Florida Legislature 2004 Session Report

1
Florida Legislature2004 Session Report

• Presented by
• Ralph Glatfelter
• Sr. Vice President
• May 2004

2
Absence of Evil is the Highest Good

• Managed Care Issues
• No price fixing for HMOs or PPOs
• No publication of charge masters
• No bill audits and fines by AHCA
• No penalty for incorrect estimates.

3
Absence of Evil is the Highest Good

• Budget Issues
• Medically needy funded
• Pregnant women and children funded
• UPL program continued
• Medicaid fee-for-service maintained at 60-40.

4
Absence of Evil is the Highest Good

• Medical Practice Issues
• No prohibition on hospitals requiring physicians
  to carry liability insurance
• No change in physician discipline and peer review
  process
• No change in definition of adverse incidents to
  include incidents where a mistake was caught
  before injury occurred.

5
Transparency Building Block of Consumer-Driven
Healthcare?

• Rep. Donna Clarke, Humana and Transparency
• Hospital charge masters published by AHCA
• Hospital charges cannot change without 30 days
  notice
• AHCA audits hospital bills over 20,000
• Hospital must give estimates to all non-emergency
  admissions
• If estimate is off by 1,000 or 20, the payor
  doesnt pay.

6
Transparency Building Block of Consumer-Driven
Healthcare?

• Rep. Donna Clarke, Humana and Transparency
• Patient or payor given right to appeal any
  hospital charge
• Annual report of appeals to be submitted to AHCA
• Hospital reporting expanded
• Non-hospital and health plan reported reduced.

7
Transparency Building Block of Consumer-Driven
Healthcare?

• Transparency What Passed
• Hospitals, pharmacies, health insurers and HMOs
  required to create a link between their websites
  and the performance and financial data on AHCAs
  website
• Hospitals required to post a sign about
  information and website
• Hospitals non-complying fined 500 for each
  instance
• HMOs and insurers required to include notice
  about website and policies
• Pharmacies required to post a notice of website.

8
Transparency Building Block of Consumer-Driven
Healthcare?

• Transparency What Passed
• AHCA required to make available on its website
• By October 1, 2004, patient charge, volumes, LOS,
  and performance outcomes for hospitals and ASCs
• Provide an interactive search mode to compare
  facilities by region
• By October 1, 2005, drug prices for 30-day supply
  of the 50 most commonly prescribed drugs, updated
  quarterly
• Compare generic to brand-name and available by
  region.

9
Transparency Building Block of Consumer-Driven
Healthcare?

• Transparency What Passed
• AHCA required to develop long-range plan for
  performance outcome and financial data allowing
  consumers to compare
• Hospitals
• Pharmaceuticals
• Physicians
• Health care facilities
• Health plans
• Managed care entities.
• Report submitted by March 1, 2005

10
Transparency Building Block of Consumer-Driven
Healthcare?

• Transparency What Passed
• AHCA required to make available performance
  measures, benefit design and premium costs for
  health plans, including
• Membership satisfaction
• Quality of care
• Accuracy and speed of claims payment
• Network adequacy
• Any data currently not reported.

11
Transparency Building Block of Consumer-Driven
Healthcare?

• Transparency What Passed
• Hospitals required to
• Provide written good-faith estimates of charges
  upon receipt of written report
• Estimates may be average charges per DRG
• Notice in reception area required
• Non-compliance 500 fine per instance
• No penalty if estimate is not accurate

12
Transparency Building Block of Consumer-Driven
Healthcare?

• Transparency What Passed
• Hospitals required to make patients records
  available within 30 business days after request
• Hospital required to establish a method for
  answering patient questions about bills within 30
  days. If patient isnt satisfied, then hospital
  must provide AHCAs address.

13
Transparency Building Block of Consumer-Driven
Healthcare?

• Transparency What Passed
• HMOs required to make available to subscribers
• Estimated copays, coinsurance percentage, or
  deductible, whichever applies.
• Status of maximum annual out-of-pocket payments
  and lifetime benefit.

14
Managed Care and Health Insurance Issues

• Small Employer Market
• High deductible plans required which meet federal
  standards for HSAs and HRAs
• Small employer access program created
• 2 to 25 employees
• City, county, school boards, rural hospitals in
  rural areas allowed to join
• One HMO or health insurer selected for a defined
  geographic area
• Benefits standard and basic, high deductible or
  alternative plan.

15
Managed Care and Health Insurance Issues

• Florida Health Insurance Plan (FHIP) created but
  probably not implemented
• Emergency room diversion programs encouraged
• Higher deductibles and copays authorized for
  inappropriate ER usage
• Discount card organizations to be licensed
• Operators of fraudulent discount card
  organizations subject to felony penalty.

16
KidCare

• Highlights
• Eliminated waiting list of over 90,000 children
• Eliminated waiting list
• Creates restrictive new eligibility criteria
• Parents voluntarily dropped coverage
• Parents can access coverage costing less than 5
  of annual salary.

17
KidCare

• Highlights
• 1.5 million kids enrolled 43 of Floridas
  children
• 05 budget increased by 131 million to 531
  million.
• Future Considerations
• Title XXI must be reauthorized by 07
• Florida spending exceeds federal allotment.

18
Trauma Care

• Highlights
• Over 1 million one-time appropriation for each
  trauma center
• Study to evaluate effectiveness and future
  funding of trauma centers
• Revises obsolete and technical language governing
  trauma centers and regions.

19
Hospital Medicaid Rate Reduction for FY 04-05

• Mandated rate reduction for hospital inpatient
  services 69.7 million
• Mandated rate reduction for hospital outpatient
  services 14.1 million
• Estimated reduction necessary to achieve
  savings between 5 to 5.5
• Adjustment reflects an annualized permanent
  reduction in hospital rate base
• Effective Date July 1, 2005

20
Hospital Medicaid Rate Reduction for FY 04-05

• Step One All hospital inpatient and
  outpatient rates will be adjusted according to
  current methodology on July 1.
• Step Two An across the board percentage
  decrease will be applied at a level to
  produce the required amount of savings.
• Additional Legislative Specifications
• The Medicaid reimbursement rates for any hospital
  with more than 20,000 Medicaid inpatient days in
  FY 02 cannot be reduced below their June 30, 2004
  rate.
• The Medicaid reimbursement rates for Statutory
  Rural Hospitals cannot be reduced below their
  June 30, 2004 rate.

21
CON REFORM

• Highlights
• Niche hospitals prohibited
• Adult open heart surgery, PCIs, diagnostic caths
  and burn units deregulated, licensure required
• Acute care, mental health and NICU bed additions
  at existing hospitals deregulated
• Exemptions created for NICU Levels II and III and
  for additional rehab beds at existing hospitals.

22
CON REFORM

• Single Specialty, Boutique Hospitals Prohibited
• Licensure or re-licensure prohibited if 65
  percent of discharges are
• Cardiac related
• Orthopedic related
• Cancer related
• Or any combination of the above.
• Licensure or re-licensure prohibited if hospital
  restricts services to primarily or exclusively
  cardiac, orthopedic, surgical, or oncology.

23
CON REFORM

• Single Specialty, Boutique Hospitals Prohibited
• Existing hospitals grandfathered provided
• Maintains same ownership
• Maintains same facility street address
• Maintains range of services offered June 1, 2004.

24
CON REFORM

• Single Specialty, Boutique Hospitals Prohibited
• Existing hospitals may initiate or intervene in
  administrative hearings to approve, deny, or
  revoke licensure of a hospital for violation of
  this section
• In order to have standing, intervening hospital
  must be substantially affected by the issuance or
  renewal of a license to a hospital within the
  same district or service area.

25
CON REFORM

• What Remains Regulated
• New hospitals or replacement hospitals located
  more than 1 mile away from existing facility
• Hospital conversions
• Tertiary services, including pediatric open
  heart, pediatric cardiac catheterization, organ
  transplant, NICU and comprehensive medical
  rehabilitation
• Hospice and nursing homes
• Bed additions in a hospital located in a low
  growth county.

26
CON REFORM

• CON Exemptions Created
• Additions of 10 rehab beds or 10 percent of
  licensed capacity, whichever is greater with 80
  percent occupancy
• Level II NICU of at least 10 beds minimum 1,500
  births during previous 12 months
• Level III NICU of at least 25 beds minimum
  3,500 births during previous 12 months
• Adult open heart program for a hospital
  experiencing annual net out-migration for three
  years of 600 open heart surgery cases and
  district population exceeds state average per
  open heart program by 25 percent.

27
CON REFORM

• CON Exemptions Created
• Hospitals receiving notice of intent or final
  order for establishment of an adult open heart
  program
• For hospitals to provide primary PCIs for
  emergent patients
• For the addition of mental health services or
  beds, if hospital commits to providing services
  to Medicaid or charity care patients equal to the
  district average.

28
CON REFORM

• Notification Requirements
• For replacement of a health care facility within
  1 mile of the existing site, provided no increase
  in beds
• Termination of health care service with 30 days
  notice
• The addition or delicensure of beds
• Notification either electronically, by fax or
  other written means.

29
CON REFORM

• Adult Open Heart Licensure
• Level I PCIs without open heart backup
• Level II PCIs and open heart surgery.

30
CON REFORM

• Licensure Thresholds for Level I Services
• 300 adult inpatient and outpatient diagnostic
  cardiac catheterizations for most recent 12
  months
• 300 inpatients with principal diagnosis of
  ischemic heart disease for most recent 12 months.

31
CON REFORM

• Licensure Thresholds for Level II Services
• 800 patients discharged with principal diagnosis
  of ischemic heart disease for most recent 12
  months
• 1100 caths of which 400 must be therapeutic for
  most recent 12 months.

32
CON REFORM

• Existing CON rules for adult open heart and burn
  units are ratified and remain in effect until
  licensure rules are adopted
• Existing adult open heart providers grandfathered
  for at least 3 years after rules are implemented
• Providers with exemptions, notices of intent or
  final orders for adult open heart are
  grandfathered.

33
CON REFORM

• Evaluation Based on Outcomes
• Technical advisory panel created to study methods
  for measuring outcomes
• Rules must include the following
• Standard data set
• Risk adjustment methodology which accounts for
  variations in severity and case mix
• Outcomes standard specifying expected levels of
  performance
• Specific steps taken for hospitals failing to
  meet standards.

34
CON REFORM

• Other Studies
• Advisory group on replacement of CON with
  licensure for organ transplant programs
• Workgroup to study need methodology for new
  hospitals and transfers of beds to new sites
• Considerations include
• Viability of safety net services
• Market competition and accessibility of
  hospitals.