HB 3B

1	A bill to be entitled
2	An act relating to Medicaid; amending s. 641.2261, F.S.;
3	revising the applicability of solvency requirements to
4	include Medicaid provider service networks and updating a
5	reference; amending s. 409.911, F.S.; renaming the
6	Medicaid Disproportionate Share Council; providing for
7	appointment of council members; providing responsibilities
8	of the council; amending s. 409.912, F.S.; providing an
9	exception from certain contract procurement requirements
10	for specified Medicaid managed care pilot programs and
11	Medicaid health maintenance organizations; deleting the
12	competitive procurement requirement for provider service
13	networks; requiring provider service networks to comply
14	with the solvency requirements in s. 641.2261, F.S.;
15	updating a reference; amending s. 409.91211, F.S.;
16	providing for distribution of upper payment limit,
17	hospital disproportionate share program, and low income
18	pool funds; providing legislative intent with respect to
19	distribution of said funds; providing for implementation
20	of the powers, duties, and responsibilities of the Agency
21	for Health Care Administration with respect to the pilot
22	program; including the Division of Children's Medical
23	Services Network within the Department of Health in a list
24	of state-authorized pilot programs; requiring the agency
25	to develop a data reporting system; requiring the agency
26	to implement procedures to minimize fraud and abuse;
27	providing that certain Medicaid and Supplemental Security
28	Income recipients are exempt from s. 409.9122, F.S.;
29	authorizing the agency to assign certain Medicaid
30	recipients to reform plans; authorizing the agency to
31	implement the provisions of the waiver approved by Centers
32	for Medicare and Medicaid Services and requiring the
33	agency to notify the Legislature prior to seeking federal
34	approval of modifications to said terms and conditions;
35	requiring an annual review by the Office of Insurance
36	Regulation of the pilot program's rate setting
37	methodology; requiring a report to the Legislature;
38	defining the term "capitated managed care plan"; creating
39	s. 409.91212, F.S.; authorizing the agency to expand the
40	Medicaid reform demonstration program; providing readiness
41	criteria; providing for public meetings; requiring notice
42	of intent to expand the demonstration program; requiring
43	the agency to request a hearing by the Joint Legislative
44	Committee on Medicaid Reform Implementation; authorizing
45	the agency to request certain budget transfers; amending
46	s. 409.9122, F.S.; revising provisions relating to
47	assignment of certain Medicaid recipients to managed care
48	plans; requiring the agency to submit reports to the
49	Legislature; specifying content of reports; creating s.
50	11.72, F.S.; creating the Joint Legislative Committee on
51	Medicaid Reform Implementation; providing for membership,
52	powers, and duties; providing for conflict between
53	specified provisions of ch. 409, F.S., and requiring a
54	report by the agency pertaining thereto; amending s.
55	216.346, F.S.; revising provisions relating to contracts
56	between state agencies; providing an appropriation;
57	providing an effective date.
58
59	Be It Enacted by the Legislature of the State of Florida:
60
61	Section 1.  Section 641.2261, Florida Statutes, is amended
62	to read:
63	641.2261  Application of federal solvency requirements to
64	provider-sponsored organizations and Medicaid provider service
65	networks.--
66	(1)  The solvency requirements of ss. 1855 and 1856 of the
67	Balanced Budget Act of 1997 and 42 C.F.R. s. 422.350, subpart H,
68	rules adopted by the Secretary of the United States Department
69	of Health and Human Services apply to a health maintenance
70	organization that is a provider-sponsored organization rather
71	than the solvency requirements of this part. However, if the
72	provider-sponsored organization does not meet the solvency
73	requirements of this part, the organization is limited to the
74	issuance of Medicare+Choice plans to eligible individuals. For
75	the purposes of this section, the terms "Medicare+Choice plans,"
76	"provider-sponsored organizations," and "solvency requirements"
77	have the same meaning as defined in the federal act and federal
78	rules and regulations.
79	(2)  The solvency requirements of 42 C.F.R. s. 422.350,
80	subpart H, and the solvency requirements established in the
81	approved federal waiver pursuant to chapter 409 apply to a
82	Medicaid provider service network rather than the solvency
83	requirements of this part.
84	Section 2.  Subsection (9) of section 409.911, Florida
85	Statutes, is amended to read:
86	409.911  Disproportionate share program.--Subject to
87	specific allocations established within the General
88	Appropriations Act and any limitations established pursuant to
89	chapter 216, the agency shall distribute, pursuant to this
90	section, moneys to hospitals providing a disproportionate share
91	of Medicaid or charity care services by making quarterly
92	Medicaid payments as required. Notwithstanding the provisions of
93	s. 409.915, counties are exempt from contributing toward the
94	cost of this special reimbursement for hospitals serving a
95	disproportionate share of low-income patients.
96	(9)  The Agency for Health Care Administration shall create
97	a Medicaid Low Income Pool Disproportionate Share Council. The
98	Low Income Pool Council shall consist of 17 members, including
99	three representatives of statutory teaching hospitals, three
100	representatives of public hospitals, three representatives of
101	nonprofit hospitals, three representatives of for-profit
102	hospitals, two representatives of rural hospitals, two
103	representatives of units of local government which contribute
104	funding, and one representative from the Department of Health.
105	The council shall have the following responsibilities:
106	(a)  Make recommendations on the financing of the upper
107	payment limit program, the hospital disproportionate share
108	program, or the low income pool as implemented by the agency
109	pursuant to federal waiver and on the distribution of funds.
110	(b)  Advise the agency on the development of the low income
111	pool plan required by the Centers for Medicare and Medicaid
112	Services pursuant to the Medicaid reform waiver.
113	(c)  Advise the agency on the distribution of hospital
114	funds used to adjust inpatient hospital rates and rebase rates
115	or otherwise exempt hospitals from reimbursement limits as
116	financed by intergovernmental transfers.
117	(a)  The purpose of the council is to study and make
118	recommendations regarding:
119	1.  The formula for the regular disproportionate share
120	program and alternative financing options.
121	2.  Enhanced Medicaid funding through the Special Medicaid
122	Payment program.
123	3.  The federal status of the upper-payment-limit funding
124	option and how this option may be used to promote health care
125	initiatives determined by the council to be state health care
126	priorities.
127	(b)  The council shall include representatives of the
128	Executive Office of the Governor and of the agency;
129	representatives from teaching, public, private nonprofit,
130	private for-profit, and family practice teaching hospitals; and
131	representatives from other groups as needed.
132	(d)(c)  The council shall Submit its findings and
133	recommendations to the Governor and the Legislature no later
134	than February 1 of each year.
135	Section 3.  Paragraphs (b) and (d) of subsection (4) of
136	section 409.912, Florida Statutes, are amended to read:
137	409.912  Cost-effective purchasing of health care.--The
138	agency shall purchase goods and services for Medicaid recipients
139	in the most cost-effective manner consistent with the delivery
140	of quality medical care. To ensure that medical services are
141	effectively utilized, the agency may, in any case, require a
142	confirmation or second physician's opinion of the correct
143	diagnosis for purposes of authorizing future services under the
144	Medicaid program. This section does not restrict access to
145	emergency services or poststabilization care services as defined
146	in 42 C.F.R. part 438.114. Such confirmation or second opinion
147	shall be rendered in a manner approved by the agency. The agency
148	shall maximize the use of prepaid per capita and prepaid
149	aggregate fixed-sum basis services when appropriate and other
150	alternative service delivery and reimbursement methodologies,
151	including competitive bidding pursuant to s. 287.057, designed
152	to facilitate the cost-effective purchase of a case-managed
153	continuum of care. The agency shall also require providers to
154	minimize the exposure of recipients to the need for acute
155	inpatient, custodial, and other institutional care and the
156	inappropriate or unnecessary use of high-cost services. The
157	agency shall contract with a vendor to monitor and evaluate the
158	clinical practice patterns of providers in order to identify
159	trends that are outside the normal practice patterns of a
160	provider's professional peers or the national guidelines of a
161	provider's professional association. The vendor must be able to
162	provide information and counseling to a provider whose practice
163	patterns are outside the norms, in consultation with the agency,
164	to improve patient care and reduce inappropriate utilization.
165	The agency may mandate prior authorization, drug therapy
166	management, or disease management participation for certain
167	populations of Medicaid beneficiaries, certain drug classes, or
168	particular drugs to prevent fraud, abuse, overuse, and possible
169	dangerous drug interactions. The Pharmaceutical and Therapeutics
170	Committee shall make recommendations to the agency on drugs for
171	which prior authorization is required. The agency shall inform
172	the Pharmaceutical and Therapeutics Committee of its decisions
173	regarding drugs subject to prior authorization. The agency is
174	authorized to limit the entities it contracts with or enrolls as
175	Medicaid providers by developing a provider network through
176	provider credentialing. The agency may competitively bid single-
177	source-provider contracts if procurement of goods or services
178	results in demonstrated cost savings to the state without
179	limiting access to care. The agency may limit its network based
180	on the assessment of beneficiary access to care, provider
181	availability, provider quality standards, time and distance
182	standards for access to care, the cultural competence of the
183	provider network, demographic characteristics of Medicaid
184	beneficiaries, practice and provider-to-beneficiary standards,
185	appointment wait times, beneficiary use of services, provider
186	turnover, provider profiling, provider licensure history,
187	previous program integrity investigations and findings, peer
188	review, provider Medicaid policy and billing compliance records,
189	clinical and medical record audits, and other factors. Providers
190	shall not be entitled to enrollment in the Medicaid provider
191	network. The agency shall determine instances in which allowing
192	Medicaid beneficiaries to purchase durable medical equipment and
193	other goods is less expensive to the Medicaid program than long-
194	term rental of the equipment or goods. The agency may establish
195	rules to facilitate purchases in lieu of long-term rentals in
196	order to protect against fraud and abuse in the Medicaid program
197	as defined in s. 409.913. The agency may seek federal waivers
198	necessary to administer these policies.
199	(4)  The agency may contract with:
200	(b)  An entity that is providing comprehensive behavioral
201	health care services to certain Medicaid recipients through a
202	capitated, prepaid arrangement pursuant to the federal waiver
203	provided for by s. 409.905(5). Such an entity must be licensed
204	under chapter 624, chapter 636, or chapter 641 and must possess
205	the clinical systems and operational competence to manage risk
206	and provide comprehensive behavioral health care to Medicaid
207	recipients. As used in this paragraph, the term "comprehensive
208	behavioral health care services" means covered mental health and
209	substance abuse treatment services that are available to
210	Medicaid recipients. The secretary of the Department of Children
211	and Family Services shall approve provisions of procurements
212	related to children in the department's care or custody prior to
213	enrolling such children in a prepaid behavioral health plan. Any
214	contract awarded under this paragraph must be competitively
215	procured. In developing the behavioral health care prepaid plan
216	procurement document, the agency shall ensure that the
217	procurement document requires the contractor to develop and
218	implement a plan to ensure compliance with s. 394.4574 related
219	to services provided to residents of licensed assisted living
220	facilities that hold a limited mental health license. Except as
221	provided in subparagraph 8. and except in counties where the
222	Medicaid managed care pilot program is authorized under s.
223	409.91211, the agency shall seek federal approval to contract
224	with a single entity meeting these requirements to provide
225	comprehensive behavioral health care services to all Medicaid
226	recipients not enrolled in a Medicaid capitated managed care
227	plan authorized under s. 409.91211 or a Medicaid health
228	maintenance organization plan in an AHCA area. In an AHCA area
229	where the Medicaid managed care pilot program is authorized
230	under s. 409.91211 in one or more counties, the agency may
231	procure a contract with a single entity to serve the remaining
232	counties as an AHCA area or the remaining counties may be
233	included with an adjacent AHCA area and shall be subject to this
234	paragraph. Each entity must offer sufficient choice of providers
235	in its network to ensure recipient access to care and the
236	opportunity to select a provider with whom they are satisfied.
237	The network shall include all public mental health hospitals. To
238	ensure unimpaired access to behavioral health care services by
239	Medicaid recipients, all contracts issued pursuant to this
240	paragraph shall require 80 percent of the capitation paid to the
241	managed care plan, including health maintenance organizations,
242	to be expended for the provision of behavioral health care
243	services. In the event the managed care plan expends less than
244	80 percent of the capitation paid pursuant to this paragraph for
245	the provision of behavioral health care services, the difference
246	shall be returned to the agency. The agency shall provide the
247	managed care plan with a certification letter indicating the
248	amount of capitation paid during each calendar year for the
249	provision of behavioral health care services pursuant to this
250	section. The agency may reimburse for substance abuse treatment
251	services on a fee-for-service basis until the agency finds that
252	adequate funds are available for capitated, prepaid
253	arrangements.
254	1.  By January 1, 2001, the agency shall modify the
255	contracts with the entities providing comprehensive inpatient
256	and outpatient mental health care services to Medicaid
257	recipients in Hillsborough, Highlands, Hardee, Manatee, and Polk
258	Counties, to include substance abuse treatment services.
259	2.  By July 1, 2003, the agency and the Department of
260	Children and Family Services shall execute a written agreement
261	that requires collaboration and joint development of all policy,
262	budgets, procurement documents, contracts, and monitoring plans
263	that have an impact on the state and Medicaid community mental
264	health and targeted case management programs.
265	3.  Except as provided in subparagraph 8., by July 1, 2006,
266	the agency and the Department of Children and Family Services
267	shall contract with managed care entities in each AHCA area
268	except area 6 or arrange to provide comprehensive inpatient and
269	outpatient mental health and substance abuse services through
270	capitated prepaid arrangements to all Medicaid recipients who
271	are eligible to participate in such plans under federal law and
272	regulation. In AHCA areas where eligible individuals number less
273	than 150,000, the agency shall contract with a single managed
274	care plan to provide comprehensive behavioral health services to
275	all recipients who are not enrolled in a Medicaid health
276	maintenance organization or a Medicaid capitated managed care
277	plan authorized under s. 409.91211. The agency may contract with
278	more than one comprehensive behavioral health provider to
279	provide care to recipients who are not enrolled in a Medicaid
280	health maintenance organization or a Medicaid capitated managed
281	care plan authorized under s. 409.91211 in AHCA areas where the
282	eligible population exceeds 150,000. In an AHCA area where the
283	Medicaid managed care pilot program is authorized under s.
284	409.91211 in one or more counties, the agency may procure a
285	contract with a single entity to serve the remaining counties as
286	an AHCA area or the remaining counties may be included with an
287	adjacent AHCA area and shall be subject to this paragraph.
288	Contracts for comprehensive behavioral health providers awarded
289	pursuant to this section shall be competitively procured. Both
290	for-profit and not-for-profit corporations shall be eligible to
291	compete. Managed care plans contracting with the agency under
292	subsection (3) shall provide and receive payment for the same
293	comprehensive behavioral health benefits as provided in AHCA
294	rules, including handbooks incorporated by reference. In AHCA
295	area 11, the agency shall contract with at least two
296	comprehensive behavioral health care providers to provide
297	behavioral health care to recipients in that area who are
298	enrolled in, or assigned to, the MediPass program. One of the
299	behavioral health care contracts shall be with the existing
300	provider service network pilot project, as described in
301	paragraph (d), for the purpose of demonstrating the cost-
302	effectiveness of the provision of quality mental health services
303	through a public hospital-operated managed care model. Payment
304	shall be at an agreed-upon capitated rate to ensure cost
305	savings. Of the recipients in area 11 who are assigned to
306	MediPass under the provisions of s. 409.9122(2)(k), A minimum of
307	50,000 of those MediPass-enrolled recipients shall be assigned
308	to the existing provider service network in area 11 for their
309	behavioral care.
310	4.  By October 1, 2003, the agency and the department shall
311	submit a plan to the Governor, the President of the Senate, and
312	the Speaker of the House of Representatives which provides for
313	the full implementation of capitated prepaid behavioral health
314	care in all areas of the state.
315	a.  Implementation shall begin in 2003 in those AHCA areas
316	of the state where the agency is able to establish sufficient
317	capitation rates.
318	b.  If the agency determines that the proposed capitation
319	rate in any area is insufficient to provide appropriate
320	services, the agency may adjust the capitation rate to ensure
321	that care will be available. The agency and the department may
322	use existing general revenue to address any additional required
323	match but may not over-obligate existing funds on an annualized
324	basis.
325	c.  Subject to any limitations provided for in the General
326	Appropriations Act, the agency, in compliance with appropriate
327	federal authorization, shall develop policies and procedures
328	that allow for certification of local and state funds.
329	5.  Children residing in a statewide inpatient psychiatric
330	program, or in a Department of Juvenile Justice or a Department
331	of Children and Family Services residential program approved as
332	a Medicaid behavioral health overlay services provider shall not
333	be included in a behavioral health care prepaid health plan or
334	any other Medicaid managed care plan pursuant to this paragraph.
335	6.  In converting to a prepaid system of delivery, the
336	agency shall in its procurement document require an entity
337	providing only comprehensive behavioral health care services to
338	prevent the displacement of indigent care patients by enrollees
339	in the Medicaid prepaid health plan providing behavioral health
340	care services from facilities receiving state funding to provide
341	indigent behavioral health care, to facilities licensed under
342	chapter 395 which do not receive state funding for indigent
343	behavioral health care, or reimburse the unsubsidized facility
344	for the cost of behavioral health care provided to the displaced
345	indigent care patient.
346	7.  Traditional community mental health providers under
347	contract with the Department of Children and Family Services
348	pursuant to part IV of chapter 394, child welfare providers
349	under contract with the Department of Children and Family
350	Services in areas 1 and 6, and inpatient mental health providers
351	licensed pursuant to chapter 395 must be offered an opportunity
352	to accept or decline a contract to participate in any provider
353	network for prepaid behavioral health services.
354	8.  For fiscal year 2004-2005, all Medicaid eligible
355	children, except children in areas 1 and 6, whose cases are open
356	for child welfare services in the HomeSafeNet system, shall be
357	enrolled in MediPass or in Medicaid fee-for-service and all
358	their behavioral health care services including inpatient,
359	outpatient psychiatric, community mental health, and case
360	management shall be reimbursed on a fee-for-service basis.
361	Beginning July 1, 2005, such children, who are open for child
362	welfare services in the HomeSafeNet system, shall receive their
363	behavioral health care services through a specialty prepaid plan
364	operated by community-based lead agencies either through a
365	single agency or formal agreements among several agencies. The
366	specialty prepaid plan must result in savings to the state
367	comparable to savings achieved in other Medicaid managed care
368	and prepaid programs. Such plan must provide mechanisms to
369	maximize state and local revenues. The specialty prepaid plan
370	shall be developed by the agency and the Department of Children
371	and Family Services. The agency is authorized to seek any
372	federal waivers to implement this initiative.
373	(d)  A provider service network which may be reimbursed on
374	a fee-for-service or prepaid basis. A provider service network
375	which is reimbursed by the agency on a prepaid basis shall be
376	exempt from parts I and III of chapter 641, but must comply with
377	the solvency requirements in s. 641.2261(2) and meet appropriate
378	financial reserve, quality assurance, and patient rights
379	requirements as established by the agency. The agency shall
380	award contracts on a competitive bid basis and shall select
381	bidders based upon price and quality of care. Medicaid
382	recipients assigned to a provider service network demonstration
383	project shall be chosen equally from those who would otherwise
384	have been assigned to prepaid plans and MediPass. The agency is
385	authorized to seek federal Medicaid waivers as necessary to
386	implement the provisions of this section. Any contract
387	previously awarded to a provider service network operated by a
388	hospital pursuant to this subsection shall remain in effect for
389	a period of 3 years following the current contract expiration
390	date, regardless of any contractual provisions to the contrary.
391	A provider service network is a network established or organized
392	and operated by a health care provider, or group of affiliated
393	health care providers, which provides a substantial proportion
394	of the health care items and services under a contract directly
395	through the provider or affiliated group of providers and may
396	make arrangements with physicians or other health care
397	professionals, health care institutions, or any combination of
398	such individuals or institutions to assume all or part of the
399	financial risk on a prospective basis for the provision of basic
400	health services by the physicians, by other health
401	professionals, or through the institutions. The health care
402	providers must have a controlling interest in the governing body
403	of the provider service network organization.
404	Section 4.  Section 409.91211, Florida Statutes, is amended
405	to read:
406	409.91211  Medicaid managed care pilot program.--
407	(1)(a)  The agency is authorized to seek experimental,
408	pilot, or demonstration project waivers, pursuant to s. 1115 of
409	the Social Security Act, to create a statewide initiative to
410	provide for a more efficient and effective service delivery
411	system that enhances quality of care and client outcomes in the
412	Florida Medicaid program pursuant to this section. Phase one of
413	the demonstration shall be implemented in two geographic areas.
414	One demonstration site shall include only Broward County. A
415	second demonstration site shall initially include Duval County
416	and shall be expanded to include Baker, Clay, and Nassau
417	Counties within 1 year after the Duval County program becomes
418	operational. This waiver authority is contingent upon federal
419	approval to preserve the upper-payment-limit funding mechanism
420	for hospitals, including a guarantee of a reasonable growth
421	factor, a methodology to allow the use of a portion of these
422	funds to serve as a risk pool for demonstration sites,
423	provisions to preserve the state's ability to use
424	intergovernmental transfers, and provisions to protect the
425	disproportionate share program authorized pursuant to this
426	chapter. Under the upper payment limit program, the hospital
427	disproportionate share program, or the low income pool as
428	implemented by the agency pursuant to federal waiver, the state
429	matching funds required for the program shall be provided by the
430	state and by local governmental entities through
431	intergovernmental transfers. The agency shall distribute funds
432	from the upper payment limit program, the hospital
433	disproportionate share program, and the low income pool
434	according to federal regulations and waivers and the low income
435	pool methodology approved by the Centers for Medicare and
436	Medicaid Services. Upon completion of the evaluation conducted
437	under s. 3, ch. 2005-133, Laws of Florida, the agency may
438	request statewide expansion of the demonstration projects.
439	Statewide phase-in to additional counties shall be contingent
440	upon review and approval by the Legislature.
441	(b)  It is the intent of the Legislature that the low
442	income pool plan required by the terms and conditions of the
443	Medicaid reform waiver and submitted to the Centers for Medicare
444	and Medicaid Services propose the distribution of the program
445	funds in paragraph (a) based on the following objectives:
446	1.  Ensure a broad and fair distribution of available funds
447	based on the access provided by Medicaid participating
448	hospitals, regardless of their ownership status, through their
449	delivery of inpatient or outpatient care for Medicaid
450	beneficiaries and uninsured and underinsured individuals.
451	2.  Ensure accessible emergency inpatient and outpatient
452	care for Medicaid beneficiaries and uninsured and underinsured
453	individuals.
454	3.  Enhance primary, preventive, and other ambulatory care
455	coverages for uninsured individuals.
456	4.  Promote teaching and specialty hospital programs.
457	5.  Promote the stability and viability of statutorily
458	defined rural hospitals and hospitals that serve as sole
459	community hospitals.
460	6.  Recognize the extent of hospital uncompensated care
461	costs.
462	7.  Maintain and enhance essential community hospital care.
463	8.  Maintain incentives for local governmental entities to
464	contribute to the cost of uncompensated care.
465	9.  Promote measures to avoid preventable hospitalizations.
466	10.  Account for hospital efficiency.
467	11.  Contribute to a community's overall health system.
468	(2)  The Legislature intends for the capitated managed care
469	pilot program to:
470	(a)  Provide recipients in Medicaid fee-for-service or the
471	MediPass program a comprehensive and coordinated capitated
472	managed care system for all health care services specified in
473	ss. 409.905 and 409.906.
474	(b)  Stabilize Medicaid expenditures under the pilot
475	program compared to Medicaid expenditures in the pilot area for
476	the 3 years before implementation of the pilot program, while
477	ensuring:
478	1.  Consumer education and choice.
479	2.  Access to medically necessary services.
480	3.  Coordination of preventative, acute, and long-term
481	care.
482	4.  Reductions in unnecessary service utilization.
483	(c)  Provide an opportunity to evaluate the feasibility of
484	statewide implementation of capitated managed care networks as a
485	replacement for the current Medicaid fee-for-service and
486	MediPass systems.
487	(3)  The agency shall have the following powers, duties,
488	and responsibilities with respect to the development of a pilot
489	program:
490	(a)  To implement develop and recommend a system to deliver
491	all mandatory services specified in s. 409.905 and optional
492	services specified in s. 409.906, as approved by the Centers for
493	Medicare and Medicaid Services and the Legislature in the waiver
494	pursuant to this section. Services to recipients under plan
495	benefits shall include emergency services provided under s.
496	409.9128.
497	(b)  To implement a pilot program that includes recommend
498	Medicaid eligibility categories, from those specified in ss.
499	409.903 and 409.904 as authorized in an approved federal waiver,
500	which shall be included in the pilot program.
501	(c)  To implement determine and recommend how to design the
502	managed care pilot program that maximizes in order to take
503	maximum advantage of all available state and federal funds,
504	including those obtained through intergovernmental transfers,
505	the low income pool, supplemental Medicaid payments upper-
506	payment-level funding systems, and the disproportionate share
507	program. Within the parameters allowed by federal statute and
508	rule, the agency is authorized to seek options for making direct
509	payments to hospitals and physicians employed by or under
510	contract with the state's medical schools for the costs
511	associated with graduate medical education under Medicaid
512	reform.
513	(d)  To implement determine and recommend actuarially
514	sound, risk-adjusted capitation rates for Medicaid recipients in
515	the pilot program which can be separated to cover comprehensive
516	care, enhanced services, and catastrophic care.
517	(e)  To implement determine and recommend policies and
518	guidelines for phasing in financial risk for approved provider
519	service networks over a 3-year period. These policies and
520	guidelines shall include an option for a provider service
521	network to be paid to pay fee-for-service rates. For any
522	provider service network established in a managed care pilot
523	area, the option to be paid fee-for-service rates shall include
524	a savings-settlement mechanism that is consistent with s.
525	409.912(44) that may include a savings-settlement option for at
526	least 2 years. This model shall may be converted to a risk-
527	adjusted capitated rate no later than the beginning of the
528	fourth in the third year of operation and may be converted
529	earlier at the option of the provider service network. Federally
530	qualified health centers may be offered an opportunity to accept
531	or decline a contract to participate in any provider network for
532	prepaid primary care services.
533	(f)  To implement determine and recommend provisions
534	related to stop-loss requirements and the transfer of excess
535	cost to catastrophic coverage that accommodates the risks
536	associated with the development of the pilot program.
537	(g)  To determine and recommend a process to be used by the
538	Social Services Estimating Conference to determine and validate
539	the rate of growth of the per-member costs of providing Medicaid
540	services under the managed care pilot program.
541	(h)  To implement determine and recommend program standards
542	and credentialing requirements for capitated managed care
543	networks to participate in the pilot program, including those
544	related to fiscal solvency, quality of care, and adequacy of
545	access to health care providers. It is the intent of the
546	Legislature that, to the extent possible, any pilot program
547	authorized by the state under this section include any federally
548	qualified health center, any federally qualified rural health
549	clinic, county health department, the Division of Children's
550	Medical Services Network within the Department of Health, or any
551	other federally, state, or locally funded entity that serves the
552	geographic areas within the boundaries of the pilot program that
553	requests to participate. This paragraph does not relieve an
554	entity that qualifies as a capitated managed care network under
555	this section from any other licensure or regulatory requirements
556	contained in state or federal law which would otherwise apply to
557	the entity. The standards and credentialing requirements shall
558	be based upon, but are not limited to:
559	1.  Compliance with the accreditation requirements as
560	provided in s. 641.512.
561	2.  Compliance with early and periodic screening,
562	diagnosis, and treatment screening requirements under federal
563	law.
564	3.  The percentage of voluntary disenrollments.
565	4.  Immunization rates.
566	5.  Standards of the National Committee for Quality
567	Assurance and other approved accrediting bodies.
568	6.  Recommendations of other authoritative bodies.
569	7.  Specific requirements of the Medicaid program, or
570	standards designed to specifically meet the unique needs of
571	Medicaid recipients.
572	8.  Compliance with the health quality improvement system
573	as established by the agency, which incorporates standards and
574	guidelines developed by the Centers for Medicare and Medicaid
575	Services as part of the quality assurance reform initiative.
576	9.  The network's infrastructure capacity to manage
577	financial transactions, recordkeeping, data collection, and
578	other administrative functions.
579	10.  The network's ability to submit any financial,
580	programmatic, or patient-encounter data or other information
581	required by the agency to determine the actual services provided
582	and the cost of administering the plan.
583	(i)  To implement develop and recommend a mechanism for
584	providing information to Medicaid recipients for the purpose of
585	selecting a capitated managed care plan. For each plan available
586	to a recipient, the agency, at a minimum, shall ensure that the
587	recipient is provided with:
588	1.  A list and description of the benefits provided.
589	2.  Information about cost sharing.
590	3.  Plan performance data, if available.
591	4.  An explanation of benefit limitations.
592	5.  Contact information, including identification of
593	providers participating in the network, geographic locations,
594	and transportation limitations.
595	6.  Any other information the agency determines would
596	facilitate a recipient's understanding of the plan or insurance
597	that would best meet his or her needs.
598	(j)  To implement develop and recommend a system to ensure
599	that there is a record of recipient acknowledgment that choice
600	counseling has been provided.
601	(k)  To implement develop and recommend a choice counseling
602	system to ensure that the choice counseling process and related
603	material are designed to provide counseling through face-to-face
604	interaction, by telephone, and in writing and through other
605	forms of relevant media. Materials shall be written at the
606	fourth-grade reading level and available in a language other
607	than English when 5 percent of the county speaks a language
608	other than English. Choice counseling shall also use language
609	lines and other services for impaired recipients, such as
610	TTD/TTY.
611	(l)  To implement develop and recommend a system that
612	prohibits capitated managed care plans, their representatives,
613	and providers employed by or contracted with the capitated
614	managed care plans from recruiting persons eligible for or
615	enrolled in Medicaid, from providing inducements to Medicaid
616	recipients to select a particular capitated managed care plan,
617	and from prejudicing Medicaid recipients against other capitated
618	managed care plans. The system shall require the entity
619	performing choice counseling to determine if the recipient has
620	made a choice of a plan or has opted out because of duress,
621	threats, payment to the recipient, or incentives promised to the
622	recipient by a third party. If the choice counseling entity
623	determines that the decision to choose a plan was unlawfully
624	influenced or a plan violated any of the provisions of s.
625	409.912(21), the choice counseling entity shall immediately
626	report the violation to the agency's program integrity section
627	for investigation. Verification of choice counseling by the
628	recipient shall include a stipulation that the recipient
629	acknowledges the provisions of this subsection.
630	(m)  To implement develop and recommend a choice counseling
631	system that promotes health literacy and provides information
632	aimed to reduce minority health disparities through outreach
633	activities for Medicaid recipients.
634	(n)  To develop and recommend a system for the agency to
635	contract with entities to perform choice counseling. The agency
636	may establish standards and performance contracts, including
637	standards requiring the contractor to hire choice counselors who
638	are representative of the state's diverse population and to
639	train choice counselors in working with culturally diverse
640	populations.
641	(o)  To implement determine and recommend descriptions of
642	the eligibility assignment processes which will be used to
643	facilitate client choice while ensuring pilot programs of
644	adequate enrollment levels. These processes shall ensure that
645	pilot sites have sufficient levels of enrollment to conduct a
646	valid test of the managed care pilot program within a 2-year
647	timeframe.
648	(p)  To implement standards for plan compliance, including,
649	but not limited to, quality assurance and performance
650	improvement standards, peer or professional review standards,
651	grievance policies, and program integrity policies.
652	(q)  To develop a data reporting system, seek input from
653	managed care plans to establish patient-encounter reporting
654	requirements, and ensure that the data reported is accurate and
655	complete.
656	(r)  To work with managed care plans to establish a uniform
657	system to measure and monitor outcomes of a recipient of
658	Medicaid services which shall use financial, clinical, and other
659	criteria based on pharmacy services, medical services, and other
660	data related to the provision of Medicaid services, including,
661	but not limited to:
662	1.  Health Plan Employer Data and Information Set (HEDIS)
663	or HEDIS measures specific to Medicaid.
664	2.  Member satisfaction.
665	3.  Provider satisfaction.
666	4.  Report cards on plan performance and best practices.
667	5.  Compliance with the prompt payment of claims
668	requirements provided in ss. 627.613, 641.3155, and 641.513.
669	(s)  To require managed care plans that have contracted
670	with the agency to establish a quality assurance system that
671	incorporates the provisions of s. 409.912(27) and any standards,
672	rules, and guidelines developed by the agency.
673	(t)  To establish a patient-encounter database to compile
674	data on health care services rendered by health care
675	practitioners that provide services to patients enrolled in
676	managed care plans in the demonstration sites. Health care
677	practitioners and facilities in the demonstration sites shall
678	submit, and managed care plans participating in the
679	demonstration sites shall receive, claims payment and any other
680	information reasonably related to the patient-encounter database
681	electronically in a standard format as required by the agency.
682	The agency shall establish reasonable deadlines for phasing in
683	the electronic transmittal of full-encounter data. The patient-
684	encounter database shall:
685	1.  Collect the following information, if applicable, for
686	each type of patient encounter with a health care practitioner
687	or facility, including:
688	a.  The demographic characteristics of the patient.
689	b.  The principal, secondary, and tertiary diagnosis.
690	c.  The procedure performed.
691	d.  The date when and the location where the procedure was
692	performed.
693	e.  The amount of the payment for the procedure.
694	f.  The health care practitioner's universal identification
695	number.
696	g.  If the health care practitioner rendering the service
697	is a dependent practitioner, the modifiers appropriate to
698	indicate that the service was delivered by the dependent
699	practitioner.
700	2.  Collect appropriate information relating to
701	prescription drugs for each type of patient encounter.
702	3.  Collect appropriate information related to health care
703	costs and utilization from managed care plans participating in
704	the demonstration sites. To the extent practicable, the agency
705	shall utilize a standardized claim form or electronic transfer
706	system that is used by health care practitioners, facilities,
707	and payors. To develop and recommend a system to monitor the
708	provision of health care services in the pilot program,
709	including utilization and quality of health care services for
710	the purpose of ensuring access to medically necessary services.
711	This system shall include an encounter data-information system
712	that collects and reports utilization information. The system
713	shall include a method for verifying data integrity within the
714	database and within the provider's medical records.
715	(u)(q)  To implement recommend a grievance resolution
716	process for Medicaid recipients enrolled in a capitated managed
717	care network under the pilot program modeled after the
718	subscriber assistance panel, as created in s. 408.7056. This
719	process shall include a mechanism for an expedited review of no
720	greater than 24 hours after notification of a grievance if the
721	life of a Medicaid recipient is in imminent and emergent
722	jeopardy.
723	(v)(r)  To implement recommend a grievance resolution
724	process for health care providers employed by or contracted with
725	a capitated managed care network under the pilot program in
726	order to settle disputes among the provider and the managed care
727	network or the provider and the agency.
728	(w)(s)  To implement develop and recommend criteria in an
729	approved federal waiver to designate health care providers as
730	eligible to participate in the pilot program. The agency and
731	capitated managed care networks must follow national guidelines
732	for selecting health care providers, whenever available. These
733	criteria must include at a minimum those criteria specified in
734	s. 409.907.
735	(x)(t)  To use develop and recommend health care provider
736	agreements for participation in the pilot program.
737	(y)(u)  To require that all health care providers under
738	contract with the pilot program be duly licensed in the state,
739	if such licensure is available, and meet other criteria as may
740	be established by the agency. These criteria shall include at a
741	minimum those criteria specified in s. 409.907.
742	(z)(v)  To ensure that managed care organizations work
743	collaboratively develop and recommend agreements with other
744	state or local governmental programs or institutions for the
745	coordination of health care to eligible individuals receiving
746	services from such programs or institutions.
747	(aa)(w)  To implement procedures to minimize the risk of
748	Medicaid fraud and abuse in all plans operating in the Medicaid
749	managed care pilot program authorized in this section:
750	1.  The agency shall ensure that applicable provisions of
751	chapters 409, 414, 626, 641, and 932, relating to Medicaid fraud
752	and abuse, are applied and enforced at the demonstration sites.
753	2.  Providers shall have the necessary certification,
754	license, and credentials required by law and federal waiver.
755	3.  The agency shall ensure that the plan is in compliance
756	with the provisions of s. 409.912(21) and (22).
757	4.  The agency shall require each plan to establish program
758	integrity functions and activities to reduce the incidence of
759	fraud and abuse. Plans must report instances of fraud and abuse
760	pursuant to chapter 641.
761	5.  The plan shall have written administrative and
762	management procedures, including a mandatory compliance plan,
763	that are designed to guard against fraud and abuse. The plan
764	shall designate a compliance officer with sufficient experience
765	in health care.
766	6.a.  The agency shall require all managed care plan
767	contractors in the pilot program to report all instances of
768	suspected fraud and abuse. A failure to report instances of
769	suspected fraud and abuse is a violation of law and subject to
770	the penalties provided by law.
771	b.  An instance of fraud and abuse in the managed care
772	plan, including, but not limited to, defrauding the state health
773	care benefit program by misrepresentation of fact in reports,
774	claims, certifications, enrollment claims, demographic
775	statistics, and patient-encounter data; misrepresentation of the
776	qualifications of persons rendering health care and ancillary
777	services; bribery and false statements relating to the delivery
778	of health care; unfair and deceptive marketing practices; and
779	managed care false claims actions, is a violation of law and
780	subject to the penalties provided by law.
781	c.  The agency shall require all contractors to make all
782	files and relevant billing and claims data accessible to state
783	regulators and investigators and all such data shall be linked
784	into a unified system for seamless reviews and investigations.
785	To develop and recommend a system to oversee the activities of
786	pilot program participants, health care providers, capitated
787	managed care networks, and their representatives in order to
788	prevent fraud or abuse, overutilization or duplicative
789	utilization, underutilization or inappropriate denial of
790	services, and neglect of participants and to recover
791	overpayments as appropriate. For the purposes of this paragraph,
792	the terms "abuse" and "fraud" have the meanings as provided in
793	s. 409.913. The agency must refer incidents of suspected fraud,
794	abuse, overutilization and duplicative utilization, and
795	underutilization or inappropriate denial of services to the
796	appropriate regulatory agency.
797	(bb)(x)  To develop and provide actuarial and benefit
798	design analyses that indicate the effect on capitation rates and
799	benefits offered in the pilot program over a prospective 5-year
800	period based on the following assumptions:
801	1.  Growth in capitation rates which is limited to the
802	estimated growth rate in general revenue.
803	2.  Growth in capitation rates which is limited to the
804	average growth rate over the last 3 years in per-recipient
805	Medicaid expenditures.
806	3.  Growth in capitation rates which is limited to the
807	growth rate of aggregate Medicaid expenditures between the 2003-
808	2004 fiscal year and the 2004-2005 fiscal year.
809	(cc)(y)  To develop a mechanism to require capitated
810	managed care plans to reimburse qualified emergency service
811	providers, including, but not limited to, ambulance services, in
812	accordance with ss. 409.908 and 409.9128. The pilot program must
813	include a provision for continuing fee-for-service payments for
814	emergency services, including, but not limited to, individuals
815	who access ambulance services or emergency departments and who
816	are subsequently determined to be eligible for Medicaid
817	services.
818	(dd)(z)  To ensure develop a system whereby school
819	districts participating in the certified school match program
820	pursuant to ss. 409.908(21) and 1011.70 shall be reimbursed by
821	Medicaid, subject to the limitations of s. 1011.70(1), for a
822	Medicaid-eligible child participating in the services as
823	authorized in s. 1011.70, as provided for in s. 409.9071,
824	regardless of whether the child is enrolled in a capitated
825	managed care network. Capitated managed care networks must make
826	a good faith effort to execute agreements with school districts
827	regarding the coordinated provision of services authorized under
828	s. 1011.70. County health departments delivering school-based
829	services pursuant to ss. 381.0056 and 381.0057 must be
830	reimbursed by Medicaid for the federal share for a Medicaid-
831	eligible child who receives Medicaid-covered services in a
832	school setting, regardless of whether the child is enrolled in a
833	capitated managed care network. Capitated managed care networks
834	must make a good faith effort to execute agreements with county
835	health departments regarding the coordinated provision of
836	services to a Medicaid-eligible child. To ensure continuity of
837	care for Medicaid patients, the agency, the Department of
838	Health, and the Department of Education shall develop procedures
839	for ensuring that a student's capitated managed care network
840	provider receives information relating to services provided in
841	accordance with ss. 381.0056, 381.0057, 409.9071, and 1011.70.
842	(ee)(aa)  To implement develop and recommend a mechanism
843	whereby Medicaid recipients who are already enrolled in a
844	managed care plan or the MediPass program in the pilot areas
845	shall be offered the opportunity to change to capitated managed
846	care plans on a staggered basis, as defined by the agency. All
847	Medicaid recipients shall have 30 days in which to make a choice
848	of capitated managed care plans. Those Medicaid recipients who
849	do not make a choice shall be assigned to a capitated managed
850	care plan in accordance with paragraph (4)(a) and shall be
851	exempt from s. 409.9122. To facilitate continuity of care for a
852	Medicaid recipient who is also a recipient of Supplemental
853	Security Income (SSI), prior to assigning the SSI recipient to a
854	capitated managed care plan, the agency shall determine whether
855	the SSI recipient has an ongoing relationship with a provider or
856	capitated managed care plan, and, if so, the agency shall assign
857	the SSI recipient to that provider or capitated managed care
858	plan where feasible. Those SSI recipients who do not have such a
859	provider relationship shall be assigned to a capitated managed
860	care plan provider in accordance with paragraph (4)(a) and shall
861	be exempt from s. 409.9122.
862	(ff)(bb)  To develop and recommend a service delivery
863	alternative for children having chronic medical conditions which
864	establishes a medical home project to provide primary care
865	services to this population. The project shall provide
866	community-based primary care services that are integrated with
867	other subspecialties to meet the medical, developmental, and
868	emotional needs for children and their families. This project
869	shall include an evaluation component to determine impacts on
870	hospitalizations, length of stays, emergency room visits, costs,
871	and access to care, including specialty care and patient and
872	family satisfaction.
873	(gg)(cc)  To develop and recommend service delivery
874	mechanisms within capitated managed care plans to provide
875	Medicaid services as specified in ss. 409.905 and 409.906 to
876	persons with developmental disabilities sufficient to meet the
877	medical, developmental, and emotional needs of these persons.
878	(hh)(dd)  To develop and recommend service delivery
879	mechanisms within capitated managed care plans to provide
880	Medicaid services as specified in ss. 409.905 and 409.906 to
881	Medicaid-eligible children in foster care. These services must
882	be coordinated with community-based care providers as specified
883	in s. 409.1675, where available, and be sufficient to meet the
884	medical, developmental, and emotional needs of these children.
885	(4)(a)  A Medicaid recipient in the pilot area who is not
886	currently enrolled in a capitated managed care plan upon
887	implementation is not eligible for services as specified in ss.
888	409.905 and 409.906, for the amount of time that the recipient
889	does not enroll in a capitated managed care network. If a
890	Medicaid recipient has not enrolled in a capitated managed care
891	plan within 30 days after eligibility, the agency shall assign
892	the Medicaid recipient to a capitated managed care plan based on
893	the assessed needs of the recipient as determined by the agency
894	and shall be exempt from s. 409.9122. When making assignments,
895	the agency shall take into account the following criteria:
896	1.  A capitated managed care network has sufficient network
897	capacity to meet the needs of members.
898	2.  The capitated managed care network has previously
899	enrolled the recipient as a member, or one of the capitated
900	managed care network's primary care providers has previously
901	provided health care to the recipient.
902	3.  The agency has knowledge that the member has previously
903	expressed a preference for a particular capitated managed care
904	network as indicated by Medicaid fee-for-service claims data,
905	but has failed to make a choice.
906	4.  The capitated managed care network's primary care
907	providers are geographically accessible to the recipient's
908	residence.
909	(b)  When more than one capitated managed care network
910	provider meets the criteria specified in paragraph (3)(h), the
911	agency shall make recipient assignments consecutively by family
912	unit.
913	(c)  If a recipient is currently enrolled with a Medicaid
914	managed care organization that also operates an approved reform
915	plan within a pilot area and the recipient fails to choose a
916	plan during the reform enrollment process or during
917	redetermination of eligibility, the recipient shall be
918	automatically assigned by the agency into the most appropriate
919	reform plan operated by the recipient's current Medicaid managed
920	care organization. If the recipient's current managed care
921	organization does not operate a reform plan in the pilot area
922	that adequately meets the needs of the Medicaid recipient, the
923	agency shall use the auto assignment process as prescribed in
924	the Centers for Medicare and Medicaid Services Special Terms and
925	Conditions number 11-W-00206/4. All agency enrollment and choice
926	counseling materials shall communicate the provisions of this
927	paragraph to current managed care recipients.
928	(d)(c)  The agency may not engage in practices that are
929	designed to favor one capitated managed care plan over another
930	or that are designed to influence Medicaid recipients to enroll
931	in a particular capitated managed care network in order to
932	strengthen its particular fiscal viability.
933	(e)(d)  After a recipient has made a selection or has been
934	enrolled in a capitated managed care network, the recipient
935	shall have 90 days in which to voluntarily disenroll and select
936	another capitated managed care network. After 90 days, no
937	further changes may be made except for cause. Cause shall
938	include, but not be limited to, poor quality of care, lack of
939	access to necessary specialty services, an unreasonable delay or
940	denial of service, inordinate or inappropriate changes of
941	primary care providers, service access impairments due to
942	significant changes in the geographic location of services, or
943	fraudulent enrollment. The agency may require a recipient to use
944	the capitated managed care network's grievance process as
945	specified in paragraph (3)(g) prior to the agency's
946	determination of cause, except in cases in which immediate risk
947	of permanent damage to the recipient's health is alleged. The
948	grievance process, when used, must be completed in time to
949	permit the recipient to disenroll no later than the first day of
950	the second month after the month the disenrollment request was
951	made. If the capitated managed care network, as a result of the
952	grievance process, approves an enrollee's request to disenroll,
953	the agency is not required to make a determination in the case.
954	The agency must make a determination and take final action on a
955	recipient's request so that disenrollment occurs no later than
956	the first day of the second month after the month the request
957	was made. If the agency fails to act within the specified
958	timeframe, the recipient's request to disenroll is deemed to be
959	approved as of the date agency action was required. Recipients
960	who disagree with the agency's finding that cause does not exist
961	for disenrollment shall be advised of their right to pursue a
962	Medicaid fair hearing to dispute the agency's finding.
963	(f)(e)  The agency shall apply for federal waivers from the
964	Centers for Medicare and Medicaid Services to lock eligible
965	Medicaid recipients into a capitated managed care network for 12
966	months after an open enrollment period. After 12 months of
967	enrollment, a recipient may select another capitated managed
968	care network. However, nothing shall prevent a Medicaid
969	recipient from changing primary care providers within the
970	capitated managed care network during the 12-month period.
971	(g)(f)  The agency shall apply for federal waivers from the
972	Centers for Medicare and Medicaid Services to allow recipients
973	to purchase health care coverage through an employer-sponsored
974	health insurance plan instead of through a Medicaid-certified
975	plan. This provision shall be known as the opt-out option.
976	1.  A recipient who chooses the Medicaid opt-out option
977	shall have an opportunity for a specified period of time, as
978	authorized under a waiver granted by the Centers for Medicare
979	and Medicaid Services, to select and enroll in a Medicaid-
980	certified plan. If the recipient remains in the employer-
981	sponsored plan after the specified period, the recipient shall
982	remain in the opt-out program for at least 1 year or until the
983	recipient no longer has access to employer-sponsored coverage,
984	until the employer's open enrollment period for a person who
985	opts out in order to participate in employer-sponsored coverage,
986	or until the person is no longer eligible for Medicaid,
987	whichever time period is shorter.
988	2.  Notwithstanding any other provision of this section,
989	coverage, cost sharing, and any other component of employer-
990	sponsored health insurance shall be governed by applicable state
991	and federal laws.
992	(5)  This section does not authorize the agency to
993	implement any provision of s. 1115 of the Social Security Act
994	experimental, pilot, or demonstration project waiver to reform
995	the state Medicaid program in any part of the state other than
996	the two geographic areas specified in this section unless
997	approved by the Legislature.
998	(5)(6)  The agency shall develop and submit for approval
999	applications for waivers of applicable federal laws and
1000	regulations as necessary to implement the managed care pilot
1001	project as defined in this section. The agency shall post all
1002	waiver applications under this section on its Internet website
1003	30 days before submitting the applications to the United States
1004	Centers for Medicare and Medicaid Services. All waiver
1005	applications shall be provided for review and comment to the
1006	appropriate committees of the Senate and House of
1007	Representatives for at least 10 working days prior to
1008	submission. All waivers submitted to and approved by the United
1009	States Centers for Medicare and Medicaid Services under this
1010	section must be approved by the Legislature. Federally approved
1011	waivers must be submitted to the President of the Senate and the
1012	Speaker of the House of Representatives for referral to the
1013	appropriate legislative committees. The appropriate committees
1014	shall recommend whether to approve the implementation of any
1015	waivers to the Legislature as a whole. The agency shall submit a
1016	plan containing a recommended timeline for implementation of any
1017	waivers and budgetary projections of the effect of the pilot
1018	program under this section on the total Medicaid budget for the
1019	2006-2007 through 2009-2010 state fiscal years. This
1020	implementation plan shall be submitted to the President of the
1021	Senate and the Speaker of the House of Representatives at the
1022	same time any waivers are submitted for consideration by the
1023	Legislature. The agency is authorized to implement the waiver
1024	and Centers for Medicare and Medicaid Services Special Terms and
1025	Conditions number 11-W-00206/4. If the agency seeks approval by
1026	the Federal Government of any modifications to these special
1027	terms and conditions, the agency shall provide written
1028	notification of its intent to modify these terms and conditions
1029	to the President of the Senate and Speaker of the House of
1030	Representatives at least 15 days prior to submitting the
1031	modifications to the Federal Government for consideration. The
1032	notification shall identify all modifications being pursued and
1033	the reason they are needed. Upon receiving federal approval of
1034	any modifications to the special terms and conditions, the
1035	agency shall report to the Legislature describing the federally
1036	approved modifications to the special terms and conditions
1037	within 7 days after their approval by the Federal Government.
1038	(6)(7)  Upon review and approval of the applications for
1039	waivers of applicable federal laws and regulations to implement
1040	the managed care pilot program by the Legislature, the agency
1041	may initiate adoption of rules pursuant to ss. 120.536(1) and
1042	120.54 to implement and administer the managed care pilot
1043	program as provided in this section.
1044	(7)  The Office of Insurance Regulation shall conduct an
1045	annual review of the Medicaid managed care pilot program's risk-
1046	adjusted rate setting methodology as developed by the agency.
1047	The Office of Insurance Regulation shall contract with an
1048	independent actuary firm to assist in the annual review and to
1049	provide technical expertise.
1050	(a)  After reviewing the actuarial analysis provided by the
1051	agency, the Office of Insurance Regulation shall make advisory
1052	recommendations to the Governor and the Legislature regarding:
1053	1.  The methodology adopted by the agency for risk-adjusted
1054	rates.
1055	2.  Alternative rate options based on the agency's
1056	methodology.
1057	3.  The risk-adjusted rate for each Medicaid eligibility
1058	category in the demonstration program.
1059	4.  Administrative and implementation issues regarding the
1060	use of risk-adjusted rates, including, but not limited to, cost,
1061	simplicity, client privacy, data accuracy, and data exchange.
1062	(b)  For each annual review, the Office of Insurance
1063	Regulation shall solicit input concerning the agency's rate
1064	setting methodology from the Florida Association of Health
1065	Plans, the Florida Hospital Association, the Florida Medical
1066	Association, Medicaid recipient advocacy groups, and other
1067	stakeholder representatives as necessary to obtain a broad
1068	representation of perspectives on the effects of the agency's
1069	adopted rate setting methodology and recommendations on possible
1070	modifications to the methodology.
1071	(c)  The Office of Insurance Regulation shall submit its
1072	findings and advisory recommendations to the Governor and the
1073	Legislature no later than February 1 of each year for
1074	consideration by the Legislature for inclusion in the General
1075	Appropriations Act.
1076	(8)  For purposes of this section, the term "capitated
1077	managed care plan" includes health insurers authorized under
1078	chapter 624, exclusive provider organizations authorized under
1079	chapter 627, health maintenance organizations authorized under
1080	chapter 641, and provider service networks that elect to be paid
1081	fee-for-service for up to 3 years as authorized under this
1082	section.
1083	Section 5.  Section 409.91212, Florida Statutes, is created
1084	to read:
1085	409.91212  Medicaid reform demonstration program
1086	expansion.--
1087	(1)  The agency may expand the Medicaid reform
1088	demonstration program pursuant to s. 409.91211 into any county
1089	of the state beginning in year two of the demonstration program
1090	if readiness criteria are met, the Joint Legislative Committee
1091	on Medicaid Reform Implementation has submitted a recommendation
1092	pursuant to s. 11.72 regarding the extent to which the criteria
1093	have been met, and the agency has secured budget approval from
1094	the Legislative Budget Commission pursuant to s. 11.90. For the
1095	purpose of this section, the term "readiness" means there is
1096	evidence that at least two programs in a county meet the
1097	following criteria:
1098	(a)  Demonstrate knowledge and understanding of managed
1099	care under the framework of Medicaid reform.
1100	(b)  Demonstrate financial capability to meet solvency
1101	standards.
1102	(c)  Demonstrate adequate controls and process for
1103	financial management.
1104	(d)  Demonstrate the capability for clinical management of
1105	Medicaid recipients.
1106	(e)  Demonstrate the adequacy, capacity, and accessibility
1107	of the services network.
1108	(f)  Demonstrate the capability to operate a management
1109	information system and an encounter data system.
1110	(g)  Demonstrate capability to implement quality assurance
1111	and utilization management activities.
1112	(h)  Demonstrate capability to implement fraud control
1113	activities.
1114	(2)  The agency shall conduct meetings and public hearings
1115	in the targeted expansion county with the public and provider
1116	community. The agency shall provide notice regarding public
1117	hearings. The agency shall maintain records of the proceedings.
1118	(3)  The agency shall provide a 30-day notice of intent to
1119	expand the demonstration program with supporting documentation
1120	that the readiness criteria has been met to the President of the
1121	Senate, the Speaker of the House of Representatives, the
1122	Minority Leader of the Senate, the Minority Leader of the House
1123	of Representatives, and the Office of Program Policy Analysis
1124	and Government Accountability.
1125	(4)  The agency shall request a hearing and consideration
1126	by the Joint Legislative Committee on Medicaid Reform
1127	Implementation after the 30-day notice required in subsection
1128	(3) has expired in the form of a letter to the chair of the
1129	committee.
1130	(5)  Upon receiving a memorandum from the Joint Legislative
1131	Committee on Medicaid Reform Implementation regarding the extent
1132	to which the expansion criteria pursuant to subsection (1) have
1133	been met, the agency may submit a budget amendment, pursuant to
1134	chapter 216, to request the necessary budget transfers
1135	associated with the expansion of the demonstration program.
1136	Section 6.  Subsections (8) through (14) of section
1137	409.9122, Florida Statutes, are renumbered as subsections (7)
1138	through (13), respectively, and paragraphs (e), (f), (g), (h),
1139	(k), and (l) of subsection (2) and present subsection (7) of
1140	that section are amended to read:
1141	409.9122  Mandatory Medicaid managed care enrollment;
1142	programs and procedures.--
1143	(2)
1144	(e)  Medicaid recipients who are already enrolled in a
1145	managed care plan or MediPass shall be offered the opportunity
1146	to change managed care plans or MediPass providers on a
1147	staggered basis, as defined by the agency. All Medicaid
1148	recipients shall have 30 days in which to make a choice of
1149	managed care plans or MediPass providers. Those Medicaid
1150	recipients who do not make a choice shall be assigned to a
1151	managed care plan or MediPass in accordance with paragraph (f).
1152	To facilitate continuity of care, for a Medicaid recipient who
1153	is also a recipient of Supplemental Security Income (SSI), prior
1154	to assigning the SSI recipient to a managed care plan or
1155	MediPass, the agency shall determine whether the SSI recipient
1156	has an ongoing relationship with a MediPass provider or managed
1157	care plan, and if so, the agency shall assign the SSI recipient
1158	to that MediPass provider or managed care plan. Those SSI
1159	recipients who do not have such a provider relationship shall be
1160	assigned to a managed care plan or MediPass provider in
1161	accordance with paragraph (f).
1162	(f)  When a Medicaid recipient does not choose a managed
1163	care plan or MediPass provider, the agency shall assign the
1164	Medicaid recipient to a managed care plan or MediPass provider.
1165	Medicaid recipients who are subject to mandatory assignment but
1166	who fail to make a choice shall be assigned to managed care
1167	plans until an enrollment of 40 percent in MediPass and 60
1168	percent in managed care plans is achieved. Once this enrollment
1169	is achieved, the assignments shall be divided in order to
1170	maintain an enrollment in MediPass and managed care plans which
1171	is in a 40 percent and 60 percent proportion, respectively.
1172	Thereafter, assignment of Medicaid recipients who fail to make a
1173	choice shall be based proportionally on the preferences of
1174	recipients who have made a choice in the previous period. Such
1175	proportions shall be revised at least quarterly to reflect an
1176	update of the preferences of Medicaid recipients. The agency
1177	shall disproportionately assign Medicaid-eligible recipients who
1178	are required to but have failed to make a choice of managed care
1179	plan or MediPass, including children, and who are to be assigned
1180	to the MediPass program to children's networks as described in
1181	s. 409.912(4)(g), Children's Medical Services Network as defined
1182	in s. 391.021, exclusive provider organizations, provider
1183	service networks, minority physician networks, and pediatric
1184	emergency department diversion programs authorized by this
1185	chapter or the General Appropriations Act, in such manner as the
1186	agency deems appropriate, until the agency has determined that
1187	the networks and programs have sufficient numbers to be
1188	economically operated. For purposes of this paragraph, when
1189	referring to assignment, the term "managed care plans" includes
1190	health maintenance organizations, exclusive provider
1191	organizations, provider service networks, minority physician
1192	networks, Children's Medical Services Network, and pediatric
1193	emergency department diversion programs authorized by this
1194	chapter or the General Appropriations Act. When making
1195	assignments, the agency shall take into account the following
1196	criteria:
1197	1.  A managed care plan has sufficient network capacity to
1198	meet the need of members.
1199	2.  The managed care plan or MediPass has previously
1200	enrolled the recipient as a member, or one of the managed care
1201	plan's primary care providers or MediPass providers has
1202	previously provided health care to the recipient.
1203	3.  The agency has knowledge that the member has previously
1204	expressed a preference for a particular managed care plan or
1205	MediPass provider as indicated by Medicaid fee-for-service
1206	claims data, but has failed to make a choice.
1207	4.  The managed care plan is plan's or MediPass primary
1208	care providers are geographically accessible to the recipient's
1209	residence.
1210	5.  The agency has authority to make mandatory assignments
1211	based on quality of service and performance of managed care
1212	plans.
1213	(g)  When more than one managed care plan or MediPass
1214	provider meets the criteria specified in paragraph (f), the
1215	agency shall make recipient assignments consecutively by family
1216	unit.
1217	(h)  The agency may not engage in practices that are
1218	designed to favor one managed care plan over another or that are
1219	designed to influence Medicaid recipients to enroll in MediPass
1220	rather than in a managed care plan or to enroll in a managed
1221	care plan rather than in MediPass. This subsection does not
1222	prohibit the agency from reporting on the performance of
1223	MediPass or any managed care plan, as measured by performance
1224	criteria developed by the agency.
1225	(k)  When a Medicaid recipient does not choose a managed
1226	care plan or MediPass provider, the agency shall assign the
1227	Medicaid recipient to a managed care plan, except in those
1228	counties in which there are fewer than two managed care plans
1229	accepting Medicaid enrollees, in which case assignment shall be
1230	to a managed care plan or a MediPass provider. Medicaid
1231	recipients in counties with fewer than two managed care plans
1232	accepting Medicaid enrollees who are subject to mandatory
1233	assignment but who fail to make a choice shall be assigned to
1234	managed care plans until an enrollment of 40 percent in MediPass
1235	and 60 percent in managed care plans is achieved. Once that
1236	enrollment is achieved, the assignments shall be divided in
1237	order to maintain an enrollment in MediPass and managed care
1238	plans which is in a 40 percent and 60 percent proportion,
1239	respectively. In service areas 1 and 6 of the Agency for Health
1240	Care Administration where the agency is contracting for the
1241	provision of comprehensive behavioral health services through a
1242	capitated prepaid arrangement, recipients who fail to make a
1243	choice shall be assigned equally to MediPass or a managed care
1244	plan. For purposes of this paragraph, when referring to
1245	assignment, the term "managed care plans" includes exclusive
1246	provider organizations, provider service networks, Children's
1247	Medical Services Network, minority physician networks, and
1248	pediatric emergency department diversion programs authorized by
1249	this chapter or the General Appropriations Act. When making
1250	assignments, the agency shall take into account the following
1251	criteria:
1252	1.  A managed care plan has sufficient network capacity to
1253	meet the need of members.
1254	2.  The managed care plan or MediPass has previously
1255	enrolled the recipient as a member, or one of the managed care
1256	plan's primary care providers or MediPass providers has
1257	previously provided health care to the recipient.
1258	3.  The agency has knowledge that the member has previously
1259	expressed a preference for a particular managed care plan or
1260	MediPass provider as indicated by Medicaid fee-for-service
1261	claims data, but has failed to make a choice.
1262	4.  The managed care plan's or MediPass primary care
1263	providers are geographically accessible to the recipient's
1264	residence.
1265	5.  The agency has authority to make mandatory assignments
1266	based on quality of service and performance of managed care
1267	plans.
1268	(k)(l)  Notwithstanding the provisions of chapter 287, the
1269	agency may, at its discretion, renew cost-effective contracts
1270	for choice counseling services once or more for such periods as
1271	the agency may decide. However, all such renewals may not
1272	combine to exceed a total period longer than the term of the
1273	original contract.
1274	(7)  The agency shall investigate the feasibility of
1275	developing managed care plan and MediPass options for the
1276	following groups of Medicaid recipients:
1277	(a)  Pregnant women and infants.
1278	(b)  Elderly and disabled recipients, especially those who
1279	are at risk of nursing home placement.
1280	(c)  Persons with developmental disabilities.
1281	(d)  Qualified Medicare beneficiaries.
1282	(e)  Adults who have chronic, high-cost medical conditions.
1283	(f)  Adults and children who have mental health problems.
1284	(g)  Other recipients for whom managed care plans and
1285	MediPass offer the opportunity of more cost-effective care and
1286	greater access to qualified providers.
1287	Section 7.  The Agency for Health Care Administration shall
1288	report to the Legislature by April 1, 2006, the specific
1289	preimplementation milestones required by the Centers for
1290	Medicare and Medicaid Services Special Terms and Conditions
1291	related to the low income pool that have been approved by the
1292	Federal Government and the status of any remaining
1293	preimplementation milestones that have not been approved by the
1294	Federal Government.
1295	Section 8.  Quarterly progress and annual reports.--The
1296	Agency for Health Care Administration shall submit to the
1297	Governor, the President of the Senate, the Speaker of the House
1298	of Representatives, the Minority Leader of the Senate, the
1299	Minority Leader of the House of Representatives, and the Office
1300	of Program Policy Analysis and Government Accountability the
1301	following reports:
1302	(1)  Quarterly progress reports submitted to Centers for
1303	Medicare and Medicaid Services no later than 60 days following
1304	the end of each quarter. These reports shall present the
1305	agency's analysis and the status of various operational areas.
1306	The quarterly progress reports shall include, but are not
1307	limited to, the following:
1308	(a)  Documentation of events that occurred during the
1309	quarter or that are anticipated to occur in the near future that
1310	affect health care delivery, including, but not limited to, the
1311	approval of contracts with new managed care plans, the
1312	procedures for designating coverage areas, the process of
1313	phasing in managed care, a description of the populations served
1314	and the benefits provided, the number of recipients enrolled, a
1315	list of grievances submitted by enrollees, and other operational
1316	issues.
1317	(b)  Action plans for addressing policy and administrative
1318	issues.
1319	(c)  Documentation of agency efforts related to the
1320	collection and verification of encounter and utilization data.
1321	(d)  Enrollment data for each managed care plan according
1322	to the following specifications: total number of enrollees,
1323	eligibility category, number of enrollees receiving Temporary
1324	Assistance for Needy Families or Supplemental Security Income,
1325	market share, and percentage change in enrollment. In addition,
1326	the agency shall provide a summary of voluntary and mandatory
1327	selection rates and disenrollment data. Enrollment data, number
1328	of members by month, and expenditures shall be submitted in the
1329	format for monitoring budget neutrality provided by the Centers
1330	for Medicare and Medicaid Services.
1331	(e)  Documentation of low income pool activities and
1332	associated expenditures.
1333	(f)  Documentation of activities related to the
1334	implementation of choice counseling including efforts to improve
1335	health literacy and the methods used to obtain public input
1336	including recipient focus groups.
1337	(g)  Participation rates in the Enhanced Benefit Accounts
1338	Program, as established in the Centers for Medicare and Medicaid
1339	Services Special Terms and Conditions number 11-W-00206/4, which
1340	shall include: participation levels, summary of activities and
1341	associated expenditures, number of accounts established
1342	including active participants and individuals who continue to
1343	retain access to funds in an account but no longer actively
1344	participate, estimated quarterly deposits in accounts, and
1345	expenditures from the accounts.
1346	(h)  Enrollment data on employer-sponsored insurance that
1347	documents the number of individuals selecting to opt out when
1348	employer-sponsored insurance is available. The agency shall
1349	include data that identifies enrollee characteristics to include
1350	eligibility category, type of employer-sponsored insurance, and
1351	type of coverage based on whether the coverage is for the
1352	individual or the family. The agency shall develop and maintain
1353	disenrollment reports specifying the reason for disenrolling in
1354	an employer-sponsored insurance program. The agency shall also
1355	track and report on those enrollees who elect to reenroll in the
1356	Medicaid reform waiver demonstration program.
1357	(i)  Documentation of progress toward the demonstration
1358	program goals.
1359	(j)  Documentation of evaluation activities.
1360	(2)  The annual report shall document accomplishments,
1361	program status, quantitative and case study findings,
1362	utilization data, and policy and administrative difficulties in
1363	the operation of the Medicaid reform waiver demonstration
1364	program. The agency shall submit the draft annual report no
1365	later than October 1 after the end of each fiscal year.
1366	(a)  Beginning with the annual report for demonstration
1367	program year two, the agency shall include a section on the
1368	administration of enhanced benefit accounts, participation
1369	rates, an assessment of expenditures, and potential cost
1370	savings.
1371	(b)  Beginning with the annual report for demonstration
1372	program year four, the agency shall include a section that
1373	provides qualitative and quantitative data that describes the
1374	impact of the low income pool on the number of uninsured persons
1375	in the state from the start of the implementation of the
1376	demonstration program.
1377	Section 9.  Section 11.72, Florida Statutes, is created to
1378	read:
1379	11.72  Joint Legislative Committee on Medicaid Reform
1380	Implementation; creation; membership; powers; duties.--
1381	(1)  There is created a standing joint committee of the
1382	Legislature designated the Joint Legislative Committee on
1383	Medicaid Reform Implementation for the purpose of reviewing
1384	policy issues related to expansion of the Medicaid managed care
1385	pilot program pursuant to s. 409.91211.
1386	(2)  The Joint Legislative Committee on Medicaid Reform
1387	Implementation shall be composed of eight members appointed as
1388	follows: four members of the House of Representatives appointed
1389	by the Speaker of the House of Representatives, one of whom
1390	shall be a member of the minority party; and four members of the
1391	Senate appointed by the President of the Senate, one of whom
1392	shall be a member of the minority party. The President of the
1393	Senate shall appoint the chair in even-numbered years and the
1394	vice chair in odd-numbered years, and the Speaker of the House
1395	of Representatives shall appoint the chair in odd-numbered years
1396	and the vice chair in even-numbered years from among the
1397	committee membership. Vacancies shall be filled in the same
1398	manner as the original appointment. Members shall serve without
1399	compensation, except that members are entitled to reimbursement
1400	for per diem and travel expenses in accordance with s. 112.061.
1401	(3)  The committee shall be governed by joint rules of the
1402	Senate and the House of Representatives which shall remain in
1403	effect until repealed or amended by concurrent resolution.
1404	(4)  The committee shall meet at the call of the chair. The
1405	committee may hold hearings on matters within its purview which
1406	are in the public interest. A quorum shall consist of a majority
1407	of members from each house, plus one additional member from
1408	either house. Action by the committee requires a majority vote
1409	of the members present of each house.
1410	(5)  The committee shall be jointly staffed by the
1411	appropriations and substantive committees of the House of
1412	Representatives and the Senate. During even-numbered years the
1413	Senate shall serve as lead staff and during odd-numbered years
1414	the House of Representatives shall serve as lead staff.
1415	(6)  The committee shall:
1416	(a)  Review reports, public hearing proceedings, documents,
1417	and materials provided by the Agency for Health Care
1418	Administration relating to the expansion of the Medicaid managed
1419	care pilot program to other counties of the state pursuant to s.
1420	409.91212.
1421	(b)  Consult with the substantive and fiscal committees of
1422	the House of Representatives and the Senate which have
1423	jurisdiction over the Medicaid matters relating to agency action
1424	to expand the Medicaid managed care pilot program.
1425	(c)  Meet to consider and make a recommendation regarding
1426	the extent to which the expansion criteria pursuant to s.
1427	409.91212 have been met.
1428	(7)  Within 2 days after meeting, during which the
1429	committee reviewed documents, material, and testimony related to
1430	the expansion criteria, the committee shall submit a memorandum
1431	to the Speaker of the House of Representatives, the President of
1432	the Senate, the Legislative Budget Commission, and the agency
1433	delineating the extent to which the agency met the expansion
1434	criteria.
1435	Section 10.  It is the intent of the Legislature that if
1436	any conflict exists between the provisions contained in s.
1437	409.91211, Florida Statutes, and other provisions of chapter
1438	409, Florida Statutes, as they relate to implementation of the
1439	Medicaid managed care pilot program, the provisions contained in
1440	s. 409.91211, Florida Statutes, shall control. The Agency for
1441	Health Care Administration shall provide a written report to the
1442	President of the Senate and the Speaker of the House of
1443	Representatives by April 1, 2006, identifying any provisions of
1444	chapter 409, Florida Statutes, that conflict with the
1445	implementation of the Medicaid managed care pilot program as
1446	created in s. 409.91211, Florida Statutes. After April 1, 2006,
1447	the agency shall provide a written report to the President of
1448	the Senate and the Speaker of the House of Representatives
1449	immediately upon identifying any provisions of chapter 409,
1450	Florida Statutes, that conflict with the implementation of the
1451	Medicaid managed care pilot program as created in s. 409.91211,
1452	Florida Statutes.
1453	Section 11.  Section 216.346, Florida Statutes, is amended
1454	to read:
1455	216.346  Contracts between state agencies; restriction on
1456	overhead or other indirect costs.--In any contract between state
1457	agencies, including any contract involving the State University
1458	System or the Florida Community College System, the agency
1459	receiving the contract or grant moneys shall charge no more than
1460	a reasonable percentage 5 percent of the total cost of the
1461	contract or grant for overhead or indirect costs or any other
1462	costs not required for the payment of direct costs. This
1463	provision is not intended to limit an agency's ability to
1464	certify matching funds or designate in-kind contributions which
1465	will allow the drawdown of federal Medicaid dollars that do not
1466	affect state budgeting.
1467	Section 12.  One full-time equivalent position is
1468	authorized and the sum of $250,000 is appropriated for fiscal
1469	year 2006-2007 from the General Revenue Fund to the Office of
1470	Insurance Regulation of the Financial Services Commission to
1471	fund the annual review of the Medicaid managed care pilot
1472	program's risk-adjusted rate setting methodology.
1473	Section 13.  This act shall take effect upon becoming a
1474	law.

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