STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MARCUS E. PAUL, )

)

Petitioner, )

)

vs. ) CASE NO. 88-1451

) DEPARTMENT OF ADMINISTRATION, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Pensacola, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, Diane Cleavinger, on December 13, 1988. The parties are represented as follows:

For Petitioner: Julian Harris, Jr., Esquire

901 North Reus Street Post Office Box 2807 Pensacola, Florida 32513

For Respondent: Augustus D. Aikens, Jr., Esquire General Counsel

Department of Administration

435 Carlton Building Tallahassee, Florida 32399-1550

The issue addressed in this proceeding is whether Petitioner owes Respondent $1,000 for overpayment of Petitioner's health insurance claim.

Respondent called two witnesses and introduced three exhibits. Petitioner testified in his own behalf and introduced three exhibits. Petitioner and Respondent filed their proposed recommended orders on March 13, 1989 and March 16, 1989, respectively. The parties' proposed findings of fact have been considered and utilized in the preparation of this Recommended Order except where such proposals were not supported by the weight of the evidence or were immaterial, cumulative or subordinate. Specific rulings on the parties' proposed findings of fact are contained in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Petitioner, Marcus Paul, was employed part-time as a dentist by the State of Florida, Department of Health and Rehabilitative Services, Pensacola, Florida. As part of his employment Dr. Paul was enrolled in the State's Employee Health Insurance Plan.

   
   

2. The State's Health Plan is a self-insurance plan. Blue Cross and Blue Shield (BCBS) of Florida is the State's agent for administering the Health Plan

   and is initially responsible for timely and promptly investigating and paying legitimate health claims.

   
   

3. Under the State's Health Plan an employee is responsible for the first

   $1,000 of covered expenses. The Plan pays the balance of any covered expenses incurred by the employee. Covered expenses are defined in the plan. Such expenses are basically limited to reasonably necessary medical treatment or care of some kind.

   
   

4. Dr. Paul also carried a direct pay health insurance policy with Blue Cross and Blue Shield of Philadelphia, Pennsylvania. The Pennsylvania policy was a non-coordinating policy with the State's Health Plan. In essence, the Pennsylvania policy paid directly to its insured, Dr. Paul, regardless of the benefits paid by the State's Plan and the State's Plan benefits are not reduced by the Pennsylvania policy's payment of health benefits.

   
   

5. Around September 15, 1984, Dr. Paul suffered a pulmonary embolism. He was hospitalized for his condition from September 15, 1984 to September 30, 1984. On admission, the hospital obtained Dr. Paul's health insurance information and had him sign the usual authorizations to allow the hospital to file his insurance claim.

   
   

6. The total hospital charge resulting from Petitioner's hospitalization was $10,873.01 of which $10,582.30 was eligible for payment under the State Plan.

   
   

7. The hospital filed a claim on both of Dr. Paul's contracts of insurance.

   
   

8. Both contracts of insurance paid benefits to the hospital. BCBS of Pennsylvania paid approximately $9,500 and BCBS of Florida paid $9,582.00. The amount paid by BCBS of Florida represents the total covered expenses less the

   $1,000 the insured is responsible for.

   
   

9. Because of the double payment the hospital told Dr. Paul that he was entitled to a refund from it.

   
   

10. However, before the hospital refunded the money to Dr. Paul, BCBS of Florida discovered the double payment. No evidence was presented as to how BCBS of Florida discovered the other insurance company's co-payment.

    
    

11. BCBS of Florida immediately demanded the hospital refund its payment. The hospital did so. BCBS of Florida mistakenly took the position that it was not the primary payor on the claim and refused to pay the claim. The hospital thereafter looked to the Pennsylvania proceeds for its payment. Dr. Paul was thereby prevented from receiving the monies due him under his Pennsylvania policy at a time when his need for funds was high since, due to his illness, he could not conduct a regular practice.

    
    

12. For approximately one year Dr. Paul attempted to correct BCBS of Florida's mistake. However, he ran into a brick wall. Finally, after Dr. Paul retained an attorney to deal with BCBS, BCBS admitted its mistake and paid the hospital as the primary payor of Dr. Paul's claim. BCBS' failure to pay Dr. Paul's claim for over one year was a breach of his contract of insurance and negligent. BCBS' actions caused Dr. Paul not to be able to receive other monies that were rightfully his and at a minimum caused Dr. Paul to incur damages in the amount of attorney's fee he was forced to pay to rectify BCBS' mistake.

13. When BCBS paid the claim the second time the company paid $10,281.93 to the hospital. Dr. Paul's $1,000 deductible was not subtracted from the amount BCBS paid. The hospital then refunded $10,105.70 to Dr. Paul.

    
    

14. The discrepancy between the original `84 payment and the second `85 payment is $300.17. Therefore, only $699.83 could be attributable to Dr. Paul. Additionally Dr. Paul did not receive the full BCBS payment from the hospital. The amount he received was $176.23 less than the amount paid by BCBS. Therefore, the amount owed by Dr. Paul, if any, is $523.60. The hospital has possession of the other $176.23.

    
    

15. BCBS later discovered its error and attempted to collect the full

    $1,000 deductible from Dr. Paul. He refused to pay since he had incurred and paid more than $3,000 in attorney's fees when he was forced to hire an attorney to obtain proper payment of his insurance claim.

    
    

16. Since Dr. Paul refused to pay, BCBS turned his name over to DOA, its principal, for further collection action. DOA terminated further payment of Dr. Paul's ongoing insurance claims. 1/ Additionally, DOA unsuccessfully attempted to have the comptroller garnish Dr. Paul's wages. These actions were taken even in light of the breach of contract and negligent failure of DOA's agent to properly pay Dr. Paul's claim.

    
    

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding.

    
    

18. Section 110.123(5), Florida Statutes gives the Secretary of Administration the responsibility for administering the state group insurance program. Additionally, the Department, subject to prior legislative approval, determines benefits and the required contributions.

    
    

19. The Department of Administration has determined the maximum out of pocket expenses payable by an insured in Section V of its Benefits Document:

    
    

    V. EXTENDED COVERAGE

    A. After benefits totaling four thousand dollars ($4,000.00) have been paid in any calendar year to or on behalf of an insured covered under the Plan for those covered services reimbursed at

    80 percent, the Plan will pay 100 percent of such additional covered services of that insured for the remainder of the calendar year;

    
    

20. Before $4,000 of services are paid by the plan at the 80 percent reimbursement rate, a total of $5,000 of covered services must be charged to an insured. The $1,000 difference (20 percent of $5,000) is the responsibility of the Insured.

    
    

21. The issue in this case is whether Petitioner is entitled to be relieved from the $1,000 stop-loss provision under the State of Florida's Employees' Group Self-Health Insurance Plan. The initial burden of proof is on the Department to show that the Petitioner owes the Department $1,000.

    Thereafter, since it is the Petitioner who is attempting to show an exclusion from the stop-loss policy, the burden of proof shifts to the Petitioner to demonstrate that he does not owe the $1000 deductible. Tropical Park, Inc. v. Ratliff, 97 So.2d (Fla. 1957). Please see also Florida Department of Health and Rehabilitative Services v. Career Service Commission, 289 So.2d 412 (Fla.

    4th DCA 1974).

    
    

22. In this case, the evidence demonstrated that $523.60 of the original

$1,000 stop loss is owed by Dr. Paul to the State. Dr. Paul's defense to this debt consisted of asserting a right to a setoff for the damages he incurred due to the breach of contract and negligence of the Department's agent, BCBS of Florida. In that regard, the evidence demonstrated Respondent's negligent failure to pay Dr. Paul's claim. In addition, the evidence demonstrated that DOA turned a deaf ear to Dr. Paul's treatment by its agent and proceeded to attempt collection of the $1,000 stop loss. However, even in light of the shameful treatment accorded Dr. Paul by DOA and its agent, this forum affords no remedy for a negligence or contractual claim of this type in either law or equity. The proper forum for such an action is in Circuit Court.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is Recommended:

That the Department enter a final order determining that Dr. Paul is liable to it for the $523.60.

DONE and ENTERED this 25th day of April, 1989, in Tallahassee, Leon County, Florida.

DIANE CLEAVINGER

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 25th day of April, 1989.

ENDNOTE

1/ Several thousand dollars of unpaid insurance claims have accrued since DOA stopped insurance payments. Dr. Paul continued to pay his premium.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-1451

The facts contained in paragraphs 1,2,3,5,6,7 and 9 of Respondent's Proposed Findings of Fact are adopted, in substance, insofar as material.

The facts contained in the first sentence of paragraph 4 of Respondent's Proposed Findings of Fact was not shown by the evidence. The remainder of paragraph 4 is adopted.

The facts contained in paragraph 1 of Petitioner's Proposed Findings of Fact are adopted, in substance, insofar as material.

The facts contained in paragraph 2 of Petitioner's Proposed Findings of Fact are subordinate.

COPIES FURNISHED:

Julian Harris, Jr., Esquire 901 North Reus Street

Post Office Box 2807 Pensacola, Florida 32513

Augustus D. Aikens, Jr., Esquire General Counsel

Department of Administration

435 Carlton Building Tallahassee, Florida 32399-1550

Adis Vila, Secretary Department of Administration

435 Carlton Building Tallahassee, Florida 32399-1550

Docket for Case No: 88-001451

Orders for Case No: 88-001451