Florida Senate - 2026 CS for SB 1760
By the Committee on Health Policy; and Senators Brodeur, Gaetz,
Rouson, and Massullo
588-02792-26 20261760c1
1 A bill to be entitled
2 An act relating to health care coverage; amending s.
3 1.01, F.S.; defining the term “Joint Legislative
4 Committee on Medicaid Oversight”; creating s. 11.405,
5 F.S.; establishing the Joint Legislative Committee on
6 Medicaid Oversight for specified purposes; providing
7 for membership, subcommittees, and meetings of the
8 committee; specifying duties of the committee;
9 authorizing the committee to submit periodic reports
10 to the Legislature; requiring the Auditor General and
11 the Agency for Health Care Administration to enter
12 into and maintain a data sharing agreement for a
13 certain purpose by a specified date; requiring the
14 Auditor General to assist the committee by providing
15 certain staff or consulting services; requiring that
16 state agencies, political subdivisions of the state,
17 and entities contracted with state agencies give the
18 committee access to certain records, papers, and
19 documents; authorizing the committee to compel
20 testimony and evidence according to specified
21 provisions; providing for additional powers of the
22 committee; providing that certain joint rules of the
23 Legislature apply to the proceedings of the committee;
24 requiring the agency to notify the committee of
25 certain changes and provide a report containing
26 specified information to the committee; requiring the
27 agency to submit a copy of certain reports to the
28 committee; amending s. 409.962, F.S.; defining terms;
29 amending s. 409.967, F.S.; revising encounter data
30 reporting requirements for prepaid Medicaid plans;
31 requiring the agency’s analysis of such encounter data
32 to include identification of specified occurrences;
33 requiring the agency to use such analysis in setting
34 managed care plan capitation rates; requiring that
35 managed care plan contracts require any third-party
36 administrative entity contracted with the plan to
37 adhere to specified requirements; specifying
38 additional types of payments which may not be included
39 in calculating income for purposes of the achieved
40 savings rebate; requiring, rather than authorizing,
41 the agency to calculate the medical loss ratio for all
42 managed care plans under certain circumstances;
43 revising requirements for the calculation of medical
44 loss ratios; requiring the agency to report medical
45 loss ratios quarterly and annually for each managed
46 care plan to the Governor and the Legislature within a
47 specified timeframe; requiring the agency to ensure
48 oversight of affiliated entities and related parties
49 paid by managed care plans; requiring the agency to
50 examine specified records and data related to such
51 entities and parties; requiring the agency to consider
52 certain data and findings when developing managed care
53 plan capitation rates; revising the income sharing
54 ratios used to calculate the achieved savings rebate
55 beginning on a specified date; creating s. 409.9675,
56 F.S.; requiring managed care plans to report to the
57 agency and the Office of Insurance Regulation the
58 existence of and specified details relating to certain
59 affiliations by a specified date and annually
60 thereafter; requiring managed care plans to report any
61 change in such information to the agency and the
62 office in writing within a specified timeframe;
63 requiring the agency to calculate, analyze, and
64 publicly report on the agency’s website an assessment
65 of affiliated entity payment transactions in the
66 Medicaid program and certain administrative costs by a
67 specified date and annually thereafter; providing
68 requirements for the assessment; amending s. 626.8825,
69 F.S.; defining the terms “affiliated manufacturer” and
70 “covered prescription drug”; revising the definition
71 of the term “pharmacy benefits plan or program”;
72 revising requirements for contracts between a pharmacy
73 benefit manager and a pharmacy benefits plan or
74 program and a participating pharmacy; revising the
75 frequency of and deadlines for certain reports
76 pharmacy benefit managers are required to submit to
77 the office beginning on a specified date; amending s.
78 626.8827, F.S.; revising and specifying additional
79 practices pharmacy benefit managers are prohibited
80 from engaging in; amending s. 627.42392, F.S.;
81 conforming a cross-reference; providing effective
82 dates.
83
84 Be It Enacted by the Legislature of the State of Florida:
85
86 Section 1. Effective upon this act becoming a law,
87 subsection (20) is added to section 1.01, Florida Statutes, to
88 read:
89 1.01 Definitions.—In construing these statutes and each and
90 every word, phrase, or part hereof, where the context will
91 permit:
92 (20) The term “Joint Legislative Committee on Medicaid
93 Oversight” means a committee or committees designated by joint
94 rule of the Legislature, by the President of the Senate or the
95 Speaker of the House of Representatives, or by agreement between
96 the President of the Senate and the Speaker of the House of
97 Representatives.
98 Section 2. Effective upon this act becoming a law, section
99 11.405, Florida Statutes, is created to read:
100 11.405 Joint Legislative Committee on Medicaid Oversight.
101 The Joint Legislative Committee on Medicaid Oversight is created
102 to ensure that the state Medicaid program is operating in
103 accordance with the Legislature’s intent and to promote
104 transparency and efficiency in government spending.
105 (1) MEMBERSHIP; SUBCOMMITTEES; MEETINGS.—
106 (a) The committee shall be composed of five members of the
107 Senate appointed by the President of the Senate and five members
108 of the House of Representatives appointed by the Speaker of the
109 House of Representatives, with each member serving a 2-year
110 term. The chair and vice chair shall each be appointed for 1
111 year terms, with the appointments alternating between the
112 President of the Senate and the Speaker of the House of
113 Representatives. The chair and vice chair may not be members of
114 the same house of the Legislature. If both the chair and vice
115 chair are absent at any meeting, the members present must elect
116 a temporary chair by a majority vote.
117 (b) Members shall serve without compensation but may be
118 reimbursed for per diem and travel expenses pursuant to s.
119 112.061.
120 (c) The chair may establish subcommittees as needed to
121 fulfill the committee’s duties.
122 (d) The committee shall convene at least twice a year, and
123 as often as necessary to conduct its business as required under
124 this section. Meetings may be held through teleconference or
125 other electronic means.
126 (2) COMMITTEE DUTIES.—
127 (a) The committee shall evaluate all aspects of the state
128 Medicaid program related to program financing, quality of care
129 and health outcomes, administrative functions, and operational
130 functions to ensure that the program is providing transparency
131 in the provision of health care plans and providers, ensuring
132 Medicaid recipients have access to quality health care services
133 and providing stability to the state’s budget through a health
134 care delivery system designed to contain costs.
135 (b) The committee shall identify and recommend policies
136 that limit Medicaid spending growth while improving health care
137 outcomes for Medicaid recipients. In developing its
138 recommendations, the committee shall do all of the following:
139 1. Evaluate legislation for its long-term impact on the
140 state Medicaid program.
141 2. Review data submitted to the Agency for Health Care
142 Administration by the Medicaid managed care plans pursuant to
143 statutory and contract requirements, including, but not limited
144 to, timeliness of provider credentialing, timely payment of
145 claims, rate of claim denials, prior authorizations for
146 services, and consumer complaints.
147 3. Review the Medicaid managed care plans’ encounter data,
148 financial data, and audits and the data used to calculate the
149 plans’ achieved savings rebates and medical loss ratios.
150 4. Review data related to health outcomes of Medicaid
151 recipients, including, but not limited to, Healthcare
152 Effectiveness Data and Information Set measures developed by the
153 National Committee for Quality Assurance, for each Medicaid
154 managed care plan, each Medicaid managed care plan’s performance
155 improvement projects, and outcome data related to all quality
156 goals included in the Medicaid managed care organization
157 contracts to improve quality for recipients.
158 5. Identify any areas for improvement in statute and rule
159 relating to the state Medicaid program.
160 6. Develop a plan of action for the future of the state
161 Medicaid program.
162 (c) The committee may submit periodic reports, including
163 recommendations, to the Legislature on issues related to the
164 state Medicaid program and any affiliated programs.
165 (3) COOPERATION.—
166 (a) The Auditor General and the Agency for Health Care
167 Administration shall enter into and maintain a data sharing
168 agreement by July 1, 2026, to ensure the committee has full
169 access to all data needed to fulfill its responsibilities.
170 (b) The Auditor General shall assist the committee in its
171 work by providing credentialed professional staff or consulting
172 services, including, but not limited to, an actuary not
173 associated with the state Medicaid program or any Medicaid
174 managed care organization who currently has a contract with the
175 state.
176 (c) The committee, in the course of its official duties,
177 must be given access to any relevant record, paper, or document
178 in possession of a state agency, any political subdivision of
179 the state, or any entity engaged in business or under contract
180 with a state agency, and may compel the attendance and testimony
181 of any state official or employee before the committee or secure
182 any evidence as provided in s. 11.143. The committee may also
183 have any other powers conferred on it by joint rules of the
184 Senate and the House of Representatives, and any joint rules of
185 the Senate and the House of Representatives applicable to joint
186 legislative committees apply to the proceedings of the committee
187 under this section.
188 (4) AGENCY REPORTS.—
189 (a) Before implementing any change to the Medicaid managed
190 care capitation rates, the Agency for Health Care Administration
191 shall notify the committee of the change and appear before the
192 committee to provide a report detailing the managed care
193 capitation rates and administrative costs built into the
194 capitation rates. The report must include the agency’s
195 historical and projected Medicaid program expenditure and
196 utilization trend rates by Medicaid program and service category
197 for the rate year, an explanation of how the trend rates were
198 calculated, and the policy decisions that were included in
199 setting the capitation rates.
200 (b) If the Agency for Health Care Administration or any
201 division within the agency is required by law to report to the
202 Legislature or to any legislative committee or subcommittee on
203 matters relating to the state Medicaid program, the agency must
204 also submit a copy of the report to the committee.
205 Section 3. Present subsections (2) through (5), (6) through
206 (10), and (11) through (18) of section 409.962, Florida
207 Statutes, are redesignated as subsections (3) through (6), (8)
208 through (12), and (14) through (21), respectively, and new
209 subsections (2), (7), and (13) are added to that section, to
210 read:
211 409.962 Definitions.—As used in this part, except as
212 otherwise specifically provided, the term:
213 (2) “Affiliate,” including the terms “affiliated with” and
214 “affiliation,” means a person, as construed in s. 1.01(3), who:
215 (a) Directly or indirectly, through one or more
216 intermediaries, controls, is controlled by, or is under common
217 control with a specified entity or person, including parent and
218 subsidiary entities; or
219 (b) Is deemed a “related party” according to the standards
220 adopted by the Financial Accounting Standards Board.
221 (7) “Control,” including the terms “controlling,”
222 “controlled by,” and “under common control with,” means the
223 possession, direct or indirect, of the power to direct or cause
224 the direction of the management and policies of a person,
225 whether through the ownership or voting securities, by contract
226 other than a commercial contract for goods or nonmanagement
227 services, or otherwise, unless the power is the result of an
228 official position with or corporate office held by the person.
229 This definition applies regardless of whether such power is
230 affirmative or negative or whether such power is actually used.
231 Control is presumed to exist, but is not limited to, when any
232 affiliate or person, as construed in s. 1.01(3):
233 (a) Directly or indirectly owns, controls, holds the power
234 to vote, or holds proxies representing 10 percent or more of any
235 class of the voting securities of any other person.
236 (b) Shares common ownership with any person; has an
237 investor or is a holder of an ownership interest in any person;
238 exercises control in any manner over the election of a majority
239 of the directors or of individuals exercising similar functions
240 of any person; has the power to exercise controlling influence
241 over the management of any person; or serves as a working
242 majority of the board of directors, the managers, or the
243 officers of a person, who is:
244 1. A provider or a member of a provider group or group
245 practice as defined in s. 456.053(3) under the managed care
246 plan; or
247 2. A person responsible for providing any pharmacy
248 services, pharmaceuticals, diagnostics, care coordination, care
249 delivery, health care services, medical equipment,
250 administrative services, or financial services under the managed
251 care plan.
252 (13) “Market rate” means the price that a willing buyer
253 will pay and a willing seller will accept in an arm’s-length
254 transaction which is beneficial to both parties.
255 Section 4. Subsections (1) and (2), paragraph (h) of
256 subsection (3), and subsection (4) of section 409.967, Florida
257 Statutes, are amended, and subsection (5) is added to that
258 section, to read:
259 409.967 Managed care plan accountability.—
260 (1) CONTRACT PROCUREMENT PROCESS.—Beginning with the
261 contract procurement process initiated during the 2023 calendar
262 year, the agency shall establish a 6-year contract with each
263 managed care plan selected through the procurement process
264 described in s. 409.966. A plan contract may not be renewed;
265 however, the agency may extend the term of a plan contract to
266 cover any delays during the transition to a new plan. The agency
267 shall extend until December 31, 2024, the term of existing plan
268 contracts awarded pursuant to the invitation to negotiate
269 published in July 2017.
270 (2) CONTRACT REQUIREMENTS.—The agency shall establish such
271 contract requirements as are necessary for the operation of the
272 statewide managed care program. In addition to any other
273 provisions the agency may deem necessary, the contract must
274 require:
275 (a) Physician compensation.—Managed care plans are expected
276 to coordinate care, manage chronic disease, and prevent the need
277 for more costly services. Effective care management should
278 enable plans to redirect available resources and increase
279 compensation for physicians. Plans achieve this performance
280 standard when physician payment rates equal or exceed Medicare
281 rates for similar services. The agency may impose fines or other
282 sanctions on a plan that fails to meet this performance standard
283 after 2 years of continuous operation.
284 (b) Emergency services.—Managed care plans shall pay for
285 services required by ss. 395.1041 and 401.45 and rendered by a
286 noncontracted provider. The plans must comply with s. 641.3155.
287 Reimbursement for services under this paragraph is the lesser
288 of:
289 1. The provider’s charges;
290 2. The usual and customary provider charges for similar
291 services in the community where the services were provided;
292 3. The charge mutually agreed to by the entity and the
293 provider within 60 days after submittal of the claim; or
294 4. The Medicaid rate, which, for the purposes of this
295 paragraph, means the amount the provider would collect from the
296 agency on a fee-for-service basis, less any amounts for the
297 indirect costs of medical education and the direct costs of
298 graduate medical education that are otherwise included in the
299 agency’s fee-for-service payment, as required under 42 U.S.C. s.
300 1396u-2(b)(2)(D). For the purpose of establishing the amounts
301 specified in this subparagraph, the agency shall publish on its
302 website annually, or more frequently as needed, the applicable
303 fee-for-service fee schedules and their effective dates, less
304 any amounts for indirect costs of medical education and direct
305 costs of graduate medical education that are otherwise included
306 in the agency’s fee-for-service payments.
307 (c) Access.—
308 1. The agency shall establish specific standards for the
309 number, type, and regional distribution of providers in managed
310 care plan networks to ensure access to care for both adults and
311 children. Each plan must maintain a regionwide network of
312 providers in sufficient numbers to meet the access standards for
313 specific medical services for all recipients enrolled in the
314 plan. The exclusive use of mail-order pharmacies may not be
315 sufficient to meet network access standards. Consistent with the
316 standards established by the agency, provider networks may
317 include providers located outside the region. Each plan shall
318 establish and maintain an accurate and complete electronic
319 database of contracted providers, including information about
320 licensure or registration, locations and hours of operation,
321 specialty credentials and other certifications, specific
322 performance indicators, and such other information as the agency
323 deems necessary. The database must be available online to both
324 the agency and the public and have the capability to compare the
325 availability of providers to network adequacy standards and to
326 accept and display feedback from each provider’s patients. Each
327 plan shall submit quarterly reports to the agency identifying
328 the number of enrollees assigned to each primary care provider.
329 The agency shall conduct, or contract for, systematic and
330 continuous testing of the provider network databases maintained
331 by each plan to confirm accuracy, confirm that behavioral health
332 providers are accepting enrollees, and confirm that enrollees
333 have access to behavioral health services.
334 2. Each managed care plan must publish any prescribed drug
335 formulary or preferred drug list on the plan’s website in a
336 manner that is accessible to and searchable by enrollees and
337 providers. The plan must update the list within 24 hours after
338 making a change. Each plan must ensure that the prior
339 authorization process for prescribed drugs is readily accessible
340 to health care providers, including posting appropriate contact
341 information on its website and providing timely responses to
342 providers. For Medicaid recipients diagnosed with hemophilia who
343 have been prescribed anti-hemophilic-factor replacement
344 products, the agency shall provide for those products and
345 hemophilia overlay services through the agency’s hemophilia
346 disease management program.
347 3. Managed care plans, and their fiscal agents or
348 intermediaries, must accept prior authorization requests for any
349 service electronically.
350 4. Managed care plans serving children in the care and
351 custody of the Department of Children and Families must maintain
352 complete medical, dental, and behavioral health encounter
353 information and participate in making such information available
354 to the department or the applicable contracted community-based
355 care lead agency for use in providing comprehensive and
356 coordinated case management. The agency and the department shall
357 establish an interagency agreement to provide guidance for the
358 format, confidentiality, recipient, scope, and method of
359 information to be made available and the deadlines for
360 submission of the data. The scope of information available to
361 the department shall be the data that managed care plans are
362 required to submit to the agency. The agency shall determine the
363 plan’s compliance with standards for access to medical, dental,
364 and behavioral health services; the use of medications; and
365 follow-up followup on all medically necessary services
366 recommended as a result of early and periodic screening,
367 diagnosis, and treatment.
368 (d) Quality care.—Managed care plans shall provide, or
369 contract for the provision of, care coordination to facilitate
370 the appropriate delivery of behavioral health care services in
371 the least restrictive setting with treatment and recovery
372 capabilities that address the needs of the patient. Services
373 shall be provided in a manner that integrates behavioral health
374 services and primary care. Plans shall be required to achieve
375 specific behavioral health outcome standards, established by the
376 agency in consultation with the department.
377 (e) Encounter data.—The agency shall maintain and operate a
378 Medicaid Encounter Data System to collect, process, store, and
379 report on covered services provided to all Medicaid recipients
380 enrolled in prepaid plans.
381 1. Each prepaid plan must comply with the agency’s
382 reporting requirements for the Medicaid Encounter Data System.
383 Prepaid plans must submit encounter data, including data on
384 encounters for which payment was denied and encounters for which
385 a health care provider was reimbursed by the plan on a capitated
386 basis, electronically in a format that complies with the Health
387 Insurance Portability and Accountability Act provisions for
388 electronic claims and in accordance with deadlines established
389 by the agency. Prepaid plans must certify that the data reported
390 is accurate and complete.
391 2. The agency is responsible for validating the data
392 submitted by the plans. The agency shall develop methods and
393 protocols for ongoing analysis of the encounter data that
394 adjusts for differences in characteristics of prepaid plan
395 enrollees to allow comparison of service utilization among plans
396 and against expected levels of use. The analysis shall be used
397 to identify possible cases of overspending on administrative
398 costs, payments by plans in excess of market rates, systemic
399 underutilization or denials of claims and inappropriate service
400 utilization such as higher-than-expected emergency department
401 encounters, and potential managed care plan fraud, waste, and
402 abuse. The analysis shall provide periodic feedback to the plans
403 and enable the agency to establish corrective action plans when
404 necessary. One of the focus areas for the analysis shall be the
405 use of prescription drugs. The analysis shall be used in managed
406 care plan capitation rate-setting processes provided under this
407 part.
408 3. The agency shall make encounter data available to those
409 plans accepting enrollees who are assigned to them from other
410 plans leaving a region.
411 4. The agency shall annually produce a report entitled
412 “Analysis of Potentially Preventable Health Care Events of
413 Florida Medicaid Enrollees.” The report must include, but need
414 not be limited to, an analysis of the potentially preventable
415 hospital emergency department visits, hospital admissions, and
416 hospital readmissions that occurred during the previous state
417 fiscal year which may have been prevented with better access to
418 primary care, improved medication management, or better
419 coordination of care, reported by age, eligibility group,
420 managed care plan, and region, including conditions contributing
421 to each potentially preventable event or category of potentially
422 preventable events. The agency may include any other data or
423 analysis parameters to augment the report which it deems
424 pertinent to the analysis. The report must demonstrate trends
425 using applicable historical data. The agency shall submit the
426 report to the Governor, the President of the Senate, and the
427 Speaker of the House of Representatives by October 1, 2024, and
428 each October 1 thereafter. The agency may contract with a third
429 party vendor to produce the report required under this
430 subparagraph.
431 (f) Continuous improvement.—The agency shall establish
432 specific performance standards and expected milestones or
433 timelines for improving performance over the term of the
434 contract.
435 1. Each managed care plan shall establish an internal
436 health care quality improvement system, including enrollee
437 satisfaction and disenrollment surveys. The quality improvement
438 system must include incentives and disincentives for network
439 providers.
440 2. Each managed care plan must collect and report the
441 Healthcare Effectiveness Data and Information Set (HEDIS)
442 measures, the federal Core Set of Children’s Health Care Quality
443 measures, and the federal Core Set of Adult Health Care Quality
444 Measures, as specified by the agency. Each plan must collect and
445 report the Adult Core Set behavioral health measures beginning
446 with data reports for the 2025 calendar year. Each plan must
447 stratify reported measures by age, sex, race, ethnicity, primary
448 language, and whether the enrollee received a Social Security
449 Administration determination of disability for purposes of
450 Supplemental Security Income beginning with data reports for the
451 2026 calendar year. A plan’s performance on these measures must
452 be published on the plan’s website in a manner that allows
453 recipients to reliably compare the performance of plans. The
454 agency shall use the measures as a tool to monitor plan
455 performance.
456 3. Each managed care plan must be accredited by the
457 National Committee for Quality Assurance, the Joint Commission,
458 or another nationally recognized accrediting body, or have
459 initiated the accreditation process, within 1 year after the
460 contract is executed. For any plan not accredited within 18
461 months after executing the contract, the agency shall suspend
462 automatic assignment under ss. 409.977 and 409.984.
463 (g) Program integrity.—Each managed care plan shall
464 establish program integrity functions and activities to reduce
465 the incidence of fraud and abuse, including, at a minimum:
466 1. A provider credentialing system and ongoing provider
467 monitoring, including maintenance of written provider
468 credentialing policies and procedures which comply with federal
469 and agency guidelines;
470 2. An effective prepayment and postpayment review process
471 including, but not limited to, data analysis, system editing,
472 and auditing of network providers;
473 3. Procedures for reporting instances of fraud and abuse
474 pursuant to chapter 641;
475 4. Administrative and management arrangements or
476 procedures, including a mandatory compliance plan, designed to
477 prevent fraud and abuse; and
478 5. Designation of a program integrity compliance officer.
479 (h) Grievance resolution.—Consistent with federal law, each
480 managed care plan shall establish and the agency shall approve
481 an internal process for reviewing and responding to grievances
482 from enrollees. Each plan shall submit quarterly reports on the
483 number, description, and outcome of grievances filed by
484 enrollees.
485 (i) Penalties.—
486 1. Withdrawal and enrollment reduction.—Managed care plans
487 that reduce enrollment levels or leave a region before the end
488 of the contract term must reimburse the agency for the cost of
489 enrollment changes and other transition activities. If more than
490 one plan leaves a region at the same time, costs must be shared
491 by the departing plans proportionate to their enrollments. In
492 addition to the payment of costs, departing provider services
493 networks must pay a per-enrollee penalty of up to 3 months’
494 payment and continue to provide services to the enrollee for 90
495 days or until the enrollee is enrolled in another plan,
496 whichever occurs first. In addition to payment of costs, all
497 other departing plans must pay a penalty of 25 percent of that
498 portion of the minimum surplus maintained pursuant to s.
499 641.225(1) which is attributable to the provision of coverage to
500 Medicaid enrollees. Plans shall provide at least 180 days’
501 notice to the agency before withdrawing from a region. If a
502 managed care plan leaves a region before the end of the contract
503 term, the agency shall terminate all contracts with that plan in
504 other regions pursuant to the termination procedures in
505 subparagraph 3.
506 2. Encounter data.—If a plan fails to comply with the
507 encounter data reporting requirements of this section for 30
508 days, the agency must assess a fine of $5,000 per day for each
509 day of noncompliance beginning on the 31st day. On the 31st day,
510 the agency must notify the plan that the agency will initiate
511 contract termination procedures on the 90th day unless the plan
512 comes into compliance before that date.
513 3. Termination.—If the agency terminates more than one
514 regional contract with the same managed care plan due to
515 noncompliance with the requirements of this section, the agency
516 shall terminate all the regional contracts held by that plan.
517 When terminating multiple contracts, the agency must develop a
518 plan to provide for the transition of enrollees to other plans,
519 and phase in the terminations over a time period sufficient to
520 ensure a smooth transition.
521 (j) Prompt payment.—Managed care plans shall comply with
522 ss. 641.315, 641.3155, and 641.513.
523 (k) Electronic claims.—Managed care plans, and their fiscal
524 agents or intermediaries, shall accept electronic claims in
525 compliance with federal standards.
526 (l) Fair payment.—Provider service networks must ensure
527 that no entity licensed under chapter 395 with a controlling
528 interest in the network charges a Medicaid managed care plan
529 more than the amount paid to that provider by the provider
530 service network for the same service.
531 (m) Itemized payment.—Any claims payment to a provider by a
532 managed care plan, or by a fiscal agent or intermediary of the
533 plan, must be accompanied by an itemized accounting of the
534 individual claims included in the payment including, but not
535 limited to, the enrollee’s name, the date of service, the
536 procedure code, the amount of reimbursement, and the
537 identification of the plan on whose behalf the payment is made.
538 (n) Provider dispute resolution.—Disputes between a plan
539 and a provider may be resolved as described in s. 408.7057.
540 (o) Transparency.—Managed care plans shall comply with ss.
541 627.6385(3) and 641.54(7).
542 (p) Third-party administrators.—The agency′s contract with
543 a managed care plan must require that any third-party
544 administrative entity contracted by the plan adheres to all
545 pertinent requirements of the Medicaid program placed on the
546 plan under the plan′s contract with the agency.
547 (3) ACHIEVED SAVINGS REBATE.—
548 (h) The following may not be included as allowable expenses
549 in calculating income for determining the achieved savings
550 rebate:
551 1. Payment of achieved savings rebates.
552 2. Any financial incentive payments made to the plan
553 outside of the capitation rate.
554 3. Any financial disincentive payments levied by the state
555 or Federal Government.
556 4. Expenses associated with any lobbying or political
557 activities.
558 5. The cash value or equivalent cash value of bonuses of
559 any type paid or awarded to the plan’s executive staff, other
560 than base salary.
561 6. Reserves and reserve accounts.
562 7. Administrative costs, including, but not limited to,
563 reinsurance expenses, interest payments, depreciation expenses,
564 bad debt expenses, and outstanding claims expenses in excess of
565 actuarially sound maximum amounts set by the agency.
566 8. Payments to affiliates as defined in s. 409.962 in
567 excess of market rates.
568
569 The agency shall consider these and other factors in developing
570 contracts that establish shared savings arrangements.
571 (4) MEDICAL LOSS RATIOS RATIO.—
572 (a) If required by federal regulations or as a condition of
573 a waiver, the agency must may calculate a medical loss ratios
574 ratio for all managed care plans contracted with the agency
575 under this part. The calculations must calculation shall use
576 uniform financial data collected from all plans and shall be
577 computed for each plan on a statewide basis. If a plan
578 participates in the managed medical assistance program, the
579 long-term care managed care program, or the pilot program for
580 individuals with developmental disabilities, the agency must
581 calculate medical loss ratios for the plan’s participation in
582 each program separately and, if the plan participates in more
583 than one of these programs, for the plan’s overall participation
584 in statewide Medicaid managed care. Medical loss ratios must be
585 calculated and The method for calculating the medical loss ratio
586 shall meet the following criteria:
587 (a) Except as provided in paragraphs (b) and (c),
588 expenditures must shall be classified in a manner consistent
589 with 42 C.F.R. part 438 45 C.F.R. part 158.
590 (b) The agency shall report medical loss ratios quarterly
591 and annually for each managed care plan contracted with the
592 agency under this part to the Governor, the President of the
593 Senate, and the Speaker of the House of Representatives no later
594 than 6 months after the end of each such period Funds provided
595 by plans to graduate medical education institutions to
596 underwrite the costs of residency positions shall be classified
597 as medical expenditures, provided the funding is sufficient to
598 sustain the positions for the number of years necessary to
599 complete the residency requirements and the residency positions
600 funded by the plans are active providers of care to Medicaid and
601 uninsured patients.
602 (c) Before final determination of the medical loss ratio
603 for any period, a plan may contribute to a designated state
604 trust fund for the purpose of supporting Medicaid and indigent
605 care and have the contribution counted as a medical expenditure
606 for the period. Funds contributed for this purpose shall be
607 deposited into the Grants and Donations Trust Fund.
608 (5) AFFILIATED ENTITIES AND RELATED PARTIES.—
609 (a) The agency shall ensure oversight of affiliated
610 entities and related parties paid by managed care plans under
611 this part, including, but not limited to, examining financial
612 records and self-referral data of any managed care plan
613 providing services within the statewide managed care program
614 which uses affiliated entities and related parties.
615 (b) The agency shall consider data examined under paragraph
616 (a) and the findings of the annual assessment required under s.
617 409.9675(4) when developing managed care plan capitation rates
618 under this part.
619 Section 5. Effective January 1, 2027, paragraph (f) of
620 subsection (3) of section 409.967, Florida Statutes, is amended,
621 and paragraph (g) of that subsection is republished, to read:
622 409.967 Managed care plan accountability.—
623 (3) ACHIEVED SAVINGS REBATE.—
624 (f) Achieved savings rebates validated by the certified
625 public accountant are due within 30 days after the report is
626 submitted. Except as provided in paragraph (h), the achieved
627 savings rebate is established by determining pretax income as a
628 percentage of revenues and applying the following income sharing
629 ratios:
630 1. One hundred percent of income up to and including 3 5
631 percent of revenue shall be retained by the plan.
632 2. Thirty Fifty percent of income above 3 5 percent and up
633 to 10 percent shall be retained by the plan, and the other 70 50
634 percent shall be refunded to the state and adjusted for the
635 Federal Medical Assistance Percentages. The state share shall be
636 transferred to the General Revenue Fund, unallocated, and the
637 federal share shall be transferred to the Medical Care Trust
638 Fund, unallocated.
639 3. One hundred percent of income above 10 percent of
640 revenue shall be refunded to the state and adjusted for the
641 Federal Medical Assistance Percentages. The state share shall be
642 transferred to the General Revenue Fund, unallocated, and the
643 federal share shall be transferred to the Medical Care Trust
644 Fund, unallocated.
645 (g) A plan that exceeds agency-defined quality measures in
646 the reporting period may retain an additional 1 percent of
647 revenue. For the purpose of this paragraph, the quality measures
648 must include plan performance for preventing or managing
649 complex, chronic conditions that are associated with an elevated
650 likelihood of requiring high-cost medical treatments.
651 Section 6. Section 409.9675, Florida Statutes, is created
652 to read:
653 409.9675 Affiliated entities and controlling interests;
654 reports required.—
655 (1) Each managed care plan contracted by the agency under
656 this part shall report all of the following by March 31, 2027,
657 for the prior calendar year, and annually thereafter, to the
658 agency and the Office of Insurance Regulation in a manner
659 prescribed by the agency:
660 (a) Any person controlled by or affiliated with the managed
661 care plan, including, but not limited to, any provider, provider
662 group, group practice defined in s. 456.053(3), or person
663 responsible for providing any pharmacy services,
664 pharmaceuticals, diagnostics, care coordination, care delivery,
665 health care services, medical equipment, administrative
666 services, or financial services for, to, or on behalf of the
667 managed care plan.
668 (b) Any affiliation of any kind or nature with any person
669 which has, either directly or indirectly through one or more
670 intermediaries, an investment or ownership interest representing
671 10 percent or more, shares common ownership with, or has an
672 investor or a holder of an ownership interest representing 10
673 percent or more with any person providing pharmacy services,
674 diagnostics, care coordination, care delivery, health care
675 services, medical equipment, administrative services, or
676 financial services for, to, or on behalf of the managed care
677 plan.
678 (2) For any affiliation reported by a managed care plan
679 under subsection (1), the report must include all of the
680 following:
681 (a) The percentage of ownership or control of any person or
682 affiliate with whom the managed care plan has had business
683 transactions totaling in the aggregate more than $25,000 during
684 the prior 12-month period in the annual achieved savings rebate
685 financial reporting required under s. 409.967(3) and
686 identification of the specific contract or contracts involved in
687 such business transactions.
688 (b) Any significant business transactions between the
689 managed care plan and any affiliated person during the 12-month
690 period in the annual achieved savings rebate financial reporting
691 required under s. 409.967(3).
692 (3) Each managed care plan shall report any change in
693 information required by subsection (1) to the agency and the
694 Office of Insurance Regulation in writing within 60 days after
695 the change occurs.
696 (4) By December 31, 2026, and annually thereafter, the
697 agency shall calculate, analyze, and publicly report on the
698 agency’s website an assessment of affiliated entity payment
699 transactions in the Medicaid program for medical benefit and
700 administrative costs as reported for purposes of the achieved
701 savings rebate. The baseline assessment, at a minimum, must
702 include achieved savings rebate transactions for the years 2021,
703 2022, and 2023; the amount and associated percentage of
704 affiliated entity payments within the medical loss ratio; and
705 the payment deviation percentages and associated amounts at the
706 Healthcare Common Procedure Coding System level for affiliated
707 entities as compared to nonaffiliated entities. The assessment
708 must also compare payment amounts for value-based or alternative
709 payment arrangements.
710 Section 7. Present paragraphs (b), (c), and (d), and (e)
711 through (x) of subsection (1) of section 626.8825, Florida
712 Statutes, are redesignated as paragraphs (c), (d), and (e), and
713 (g) through (z), respectively, new paragraphs (b) and (f) are
714 added to that subsection, and present paragraph (u) of
715 subsection (1), paragraphs (e) and (g) of subsection (2), and
716 paragraphs (c) and (h) of subsection (3) of that section are
717 amended, to read:
718 626.8825 Pharmacy benefit manager transparency and
719 accountability.—
720 (1) DEFINITIONS.—As used in this section, the term:
721 (b) “Affiliated manufacturer” means a prescription drug
722 manufacturer permitted under chapter 499 or a private label
723 distributor as defined in 21 C.F.R. s. 207.1 which directly or
724 indirectly through one or more intermediaries:
725 1. Has an investment or ownership interest in a pharmacy
726 benefit manager holding a certificate of authority issued under
727 this part;
728 2. Shares common ownership with a pharmacy benefit manager
729 holding a certificate of authority issued under this part; or
730 3. Has an investor or a holder of an ownership interest
731 which is a pharmacy benefit manager holding a certificate of
732 authority issued under this part.
733 (f) “Covered prescription drug” means any drug or biologic
734 included in a pharmacy benefit manager’s formulary which is paid
735 for as a pharmacy benefit under the plan at any of the plan’s
736 network pharmacies.
737 (w)(u) “Pharmacy benefits plan or program” means a plan or
738 program that pays for, reimburses, covers the cost of, or
739 provides access to discounts on pharmacist services provided by
740 one or more pharmacies to covered persons who reside in, are
741 employed by, or receive pharmacist services from this state.
742 1. The term includes, but is not limited to, health
743 maintenance organizations, health insurers, self-insured
744 employer health plans, discount card programs, and government
745 funded health plans, including the Statewide Medicaid Managed
746 Care program established pursuant to part IV of chapter 409 and
747 the state group insurance program pursuant to part I of chapter
748 110.
749 2. The term excludes such a plan or program under s. 430.84
750 or chapter 440.
751 (2) CONTRACTS BETWEEN A PHARMACY BENEFIT MANAGER AND A
752 PHARMACY BENEFITS PLAN OR PROGRAM.—In addition to any other
753 requirements in the Florida Insurance Code, all contractual
754 arrangements executed, amended, adjusted, or renewed on or after
755 July 1, 2023, which are applicable to pharmacy benefits covered
756 on or after January 1, 2024, between a pharmacy benefit manager
757 and a pharmacy benefits plan or program must include, in
758 substantial form, terms that ensure compliance with all of the
759 following requirements and that, except to the extent not
760 allowed by law, shall supersede any contractual terms to the
761 contrary:
762 (e) Include network adequacy requirements that meet or
763 exceed Medicare Part D program standards for convenient access
764 to the network pharmacies set forth in 42 C.F.R. s.
765 423.120(a)(1) and that:
766 1. Do not limit a network to solely include affiliated
767 pharmacies;
768 2. Require a pharmacy benefit manager to offer a provider
769 contract to licensed pharmacies physically located on the
770 physical site of providers that are:
771 a. Within the pharmacy benefits plan’s or program’s
772 geographic service area and that have been specifically
773 designated as essential providers by the Agency for Health Care
774 Administration pursuant to s. 409.975(1)(a);
775 b. Designated as cancer centers of excellence under s.
776 381.925, regardless of the pharmacy benefits plan’s or program’s
777 geographic service area;
778 c. Organ transplant hospitals, regardless of the pharmacy
779 benefits plan’s or program’s geographic service area;
780 d. Hospitals licensed as specialty children’s hospitals as
781 defined in s. 395.002; or
782 e. Regional perinatal intensive care centers as defined in
783 s. 383.16(2), regardless of the pharmacy benefits plan’s or
784 program’s geographic service area.
785
786 Such provider contracts must be solely for the administration
787 and or dispensing of covered prescription drugs, including
788 biological products, which are administered through infusions,
789 intravenously injected, or inhaled during a surgical procedure
790 or are covered parenteral drugs, as part of onsite outpatient
791 care;
792 3. Do not require a covered person to receive a
793 prescription drug by United States mail, common carrier, local
794 courier, third-party company or delivery service, or pharmacy
795 direct delivery unless the prescription drug cannot be acquired
796 at any retail pharmacy in the pharmacy benefit manager’s network
797 for the covered person’s pharmacy benefits plan or program. This
798 subparagraph does not prohibit a pharmacy benefit manager from
799 operating mail order or delivery programs on an opt-in basis at
800 the sole discretion of a covered person, provided that the
801 covered person is not penalized through the imposition of any
802 additional retail cost-sharing obligations or a lower allowed
803 quantity limit for choosing not to select the mail order or
804 delivery programs;
805 4. For the in-person administration of covered prescription
806 drugs, prohibit requiring a covered person to receive pharmacist
807 services from an affiliated pharmacy or an affiliated health
808 care provider; and
809 5. Prohibit offering or implementing pharmacy networks that
810 require or provide a promotional item or an incentive, defined
811 as anything other than a reduced cost-sharing amount or enhanced
812 quantity limit allowed under the benefit design for a covered
813 drug, to a covered person to use an affiliated pharmacy or an
814 affiliated health care provider for the in-person administration
815 of covered prescription drugs; or advertising, marketing, or
816 promoting an affiliated pharmacy to covered persons. Subject to
817 the foregoing, a pharmacy benefit manager may include an
818 affiliated pharmacy in communications to covered persons
819 regarding network pharmacies and prices, provided that the
820 pharmacy benefit manager includes information, such as links to
821 all nonaffiliated network pharmacies, in such communications and
822 that the information provided is accurate and of equal
823 prominence. This subparagraph may not be construed to prohibit a
824 pharmacy benefit manager from entering into an agreement with an
825 affiliated pharmacy to provide pharmacist services to covered
826 persons.
827 (g) Prohibit a pharmacy benefit manager from instituting a
828 network that requires a pharmacy to meet accreditation standards
829 inconsistent with or more stringent than applicable federal and
830 state requirements for licensure and operation as a pharmacy in
831 this state. However, a pharmacy benefit manager may specify
832 additional specialty networks that require enhanced standards
833 related to the safety and competency necessary to meet the
834 United States Food and Drug Administration’s limited
835 distribution requirements for dispensing any drug that, on a
836 drug-by-drug basis, requires extraordinary special handling,
837 provider coordination, or clinical care or monitoring when such
838 extraordinary requirements cannot be met by a retail pharmacy.
839 For purposes of this paragraph, drugs requiring extraordinary
840 special handling are limited to drugs that are subject to a risk
841 evaluation and mitigation strategy approved by the United States
842 Food and Drug Administration and that:
843 1. Require special certification of a health care provider
844 to prescribe, receive, dispense, or administer; or
845 2. Require special handling due to the molecular complexity
846 or cytotoxic properties of the biologic or biosimilar product or
847 drug.
848
849 For participation in a specialty network, a pharmacy benefit
850 manager may not require a pharmacy to meet requirements for
851 participation beyond those necessary to demonstrate the
852 pharmacy’s ability to dispense the drug in accordance with the
853 United States Food and Drug Administration’s approved
854 manufacturer labeling.
855 (3) CONTRACTS BETWEEN A PHARMACY BENEFIT MANAGER AND A
856 PARTICIPATING PHARMACY.—In addition to other requirements in the
857 Florida Insurance Code, a participation contract executed,
858 amended, adjusted, or renewed on or after July 1, 2023, that
859 applies to pharmacist services on or after January 1, 2024,
860 between a pharmacy benefit manager and one or more pharmacies or
861 pharmacists, must include, in substantial form, terms that
862 ensure compliance with all of the following requirements, and
863 that, except to the extent not allowed by law, shall supersede
864 any contractual terms in the participation contract to the
865 contrary:
866 (c) A prohibition of financial clawbacks, reconciliation
867 offsets, or offsets to adjudicated claims. A pharmacy benefit
868 manager may not charge, withhold, offset, or recoup any direct
869 or indirect remuneration fees, dispensing fees, brand name or
870 generic effective rate adjustments through reconciliation, or
871 any other monetary charge, withholding, or recoupments as
872 related to discounts, multiple network reconciliation offsets,
873 adjudication transaction fees, and any other instance when an
874 amount a fee may be recouped from a pharmacy if such action
875 would result in a reduction in the amount paid to the pharmacy
876 or pharmacist. This prohibition does not apply to:
877 1. Any incentive payments provided by the pharmacy benefit
878 manager to a network pharmacy for meeting or exceeding
879 predefined quality measures, such as Healthcare Effectiveness
880 Data and Information Set measures; recoupment due to an
881 erroneous claim, fraud, waste, or abuse; a claim adjudicated in
882 error; a maximum allowable cost appeal pricing adjustment; or an
883 adjustment made as part of a pharmacy audit pursuant to s.
884 624.491.
885 2. Any recoupment that is returned to the state for
886 programs in chapter 409 or the state group insurance program in
887 s. 110.123.
888 (h) The pharmacy benefit manager shall provide a reasonable
889 administrative appeal procedure to allow a pharmacy or
890 pharmacist to challenge the maximum allowable cost pricing
891 information and the reimbursement made under the maximum
892 allowable cost as defined in s. 627.64741 for a specific drug as
893 being below the acquisition cost available to the challenging
894 pharmacy or pharmacist.
895 1. The administrative appeal procedure must include a
896 telephone number and e-mail address, or a website, for the
897 purpose of submitting the administrative appeal. The appeal may
898 be submitted by the pharmacy or an agent of the pharmacy
899 directly to the pharmacy benefit manager or through a pharmacy
900 service administration organization. The administrative appeal
901 process must allow a pharmacy or pharmacist the option to submit
902 an electronic spreadsheet or similar electronic document
903 containing a consolidated administrative appeal representing
904 multiple adjudicated claims that share the same drug and day
905 supply and have a date of service occurring within the same
906 calendar month. The pharmacy or pharmacist must be given at
907 least 30 business days after a maximum allowable cost update or
908 after an adjudication for an electronic claim or reimbursement
909 for a nonelectronic claim to file the administrative appeal.
910 2. The pharmacy benefit manager must respond to the
911 administrative appeal within 30 business days after receipt of
912 the appeal.
913 3. If the appeal is upheld, the pharmacy benefit manager
914 must:
915 a. Update the maximum allowable cost pricing information to
916 at least the acquisition cost available to the pharmacy;
917 b. Permit the pharmacy or pharmacist to reverse and rebill
918 the claim in question;
919 c. Provide to the pharmacy or pharmacist the national drug
920 code on which the increase or change is based; and
921 d. Make the increase or change effective for each similarly
922 situated pharmacy or pharmacist who is subject to the applicable
923 maximum allowable cost pricing information.
924 4. If the appeal is denied, the pharmacy benefit manager
925 must provide to the pharmacy or pharmacist the national drug
926 code and the name of the national or regional pharmaceutical
927 wholesalers operating in this state which have the drug
928 currently in stock at a price below the maximum allowable cost
929 pricing information.
930 5. Beginning August 15, 2026 Every 90 days, a pharmacy
931 benefit manager shall report to the office the total number of
932 appeals received and denied in the preceding quarter 90-day
933 period, with an explanation or reason for each denial, for each
934 specific drug for which an appeal was submitted pursuant to this
935 paragraph. The deadlines for each filing are March 1 for the
936 preceding year′s fourth quarter; May 15 for each year′s first
937 quarter; August 15 for each year′s second quarter; and November
938 15 for each year′s third quarter.
939 Section 8. Subsection (7) of section 626.8827, Florida
940 Statutes, is amended, and subsections (8), (9), and (10) are
941 added to that section, to read:
942 626.8827 Pharmacy benefit manager prohibited practices.—In
943 addition to other prohibitions in this part, a pharmacy benefit
944 manager may not do any of the following:
945 (7) Fail to comply with the requirements in s. 624.491 or
946 s. 626.8825, or breach contractual terms required under s.
947 626.8825.
948 (8) Prohibit or restrict a pharmacy from declining to
949 dispense a drug if the reimbursement rate for the drug is less
950 than the actual acquisition cost to the pharmacy.
951 (9) Reimburse a pharmacy less than it reimburses an
952 affiliate pharmacy.
953 (10) Maintain an ownership interest, investment interest,
954 or common ownership with an affiliated manufacturer, or share
955 any investor or holder of an ownership interest with an
956 affiliated manufacturer.
957 Section 9. Subsection (1) of section 627.42392, Florida
958 Statutes, is amended to read:
959 627.42392 Prior authorization.—
960 (1) As used in this section, the term “health insurer”
961 means an authorized insurer offering health insurance as defined
962 in s. 624.603, a managed care plan as defined in s. 409.962 s.
963 409.962(10), or a health maintenance organization as defined in
964 s. 641.19(12).
965 Section 10. Except as otherwise provided in this act and
966 except for this section, which shall take effect upon this act
967 becoming a law, this act shall take effect July 1, 2026.