So Where Are We and Where Do We Go From Here?

Yes, we are still shaking our heads and trying to wrap our minds around what REALLY happened the last week of April, when the House abruptly shut its doors and members left town. It was a shot that was heard throughout Florida and unfortunately, the Nation.  In an effort to figure it out, we took a look back to see where it all began and how we got ourselves into this mess.

The Beginning

What we found was that it really began back in December of 2014 when Senate President Andy Gardiner expressed concern about how willing the federal government would be to grant the state flexibility in setting up a plan that would use Medicaid expansion dollars to help lower-income Floridians purchase private health insurance. As the weeks moved closer to March 3, negotiations began to break down when confusion over each chamber’s motives, and the willingness to force a showdown, conspired with the tight deadline of a 60-day session to derail lawmakers’ plans.  At a January 2015 meeting with Senate President Gardiner and House Speaker Crisafulli, it was clear that they had very different views on the issue, but neither the Senate President nor the House Speaker gave any clue that the issue could completely destroy the 2015 Legislative Session.  Both did, however, indicate that positions had not changed over the last two years of debate.

What Happened Next

By the time the legislative session opened March 3, President Gardiner did say that the Senate had more than an interest in the expansion issue and that they must consider Medicaid expansion, due to the possibility that the Low Income Pool (LIP) could end.  Shortly after, the Senate unveiled legislation to establish the Florida Health Insurance Affordability Exchange Program; a federally funded program would act as a “marketplace” for enrolling people in private insurance coverage. During this same time, negotiations with the Federal Government were in full swing over the future of LIP, and indications of difficulty within the negotiations began to rear its head. The battles soon grew hotter and the line in the sand grew deeper, as we all started hearing very outspoken rhetoric between the two Chambers.

As late as mid-April, state officials continued to push, with no luck, to meet with Washington officials, who had basically said that whatever happened with LIP was tied to what happened with Medicaid expansion. Vikki Wachino, a high-ranking CMS official said, “Medicaid expansion would reduce uncompensated care in the state, and therefore have an impact on the LIP, which is why the state’s expansion status is an important consideration in our approach regarding extending the LIP beyond June.”  The same week, Scott announced his intent to sue the Federal Government for “unconstitutionally coercing Florida into expanding Medicaid.”

Next we heard talk of the “budget continuation suggestion” as both Chambers rallied their members for the next play. And that play came on April 23 when Speaker Crisafulli sent an offer to President Gardiner of a spending plan that would have used $200 million in state money, and another $300 million in federal funding to offset potential losses to hospitals from LIP. President Gardiner responded with the Senate’s plan to set aside $600 million in recurring funds and use savings from the Senate’s Florida Health Insurance Affordability Exchange Program to fund additional education spending. The House then “raised the ante to the Senate” by offering $600 million in state funds, but not specifying whether they would be recurring or non-recurring state funds.  The Senate volleyed with no way!  And what followed was a drama of the ages when President Gardiner called  Speaker Crisafulli to start discussions on how to orchestrate an ending to the session without any surprises, both knowing that the budget could wait for a special or extended session.  What we all thought would be a good discussion and a compromise turned into chaos when Speaker Crisafulli tried unsuccessfully to reach Gardiner on his cellphone, and instead left a voice message that said basically, “The House is going home.” We can only assume that everyone was in shock and although the Senate stayed another day and a half considering legislation, much of the discussion and debate was on the action taken by the House to “leave the work undone.”

So Where Do We Go From Here?

The special session has been set for June 1-20 and words like, “we can come together to develop a reasonable allocation plan and complete our work to craft a balanced budget,” and “fresh air will clear out lots of cobwebs and everything will be fine.”  Sounds perfect, but the fact remains, the LIP issue is still looming very large and even more of a point of contention since Gov. Scott visited Washington on Tuesday, May 6.  He went there to urge the lawmakers to issue statements, make phone calls and write letters supporting renewal of LIP.  He left the meeting disappointed, except that House Energy and Commerce Committee Chairman Fred Upton of Michigan pledged to hold a hearing this summer on the LIP issue.  Unfortunately, that might be way too late for what needs to happen in the special session.  We will watch and wait. Click HERE to read Governor Scott’s recent press release regarding the results of his travel to Washington.

Much to be learned from Gov. Scott’s Recent Travel to Washington

As we noted above, on May 6, Gov. Rick Scott traveled to Washington to meet with Florida’s Congressional Delegation as well as the head of HHS, Secretary Sylvia Mathews Burwell to ask – Can Florida have its over $2 billion in low income pool funding for hospitals and if so, can Florida have that money without Medicaid strings attached?  The meeting was at 11:30 a.m. and at 11:45 a.m., the Governor’s press office announced that he would be holding a media availability.

During the press availability on Capitol Hill, the Governor expressed his great displeasure with federal officials for their failure to reauthorize Low Income Pool Funding for Florida.  The Governor compared the Obama administration to the crime family featured in the HBO series, “The Sopranos,” and slammed the White House for attempting to “coerce” Florida into expanding Medicaid by cutting off federal money used to treat uninsured hospital patients.

A day earlier, on May 5, the Governor issued an executive order (see article HERE)

(See the order at Executive Order 2015-99 creation of Commission on Healthcare and Hospital Funding) that is aimed at investigating outcomes at taxpayer-supported hospitals; the working group will examine executive compensation and spending on lobbyists, advertising and political campaigns.

This is so important to you as our readers because the fight /debate over Florida’s healthcare financing for low income individuals and others who need access to care has taken over every single policy debate in our state.  Despite a veto-proof majority in the House (81 Republicans to 39 Democrats) and a 12-member majority in the Senate (26 Republicans to 14 Democrats), Florida’s fiscal future is in gridlock as of the release of this newsletter.  The recent regular session started with a $1 billion surplus for legislators to dole out for various causes and projects and the presiding officers of both the House and Senate collegially supported helping  the developmentally disabled, planning for the future of our water resources, expanding the financial resources for our education system and of course, cutting taxes.

But oh what a difference spending a few weeks together in the State Capitol can cause.  Some say the honeymoon is over and the disagreements rose to fever pitch when the House unexpectedly adjourned on Tuesday, April 28, 2015 at 1:16 p.m. and the Senate stayed in session with various speeches about the recalcitrant House.  When the Senate announced they would haul the House into the Supreme Court with a petition (filed by  Senate Democrats) outlining the unconstitutionality of the House’s early adjournment, the House quickly responded by arguing that the 13 Democratic State Senators didn’t have standing to compel the House to return to Tallahassee. Ultimately, the Supreme Court agreed that the House’s early departure was unconstitutional but stopped short of ordering  the House back into legislative action. The House basically said they would not be coming back but would be ready to begin budget negotiations in a Special Session.

Over 1750 bills were filed this year and only 232 made it through the process to be sent to the governor. In my over 30 years on and off in the legislative process, I have never seen anything like this where in regular session the acrimony was so stunning.

As we noted earlier, an agreed upon Special Session is now scheduled to begin on June 1 and let’s hope the time away from Tallahassee for our legislators will allow a resurgence of the collegial spirit between the two chambers and that real, workable solutions to the budget stalemate will be quickly offered up for discussion.  Reach out to your members of the House and Senate and tell them what you think and then let us know what you told them!

Supreme Court Inoculates Citizens against Bad Faith Lawsuits

On Thursday May 14, in a much watched and anticipated court case the Florida Supreme Court ruled that Citizens Property Insurance Corporation cannot be sued for “bad faith” because of the way it handled a claim. In an 11 year court battle, Perdido Sun Condominium Association in Escambia County, who won its case at the appellate level, was denied the right to receive bad faith damages because, as Justice Barbara Patients said, the Legislature has not carved an exception into the law for bad-faith cases. In May 2005, Perdido Sun filed a lawsuit against Citizens after Hurricane Ivan devastated the Florida Panhandle because of a dispute about payment of its claim. The Condominium Association ultimately was awarded more than $5.6 million in that breach-of-contract lawsuit, a form of litigation state law allows against Citizens. In 2009, Perdido Sun filed an additional suit alleging Citizens had acted in bad faith. A circuit judge dismissed the case, but the appeals court sided with the condominium association. Based upon last Thursday’s Supreme Court ruling, Citizens appears insulated against future bad faith actions, unless the Florida Legislature were to amend the Insurance Code removing Citizens’ exemption from bad faith statutes. Please let us know your thoughts about this landmark decision and we are happy to provide the Court’s 11 page ruling.

National Association of Insurance Commissioners Releases Cyber Security Guidelines

On April 17, the National Association of Insurance Commissioners (NAIC) released “Principles for Effective Cybersecurity: Insurance Regulatory Guidance”, guidelines for insurance companies with respect to cyber security. The guidelines were issued in draft form and we expect a healthy debate as these continue to be formulated. The guidelines spell out a dozen principles for regulators to follow when dealing with insurer-related cyber security issues. While the guidelines aren’t the NAIC’s last word on the subject, James Woods, co-leader of Mayer Brown’s Global Insurance Industry Group in New York stated, “The NAIC guiding principles help lay a foundation to prevent the disclosure of personally identifiable information and best positions those in the insurance industry should a breach occur, if action is taken against them.”  We’ll keep an eye out for the final version of the guidelines and share it with you as soon as we have them.   To review the NAIC’s draft guidelines, click HERE.

Gov. Scott Appoints Nine to the Commission on

Healthcare and Hospital Funding May 12

Last month, in the midst of the budget battle between the House and the Senate, Gov. Scott presented the idea of a commission to look at taxpayer-supported hospitals.  On May 12, he created that commission by executive order naming it the Commission on Healthcare and Hospital Funding. The task of the Commission will be to investigate “the role of taxpayer funding for hospitals, insurers and healthcare providers, and the affordability, access and quality of healthcare services they provide to Florida families as a return on taxpayer investment, as well as, the extent to which taxpayer-funded hospitals pay for lobbyists, campaign contributions and advertising.”  The executive order, among other things, highlights a review of executive compensation. Scott’s three-page executive order notes that Florida’s Medicaid program costs $23.6 billion – nearly one-third of the state budget, so this is important work. The nine Floridians appointed to serve represent a diverse group including Carlos Beruff who is a member of the South Florida Water Management District, the Sarasota Manatee Airport Authority and is the President of Medallion Homes. Mr. Beruff will serve as Chair of the Commission. The Governor also named AHCA Secretary Liz Dudek and Surgeon General John Armstrong as co-executive directors of the Commission. The first meeting of the Commission will take place in Tallahassee on May 20th.  To view a copy of Executive Order 15-99 click HERE.

To see a draft outline that will guide the Commission’s investigation on the role of taxpayer funding for hospitals, insurers, and healthcare providers please click HERE. Please note that the outline document is a working draft and will continue to evolve.

Wesley Todd, To Hail and Back: The Four Problems with Hail Claims and the Six Tools You Need to Solve Them…Coming to a Roof Near YOU!

You gotta read this! I recently worked on this article with Wesley Todd, attorney and founder of the CaseGlide claims and litigation software. Like me, he has done a ton of compelling research on the assignment of benefits issue. Also like me, he is focused on the emerging trends: roofers using assignment of benefits to gain significant advantages in claims and litigation over hail claims. I encourage you to take a look at Wesley’s article and let us know if you have any questions. HERE is the article.

Office Issues Directive on Insurer Use of Price Optimization

On Thursday, May 14 the Office of Insurance Regulation issued an Informational Memorandum (OIR-15-04M) to all Property & Casualty Insurers licensed to do business in this state providing direction on the use of price optimization in premium determination. According to the OIR, there is no universally accepted definition of “price optimization”, however, for the purposes of complying with the Memorandum, the Office has stated that price optimization is a process for modifying the insurance premium that would otherwise be charged to an insured or class of insureds in order to maximize insurer retention, profitability, written premium, market share, or any combination of these while remaining within real world constraints.

A copy of the Informational Memorandum can be obtained by clicking HERE. We encourage our readers to familiarize themselves with this Memorandum because violations could result in formal disciplinary action by the OIR. Please contact our office if you have any questions or need assistance in interpreting provisions of the Memorandum.

We Were There So You Didn’t Have To Be

…and We Still Are

So, as we count down 14 days (including today) until the beginning of the special session, we are definitely doing all we can, along with you, to help our representatives prepare to accomplish what needs to be done by June 20.  We hope that they did in fact go home and reflect on those past almost 60 days of hard work and will come back with an attitude of compromise.  We know that differing opinions are a strong human instinct and that isn’t a bad thing.  But we also know that if the parties involved in the disagreement really want to do the right thing, they will try to understand the differences and find a compromise.  Politics should be doing the good work for the folks who live in our great state and country, and as we have said over and over…..sharing a coffee and a quiet corner can get lots of good work accomplished.  Our elected officials have great responsibility in making good policy and we will stand beside them as they reach out across the Capitol rotunda and find compromise.

Say a prayer on June 1 along with us and stay tuned.  We’ll be there!

Lisa and the LMA Team