HB 3B

1	A bill to be entitled
2	An act relating to Medicaid; amending s. 409.911, F.S.;
3	adding a duty to the Medicaid Disproportionate Share
4	Council; providing a future repeal of the Disproportionate
5	Share Council; creating the Medicaid Low-Income Pool
6	Council; providing for membership and duties; amending s.
7	409.912, F.S.; authorizing the Agency for Health Care
8	Administration to contract with comprehensive behavioral
9	health plans in separate counties within or adjacent to an
10	AHCA area; providing that specified federally qualified
11	health centers or entities that are owned by one or more
12	federally qualified health centers are exempt from the
13	requirements imposed by law on health maintenance
14	organizations and health care services; providing
15	exceptions; conforming provisions to the solvency
16	requirements in s. 641.2261, F.S.; deleting the
17	competitive-procurement requirement for provider service
18	networks; updating a reference to the provider service
19	network; amending s. 409.91211, F.S.; specifying the
20	process for statewide expansion of the Medicaid managed
21	care demonstration program; requiring that matching funds
22	for the Medicaid managed care pilot program be provided by
23	local governmental entities; providing for distribution of
24	funds by the agency; providing legislative intent with
25	respect to the low-income pool plan required under the
26	Medicaid reform waiver; specifying the agency's powers,
27	duties, and responsibilities with respect to implementing
28	the Medicaid managed care pilot program; revising the
29	guidelines for allowing a provider service network to
30	receive fee-for-service payments in the demonstration
31	areas; authorizing the agency to make direct payments to
32	hospitals and physicians for the costs associated with
33	graduate medical education under Medicaid reform;
34	including the Children's Medical Services Network in the
35	Department of Health within those programs intended by the
36	Legislature to participate in the pilot program to the
37	extent possible; requiring that the agency implement
38	standards of quality assurance and performance improvement
39	in the demonstration areas of the pilot program; requiring
40	the agency to establish an encounter database to compile
41	data from managed care plans; requiring the agency to
42	implement procedures to minimize the risk of Medicaid
43	fraud and abuse in all managed care plans in the
44	demonstration areas; clarifying that the assignment
45	process for the pilot program is exempt from certain
46	mandatory procedures for Medicaid managed care enrollment
47	specified in s. 409.9122, F.S.; revising the automatic
48	assignment process in the demonstration areas; requiring
49	that the agency report any modifications to the approved
50	waiver and special terms and conditions to the Legislature
51	within specified time periods; authorizing the agency to
52	implement the provisions of the waiver approved by federal
53	Centers for Medicare and Medicaid Services; requiring the
54	Secretary of Health Care Administration to convene a
55	technical advisory panel to advise the agency in matters
56	relating to rate setting, benefit design, and choice
57	counseling; providing for panel members; providing certain
58	requirements for managed care plans providing benefits to
59	TANF and SSI recipients; providing for capitation rates to
60	be phased in; providing an exception for high-risk,
61	specialty populations; requiring the certification of
62	rates by an actuary and federal approval; providing that,
63	if any conflict exists between the provisions contained in
64	s. 409.91211, F.S., and ch. 409, F.S., concerning the
65	implementation of the pilot program, the provisions
66	contained in s. 409.91211, F.S., control; creating s.
67	409.91213, F.S.; requiring the agency to submit quarterly
68	and annual progress reports to the Legislature; providing
69	requirements for the reports; amending s. 641.2261, F.S.;
70	revising the application of solvency requirements to
71	include Medicaid provider service networks; updating a
72	reference; requiring that the agency report to the
73	Legislature the pre-implementation milestones concerning
74	the low-income pool which have been approved by the
75	Federal Government and the status of those remaining to be
76	approved; amending s. 216.346, F.S.; revising provisions
77	relating to contracts between state agencies; providing an
78	effective date.
79
80	Be It Enacted by the Legislature of the State of Florida:
81
82	Section 1.  Subsection (9) of section 409.911, Florida
83	Statutes, is amended, and subsection (10) is added to that
84	section, to read:
85	409.911  Disproportionate share program.--Subject to
86	specific allocations established within the General
87	Appropriations Act and any limitations established pursuant to
88	chapter 216, the agency shall distribute, pursuant to this
89	section, moneys to hospitals providing a disproportionate share
90	of Medicaid or charity care services by making quarterly
91	Medicaid payments as required. Notwithstanding the provisions of
92	s. 409.915, counties are exempt from contributing toward the
93	cost of this special reimbursement for hospitals serving a
94	disproportionate share of low-income patients.
95	(9)  The Agency for Health Care Administration shall create
96	a Medicaid Disproportionate Share Council.
97	(a)  The purpose of the council is to study and make
98	recommendations regarding:
99	1.  The formula for the regular disproportionate share
100	program and alternative financing options.
101	2.  Enhanced Medicaid funding through the Special Medicaid
102	Payment program.
103	3.  The federal status of the upper-payment-limit funding
104	option and how this option may be used to promote health care
105	initiatives determined by the council to be state health care
106	priorities.
107	4.  The development of the low-income pool plan as required
108	by the federal Centers for Medicare and Medicaid Services using
109	the objectives established in s. 409.91211(1)(c).
110	(b)  The council shall include representatives of the
111	Executive Office of the Governor and of the agency;
112	representatives from teaching, public, private nonprofit,
113	private for-profit, and family practice teaching hospitals; and
114	representatives from other groups as needed. The agency must
115	ensure that there is fair representation of each group specified
116	in this paragraph.
117	(c)  The council shall submit its findings and
118	recommendations to the Governor and the Legislature no later
119	than March February 1 of each year.
120	(d)  This subsection shall stand repealed June 30, 2006,
121	unless reviewed and saved from repeal through reenactment by the
122	Legislature.
123	(10)  The Agency for Health Care Administration shall
124	create a Medicaid Low-Income Pool Council by July 1, 2006. The
125	Low-Income Pool Council shall consist of 17 members, including
126	three representatives of statutory teaching hospitals, three
127	representatives of public hospitals, three representatives of
128	nonprofit hospitals, three representatives of for-profit
129	hospitals, two representatives of rural hospitals, two
130	representatives of units of local government which contribute
131	funding, and one representative of family practice teaching
132	hospitals. The council shall:
133	(a)  Make recommendations on the financing of the low-
134	income pool and the disproportionate share hospital program and
135	the distribution of their funds.
136	(b)  Advise the Agency for Health Care Administration on
137	the development of the low-income pool plan required by the
138	federal Centers for Medicare and Medicaid Services pursuant to
139	the Medicaid reform waiver.
140	(c)  Advise the Agency for Health Care Administration on
141	the distribution of hospital funds used to adjust inpatient
142	hospital rates, rebase rates, or otherwise exempt hospitals from
143	reimbursement limits as financed by intergovernmental transfers.
144	(d)  Submit its findings and recommendations to the
145	Governor and the Legislature no later than February 1 of each
146	year.
147	Section 2.  Paragraphs (b), (c), and (d) of subsection (4)
148	of section 409.912, Florida Statutes, are amended to read:
149	409.912  Cost-effective purchasing of health care.--The
150	agency shall purchase goods and services for Medicaid recipients
151	in the most cost-effective manner consistent with the delivery
152	of quality medical care. To ensure that medical services are
153	effectively utilized, the agency may, in any case, require a
154	confirmation or second physician's opinion of the correct
155	diagnosis for purposes of authorizing future services under the
156	Medicaid program. This section does not restrict access to
157	emergency services or poststabilization care services as defined
158	in 42 C.F.R. part 438.114. Such confirmation or second opinion
159	shall be rendered in a manner approved by the agency. The agency
160	shall maximize the use of prepaid per capita and prepaid
161	aggregate fixed-sum basis services when appropriate and other
162	alternative service delivery and reimbursement methodologies,
163	including competitive bidding pursuant to s. 287.057, designed
164	to facilitate the cost-effective purchase of a case-managed
165	continuum of care. The agency shall also require providers to
166	minimize the exposure of recipients to the need for acute
167	inpatient, custodial, and other institutional care and the
168	inappropriate or unnecessary use of high-cost services. The
169	agency shall contract with a vendor to monitor and evaluate the
170	clinical practice patterns of providers in order to identify
171	trends that are outside the normal practice patterns of a
172	provider's professional peers or the national guidelines of a
173	provider's professional association. The vendor must be able to
174	provide information and counseling to a provider whose practice
175	patterns are outside the norms, in consultation with the agency,
176	to improve patient care and reduce inappropriate utilization.
177	The agency may mandate prior authorization, drug therapy
178	management, or disease management participation for certain
179	populations of Medicaid beneficiaries, certain drug classes, or
180	particular drugs to prevent fraud, abuse, overuse, and possible
181	dangerous drug interactions. The Pharmaceutical and Therapeutics
182	Committee shall make recommendations to the agency on drugs for
183	which prior authorization is required. The agency shall inform
184	the Pharmaceutical and Therapeutics Committee of its decisions
185	regarding drugs subject to prior authorization. The agency is
186	authorized to limit the entities it contracts with or enrolls as
187	Medicaid providers by developing a provider network through
188	provider credentialing. The agency may competitively bid single-
189	source-provider contracts if procurement of goods or services
190	results in demonstrated cost savings to the state without
191	limiting access to care. The agency may limit its network based
192	on the assessment of beneficiary access to care, provider
193	availability, provider quality standards, time and distance
194	standards for access to care, the cultural competence of the
195	provider network, demographic characteristics of Medicaid
196	beneficiaries, practice and provider-to-beneficiary standards,
197	appointment wait times, beneficiary use of services, provider
198	turnover, provider profiling, provider licensure history,
199	previous program integrity investigations and findings, peer
200	review, provider Medicaid policy and billing compliance records,
201	clinical and medical record audits, and other factors. Providers
202	shall not be entitled to enrollment in the Medicaid provider
203	network. The agency shall determine instances in which allowing
204	Medicaid beneficiaries to purchase durable medical equipment and
205	other goods is less expensive to the Medicaid program than long-
206	term rental of the equipment or goods. The agency may establish
207	rules to facilitate purchases in lieu of long-term rentals in
208	order to protect against fraud and abuse in the Medicaid program
209	as defined in s. 409.913. The agency may seek federal waivers
210	necessary to administer these policies.
211	(4)  The agency may contract with:
212	(b)  An entity that is providing comprehensive behavioral
213	health care services to certain Medicaid recipients through a
214	capitated, prepaid arrangement pursuant to the federal waiver
215	provided for by s. 409.905(5). Such an entity must be licensed
216	under chapter 624, chapter 636, or chapter 641 and must possess
217	the clinical systems and operational competence to manage risk
218	and provide comprehensive behavioral health care to Medicaid
219	recipients. As used in this paragraph, the term "comprehensive
220	behavioral health care services" means covered mental health and
221	substance abuse treatment services that are available to
222	Medicaid recipients. The secretary of the Department of Children
223	and Family Services shall approve provisions of procurements
224	related to children in the department's care or custody prior to
225	enrolling such children in a prepaid behavioral health plan. Any
226	contract awarded under this paragraph must be competitively
227	procured. In developing the behavioral health care prepaid plan
228	procurement document, the agency shall ensure that the
229	procurement document requires the contractor to develop and
230	implement a plan to ensure compliance with s. 394.4574 related
231	to services provided to residents of licensed assisted living
232	facilities that hold a limited mental health license. Except as
233	provided in subparagraph 8., and except in counties where the
234	Medicaid managed care pilot program is authorized pursuant s.
235	409.91211, the agency shall seek federal approval to contract
236	with a single entity meeting these requirements to provide
237	comprehensive behavioral health care services to all Medicaid
238	recipients not enrolled in a Medicaid managed care plan
239	authorized under s. 409.91211 or a Medicaid health maintenance
240	organization in an AHCA area. In an AHCA area where the Medicaid
241	managed care pilot program is authorized pursuant to s.
242	409.91211 in one or more counties, the agency may procure a
243	contract with a single entity to serve the remaining counties as
244	an AHCA area or the remaining counties may be included with an
245	adjacent AHCA area and shall be subject to this paragraph. Each
246	entity must offer sufficient choice of providers in its network
247	to ensure recipient access to care and the opportunity to select
248	a provider with whom they are satisfied. The network shall
249	include all public mental health hospitals. To ensure unimpaired
250	access to behavioral health care services by Medicaid
251	recipients, all contracts issued pursuant to this paragraph
252	shall require 80 percent of the capitation paid to the managed
253	care plan, including health maintenance organizations, to be
254	expended for the provision of behavioral health care services.
255	In the event the managed care plan expends less than 80 percent
256	of the capitation paid pursuant to this paragraph for the
257	provision of behavioral health care services, the difference
258	shall be returned to the agency. The agency shall provide the
259	managed care plan with a certification letter indicating the
260	amount of capitation paid during each calendar year for the
261	provision of behavioral health care services pursuant to this
262	section. The agency may reimburse for substance abuse treatment
263	services on a fee-for-service basis until the agency finds that
264	adequate funds are available for capitated, prepaid
265	arrangements.
266	1.  By January 1, 2001, the agency shall modify the
267	contracts with the entities providing comprehensive inpatient
268	and outpatient mental health care services to Medicaid
269	recipients in Hillsborough, Highlands, Hardee, Manatee, and Polk
270	Counties, to include substance abuse treatment services.
271	2.  By July 1, 2003, the agency and the Department of
272	Children and Family Services shall execute a written agreement
273	that requires collaboration and joint development of all policy,
274	budgets, procurement documents, contracts, and monitoring plans
275	that have an impact on the state and Medicaid community mental
276	health and targeted case management programs.
277	3.  Except as provided in subparagraph 8., by July 1, 2006,
278	the agency and the Department of Children and Family Services
279	shall contract with managed care entities in each AHCA area
280	except area 6 or arrange to provide comprehensive inpatient and
281	outpatient mental health and substance abuse services through
282	capitated prepaid arrangements to all Medicaid recipients who
283	are eligible to participate in such plans under federal law and
284	regulation. In AHCA areas where eligible individuals number less
285	than 150,000, the agency shall contract with a single managed
286	care plan to provide comprehensive behavioral health services to
287	all recipients who are not enrolled in a Medicaid health
288	maintenance organization or a Medicaid capitated managed care
289	plan authorized under s. 409.91211. The agency may contract with
290	more than one comprehensive behavioral health provider to
291	provide care to recipients who are not enrolled in a Medicaid
292	capitated managed care plan authorized under s. 409.91211 or a
293	Medicaid health maintenance organization in AHCA areas where the
294	eligible population exceeds 150,000. In an AHCA area where the
295	Medicaid managed care pilot program is authorized pursuant to s.
296	409.91211 in one or more counties, the agency may procure a
297	contract with a single entity to serve the remaining counties as
298	an AHCA area or the remaining counties may be included with an
299	adjacent AHCA area and shall be subject to this paragraph.
300	Contracts for comprehensive behavioral health providers awarded
301	pursuant to this section shall be competitively procured. Both
302	for-profit and not-for-profit corporations shall be eligible to
303	compete. Managed care plans contracting with the agency under
304	subsection (3) shall provide and receive payment for the same
305	comprehensive behavioral health benefits as provided in AHCA
306	rules, including handbooks incorporated by reference. In AHCA
307	area 11, the agency shall contract with at least two
308	comprehensive behavioral health care providers to provide
309	behavioral health care to recipients in that area who are
310	enrolled in, or assigned to, the MediPass program. One of the
311	behavioral health care contracts shall be with the existing
312	provider service network pilot project, as described in
313	paragraph (d), for the purpose of demonstrating the cost-
314	effectiveness of the provision of quality mental health services
315	through a public hospital-operated managed care model. Payment
316	shall be at an agreed-upon capitated rate to ensure cost
317	savings. Of the recipients in area 11 who are assigned to
318	MediPass under the provisions of s. 409.9122(2)(k), a minimum of
319	50,000 of those MediPass-enrolled recipients shall be assigned
320	to the existing provider service network in area 11 for their
321	behavioral care.
322	4.  By October 1, 2003, the agency and the department shall
323	submit a plan to the Governor, the President of the Senate, and
324	the Speaker of the House of Representatives which provides for
325	the full implementation of capitated prepaid behavioral health
326	care in all areas of the state.
327	a.  Implementation shall begin in 2003 in those AHCA areas
328	of the state where the agency is able to establish sufficient
329	capitation rates.
330	b.  If the agency determines that the proposed capitation
331	rate in any area is insufficient to provide appropriate
332	services, the agency may adjust the capitation rate to ensure
333	that care will be available. The agency and the department may
334	use existing general revenue to address any additional required
335	match but may not over-obligate existing funds on an annualized
336	basis.
337	c.  Subject to any limitations provided for in the General
338	Appropriations Act, the agency, in compliance with appropriate
339	federal authorization, shall develop policies and procedures
340	that allow for certification of local and state funds.
341	5.  Children residing in a statewide inpatient psychiatric
342	program, or in a Department of Juvenile Justice or a Department
343	of Children and Family Services residential program approved as
344	a Medicaid behavioral health overlay services provider shall not
345	be included in a behavioral health care prepaid health plan or
346	any other Medicaid managed care plan pursuant to this paragraph.
347	6.  In converting to a prepaid system of delivery, the
348	agency shall in its procurement document require an entity
349	providing only comprehensive behavioral health care services to
350	prevent the displacement of indigent care patients by enrollees
351	in the Medicaid prepaid health plan providing behavioral health
352	care services from facilities receiving state funding to provide
353	indigent behavioral health care, to facilities licensed under
354	chapter 395 which do not receive state funding for indigent
355	behavioral health care, or reimburse the unsubsidized facility
356	for the cost of behavioral health care provided to the displaced
357	indigent care patient.
358	7.  Traditional community mental health providers under
359	contract with the Department of Children and Family Services
360	pursuant to part IV of chapter 394, child welfare providers
361	under contract with the Department of Children and Family
362	Services in areas 1 and 6, and inpatient mental health providers
363	licensed pursuant to chapter 395 must be offered an opportunity
364	to accept or decline a contract to participate in any provider
365	network for prepaid behavioral health services.
366	8.  For fiscal year 2004-2005, all Medicaid eligible
367	children, except children in areas 1 and 6, whose cases are open
368	for child welfare services in the HomeSafeNet system, shall be
369	enrolled in MediPass or in Medicaid fee-for-service and all
370	their behavioral health care services including inpatient,
371	outpatient psychiatric, community mental health, and case
372	management shall be reimbursed on a fee-for-service basis.
373	Beginning July 1, 2005, such children, who are open for child
374	welfare services in the HomeSafeNet system, shall receive their
375	behavioral health care services through a specialty prepaid plan
376	operated by community-based lead agencies either through a
377	single agency or formal agreements among several agencies. The
378	specialty prepaid plan must result in savings to the state
379	comparable to savings achieved in other Medicaid managed care
380	and prepaid programs. Such plan must provide mechanisms to
381	maximize state and local revenues. The specialty prepaid plan
382	shall be developed by the agency and the Department of Children
383	and Family Services. The agency is authorized to seek any
384	federal waivers to implement this initiative.
385	(c)  A federally qualified health center or an entity owned
386	by one or more federally qualified health centers or an entity
387	owned by other migrant and community health centers receiving
388	non-Medicaid financial support from the Federal Government to
389	provide health care services on a prepaid or fixed-sum basis to
390	recipients. A federally qualified health center or an entity
391	that is owned by one or more federally qualified health centers
392	and is reimbursed by the agency on a prepaid basis is exempt
393	from parts I and III of chapter 641, but must comply with the
394	solvency requirements in s. 641.2261(2) and meet the appropriate
395	requirements governing financial reserve, quality assurance, and
396	patients' rights  established by the agency. Such prepaid health
397	care services entity must be licensed under parts I and III of
398	chapter 641, but shall be prohibited from serving Medicaid
399	recipients on a prepaid basis, until such licensure has been
400	obtained. However, such an entity is exempt from s. 641.225 if
401	the entity meets the requirements specified in subsections (17)
402	and (18).
403	(d)  A provider service network may be reimbursed on a fee-
404	for-service or prepaid basis. A provider service network which
405	is reimbursed by the agency on a prepaid basis shall be exempt
406	from parts I and III of chapter 641, but must comply with the
407	solvency requirements in s. 641.2261(2) and meet appropriate
408	financial reserve, quality assurance, and patient rights
409	requirements as established by the agency. The agency shall
410	award contracts on a competitive bid basis and shall select
411	bidders based upon price and quality of care. Medicaid
412	recipients assigned to a provider service network demonstration
413	project shall be chosen equally from those who would otherwise
414	have been assigned to prepaid plans and MediPass. The agency is
415	authorized to seek federal Medicaid waivers as necessary to
416	implement the provisions of this section. Any contract
417	previously awarded to a provider service network operated by a
418	hospital pursuant to this subsection shall remain in effect for
419	a period of 3 years following the current contract expiration
420	date, regardless of any contractual provisions to the contrary.
421	A provider service network is a network established or organized
422	and operated by a health care provider, or group of affiliated
423	health care providers, including minority physician networks and
424	emergency room diversion programs that meet the requirements of
425	s. 409.91211, which provides a substantial proportion of the
426	health care items and services under a contract directly through
427	the provider or affiliated group of providers and may make
428	arrangements with physicians or other health care professionals,
429	health care institutions, or any combination of such individuals
430	or institutions to assume all or part of the financial risk on a
431	prospective basis for the provision of basic health services by
432	the physicians, by other health professionals, or through the
433	institutions. The health care providers must have a controlling
434	interest in the governing body of the provider service network
435	organization.
436	Section 3.  Section 409.91211, Florida Statutes, is amended
437	to read:
438	409.91211  Medicaid managed care pilot program.--
439	(1)(a)  The agency is authorized to seek and implement
440	experimental, pilot, or demonstration project waivers, pursuant
441	to s. 1115 of the Social Security Act, to create a statewide
442	initiative to provide for a more efficient and effective service
443	delivery system that enhances quality of care and client
444	outcomes in the Florida Medicaid program pursuant to this
445	section. Phase one of the demonstration shall be implemented in
446	two geographic areas. One demonstration site shall include only
447	Broward County. A second demonstration site shall initially
448	include Duval County and shall be expanded to include Baker,
449	Clay, and Nassau Counties within 1 year after the Duval County
450	program becomes operational. The agency shall implement
451	expansion of the program to include the remaining counties of
452	the state and remaining eligibility groups in accordance with
453	the process specified in the federally-approved special terms
454	and conditions numbered 11-W-00206/4, as approved by the federal
455	Centers for Medicare and Medicaid Services on October 19, 2005,
456	with a goal of full statewide implementation by June 30, 2011.
457	(b)  This waiver authority is contingent upon federal
458	approval to preserve the upper-payment-limit funding mechanism
459	for hospitals, including a guarantee of a reasonable growth
460	factor, a methodology to allow the use of a portion of these
461	funds to serve as a risk pool for demonstration sites,
462	provisions to preserve the state's ability to use
463	intergovernmental transfers, and provisions to protect the
464	disproportionate share program authorized pursuant to this
465	chapter. Upon completion of the evaluation conducted under s. 3,
466	ch. 2005-133, Laws of Florida, the agency may request statewide
467	expansion of the demonstration projects. Statewide phase-in to
468	additional counties shall be contingent upon review and approval
469	by the Legislature. Under the upper-payment-limit program, or
470	the low-income pool as implemented by the Agency for Health Care
471	Administration pursuant to federal waiver, the state matching
472	funds required for the program shall be provided by local
473	governmental entities through intergovernmental transfers in
474	accordance with published federal statutes and regulations. The
475	Agency for Health Care Administration shall distribute upper-
476	payment-limit, disproportionate share hospital, and low-income
477	pool funds according to published federal statutes, regulations,
478	and waivers and the low-income pool methodology approved by the
479	federal Centers for Medicare and Medicaid Services.
480	(c)  It is the intent of the Legislature that the low-
481	income pool plan required by the terms and conditions of the
482	Medicaid reform waiver and submitted to the federal Centers for
483	Medicare and Medicaid Services propose the distribution of the
484	abovementioned program funds based on the following objectives:
485	1.  Assure a broad and fair distribution of available funds
486	based on the access provided by Medicaid participating
487	hospitals, regardless of their ownership status, through their
488	delivery of inpatient or outpatient care for Medicaid
489	beneficiaries and uninsured and underinsured individuals;
490	2.  Assure accessible emergency inpatient and outpatient
491	care for Medicaid beneficiaries and uninsured and underinsured
492	individuals;
493	3.  Enhance primary, preventive, and other ambulatory care
494	coverages for uninsured individuals;
495	4.  Promote teaching and specialty hospital programs;
496	5.  Promote the stability and viability of statutorily
497	defined rural hospitals and hospitals that serve as sole
498	community hospitals;
499	6.  Recognize the extent of hospital uncompensated care
500	costs;
501	7.  Maintain and enhance essential community hospital care;
502	8.  Maintain incentives for local governmental entities to
503	contribute to the cost of uncompensated care;
504	9.  Promote measures to avoid preventable hospitalizations;
505	10.  Account for hospital efficiency; and
506	11.  Contribute to a community's overall health system.
507	(2)  The Legislature intends for the capitated managed care
508	pilot program to:
509	(a)  Provide recipients in Medicaid fee-for-service or the
510	MediPass program a comprehensive and coordinated capitated
511	managed care system for all health care services specified in
512	ss. 409.905 and 409.906.
513	(b)  Stabilize Medicaid expenditures under the pilot
514	program compared to Medicaid expenditures in the pilot area for
515	the 3 years before implementation of the pilot program, while
516	ensuring:
517	1.  Consumer education and choice.
518	2.  Access to medically necessary services.
519	3.  Coordination of preventative, acute, and long-term
520	care.
521	4.  Reductions in unnecessary service utilization.
522	(c)  Provide an opportunity to evaluate the feasibility of
523	statewide implementation of capitated managed care networks as a
524	replacement for the current Medicaid fee-for-service and
525	MediPass systems.
526	(3)  The agency shall have the following powers, duties,
527	and responsibilities with respect to the development of a pilot
528	program:
529	(a)  To implement develop and recommend a system to deliver
530	all mandatory services specified in s. 409.905 and optional
531	services specified in s. 409.906, as approved by the Centers for
532	Medicare and Medicaid Services and the Legislature in the waiver
533	pursuant to this section. Services to recipients under plan
534	benefits shall include emergency services provided under s.
535	409.9128.
536	(b)  To implement a pilot program, including recommend
537	Medicaid eligibility categories, from those specified in ss.
538	409.903 and 409.904, as authorized in an approved federal waiver
539	which shall be included in the pilot program.
540	(c)  To implement determine and recommend how to design the
541	managed care pilot program that maximizes in order to take
542	maximum advantage of all available state and federal funds,
543	including those obtained through intergovernmental transfers,
544	the low-income pool, supplemental Medicaid payments the upper-
545	payment-level funding systems, and the disproportionate share
546	program. Within the parameters allowed by federal statute and
547	rule, the agency may seek options for making direct payments to
548	hospitals and physicians employed by or under contract with the
549	state's medical schools for the costs associated with graduate
550	medical education under Medicaid reform.
551	(d)  To implement determine and recommend actuarially
552	sound, risk-adjusted capitation rates for Medicaid recipients in
553	the pilot program which can be separated to cover comprehensive
554	care, enhanced services, and catastrophic care.
555	(e)  To implement determine and recommend policies and
556	guidelines for phasing in financial risk for approved provider
557	service networks over a 3-year period. These policies and
558	guidelines must shall include an option for a provider service
559	network to be paid to pay fee-for-service rates that may include
560	a savings-settlement option for at least 2 years. For any
561	provider service network established in a managed care pilot
562	area, the option to be paid fee-for-service rates shall include
563	a savings-settlement mechanism that is consistent with s.
564	409.912(44). This model shall may be converted to a risk-
565	adjusted capitated rate no later than the beginning of the
566	fourth in the third year of operation, and may be converted
567	earlier at the option of the provider service network. Federally
568	qualified health centers may be offered an opportunity to accept
569	or decline a contract to participate in any provider network for
570	prepaid primary care services.
571	(f)  To implement determine and recommend provisions
572	related to stop-loss requirements and the transfer of excess
573	cost to catastrophic coverage that accommodates the risks
574	associated with the development of the pilot program.
575	(g)  To determine and recommend a process to be used by the
576	Social Services Estimating Conference to determine and validate
577	the rate of growth of the per-member costs of providing Medicaid
578	services under the managed care pilot program.
579	(h)  To implement determine and recommend program standards
580	and credentialing requirements for capitated managed care
581	networks to participate in the pilot program, including those
582	related to fiscal solvency, quality of care, and adequacy of
583	access to health care providers. It is the intent of the
584	Legislature that, to the extent possible, any pilot program
585	authorized by the state under this section include any federally
586	qualified health center, federally qualified rural health
587	clinic, county health department, the Children's Medical
588	Services Network within the Department of Health, or other
589	federally, state, or locally funded entity that serves the
590	geographic areas within the boundaries of the pilot program that
591	requests to participate. This paragraph does not relieve an
592	entity that qualifies as a capitated managed care network under
593	this section from any other licensure or regulatory requirements
594	contained in state or federal law which would otherwise apply to
595	the entity. The standards and credentialing requirements shall
596	be based upon, but are not limited to:
597	1.  Compliance with the accreditation requirements as
598	provided in s. 641.512.
599	2.  Compliance with early and periodic screening,
600	diagnosis, and treatment screening requirements under federal
601	law.
602	3.  The percentage of voluntary disenrollments.
603	4.  Immunization rates.
604	5.  Standards of the National Committee for Quality
605	Assurance and other approved accrediting bodies.
606	6.  Recommendations of other authoritative bodies.
607	7.  Specific requirements of the Medicaid program, or
608	standards designed to specifically meet the unique needs of
609	Medicaid recipients.
610	8.  Compliance with the health quality improvement system
611	as established by the agency, which incorporates standards and
612	guidelines developed by the Centers for Medicare and Medicaid
613	Services as part of the quality assurance reform initiative.
614	9.  The network's infrastructure capacity to manage
615	financial transactions, recordkeeping, data collection, and
616	other administrative functions.
617	10.  The network's ability to submit any financial,
618	programmatic, or patient-encounter data or other information
619	required by the agency to determine the actual services provided
620	and the cost of administering the plan.
621	(i)  To implement develop and recommend a mechanism for
622	providing information to Medicaid recipients for the purpose of
623	selecting a capitated managed care plan. For each plan available
624	to a recipient, the agency, at a minimum, shall ensure that the
625	recipient is provided with:
626	1.  A list and description of the benefits provided.
627	2.  Information about cost sharing.
628	3.  Plan performance data, if available.
629	4.  An explanation of benefit limitations.
630	5.  Contact information, including identification of
631	providers participating in the network, geographic locations,
632	and transportation limitations.
633	6.  Any other information the agency determines would
634	facilitate a recipient's understanding of the plan or insurance
635	that would best meet his or her needs.
636	(j)  To implement develop and recommend a system to ensure
637	that there is a record of recipient acknowledgment that choice
638	counseling has been provided.
639	(k)  To implement develop and recommend a choice counseling
640	system to ensure that the choice counseling process and related
641	material are designed to provide counseling through face-to-face
642	interaction, by telephone, and in writing and through other
643	forms of relevant media. Materials shall be written at the
644	fourth-grade reading level and available in a language other
645	than English when 5 percent of the county speaks a language
646	other than English. Choice counseling shall also use language
647	lines and other services for impaired recipients, such as
648	TTD/TTY.
649	(l)  To implement develop and recommend a system that
650	prohibits capitated managed care plans, their representatives,
651	and providers employed by or contracted with the capitated
652	managed care plans from recruiting persons eligible for or
653	enrolled in Medicaid, from providing inducements to Medicaid
654	recipients to select a particular capitated managed care plan,
655	and from prejudicing Medicaid recipients against other capitated
656	managed care plans. The system shall require the entity
657	performing choice counseling to determine if the recipient has
658	made a choice of a plan or has opted out because of duress,
659	threats, payment to the recipient, or incentives promised to the
660	recipient by a third party. If the choice counseling entity
661	determines that the decision to choose a plan was unlawfully
662	influenced or a plan violated any of the provisions of s.
663	409.912(21), the choice counseling entity shall immediately
664	report the violation to the agency's program integrity section
665	for investigation. Verification of choice counseling by the
666	recipient shall include a stipulation that the recipient
667	acknowledges the provisions of this subsection.
668	(m)  To implement develop and recommend a choice counseling
669	system that promotes health literacy and provides information
670	aimed to reduce minority health disparities through outreach
671	activities for Medicaid recipients.
672	(n)  To develop and recommend a system for the agency to
673	contract with entities to perform choice counseling. The agency
674	may establish standards and performance contracts, including
675	standards requiring the contractor to hire choice counselors who
676	are representative of the state's diverse population and to
677	train choice counselors in working with culturally diverse
678	populations.
679	(o)  To implement determine and recommend descriptions of
680	the eligibility assignment processes which will be used to
681	facilitate client choice while ensuring pilot programs of
682	adequate enrollment levels. These processes shall ensure that
683	pilot sites have sufficient levels of enrollment to conduct a
684	valid test of the managed care pilot program within a 2-year
685	timeframe.
686	(p)  To implement standards for plan compliance, including,
687	but not limited to, standards for quality assurance and
688	performance improvement, standards for peer or professional
689	reviews, grievance policies, and policies for maintaining
690	program integrity. The agency shall develop a data-reporting
691	system, seek input from managed care plans in order to establish
692	requirements for patient-encounter reporting, and ensure that
693	the data reported is accurate and complete.
694	1.  In performing the duties required under this section,
695	the agency shall work with managed care plans to establish a
696	uniform system to measure and monitor outcomes for a recipient
697	of Medicaid services.
698	2.  The system shall use financial, clinical, and other
699	criteria based on pharmacy, medical services, and other data
700	that is related to the provision of Medicaid services,
701	including, but not limited to:
702	a.  The Health Plan Employer Data and Information Set
703	(HEDIS) or measures that are similar to HEDIS.
704	b.  Member satisfaction.
705	c.  Provider satisfaction.
706	d.  Report cards on plan performance and best practices.
707	e.  Compliance with the requirements for prompt payment of
708	claims under ss. 627.613, 641.3155, and 641.513.
709	f.  Utilization and quality data for the purpose of
710	ensuring access to medically necessary services, including
711	underutilization or inappropriate denial of services.
712	3.  The agency shall require the managed care plans that
713	have contracted with the agency to establish a quality assurance
714	system that incorporates the provisions of s. 409.912(27) and
715	any standards, rules, and guidelines developed by the agency.
716	4.  The agency shall establish an encounter database in
717	order to compile data on health services rendered by health care
718	practitioners who provide services to patients enrolled in
719	managed care plans in the demonstration sites. The encounter
720	database shall:
721	a.  Collect the following for each type of patient
722	encounter with a health care practitioner or facility,
723	including:
724	(I)  The demographic characteristics of the patient.
725	(II)  The principal, secondary, and tertiary diagnosis.
726	(III)  The procedure performed.
727	(IV)  The date and location where the procedure was
728	performed.
729	(V)  The payment for the procedure, if any.
730	(VI)  If applicable, the health care practitioner's
731	universal identification number.
732	(VII)  If the health care practitioner rendering the
733	service is a dependent practitioner, the modifiers appropriate
734	to indicate that the service was delivered by the dependent
735	practitioner.
736	b.  Collect appropriate information relating to
737	prescription drugs for each type of patient encounter.
738	c.  Collect appropriate information related to health care
739	costs and utilization from managed care plans participating in
740	the demonstration sites.
741	5.  To the extent practicable, when collecting the data the
742	agency shall use a standardized claim form or electronic
743	transfer system that is used by health care practitioners,
744	facilities, and payors.
745	6.  Health care practitioners and facilities in the
746	demonstration sites shall electronically submit, and managed
747	care plans participating in the demonstration sites shall
748	electronically receive, information concerning claims payments
749	and any other information reasonably related to the encounter
750	database using a standard format as required by the agency.
751	7.  The agency shall establish reasonable deadlines for
752	phasing in the electronic transmittal of full encounter data.
753	8.  The system must ensure that the data reported is
754	accurate and complete.
755	(p)  To develop and recommend a system to monitor the
756	provision of health care services in the pilot program,
757	including utilization and quality of health care services for
758	the purpose of ensuring access to medically necessary services.
759	This system shall include an encounter data-information system
760	that collects and reports utilization information. The system
761	shall include a method for verifying data integrity within the
762	database and within the provider's medical records.
763	(q)  To implement recommend a grievance resolution process
764	for Medicaid recipients enrolled in a capitated managed care
765	network under the pilot program modeled after the subscriber
766	assistance panel, as created in s. 408.7056. This process shall
767	include a mechanism for an expedited review of no greater than
768	24 hours after notification of a grievance if the life of a
769	Medicaid recipient is in imminent and emergent jeopardy.
770	(r)  To implement recommend a grievance resolution process
771	for health care providers employed by or contracted with a
772	capitated managed care network under the pilot program in order
773	to settle disputes among the provider and the managed care
774	network or the provider and the agency.
775	(s)  To implement develop and recommend criteria in an
776	approved federal waiver to designate health care providers as
777	eligible to participate in the pilot program. The agency and
778	capitated managed care networks must follow national guidelines
779	for selecting health care providers, whenever available. These
780	criteria must include at a minimum those criteria specified in
781	s. 409.907.
782	(t)  To use develop and recommend health care provider
783	agreements for participation in the pilot program.
784	(u)  To require that all health care providers under
785	contract with the pilot program be duly licensed in the state,
786	if such licensure is available, and meet other criteria as may
787	be established by the agency. These criteria shall include at a
788	minimum those criteria specified in s. 409.907.
789	(v)  To ensure that managed care organizations work
790	collaboratively develop and recommend agreements with other
791	state or local governmental programs or institutions for the
792	coordination of health care to eligible individuals receiving
793	services from such programs or institutions.
794	(w)  To implement procedures to minimize the risk of
795	Medicaid fraud and abuse in all plans operating in the Medicaid
796	managed care pilot program authorized in this section.
797	1.  The agency shall ensure that applicable provisions of
798	this chapter and chapters 414, 626, 641, and 932 which relate to
799	Medicaid fraud and abuse are applied and enforced at the
800	demonstration project sites.
801	2.  Providers must have the certification, license, and
802	credentials that are required by law and waiver requirements.
803	3.  The agency shall ensure that the plan is in compliance
804	with s. 409.912(21) and (22).
805	4.  The agency shall require that each plan establish
806	functions and activities governing program integrity in order to
807	reduce the incidence of fraud and abuse. Plans must report
808	instances of fraud and abuse pursuant to chapter 641.
809	5.  The plan shall have written administrative and
810	management arrangements or procedures, including a mandatory
811	compliance plan, which are designed to guard against fraud and
812	abuse. The plan shall designate a compliance officer who has
813	sufficient experience in health care.
814	6.a.  The agency shall require all managed care plan
815	contractors in the pilot program to report all instances of
816	suspected fraud and abuse. A failure to report instances of
817	suspected fraud and abuse is a violation of law and subject to
818	the penalties provided by law.
819	b.  An instance of fraud and abuse in the managed care
820	plan, including, but not limited to, defrauding the state health
821	care benefit program by misrepresentation of fact in reports,
822	claims, certifications, enrollment claims, demographic
823	statistics, or patient-encounter data; misrepresentation of the
824	qualifications of persons rendering health care and ancillary
825	services; bribery and false statements relating to the delivery
826	of health care; unfair and deceptive marketing practices; and
827	false claims actions in the provision of managed care, is a
828	violation of law and subject to the penalties provided by law.
829	c.  The agency shall require that all contractors make all
830	files and relevant billing and claims data accessible to state
831	regulators and investigators and that all such data is linked
832	into a unified system to ensure consistent reviews and
833	investigations.
834	(w)  To develop and recommend a system to oversee the
835	activities of pilot program participants, health care providers,
836	capitated managed care networks, and their representatives in
837	order to prevent fraud or abuse, overutilization or duplicative
838	utilization, underutilization or inappropriate denial of
839	services, and neglect of participants and to recover
840	overpayments as appropriate. For the purposes of this paragraph,
841	the terms "abuse" and "fraud" have the meanings as provided in
842	s. 409.913. The agency must refer incidents of suspected fraud,
843	abuse, overutilization and duplicative utilization, and
844	underutilization or inappropriate denial of services to the
845	appropriate regulatory agency.
846	(x)  To develop and provide actuarial and benefit design
847	analyses that indicate the effect on capitation rates and
848	benefits offered in the pilot program over a prospective 5-year
849	period based on the following assumptions:
850	1.  Growth in capitation rates which is limited to the
851	estimated growth rate in general revenue.
852	2.  Growth in capitation rates which is limited to the
853	average growth rate over the last 3 years in per-recipient
854	Medicaid expenditures.
855	3.  Growth in capitation rates which is limited to the
856	growth rate of aggregate Medicaid expenditures between the 2003-
857	2004 fiscal year and the 2004-2005 fiscal year.
858	(y)  To develop a mechanism to require capitated managed
859	care plans to reimburse qualified emergency service providers,
860	including, but not limited to, ambulance services, in accordance
861	with ss. 409.908 and 409.9128. The pilot program must include a
862	provision for continuing fee-for-service payments for emergency
863	services, including, but not limited to, individuals who access
864	ambulance services or emergency departments and who are
865	subsequently determined to be eligible for Medicaid services.
866	(z)  To ensure that develop a system whereby school
867	districts participating in the certified school match program
868	pursuant to ss. 409.908(21) and 1011.70 shall be reimbursed by
869	Medicaid, subject to the limitations of s. 1011.70(1), for a
870	Medicaid-eligible child participating in the services as
871	authorized in s. 1011.70, as provided for in s. 409.9071,
872	regardless of whether the child is enrolled in a capitated
873	managed care network. Capitated managed care networks must make
874	a good faith effort to execute agreements with school districts
875	regarding the coordinated provision of services authorized under
876	s. 1011.70. County health departments and federal qualified
877	health centers delivering school-based services pursuant to ss.
878	381.0056 and 381.0057 must be reimbursed by Medicaid for the
879	federal share for a Medicaid-eligible child who receives
880	Medicaid-covered services in a school setting, regardless of
881	whether the child is enrolled in a capitated managed care
882	network. Capitated managed care networks must make a good faith
883	effort to execute agreements with county health departments and
884	federally qualified health centers regarding the coordinated
885	provision of services to a Medicaid-eligible child. To ensure
886	continuity of care for Medicaid patients, the agency, the
887	Department of Health, and the Department of Education shall
888	develop procedures for ensuring that a student's capitated
889	managed care network provider receives information relating to
890	services provided in accordance with ss. 381.0056, 381.0057,
891	409.9071, and 1011.70.
892	(aa)  To implement develop and recommend a mechanism
893	whereby Medicaid recipients who are already enrolled in a
894	managed care plan or the MediPass program in the pilot areas
895	shall be offered the opportunity to change to capitated managed
896	care plans on a staggered basis, as defined by the agency. All
897	Medicaid recipients shall have 30 days in which to make a choice
898	of capitated managed care plans. Those Medicaid recipients who
899	do not make a choice shall be assigned to a capitated managed
900	care plan in accordance with paragraph (4)(a) and shall be
901	exempt from s. 409.9122. To facilitate continuity of care for a
902	Medicaid recipient who is also a recipient of Supplemental
903	Security Income (SSI), prior to assigning the SSI recipient to a
904	capitated managed care plan, the agency shall determine whether
905	the SSI recipient has an ongoing relationship with a provider or
906	capitated managed care plan, and, if so, the agency shall assign
907	the SSI recipient to that provider or capitated managed care
908	plan where feasible. Those SSI recipients who do not have such a
909	provider relationship shall be assigned to a capitated managed
910	care plan provider in accordance with paragraph (4)(a) and shall
911	be exempt from s. 409.9122.
912	(bb)  To develop and recommend a service delivery
913	alternative for children having chronic medical conditions which
914	establishes a medical home project to provide primary care
915	services to this population. The project shall provide
916	community-based primary care services that are integrated with
917	other subspecialties to meet the medical, developmental, and
918	emotional needs for children and their families. This project
919	shall include an evaluation component to determine impacts on
920	hospitalizations, length of stays, emergency room visits, costs,
921	and access to care, including specialty care and patient and
922	family satisfaction.
923	(cc)  To develop and recommend service delivery mechanisms
924	within capitated managed care plans to provide Medicaid services
925	as specified in ss. 409.905 and 409.906 to persons with
926	developmental disabilities sufficient to meet the medical,
927	developmental, and emotional needs of these persons.
928	(dd)  To develop and recommend service delivery mechanisms
929	within capitated managed care plans to provide Medicaid services
930	as specified in ss. 409.905 and 409.906 to Medicaid-eligible
931	children in foster care. These services must be coordinated with
932	community-based care providers as specified in s. 409.1675,
933	where available, and be sufficient to meet the medical,
934	developmental, and emotional needs of these children.
935	(4)(a)  A Medicaid recipient in the pilot area who is not
936	currently enrolled in a capitated managed care plan upon
937	implementation is not eligible for services as specified in ss.
938	409.905 and 409.906, for the amount of time that the recipient
939	does not enroll in a capitated managed care network. If a
940	Medicaid recipient has not enrolled in a capitated managed care
941	plan within 30 days after eligibility, the agency shall assign
942	the Medicaid recipient to a capitated managed care plan based on
943	the assessed needs of the recipient as determined by the agency
944	and the recipient shall be exempt from s. 409.9122. When making
945	assignments, the agency shall take into account the following
946	criteria:
947	1.  A capitated managed care network has sufficient network
948	capacity to meet the needs of members.
949	2.  The capitated managed care network has previously
950	enrolled the recipient as a member, or one of the capitated
951	managed care network's primary care providers has previously
952	provided health care to the recipient.
953	3.  The agency has knowledge that the member has previously
954	expressed a preference for a particular capitated managed care
955	network as indicated by Medicaid fee-for-service claims data,
956	but has failed to make a choice.
957	4.  The capitated managed care network's primary care
958	providers are geographically accessible to the recipient's
959	residence.
960	(b)  When more than one capitated managed care network
961	provider meets the criteria specified in paragraph (3)(h), the
962	agency shall make recipient assignments consecutively by family
963	unit.
964	(c)  If a recipient is currently enrolled with a Medicaid
965	managed care organization that also operates an approved reform
966	plan within a demonstration area and the recipient fails to
967	choose a plan during the reform enrollment process or during
968	redetermination of eligibility, the recipient shall be
969	automatically assigned by the agency into the most appropriate
970	reform plan operated by the recipient's current Medicaid managed
971	care plan. If the recipient's current managed care plan does not
972	operate a reform plan in the demonstration area which adequately
973	meets the needs of the Medicaid recipient, the agency shall use
974	the automatic assignment process as prescribed in the special
975	terms and conditions numbered 11-W-00206/4. All enrollment and
976	choice counseling materials provided by the agency must contain
977	an explanation of the provisions of this paragraph for current
978	managed care recipients.
979	(d)(c)  The agency may not engage in practices that are
980	designed to favor one capitated managed care plan over another
981	or that are designed to influence Medicaid recipients to enroll
982	in a particular capitated managed care network in order to
983	strengthen its particular fiscal viability.
984	(e)(d)  After a recipient has made a selection or has been
985	enrolled in a capitated managed care network, the recipient
986	shall have 90 days in which to voluntarily disenroll and select
987	another capitated managed care network. After 90 days, no
988	further changes may be made except for cause. Cause shall
989	include, but not be limited to, poor quality of care, lack of
990	access to necessary specialty services, an unreasonable delay or
991	denial of service, inordinate or inappropriate changes of
992	primary care providers, service access impairments due to
993	significant changes in the geographic location of services, or
994	fraudulent enrollment. The agency may require a recipient to use
995	the capitated managed care network's grievance process as
996	specified in paragraph (3)(g) prior to the agency's
997	determination of cause, except in cases in which immediate risk
998	of permanent damage to the recipient's health is alleged. The
999	grievance process, when used, must be completed in time to
1000	permit the recipient to disenroll no later than the first day of
1001	the second month after the month the disenrollment request was
1002	made. If the capitated managed care network, as a result of the
1003	grievance process, approves an enrollee's request to disenroll,
1004	the agency is not required to make a determination in the case.
1005	The agency must make a determination and take final action on a
1006	recipient's request so that disenrollment occurs no later than
1007	the first day of the second month after the month the request
1008	was made. If the agency fails to act within the specified
1009	timeframe, the recipient's request to disenroll is deemed to be
1010	approved as of the date agency action was required. Recipients
1011	who disagree with the agency's finding that cause does not exist
1012	for disenrollment shall be advised of their right to pursue a
1013	Medicaid fair hearing to dispute the agency's finding.
1014	(f)(e)  The agency shall apply for federal waivers from the
1015	Centers for Medicare and Medicaid Services to lock eligible
1016	Medicaid recipients into a capitated managed care network for 12
1017	months after an open enrollment period. After 12 months of
1018	enrollment, a recipient may select another capitated managed
1019	care network. However, nothing shall prevent a Medicaid
1020	recipient from changing primary care providers within the
1021	capitated managed care network during the 12-month period.
1022	(g)(f)  The agency shall apply for federal waivers from the
1023	Centers for Medicare and Medicaid Services to allow recipients
1024	to purchase health care coverage through an employer-sponsored
1025	health insurance plan instead of through a Medicaid-certified
1026	plan. This provision shall be known as the opt-out option.
1027	1.  A recipient who chooses the Medicaid opt-out option
1028	shall have an opportunity for a specified period of time, as
1029	authorized under a waiver granted by the Centers for Medicare
1030	and Medicaid Services, to select and enroll in a Medicaid-
1031	certified plan. If the recipient remains in the employer-
1032	sponsored plan after the specified period, the recipient shall
1033	remain in the opt-out program for at least 1 year or until the
1034	recipient no longer has access to employer-sponsored coverage,
1035	until the employer's open enrollment period for a person who
1036	opts out in order to participate in employer-sponsored coverage,
1037	or until the person is no longer eligible for Medicaid,
1038	whichever time period is shorter.
1039	2.  Notwithstanding any other provision of this section,
1040	coverage, cost sharing, and any other component of employer-
1041	sponsored health insurance shall be governed by applicable state
1042	and federal laws.
1043	(5)  This section does not authorize the agency to
1044	implement any provision of s. 1115 of the Social Security Act
1045	experimental, pilot, or demonstration project waiver to reform
1046	the state Medicaid program in any part of the state other than
1047	the two geographic areas specified in this section unless
1048	approved by the Legislature.
1049	(6)  The agency shall develop and submit for approval
1050	applications for waivers of applicable federal laws and
1051	regulations as necessary to implement the managed care pilot
1052	project as defined in this section. The agency shall post all
1053	waiver applications under this section on its Internet website
1054	30 days before submitting the applications to the United States
1055	Centers for Medicare and Medicaid Services. All waiver
1056	applications shall be provided for review and comment to the
1057	appropriate committees of the Senate and House of
1058	Representatives for at least 10 working days prior to
1059	submission. All waivers submitted to and approved by the United
1060	States Centers for Medicare and Medicaid Services under this
1061	section must be approved by the Legislature. Federally approved
1062	waivers must be submitted to the President of the Senate and the
1063	Speaker of the House of Representatives for referral to the
1064	appropriate legislative committees. The appropriate committees
1065	shall recommend whether to approve the implementation of any
1066	waivers to the Legislature as a whole. The agency shall submit a
1067	plan containing a recommended timeline for implementation of any
1068	waivers and budgetary projections of the effect of the pilot
1069	program under this section on the total Medicaid budget for the
1070	2006-2007 through 2009-2010 state fiscal years. This
1071	implementation plan shall be submitted to the President of the
1072	Senate and the Speaker of the House of Representatives at the
1073	same time any waivers are submitted for consideration by the
1074	Legislature. The agency may implement the waiver and special
1075	terms and conditions numbered 11-W-00206/4, as approved by the
1076	federal Centers for Medicare and Medicaid Services. If the
1077	agency seeks approval by the Federal Government of any
1078	modifications to these special terms and conditions, the agency
1079	must provide written notification of its intent to modify these
1080	terms and conditions to the President of the Senate and the
1081	Speaker of the House of Representatives at least 15 days before
1082	submitting the modifications to the Federal Government for
1083	consideration. The notification must identify all modifications
1084	being pursued and the reason the modifications are needed. Upon
1085	receiving federal approval of any modifications to the special
1086	terms and conditions, the agency shall provide a report to the
1087	Legislature describing the federally approved modifications to
1088	the special terms and conditions within 7 days after approval by
1089	the Federal Government.
1090	(7)(a)  The Secretary of Health Care Administration shall
1091	convene a technical advisory panel to advise the agency in the
1092	areas of risk-adjusted-rate setting, benefit design, and choice
1093	counseling. The panel shall include representatives from the
1094	Florida Association of Health Plans, representatives from
1095	provider-sponsored networks, a Medicaid consumer representative,
1096	and a representative from the Office of Insurance Regulation.
1097	(b)  The technical advisory panel shall advise the agency
1098	concerning:
1099	1.  The risk-adjusted rate methodology to be used by the
1100	agency, including recommendations on mechanisms to recognize the
1101	risk of all Medicaid enrollees and for the transition to a risk-
1102	adjustment system, including recommendations for phasing in risk
1103	adjustment and the use of risk corridors.
1104	2.  Implementation of an encounter data system to be used
1105	for risk-adjusted rates.
1106	3.  Administrative and implementation issues regarding the
1107	use of risk-adjusted rates, including, but not limited to, cost,
1108	simplicity, client privacy, data accuracy, and data exchange.
1109	4.  Issues of benefit design, including the actuarial
1110	equivalence and sufficiency standards to be used.
1111	5.  The implementation plan for the proposed choice-
1112	counseling system, including the information and materials to be
1113	provided to recipients, the methodologies by which recipients
1114	will be counseled regarding choice, criteria to be used to
1115	assess plan quality, the methodology to be used to assign
1116	recipients into plans if they fail to choose a managed care
1117	plan, and the standards to be used for responsiveness to
1118	recipient inquiries.
1119	(c)  The technical advisory panel shall continue in
1120	existence and advise the agency on matters outlined in this
1121	subsection.
1122	(8)  The agency must ensure, in the first two state fiscal
1123	years in which a risk-adjusted methodology is a component of
1124	rate setting, that no managed care plan providing comprehensive
1125	benefits to TANF and SSI recipients has an aggregate risk score
1126	that varies by more than 10 percent from the aggregate weighted
1127	mean of all managed care plans providing comprehensive benefits
1128	to TANF and SSI recipients in a reform area. The agency's
1129	payment to a managed care plan shall be based on such revised
1130	aggregate risk score.
1131	(9)  After any calculations of aggregate risk scores or
1132	revised aggregate risk scores in subsection (8), the capitation
1133	rates for plans participating under s. 409.91211 shall be phased
1134	in as follows:
1135	(a)  In the first year, the capitation rates shall be
1136	weighted so that 75 percent of each capitation rate is based on
1137	the current methodology and 25 percent is based on a new risk-
1138	adjusted capitation rate methodology.
1139	(b)  In the second year, the capitation rates shall be
1140	weighted so that 50 percent of each capitation rate is based on
1141	the current methodology and 50 percent is based on a new risk-
1142	adjusted rate methodology.
1143	(c)  In the following fiscal year, the risk-adjusted
1144	capitation methodology may be fully implemented.
1145	(10)  Subsections (8) and (9) do not apply to managed care
1146	plans offering benefits exclusively to high-risk, specialty
1147	populations. The agency may set risk-adjusted rates immediately
1148	for such plans.
1149	(11)  Before the implementation of risk-adjusted rates, the
1150	rates shall be certified by an actuary and approved by the
1151	federal Centers for Medicare and Medicaid Services.
1152	(12)  For purposes of this section, the term "capitated
1153	managed care plan" includes health insurers authorized under
1154	chapter 624, exclusive provider organizations authorized under
1155	chapter 627, health maintenance organizations authorized under
1156	chapter 641, the Children's Medical Services Network under
1157	chapter 391, and provider service networks that elect to be paid
1158	fee-for-service for up to 3 years as authorized under this
1159	section.
1160	(13)(7)  Upon review and approval of the applications for
1161	waivers of applicable federal laws and regulations to implement
1162	the managed care pilot program by the Legislature, the agency
1163	may initiate adoption of rules pursuant to ss. 120.536(1) and
1164	120.54 to implement and administer the managed care pilot
1165	program as provided in this section.
1166	(14)  It is the intent of the Legislature that if any
1167	conflict exists between the provisions contained in this section
1168	and other provisions of this chapter which relate to the
1169	implementation of the Medicaid managed care pilot program, the
1170	provisions contained in this section shall control. The agency
1171	shall provide a written report to the Legislature by April 1,
1172	2006, identifying any provisions of this chapter which conflict
1173	with the implementation of the Medicaid managed care pilot
1174	program created in this section. After April 1, 2006, the agency
1175	shall provide a written report to the Legislature immediately
1176	upon identifying any provisions of this chapter which conflict
1177	with the implementation of the Medicaid managed care pilot
1178	program created in this section.
1179	Section 4.  Section 409.91213, Florida Statutes, is created
1180	to read:
1181	409.91213  Quarterly progress reports and annual reports.--
1182	(1)  The agency shall submit to the Governor, the President
1183	of the Senate, the Speaker of the House of Representatives, the
1184	Minority Leader of the Senate, the Minority Leader of the House
1185	of Representatives, and the Office of Program Policy Analysis
1186	and Government Accountability the following reports:
1187	(a)  The quarterly progress report submitted to the United
1188	States Centers for Medicare and Medicaid Services no later than
1189	60 days following the end of each quarter. The intent of this
1190	report is to present the agency's analysis and the status of
1191	various operational areas. The quarterly progress report must
1192	include, but need not be limited to:
1193	1.  Events occurring during the quarter or anticipated to
1194	occur in the near future which affect health care delivery,
1195	including, but not limited to, the approval of and contracts for
1196	new plans, which report must specify the coverage area, phase-in
1197	period, populations served, and benefits; the enrollment;
1198	grievances; and other operational issues.
1199	2.  Action plans for addressing any policy and
1200	administrative issues.
1201	3.  Agency efforts related to collecting and verifying
1202	encounter data and utilization data.
1203	4.  Enrollment data disaggregated by plan and by
1204	eligibility category, such as Temporary Assistance for Needy
1205	Families or Supplemental Security Income; the total number of
1206	enrollees; market share; and the percentage change in enrollment
1207	by plan. In addition, the agency shall provide a summary of
1208	voluntary and mandatory selection rates and disenrollment data.
1209	5.  For purposes of monitoring budget neutrality,
1210	enrollment data, member-month data, and expenditures in the
1211	format for monitoring budget neutrality which is provided by the
1212	federal Centers for Medicare and Medicaid Services.
1213	6.  Activities and associated expenditures of the low-
1214	income pool.
1215	7.  Activities related to the implementation of choice
1216	counseling, including efforts to improve health literacy and the
1217	methods used to obtain public input, such as recipient focus
1218	groups.
1219	8.  Participation rates in the enhanced benefit accounts
1220	program, including participation levels; a summary of activities
1221	and associated expenditures; the number of accounts established,
1222	including active participants and individuals who continue to
1223	retain access to funds in an account but who no longer actively
1224	participate; an estimate of quarterly deposits in the accounts;
1225	and expenditures from the accounts.
1226	9.  Enrollment data concerning employer-sponsored insurance
1227	which document the number of individuals selecting to opt out
1228	when employer-sponsored insurance is available. The agency shall
1229	include data that identify enrollee characteristics, including
1230	the eligibility category, type of employer-sponsored insurance,
1231	and type of coverage, such as individual or family coverage. The
1232	agency shall develop and maintain disenrollment reports
1233	specifying the reason for disenrollment in an employer-sponsored
1234	insurance program. The agency shall also track and report on
1235	those enrollees who elect the option to reenroll in the Medicaid
1236	reform demonstration.
1237	10.  Progress toward meeting the demonstration goals.
1238	11.  Evaluation activities.
1239	(b)  An annual report documenting accomplishments, project
1240	status, quantitative and case-study findings, utilization data,
1241	and policy and administrative difficulties in the operation of
1242	the Medicaid waiver demonstration program. The agency shall
1243	submit the draft annual report no later than October 1 after the
1244	end of each fiscal year.
1245	(2)  Beginning with the annual report for demonstration
1246	year two, the agency shall include a section concerning the
1247	administration of enhanced benefit accounts, the participation
1248	rates, an assessment of expenditures, and an assessment of
1249	potential cost savings.
1250	(3)  Beginning with the annual report for demonstration
1251	year four, the agency shall include a section that provides
1252	qualitative and quantitative data describing the impact the low-
1253	income pool has had on the rate of uninsured people in this
1254	state, beginning with the implementation of the demonstration
1255	program.
1256	Section 5.  Section 641.2261, Florida Statutes, is amended
1257	to read:
1258	641.2261  Application of federal solvency requirements to
1259	provider-sponsored organizations and Medicaid provider service
1260	networks.--
1261	(1)  The solvency requirements of ss. 1855 and 1856 of the
1262	Balanced Budget Act of 1997 and 42 C.F.R. 422.350, subpart H,
1263	rules adopted by the Secretary of the United States Department
1264	of Health and Human Services apply to a health maintenance
1265	organization that is a provider-sponsored organization rather
1266	than the solvency requirements of this part. However, if the
1267	provider-sponsored organization does not meet the solvency
1268	requirements of this part, the organization is limited to the
1269	issuance of Medicare+Choice plans to eligible individuals. For
1270	the purposes of this section, the terms "Medicare+Choice plans,"
1271	"provider-sponsored organizations," and "solvency requirements"
1272	have the same meaning as defined in the federal act and federal
1273	rules and regulations.
1274	(2)  The solvency requirements in 42 C.F.R. 422.350,
1275	subpart H, and the solvency requirements established in approved
1276	federal waivers pursuant to chapter 409, apply to a Medicaid
1277	provider service network rather than the solvency requirements
1278	of this part.
1279	Section 6.  The Agency for Health Care Administration shall
1280	report to the Legislature by April 1, 2006, on the specific pre-
1281	implementation milestones required by the special terms and
1282	conditions related to the low-income pool which have been
1283	approved by the Federal Government and the status of any
1284	remaining pre-implementation milestones that have not been
1285	approved by the Federal Government.
1286	Section 7.  Section 216.346, Florida Statutes, is amended
1287	to read:
1288	216.346  Contracts between state agencies; restriction on
1289	overhead or other indirect costs.--In any contract between state
1290	agencies, including any contract involving the State University
1291	System or the Florida Community College System, the agency
1292	receiving the contract or grant moneys shall charge no more than
1293	a reasonable percentage 5 percent of the total cost of the
1294	contract or grant for overhead or indirect costs or any other
1295	costs not required for the payment of direct costs. This
1296	provision is not intended to limit an agency's ability to
1297	certify matching funds or designate in-kind contributions that
1298	will allow the drawdown of federal Medicaid dollars that do not
1299	affect state budgeting.
1300	Section 8.  This act shall take effect upon becoming a law.

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