefits in excess of those
19 provided under the group policy from which conversion is made.
20 (b) An insurer shall offer the benefits specified in
21 s. 627.668 and the benefits specified in s. 627.669 if those
22 benefits were provided in the group plan.
23 (c) An insurer shall offer maternity benefits and
24 dental benefits if those benefits were provided in the group
25 plan.
26 (9) PREEXISTING CONDITION PROVISION.--The converted
27 policy shall not exclude a preexisting condition not excluded
28 by the group policy. However, the converted policy may provide
29 that any hospital, surgical, or medical benefits payable under
30 the converted policy may be reduced by the amount of any such
31 benefits payable under the group policy after the termination
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1 of covered under the group policy. The converted policy may
2 also provide that during the first policy year the benefits
3 payable under the converted policy, together with the benefits
4 payable under the group policy, shall not exceed those that
5 would have been payable had the individual's insurance under
6 the group policy remained in force.
7 (10) REQUIRED OPTION FOR MAJOR MEDICAL
8 COVERAGE.--Subject to the provisions and conditions of this
9 part, the employee or member shall be entitled to obtain a
10 converted policy providing major medical coverage under a plan
11 meeting the following requirements:
12 (a) A maximum benefit equal to the lesser of the
13 policy limit of the group policy from which the individual
14 converted or $500,000 per covered person for all covered
15 medical expenses incurred during the covered person's
16 lifetime.
17 (b) Payment of benefits at the rate of 80 percent of
18 covered medical expenses which are in excess of the
19 deductible, until 20 percent of such expenses in a benefit
20 period reaches $2,000, after which benefits will be paid at
21 the rate of 90 percent during the remainder of the contract
22 year unless the insured is in the insurer's case management
23 program, in which case benefits shall be paid at the rate of
24 100 percent during the remainder of the contract year. For
25 the purposes of this paragraph, "case management program"
26 means the specific supervision and management of the medical
27 care provided or prescribed for a specific individual, which
28 may include the use of health care providers designated by the
29 insurer. Payment of benefits for outpatient treatment of
30 mental illness, if provided in the converted policy, may be at
31 a lesser rate but not less than 50 percent.
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1 (c) A deductible for each calendar year that must be
2 $500, $1,000, or $2,000, at the option of the policyholder.
3 (d) The term "covered medical expenses," as used in
4 this subsection, shall be consistent with those customarily
5 offered by the insurer under group or individual health
6 insurance policies but is not required to be identical to the
7 covered medical expenses provided in the group policy from
8 which the individual converted.
9 (11) ALTERNATIVE PLANS.--The insurer shall, in
10 addition to the option required by subsection (10), offer the
11 standard health benefit plan, as established pursuant to s.
12 627.6699(12). The insurer may, at its option, also offer
13 alternative plans for group health conversion in addition to
14 the plans required by this section.
15 (12) RETIREMENT COVERAGE.--If coverage would be
16 continued under the group policy on an employee following the
17 employee's retirement prior to the time he or she is or could
18 be covered by Medicare, the employee may elect, instead of
19 such continuation of group insurance, to have the same
20 conversion rights as would apply had his or her insurance
21 terminated at retirement by reason or termination of
22 employment or membership.
23 (13) REDUCTION OF COVERAGE DUE TO MEDICARE.--The
24 converted policy may provide for reduction of coverage on any
25 person upon his or her eligibility for coverage under Medicare
26 or under any other state or federal law providing for benefits
27 similar to those provided by the converted policy.
28 (14) CONVERSION PRIVILEGE ALLOWED.--The conversion
29 privilege shall also be available to any of the following:
30 (a) The surviving spouse, if any, at the death of the
31 employee or member, with respect to the spouse and the
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1 children whose coverages under the group policy terminate by
2 reason of the death, otherwise to each surviving child whose
3 coverage under the group policy terminates by reason of such
4 death, or, if the group policy provides for continuation of
5 dependents' coverages following the employee's or member's
6 death, at the end of such continuation.
7 (b) The former spouse whose coverage would otherwise
8 terminate because of annulment or dissolution of marriage, if
9 the former spouse is dependent for financial support.
10 (c) The spouse of the employee or member upon
11 termination of coverage of the spouse, while the employee or
12 member remains insured under the group policy, by reason of
13 ceasing to be a qualified family member under the group
14 policy, with respect to the spouse and the children whose
15 coverages under the group policy terminate at the same time.
16 (d) A child solely with respect to himself or herself
17 upon termination of his or her coverage by reason of ceasing
18 to be a qualified family member under the group policy, if a
19 conversion privilege is not otherwise provided in this
20 subsection with respect to such termination.
21 (15) BENEFIT LEVELS.--If the benefit levels required
22 in subsection (10) exceed the benefit levels provided under
23 the group policy, the conversion policy may offer benefits
24 which are substantially similar to those provided under the
25 group policy in lieu of those required in subsection (10).
26 (16) GROUP COVERAGE INSTEAD OF INDIVIDUAL
27 COVERAGE.--The insurer may elect to provide group insurance
28 coverage instead of issuing a converted individual policy.
29 (17) NOTIFICATION.--A notification of the conversion
30 privilege shall be included in each certificate of coverage.
31 The insurer shall mail an election and premium notice form,
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1 including an outline of coverage, on a form approved by the
2 department, within 14 days after an individual who is eligible
3 for a converted policy gives notice to the insurer that the
4 individual is considering applying for the converted policy or
5 otherwise requests such information. The outline of coverage
6 must contain a description of the principal benefits and
7 coverage provided by the policy and its principal exclusions
8 and limitations, including, but not limited to, deductibles
9 and coinsurance.
10 (18) OUTSIDE CONVERSIONS.--A converted policy that is
11 delivered outside of this state must be on a form that could
12 be delivered in the other jurisdiction as a converted policy
13 had the group policy been issued in that jurisdiction.
14 (19) APPLICABILITY.--This section does not require
15 conversion on termination of eligibility for a policy or
16 contract that provides benefits for specified diseases, or for
17 accidental injuries only, disability income, Medicare
18 supplement, hospital indemnity, limited benefit,
19 nonconventional, or excess policies.
20 (20) Nothing in this section or in the incorporation
21 of it into insurance policies shall be construed to require
22 insurers to provide benefits equal to those provided in the
23 group policy from which the individual converted, provided,
24 however, that comprehensive benefits are offered which shall
25 be subject to approval by the Insurance Commissioner.
26 Section 13. Section 641.3108, Florida Statutes, is
27 amended to read:
28 641.3108 Notice of cancellation of contract.--
29 (1) Except for nonpayment of premium or termination of
30 eligibility, no health maintenance organization may cancel or
31 otherwise terminate or fail to renew a health maintenance
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1 contract without giving the subscriber at least 45 days'
2 notice in writing of the cancellation, termination, or
3 nonrenewal of the contract. The written notice shall state the
4 reason or reasons for the cancellation, termination, or
5 nonrenewal. All health maintenance contracts shall contain a
6 clause which requires that this notice be given.
7 (2) If cancellation is due to nonpayment of premium,
8 the health maintenance organization may not retroactively
9 cancel the contract to a date prior to the date that notice of
10 cancellation was provided to the subscriber unless the
11 organization mails notice of cancellation to the subscriber
12 prior to 45 days after the date the premium was due. Such
13 notice must be mailed to the subscriber's last address as
14 shown by the records of the organization and may provide for a
15 retroactive date of cancellation no earlier than midnight of
16 the date that the premium was due.
17 (3) In the case of a health maintenance contract
18 issued to an employer or person holding the contract on behalf
19 of the subscriber group, the health maintenance organization
20 may make the notification through the employer or group
21 contract holder, and, if the health maintenance organization
22 elects to take this action through the employer or group
23 contract holder, the organization shall be deemed to have
24 complied with the provisions of this section upon notifying
25 the employer or group contract holder of the requirements of
26 this section and requesting the employer or group contract
27 holder to forward to all subscribers the notice required
28 herein.
29 Section 14. Subsection (1) of section 641.3922,
30 Florida Statutes, 1998 Supplement, is amended to read:
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1 641.3922 Conversion contracts; conditions.--Issuance
2 of a converted contract shall be subject to the following
3 conditions:
4 (1) TIME LIMIT.--Written application for the converted
5 contract shall be made and the first premium paid to the
6 health maintenance organization not later than 63 days after
7 such termination. However, if termination was the result of
8 failure to pay any required premium or contribution and such
9 nonpayment of premium was due to acts of an employer or group
10 contract holder other than the employee or individual
11 subscriber, written application for the contract must be made
12 and the first premium must be paid not later than 63 days
13 after notice of termination is mailed by the organization or
14 the employer, whichever is earlier, to the employee's or
15 individual's last address as shown by the record of the
16 organization or the employer, whichever is applicable. In such
17 case of termination due to non-payment of premium by the
18 employer or group contract holder, the premium for the
19 converted contract may not exceed the rate for the prior group
20 coverage for the period of coverage under the converted
21 contract prior to the date notice of termination is mailed to
22 the employee or individual subscriber. For the period of
23 coverage after such date, the premium for the converted
24 contract is subject to the requirements of subsection (3).
25 Section 15. Subsection (9) is added to section 20.41,
26 Florida Statutes, to read:
27 20.41 Department of Elderly Affairs.--There is created
28 a Department of Elderly Affairs.
29 (9) Area agencies on aging are subject to chapter 119,
30 relating to public records, and, when considering any
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1 contracts requiring the expenditure of funds, are subject to
2 ss. 286.011-286.012, relating to public meetings.
3 Section 16. There is appropriated to the Agency for
4 Health Care Administration for fiscal year 1999-2000
5 $1,439,000 from the Health Care Trust Fund for 12 months of
6 funding for the purpose of implementing this act.
7 Section 17. This act shall take effect upon becoming a
8 law.
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