Major Florida Health Care Reforms Proposed by Florida's Governor and Legislature

13 January 2011 Publication
Authors: George W. Ash Gary D. Koch Nathaniel M. Lacktman Lawrence W. Vernaglia

Legal News Alert: Health Care

As Florida Governor Rick Scott is sworn into office, his administration has proposed a number of sweeping changes to the state’s health care regulatory system, including the reorganization and consolidation of health care agencies, and comprehensive Medicaid reform such as the statewide expansion of Medicaid managed care. These health care priorities and major initiatives are outlined in a report issued by Governor Scott’s Health and Human Services Transition Team.

On January 3, 2011, House Bill (HB) 115 was filed, which seeks to reorganize most of Florida’s health and human services agencies into a single agency — the Department of Health & Human Services — with six regional offices statewide. HB 115 also would create the Central Office of Investigative Services, designed to coordinate investigations with federal agencies and provide regional oversight for all investigations relating to Medicaid fraud, complaints against health care professionals, providers, and managed care organizations, child abuse and adult abuse.

These issues and developments, along with recommendations and strategic considerations, are discussed below.

House Bill 115
HB 115, filed by Representative Janet Adkins (R-12th District), seeks to reorganize most of Florida’s health and human services agencies into a single agency, named the Department of Health & Human Services, with six regional offices statewide. The bill was filed a day before Governor Scott signed his first four executive orders, including Executive Order No. 11-01, imposing a 90-day freeze on agency rulemaking. Foley published a Legal News Alert on Executive Order No. 11-01, available here.

Under HB 115, four of Florida's health care agencies (AHCA, the DOH, Department of Children and Families, and the Agency for Persons with Disabilities) would be combined into the Department of Health & Human Services. The proposed Department of Health & Human Services would establish the following Program Divisions responsible for administering programs in 16 different service areas for each region: Medicaid, Long-Term Care, Mental Health, Adult, Child Care, Foster Care, Quality Assurance, Domestic Violence, Economic Self-Sufficiency, Family Safety, Refugees, Substance Abuse, Contracting, Legal, Administrative, and Benefits.

HB 115 also would create the Central Office of Investigative Services. This additional enforcement arm would likely work in partnership with the existing federal-state cooperative health care enforcement efforts, such as the Health Care Fraud Prevention and Enforcement Action Team (HEAT) and the multi-agency Medicare Fraud Strike Force, which has now expanded into Miami-Dade County and the Tampa Bay area. Because federal and state enforcement agencies are directing additional resources toward health care enforcement, Florida health care businesses are advised to direct similar focus to ensure they are operating in compliance with existing statutes and regulations.

HB 115 is likely the first of many proposals to significantly revamp the structure and operation of Florida’s health care agencies. These proposals may focus on multiple agencies (as with HB 115) or one agency, as with HB 5311, passed by the Legislature during the 2010 regular session, which required DOH to conduct an evaluation and justification review of each of its divisions. Beyond individual members, House and Senate health care committees also will likely develop their own proposals to reform Florida’s health care agencies.

Health and Human Services Transition Team Report
HB 115 follows on the heels of the December 18, 2010 report issued by the governor’s Health and Human Services Transition Team, outlining the Transition Team’s health care priorities. The 68-page report recommends the following three major initiatives:

  • Reorganize and consolidate Florida’s existing health care and human services agencies. Like HB 115, the Transition Team report proposed the creation of a single agency, the Department of Health & Human Services. Unlike HB 115, the merged agencies proposed in the report would include AHCA, the DOH, the Department of Elder Affairs, and the Agency for Persons with Disabilities, but not the Department of Children and Families. As prior Foley & Lardner Government and Politics Weekly Updates have mentioned, a proposal to merge AHCA and the DOH has previously been discussed as an effort to reduce costs. Presuming support from the Legislature, the reorganization proposed by the Transition Team would take at least a year to implement, once a formal plan is established and approved.
  • Advocate for the repeal of the federal Patient Protection and Affordable Care Act (PPACA). The report focuses on the additional costs PPACA would impose on the state. Foley has extensively covered PPACA and related health reform issues, all of which are available at our Health Care Reform Site at Foley.com/HCReform.
  • Implement extensive reform of Florida’s Medicaid program. This would primarily be achieved by expanding Medicaid managed care and coverting existing Medicaid fee-for-service (FFS) enrollees, such as dual-eligible and nursing home patients, into a Medicaid managed care program. The report discusses the growing costs of the Medicaid program and recommends Florida seek more federal Medicaid funding for the Disproportionate Share Hospital Program, as well as expand the Medicaid reform waiver statewide. The current waiver permits Medicaid managed care in multiple forms, from HMOs to Provider Service Networks.

Recommendations and Strategic Implications

In light of the significant majorities in the House and Senate, and an ambitious agenda from the newly elected governor, health care suppliers, providers, facilities, and plans need to understand that considerable changes in the delivery of, and payment for, health care in Florida are inevitable and will have real-world consequences.

These changes will affect the existing relationships health care suppliers, providers, facilities, and plans have with key personnel at the current Florida health care agencies. They will likely trigger changes to the current processes for licensing, enforcement, and oversight of health care businesses in Florida. Other changes may be more disruptive, such as providers losing the ability to contract directly with the state and plans being subject to additional restrictions in contracting with providers.

It is imperative for businesses that participate in the delivery and payment of health care services in Florida to partner with skilled health care counsel and public affairs professionals as soon as possible. Accomplished health care counsel and public affairs professionals, with the knowledge and relationships necessary to expertly navigate the legislative process, are essential to protect the interests of health care clients during these tumultuous times.

A copy of HB 115 is available online at: http://tinyurl.com/4f6myuz.

 


Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our health care clients and colleagues. If you have any questions about this alert or would like to discuss this topic further, please contact your Foley attorney or any of the following individuals:

Nathaniel M. Lacktman
Tampa, Florida
813.225.4127
nlacktman@foley.com

Paul W. Lowell
Tallahassee, Florida
850.513.3380
plowell@foley.com

Jonathan P. Kilman
Orlando, Florida
407.244.3256
jkilman@foley.com

Gary D. Koch
Tampa, Florida
813.225.4124
gkoch@foley.com

George W. Ash
Detroit, Michigan
313.234.7147
gash@foley.com

Lawrence W. Vernaglia
Boston, Massachusetts
617.342.4079
lvernaglia@foley.com

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