Welcome back to Diagnosis, a vertical that focuses on the crossroads of health care policy and politics.

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Florida TaxWatch is again warning that the trust fund covering public worker health benefits is heading toward insolvency, and it’s proposing a solution to address the issue.

A new report from the government watchdog argues that the state could shore up the State Employees’ Health Insurance Trust Fund by expanding access to interdisciplinary pain management, a team-based approach that treats chronic pain through coordinated medical, psychological and rehabilitative care.

The state group health insurance program covers about 171,000 employees and roughly 350,000 Floridians overall. Left unchanged, the fund that pays their health claims could fall $237 million into the red by the end of the current fiscal year and spiral to a nearly $1.7 billion deficit by the end of fiscal year 2029-30.

Florida TaxWatch says that while lawmakers have historically plugged shortfalls with general revenue, the state can’t rely on those bailouts forever. Its January report called for aligning employee premium contributions with other large employers, a change that could save $446 million annually. But FTW President and CEO Dominic Calabro says that alone “does not go far enough.”

This follow-up report focuses on how chronic pain increases program costs. Nationally, one in four adults experiences chronic pain and one in 12 reports “high-impact” chronic pain that limits daily activity. For Florida’s covered workforce — FTW says that “there is no reason to believe that the population covered by the SGIP is any different” — that translates to an estimated 35,000 state employees contending with chronic pain each year, and accounts for $945 million in annual spending.

“Reducing the costs of health care will reduce the likelihood that the Legislature would have to increase premiums paid by state employees, their dependents and retirees,” said Jeff Kottkamp, the organization’s executive vice president and General Counsel.

The report cites outcomes from interdisciplinary programs in Georgia and South Carolina to illustrate the potential savings. Georgia’s State Health Benefit Plan spends about $429 million annually treating chronic pain for 34,000 members out of its total pool of 700,000; South Carolina’s program averages $105 million for just 7,600 members experiencing chronic pain.

Beyond lowering claims, research suggests interdisciplinary programs can reduce hospitalizations and surgery rates by more than half, cut annual medical costs by $260 million across patient groups and help reduce opioid reliance.

Florida TaxWatch recommends that the Department of Management Services include an interdisciplinary pain management pilot program in its plan to address the looming deficit. The report also urges lawmakers to authorize or expand such pilots in 2026 and require that all providers be accredited by the Commission for Accreditation of Rehabilitation Facilities.

If successful, the pilot could provide a new template for bending Florida’s health care cost curve without shifting more of the burden onto employees.

— Fail First —

Sen. Gayle Harrell is again challenging Florida’s “fail first” rules for mental health treatment, re-filing legislation (SB 70) for the 2026 Legislative Session that would expand exceptions to so-called “step therapy” protocols for Medicaid beneficiaries.

Step therapy — a common insurance cost-control practice — requires patients to try lower-cost medications before insurers will cover more expensive prescriptions. Critics, including physicians and mental health advocates, say those policies delay effective treatment for patients with severe psychiatric conditions.

Harrell, a Stuart Republican and longtime health care policy leader, has made similar attempts in recent years. Her 2025 proposal (SB 264) carried a hefty estimated annual price tag of up to $50 million in new Medicaid costs, based on staff analysis of the bill. But she and others argue that short-term savings pale in comparison to the long-term social and economic toll of untreated or undertreated mental illness.

That argument echoes findings from a 2023 analysis by the Regional Economic Consulting Group, which estimated that restrictive step therapy practices cost Florida’s economy $271.5 million each year, including more than $52 million borne by the Medicaid program alone. The study attributed those losses to decreased productivity, higher hospitalization rates and, in severe cases, suicide.

At the time, Harrell’s Senate version and a House companion, introduced by Tampa Republican Rep. Karen Gonzalez Pittman, drew broad bipartisan support and backing from business and patient groups, such as reThink Brain Health Florida and the Florida State Hispanic Chamber of Commerce.

— Get well soon —

Rep. Felicia Robinson is pushing new safety and licensing standards for Florida’s growing number of postsurgical recovery centers — many of which cater to cosmetic surgery patients and operate with little direct oversight.

Her bill (HB 81), titled the “Postsurgical Recovery Home Safety Act,” would require such facilities to be licensed through the Agency for Health Care Administration and subject to regular inspections, background checks and insurance verification. Operators would also be mandated to maintain 24-hour licensed nursing coverage, meet minimum staffing ratios, and comply with stringent facility safety standards.

The legislation follows reports of unregulated “recovery homes” springing up across South Florida, particularly in the vicinity of Miami’s booming cosmetic surgery industry. Unlike assisted living facilities or other care settings, postsurgical recovery homes aren’t clearly defined under current law, leaving a regulatory gap that has drawn increasing concern from health officials and lawmakers.

Under Robinson’s proposal, advertising or operating an unlicensed recovery home would result in fines, license suspension or revocation and, in some cases, felony penalties. AHCA would be empowered to establish and enforce detailed rules governing licensing, inspections and staff training.

— Innovation pays —

The Florida Department of Health has opened applications for its new Health Care Innovation Loan Program, a $50 million annual initiative aimed at transforming the delivery of care across the state.

Created under 2024’s Live Healthy legislative package (SB 7018), the revolving loan fund will support hospitals, nursing homes, ambulatory centers and educational institutions that develop or implement new technologies and models to improve access, efficiency, and patient outcomes.

The Health Care Innovation Council oversees the project, a public advisory body chaired by the Lieutenant Governor and composed of health, technology, finance and advocacy experts. The Council will review applications, identify best practices, and guide project selection with a focus on rural hospitals and nonprofit providers serving Medicaid patients.

“The launch of the Health Care Innovation Revolving Loan program represents yet another significant step in Florida’s efforts to foster a culture of innovation within Florida’s health care community,” Lt. Gov. Jay Collins said in a news release. “As the Council Chair and newest member, I am honored to work with the Council to support health care innovation by implementing solutions that address the evolving needs of our state’s health care system.”

Surgeon General Joseph Ladapo added, “This loan program reflects Florida’s commitment to patient-centered innovation and medical choice. We are investing in the lives of Floridians by supporting solutions that improve care delivery and outcomes.”

Loans carry a maximum 1% interest rate and will be distributed annually through 2034–35. Projects eligible for funding include workforce training programs, new service delivery models, and technology deployments designed to reduce costs and enhance the state’s health care infrastructure.

The initiative’s future was briefly in doubt earlier this year. In March, a House budget panel proposed eliminating both the 10-year, $500 million program and the 15-member Council that oversees it — a move Harrell told the Florida Phoenix left her “not happy” and “seriously concerned.” Lawmakers ultimately backed off the proposal, allowing the Department to proceed with implementation.

— ROSTER —

Seven Oaks Health — the parent company of Big Bend Hospice — has named Norman Pasley as its new Chief Nursing Officer, tapping the longtime Tallahassee Memorial HealthCare leader to oversee clinical operations across the eight-county Big Bend region.

Pasley brings more than three decades of clinical and administrative experience to the role, including 20 years at TMH, where he served in several senior positions. His leadership helped TMH’s Rehabilitation Center earn a five-star rating from the Centers for Medicare & Medicaid Services and guided its Home Health program to a 3.5-star rating from CMS. Most recently, he managed multiple service lines, including home health and outpatient neurology, where the clinic served between 70 and 90 patients daily.

A U.S. Army veteran, Pasley spent seven years as an active-duty combat medic and licensed practical nurse, concluding his service at Walter Reed Army Medical Center. He holds master’s degrees in nursing and business administration and is pursuing a Doctor of Nursing Practice in executive health care leadership at Florida State University.

“Norman’s exceptional track record at TMH and his deep commitment to clinical excellence make him the ideal leader to guide clinical operations at Big Bend Hospice,” said Bill Wertman, CEO of Seven Oaks Health and Big Bend Hospice. “Our partnership with TMH has always been essential to providing compassionate, seamless care in our community, and Norman’s appointment strengthens that bond.”

In his new position, Pasley will lead clinical services for Big Bend Hospice, advancing Seven Oaks Health’s mission to deliver high-quality, compassionate hospice and palliative care while strengthening collaboration with community partners throughout the Big Bend.

— ICYMI —

“Subpoenas are flying over Hope Florida scandal with grand jury reportedly imminent” via Gabrielle Russon of Florida Politics — Subpoenas are being issued to Gov. Ron DeSantis’ staffers over the Hope Florida spending scandal. Former acting Attorney General John Guard and longtime staffer Kate Strickland are set to receive subpoenas. James Holton, the former Chair of St. Petersburg-based Save Our Society from Drugs, one of the nonprofits that received millions from the Hope Florida Foundation, was also subpoenaed, according to an associate of Holton. The subpoenas come as prosecutors in Tallahassee are convening a grand jury to meet during the week of Oct. 13, according to the Miami Herald/Tampa Bay Times.

“‘Tristin Murphy Act,’ designed to protect mentally ill in jails, goes into effect” via Drew Dixon of Florida Politics — An emotional journey for legislation designed to protect incarcerated individuals suffering mental health issues enters its final phase as it takes effect Oct. 1. The measure is named after Tristin Murphy, who committed suicide in a Florida prison in 2021. The legislation calls for the state to establish probation conditions for defendants with mental illness, sets requirements for work assignments for those detainees and expands training options under the criminal justice, mental health and substance abuse grant programs. Sen. Jennifer Bradley, a Fleming Island Republican, crafted the Senate’s original bill (SB 168). Senate President Ben Albritton, a Wauchula Republican, personally championed the Tristin Murphy Act. When DeSantis finally approved it, he became emotional.

“Commission votes 3-2 to negotiate ‘payment structure’ and sale of TMH to FSU” via Elena Barrera of the Tallahassee Democrat — The Tallahassee City Commission met this morning to discuss the future of Tallahassee Memorial HealthCare. After months of largely being kept in the dark, Commissioners are finally learning about the deal TMH has worked out with Florida State University as a step toward creating an academic medical center in Tallahassee. The non-binding agreement was announced on Sept. 16 and would merge TMH into FSU Health, with the university taking control of all the city-owned assets of the hospital.

“Hospitals challenge transplant proposal” via Jim Saunders of News Service of Florida — Three major hospital systems have challenged a new state proposal about approving organ-transplant programs, alleging it does not include adequate safeguards for quality of care. Tampa General Hospital, UF Health Shands Hospital in Gainesville and Jackson Memorial Hospital in Miami filed the challenges after the Florida Agency for Health Care Administration in August issued a proposed rule for transplant programs. The challenges, filed this month at the state Division of Administrative Hearings, came after years of debate and disputes about approving transplant programs. Tampa General, UF Health Shands and Jackson provide procedures such as heart, liver, lung and kidney transplants. The proposed rule, in part, would revise standards for hospitals that want to begin providing such procedures. — and continue providing them after getting initial approvals.

 — RULES —

The Agency for Health Care Administration rule regarding waivers for individual budgeting for developmental disabilities services (59G-13.081) goes into effect Oct. 12. More here.

AHCA’s Division for Health Facility and Agency Licensing has proposed amending Rule 59A-4.200 regarding the requirements for obtaining a Gold Seal Award to update application requirements and termination criteria. More here.

The Board of Orthotists and Prosthetists has issued a final rule (64B14-4.002) on initial licensure and registration requirements that went into effect Oct. 6. More here.

 — PENCIL IT IN —

Oct. 7

9 a.m. — The Senate Health Policy Committee will hear presentations from the Agency for Health Care Administration and the Department of Health on the implementation of recently enacted health care laws. Room 412, Knott Building.

1:30 p.m. — The Health Professions & Programs Subcommittee will hear an implementation briefing on legislation passed during the 2024 and 2025 Sessions from the Department of Health, Room 102, House Office Building.

Oct. 8

10:30 a.m. — The House Health Care Facilities & Systems Subcommittee will receive implementation briefings on HB 885 (2024) Coverage for Biomarker Testing and SB 2514 (2025) related to biomarker testing. Room 404, House Office Building.

Oct. 14

9 a.m. — The Senate Health Policy Committee is tentatively scheduled to meet at 9 a.m. in Room 412 of the Knott Building. The notice deadline is 2:30 p.m. on Oct. 7.

3:30 p.m. — The Health Care Facilities & Systems Subcommittee is tentatively scheduled to meet at 3:30 p.m. in Room 404 of the House Office Building. The notice deadline is 5 p.m. on Oct. 7.

Oct. 15

Happy birthday to Rep. Josie Tomkow!

8 a.m. — The House Health Care Budget Subcommittee is tentatively scheduled to meet in Room 314 of the House Office Building. The notice deadline is 5 p.m. on Oct. 8.

9 a.m. — The Senate Appropriations Committee on Health and Human Services is tentatively scheduled to meet in Room 412 of the Knott Building. The notice deadline is 2:30 p.m. on Oct. 8.

11:30 a.m. — The House Health Professions & Programs Subcommittee is tentatively scheduled to meet in Room 102 of the House Office Building. The notice deadline is 5 p.m. on Oct. 8.

Oct. 16

Happy birthday to Reps. Lisa Dunkley and Meg Weinberger!

Oct. 20

5 p.m. — Rep. Anna V. Eskamani is hosting a town hall on vaccines and public health at the Beardall Senior Center, 800 Delaney Ave. #3897 in Orlando. In-person attendees are required to RSVP; the event will also be livestreamed on Facebook.