The Florida Senate BILL ANALYSIS AND FISCAL IMPACT STATEMENT (This document is based on the provisions contained in the legislation as of the latest date listed below.) Prepared By: The Professional Staff of the Appropriations Subcommittee on Health and Human Services BILL: SB 1770 INTRODUCER: Senator Book SUBJECT: Donor Human Milk Bank Services DATE: February 15, 2022 ANALYST STAFF DIRECTOR REFERENCE ACTION 1. Smith Brown HP Favorable 2. McKnight Money AHS Pre-meeting 3. AP I. Summary: SB 1770 authorizes the Florida Medicaid program to pay for donor human milk bank services as an optional covered service in the fee-for service delivery system and requires health plans participating in the Statewide Medicaid Managed Care program to cover donor human milk bank services. The bill specifies health conditions for which human donor milk services would be medically necessary and provides requirements that milk banks must meet in order to qualify as Medicaid providers. The bill establishes that Medicaid’s reimbursement rates for donor human milk cannot be less than the milk bank’s cost to procure it plus reasonable processing and handling fees. The bill has a significant negative fiscal impact to the Florida Medicaid program. See Section V of this analysis. The bill takes effect on July 1, 2022. II. Present Situation: Donor Human Breast Milk According to the federal Centers for Disease Control and Prevention (CDC), breast milk is the best source of nutrition for most infants. 1 Ideally, an infant should be fed his or her own mother’s breast milk because nutritional components within the mother’s breast milk change to meet the infant’s needs as he or she ages. 2 Mothers of infants born prematurely are sometimes unable to produce milk because their bodies are not ready, they too are sick, or they are affected by the 1 Centers for Disease Control and Prevention, Frequently Asked Questions (FAQ) (Aug. 10, 2021) available at https://www.cdc.gov/breastfeeding/faq/index.htm (last visited Jan. 22, 2022). 2 Id. REVISED: BILL: SB 1770 Page 2 stress of having their premature infant in intensive care. 3 Breast milk donated by nursing mothers provides an option for infants who are unable to receive adequate nutrition from their mother’s own milk or from commercial infant formulas. Very few illnesses are transmitted via breast milk, even in cases where someone else’s breast milk is given to another child. 4 The American Academy of Pediatrics notes that human donor breast milk can be effective for high-risk and very low birthweight infants if the child’s mother is unable to provide enough milk. 5 Additionally, the World Health Organization (WHO) indicates that human donor breast milk can prevent some digestive disorders but specifies that any donor milk must come from safe facilities and is not recommended for sick infants or those weighing less than 1000 grams. 6, 7 In the absence of a mother’s milk, the WHO notes that standard formula is also an acceptable alternative. 8 Currently, the federal Food and Drug Administration (FDA) considers human donor breast milk a “food” source rather than a medical product. The FDA does not have established guidelines or standards for human donor breast milk or milk banks, although it does recommend consulting with a health care provider before feeding it to an infant. 9 Additionally, the FDA recommends that the caregiver only feed an infant milk from a source that has screened its donors and has taken precautions to ensure milk safety, such as a milk bank. 10 The Human Milk Banking Association of North America (HMBANA) Founded in 1985, the Human Milk Banking Association of North America (HMBANA) serves as the professional organization that accredits nonprofit milk banks in the United States and Canada. 11 The HMBANA is funded by membership fees from its 31 member nonprofit milk banks, foundation funds, and individual donors. 12 There is one HMBANA-accredited location in Florida – the Mother’s Milk Bank of Florida located in Orlando. 13 The Mother’s Milk Bank of 3 Naseem S. Miller, Bill aims to get Medicaid coverage for donor breast milk: 'Something like this makes smart policy', Orlando Sentinel (Mar. 15, 2019) available at https://www.orlandosentinel.com/health/os-ne-mothers-milk-bank-bill- 20190315-story.html (last visited Jan. 22, 2022). 4 Centers for Disease Control and Prevention, Frequently Asked Questions (FAQ) (Aug. 10, 2021) available at https://www.cdc.gov/breastfeeding/faq/index.htm (last visited Jan. 22, 2022). 5 American Academy of Pediatrics Committee on Nutrition, Section on Breastfeeding and Committee on Fetus and Newborn, Policy Statement, Donor Human Milk for the High-Risk Infant: Preparation, Safety, and Usage Options in the United States (Jan. 2017) available at https://publications.aap.org/pediatrics/article/139/1/e20163440/52000/Donor-Human-Milk-for-the- High-Risk-Infant (last visited Jan. 22, 2022). 6 Agency for Health Care Administration, Senate Bill 240 Fiscal Analysis (Dec. 28, 2020) (on file with Senate Committee on Health Policy). 7 World Health Organization, Recommendations for the Feeding of low-birth-weight infants in low- and middle-income countries, available at https://www.who.int/elena/titles/full_recommendations/feeding_lbw/en/ (last visited Jan. 22, 2022). 8 Id. 9 U.S. Food and Drug Administration, Use of Donor Human Milk (Mar. 22, 2018) available at https://www.fda.gov/science- research/pediatrics/use-donor-human-milk (last visited Jan. 22, 2022). 10 Id. 11 Human Milk Banking Association of North America, About Us, available at https://www.hmbana.org/about-us/ (last visited Jan. 22, 2022). 12 Id. 13 Id. BILL: SB 1770 Page 3 Florida supplies pasteurized donor human milk to 38 of the 68 14 neonatal intensive care units (NICUs) in Florida, as well as to medically fragile babies at home. 15 HMBANA Safety Guidelines 16 The HMBANA reports that its member milk banks follow guidelines that were developed by the HMBANA in consultation with the CDC and the FDA. The FDA reports that it has not been involved in establishing these voluntary guidelines. 17 According to the AHCA, no federal or state regulations are in place to oversee the Mother’s Milk Bank of Florida. 18 Under the HMBANA’s guidelines, before milk is collected, each donor is strictly screened for medical and lifestyle risk factors and serum is screened for HIV, HTLV, syphilis, and Hepatitis B and C. 19 After the milk is collected, it is mixed and pooled so that each pool includes human milk from three to five donors. This is done to ensure an even distribution of nutritional components. Bottles are filled with the pooled milk and then the milk is pasteurized to eliminate potentially harmful bacteria while retaining the majority of the milk’s beneficial nutrients. Milk samples are taken during the pasteurization process and cultured to check for bacterial growth. Any contaminated milk is discarded. No milk is dispensed after pasteurization until a culture is found to be negative for bacteriological growth. After pasteurization, the milk is frozen and shipped to hospitals and outpatient families. AHCA Report on Donor Human Milk 20 In 2021, the Legislature required the Agency for Health Care Administration (AHCA), in consultation with the Department of Health (DOH), to study and report on the use of donor human milk as a supplement to newborn care and health specific to newborn infants born prematurely and hospitalized within the NICU. 21 On November 1, 2021, the report was published. The study reports that a survey of Florida NICUs in 2021 determined that 86 percent of them use pasteurized donor human milk (PDHM). The most common reasons for administering PDHM were prematurity (92 percent), birth weight threshold (76 percent), and medical necessity (71 percent) determined by the attending physician based on diagnosis and symptoms. 14 Naseem S. Miller, Bill aims to get Medicaid coverage for donor breast milk: 'Something like this makes smart policy', Orlando Sentinel (Mar. 15, 2019) available at https://www.orlandosentinel.com/health/os-ne-mothers-milk-bank-bill- 20190315-story.html (last visited Jan. 22, 2022). 15 Mothers’ Milk Bank of Florida, Covid-19 Update, available at https://milkbankofflorida.org/covid-19-update/ (last visited Jan. 22, 2022). 16 Human Milk Banking Association of North America, Milk Processing and Safety, available at https://www.hmbana.org/our-work/milk-processing-safety.html (last visited Jan. 22, 2022). 17 U.S. Food and Drug Administration, Use of Donor Human Milk (Mar. 22, 2018) available at https://www.fda.gov/science- research/pediatrics/use-donor-human-milk (last visited Jan. 22, 2022). 18 Agency for Health Care Administration, Senate Bill 240 Fiscal Analysis (Dec. 28, 2020) (on file with Senate Committee on Health Policy). 19 Human Milk Banking Association of North America, Milk Banking and COVID-19 (Apr. 2, 2020) available at https://www.hmbana.org/file_download/inline/a04ca2a1-b32a-4c2e-9375-44b37270cfbd (last visited Jan. 22, 2022). 20 Agency for Health Care Administration, Donor Human Milk Legislative Report (Nov. 1, 2021) (on file with Senate Committee on Health Policy). 21 Chapter 2021-36, s. 3, Laws of Fla. BILL: SB 1770 Page 4 The report includes recommendations of best practices for the oversight of milk banks and their staff, operating procedures, standards for donor screening, and recommendations for the collection, storage, handling, processing, and dispending of donor human milk. In addition, the report addresses the need for high-quality clinical studies to quantify the efficacy and cost- effectiveness of donor human milk derivatives. The AHCA report also conducted an economic analysis on the impact of inpatient feeding of PDHM. While PDHM use is not currently reimbursable by the Florida Medicaid program or commercial health insurance companies, some Florida hospitals have earned grant funding or donations to support the provision of PDHM, and most large facilities using PDHM have chosen to do so knowing that the cost will not be reimbursed. These facilities balance the direct costs of PDHM use with better outcomes, in hopes that improved outcomes will ultimately decrease total cost of care by reducing risk and severity of necrotizing enterocolitis (NEC), a severe and lethal complication affecting premature and low birth weight infants, and other illnesses associated with prematurity. In Florida, approximately 3,500 infants are born with a very low birth weight (VLBW) (birth weight less than 1,500 grams or 3.5 pounds) annually. The AHCA report found that if Florida NICUs were to stop using PDHM, there would be a 5 percent increase in the number NEC cases from the 2,755 VLBW infants born annually in Florida. As illustrated in the chart below, when comparing costs of providing PDHM ($1.1 million) to estimated costs of not using PDHM ($5.2 million), there is an estimated $4.1 million cost avoidance statewide among all payers. The report finds that the avoided cost is largely predicated on the management of NEC. This cost-avoidance is among all payers; however, it is particularly relevant to the Florida Medicaid program given its coverage of over 50 percent of births in the State of Florida. Furthermore, the report states that this cost-avoidance with PDHM is an underestimate, as it does not factor in additional benefits after the birth hospitalization with respect to readmissions, home nursing, and emergency room visits. Florida Medicaid Program The Medicaid program is a joint federal-state program that finances health coverage for individuals, including eligible low-income adults, children, pregnant women, elderly adults and BILL: SB 1770 Page 5 persons with disabilities. 22 The Centers for Medicare and Medicaid Services (CMS) within the U.S. Department of Health and Human Services (HHS) is responsible for administering the federal Medicaid program. Florida Medicaid is the health care safety net for low-income Floridians. Florida’s program is administered by the AHCA and financed through state and federal funds. 23 A Medicaid state plan is an agreement between a state and the federal government describing how the state administers its Medicaid programs. The state plan establishes groups of individuals covered under the Medicaid program, services that are provided, payment methodologies, and other administrative and organizational requirements. In order to participate in Medicaid, federal law requires states to cover certain population groups (mandatory eligibility groups) and gives states the flexibility to cover other population groups (optional eligibility groups). States set individual eligibility criteria within federal minimum standards. The AHCA may seek an amendment to the state plan as necessary to comply with federal or state laws or to implement program changes. States send state plan amendments to the federal CMS for review and approval. 24 Medicaid enrollees generally receive benefits through one of two service-delivery systems: fee- for-service (FFS) or managed care. Under FFS, health care providers are paid by the state Medicaid program for each service provided to a Medicaid enrollee. Under managed care, the AHCA contracts with private managed care plans for the coordination and payment of services for Medicaid enrollees. The state pays the managed care plans a capitation payment, or fixed monthly payment, per recipient enrolled in the managed care plan. In Florida, the majority of Medicaid recipients receive their services through a managed care plan contracted with the AHCA under the Statewide Medicaid Managed Care (SMMC) program. 25 The SMMC program has two components, the Managed Medical Assistance (MMA) program and the Long-Term Care program. Florida’s SMMC offers a health care package covering both acute and long-term care. 26 The SMMC benefits are authorized by federal authority and are specifically required in ss. 409.973 and 409.98, F.S. The AHCA contracts with managed care plans on a regional basis to provide services to eligible recipients. The MMA program, which covers most medical and acute care services for managed care plan enrollees, was fully implemented in August 2014, and was re-procured for a period beginning December 2018 and ending in 2023. 27 In 2020, the Legislature extended the allowable term of the SMMC contracts from five to six years. 28 As a result, the AHCA’s current contracts will end in December 2024. 22 Medicaid.gov, Medicaid, available at https://www.medicaid.gov/medicaid/index.html (last visited Jan. 22, 2022). 23 Section 20.42, F.S. 24 Medicaid.gov, Medicaid State Plan Amendments, available at https://www.medicaid.gov/medicaid/medicaid-state-plan- amendments/index.html (last visited Jan. 22, 2022). 25 Id. 26 Id. 27 Id. 28 Chapter 2020-156, s. 44, Laws of Fla. BILL: SB 1770 Page 6 Medical Necessity Requirements Florida Medicaid covers services that are medically necessary, as defined in its Medicaid state plan pursuant to Rule 59G-1.010 of the Florida Administrative Code. The AHCA routinely reviews new health services, products, and supplies to assess potential coverage under Florida Medicaid which depends on whether that service, product, or supply is medically necessary. 29 Care, goods, and services are deemed medically necessary if they are: Necessary to protect life, to prevent significant illness or significant disability, or to alleviate severe pain; Individualized, specific, and consistent with symptoms or confirmed diagnosis of the illness or injury under treatment, and not in excess of the patient’s needs; Consistent with generally accepted professional medical standards as determined by the Medicaid program, and not experimental or investigational; Reflective of the level of service that can be safely furnished, and for which no equally effective and more conservative or less costly treatment is available statewide; and Furnished in a manner not primarily intended for the convenience of the recipient, the recipient’s caretaker, or the provider. 30 Under federal law, Medicaid states must have a process in place to pay for services that are medically necessary but are not covered for recipients under the age of 21. 31 This is often referred to as the federal Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) guidelines. Health plans participating in the SMMC program must also adhere to EPSDT guidelines. 32 Coverage of Nutritional Supplements for Infants in Florida 33 Florida Medicaid covers prescription enteral and parenteral commercial formulas under the Durable Medical Equipment and Supplies benefit, when medically necessary. Commercial formula would be considered medically necessary for infants diagnosed with conditions such as metabolic disorders or who are unable to accept nutrition orally. In addition, if an infant needs commercial formula during an inpatient hospital stay, it would be covered as part of the all- inclusive payment to the hospital, just as needed food or medicine would be covered for a patient of any age. The Women, Infants, and Children (WIC) program is a federally funded program that provides nutritional support for women and children. Administered by the DOH, WIC provides food assistance such as milk and infant and toddler formulas. If a child is not able to consume a contract formula, 34 WIC can make exceptions and provide non-contract formulas with 29 Agency for Health Care Administration, Senate Bill 240 Fiscal Analysis (Dec. 28, 2020) (on file with Senate Committee on Health Policy). 30 59G-1.010, F.A.C. 31 42 C.F.R. s. 441 Subpart B. 32 Id. 33 Supra note 30. 34 Commercial infant formula manufacturers provide substantial discounts, in the form of rebates, to state WIC programs in return for the exclusive right to provide their products to the state’s WIC participants. Commercial formulas whose manufacturers have those exclusive rights are considered “contract formulas.” See Steven Carlson, Robert Greenstein, and Zoe Neuberger, Center on Budget and Policy Priorities, WIC’s Competitive Bidding Process for Infant Formula Is Highly BILL: SB 1770 Page 7 appropriate medical documentation. Contract formulas currently available through WIC include: Enfamil, Enfagrow, Gerber Good Start Soy 1, and Gerber Good Start Soy 3. WIC does not provide human donor breast milk to program participants. Florida Medicaid does not reimburse separately for human donor breast milk or contract formulas covered through WIC. If an infant needed human donor breast milk outside of the hospital setting, a request would need to be made through the EPSDT coverage process. The AHCA reports that it is not aware of any such requests being made for infants in fee-for-service or Medicaid managed care. 35 Most private insurers do not cover donor human breast milk, which costs approximately $4 an ounce and can add up to over $1,000 per month per infant. 36 Through donations and fundraisers, the Mother’s Milk Bank of Florida provides grants to low-income families to make donor human breast milk more affordable. 37 Medicaid Coverage of Human Donor Breast Milk in Other States Currently nine states (California, Connecticut, Iowa, Kansas, Missouri, New Jersey, New York, Texas, and Utah) and the District of Columbia, provide coverage for human donor milk under their state Medicaid programs. 38 State Medicaid Coverage Policies for Donor Human Milk 39 State/Territory Description of Coverage HMBANA Bank in State California Coverage when mother’s own milk is insufficient, or infant cannot breastfeed, or contraindication to formula. Cover for inpatient and outpatient. Yes Connecticut Coverage when medically necessary, infant unable to breastfeed, or mother unable to produce insufficient milk. No Iowa Coverage for infants in the inpatient setting. Yes Kansas Coverage for infants under 3 months of age who are critically ill and have medical necessity. Coverage for NICU only. Prior authorization required. No Missouri Coverage for infants under 3 months of age who are critically ill and have medical necessity for human milk diet. Coverage for NICU only. Yes Cost-Effective (Feb. 17, 2017) available at https://www.cbpp.org/sites/default/files/atoms/files/6-26-15fa.pdf (last viewed Mar. 4, 2021). 35 Agency for Health Care Administration, Senate Bill 240 Fiscal Analysis (Dec. 28, 2020) (on file with Senate Committee on Health Policy). 36 Naseem S. Miller, Bill aims to get Medicaid coverage for donor breast milk: 'Something like this makes smart policy', Orlando Sentinel (Mar. 15, 2019) available at https://www.orlandosentinel.com/health/os-ne-mothers-milk-bank-bill- 20190315-story.html (last visited Jan. 22, 2022). 37 Id. 38 Agency for Health Care Administration, Donor Human Milk Legislative Report (Nov. 1, 2021) (on file with Senate Committee on Health Policy). 39 Id. BILL: SB 1770 Page 8 State Medicaid Coverage Policies for Donor Human Milk 40 New Jersey Coverage for infants under 6 months of age, infant unable to breastfeed, mother unable to produce sufficient milk, infant body weight below healthy level, or medically necessary. Coverage for inpatient and outpatient. No New York Coverage for infants with birth weights less than 1,500 grams, infant unable to breastfeed, mother unable to produce sufficient milk, or medical necessity. Coverage for inpatient. Prior authorization required. Yes Texas Coverage for inpatient infants at or under six months of age with medical necessity. Coverage for outpatient infants at or under 11 months of age but may be extended through 20 years with inability to tolerate formula and medical necessity. Prior authorization for outpatient. Subsequent reauthorization for both inpatient and outpatient. Yes Utah Coverage for infants under 11 months of age with medical necessity. Cover for outpatient only. Prior authorization with reauthorization. Yes District of Columbia Coverage of infants under 11 months of age who are unable to tolerate formula and have medical necessity. Coverage for inpatient and outpatient. Prior authorization and reauthorization required. No III. Effect of Proposed Changes: Section 1 amends s. 409.906, F.S., to authorize the Agency for Health Care Administration (AHCA) to reimburse through Florida Medicaid for the cost of donor human milk for home and inpatient use for an infant who: Is medially or physically unable to receive maternal breast milk or whose mother medically or physically unable to produce maternal breast milk or breastfeed; and Has a documented birth weight of 1,500 grams or less; has a congenital or acquired intestinal condition and is at high risk for developing a feeding intolerance, necrotizing enterocolitis, or an infection; or otherwise requires nourishment by breast milk. Because a service covered under Florida Medicaid is only considered to be medically necessary if no equally effective and more conservative or less costly treatment is available, a provider seeking to be reimbursed under the Medicaid program would need to demonstrate that the infant cannot tolerate or has medical contra-indications for commercial formula (available through programs like the Women, Infants, and Children (WIC) program or prescription formulas already covered under Medicaid) to the extent that these options are more cost effective. 40 Agency for Health Care Administration, Donor Human Milk Legislative Report (Nov. 1, 2021) (on file with Senate Committee on Health Policy). BILL: SB 1770 Page 9 The bill requires the donor human milk to be procured from a nonprofit milk bank certified by the Human Milk Banking Association of North America (HMBANA). For a milk bank to procure donor human milk, it would need to enroll as a Durable Medical Equipment provider under Florida Medicaid and to comply with provider requirements such as providing a surety bond of $50,000 pursuant to s. 409.912(8)(b), F.S. The bill specifies that coverage for donor human milk may not be for less than the reasonable cost of the milk procured from a HMBANA-certified milk bank, plus reasonable processing and handling fees. Section 2 amends s. 409.908, F.S., to authorize Florida Medicaid to pay for donor human milk bank services as an optional covered service in the fee-for service delivery system. Section 3 amends s. 409.973, F.S., to require health plans participating in the Statewide Medicaid Managed Care program to cover donor human milk bank services. Section 4 provides an effective date of July 1, 2022. IV. Constitutional Issues: A. Municipality/County Mandates Restrictions: None. B. Public Records/Open Meetings Issues: None. C. Trust Funds Restrictions: None. D. State Tax or Fee Increases: None. E. Other Constitutional Issues: None. V. Fiscal Impact Statement: A. Tax/Fee Issues: None. BILL: SB 1770 Page 10 B. Private Sector Impact: For a milk bank to procure donor human milk, it would need to enroll as a Durable Medical Equipment provider under Florida Medicaid and to comply with provider requirements such as providing a surety bond of $50,000 pursuant to s. 409.912(8)(b), F.S. In order to be reimbursed for donor human milk provided to infants enrolled in the Statewide Medicaid Managed Care (SMMC) program, milk banks would need to contract with the health plans. C. Government Sector Impact 41 : Because human donor milk is not currently a covered service, SB 1770 may have a significant negative fiscal impact on the Florida Medicaid program. It is unknown how many infants would satisfy the health conditions specified in the bill and meet Medicaid’s medical necessity criteria. Therefore, the AHCA projected a fiscal impact focused on a percentage of infants with a very low birth weight (VLBW) of 1,500 grams or less in a neonatal intensive care unit (NICU). In 2021, the AHCA provided a fiscal estimate for SB 240 which was at the time, identical to this bill with an effective date of July 1, 2021. In Fiscal Year 2019-2020, there were 2,494 infants with a VLBW of 1,500 grams or less in a NICU covered by Medicaid. The AHCA’s analysis assumes that 47.60 percent of these infants will receive donor milk for the first six months of life. (These infants may be eligible to receive donor milk for up to 12 months.) The 47.60 percent figure is based on the count for breastfed babies in Florida who are not breastfeeding at six months according to information from the Centers for Disease Control and Prevention. Based on those assumptions, the AHCA’s estimated cost to the Medicaid program in Fiscal Year 2022-2023 is a recurring $29.8 million, of which $11.8 is general revenue. Taking into consideration the cost comparison of providing donor human milk to estimated costs of not using donor human as reported in the AHCA’s Donor Human Milk Legislative Report to the Florida Legislature and highlighted in Section 2 of this bill analysis, there is a possible cost avoidance statewide among all payers particularly relevant to the Florida Medicaid program, given its coverage of over 50 percent of births in the State of Florida. Furthermore, the AHCA report states that this cost-avoidance with donor human milk is an underestimate, as it does not factor in additional benefits after the birth hospitalization with respect to readmissions, home nursing, and emergency room visits. Without additional data on the additional benefits, any potential savings that would offset costs realized from a policy change are indeterminate at this time. The changes in this bill would also require the AHCA to update its rules, fee schedules, and contracts with the SMMC health plans. These actions are part of the AHCA’s routine 41 Agency for Health Care Administration, Senate Bill 240 Fiscal Analysis (Dec. 28, 2020) (on file with Senate Committee on Health Policy). BILL: SB 1770 Page 11 business practices and the ACHA reports that this can be accomplished using existing resources. VI. Technical Deficiencies: None. VII. Related Issues: None. VIII. Statutes Affected: This bill substantially amends the following sections of the Florida Statutes: 409.906, 409.908, and 409.973. IX. Additional Information: A. Committee Substitute – Statement of Changes: (Summarizing differences between the Committee Substitute and the prior version of the bill.) None. B. Amendments: None. This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.