STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL SERVICES,

Petitioner,

vs.

JENNIFER SOPHIA D'ALESSANDRO,

Respondent.

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) Case No. 06-0754PL

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RECOMMENDED ORDER

On August 24, 2006, a formal administrative hearing was held in this case in St. Petersburg, Florida, before Carolyn S. Holifield, Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Philip M. Payne, Esquire

Department of Financial Services 624 Larson Building

200 East Gaines Street Tallahassee, Florida 32399-0333

For Respondent: Doug Wilcock, Esquire

Bauman and Wilcock, P. A. 6640 34th Avenue, North

St. Petersburg, Florida 33710 STATEMENT OF THE ISSUES

The issues for determination are whether Respondent violated Subsections 626.611(7) and 642.041(5), Florida Statutes (2004),1 as alleged in the Administrative Complaint, and, if so,

what disciplinary actions should be imposed on her license as a health insurance agent and legal expense sales representative.

PRELIMINARY STATEMENT

On February 16, 2006, Petitioner, the Department of Financial Services (“Department”), filed an Administrative Complaint against Respondent, a licensed Florida health insurance agent and legal expense sales representative. The Administrative Complaint alleges the following: (1) while licensed as a health insurance agent and legal expense sales representative, Respondent was accountable for the submission of a February 2005 fraudulent Medicaid pre-enrollment application and appointment sheet for Susan Scott, of New Port Richey, Florida, without Ms. Scott's knowledge, consent, and proper signature; (2) Respondent's signature was on the "fraudulent" application; (3) the "fraudulent" application and appointment sheet were submitted to Amerigroup Corporation; and (4) as a result of the submission of the "fraudulent" application and the appointment sheet, Amerigroup paid Respondent a commission and issued a Medicaid coverage identification card to Ms. Scott.

The Department charged that by engaging in the alleged conduct, Respondent has demonstrated lack of fitness or trustworthiness to engage in the business of insurance, which is a basis for the Department's taking disciplinary action against Respondent's

insurance licenses, pursuant to Subsections 626.611(7) and 642.041(5), Florida Statutes.

Respondent challenged the factual allegations and timely requested a formal hearing. On or about March 1, 2006, the Department forwarded the matter to the Division of Administrative Hearings for assignment of an Administrative Law Judge to conduct the formal hearing. By Notice issued March 14, 2006, the hearing was initially set for April 26, 2006.

However, the parties subsequently requested and were granted two continuances.

At the hearing, the Department presented the testimony of two witnesses, Susan Scott and Patricia Watkins. Petitioner's Exhibits 1 through 10 were received into evidence. Respondent testified on her own behalf and presented the testimony of Anthony Nespeca.

A Transcript of the hearing was filed on September 11, 2006. At the conclusion of the hearing, the time for filing proposed recommended orders was set for ten days after the Transcript was filed. The Department filed its Proposed Recommended Order on September 21, 2006. Subsequently, Respondent requested and was granted an extension of time to file her proposed recommended order. Respondent's Proposed Recommended Order was filed on October 5, 2006. The Proposed

Recommended Orders of both parties have been carefully considered in preparation of this Recommended Order.

FINDINGS OF FACT

1. Respondent was and, at all times material hereto, has been licensed in Florida as a health insurance agent and a legal expense sales representative. Respondent’s license number with the Department is D037418.

2. On or about August 16, 2005, Respondent was appointed as an agent with Amerigroup of Florida, Inc. (Amerigroup).

3. In early February 2005, Susan Scott and Frank Barrs, her husband,2 had Medicaid coverage through the Staywell Medicaid Program. Later that month, Ms. Scott received a "Welcome Packet" from Amerigroup and enrollment cards which indicated that she had Medicaid coverage through Amerigroup.

4. Ms. Scott then contacted the Medicaid Options Office and Amerigroup to advise both offices that she had not authorized that her Medicaid coverage be switched from Staywell to Amerigroup. Upon receiving the call from Ms. Scott, Amerigroup investigated the matter.

5. Amerigroup's investigation concluded that Ms. Scott's Medicaid plan was switched from Staywell Medicaid plan to the Amerigroup Medicaid plan without her knowledge, consent, and/or approval.

6. Ms. Scott was unaware of how the unauthorized switch of her Medicaid plan occurred. However, Ms. Scott recalled that sometime prior to the unauthorized switch, she was approached by an Amerigroup representative while she was at the Department of Children and Family Services office. That representative asked Ms. Scott if she had Medicaid coverage and about her insurance and her open enrollment period. Ms. Scott believed that these inquiries were made in an effort to persuade her to change her current Medicaid coverage. However, at that time, Ms. Scott told the representative four or five times that she was satisfied with her current Medicaid program.

7. Subsequently, the representative, who had approached Ms. Scott at the Department of Children and Family Services office, showed up at her house without her permission.

   Ms. Scott identified this person as Herbert Stadler.

   
   

8. It was soon after the person whom Ms. Scott identified as Mr. Stadler came to her house that Ms. Scott learned that her Medicaid insurance coverage had been switched from Staywell to Amerigroup without her prior knowledge, consent, or authorization.

9. A transfer of coverage to Amerigroup required three steps: (1) a completed Appointment Sheet Form (Appointment Sheet), (2) an in-person presentation by an Amerigroup representative and completion of a pre-enrollment form, and

   (3) a call by the applicant to the Medicaid Options Office to advise that office of the applicant's decision or plan to change his/her Medicaid coverage.

10. Amerigroup’s Appointment Sheet requires that the "applicant" listed on the Appointment Sheet indicate how the applicant's appointment with the Amerigroup representative was made. These options are whether the appointment was made in person or by the applicant's calling Amerigroup to request an appointment. The Appointment Sheet includes spaces for the applicant to list his/her name, address, and telephone number, to consent to have a representative of Amerigroup contact the applicant within the next 90 days or during the applicant's next enrollment period, and to give Amerigroup permission to view the eligibility of recipients listed on the Pre-Enrollment Application. Finally, the Appointment Sheet includes signature lines for the applicant's signature and the Amerigroup marketing representative's signature.

11. An Amerigroup Appointment Sheet dated February 16, 2005, bears the signature of Anthony Nespeca, as the marketing representative, and also purports to bear the signature of Susan Scott. The Appointment Sheet lists Ms. Scott's address as

    10625 Houston Avenue, in Hudson, Florida, in Pasco County, Florida. According to the Appointment Sheet, Ms. Scott consented to have an Amerigroup representative contact her.

12. It is unknown who signed Ms. Scott's name on the Appointment Sheet referred to in paragraph 11, but clearly, Ms. Scott did not sign that form. Also, notwithstanding the indication on the Appointment Sheet to the contrary, Ms. Scott never made or requested an appointment with an Amerigroup

    representative--either in person or by telephone. Finally, the address listed on the Appointment Sheet as Ms. Scott's address was not her and/or her husband's address. On February 16, 2005, Ms. Scott's and her husband's correct address was an address on Gray Fox Lane in Port Richey, Florida.

13. Amerigroup has a Pre-Enrollment Application form that provides space for information regarding the applicant, including the applicant's name and physical address. The Pre- Enrollment Application also provides a box that the applicant may check, indicating that "I understand the benefits as they have been explained to me and I wish to enroll with Amerigroup of Florida." Immediately below that statement is a line for the applicant's signature. The Pre-Enrollment Application also provides a space for the marketing representative's signature and a place for the marketing representative to print his or her name. Finally, the Pre-Enrollment Application has a space to indicate whether the applicant called the Medicaid Options Office to report the change in his/her Medicaid plan.

14. The Pre-Enrollment Application, applicable in this case, lists Ms. Scott and her husband as the applicants, and includes a signature, dated February 17, 2005, purporting to be that of Ms. Scott. Notwithstanding the purported signature of Ms. Scott on the Pre-Enrollment Application, Ms. Scott did not sign that form. Moreover, the Pre-Enrollment Application, like the Appointment Sheet, incorrectly lists Ms. Scott's address as being in Hudson, Florida, when, in fact, her address was in Port Richey, Florida. Finally, even though the Pre-Enrollment Application indicates that Ms. Scott placed a telephone call to the Medicaid Options Office to change her Medicaid enrollment, she never made such a call.

15. On the Pre-Enrollment Application, Respondent's signature is on the line designated for the marketing representative's signature. Next to Respondent's signature is February 17, 2005, which is one day after she was appointed an agent with Amerigroup; however, there is no evidence that Respondent wrote that date on the Pre-Enrollment Application. Below Respondent's signature is a space for the marketing representative to print his or her name. Printed in that space is the name, "Anthony Nespeca."

16. Based on the information from the Appointment Sheet and Pre-Enrollment Application forms, Ms. Scott and her husband were entered into Amerigroup’s Florida sales tracking data base.

    This resulted in Ms. Scott and her husband being switched from the Staywell Medicaid plan to the Amerigroup Medicaid plan.

17. Based on Amerigroup's practice, the representative or representatives whose names appeared on the Pre-Enrollment Applications were paid a commission for the new customer. When there were two names appearing on the Pre-Enrollment Form, as in this case, the commission was split between the two individuals. Here, because both Respondent's name and Anthony Nespeca's name appeared on the Pre-Enrollment Form, Amerigroup paid a commission to Respondent and Mr. Nespeca.

18. The Amerigroup investigation found that the telephone call to the Medicaid Options Office for the enrollment of

    Ms. Scott was placed from Mr. Nespeca’s home telephone.

    
    

19. The undisputed evidence in this proceeding is that Ms. Scott and her husband were switched from their Staywell Medicaid plan to the Amerigroup Medicaid plan, without their knowledge, consent, and/or authorization. Also, the undisputed evidence in this proceeding established that the call to Medicaid Options Office, purported to be from Ms. Scott, was made from Mr. Nespeca's home telephone.

20. Mr. Nespeca was subsequently terminated from his job with Amerigroup and thereafter entered into an agreement with the Department of Financial Services for a consent order that resulted in a 12-month suspension of his license.

21. It is undisputed that Respondent’s signature appeared on the Pre-Enrollment Application for Ms. Scott. However, there is no evidence that Respondent knew about or was in any way involved in the transaction which resulted in Ms. Scott's Medicaid plan being improperly switched.

22. The credible testimony of Respondent is that an agent employed by Amerigroup often partners with another agent in the company to share commissions. Often these agents go together to visit potential clients, but there are times when they do not do so. Nonetheless, in order to share commissions, the names of both agents/representatives must be on the Pre-Enrollment form. To ensure that Respondent and Mr. Nespeca received the shared commissions, they exchanged pre-signed Pre-Enrollment Application forms, that were not filled out, as a mechanism of splitting commissions.

23. The practice of agents sharing commissions was not uncommon or against Amerigroup policy. Furthermore, Amerigroup used the Pre-Enrollment Application forms to determine which agents/representatives should be paid commissions.

24. Respondent was not involved in the telephone call to the Medicaid Options Office that was an important element in Ms. Scott’s insurance carriers being switched, and no evidence to the contrary was presented.

25. Respondent has never met Ms. Scott and has never gone to her house. Respondent did not fill out the Pre-Enrollment Application, and the telephone call did not come from her house.

26. Prior to the investigation conducted by Amerigroup, in which she was questioned and confronted about Ms. Scott's complaint, Respondent had no knowledge or involvement in the events which led to Ms. Scott's Medicaid plan being switched.

27. Respondent's only involvement with the transaction involving Ms. Scott's Medicaid coverage being switched was that she and Mr. Nespeca split the commission. This action did not require or involve any action by Respondent. The mere fact that Respondent's signature was on the Pre-Enrollment Application form triggered the process that resulted in Amerigroup's paying the commission for that enrollment to Respondent and

    Mr. Nespeca.

    
    

28. In her first year with Amerigroup, Respondent was the top producer and, except for this case, Respondent has never been accused of submitting a fraudulent claim.

    CONCLUSIONS OF LAW

    
    

29. The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding. See §§ 120.569 and 120.57(1), Fla. Stat. (2005).

30. The Department’s Administrative Complaint alleges that Respondent violated Subsections 626.611(7) and 642.041(5), Florida Statutes.

31. Subsection 626.611 (7), Florida Statutes, authorizes the Department to suspend, revoke, or otherwise discipline the license of an insurance agent, if such licensee has "demonstrated lack of fitness or trustworthiness to engage in the business of insurance."

32. Subsection 642.041(5), Florida Statutes, authorizes the Department to suspend, revoke, or otherwise discipline the license of a sales representative if such licensee has "demonstrated lack of fitness or trustworthiness to engage in the business of legal expense insurance."

33. In the instant case, the Department has the burden of proving its allegations by clear and convincing evidence. See Department of Banking and Finance v. Osborne Stern and Company, 670 So. 2d 932, 935 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

34. Clear and convincing evidence is that which is credible, precise, explicit, and lacking confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact the firm belief of conviction, without hesitancy, as to the truth of the

    allegations. Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983).

35. The alleged violation of Subsections 626.611(7) and 642.041(5), Florida Statutes, relates to the allegations in the Administrative Complaint that Respondent was "accountable" for the submission of a fraudulent Medicaid Pre-Enrollment application and appointment sheet, which resulted in Respondent's receiving a commission.

36. In order to establish a lack of fitness or trustworthiness to engage in the business of insurance under Subsection 626.611(7), Florida Statutes, the Department must adduce evidence of bad intent, willfulness or fraudulent conduct. See Hartnett v. Department of Insurance, 406 So. 2d 1180 (Fla. 1st DCA 1981), cited in In the Matter of Oscar Brown,

    Jr., at paragraph 42, Case No. 04-0765PL (DOAH September 30, 2004) (Final Order adopting Recommended Order filed December 17, 2004).3

37. Subsection 642.041(5), Florida Statutes, like Subsection 626.611(7), Florida Statutes, refers to "lack of fitness or trustworthiness" to engage in certain business activities. The only difference in the two provisions is that the former provision refers to the "business of legal expense insurance," and the latter one refers to the "business of insurance." Given that the key language in those provisions is

    identical, the elements of bad intent, willfulness, and fraudulent conduct required to prove Subsection 626.611(7), Florida Statutes, is also required to prove Subsection 642.041(5), Florida Statutes.

38. In this case, the Department failed to meet its burden of proof. While the Department asserts that Respondent, willfully and without justifiable excuse, signed her name to the fraudulent Amerigroup Pre-Enrollment Application form of

    Ms. Scott and her husband, it failed to present evidence to support that assertion.

39. The Department offered no credible evidence to show that Respondent was involved in the execution and subsequent submission of the fraudulent Appointment Sheet and the Pre- Enrollment Application or the phone call to Medicaid Options necessary to fraudulently transfer Ms. Scott’s Medicaid carrier.

40. The Department's assertion that Respondent's signature was on the fraudulent forms and that she was accountable for the submission of those forms, does not meet the elements of bad intent, willfulness, or fraudulent conduct necessary to prove the alleged violations. Rather, the clear and convincing evidence established that Respondent pre-signed Pre-Enrollment Application forms and that one of these forms was misused by

    someone else to enroll Ms. Scott in Amerigroup, without Ms. Scott's permission, consent, or authorization.

41. The Department failed to meet the burden as to the willfulness of Respondent’s conduct since the Administrative Complaint does not allege that pre-signing a pre-enrollment form is a violation of law or policy. At most, Respondent's conduct of pre-signing an otherwise incomplete Pre-Enrollment Application may constitute negligence and/or reflect poor judgment. However, no such allegations were made in the Administrative Complaint.

42. In summary, the conduct of Respondent, pre-signing an otherwise incomplete Pre-Enrollment Application that was later fraudulently completed and submitted by another agent, reflects poor judgment. However, for the reasons found and concluded above, Respondent is not guilty of violating the provisions under Subsections 626.611(7) and 642.041(5), Florida Statutes.

RECOMMENDATION

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

RECOMMENDED that the Department of Financial Services enter a final order dismissing the Administrative Complaint.

DONE AND ENTERED this 29th day of December, 2006, in Tallahassee, Leon County, Florida.

S

CAROLYN S. HOLIFIELD

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 29th day of December, 2006.

ENDNOTES

1/ All references to Florida Statutes are to Florida Statutes (2004), unless otherwise indicated.

2/ Ms. Scott testified that in February 2005, she and Mr. Barr were living together, but since that time, in March 2006, they were married.

3/ While the Hartnett Court explicitly deferred to the Department on interpreting Subsection 626.611(7), it cautiously “venture[d] to suggest” that the element of willfulness would be essential to proving a case pursuant to Subsection 626.611(7), Florida Statutes. Hartnett at 1184. Based on the Department's ruling in Brown, it has adopted the element of "willfulness" to prove a case under Subsection 626.611(7), Florida Statutes.

COPIES FURNISHED:

Philip M. Payne, Esquire Department of Financial Services 624 Larson Building

200 East Gaines Street Tallahassee, Florida 32399-0333

Doug Wilcock, Esquire Bauman and Wilcock, P. A. 6640 34th Avenue, North

St. Petersburg, Florida 33710

Honorable Tom Gallagher Chief Financial Officer

Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300

Carlos G. Muñiz, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0307

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 06-000754PL

Orders for Case No: 06-000754PL