CS/CS/SB 1760 full text · Session Watch

Florida Senate - 2026 CS for CS for SB 1760 By the Committees on Appropriations; and Health Policy; and Senators Brodeur, Gaetz, Rouson, Massullo, Garcia, and Harrell 576-03338-26 20261760c2

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 state

16 agencies, political subdivisions of the state, and

17 entities contracted with state agencies to 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 that the agency’s analysis of such encounter

32 data 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 term “affiliated manufacturer”;

70 revising the definition of the term “pharmacy benefits

71 plan or program”; revising requirements for contracts

72 between a pharmacy benefit manager and a participating

73 pharmacy; revising the frequency of and deadlines for

74 certain reports pharmacy benefit managers are required

75 to submit to the office beginning on a specified date;

76 amending s. 626.8827, F.S.; revising and specifying

77 additional practices pharmacy benefit managers are

78 prohibited from engaging in; amending s. 627.42392,

79 F.S.; conforming a cross-reference; providing

80 effective dates.

82 Be It Enacted by the Legislature of the State of Florida:

84 Section 1. Effective upon this act becoming a law,

85 subsection (20) is added to section 1.01, Florida Statutes, to

86 read:

87 1.01 Definitions.—In construing these statutes and each and

88 every word, phrase, or part hereof, where the context will

89 permit:

90 (20) The term “Joint Legislative Committee on Medicaid

91 Oversight” means a committee or committees designated by joint

92 rule of the Legislature, by the President of the Senate or the

93 Speaker of the House of Representatives, or by agreement between

94 the President of the Senate and the Speaker of the House of

95 Representatives.

96 Section 2. Effective upon this act becoming a law, section

97 11.405, Florida Statutes, is created to read:

98 11.405 Joint Legislative Committee on Medicaid Oversight.

99 The Joint Legislative Committee on Medicaid Oversight is created

100 to ensure that the state Medicaid program is operating in

101 accordance with the Legislature’s intent and to promote

102 transparency and efficiency in government spending.

103 (1) MEMBERSHIP; SUBCOMMITTEES; MEETINGS.—

104 (a) The committee shall be composed of five members of the

105 Senate appointed by the President of the Senate and five members

106 of the House of Representatives appointed by the Speaker of the

107 House of Representatives, with each member serving a 2-year

108 term. The chair and vice chair shall each be appointed for 1

109 year terms, with the appointments alternating between the

110 President of the Senate and the Speaker of the House of

111 Representatives. The chair and vice chair may not be members of

112 the same house of the Legislature. If both the chair and vice

113 chair are absent from any meeting, the members present must

114 elect a temporary chair by a majority vote.

115 (b) Members shall serve without compensation but may be

116 reimbursed for per diem and travel expenses pursuant to s.

117 112.061.

118 (c) The chair may establish subcommittees as needed to

119 fulfill the committee’s duties.

120 (d) The committee shall convene at least twice a year, and

121 as often as necessary to conduct its business as required under

122 this section. Meetings may be held through teleconference or

123 other electronic means.

124 (2) COMMITTEE DUTIES.—

125 (a) The committee shall evaluate all aspects of the state

126 Medicaid program related to program financing, quality of care

127 and health outcomes, administrative functions, and operational

128 functions to ensure that the program is providing transparency

129 in the provision of health care plans and providers, ensuring

130 Medicaid recipients have access to quality health care services

131 and providing stability to the state’s budget through a health

132 care delivery system designed to contain costs.

133 (b) The committee shall identify and recommend policies

134 that limit Medicaid spending growth while improving health care

135 outcomes for Medicaid recipients. In developing its

136 recommendations, the committee shall do all of the following:

137 1. Evaluate legislation for its long-term impact on the

138 state Medicaid program.

139 2. Review data submitted to the Agency for Health Care

140 Administration by the Medicaid managed care plans pursuant to

141 statutory and contract requirements, including, but not limited

142 to, timeliness of provider credentialing, timely payment of

143 claims, rate of claim denials, prior authorizations for

144 services, and consumer complaints.

145 3. Review the Medicaid managed care plans’ encounter data,

146 financial data, and audits and the data used to calculate the

147 plans’ achieved savings rebates and medical loss ratios.

148 4. Review data related to health outcomes of Medicaid

149 recipients, including, but not limited to, Healthcare

150 Effectiveness Data and Information Set measures developed by the

151 National Committee for Quality Assurance, for each Medicaid

152 managed care plan, each Medicaid managed care plan’s performance

153 improvement projects, and outcome data related to all quality

154 goals included in the Medicaid managed care organization

155 contracts to improve quality for recipients.

156 5. Identify any areas for improvement in the laws and rules

157 relating to the state Medicaid program.

158 6. Develop a plan of action for the future of the state

159 Medicaid program.

160 (c) The committee may submit periodic reports, including

161 recommendations, to the Legislature on issues related to the

162 state Medicaid program and any affiliated programs.

163 (3) COOPERATION.—

164 (a) The Auditor General and the Agency for Health Care

165 Administration shall enter into and maintain a data sharing

166 agreement by July 1, 2026, to ensure the committee has full

167 access to all data needed to fulfill its responsibilities.

168 (b) The Auditor General shall assist the committee in its

169 work by providing credentialed professional staff or consulting

170 services, including, but not limited to, an actuary not

171 associated with the state Medicaid program or any Medicaid

172 managed care organization who currently has a contract with the

173 state.

174 (c) The committee, in the course of its official duties,

175 must be given access to any relevant record, paper, or document

176 in possession of a state agency, any political subdivision of

177 the state, or any entity engaged in business or under contract

178 with a state agency, and may compel the attendance and testimony

179 of any state official or employee before the committee or secure

180 any evidence as provided in s. 11.143. The committee may also

181 have any other powers conferred on it by joint rules of the

182 Senate and the House of Representatives, and any joint rules of

183 the Senate and the House of Representatives applicable to joint

184 legislative committees apply to the proceedings of the committee

185 under this section.

186 (4) AGENCY REPORTS.—

187 (a) Before implementing any change to the Medicaid managed

188 care capitation rates, the Agency for Health Care Administration

189 shall notify the committee of the change and appear before the

190 committee to provide a report detailing the managed care

191 capitation rates and administrative costs built into the

192 capitation rates. The report must include the agency’s

193 historical and projected Medicaid program expenditure and

194 utilization trend rates by Medicaid program and service category

195 for the rate year, an explanation of the manner in which the

196 trend rates were calculated, and the policy decisions that were

197 included in setting the capitation rates.

198 (b) If the Agency for Health Care Administration or any

199 division within the agency is required by law to report to the

200 Legislature or to any legislative committee or subcommittee on

201 matters relating to the state Medicaid program, the agency must

202 also submit a copy of the report to the committee.

203 Section 3. Present subsections (2) through (5), (6) through

204 (10), and (11) through (18) of section 409.962, Florida

205 Statutes, are redesignated as subsections (3) through (6), (8)

206 through (12), and (14) through (21), respectively, and new

207 subsections (2), (7), and (13) are added to that section, to

208 read:

209 409.962 Definitions.—As used in this part, except as

210 otherwise specifically provided, the term:

211 (2) “Affiliate,” including the terms “affiliated with” and

212 “affiliation,” means a person, as construed in s. 1.01(3), who:

213 (a) Directly or indirectly, through one or more

214 intermediaries, controls, is controlled by, or is under common

215 control with a specified entity or person, including parent and

216 subsidiary entities; or

217 (b) Is deemed a “related party” according to the standards

218 adopted by the Financial Accounting Standards Board.

219 (7) “Control,” including the terms “controlling,”

220 “controlled by,” and “under common control with,” means the

221 possession, direct or indirect, of the power to direct or cause

222 the direction of the management and policies of a person,

223 whether through the ownership or voting securities, by contract

224 other than a commercial contract for goods or nonmanagement

225 services, or otherwise, unless the power is the result of an

226 official position with or corporate office held by the person.

227 This definition applies regardless of whether such power is

228 affirmative or negative or whether such power is actually used.

229 Control is presumed to exist, but is not limited to, when any

230 affiliate or person, as construed in s. 1.01(3):

231 (a) Directly or indirectly owns, controls, holds the power

232 to vote, or holds proxies representing 10 percent or more of any

233 class of the voting securities of any other person.

234 (b) Shares common ownership with any person; has an

235 investor or is a holder of an ownership interest in any person;

236 exercises control in any manner over the election of a majority

237 of the directors or of individuals exercising similar functions

238 of any person; has the power to exercise controlling influence

239 over the management of any person; or serves as a working

240 majority of the board of directors, the managers, or the

241 officers of a person, who is:

242 1. A provider or a member of a provider group or group

243 practice as defined in s. 456.053(3) under the managed care

244 plan; or

245 2. A person responsible for providing any pharmacy

246 services, pharmaceuticals, diagnostics, care coordination, care

247 delivery, health care services, medical equipment,

248 administrative services, or financial services under the managed

249 care plan.

250 (13) “Market rate” means the price that a willing buyer

251 will pay and a willing seller will accept in an arm’s-length

252 transaction which is beneficial to both parties.

253 Section 4. Subsections (1) and (2), paragraph (h) of

254 subsection (3), and subsection (4) of section 409.967, Florida

255 Statutes, are amended, and subsection (5) is added to that

256 section, to read:

257 409.967 Managed care plan accountability.—

258 (1) CONTRACT PROCUREMENT PROCESS.— Beginning with the

259 contract procurement process initiated during the 2023 calendar

260 year, the agency shall establish a 6-year contract with each

261 managed care plan selected through the procurement process

262 described in s. 409.966. A plan contract may not be renewed;

263 however, the agency may extend the term of a plan contract to

264 cover any delays during the transition to a new plan. The agency

265 shall extend until December 31, 2024, the term of existing plan

266 contracts awarded pursuant to the invitation to negotiate

267 published in July 2017.

268 (2) CONTRACT REQUIREMENTS.— The agency shall establish such

269 contract requirements as are necessary for the operation of the

270 statewide managed care program. In addition to any other

271 provisions the agency may deem necessary, the contract must

272 require:

273 (a) Physician compensation.—Managed care plans are expected

274 to coordinate care, manage chronic disease, and prevent the need

275 for more costly services. Effective care management should

276 enable plans to redirect available resources and increase

277 compensation for physicians. Plans achieve this performance

278 standard when physician payment rates equal or exceed Medicare

279 rates for similar services. The agency may impose fines or other

280 sanctions on a plan that fails to meet this performance standard

281 after 2 years of continuous operation.

282 (b) Emergency services.—Managed care plans shall pay for

283 services required by ss. 395.1041 and 401.45 and rendered by a

284 noncontracted provider. The plans must comply with s. 641.3155.

285 Reimbursement for services under this paragraph is the lesser

286 of:

287 1. The provider’s charges;

288 2. The usual and customary provider charges for similar

289 services in the community where the services were provided;

290 3. The charge mutually agreed to by the entity and the

291 provider within 60 days after submittal of the claim; or

292 4. The Medicaid rate, which, for the purposes of this

293 paragraph, means the amount the provider would collect from the

294 agency on a fee-for-service basis, less any amounts for the

295 indirect costs of medical education and the direct costs of

296 graduate medical education that are otherwise included in the

297 agency’s fee-for-service payment, as required under 42 U.S.C. s.

298 1396u-2(b)(2)(D). For the purpose of establishing the amounts

299 specified in this subparagraph, the agency shall publish on its

300 website annually, or more frequently as needed, the applicable

301 fee-for-service fee schedules and their effective dates, less

302 any amounts for indirect costs of medical education and direct

303 costs of graduate medical education that are otherwise included

304 in the agency’s fee-for-service payments.

305 (c) Access.—

306 1. The agency shall establish specific standards for the

307 number, type, and regional distribution of providers in managed

308 care plan networks to ensure access to care for both adults and

309 children. Each plan must maintain a regionwide network of

310 providers in sufficient numbers to meet the access standards for

311 specific medical services for all recipients enrolled in the

312 plan. The exclusive use of mail-order pharmacies may not be

313 sufficient to meet network access standards. Consistent with the

314 standards established by the agency, provider networks may

315 include providers located outside the region. Each plan shall

316 establish and maintain an accurate and complete electronic

317 database of contracted providers, including information about

318 licensure or registration, locations and hours of operation,

319 specialty credentials and other certifications, specific

320 performance indicators, and such other information as the agency

321 deems necessary. The database must be available online to both

322 the agency and the public and have the capability to compare the

323 availability of providers to network adequacy standards and to

324 accept and display feedback from each provider’s patients. Each

325 plan shall submit quarterly reports to the agency identifying

326 the number of enrollees assigned to each primary care provider.

327 The agency shall conduct, or contract for, systematic and

328 continuous testing of the provider network databases maintained

329 by each plan to confirm accuracy, confirm that behavioral health

330 providers are accepting enrollees, and confirm that enrollees

331 have access to behavioral health services.

332 2. Each managed care plan must publish any prescribed drug

333 formulary or preferred drug list on the plan’s website in a

334 manner that is accessible to and searchable by enrollees and

335 providers. The plan must update the list within 24 hours after

336 making a change. Each plan must ensure that the prior

337 authorization process for prescribed drugs is readily accessible

338 to health care providers, including posting appropriate contact

339 information on its website and providing timely responses to

340 providers. For Medicaid recipients diagnosed with hemophilia who

341 have been prescribed anti-hemophilic-factor replacement

342 products, the agency shall provide for those products and

343 hemophilia overlay services through the agency’s hemophilia

344 disease management program.

345 3. Managed care plans, and their fiscal agents or

346 intermediaries, must accept prior authorization requests for any

347 service electronically.

348 4. Managed care plans serving children in the care and

349 custody of the Department of Children and Families must maintain

350 complete medical, dental, and behavioral health encounter

351 information and participate in making such information available

352 to the department or the applicable contracted community-based

353 care lead agency for use in providing comprehensive and

354 coordinated case management. The agency and the department shall

355 establish an interagency agreement to provide guidance for the

356 format, confidentiality, recipient, scope, and method of

357 information to be made available and the deadlines for

358 submission of the data. The scope of information available to

359 the department shall be the data that managed care plans are

360 required to submit to the agency. The agency shall determine the

361 plan’s compliance with standards for access to medical, dental,

362 and behavioral health services; the use of medications; and

363 follow-up ~~followup~~ on all medically necessary services

364 recommended as a result of early and periodic screening,

365 diagnosis, and treatment.

366 (d) Quality care.—Managed care plans shall provide, or

367 contract for the provision of, care coordination to facilitate

368 the appropriate delivery of behavioral health care services in

369 the least restrictive setting with treatment and recovery

370 capabilities that address the needs of the patient. Services

371 shall be provided in a manner that integrates behavioral health

372 services and primary care. Plans shall be required to achieve

373 specific behavioral health outcome standards, established by the

374 agency in consultation with the department.

375 (e) Encounter data.—The agency shall maintain and operate a

376 Medicaid Encounter Data System to collect, process, store, and

377 report on covered services provided to all Medicaid recipients

378 enrolled in prepaid plans.

379 1. Each prepaid plan must comply with the agency’s

380 reporting requirements for the Medicaid Encounter Data System.

381 Prepaid plans must submit encounter data , including data on

382 encounters for which payment was denied and encounters for which

383 a health care provider was reimbursed by the plan on a capitated

384 basis, electronically in a format that complies with the Health

385 Insurance Portability and Accountability Act provisions for

386 electronic claims and in accordance with deadlines established

387 by the agency. Prepaid plans must certify that the data reported

388 is accurate and complete.

389 2. The agency is responsible for validating the data

390 submitted by the plans. The agency shall develop methods and

391 protocols for ongoing analysis of the encounter data that

392 adjusts for differences in characteristics of prepaid plan

393 enrollees to allow comparison of service utilization among plans

394 and against expected levels of use. The analysis shall be used

395 to identify possible cases of overspending on administrative

396 costs, payments by plans in excess of market rates, systemic

397 underutilization or denials of claims and inappropriate service

398 utilization such as higher-than-expected emergency department

399 encounters , and potential managed care plan fraud, waste, and

400 abuse . The analysis shall provide periodic feedback to the plans

401 and enable the agency to establish corrective action plans when

402 necessary. One of the focus areas for the analysis shall be the

403 use of prescription drugs. The analysis shall be used in managed

404 care plan capitation rate-setting processes provided under this

405 part.

406 3. The agency shall make encounter data available to those

407 plans accepting enrollees who are assigned to them from other

408 plans leaving a region.

409 4. The agency shall annually produce a report entitled

410 “Analysis of Potentially Preventable Health Care Events of

411 Florida Medicaid Enrollees.” The report must include, but need

412 not be limited to, an analysis of the potentially preventable

413 hospital emergency department visits, hospital admissions, and

414 hospital readmissions that occurred during the previous state

415 fiscal year which may have been prevented with better access to

416 primary care, improved medication management, or better

417 coordination of care, reported by age, eligibility group,

418 managed care plan, and region, including conditions contributing

419 to each potentially preventable event or category of potentially

420 preventable events. The agency may include any other data or

421 analysis parameters to augment the report which it deems

422 pertinent to the analysis. The report must demonstrate trends

423 using applicable historical data. The agency shall submit the

424 report to the Governor, the President of the Senate, and the

425 Speaker of the House of Representatives by October 1, 2024, and

426 each October 1 thereafter. The agency may contract with a third

427 party vendor to produce the report required under this

428 subparagraph.

429 (f) Continuous improvement.—The agency shall establish

430 specific performance standards and expected milestones or

431 timelines for improving performance over the term of the

432 contract.

433 1. Each managed care plan shall establish an internal

434 health care quality improvement system, including enrollee

435 satisfaction and disenrollment surveys. The quality improvement

436 system must include incentives and disincentives for network

437 providers.

438 2. Each managed care plan must collect and report the

439 Healthcare Effectiveness Data and Information Set (HEDIS)

440 measures, the federal Core Set of Children’s Health Care Quality

441 measures, and the federal Core Set of Adult Health Care Quality

442 Measures, as specified by the agency. Each plan must collect and

443 report the Adult Core Set behavioral health measures beginning

444 with data reports for the 2025 calendar year. Each plan must

445 stratify reported measures by age, sex, race, ethnicity, primary

446 language, and whether the enrollee received a Social Security

447 Administration determination of disability for purposes of

448 Supplemental Security Income beginning with data reports for the

449 2026 calendar year. A plan’s performance on these measures must

450 be published on the plan’s website in a manner that allows

451 recipients to reliably compare the performance of plans. The

452 agency shall use the measures as a tool to monitor plan

453 performance.

454 3. Each managed care plan must be accredited by the

455 National Committee for Quality Assurance, the Joint Commission,

456 or another nationally recognized accrediting body, or have

457 initiated the accreditation process, within 1 year after the

458 contract is executed. For any plan not accredited within 18

459 months after executing the contract, the agency shall suspend

460 automatic assignment under ss. 409.977 and 409.984.

461 (g) Program integrity.—Each managed care plan shall

462 establish program integrity functions and activities to reduce

463 the incidence of fraud and abuse, including, at a minimum:

464 1. A provider credentialing system and ongoing provider

465 monitoring, including maintenance of written provider

466 credentialing policies and procedures which comply with federal

467 and agency guidelines;

468 2. An effective prepayment and postpayment review process

469 including, but not limited to, data analysis, system editing,

470 and auditing of network providers;

471 3. Procedures for reporting instances of fraud and abuse

472 pursuant to chapter 641;

473 4. Administrative and management arrangements or

474 procedures, including a mandatory compliance plan, designed to

475 prevent fraud and abuse; and

476 5. Designation of a program integrity compliance officer.

477 (h) Grievance resolution.—Consistent with federal law, each

478 managed care plan shall establish and the agency shall approve

479 an internal process for reviewing and responding to grievances

480 from enrollees. Each plan shall submit quarterly reports on the

481 number, description, and outcome of grievances filed by

482 enrollees.

483 (i) Penalties.—

484 1. Withdrawal and enrollment reduction.—Managed care plans

485 that reduce enrollment levels or leave a region before the end

486 of the contract term must reimburse the agency for the cost of

487 enrollment changes and other transition activities. If more than

488 one plan leaves a region at the same time, costs must be shared

489 by the departing plans proportionate to their enrollments. In

490 addition to the payment of costs, departing provider services

491 networks must pay a per-enrollee penalty of up to 3 months’

492 payment and continue to provide services to the enrollee for 90

493 days or until the enrollee is enrolled in another plan,

494 whichever occurs first. In addition to payment of costs, all

495 other departing plans must pay a penalty of 25 percent of that

496 portion of the minimum surplus maintained pursuant to s.

497 641.225(1) which is attributable to the provision of coverage to

498 Medicaid enrollees. Plans shall provide at least 180 days’

499 notice to the agency before withdrawing from a region. If a

500 managed care plan leaves a region before the end of the contract

501 term, the agency shall terminate all contracts with that plan in

502 other regions pursuant to the termination procedures in

503 subparagraph 3.

504 2. Encounter data.—If a plan fails to comply with the

505 encounter data reporting requirements of this section for 30

506 days, the agency must assess a fine of $5,000 per day for each

507 day of noncompliance beginning on the 31st day. On the 31st day,

508 the agency must notify the plan that the agency will initiate

509 contract termination procedures on the 90th day unless the plan

510 comes into compliance before that date.

511 3. Termination.—If the agency terminates more than one

512 regional contract with the same managed care plan due to

513 noncompliance with the requirements of this section, the agency

514 shall terminate all the regional contracts held by that plan.

515 When terminating multiple contracts, the agency must develop a

516 plan to provide for the transition of enrollees to other plans,

517 and phase in the terminations over a time period sufficient to

518 ensure a smooth transition.

519 (j) Prompt payment.—Managed care plans shall comply with

520 ss. 641.315, 641.3155, and 641.513.

521 (k) Electronic claims.—Managed care plans, and their fiscal

522 agents or intermediaries, shall accept electronic claims in

523 compliance with federal standards.

524 (l) Fair payment.—Provider service networks must ensure

525 that no entity licensed under chapter 395 with a controlling

526 interest in the network charges a Medicaid managed care plan

527 more than the amount paid to that provider by the provider

528 service network for the same service.

529 (m) Itemized payment.—Any claims payment to a provider by a

530 managed care plan, or by a fiscal agent or intermediary of the

531 plan, must be accompanied by an itemized accounting of the

532 individual claims included in the payment including, but not

533 limited to, the enrollee’s name, the date of service, the

534 procedure code, the amount of reimbursement, and the

535 identification of the plan on whose behalf the payment is made.

536 (n) Provider dispute resolution.—Disputes between a plan

537 and a provider may be resolved as described in s. 408.7057.

538 (o) Transparency.—Managed care plans shall comply with ss.

539 627.6385(3) and 641.54(7).

540 (p) Third-party administrators.—The agency′s contract with

541 a managed care plan must require that any third-party

542 administrative entity contracted by the plan adheres to all

543 pertinent requirements of the Medicaid program placed on the

544 plan under the plan′s contract with the agency.

545 (3) ACHIEVED SAVINGS REBATE.—

546 (h) The following may not be included as allowable expenses

547 in calculating income for determining the achieved savings

548 rebate:

549 1. Payment of achieved savings rebates.

550 2. Any financial incentive payments made to the plan

551 outside of the capitation rate.

552 3. Any financial disincentive payments levied by the state

553 or Federal Government.

554 4. Expenses associated with any lobbying or political

555 activities.

556 5. The cash value or equivalent cash value of bonuses of

557 any type paid or awarded to the plan’s executive staff, other

558 than base salary.

559 6. Reserves and reserve accounts.

560 7. Administrative costs, including, but not limited to,

561 reinsurance expenses, interest payments, depreciation expenses,

562 bad debt expenses, and outstanding claims expenses in excess of

563 actuarially sound maximum amounts set by the agency.

564 8. Payments to affiliates as defined in s. 409.962 in

565 excess of market rates.

567 The agency shall consider these and other factors in developing

568 contracts that establish shared savings arrangements.

569 (4) MEDICAL LOSS RATIOS ~~RATIO~~ .—

570 (a) If required by federal regulations or as a condition of

571 a waiver, the agency must ~~may~~ calculate a medical loss ratios

572 ~~ratio~~ for all managed care plans contracted with the agency

573 under this part . The calculations must ~~calculation shall~~ use

574 uniform financial data collected from all plans ~~and shall be~~

575 ~~computed for each plan on a statewide basis~~ . If a plan

576 participates in the managed medical assistance program, the

577 long-term care managed care program, or the pilot program for

578 individuals with developmental disabilities, the agency must

579 calculate medical loss ratios for the plan’s participation in

580 each program separately and, if the plan participates in more

581 than one of these programs, for the plan’s overall participation

582 in statewide Medicaid managed care. Medical loss ratios must be

583 calculated and ~~The method for calculating the medical loss ratio~~

584 ~~shall meet the following criteria:~~

585 ~~(a) Except as provided in paragraphs (b) and (c),~~

586 expenditures must ~~shall~~ be classified in a manner consistent

587 with 42 C.F.R. part 438 ~~45 C.F.R. part 158~~ .

588 (b) The agency shall report medical loss ratios quarterly

589 and annually for each managed care plan contracted with the

590 agency under this part to the Governor, the President of the

591 Senate, and the Speaker of the House of Representatives no later

592 than 6 months after the end of each such period ~~Funds provided~~

593 ~~by plans to graduate medical education institutions to~~

594 ~~underwrite the costs of residency positions shall be classified~~

595 ~~as medical expenditures, provided the funding is sufficient to~~

596 ~~sustain the positions for the number of years necessary to~~

597 ~~complete the residency requirements and the residency positions~~

598 ~~funded by the plans are active providers of care to Medicaid and~~

599 ~~uninsured patients.~~

600 ~~(c) Before final determination of the medical loss ratio~~

601 ~~for any period, a plan may contribute to a designated state~~

602 ~~trust fund for the purpose of supporting Medicaid and indigent~~

603 ~~care and have the contribution counted as a medical expenditure~~

604 ~~for the period. Funds contributed for this purpose shall be~~

605 ~~deposited into the Grants and Donations Trust Fund~~ .

606 (5) AFFILIATED ENTITIES AND RELATED PARTIES.—

607 (a) The agency shall ensure oversight of affiliated

608 entities and related parties paid by managed care plans under

609 this part, including, but not limited to, examining financial

610 records and self-referral data of any managed care plan

611 providing services within the statewide managed care program

612 which uses affiliated entities and related parties.

613 (b) The agency shall consider data examined under paragraph

614 (a) and the findings of the annual assessment required under s.

615 409.9675(4) when developing managed care plan capitation rates

616 under this part.

617 Section 5. Effective January 1, 2027, paragraph (f) of

618 subsection (3) of section 409.967, Florida Statutes, is amended,

619 and paragraph (g) of that subsection is republished, to read:

620 409.967 Managed care plan accountability.—

621 (3) ACHIEVED SAVINGS REBATE.—

622 (f) Achieved savings rebates validated by the certified

623 public accountant are due within 30 days after the report is

624 submitted. Except as provided in paragraph (h), the achieved

625 savings rebate is established by determining pretax income as a

626 percentage of revenues and applying the following income sharing

627 ratios:

628 1. One hundred percent of income up to and including 3 5

629 percent of revenue shall be retained by the plan.

630 2. Thirty ~~Fifty~~ percent of income above 3 5 percent and up

631 to 10 percent shall be retained by the plan, and the other 70 50

632 percent shall be refunded to the state and adjusted for the

633 Federal Medical Assistance Percentages. The state share shall be

634 transferred to the General Revenue Fund, unallocated, and the

635 federal share shall be transferred to the Medical Care Trust

636 Fund, unallocated.

637 3. One hundred percent of income above 10 percent of

638 revenue shall be refunded to the state and adjusted for the

639 Federal Medical Assistance Percentages. The state share shall be

640 transferred to the General Revenue Fund, unallocated, and the

641 federal share shall be transferred to the Medical Care Trust

642 Fund, unallocated.

643 (g) A plan that exceeds agency-defined quality measures in

644 the reporting period may retain an additional 1 percent of

645 revenue. For the purpose of this paragraph, the quality measures

646 must include plan performance for preventing or managing

647 complex, chronic conditions that are associated with an elevated

648 likelihood of requiring high-cost medical treatments.

649 Section 6. Section 409.9675, Florida Statutes, is created

650 to read:

651 409.9675 Affiliated entities and controlling interests;

652 reports required.—

653 (1) Each managed care plan contracted by the agency under

654 this part shall report all of the following by March 31, 2027,

655 for the prior calendar year, and annually thereafter, to the

656 agency and the Office of Insurance Regulation in a manner

657 prescribed by the agency:

658 (a) Any person controlled by or affiliated with the managed

659 care plan, including, but not limited to, any provider, provider

660 group, group practice defined in s. 456.053(3), or person

661 responsible for providing any pharmacy services,

662 pharmaceuticals, diagnostics, care coordination, care delivery,

663 health care services, medical equipment, administrative

664 services, or financial services for, to, or on behalf of the

665 managed care plan.

666 (b) Any affiliation of any kind or nature with any person

667 who has, either directly or indirectly through one or more

668 intermediaries, an investment or ownership interest representing

669 10 percent or more, shares common ownership with, or has an

670 investor or a holder of an ownership interest representing 10

671 percent or more with any person providing pharmacy services,

672 diagnostics, care coordination, care delivery, health care

673 services, medical equipment, administrative services, or

674 financial services for, to, or on behalf of the managed care

675 plan.

676 (2) For any affiliation reported by a managed care plan

677 under subsection (1), the report must include all of the

678 following:

679 (a) The percentage of ownership or control of any person or

680 affiliate with whom the managed care plan has had business

681 transactions totaling in the aggregate more than $25,000 during

682 the prior 12-month period in the annual achieved savings rebate

683 financial reporting required under s. 409.967(3) and

684 identification of the specific contract or contracts involved in

685 such business transactions.

686 (b) Any significant business transactions between the

687 managed care plan and any affiliated person during the 12-month

688 period in the annual achieved savings rebate financial reporting

689 required under s. 409.967(3).

690 (3) Each managed care plan shall report any change in

691 information required by subsection (1) to the agency and the

692 Office of Insurance Regulation in writing within 60 days after

693 the change occurs.

694 (4) By December 31, 2026, and annually thereafter, the

695 agency shall calculate, analyze, and publicly report on the

696 agency’s website an assessment of affiliated entity payment

697 transactions in the Medicaid program for medical benefit and

698 administrative costs as reported for purposes of the achieved

699 savings rebate. The baseline assessment, at a minimum, must

700 include achieved savings rebate transactions for the years 2021,

701 2022, and 2023; the amount and associated percentage of

702 affiliated entity payments within the medical loss ratio; and

703 the payment deviation percentages and associated amounts at the

704 Healthcare Common Procedure Coding System level for affiliated

705 entities as compared to nonaffiliated entities. The assessment

706 must also compare payment amounts for value-based or alternative

707 payment arrangements.

708 Section 7. Present paragraphs (b) through (x) of subsection

709 (1) of section 626.8825, Florida Statutes, are redesignated as

710 paragraphs (c) through (z), respectively, a new paragraph (b) is

711 added to that subsection, and present paragraph (u) of

712 subsection (1) and paragraphs (c) and (h) of subsection (3) of

713 that section are amended, to read:

714 626.8825 Pharmacy benefit manager transparency and

715 accountability.—

716 (1) DEFINITIONS.—As used in this section, the term:

717 (b) “Affiliated manufacturer” means a prescription drug

718 manufacturer permitted under chapter 499 or a private label

719 distributor as defined in 21 C.F.R. s. 207.1 which directly or

720 indirectly through one or more intermediaries:

721 1. Has an investment or ownership interest in a pharmacy

722 benefit manager holding a certificate of authority issued under

723 this part;

724 2. Shares common ownership with a pharmacy benefit manager

725 holding a certificate of authority issued under this part; or

726 3. Has an investor or a holder of an ownership interest

727 which is a pharmacy benefit manager holding a certificate of

728 authority issued under this part.

729 (v) ~~(u)~~ “Pharmacy benefits plan or program” means a plan or

730 program that pays for, reimburses, covers the cost of, or

731 provides access to discounts on pharmacist services provided by

732 one or more pharmacies to covered persons who reside in, are

733 employed by, or receive pharmacist services from this state.

734 1. The term includes, but is not limited to, health

735 maintenance organizations, health insurers, self-insured

736 employer health plans, discount card programs, and government

737 funded health plans, including the Statewide Medicaid Managed

738 Care program established pursuant to part IV of chapter 409 and

739 the state group insurance program pursuant to part I of chapter

740 110.

741 2. The term excludes such a plan or program under s. 430.84

742 or chapter 440.

743 (3) CONTRACTS BETWEEN A PHARMACY BENEFIT MANAGER AND A

744 PARTICIPATING PHARMACY.—In addition to other requirements in the

745 Florida Insurance Code, a participation contract executed,

746 amended, adjusted, or renewed on or after July 1, 2023, that

747 applies to pharmacist services on or after January 1, 2024,

748 between a pharmacy benefit manager and one or more pharmacies or

749 pharmacists, must include, in substantial form, terms that

750 ensure compliance with all of the following requirements, and

751 that, except to the extent not allowed by law, shall supersede

752 any contractual terms in the participation contract to the

753 contrary:

754 (c) A prohibition of financial clawbacks, reconciliation

755 offsets, or offsets to adjudicated claims. A pharmacy benefit

756 manager may not charge, withhold, offset, or recoup any direct

757 or indirect remuneration fees, dispensing fees, brand name or

758 generic effective rate adjustments through reconciliation, or

759 any other monetary charge, withholding, or recoupments as

760 related to discounts, multiple network reconciliation offsets,

761 adjudication transaction fees, and any other instance when an

762 amount ~~a fee~~ may be recouped from a pharmacy if such action

763 would result in a reduction in the amount paid to the pharmacy

764 or pharmacist . This prohibition does not apply to:

765 1. Any incentive payments provided by the pharmacy benefit

766 manager to a network pharmacy for meeting or exceeding

767 predefined quality measures, such as Healthcare Effectiveness

768 Data and Information Set measures; recoupment due to an

769 erroneous claim, fraud, waste, or abuse; a claim adjudicated in

770 error; a maximum allowable cost appeal pricing adjustment; or an

771 adjustment made as part of a pharmacy audit pursuant to s.

772 624.491.

773 2. Any recoupment that is returned to the state for

774 programs in chapter 409 or the state group insurance program in

775 s. 110.123.

776 (h) The pharmacy benefit manager shall provide a reasonable

777 administrative appeal procedure to allow a pharmacy or

778 pharmacist to challenge the maximum allowable cost pricing

779 information and the reimbursement made under the maximum

780 allowable cost as defined in s. 627.64741 for a specific drug as

781 being below the acquisition cost available to the challenging

782 pharmacy or pharmacist.

783 1. The administrative appeal procedure must include a

784 telephone number and e-mail address, or a website, for the

785 purpose of submitting the administrative appeal. The appeal may

786 be submitted by the pharmacy or an agent of the pharmacy

787 directly to the pharmacy benefit manager or through a pharmacy

788 service administration organization. The administrative appeal

789 process must allow a pharmacy or pharmacist the option to submit

790 an electronic spreadsheet or similar electronic document

791 containing a consolidated administrative appeal representing

792 multiple adjudicated claims that share the same drug and day

793 supply and have a date of service occurring within the same

794 calendar month. The pharmacy or pharmacist must be given at

795 least 30 business days after a maximum allowable cost update or

796 after an adjudication for an electronic claim or reimbursement

797 for a nonelectronic claim to file the administrative appeal.

798 2. The pharmacy benefit manager must respond to the

799 administrative appeal within 30 business days after receipt of

800 the appeal.

801 3. If the appeal is upheld, the pharmacy benefit manager

802 must:

803 a. Update the maximum allowable cost pricing information to

804 at least the acquisition cost available to the pharmacy;

805 b. Permit the pharmacy or pharmacist to reverse and rebill

806 the claim in question;

807 c. Provide to the pharmacy or pharmacist the national drug

808 code on which the increase or change is based; and

809 d. Make the increase or change effective for each similarly

810 situated pharmacy or pharmacist who is subject to the applicable

811 maximum allowable cost pricing information.

812 4. If the appeal is denied, the pharmacy benefit manager

813 must provide to the pharmacy or pharmacist the national drug

814 code and the name of the national or regional pharmaceutical

815 wholesalers operating in this state which have the drug

816 currently in stock at a price below the maximum allowable cost

817 pricing information.

818 5. Beginning August 15, 2026 ~~Every 90 days~~ , a pharmacy

819 benefit manager shall report to the office the total number of

820 appeals received and denied in the preceding quarter ~~90-day~~

821 ~~period~~ , with an explanation or reason for each denial, for each

822 specific drug for which an appeal was submitted pursuant to this

823 paragraph. The deadlines for each filing are March 1 for the

824 preceding year′s fourth quarter; May 15 for the year′s first

825 quarter; August 15 for the year′s second quarter; and November

826 15 for the year′s third quarter.

827 Section 8. Subsection (7) of section 626.8827, Florida

828 Statutes, is amended, and subsections (8), (9), and (10) are

829 added to that section, to read:

830 626.8827 Pharmacy benefit manager prohibited practices.—In

831 addition to other prohibitions in this part, a pharmacy benefit

832 manager may not do any of the following:

833 (7) Fail to comply with the requirements in s. 624.491 or

834 s. 626.8825 , or breach contractual terms required under s.

835 626.8825 .

836 (8) Prohibit or restrict a pharmacy from declining to

837 dispense a drug if the reimbursement rate for the drug is less

838 than the actual acquisition cost to the pharmacy.

839 (9) Reimburse a pharmacy less than it reimburses an

840 affiliate pharmacy.

841 (10) Maintain an ownership interest, investment interest,

842 or common ownership with an affiliated manufacturer, or share

843 any investor or holder of an ownership interest with an

844 affiliated manufacturer.

845 Section 9. Subsection (1) of section 627.42392, Florida

846 Statutes, is amended to read:

847 627.42392 Prior authorization.—

848 (1) As used in this section, the term “health insurer”

849 means an authorized insurer offering health insurance as defined

850 in s. 624.603, a managed care plan as defined in s. 409.962 s.

851 ~~409.962(10)~~ , or a health maintenance organization as defined in

852 s. 641.19(12).

853 Section 10. Except as otherwise provided in this act and

854 except for this section, which shall take effect upon this act

855 becoming a law, this act shall take effect July 1, 2026.