HB 1811

1
A bill to be entitled
2An act relating to Medicaid; amending s. 16.56, F.S.;
3expanding the jurisdiction of the Office of Statewide
4Prosecution to include Medicaid fraud; amending s.
5400.408, F.S.; including the Medicaid Fraud Control Unit
6in certain local coordinating workgroups of the Agency for
7Health Care Administration; amending s. 400.434, F.S.;
8authorizing the Medicaid Fraud Control Unit to enter and
9inspect certain facilities; creating s. 409.9021, F.S.;
10creating an agreement of forfeiture of eligibility in the
11application process; amending s. 409.912, F.S.;
12authorizing the Agency for Health Care Administration to
13require a confirmation or second physician's opinion of
14the correct diagnosis before authorizing payment for
15medical treatment; authorizing the Agency for Health Care
16Administration to impose mandatory enrollment in drug
17therapy management or disease management programs for
18certain recipients; requiring that the Agency for Health
19Care Administration and the Drug Utilization Review Board
20consult with the Department of Health; allowing
21termination of certain practitioners from the Medicaid
22program; providing that Medicaid recipients be required to
23participate in a provider lock-in program for not less
24than 1 year and up to the duration of time the recipient
25participates in the program; requiring the agency to seek
26a federal waiver to terminate eligibility; allowing the
27agency to mail an explanation of benefits to verify
28services; requiring the agency to conduct a study of
29electronic verification systems; allowing the agency to
30use credentialing criteria to include providers in the
31Medicaid program; correcting cross references; amending s.
32409.913, F.S.; providing certain requirements to submit
33claims to the Medicaid program; providing for denial of
34claims not properly submitted; authorizing the agency to
35seek legal redress; providing that suspension or
36termination precludes participation in the Medicaid
37program; requiring the agency to report administrative
38sanctions to licensing authorities for certain violations;
39providing that the agency may withhold payment to a
40provider under certain circumstances; providing that the
41agency may deny payments to terminated or suspended
42providers; authorizing the agency to implement amnesty
43programs for providers to voluntarily repay overpayments;
44authorizing the agency to adopt rules; allowing for
45limiting, restricting, or suspending the eligibility of
46certain Medicaid recipients; authorizing the agency and
47the Medicaid Fraud Control Unit to review non-Medicaid-
48related records to reconcile a provider's records;
49authorizing the agency head or designee to limit,
50restrict, or suspend Medicaid eligibility under certain
51circumstances; authorizing the agency to limit the number
52of certain prescription claims; requiring the agency to
53limit the allowable amount of certain prescriptions;
54requiring that the Office of Program Policy Analysis and
55Government Accountability report to the Legislature on the
56agency's fraud and abuse prevention, deterrence,  
57detection, and recovery efforts; requiring the agency to
58conduct telephone audits of Medicaid claims to verify
59services received; amending s. 409.9131, F.S.; revising a
60definition; providing for peer review under certain
61circumstances; requiring a certain certification on
62Medicaid cost reports; amending s. 409.920, F.S.; revising
63a definition; providing that a person who knowingly uses
64or endeavors to use a Medicaid provider's or a Medicaid
65recipient's identification number or causes to be made, or
66aids and abets in the making of, a claim for items or
67services that are not authorized to be reimbursed under
68the Medicaid program commits a felony; providing criminal
69penalties; providing a definition; creating s. 409.9201,
70F.S.; providing definitions; providing that a person who
71knowingly sells or attempts to sell legend drugs obtained
72through the Medicaid program commits a felony; providing
73that a person who knowingly purchases or attempts to
74purchase legend drugs obtained through the Medicaid
75program and intended for the use of another commits a
76felony; providing that a person who knowingly makes or
77conspires to make false representations for the purpose of
78obtaining goods or services from the Medicaid program
79commits a felony; providing specified criminal penalties
80depending on the value of the legend drugs, goods, or
81services obtained from the Medicaid program; amending s.
82456.072, F.S.; providing an additional ground under which
83a health care practitioner who prescribes medicinal drugs
84or controlled substances may be subject to discipline by
85the Department of Health or the appropriate board having
86jurisdiction over the health care practitioner;
87authorizing the Department of Health to initiate a
88disciplinary investigation of prescribing practitioners
89under specified circumstances; amending s. 465.188, F.S.;
90deleting the requirement that the agency give pharmacists
91at least 1 week's notice prior to an audit; providing
92applicability; creating s. 812.0191, F.S.; providing
93definitions; providing that a person who traffics in
94property paid for in whole or in part by the Medicaid
95program, or who knowingly finances, directs, or traffics
96in such property, commits a felony; providing specified
97criminal penalties depending on the value of the property;
98amending s. 895.02, F.S.; revising a definition applicable
99to the Florida RICO Act; amending s. 905.34, F.S.;
100expanding the jurisdiction of the statewide grand jury to
101include Medicaid fraud; amending s. 932.701, F.S.;
102revising a definition applicable to the Florida Contraband
103Forfeiture Act; amending s. 932.7055, F.S.; requiring that
104proceeds collected under the Florida Contraband Forfeiture
105Act be deposited in the Agency for Health Care
106Administration's Grants and Donations Trust Fund; amending
107ss. 394.9082, 400.0077, 409.9065, 409.9071, 409.908,
108409.91196, 409.9122, 409.9131, 430.608, 636.0145, 641.225,
109and 641.386, F.S.; correcting cross references; reenacting
110s. 921.0022(3)(g), F.S., relating to the offense severity
111ranking chart of the Criminal Punishment Code, to
112incorporate the amendment to s. 409.920, F.S., in a
113reference thereto; reenacting s. 705.101(6), F.S.,
114relating to unclaimed evidence, to incorporate the
115amendment to s. 932.701, F.S., in a reference thereto;
116reenacting s. 932.703(4), F.S., relating to forfeiture of
117contraband articles, to incorporate the amendment to s.
118932.701, F.S., in a reference thereto; providing an
119effective date.
120
121Be It Enacted by the Legislature of the State of Florida:
122
123     Section 1.  Subsection (1) of section 16.56, Florida
124Statutes, is amended to read:
125     16.56  Office of Statewide Prosecution.--
126     (1)  There is created in the Department of Legal Affairs an
127Office of Statewide Prosecution.  The office shall be a separate
128"budget entity" as that term is defined in chapter 216. The
129office may:
130     (a)  Investigate and prosecute the offenses of:
131     1.  Bribery, burglary, criminal usury, extortion, gambling,
132kidnapping, larceny, murder, prostitution, perjury, robbery,
133carjacking, and home-invasion robbery;
134     2.  Any crime involving narcotic or other dangerous drugs;
135     3.  Any violation of the provisions of the Florida RICO
136(Racketeer Influenced and Corrupt Organization) Act, including
137any offense listed in the definition of racketeering activity in
138s. 895.02(1)(a), providing such listed offense is investigated
139in connection with a violation of s. 895.03 and is charged in a
140separate count of an information or indictment containing a
141count charging a violation of s. 895.03, the prosecution of
142which listed offense may continue independently if the
143prosecution of the violation of s. 895.03 is terminated for any
144reason;
145     4.  Any violation of the provisions of the Florida Anti-
146Fencing Act;
147     5.  Any violation of the provisions of the Florida
148Antitrust Act of 1980, as amended;
149     6.  Any crime involving, or resulting in, fraud or deceit
150upon any person;
151     7.  Any violation of s. 847.0135, relating to computer
152pornography and child exploitation prevention, or any offense
153related to a violation of s. 847.0135;
154     8.  Any violation of the provisions of chapter 815; or
155     9.  Any criminal violation of part I of chapter 499; or
156     10.  Any criminal violation of s. 409.920 or s. 409.9201;
157
158or any attempt, solicitation, or conspiracy to commit any of the
159crimes specifically enumerated above. The office shall have such
160power only when any such offense is occurring, or has occurred,
161in two or more judicial circuits as part of a related
162transaction, or when any such offense is connected with an
163organized criminal conspiracy affecting two or more judicial
164circuits.
165     (b)  Upon request, cooperate with and assist state
166attorneys and state and local law enforcement officials in their
167efforts against organized crimes.
168     (c)  Request and receive from any department, division,
169board, bureau, commission, or other agency of the state, or of
170any political subdivision thereof, cooperation and assistance in
171the performance of its duties.
172     Section 2.  Paragraph (i) of subsection (1) of section
173400.408, Florida Statutes, is amended to read:
174     400.408  Unlicensed facilities; referral of person for
175residency to unlicensed facility; penalties; verification of
176licensure status.--
177     (1)
178     (i)  Each field office of the Agency for Health Care
179Administration shall establish a local coordinating workgroup
180which includes representatives of local law enforcement
181agencies, state attorneys, the Medicaid Fraud Control Unit of
182the Department of Legal Affairs, local fire authorities, the
183Department of Children and Family Services, the district long-
184term care ombudsman council, and the district human rights
185advocacy committee to assist in identifying the operation of
186unlicensed facilities and to develop and implement a plan to
187ensure effective enforcement of state laws relating to such
188facilities. The workgroup shall report its findings, actions,
189and recommendations semiannually to the Director of Health
190Facility Regulation of the agency.
191     Section 3.  Section 400.434, Florida Statutes, is amended
192to read:
193     400.434  Right of entry and inspection.--Any duly
194designated officer or employee of the department, the Department
195of Children and Family Services, the agency, the Medicaid Fraud
196Control Unit of the Department of Legal Affairs, the state or
197local fire marshal, or a member of the state or local long-term
198care ombudsman council shall have the right to enter unannounced
199upon and into the premises of any facility licensed pursuant to
200this part in order to determine the state of compliance with the
201provisions of this part and of rules or standards in force
202pursuant thereto.  The right of entry and inspection shall also
203extend to any premises which the agency has reason to believe is
204being operated or maintained as a facility without a license;
205but no such entry or inspection of any premises may be made
206without the permission of the owner or person in charge thereof,
207unless a warrant is first obtained from the circuit court
208authorizing such entry.  The warrant requirement shall extend
209only to a facility which the agency has reason to believe is
210being operated or maintained as a facility without a license.  
211Any application for a license or renewal thereof made pursuant
212to this part shall constitute permission for, and complete
213acquiescence in, any entry or inspection of the premises for
214which the license is sought, in order to facilitate verification
215of the information submitted on or in connection with the
216application; to discover, investigate, and determine the
217existence of abuse or neglect; or to elicit, receive, respond
218to, and resolve complaints. Any current valid license shall
219constitute unconditional permission for, and complete
220acquiescence in, any entry or inspection of the premises by
221authorized personnel.  The agency shall retain the right of
222entry and inspection of facilities that have had a license
223revoked or suspended within the previous 24 months, to ensure
224that the facility is not operating unlawfully. However, before
225entering the facility, a statement of probable cause must be
226filed with the director of the agency, who must approve or
227disapprove the action within 48 hours.  Probable cause shall
228include, but is not limited to, evidence that the facility holds
229itself out to the public as a provider of personal care services
230or the receipt of a complaint by the long-term care ombudsman
231council about the facility. Data collected by the state or local
232long-term care ombudsman councils or the state or local advocacy
233councils may be used by the agency in investigations involving
234violations of regulatory standards.
235     Section 4.  Section 409.9021, Florida Statutes, is created
236to read:
237     409.9021  Forfeiture of eligibility agreement.--As a
238condition of Medicaid eligibility, subject to federal approval,
239a Medicaid applicant shall agree in writing to forfeit all
240entitlements to any goods or services provided through the
241Medicaid program if he or she is found by a preponderance of the
242evidence to have abused or defrauded the Medicaid program. This
243provision only applies to the Medicaid recipient found to have
244committed or participated in the abuse or fraud, and does not
245apply to any family member of the recipient that was not
246involved in the abuse or fraud.
247     Section 5.  Section 409.912, Florida Statutes, is amended
248to read:
249     409.912  Cost-effective purchasing of health care.--The
250agency shall purchase goods and services for Medicaid recipients
251in the most cost-effective manner consistent with the delivery
252of quality medical care. To ensure that medical services are
253effectively utilized, the agency may, in any case involving
254chronic infectious diseases or elective surgery, except for a
255case of a patient in a hospital emergency department, require a
256confirmation or second physician's opinion of the correct
257diagnosis before authorizing payment for medical treatment. Such
258confirmation or second opinion shall be rendered in a manner
259approved by the agency. The agency shall maximize the use of
260prepaid per capita and prepaid aggregate fixed-sum basis
261services when appropriate and other alternative service delivery
262and reimbursement methodologies, including competitive bidding
263pursuant to s. 287.057, designed to facilitate the cost-
264effective purchase of a case-managed continuum of care. The
265agency shall also require providers to minimize the exposure of
266recipients to the need for acute inpatient, custodial, and other
267institutional care and the inappropriate or unnecessary use of
268high-cost services. The agency may mandate establish prior
269authorization, drug therapy management, or disease management
270participation requirements for certain populations of Medicaid
271beneficiaries, certain drug classes, or particular drugs to
272prevent fraud, abuse, overuse, and possible dangerous drug
273interactions. The Pharmaceutical and Therapeutics Committee
274shall make recommendations to the agency on drugs for which
275prior authorization is required. The agency shall inform the
276Pharmaceutical and Therapeutics Committee of its decisions
277regarding drugs subject to prior authorization.
278     (1)  The agency shall work with the Department of Children
279and Family Services to ensure access of children and families in
280the child protection system to needed and appropriate mental
281health and substance abuse services.
282     (2)  The agency may enter into agreements with appropriate
283agents of other state agencies or of any agency of the Federal
284Government and accept such duties in respect to social welfare
285or public aid as may be necessary to implement the provisions of
286Title XIX of the Social Security Act and ss. 409.901-409.920.
287     (3)  The agency may contract with health maintenance
288organizations certified pursuant to part I of chapter 641 for
289the provision of services to recipients.
290     (4)  The agency may contract with:
291     (a)  An entity that provides no prepaid health care
292services other than Medicaid services under contract with the
293agency and which is owned and operated by a county, county
294health department, or county-owned and operated hospital to
295provide health care services on a prepaid or fixed-sum basis to
296recipients, which entity may provide such prepaid services
297either directly or through arrangements with other providers.
298Such prepaid health care services entities must be licensed
299under parts I and III by January 1, 1998, and until then are
300exempt from the provisions of part I of chapter 641. An entity
301recognized under this paragraph which demonstrates to the
302satisfaction of the Office of Insurance Regulation of the
303Financial Services Commission that it is backed by the full
304faith and credit of the county in which it is located may be
305exempted from s. 641.225.
306     (b)  An entity that is providing comprehensive behavioral
307health care services to certain Medicaid recipients through a
308capitated, prepaid arrangement pursuant to the federal waiver
309provided for by s. 409.905(5). Such an entity must be licensed
310under chapter 624, chapter 636, or chapter 641 and must possess
311the clinical systems and operational competence to manage risk
312and provide comprehensive behavioral health care to Medicaid
313recipients. As used in this paragraph, the term "comprehensive
314behavioral health care services" means covered mental health and
315substance abuse treatment services that are available to
316Medicaid recipients. The secretary of the Department of Children
317and Family Services shall approve provisions of procurements
318related to children in the department's care or custody prior to
319enrolling such children in a prepaid behavioral health plan. Any
320contract awarded under this paragraph must be competitively
321procured. In developing the behavioral health care prepaid plan
322procurement document, the agency shall ensure that the
323procurement document requires the contractor to develop and
324implement a plan to ensure compliance with s. 394.4574 related
325to services provided to residents of licensed assisted living
326facilities that hold a limited mental health license. The agency
327shall seek federal approval to contract with a single entity
328meeting these requirements to provide comprehensive behavioral
329health care services to all Medicaid recipients in an AHCA area.
330Each entity must offer sufficient choice of providers in its
331network to ensure recipient access to care and the opportunity
332to select a provider with whom they are satisfied. The network
333shall include all public mental health hospitals. To ensure
334unimpaired access to behavioral health care services by Medicaid
335recipients, all contracts issued pursuant to this paragraph
336shall require 80 percent of the capitation paid to the managed
337care plan, including health maintenance organizations, to be
338expended for the provision of behavioral health care services.
339In the event the managed care plan expends less than 80 percent
340of the capitation paid pursuant to this paragraph for the
341provision of behavioral health care services, the difference
342shall be returned to the agency. The agency shall provide the
343managed care plan with a certification letter indicating the
344amount of capitation paid during each calendar year for the
345provision of behavioral health care services pursuant to this
346section. The agency may reimburse for substance abuse treatment
347services on a fee-for-service basis until the agency finds that
348adequate funds are available for capitated, prepaid
349arrangements.
350     1.  By January 1, 2001, the agency shall modify the
351contracts with the entities providing comprehensive inpatient
352and outpatient mental health care services to Medicaid
353recipients in Hillsborough, Highlands, Hardee, Manatee, and Polk
354Counties, to include substance abuse treatment services.
355     2.  By July 1, 2003, the agency and the Department of
356Children and Family Services shall execute a written agreement
357that requires collaboration and joint development of all policy,
358budgets, procurement documents, contracts, and monitoring plans
359that have an impact on the state and Medicaid community mental
360health and targeted case management programs.
361     3.  By July 1, 2006, the agency and the Department of
362Children and Family Services shall contract with managed care
363entities in each AHCA area except area 6 or arrange to provide
364comprehensive inpatient and outpatient mental health and
365substance abuse services through capitated prepaid arrangements
366to all Medicaid recipients who are eligible to participate in
367such plans under federal law and regulation. In AHCA areas where
368eligible individuals number less than 150,000, the agency shall
369contract with a single managed care plan. The agency may
370contract with more than one plan in AHCA areas where the
371eligible population exceeds 150,000. Contracts awarded pursuant
372to this section shall be competitively procured. Both for-profit
373and not-for-profit corporations shall be eligible to compete.
374     4.  By October 1, 2003, the agency and the department shall
375submit a plan to the Governor, the President of the Senate, and
376the Speaker of the House of Representatives which provides for
377the full implementation of capitated prepaid behavioral health
378care in all areas of the state. The plan shall include
379provisions which ensure that children and families receiving
380foster care and other related services are appropriately served
381and that these services assist the community-based care lead
382agencies in meeting the goals and outcomes of the child welfare
383system. The plan will be developed with the participation of
384community-based lead agencies, community alliances, sheriffs,
385and community providers serving dependent children.
386     a.  Implementation shall begin in 2003 in those AHCA areas
387of the state where the agency is able to establish sufficient
388capitation rates.
389     b.  If the agency determines that the proposed capitation
390rate in any area is insufficient to provide appropriate
391services, the agency may adjust the capitation rate to ensure
392that care will be available. The agency and the department may
393use existing general revenue to address any additional required
394match but may not over-obligate existing funds on an annualized
395basis.
396     c.  Subject to any limitations provided for in the General
397Appropriations Act, the agency, in compliance with appropriate
398federal authorization, shall develop policies and procedures
399that allow for certification of local and state funds.
400     5.  Children residing in a statewide inpatient psychiatric
401program, or in a Department of Juvenile Justice or a Department
402of Children and Family Services residential program approved as
403a Medicaid behavioral health overlay services provider shall not
404be included in a behavioral health care prepaid health plan
405pursuant to this paragraph.
406     6.  In converting to a prepaid system of delivery, the
407agency shall in its procurement document require an entity
408providing comprehensive behavioral health care services to
409prevent the displacement of indigent care patients by enrollees
410in the Medicaid prepaid health plan providing behavioral health
411care services from facilities receiving state funding to provide
412indigent behavioral health care, to facilities licensed under
413chapter 395 which do not receive state funding for indigent
414behavioral health care, or reimburse the unsubsidized facility
415for the cost of behavioral health care provided to the displaced
416indigent care patient.
417     7.  Traditional community mental health providers under
418contract with the Department of Children and Family Services
419pursuant to part IV of chapter 394, child welfare providers
420under contract with the Department of Children and Family
421Services, and inpatient mental health providers licensed
422pursuant to chapter 395 must be offered an opportunity to accept
423or decline a contract to participate in any provider network for
424prepaid behavioral health services.
425     (c)  A federally qualified health center or an entity owned
426by one or more federally qualified health centers or an entity
427owned by other migrant and community health centers receiving
428non-Medicaid financial support from the Federal Government to
429provide health care services on a prepaid or fixed-sum basis to
430recipients. Such prepaid health care services entity must be
431licensed under parts I and III of chapter 641, but shall be
432prohibited from serving Medicaid recipients on a prepaid basis,
433until such licensure has been obtained. However, such an entity
434is exempt from s. 641.225 if the entity meets the requirements
435specified in subsections (17) (15) and (18) (16).
436     (d)  A provider service network may be reimbursed on a fee-
437for-service or prepaid basis.  A provider service network which
438is reimbursed by the agency on a prepaid basis shall be exempt
439from parts I and III of chapter 641, but must meet appropriate
440financial reserve, quality assurance, and patient rights
441requirements as established by the agency.  The agency shall
442award contracts on a competitive bid basis and shall select
443bidders based upon price and quality of care. Medicaid
444recipients assigned to a demonstration project shall be chosen
445equally from those who would otherwise have been assigned to
446prepaid plans and MediPass.  The agency is authorized to seek
447federal Medicaid waivers as necessary to implement the
448provisions of this section.
449     (e)  An entity that provides comprehensive behavioral
450health care services to certain Medicaid recipients through an
451administrative services organization agreement. Such an entity
452must possess the clinical systems and operational competence to
453provide comprehensive health care to Medicaid recipients. As
454used in this paragraph, the term "comprehensive behavioral
455health care services" means covered mental health and substance
456abuse treatment services that are available to Medicaid
457recipients. Any contract awarded under this paragraph must be
458competitively procured. The agency must ensure that Medicaid
459recipients have available the choice of at least two managed
460care plans for their behavioral health care services.
461     (f)  An entity that provides in-home physician services to
462test the cost-effectiveness of enhanced home-based medical care
463to Medicaid recipients with degenerative neurological diseases
464and other diseases or disabling conditions associated with high
465costs to Medicaid. The program shall be designed to serve very
466disabled persons and to reduce Medicaid reimbursed costs for
467inpatient, outpatient, and emergency department services. The
468agency shall contract with vendors on a risk-sharing basis.
469     (g)  Children's provider networks that provide care
470coordination and care management for Medicaid-eligible pediatric
471patients, primary care, authorization of specialty care, and
472other urgent and emergency care through organized providers
473designed to service Medicaid eligibles under age 18 and
474pediatric emergency departments' diversion programs. The
475networks shall provide after-hour operations, including evening
476and weekend hours, to promote, when appropriate, the use of the
477children's networks rather than hospital emergency departments.
478     (h)  An entity authorized in s. 430.205 to contract with
479the agency and the Department of Elderly Affairs to provide
480health care and social services on a prepaid or fixed-sum basis
481to elderly recipients. Such prepaid health care services
482entities are exempt from the provisions of part I of chapter 641
483for the first 3 years of operation. An entity recognized under
484this paragraph that demonstrates to the satisfaction of the
485Office of Insurance Regulation that it is backed by the full
486faith and credit of one or more counties in which it operates
487may be exempted from s. 641.225.
488     (i)  A Children's Medical Services network, as defined in
489s. 391.021.
490     (5)  By October 1, 2003, the agency and the department
491shall, to the extent feasible, develop a plan for implementing
492new Medicaid procedure codes for emergency and crisis care,
493supportive residential services, and other services designed to
494maximize the use of Medicaid funds for Medicaid-eligible
495recipients. The agency shall include in the agreement developed
496pursuant to subsection (4) a provision that ensures that the
497match requirements for these new procedure codes are met by
498certifying eligible general revenue or local funds that are
499currently expended on these services by the department with
500contracted alcohol, drug abuse, and mental health providers. The
501plan must describe specific procedure codes to be implemented, a
502projection of the number of procedures to be delivered during
503fiscal year 2003-2004, and a financial analysis that describes
504the certified match procedures, and accountability mechanisms,
505projects the earnings associated with these procedures, and
506describes the sources of state match. This plan may not be
507implemented in any part until approved by the Legislative Budget
508Commission. If such approval has not occurred by December 31,
5092003, the plan shall be submitted for consideration by the 2004
510Legislature.
511     (6)  The agency may contract with any public or private
512entity otherwise authorized by this section on a prepaid or
513fixed-sum basis for the provision of health care services to
514recipients. An entity may provide prepaid services to
515recipients, either directly or through arrangements with other
516entities, if each entity involved in providing services:
517     (a)  Is organized primarily for the purpose of providing
518health care or other services of the type regularly offered to
519Medicaid recipients;
520     (b)  Ensures that services meet the standards set by the
521agency for quality, appropriateness, and timeliness;
522     (c)  Makes provisions satisfactory to the agency for
523insolvency protection and ensures that neither enrolled Medicaid
524recipients nor the agency will be liable for the debts of the
525entity;
526     (d)  Submits to the agency, if a private entity, a
527financial plan that the agency finds to be fiscally sound and
528that provides for working capital in the form of cash or
529equivalent liquid assets excluding revenues from Medicaid
530premium payments equal to at least the first 3 months of
531operating expenses or $200,000, whichever is greater;
532     (e)  Furnishes evidence satisfactory to the agency of
533adequate liability insurance coverage or an adequate plan of
534self-insurance to respond to claims for injuries arising out of
535the furnishing of health care;
536     (f)  Provides, through contract or otherwise, for periodic
537review of its medical facilities and services, as required by
538the agency; and
539     (g)  Provides organizational, operational, financial, and
540other information required by the agency.
541     (7)  The agency may contract on a prepaid or fixed-sum
542basis with any health insurer that:
543     (a)  Pays for health care services provided to enrolled
544Medicaid recipients in exchange for a premium payment paid by
545the agency;
546     (b)  Assumes the underwriting risk; and
547     (c)  Is organized and licensed under applicable provisions
548of the Florida Insurance Code and is currently in good standing
549with the Office of Insurance Regulation.
550     (8)  The agency may contract on a prepaid or fixed-sum
551basis with an exclusive provider organization to provide health
552care services to Medicaid recipients provided that the exclusive
553provider organization meets applicable managed care plan
554requirements in this section, ss. 409.9122, 409.9123, 409.9128,
555and 627.6472, and other applicable provisions of law.
556     (9)  The Agency for Health Care Administration may provide
557cost-effective purchasing of chiropractic services on a fee-for-
558service basis to Medicaid recipients through arrangements with a
559statewide chiropractic preferred provider organization
560incorporated in this state as a not-for-profit corporation.  The
561agency shall ensure that the benefit limits and prior
562authorization requirements in the current Medicaid program shall
563apply to the services provided by the chiropractic preferred
564provider organization.
565     (10)  The agency shall not contract on a prepaid or fixed-
566sum basis for Medicaid services with an entity which knows or
567reasonably should know that any officer, director, agent,
568managing employee, or owner of stock or beneficial interest in
569excess of 5 percent common or preferred stock, or the entity
570itself, has been found guilty of, regardless of adjudication, or
571entered a plea of nolo contendere, or guilty, to:
572     (a)  Fraud;
573     (b)  Violation of federal or state antitrust statutes,
574including those proscribing price fixing between competitors and
575the allocation of customers among competitors;
576     (c)  Commission of a felony involving embezzlement, theft,
577forgery, income tax evasion, bribery, falsification or
578destruction of records, making false statements, receiving
579stolen property, making false claims, or obstruction of justice;
580or
581     (d)  Any crime in any jurisdiction which directly relates
582to the provision of health services on a prepaid or fixed-sum
583basis.
584     (11)  The agency, after notifying the Legislature, may
585apply for waivers of applicable federal laws and regulations as
586necessary to implement more appropriate systems of health care
587for Medicaid recipients and reduce the cost of the Medicaid
588program to the state and federal governments and shall implement
589such programs, after legislative approval, within a reasonable
590period of time after federal approval.  These programs must be
591designed primarily to reduce the need for inpatient care,
592custodial care and other long-term or institutional care, and
593other high-cost services.
594     (a)  Prior to seeking legislative approval of such a waiver
595as authorized by this subsection, the agency shall provide
596notice and an opportunity for public comment.  Notice shall be
597provided to all persons who have made requests of the agency for
598advance notice and shall be published in the Florida
599Administrative Weekly not less than 28 days prior to the
600intended action.
601     (b)  Notwithstanding s. 216.292, funds that are
602appropriated to the Department of Elderly Affairs for the
603Assisted Living for the Elderly Medicaid waiver and are not
604expended shall be transferred to the agency to fund Medicaid-
605reimbursed nursing home care.
606     (12)  The agency shall establish a postpayment utilization
607control program designed to identify recipients who may
608inappropriately overuse or underuse Medicaid services and shall
609provide methods to correct such misuse.
610     (13)  The agency shall develop and provide coordinated
611systems of care for Medicaid recipients and may contract with
612public or private entities to develop and administer such
613systems of care among public and private health care providers
614in a given geographic area.
615     (14)  The agency shall operate or contract for the
616operation of utilization management and incentive systems
617designed to encourage cost-effective use services.
618     (15)(a)  The agency shall operate the Comprehensive
619Assessment and Review(CARES) nursing facility preadmission
620screening program to ensure that Medicaid payment for nursing
621facility care is made only for individuals whose conditions
622require such care and to ensure that long-term care services are
623provided in the setting most appropriate to the needs of the
624person and in the most economical manner possible. The CARES
625program shall also ensure that individuals participating in
626Medicaid home and community-based waiver programs meet criteria
627for those programs, consistent with approved federal waivers.
628     (b)  The agency shall operate the CARES program through an
629interagency agreement with the Department of Elderly Affairs.
630     (c)  Prior to making payment for nursing facility services
631for a Medicaid recipient, the agency must verify that the
632nursing facility preadmission screening program has determined
633that the individual requires nursing facility care and that the
634individual cannot be safely served in community-based programs.
635The nursing facility preadmission screening program shall refer
636a Medicaid recipient to a community-based program if the
637individual could be safely served at a lower cost and the
638recipient chooses to participate in such program.
639     (d)  By January 1 of each year, the agency shall submit a
640report to the Legislature and the Office of Long-Term-Care
641Policy describing the operations of the CARES program. The
642report must describe:
643     1.  Rate of diversion to community alternative programs;
644     2.  CARES program staffing needs to achieve additional
645diversions;
646     3.  Reasons the program is unable to place individuals in
647less restrictive settings when such individuals desired such
648services and could have been served in such settings;
649     4.  Barriers to appropriate placement, including barriers
650due to policies or operations of other agencies or state-funded
651programs; and
652     5.  Statutory changes necessary to ensure that individuals
653in need of long-term care services receive care in the least
654restrictive environment.
655     (16)(a)  The agency shall identify health care utilization
656and price patterns within the Medicaid program which are not
657cost-effective or medically appropriate and assess the
658effectiveness of new or alternate methods of providing and
659monitoring service, and may implement such methods as it
660considers appropriate. Such methods may include disease
661management initiatives, an integrated and systematic approach
662for managing the health care needs of recipients who are at risk
663of or diagnosed with a specific disease by using best practices,
664prevention strategies, clinical-practice improvement, clinical
665interventions and protocols, outcomes research, information
666technology, and other tools and resources to reduce overall
667costs and improve measurable outcomes.
668     (b)  The responsibility of the agency under this subsection
669shall include the development of capabilities to identify actual
670and optimal practice patterns; patient and provider educational
671initiatives; methods for determining patient compliance with
672prescribed treatments; fraud, waste, and abuse prevention and
673detection programs; and beneficiary case management programs.
674     1.  The practice pattern identification program shall
675evaluate practitioner prescribing patterns based on national and
676regional practice guidelines, comparing practitioners to their
677peer groups. The agency and its Drug Utilization Review Board
678shall consult with the Department of Health and a panel of
679practicing health care professionals consisting of the
680following: the Speaker of the House of Representatives and the
681President of the Senate shall each appoint three physicians
682licensed under chapter 458 or chapter 459; and the Governor
683shall appoint two pharmacists licensed under chapter 465 and one
684dentist licensed under chapter 466 who is an oral surgeon. Terms
685of the panel members shall expire at the discretion of the
686appointing official. The panel shall begin its work by August 1,
6871999, regardless of the number of appointments made by that
688date. The advisory panel shall be responsible for evaluating
689treatment guidelines and recommending ways to incorporate their
690use in the practice pattern identification program.
691Practitioners who are prescribing inappropriately or
692inefficiently, as determined by the agency, may have their
693prescribing of certain drugs subject to prior authorization or
694may be terminated from all participation in the Medicaid
695program.
696     2.  The agency shall also develop educational interventions
697designed to promote the proper use of medications by providers
698and beneficiaries.
699     3.  The agency shall implement a pharmacy fraud, waste, and
700abuse initiative that may include a surety bond or letter of
701credit requirement for participating pharmacies, enhanced
702provider auditing practices, the use of additional fraud and
703abuse software, recipient management programs for beneficiaries
704inappropriately using their benefits, and other steps that will
705eliminate provider and recipient fraud, waste, and abuse. The
706initiative shall address enforcement efforts to reduce the
707number and use of counterfeit prescriptions.
708     4.  By September 30, 2002, the agency shall contract with
709an entity in the state to implement a wireless handheld clinical
710pharmacology drug information database for practitioners. The
711initiative shall be designed to enhance the agency's efforts to
712reduce fraud, abuse, and errors in the prescription drug benefit
713program and to otherwise further the intent of this paragraph.
714     5.  The agency may apply for any federal waivers needed to
715implement this paragraph.
716     (17)  An entity contracting on a prepaid or fixed-sum basis
717shall, in addition to meeting any applicable statutory surplus
718requirements, also maintain at all times in the form of cash,
719investments that mature in less than 180 days allowable as
720admitted assets by the Office of Insurance Regulation, and
721restricted funds or deposits controlled by the agency or the
722Office of Insurance Regulation, a surplus amount equal to one-
723and-one-half times the entity's monthly Medicaid prepaid
724revenues. As used in this subsection, the term "surplus" means
725the entity's total assets minus total liabilities. If an
726entity's surplus falls below an amount equal to one-and-one-half
727times the entity's monthly Medicaid prepaid revenues, the agency
728shall prohibit the entity from engaging in marketing and
729preenrollment activities, shall cease to process new
730enrollments, and shall not renew the entity's contract until the
731required balance is achieved.  The requirements of this
732subsection do not apply:
733     (a)  Where a public entity agrees to fund any deficit
734incurred by the contracting entity; or
735     (b)  Where the entity's performance and obligations are
736guaranteed in writing by a guaranteeing organization which:
737     1.  Has been in operation for at least 5 years and has
738assets in excess of $50 million; or
739     2.  Submits a written guarantee acceptable to the agency
740which is irrevocable during the term of the contracting entity's
741contract with the agency and, upon termination of the contract,
742until the agency receives proof of satisfaction of all
743outstanding obligations incurred under the contract.
744     (18)(a)  The agency may require an entity contracting on a
745prepaid or fixed-sum basis to establish a restricted insolvency
746protection account with a federally guaranteed financial
747institution licensed to do business in this state. The entity
748shall deposit into that account 5 percent of the capitation
749payments made by the agency each month until a maximum total of
7502 percent of the total current contract amount is reached. The
751restricted insolvency protection account may be drawn upon with
752the authorized signatures of two persons designated by the
753entity and two representatives of the agency. If the agency
754finds that the entity is insolvent, the agency may draw upon the
755account solely with the two authorized signatures of
756representatives of the agency, and the funds may be disbursed to
757meet financial obligations incurred by the entity under the
758prepaid contract. If the contract is terminated, expired, or not
759continued, the account balance must be released by the agency to
760the entity upon receipt of proof of satisfaction of all
761outstanding obligations incurred under this contract.
762     (b)  The agency may waive the insolvency protection account
763requirement in writing when evidence is on file with the agency
764of adequate insolvency insurance and reinsurance that will
765protect enrollees if the entity becomes unable to meet its
766obligations.
767     (19)  An entity that contracts with the agency on a prepaid
768or fixed-sum basis for the provision of Medicaid services shall
769reimburse any hospital or physician that is outside the entity's
770authorized geographic service area as specified in its contract
771with the agency, and that provides services authorized by the
772entity to its members, at a rate negotiated with the hospital or
773physician for the provision of services or according to the
774lesser of the following:
775     (a)  The usual and customary charges made to the general
776public by the hospital or physician; or
777     (b)  The Florida Medicaid reimbursement rate established
778for the hospital or physician.
779     (20)  When a merger or acquisition of a Medicaid prepaid
780contractor has been approved by the Office of Insurance
781Regulation pursuant to s. 628.4615, the agency shall approve the
782assignment or transfer of the appropriate Medicaid prepaid
783contract upon request of the surviving entity of the merger or
784acquisition if the contractor and the other entity have been in
785good standing with the agency for the most recent 12-month
786period, unless the agency determines that the assignment or
787transfer would be detrimental to the Medicaid recipients or the
788Medicaid program.  To be in good standing, an entity must not
789have failed accreditation or committed any material violation of
790the requirements of s. 641.52 and must meet the Medicaid
791contract requirements.  For purposes of this section, a merger
792or acquisition means a change in controlling interest of an
793entity, including an asset or stock purchase.
794     (21)  Any entity contracting with the agency pursuant to
795this section to provide health care services to Medicaid
796recipients is prohibited from engaging in any of the following
797practices or activities:
798     (a)  Practices that are discriminatory, including, but not
799limited to, attempts to discourage participation on the basis of
800actual or perceived health status.
801     (b)  Activities that could mislead or confuse recipients,
802or misrepresent the organization, its marketing representatives,
803or the agency. Violations of this paragraph include, but are not
804limited to:
805     1.  False or misleading claims that marketing
806representatives are employees or representatives of the state or
807county, or of anyone other than the entity or the organization
808by whom they are reimbursed.
809     2.  False or misleading claims that the entity is
810recommended or endorsed by any state or county agency, or by any
811other organization which has not certified its endorsement in
812writing to the entity.
813     3.  False or misleading claims that the state or county
814recommends that a Medicaid recipient enroll with an entity.
815     4.  Claims that a Medicaid recipient will lose benefits
816under the Medicaid program, or any other health or welfare
817benefits to which the recipient is legally entitled, if the
818recipient does not enroll with the entity.
819     (c)  Granting or offering of any monetary or other valuable
820consideration for enrollment, except as authorized by subsection
821(24) (22).
822     (d)  Door-to-door solicitation of recipients who have not
823contacted the entity or who have not invited the entity to make
824a presentation.
825     (e)  Solicitation of Medicaid recipients by marketing
826representatives stationed in state offices unless approved and
827supervised by the agency or its agent and approved by the
828affected state agency when solicitation occurs in an office of
829the state agency.  The agency shall ensure that marketing
830representatives stationed in state offices shall market their
831managed care plans to Medicaid recipients only in designated
832areas and in such a way as to not interfere with the recipients'
833activities in the state office.
834     (f)  Enrollment of Medicaid recipients.
835     (22)  The agency may impose a fine for a violation of this
836section or the contract with the agency by a person or entity
837that is under contract with the agency.  With respect to any
838nonwillful violation, such fine shall not exceed $2,500 per
839violation.  In no event shall such fine exceed an aggregate
840amount of $10,000 for all nonwillful violations arising out of
841the same action.  With respect to any knowing and willful
842violation of this section or the contract with the agency, the
843agency may impose a fine upon the entity in an amount not to
844exceed $20,000 for each such violation.  In no event shall such
845fine exceed an aggregate amount of $100,000 for all knowing and
846willful violations arising out of the same action.
847     (23)  A health maintenance organization or a person or
848entity exempt from chapter 641 that is under contract with the
849agency for the provision of health care services to Medicaid
850recipients may not use or distribute marketing materials used to
851solicit Medicaid recipients, unless such materials have been
852approved by the agency. The provisions of this subsection do not
853apply to general advertising and marketing materials used by a
854health maintenance organization to solicit both non-Medicaid
855subscribers and Medicaid recipients.
856     (24)  Upon approval by the agency, health maintenance
857organizations and persons or entities exempt from chapter 641
858that are under contract with the agency for the provision of
859health care services to Medicaid recipients may be permitted
860within the capitation rate to provide additional health benefits
861that the agency has found are of high quality, are practicably
862available, provide reasonable value to the recipient, and are
863provided at no additional cost to the state.
864     (25)  The agency shall utilize the statewide health
865maintenance organization complaint hotline for the purpose of
866investigating and resolving Medicaid and prepaid health plan
867complaints, maintaining a record of complaints and confirmed
868problems, and receiving disenrollment requests made by
869recipients.
870     (26)  The agency shall require the publication of the
871health maintenance organization's and the prepaid health plan's
872consumer services telephone numbers and the "800" telephone
873number of the statewide health maintenance organization
874complaint hotline on each Medicaid identification card issued by
875a health maintenance organization or prepaid health plan
876contracting with the agency to serve Medicaid recipients and on
877each subscriber handbook issued to a Medicaid recipient.
878     (27)  The agency shall establish a health care quality
879improvement system for those entities contracting with the
880agency pursuant to this section, incorporating all the standards
881and guidelines developed by the Medicaid Bureau of the Health
882Care Financing Administration as a part of the quality assurance
883reform initiative.  The system shall include, but need not be
884limited to, the following:
885     (a)  Guidelines for internal quality assurance programs,
886including standards for:
887     1.  Written quality assurance program descriptions.
888     2.  Responsibilities of the governing body for monitoring,
889evaluating, and making improvements to care.
890     3.  An active quality assurance committee.
891     4.  Quality assurance program supervision.
892     5.  Requiring the program to have adequate resources to
893effectively carry out its specified activities.
894     6.  Provider participation in the quality assurance
895program.
896     7.  Delegation of quality assurance program activities.
897     8.  Credentialing and recredentialing.
898     9.  Enrollee rights and responsibilities.
899     10.  Availability and accessibility to services and care.
900     11.  Ambulatory care facilities.
901     12.  Accessibility and availability of medical records, as
902well as proper recordkeeping and process for record review.
903     13.  Utilization review.
904     14.  A continuity of care system.
905     15.  Quality assurance program documentation.
906     16.  Coordination of quality assurance activity with other
907management activity.
908     17.  Delivering care to pregnant women and infants; to
909elderly and disabled recipients, especially those who are at
910risk of institutional placement; to persons with developmental
911disabilities; and to adults who have chronic, high-cost medical
912conditions.
913     (b)  Guidelines which require the entities to conduct
914quality-of-care studies which:
915     1.  Target specific conditions and specific health service
916delivery issues for focused monitoring and evaluation.
917     2.  Use clinical care standards or practice guidelines to
918objectively evaluate the care the entity delivers or fails to
919deliver for the targeted clinical conditions and health services
920delivery issues.
921     3.  Use quality indicators derived from the clinical care
922standards or practice guidelines to screen and monitor care and
923services delivered.
924     (c)  Guidelines for external quality review of each
925contractor which require: focused studies of patterns of care;
926individual care review in specific situations; and followup
927activities on previous pattern-of-care study findings and
928individual-care-review findings. In designing the external
929quality review function and determining how it is to operate as
930part of the state's overall quality improvement system, the
931agency shall construct its external quality review organization
932and entity contracts to address each of the following:
933     1.  Delineating the role of the external quality review
934organization.
935     2.  Length of the external quality review organization
936contract with the state.
937     3.  Participation of the contracting entities in designing
938external quality review organization review activities.
939     4.  Potential variation in the type of clinical conditions
940and health services delivery issues to be studied at each plan.
941     5.  Determining the number of focused pattern-of-care
942studies to be conducted for each plan.
943     6.  Methods for implementing focused studies.
944     7.  Individual care review.
945     8.  Followup activities.
946     (28)  In order to ensure that children receive health care
947services for which an entity has already been compensated, an
948entity contracting with the agency pursuant to this section
949shall achieve an annual Early and Periodic Screening, Diagnosis,
950and Treatment (EPSDT) Service screening rate of at least 60
951percent for those recipients continuously enrolled for at least
9528 months. The agency shall develop a method by which the EPSDT
953screening rate shall be calculated. For any entity which does
954not achieve the annual 60 percent rate, the entity must submit a
955corrective action plan for the agency's approval. If the entity
956does not meet the standard established in the corrective action
957plan during the specified timeframe, the agency is authorized to
958impose appropriate contract sanctions. At least annually, the
959agency shall publicly release the EPSDT Services screening rates
960of each entity it has contracted with on a prepaid basis to
961serve Medicaid recipients.
962     (29)  The agency shall perform enrollments and
963disenrollments for Medicaid recipients who are eligible for
964MediPass or managed care plans. Notwithstanding the prohibition
965contained in paragraph (21)(19)(f), managed care plans may
966perform preenrollments of Medicaid recipients under the
967supervision of the agency or its agents. For the purposes of
968this section, "preenrollment" means the provision of marketing
969and educational materials to a Medicaid recipient and assistance
970in completing the application forms, but shall not include
971actual enrollment into a managed care plan.  An application for
972enrollment shall not be deemed complete until the agency or its
973agent verifies that the recipient made an informed, voluntary
974choice. The agency, in cooperation with the Department of
975Children and Family Services, may test new marketing initiatives
976to inform Medicaid recipients about their managed care options
977at selected sites. The agency shall report to the Legislature on
978the effectiveness of such initiatives. The agency may contract
979with a third party to perform managed care plan and MediPass
980enrollment and disenrollment services for Medicaid recipients
981and is authorized to adopt rules to implement such services. The
982agency may adjust the capitation rate only to cover the costs of
983a third-party enrollment and disenrollment contract, and for
984agency supervision and management of the managed care plan
985enrollment and disenrollment contract.
986     (30)  Any lists of providers made available to Medicaid
987recipients, MediPass enrollees, or managed care plan enrollees
988shall be arranged alphabetically showing the provider's name and
989specialty and, separately, by specialty in alphabetical order.
990     (31)  The agency shall establish an enhanced managed care
991quality assurance oversight function, to include at least the
992following components:
993     (a)  At least quarterly analysis and followup, including
994sanctions as appropriate, of managed care participant
995utilization of services.
996     (b)  At least quarterly analysis and followup, including
997sanctions as appropriate, of quality findings of the Medicaid
998peer review organization and other external quality assurance
999programs.
1000     (c)  At least quarterly analysis and followup, including
1001sanctions as appropriate, of the fiscal viability of managed
1002care plans.
1003     (d)  At least quarterly analysis and followup, including
1004sanctions as appropriate, of managed care participant
1005satisfaction and disenrollment surveys.
1006     (e)  The agency shall conduct regular and ongoing Medicaid
1007recipient satisfaction surveys.
1008
1009The analyses and followup activities conducted by the agency
1010under its enhanced managed care quality assurance oversight
1011function shall not duplicate the activities of accreditation
1012reviewers for entities regulated under part III of chapter 641,
1013but may include a review of the finding of such reviewers.
1014     (32)  Each managed care plan that is under contract with
1015the agency to provide health care services to Medicaid
1016recipients shall annually conduct a background check with the
1017Florida Department of Law Enforcement of all persons with
1018ownership interest of 5 percent or more or executive management
1019responsibility for the managed care plan and shall submit to the
1020agency information concerning any such person who has been found
1021guilty of, regardless of adjudication, or has entered a plea of
1022nolo contendere or guilty to, any of the offenses listed in s.
1023435.03.
1024     (33)  The agency shall, by rule, develop a process whereby
1025a Medicaid managed care plan enrollee who wishes to enter
1026hospice care may be disenrolled from the managed care plan
1027within 24 hours after contacting the agency regarding such
1028request. The agency rule shall include a methodology for the
1029agency to recoup managed care plan payments on a pro rata basis
1030if payment has been made for the enrollment month when
1031disenrollment occurs.
1032     (34)  The agency and entities which contract with the
1033agency to provide health care services to Medicaid recipients
1034under this section or s. 409.9122 must comply with the
1035provisions of s. 641.513 in providing emergency services and
1036care to Medicaid recipients and MediPass recipients.
1037     (35)  All entities providing health care services to
1038Medicaid recipients shall make available, and encourage all
1039pregnant women and mothers with infants to receive, and provide
1040documentation in the medical records to reflect, the following:
1041     (a)  Healthy Start prenatal or infant screening.
1042     (b)  Healthy Start care coordination, when screening or
1043other factors indicate need.
1044     (c)  Healthy Start enhanced services in accordance with the
1045prenatal or infant screening results.
1046     (d)  Immunizations in accordance with recommendations of
1047the Advisory Committee on Immunization Practices of the United
1048States Public Health Service and the American Academy of
1049Pediatrics, as appropriate.
1050     (e)  Counseling and services for family planning to all
1051women and their partners.
1052     (f)  A scheduled postpartum visit for the purpose of
1053voluntary family planning, to include discussion of all methods
1054of contraception, as appropriate.
1055     (g)  Referral to the Special Supplemental Nutrition Program
1056for Women, Infants, and Children (WIC).
1057     (36)  Any entity that provides Medicaid prepaid health plan
1058services shall ensure the appropriate coordination of health
1059care services with an assisted living facility in cases where a
1060Medicaid recipient is both a member of the entity's prepaid
1061health plan and a resident of the assisted living facility. If
1062the entity is at risk for Medicaid targeted case management and
1063behavioral health services, the entity shall inform the assisted
1064living facility of the procedures to follow should an emergent
1065condition arise.
1066     (37)  The agency may seek and implement federal waivers
1067necessary to provide for cost-effective purchasing of home
1068health services, private duty nursing services, transportation,
1069independent laboratory services, and durable medical equipment
1070and supplies through competitive bidding pursuant to s. 287.057.
1071The agency may request appropriate waivers from the federal
1072Health Care Financing Administration in order to competitively
1073bid such services. The agency may exclude providers not selected
1074through the bidding process from the Medicaid provider network.
1075     (38)  The Agency for Health Care Administration is directed
1076to issue a request for proposal or intent to negotiate to
1077implement on a demonstration basis an outpatient specialty
1078services pilot project in a rural and urban county in the state.
1079 As used in this subsection, the term "outpatient specialty
1080services" means clinical laboratory, diagnostic imaging, and
1081specified home medical services to include durable medical
1082equipment, prosthetics and orthotics, and infusion therapy.
1083     (a)  The entity that is awarded the contract to provide
1084Medicaid managed care outpatient specialty services must, at a
1085minimum, meet the following criteria:
1086     1.  The entity must be licensed by the Office of Insurance
1087Regulation under part II of chapter 641.
1088     2.  The entity must be experienced in providing outpatient
1089specialty services.
1090     3.  The entity must demonstrate to the satisfaction of the
1091agency that it provides high-quality services to its patients.
1092     4.  The entity must demonstrate that it has in place a
1093complaints and grievance process to assist Medicaid recipients
1094enrolled in the pilot managed care program to resolve complaints
1095and grievances.
1096     (b)  The pilot managed care program shall operate for a
1097period of 3 years.  The objective of the pilot program shall be
1098to determine the cost-effectiveness and effects on utilization,
1099access, and quality of providing outpatient specialty services
1100to Medicaid recipients on a prepaid, capitated basis.
1101     (c)  The agency shall conduct a quality assurance review of
1102the prepaid health clinic each year that the demonstration
1103program is in effect. The prepaid health clinic is responsible
1104for all expenses incurred by the agency in conducting a quality
1105assurance review.
1106     (d)  The entity that is awarded the contract to provide
1107outpatient specialty services to Medicaid recipients shall
1108report data required by the agency in a format specified by the
1109agency, for the purpose of conducting the evaluation required in
1110paragraph (e).
1111     (e)  The agency shall conduct an evaluation of the pilot
1112managed care program and report its findings to the Governor and
1113the Legislature by no later than January 1, 2001.
1114     (39)  The agency shall enter into agreements with not-for-
1115profit organizations based in this state for the purpose of
1116providing vision screening.
1117     (40)(a)  The agency shall implement a Medicaid prescribed-
1118drug spending-control program that includes the following
1119components:
1120     1.  Medicaid prescribed-drug coverage for brand-name drugs
1121for adult Medicaid recipients is limited to the dispensing of
1122four brand-name drugs per month per recipient. Children are
1123exempt from this restriction. Antiretroviral agents are excluded
1124from this limitation. No requirements for prior authorization or
1125other restrictions on medications used to treat mental illnesses
1126such as schizophrenia, severe depression, or bipolar disorder
1127may be imposed on Medicaid recipients. Medications that will be
1128available without restriction for persons with mental illnesses
1129include atypical antipsychotic medications, conventional
1130antipsychotic medications, selective serotonin reuptake
1131inhibitors, and other medications used for the treatment of
1132serious mental illnesses. The agency shall also limit the amount
1133of a prescribed drug dispensed to no more than a 34-day supply.
1134The agency shall continue to provide unlimited generic drugs,
1135contraceptive drugs and items, and diabetic supplies. Although a
1136drug may be included on the preferred drug formulary, it would
1137not be exempt from the four-brand limit. The agency may
1138authorize exceptions to the brand-name-drug restriction based
1139upon the treatment needs of the patients, only when such
1140exceptions are based on prior consultation provided by the
1141agency or an agency contractor, but the agency must establish
1142procedures to ensure that:
1143     a.  There will be a response to a request for prior
1144consultation by telephone or other telecommunication device
1145within 24 hours after receipt of a request for prior
1146consultation;
1147     b.  A 72-hour supply of the drug prescribed will be
1148provided in an emergency or when the agency does not provide a
1149response within 24 hours as required by sub-subparagraph a.; and
1150     c.  Except for the exception for nursing home residents and
1151other institutionalized adults and except for drugs on the
1152restricted formulary for which prior authorization may be sought
1153by an institutional or community pharmacy, prior authorization
1154for an exception to the brand-name-drug restriction is sought by
1155the prescriber and not by the pharmacy. When prior authorization
1156is granted for a patient in an institutional setting beyond the
1157brand-name-drug restriction, such approval is authorized for 12
1158months and monthly prior authorization is not required for that
1159patient.
1160     2.  Reimbursement to pharmacies for Medicaid prescribed
1161drugs shall be set at the average wholesale price less 13.25
1162percent.
1163     3.  The agency shall develop and implement a process for
1164managing the drug therapies of Medicaid recipients who are using
1165significant numbers of prescribed drugs each month. The
1166management process may include, but is not limited to,
1167comprehensive, physician-directed medical-record reviews, claims
1168analyses, and case evaluations to determine the medical
1169necessity and appropriateness of a patient's treatment plan and
1170drug therapies. The agency may contract with a private
1171organization to provide drug-program-management services. The
1172Medicaid drug benefit management program shall include
1173initiatives to manage drug therapies for HIV/AIDS patients,
1174patients using 20 or more unique prescriptions in a 180-day
1175period, and the top 1,000 patients in annual spending. The
1176agency shall enroll any Medicaid patient in the drug benefit
1177management program if he or she meets the specifications of this
1178provision and is not enrolled in a Medicaid health maintenance
1179organization.
1180     4.  The agency may limit the size of its pharmacy network
1181based on need, competitive bidding, price negotiations,
1182credentialing, or similar criteria. The agency shall give
1183special consideration to rural areas in determining the size and
1184location of pharmacies included in the Medicaid pharmacy
1185network. A pharmacy credentialing process may include criteria
1186such as a pharmacy's full-service status, location, size,
1187patient educational programs, patient consultation, disease-
1188management services, and other characteristics. The agency may
1189impose a moratorium on Medicaid pharmacy enrollment when it is
1190determined that it has a sufficient number of Medicaid-
1191participating providers.
1192     5.  The agency shall develop and implement a program that
1193requires Medicaid practitioners who prescribe drugs to use a
1194counterfeit-proof prescription pad for Medicaid prescriptions.
1195The agency shall require the use of standardized counterfeit-
1196proof prescription pads by Medicaid-participating prescribers or
1197prescribers who write prescriptions for Medicaid recipients. The
1198agency may implement the program in targeted geographic areas or
1199statewide.
1200     6.  The agency may enter into arrangements that require
1201manufacturers of generic drugs prescribed to Medicaid recipients
1202to provide rebates of at least 15.1 percent of the average
1203manufacturer price for the manufacturer's generic products.
1204These arrangements shall require that if a generic-drug
1205manufacturer pays federal rebates for Medicaid-reimbursed drugs
1206at a level below 15.1 percent, the manufacturer must provide a
1207supplemental rebate to the state in an amount necessary to
1208achieve a 15.1-percent rebate level.
1209     7.  The agency may establish a preferred drug formulary in
1210accordance with 42 U.S.C. s. 1396r-8, and, pursuant to the
1211establishment of such formulary, it is authorized to negotiate
1212supplemental rebates from manufacturers that are in addition to
1213those required by Title XIX of the Social Security Act and at no
1214less than 10 percent of the average manufacturer price as
1215defined in 42 U.S.C. s. 1936 on the last day of a quarter unless
1216the federal or supplemental rebate, or both, equals or exceeds
121725 percent. There is no upper limit on the supplemental rebates
1218the agency may negotiate. The agency may determine that specific
1219products, brand-name or generic, are competitive at lower rebate
1220percentages. Agreement to pay the minimum supplemental rebate
1221percentage will guarantee a manufacturer that the Medicaid
1222Pharmaceutical and Therapeutics Committee will consider a
1223product for inclusion on the preferred drug formulary. However,
1224a pharmaceutical manufacturer is not guaranteed placement on the
1225formulary by simply paying the minimum supplemental rebate.
1226Agency decisions will be made on the clinical efficacy of a drug
1227and recommendations of the Medicaid Pharmaceutical and
1228Therapeutics Committee, as well as the price of competing
1229products minus federal and state rebates. The agency is
1230authorized to contract with an outside agency or contractor to
1231conduct negotiations for supplemental rebates. For the purposes
1232of this section, the term "supplemental rebates" may include, at
1233the agency's discretion, cash rebates and other program benefits
1234that offset a Medicaid expenditure. Such other program benefits
1235may include, but are not limited to, disease management
1236programs, drug product donation programs, drug utilization
1237control programs, prescriber and beneficiary counseling and
1238education, fraud and abuse initiatives, and other services or
1239administrative investments with guaranteed savings to the
1240Medicaid program in the same year the rebate reduction is
1241included in the General Appropriations Act. The agency is
1242authorized to seek any federal waivers to implement this
1243initiative.
1244     8.  The agency shall establish an advisory committee for
1245the purposes of studying the feasibility of using a restricted
1246drug formulary for nursing home residents and other
1247institutionalized adults. The committee shall be comprised of
1248seven members appointed by the Secretary of Health Care
1249Administration. The committee members shall include two
1250physicians licensed under chapter 458 or chapter 459; three
1251pharmacists licensed under chapter 465 and appointed from a list
1252of recommendations provided by the Florida Long-Term Care
1253Pharmacy Alliance; and two pharmacists licensed under chapter
1254465.
1255     9.  The Agency for Health Care Administration shall expand
1256home delivery of pharmacy products. To assist Medicaid patients
1257in securing their prescriptions and reduce program costs, the
1258agency shall expand its current mail-order-pharmacy diabetes-
1259supply program to include all generic and brand-name drugs used
1260by Medicaid patients with diabetes. Medicaid recipients in the
1261current program may obtain nondiabetes drugs on a voluntary
1262basis. This initiative is limited to the geographic area covered
1263by the current contract. The agency may seek and implement any
1264federal waivers necessary to implement this subparagraph.
1265     (b)  The agency shall implement this subsection to the
1266extent that funds are appropriated to administer the Medicaid
1267prescribed-drug spending-control program. The agency may
1268contract all or any part of this program to private
1269organizations.
1270     (c)  The agency shall submit quarterly reports to the
1271Governor, the President of the Senate, and the Speaker of the
1272House of Representatives which must include, but need not be
1273limited to, the progress made in implementing this subsection
1274and its effect on Medicaid prescribed-drug expenditures.
1275     (41)  Notwithstanding the provisions of chapter 287, the
1276agency may, at its discretion, renew a contract or contracts for
1277fiscal intermediary services one or more times for such periods
1278as the agency may decide; however, all such renewals may not
1279combine to exceed a total period longer than the term of the
1280original contract.
1281     (42)  The agency shall provide for the development of a
1282demonstration project by establishment in Miami-Dade County of a
1283long-term-care facility licensed pursuant to chapter 395 to
1284improve access to health care for a predominantly minority,
1285medically underserved, and medically complex population and to
1286evaluate alternatives to nursing home care and general acute
1287care for such population.  Such project is to be located in a
1288health care condominium and colocated with licensed facilities
1289providing a continuum of care.  The establishment of this
1290project is not subject to the provisions of s. 408.036 or s.
1291408.039.  The agency shall report its findings to the Governor,
1292the President of the Senate, and the Speaker of the House of
1293Representatives by January 1, 2003.
1294     (43)  The agency shall develop and implement a utilization
1295management program for Medicaid-eligible recipients for the
1296management of occupational, physical, respiratory, and speech
1297therapies. The agency shall establish a utilization program that
1298may require prior authorization in order to ensure medically
1299necessary and cost-effective treatments. The program shall be
1300operated in accordance with a federally approved waiver program
1301or state plan amendment. The agency may seek a federal waiver or
1302state plan amendment to implement this program. The agency may
1303also competitively procure these services from an outside vendor
1304on a regional or statewide basis.
1305     (44)  The agency may contract on a prepaid or fixed-sum
1306basis with appropriately licensed prepaid dental health plans to
1307provide dental services.
1308     (45)  The agency shall mandate a recipient's participation
1309in a provider lock-in program limiting the receipt of goods or
1310services to a single specified provider after the 21-day appeal
1311process has ended for a period of no less than 1 year. If the
1312Medicaid recipient in a lock-in program is found to have
1313committed fraud or abuse in the Medicaid program on a second
1314occasion, the Medicaid recipient shall remain in the lock-in
1315program for the duration of his or her participation in the
1316Medicaid program. The lock-in programs shall include, but are
1317not limited to, pharmacies, medical doctors, and infusion
1318clinics. The limitation shall not be applicable to emergency
1319services and care provided to the recipient in a hospital
1320emergency department. The agency shall seek any federal waivers
1321necessary to implement this subsection.
1322     (46)  The agency shall seek a federal waiver for permission
1323to terminate the eligibility of a Medicaid recipient who is
1324found to have abused or defrauded the Medicaid program for a
1325third time in a period of less than 36 months.
1326     (47)  The agency may mail to the last registered address of
1327the Medicaid recipient an explanation of benefits each time
1328goods or services are used under the Medicaid recipient's


CODING: Words stricken are deletions; words underlined are additions.