Title: Pay-for-success Contracts

Summary: Authorizing a state agency to negotiate and enter into a pay-for-success contract with a private entity, subject to authorization in the General Appropriations Act; requiring a contracted private entity to annually report to the appropriate state agency for the length of the contract; authorizing the Department of Health to implement the Nurse-Family Partnership pay-for-success program, etc.

Full Text:
WHEREAS, the Legislature finds that there are numerous prevention-focused social service programs and services for health care which can result in positive impacts and outcomes for individuals and families that use government resources more efficiently, and WHEREAS, because government resources are limited, the state is often unable to fund these critical programs or services, and WHEREAS, new and innovative financing models, like pay-for success initiatives, are emerging throughout the country which authorize nongovernmental entities to invest their funds to provide support for these programs and services, and WHEREAS, such financing models enable governmental entities to shift away from a traditional model of paying service providers for a defined quantity of services to a model where governmental entities only pay upon the successful achievement of agreed-upon outcomes, and WHEREAS, the Legislature further finds that the establishment of a pay-for-success contract program will foster partnerships between the public, private, and philanthropic sectors while also emphasizing accountability in the rendering of services and encouraging the use of sophisticated program evaluations, NOW, THEREFORE, Be It Enacted by the Legislature of the State of Florida: Section 1. Section 287.05715, Florida Statutes, is created to read: 287.05715  Pay-for-success contracts.   (1)   As used in this section, the term: (a)    Pay for-success contract  or  contract  means a contract between a state agency and a private entity to fund a program, as specified in the General Appropriations Act, to address a critical public problem with historically poor outcomes. (b)    Private entity  means a private, not-for-profit organization, or a subsidiary or an affiliate thereof, exempt from federal income taxation pursuant to s. 501(c)(3) of the Internal Revenue Code of 1986 which enters into a pay-for success contract with a state agency and subcontracts with one or more entities to provide the actual services. (c)    Success payment  means the amount paid to a private entity when performance outcome measures established in the pay for-success contract are met, or as otherwise set forth in the pay-for-success contract. (2)   Contingent upon authorization in the General Appropriations Act, a state agency may negotiate and enter into a pay-for-success contract with a private entity. The contract may be initiated in fiscal year, may continue into subsequent fiscal years, and may be paid from appropriations authorized in any of those fiscal years. The state agency shall: (a)   Determine performance outcome measures to be included in the contract in consultation with the private entity and provider. (b)   Determine the data to be included in an annual report filed by a private entity pursuant to subsection (4). (c)   Select an independent, nationally recognized evaluator through competitive solicitation procedures to evaluate the performance outcome measures specified in the contract. (d)   Ensure that subcontractors share participant data and sign an acknowledgment that the data may be shared with an independent evaluator for research and evaluation purposes, and maintain documentation of the required acknowledgements. (3)   A pay-for-success contract must meet all of the following requirements: (a)   Be limited to programs specified in the General Appropriations Act. (b)   Require the private entity to underwrite or secure upfront capital from private funders, such as foundations, banks, businesses, or individuals to fund the services provided under the subcontracts. (c)   Require an independent evaluator to determine whether the specified performance outcomes have been achieved. (d)   Require a success payment, consistent with the General Appropriations Act, if the specified performance outcome measures are achieved. (e)   Prohibit the private entity from receiving or viewing any personally identifiable participant information. (4)   The private entity shall annually report to the state agency for the duration of the contract term. (5)   Funding obtained for a program under this section is not considered a procurement item under s. 287.057. (6)   By December 1, 2017, the department shall prescribe procedures to be used by state agencies in connection with pay for-success contracts which are consistent with this section. Section 2.  Contingent upon authorization in the General Appropriations Act, the Department of Health is authorized to implement the Nurse-Family Partnership pay-for-success contract as an evidence-based practice model or provider. All subsequent models or providers funded under this program are subject to the same requirements provided under s. 287.05715, Florida Statutes, as created by this act. Section 3.  For the 2017-2018 fiscal year, the nonrecurring sum of $850,000 is appropriated from the General Revenue Fund to the Department of Health to support existing infrastructure and implementation of the Nurse-Family Partnership model in designated healthy start coalitions and federally qualified health centers as provided in Specific Appropriation of the 2016-2017 General Appropriations Act in preparation for participation in the pay-for-success contract program established under s. 287.05715, Florida Statutes, as created by this act. Section 4. This act shall take effect July 1, 2017.