LIFESTREAM BEHAVIORAL CENTER, INC.,
Petitioner,
vs.
DEPARTMENT OF CHILDREN AND FAMILIES,
Respondent, and
METRO TREATMENT OF FLORIDA, L.P.,
Intervenor.
/
Case No. 20-4322
RECOMMENDED ORDER
Pursuant to notice, a final hearing was conducted in this case on December 1, 2020, via Zoom teleconference in Tallahassee, Florida, before Lawrence P. Stevenson, a duly-designated Administrative Law Judge (“ALJ”) of the Division of Administrative Hearings (“DOAH”).
APPEARANCES
For Petitioner LifeStream Behavioral Center, Inc. (“LifeStream”):
Brittany Adams Long, Esquire Radey Law Firm, P.A.
301 South Bronough Street, Suite 200
Tallahassee, Florida 32301
For Respondent Department of Children and Families (“DCF” or “the Department”):
William D. Hall, Esquire Daniel Ryan Russell, Esquire John L. Wharton, Esquire Dean Mead and Dunbar
106 East College Avenue, Suite 1200
Tallahassee, Florida 32301
For Intervenor Metro Treatment of Florida, L.P. (“Metro”):
Mia L. McKown, Esquire Eddie Williams, II, Esquire Holland & Knight, LLP
315 South Calhoun Street, Suite 600
Tallahassee, Florida 32301
STATEMENT OF THE ISSUE
The issue is whether the Department’s intended award allowing Metro to proceed to licensure for a methadone Medication-Assisted Treatment (“MAT”) facility in Lake County violated Florida Administrative Code Rule 65D- 30.0141, was arbitrary or capricious, or was otherwise unlawful as alleged in LifeStream’s Petition for Administrative Hearing (“Petition”).
PRELIMINARY STATEMENT
On July 10, 2020, the Department issued its Notice of Intended Award for Lake County (“Notice”) stating that Metro was the intended awardee of the right to apply for licensure to operate a methadone MAT facility in Lake County. The Notice was based on an adjustment the Department made to the scores that an independent evaluation team had awarded to the applicants.
The independent evaluation team had awarded the highest score to LifeStream, with Metro finishing in second place.
LifeStream timely filed its Petition. On September 29, 2020, the Department referred the case to DOAH for the assignment of an ALJ and the
conduct of a formal hearing. Metro filed a Notice of Intervention and Appearance on September 30, 2020. The case was scheduled for hearing on November 30 and December 1, 2020. On November 20, 2020, the parties filed a joint motion requesting that the first day of the hearing be canceled. Based on the motion, an Order was entered rescheduling the hearing for
December 1, 2020.
On November 23, 2020, the parties submitted a Joint Pre-hearing Stipulation that has been used in the preparation of this Recommended Order. At the hearing, LifeStream presented the testimony of Christopher Weller, Manager of the Licensure and Designation Unit within the Department’s Office of Substance Abuse and Mental Health. Mr. Weller was also a witness for the Department, which presented no other witnesses.
Metro presented the testimony of William Sutton, General Counsel for
Metro’s parent entity, Colonial Management Group, LP.
Joint Exhibits 1 through 18 were admitted into evidence. Joint Exhibit 15 was the deposition testimony of Ute Gazioch, Director of the Department’s Office of Substance Abuse and Mental Health.1 Joint Exhibit 16 was the deposition testimony of Mr. Weller. Joint Exhibit 17 was the deposition testimony of Roger Balettie, Project Manager for ISF, Inc., the company that performed the independent evaluations of the applications.
LifeStream’s Exhibits 1 through 9 were admitted into evidence. The Department’s Exhibits 1 through 26 were admitted into evidence. Metro offered no exhibits of its own but adopted those of the Department. There were no objections to any of the exhibits.
1 The parties jointly designated pages 2 through 26 as the portions of Ms. Gazioch’s
deposition that are relevant to this proceeding.
The one-volume Transcript of the final hearing was filed with DOAH on December 18, 2020. Two joint motions to extend the time for filing proposed recommended orders were granted. In accordance with the second Order granting extension, the parties filed their Proposed Recommended Orders on January 11, 2021. The Proposed Recommended Orders have been duly considered in the writing of this Recommended Order.
All statutory references are to the 2020 edition of the Florida Statutes, unless otherwise indicated.
Rule 65D-30.014 is titled “Standards for Medication-Assisted Treatment for Opioid Use Disorders.” At the time the Department made its need determination in this case, subsection (3) of that rule provided the process for determining the need for MAT providers. After the need determination, but before the proposed awards in this case, the rule was amended to delete the need determination process. The operative language was re-adopted in a new rule 65D-30.0141, titled “Needs Assessment for Medication-Assisted Treatment for Opioid Use Disorders.” The new rule is used as the point of reference in this Recommended Order, but the operative language is the same in both iterations.
FINDINGS OF FACT
Based on the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made:
PARTIES
Petitioner LifeStream is a Florida not-for-profit corporation and provider of substance abuse treatment. LifeStream applied for the ability to proceed to licensure to provide methadone MAT services in Lake County.
The Department is the agency with regulatory authority over the provision of substance abuse services. § 397.321(1), Fla. Stat. The Department’s duties include, but are not limited to, the licensing and regulation of the delivery of substance abuse services, including clinical treatment and clinical treatment services such as “medication-assisted treatment for opiate disorder.” §§ 397.321(1) and (6); and 397.311(26)(a)7., Fla. Stat. The Department also promulgates rules governing substance abuse providers. § 397.321(5), Fla. Stat.
Metro is a provider of care for opioid use disorder treatment and operates methadone medication treatment centers nationwide, including in the state of Florida. Metro applied for the ability to proceed to licensure to provide methadone MAT services in Lake County.
STATUTORY AND REGULATORY FRAMEWORK AND NEEDS ASSESSMENTS
The substance abuse regulatory scheme in Florida is designed to provide a statewide system of care for the prevention, treatment, and recovery of children and adults with serious substance abuse disorders. Substance abuse providers, which include methadone MAT clinics, are subject to a strict statutory, regulatory, and licensing scheme, which provides direction for a continuum of community-based services including prevention, treatment, and detoxification services. See chs. 394 and 397, Fla. Stat.
MAT is “the use of medications approved by the United States Food and Drug Administration, in combination with counseling and behavioral therapies, to provide a holistic approach to the treatment of substance abuse.” § 397.311(27), Fla. Stat.
The Department is responsible for the licensure and oversight of all MAT providers in the state. See § 397.321, Fla. Stat.
Further, the Department is required to “determine the need for
establishing providers of [MAT]” on an annual basis. New MAT providers
may only be established in the state in response to a determination and publication of such need by the Department. § 397.427(2), Fla. Stat.
Rule 65D-30.0141 provides the process for determining the need for MAT providers, as follows, in relevant part:
Determination of Need.
The Department shall annually perform the assessment detailed in the “Methodology of Determination of Need Methadone Medication- Assisted Treatment,” CF-MH 4038, May 2019, incorporated by reference and available at http://www.flrules.org/Gateway/reference.asp?No= Ref-11993. The Department shall publish the results of the assessment in the Florida Administrative Register by June 30. Facilities owned and operated by the Florida Department of Corrections are exempt from the needs assessment process. However, these facilities must apply for a license to deliver this service.
The publication shall direct interested parties to submit a letter of intent to apply for licensure to provide medication-assisted treatment for opioid use disorders to the Regional Office of Substance Abuse and Mental Health where need has been demonstrated.
The publication shall provide a closing date for submission of letters of intent.
Interested parties must identify the fiscal year of the needs assessment to which they are responding and the number of awards they are applying for per county identified in the assessment in their letter of intent.
Within seven (7) business days of the closing date, the Regional Office shall notify parties who submitted a letter of intent on how to proceed.
If the number of letters of intent equals or is less than the determined need, parties shall be awarded
the opportunity to proceed to licensure by completing an “Application for Licensure to Provide Substance Abuse Services” form, C&F-SA Form 4024, May 2019, incorporated by reference and available at http://www.flrules.org/Gateway/reference.asp?No= Ref-11996.
If the number of letters of intent exceeds the determined need, parties shall be invited to submit a “Methadone Medication-Assisted Treatment (MAT) Application to Proceed to Licensure Application” form, CF-MH 4041, May 2019, incorporated by reference and available at http://www.flrules.org/Gateway/reference.asp?No= Ref-11995. Applications may not be rolled over for consideration in response to a needs assessment published in a different year and may only be submitted for a current fiscal year needs assessment.
The Department shall utilize an evaluation team made up of industry experts to conduct a formal rating of applications as stipulated in the “Methadone Medication-Assisted Treatment (MAT) Application Evaluation” form, CF-MH 4040, May 2019, incorporated by reference and available at http://www.flrules.org/Gateway/reference.asp?No= Ref-11994. The evaluation team members shall not be affiliated with the Department, current methadone medication-assisted treatment providers operating in Florida, or the applicants.
The selection of a provider shall be based on the following criteria:
Capability to Serve Selected Area(s) of Need and Priority Populations. Area(s) of Need are the counties identified as having a need for additional clinics. Priority Populations are pregnant women, women with young children, and individuals with financial hardships;
Patient Safety and Quality Assurance/Improvement;
Scope of Methadone Medication-Assisted Treatment Services;
Capability and Experience; and
Revenue Sources.
Applicants with the highest-scored applications in each county shall be awarded the opportunity to apply for licensure for the number of programs specified in their letter of intent to meet the need of that county. If there is unmet need, the next highest scored applicant(s) will receive an award(s) based on the remaining need and the number of programs specified in their letter of intent. This process will continue until the stated need is met. Regional offices shall inform the highest-scoring applicant(s) in writing of the award.
All awarded applicants must submit a letter of intent to apply for licensure to the appropriate regional office within 30 calendar days after the award. If an applicant declines an award or fails to submit the letter of intent within the specified time, the Department shall rescind the award. After the Department rescinds the original award for that selected area of need, the applicant with the next highest score shall receive the award.
Awarded applicants must receive at least a probationary license within two (2) years of receipt of an award letter connected to their “Methadone Medication-Assisted Treatment (MAT) Application to Proceed to Licensure Application” form, CF-MH 4041. If an applicant fails to obtain a probationary license within the specified time, the Department shall rescind the award. See Rule 65D-30.0036,
F.A.C. for licensure application requirements. Applicants may submit a request to the State Authority and Substance Abuse and Mental Health Program Office for an exception if unable to meet
timeframes due to a natural disaster that causes physical damage to the applicant’s building(s). Proof of natural disaster and impact on physical property must accompany the request. Upon receipt of the request for exception and accompanying proof, a one-time extension shall be granted for six
(6) months. Providers who are delayed for a reason other than a natural disaster may petition the Department for a rule waiver pursuant to Section 120.542, F.S….
In brief, potential applicants are directed to submit letters of intent to apply for a methadone MAT services license for any county in which the Department’s process demonstrates a need. Should the number of letters of intent received for a certain county be less than or equal to the need found in that county, the potential applicants may proceed directly to licensure. In the event the number of letters of intent is greater than the need found in a particular county, then potential applicants must submit an application form to the Department. The application form is adopted by reference in the rule as Form CF-MH 4041.
The rule requires the Department to “utilize an evaluation team made up of industry experts to conduct a formal rating of applications” to determine which applicant, or applicants, may proceed to licensure in a particular county. Such evaluators “shall not be affiliated with the Department, current methadone [MAT] providers operating in Florida, or the applicants.”
The scoring form that the evaluators must use is incorporated by reference in the rule as Form CF-MH 4040 (“Scoring Form”). The Scoring Form requires that each application be “independently scored by each member of the evaluation team.” It also mandates that the “same scoring principles must be applied to every application received.” The Scoring Form expressly states that “no attempt by Department personnel, or other
evaluators or other persons to influence an evaluator’s scoring shall be tolerated.”
There are five general “Criteria” in the Scoring Form upon which applicants are scored, with a number of subsections within each criterion. An application could be awarded a maximum of 220 points. The evaluators were to assign a score ranging from zero to five for each subsection, with some subsections receiving an additional “weighted value” (in which the score given would be multiplied by two). The Department gave the weighted values to provisions upon which it placed a “premium.”
The “General Instructions” section of the Scoring Form provides what an applicant must demonstrate to earn a particular score:
Superior (5 points): the application demonstrates or describes extensive competency, proven capabilities, an outstanding approach to the subject area, innovative, practical and effective solutions, full responsiveness to the question, a clear and comprehensive understanding of the requirements and planning for the unforeseen.
Good (4 points): the application demonstrates or describes clear competency, consistent capability, a reasoned approach to the subject area, feasible solutions, extensive but incomplete responsiveness to the question, and a sound understanding of the requirements.
Adequate (3 points): the application demonstrates or describes fundamental competency, adequate capability, a basic approach to the subject area, apparently feasible but somewhat unclear solutions, partial responsiveness to the question, a fair understanding of the requirements and a lack of staff experience and skills in some areas.
Poor (2 points): the application demonstrates or describes little competency, minimal capability, an inadequate approach to the subject area, infeasible or ineffective solutions, somewhat unclear, incomplete or non-responsive to the question, a lack
of understanding of the requirements and a lack of demonstrated experience and skills.
Insufficient (1 point): the application demonstrates or describes a significant or complete lack of understanding, an incomprehensible approach, a significant or complete lack of skill and experience and extensive non-responsiveness to the question.
Not Addressed (0 points): the application demonstrates or describes [that the] criteria is not addressed, approach is not described, complete non- responsiveness to the question.
Criterion Five of the Scoring Form concerns “Revenue Sources.” It contains two subsections, each worth zero to five points and each given “weighted value,” meaning that a perfect score for each subsection would earn 10 points, or a total of 20 points for Criterion Five. Subsection one asked the following question:
1. How well did the organization detail its accepted forms of payment for treatment services? At a minimum, the response should describe the procedure for each payment method offered:
Assess a point for each accepted form of payment (5 maximum points)
Self-Pay (1 point)
One form of Private Insurance (1 point) Multiple forms of Private Insurance (1 point) Medicaid (1 point)
Scholarship or Sliding Fee Scale (1 point)
While other sections of the Scoring Form permit the evaluator to subjectively evaluate the responsiveness of the answer, subsection one of Criterion Five is manifestly objective. It directs the evaluator to award one
point for each of the five accepted forms of payment addressed by the applicant, up to the maximum of five points.
Subsection two of Criterion Five asks, “How well does the application detail how the organization will determine if its pricing is competitive?” This subsection was also worth five points and allowed the evaluator to subjectively address the quality of the applicant’s response.
Christopher Weller, Manager of the Licensure and Designation Unit within the Department’s Office of Substance Abuse and Mental Health, testified that Florida MAT providers historically have accepted only out-of- pocket payments for their services, meaning that those who could not afford to pay cash or credit were often left untreated. The Department wanted to ensure that the need for MAT services would be met and that no one needing such services would be priced out of treatment. Therefore, the Department included Criterion Five in the application and gave it weighted value to encourage providers to accept multiple forms of payment.
The Department completed a needs assessment and published it in the June 20, 2020, edition of the Florida Administrative Register. The Department then announced that it would begin accepting applications to proceed to licensure. The needs assessment indicated a need for one new MAT clinic in Lake County.
Pursuant to rule 65D-30.041(1)(c)2.a., the Department contracted with an outside provider to evaluate the applications received for counties throughout the state, including Lake County. That provider, iSF, established four teams of three evaluators to score the applications and divided the counties with need among the teams. Each evaluation team consisted of a medical professional, a public health policy professional, and an academic professional. Applicant names were redacted so evaluators would not know the identity of the applicant they were scoring. Each iSF evaluator independently evaluated the various applications.
THE LAKE COUNTY APPLICATIONS
LifeStream and Metro both timely submitted letters of intent and applications for the new methadone MAT clinic needed in Lake County. Four other entities also applied for the one available license in Lake County.
LifeStream’s response to subsection one of Criterion Five provided as
follows:
Our organization has developed a detailed Financial Assistance Policy (FAP) that provides assistance to all individuals served, including insured, uninsured and underinsured individuals whose family income is less than or equal to 240% of the Federal Poverty Level without discrimination on grounds of race, sex, national origin, disability, sexual orientation, immigration status, religious preference, or any other grounds unrelated to an individual’s need for the service or the availability of the service needed for emergency and medically necessary care. Furthermore, all individuals served receive a financial screening by staff knowledgeable of the various funding mechanisms in an effort to identify the best form of payment. No one is turned away for services due to their inability to pay.
As a comprehensive provider with a sound financial infrastructure, our organization is able to accept several forms of payment for any of the services provided. This includes self-pay, private insurance (both one form and multiple forms), Medicaid and scholarship or sliding scale fee. All the individuals served are charged based upon a board of directors approved charge master which ensures that all individuals are charged the same fees for the same services. Discounts are available for individuals who qualify for financial assistance using a sliding fee discount. Our organization provides payment flexibility, including payment plans/options. In addition, our staff are trained to assist individuals in obtaining benefits and coverage as appropriate to meet any ongoing needs for treatment.
Self-Pay: The proposed clinic will conduct a financial screening in order to determine if an individual qualifies for any of the organization’s accepted forms of payment for treatment services. Individuals will be offered two payment options, by the day or by the week. The fee will include dosing, treatment services and ancillary services. Individuals will be offered the ability to pay using cash or credit card. The organization also has a mechanism to bill the individual if that is his/her preference. This allows the individual to pay for services in a manner that meets his/her current ability and timeframe.
Private Insurance (One or Multiple Forms): Our organization has numerous contracts with private insurance providers. This includes major providers such as Aetna, Blue Cross/Blue Shiled, Cigna, Magellan, Tricare, PsycCare, United Health Care and Value Options to name a few. In order to ensure that our organization has the ability to bill private insurance for these services, staff will possess the appropriate credentials, training and experience to allow them to be paneled by the insurance providers. In addition, our organization has staff that conduct financial assessments in order to determine the best funding source for the services provided. They are experienced and knowledgeable about the various private insurance plans and have the ability to determine if one or multiple forms of insurance will be utilized.
Medicaid: Our organization is an established Medicaid provider and has the ability to bill Multiple Medicaid Associations (MMAs) as a result of having contracts with several of the organizations such as Prestige, Wellcare, United Healthcare and Sunshine. All of our sites and appropriate staff have the proper credentials to bill for Medicaid services. In addition, the treatment services and ancillary services we propose to offer will be Medicaid credentialed in order to bill for those services as well.
Scholarship or Sliding Fee Scale: As stated earlier, our organization has extensive experience working with indigent individuals. As a result of a financial assessment, the level of discount for which an individual is eligible is determined based upon the individual’s family income and family size as a percentage of the FPL. Our developed policies and procedures define the meaning of “uninsured,” “underinsured,” “family income,” and “Federal Poverty Level.”
All of our financial policies are listed on our website that address payment for treatment services and are provided in detail for the people we serve.
Metro’s response to subsection one of Criterion Five provided as
follows:
To facilitate the ease of payment by individuals in need of treatment and to minimize financial barriers to treatment, we offer a wide array of payment options that include:
Self-Pay—Patients with the financial capacity to pay for their own treatment may pay using cash, credit card, Apple Pay, and/or debit card. Upon receiving the medication portion of their treatment, self-pay patients either tender cash to clinic staff for the cost of treatment or, alternatively, provide a credit card, Apple Pay, or debit card that is entered into a card processing terminal for verification and transaction authorization.
Private Insurance—We accept multiple forms of private insurance as we are in network with many private insurers (including, but not limited to, Beacon Health, Triwest, United/Optum, and Aetna). Also, we have established single case agreements with private insurers with whom we are not yet in-network so that the cost to each patient is minimized and keeps the patient in treatment. Procedurally, patients present their private insurance information to clinic staff who verify eligibility, benefits, and individual financial
responsibility (e.g., deductibles, co-pays, co- insurance). A patient’s financial responsibility, if any, is collected from the patient pursuant to their insurer’s benefit design, and the treatment services are billed to their health insurer. An assignment of benefits is signed by the patient to permit us to bill and collect directly from their health insurer.
Medicaid—Opioid Use Disorder treatment is a covered benefit under Florida Medicaid. As a result, all of our existing clinics are enrolled in the Florida Medicaid network. If our organization is awarded the clinic for this county, we would immediately enroll this clinic in the Florida Medicaid program. Patients covered by Florida Medicaid simply present their Medicaid card to clinic personnel who are able to immediately verify active coverage. Upon verification of coverage, the patient completes an assignment of benefits and is treated without any financial outlay. Treatment services received by the patient are then billed to Florida Medicaid directly for as long as the individual remains Medicaid eligible.
Sliding Fee Scale—Patients without the financial capacity to pay for their own treatment, or are without Florida Medicaid or private health insurance coverage, may qualify for our Sliding Fee Scale. The Sliding Fee Scale offers discounted fees to patients in need of treatment. Eligibility is determined based on Federal poverty guidelines, household income, and the number of people in the patient’s household. Patients who are eligible for the Sliding Fee Scale must simply provide the following financial data as a part of their application:
Pay stubs for at least the last six months;
A copy of their most recent federal income tax return;
Proof of current living situation (such as lease documents, or utility bills in the patient’s name);
A financial attestation signed by the patient, which our clinic will provide.
Upon the establishment of a patient’s eligibility, the patient’s cost of treatment is reduced to the discounted fee per the Sliding Fee Scale. In the event that a patient’s financial status changes, the patient must inform clinic staff of the changes. At a minimum, the clinic staff will review financial status with the patient every six (6) months. Financial status may be reviewed at the request of the patient or clinic at any time.
Grants—Our organization routinely pursues, and has secured, grant funding to cover the cost of treatment for patient who are [sic] unable to pay for their treatment and who do not have insurance. Grant finds are awarded through regional Managing Entities. Available grant funds are sought to cover [the] cost of care for eligible patients receiving treatment at our clinics. As mentioned, our organization is currently the recipient of grant funds from multiple Managing Entities in the State of Florida. Eligible patients must simply provide the following financial data as a part of their application:
Pay stubs for at least the last six months;
A copy of their most recent federal income tax return;
Proof of current living situation (such as lease documents, or utility bills in the patient’s name);
A financial attestation signed by the patient, which our clinic will provide.
Upon the establishment of a patient’s eligibility, the patient’s cost of treatment is reduced in accordance with the grant guidelines. In the event that a patient’s financial status changes, the patient must inform clinic staff of the changes. At a minimum, the clinic staff will review financial status with the patient every six (6) months. Financial status may be reviewed at the request of the patient or clinic at any time.
Credit—Patients with the financial capacity to pay for their own treatment via cash, credit card, and/or debit card occasionally find themselves in need of treatment but, for a variety of reasons, are unable to pay. Our organization empowers its clinic Program Directors (i.e., the on-site clinic managers) to extend credit to patients in such situations for a short period (typically one day) with the understanding that the patient will repay the credit amount extended in short order. Upon receiving credit authorization, the patient receives all medically necessary treatment as may be required.
Both the LifeStream and Metro proposals appear to have described the procedure for each of the five payment methods listed and appear to be entitled to the maximum score of five points according to the objective standards set forth in subsection one of Criterion Five. At the very least, it would be impossible to justify giving either proposal a score of zero, which is reserved for “complete nonresponsiveness” to the question.
LifeStream’s response to subsection two of Criterion Five provided as
follows:
In order to ensure that pricing is competitive, our organization will review the current environment using several data sources on a regular basis. This will include the Department of Children and Families, our state trade association, Florida Behavioral Health association and discussions with other providers. We also propose to conduct focus groups with the individuals that we serve and our
stakeholders to collect input that will be part of this review. On an annual basis, our organization will conduct a pricing study to ensure that the pricing is competitive.
As a safety net provider and an organization committed to serving individuals regardless of their ability to pay, we feel that the input from those we serve and our stakeholders is a critical piece in determining if pricing is competitive. Our organization will identify and provide solutions to ensure that those that need care are able to receive the care. We are dedicated to ensuring that the pricing will be reasonable and that options are identified and offered for low income/indigent individuals. More importantly, our organization will commit to supporting the people we serve through a continuum of services that not only addresses their opioid disorders, but also the social determinants that may affect their successful recovery. Our organization is a Medicaid provider and also has access to other funds to ensure that individuals who need this service will receive it regardless of their ability to pay.
Metro’s response to subsection two of Criterion Five provided as
follows:
As a longstanding provider of Opioid Use Disorder treatment services in the State of Florida, our organization is keenly aware of the need to properly price our services given the circumstances typically facing patients battling opioid addiction which include, but are not limited to, financial hardship. Consequently, we recognize that appropriate pricing of our services is critical so as to ensure that individuals in need of care do not perceive that treatment for their disease is unattainable. While a material and increasing number of patients have their treatment paid by Medicaid, private health insurance, and grants (as fully discussed in question 1 of Criteria 5), those patients who pay for treatment out of their own pockets routinely encounter financial barriers
which, unfortunately, result in them not seeking treatment, or leaving treatment prematurely.
Given our experience operating outpatient clinics in Florida, our organization has developed a substantial amount of year-by-year internal pricing data, which includes specific market economic data, that guides us in pricing our services within a particular Florida region. This data, which is updated annually, is measured against other payer rates (such as Medicaid and private health insurance), and compared to the rates we are paid for opioid addiction treatment services provided by our clinics in other states. Taken together, this data allows us to develop regional benchmarks that we use to price our services fairly and competitively, bearing in mind the financial challenges typically encountered by opioid addicted patients. To be clear, this is a fluid process that takes into account changing market conditions, both inside and outside of Florida, regarding the pricing of opioid addiction treatment. This allows our organization to maintain a current view of what patients can realistically afford to pay and, when necessary, immediately adjust our pricing expectations when the market data indicates that such adjustments are needed to ensure continuity of patient care.
In addition to our routine pricing analysis using our historical internal data, we will, prior to opening a new clinic in a particular area, conduct a survey of other opioid treatment clinics within the region (if any). This survey process not only allows us to gain a better understanding of what the pricing for services is in that region, but helps us identify any additional services that should be offered to patients as part of our pricing structure. Once these surveys are completed, we then use this information, along with our internal analysis of historical data, to price our treatment services according to our planned treatment protocol (e.g., timely delivery of service, having the clinic open seven (7) days per week, maintaining a Call Center
that is open and available to assist existing and prospective patients 24 hours per day, 7 days a week, etc.) and our analysis of specific market dynamics (e.g., quality of care indicators, availability of qualified clinical professionals, attendant costs of support services in the particular market, etc.). Finally, to ensure our pricing remains competitive, we repeat our outpatient treatment clinic surveys at least annually for each and every market in which our clinics operate, and use this information, along with routine feedback voluntarily provided by our existing patients, to determine if our pricing remains appropriate given the market where the clinic is located.
To be clear, we believe that our practice of conducting outpatient clinic surveys relieve patients of having to make pricing and service comparisons while trying to manage their disease. Stated differently, patients can take comfort in knowing that when they inquire as to our treatment pricing, they will receive the identical type and number of services that would typically be offered by all similarly-situated outpatient treatment programs within their geographic region at comparable prices. While this particular process can be burdensome, we have found time and again that the effort is worthwhile given the positive patient feedback we routinely receive regarding the value of services offered at our clinics.
If awarded the clinic license for this particular county, we will deploy each of the aforementioned pricing techniques (i.e., internal analysis of historical pricing data, benchmarking using public and private payer rates from within and outside of Florida, and regional pricing surveys) to develop pricing for our services that will not only be competitive, but affordable for the people within the community in need of treatment. These processes have proved tremendously effective for us thus far, and we fully expect them to be successful within this particular county.
As noted above, subsection two allowed for a more subjective evaluation of the applications. LifeStream’s response was shorter and more general than Metro’s, but both responses addressed similar themes and procedures for ensuring competitive pricing at their clinics. Both proposals showed the applicants’ understanding of the need for competitive pricing and outlined their plans for setting their prices accordingly. Even allowing for the subjectivity permitted by subsection two, it would be impossible to justify giving either proposal a score of zero, which is reserved for “complete nonresponsiveness” to the question.
SCORING OF THE LAKE COUNTY APPLICATIONS
As explained above, the applications were given to the four teams of iSF evaluators for scoring. After the evaluators completed their review, iSF provided the Department with a final report that explained the evaluation process and provided a series of tables for each county that identified each applicant’s scores.
The Lake County applications were scored by “Team Two” of the iSF evaluators. Team Two also reviewed applications for five other counties. Team Two gave LifeStream a total score of 633.5 for Lake County and gave Metro a total score of 619 for Lake County.
Mr. Weller testified that one of his employees found a typographical error in a spreadsheet that iSF produced for the Department. This error prompted Mr. Weller to take a look at the scoring of the proposals by the iSF evaluators.
Mr. Weller noted what appeared to be an anomaly. He found a series of scores in Lake County that went “5, 5, 5, zero, 5, 5, which caught my eye as unusual, and we discovered that the answers for both [subsections one and two of Criterion Five] were different in Lake County compared to all of the other ones that the particular evaluator scored for the other counties.”
A closer review of the scores revealed that each of the three Team Two evaluators gave LifeStream scores of five in both subsections of Criterion Five in its Lake County application. Two of the three evaluators gave Metro scores of five for both subsections of Criterion Five. However, the medical professional on Team Two gave Metro zeros in both subsections of Criterion Five of its Lake County application.
The Criterion Five responses of LifeStream and Metro were essentially identical in all of the six county applications reviewed by Team Two. In the five counties other than Lake County, all of the evaluators, including the medical professional, gave both LifeStream and Metro scores of five for both subsections of Criterion Five. It was only in Lake County that the medical professional decided that Metro’s identical response was completely nonresponsive and deserving of zero points.
As found above, it is impossible to justify scores of zero for Metro’s responses to Criterion Five. It was also extremely unusual for the same evaluator to give such radically different scores to the same response made in different applications. Mr. Weller wanted an explanation. He asked iSF to ask the medical evaluator to explain her reasoning for the inconsistency in her scoring of Metro’s Lake County application and to ask whether she wished to amend her score for Metro’s application.
On April 27, 2020, iSF’s contract manager, Roger Balettie, sent an email to the Team Two medical evaluator, Linda Saucier. The email requested Ms. Saucier’s response as to four scoring questions raised by the Department’s review, including the following:
You have two applicant response questions (Criteria 5 Questions 1 and 2) where an applicant (DCF 12) has two different scores for the same answer across six counties (one with 0s for each question and five with 5s for each question, and your notes are identical).
DCF would like for you to review the applicant’s C5Q1 and C5Q2 response (I will provide that section for you) and confirm either that you intended the 6 counties to be different, or that you intended the 6 counties to have consistent scores for those two questions (and provide those scores).
On May 1, 2020, Ms. Saucier responded as follows:
I just saw your email. It went to my spam folder. I am extremely busy with work. But, I can tell you that the scores are different because of the county or vicinity in which the clinic would be housed and clinicians/service availability. It’s not a cookie cutter process.
Later on May 1, 2020, Mr. Balettie sent an email asking Ms. Saucier to confirm that she did not wish to consider changing her scores for any of the four questions raised in his initial email, including Criterion Five in Lake County. Ms. Saucier responded:
Correct. Roger, there are so many variables when looking at the submissions. I have written and reviewed grants and similar documents in my position. I realized the proposals were the same for each county, unfortunately not all of the counties share the same similarities.
Read in the context of Criterion Five, it is clear that Ms. Saucier did not bother even to look again at her work on these applications before responding to Mr. Balettie. Her response is vague and defensive nonsense. Lake County possesses no unique quality that would render Metro’s pricing strategy and accepted forms of payment completely nonresponsive to Criterion Five, particularly when Ms. Saucier herself found the same responses “superior” in five other counties. Moreover, subsection one of Criterion Five did not give Ms. Saucier the discretion to award zero points to an application that addressed the five listed forms of payment as Metro’s application manifestly did. She violated the instructions of the Scoring Form and offered no real justification for doing so.
The Department reasonably believed that it was not possible to rationalize the zeros that were given to Metro’s Lake County response. The Department reasonably believed there were no differences between counties that would have any impact on pricing or payment methods.
William Sutton, General Counsel for Metro’s parent entity, Colonial Management Group, LP, testified that he personally worked on the applications Metro filed for the 2018-2019 licensure process. Mr. Sutton testified that the “forms of payment and the process [that Metro uses] to determine whether our pricing is competitive is consistent throughout the state of Florida.” He noted that Metro currently has 80 clinics operating throughout the country and that it is “critical” for the company “to have processes in place to deal with those [payment and pricing] issues consistently.”
After digesting the response from iSF, the Department concluded that Ms. Saucier’s scores of zero for Criterion Five of Metro’s Lake County application “could not be justified.” Department personnel met to discuss what action to take regarding the scoring discrepancy.
Eventually, the Department decided to override Ms. Saucier’s scores and to assign a score of five to both Criterion Five subsections in Metro’s Lake County application. The score of five was chosen because it was the same score that Ms. Saucier assigned to all of Metro’s other substantively identical Criterion Five responses in the other five counties she reviewed. The Department took this action “in the interests of fairness.” The Department also believed that Metro would challenge any intended award if the scores of zero were left unchanged and that Metro would likely prevail in such a challenge.2
The Department’s adjustment of the score gave Metro a total score of
639 points, reflecting two double-weighted scores of five instead of two scores
2 Mr. Sutton testified that Metro indeed would have raised such a challenge.
of zero in the Criterion Five subsections. LifeStream’s total score in Lake
County remained 633.5 points.3
On July 10, 2020, the Department published the Notice, which declared its intention to award the new MAT license in Lake County to Metro. The Notice explained the adjustment as follows:
During the review of the evaluators scoring process by the Department, it was discovered that the medical evaluator for Team Two provided scores of zero for both responses in Criteria Five for [Metro’s] Lake County application. The two questions responded to pertained to types of payments accepted and competitive pricing. The responses to these questions were identical to Metro’s responses in the other six applications reviewed by the same medical evaluator. Each of the responses in the other six applications were awarded the full point values (5 points each) by the medical evaluator. In addition, the same responses were awarded either 4 or 5 points by both the other Team Two evaluators and by all the evaluators in the other teams.
The scoring inconsistency resulted in Metro’s Lake County application losing 20 points (5 points for 2 questions, which were weighted by a factor of 2). Correction of the inconsistency results in Metro having the highest scoring application. Upon the Department learning of the scoring discrepancy, the medical evaluator declined to amend the scores and participate in the public meeting of the evaluators.
The responses provided by Metro’s Lake County application were identical to its six non-Lake County applications assigned to Team Two, which were awarded five points each, and identical to all other responses provided by Metro. Thus, the
3 Metro could have received five fewer points through this correction and still received the intended award. Based on the scores possible and the double-weighting of this criterion, any combination of (a) two scores of five, (b) one score of five and one score of four, (c) one score of five and one score of three, or (d) two scores of four would have caused Metro to jump past LifeStream as the successful applicant.
recommendation is to override the scores and award the licensure opportunity to Metro.
The Department’s actions in reviewing the scores awarded and making the changes to Metro’s Criterion Five scores were reasonable under the facts and circumstances presented. LifeStream was unable to mount a serious defense of Ms. Saucier’s scoring or to offer any tangible evidence that the Department was biased either against LifeStream or in favor of Metro.4
LifeStream’s chief argument is that the Department deviated from its own rule by reviewing the scores submitted by iSF, by asking iSF to inquire as to aspects of the scores and suggesting the evaluator change them, and most egregiously by changing Metro’s score after the iSF evaluator declined to amend her evaluation. This legal argument is discussed below.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over this case pursuant to sections 120.569 and 120.57(1), Florida Statutes.
LifeStream is substantially affected by the Department’s decision to change the score for Metro’s Lake County application, which resulted in proposed agency action that the ability to apply for the methadone MAT services license in Lake County be granted to Metro rather than LifeStream, despite the fact that the iSF evaluation team awarded LifeStream the highest score. LifeStream has standing to contest the Department’s proposed agency action.
This is a de novo proceeding intended to formulate final agency action.
§ 120.57(1)(k), Fla. Stat.
4 While the iSF evaluators did not know the names of the companies whose applications they were scoring, the Department was aware that it was acting on the application of Metro when it made the decision to change the scores. However, the credible evidence established that the Department would have done the same thing had LifeStream or any other applicant been in Metro’s place.
LifeStream does not challenge the scores it received in Lake County. The only intended agency action it challenges is the Department’s decision to override the two scores of zero that Metro received for Criterion Five in Lake County. LifeStream has the burden to prove by a preponderance of the evidence that such action was improper.
LifeStream alleges that the Department’s decision to override the scores of zero violated the terms of rule 65D-30.0141 and the Scoring Form adopted by reference therein. It is not disputed that the Department is legally bound to follow its own rules. See Cleveland Clinic Fla. Hosp. v. Ag. for Health Care Admin, 679 So. 2d 1237, 1242 (Fla. 1st DCA 1996).
LifeStream contends that the Department’s actions violated rule 65D- 30.0141(1)(c)2., which provides as follows, in relevant part:
The Department shall utilize an evaluation team made up of industry experts to conduct a formal rating of applications as stipulated in the “Methadone Medication-Assisted Treatment (MAT) Application Evaluation” form, CF-MH 4040, May 2019, incorporated by reference and available at http://www.flrules.org/Gateway/reference.asp?No= Ref-11994. The evaluation team members shall not be affiliated with the Department, current methadone medication-assisted treatment providers operating in Florida, or the applicants.
The selection of a provider shall be based on the following criteria:
Capability to Serve Selected Area(s) of Need and Priority Populations. Area(s) of Need are the counties identified as having a need for additional clinics. Priority Populations are pregnant women, women with young children, and individuals with financial hardships;
Patient Safety and Quality Assurance/Improvement;
Scope of Methadone Medication-Assisted Treatment Services;
Capability and Experience; and
Revenue Sources.
Applicants with the highest-scored applications in each county shall be awarded the opportunity to apply for licensure for the number of programs specified in their letter of intent to meet the need of that county. (emphasis added).
LifeStream contends that the Department’s actions violated several
provisions of the Scoring Form:
Applications shall be independently scored by each member of the evaluation team. No collaboration is permitted during the scoring process. The same scoring principles must be applied to every application received, independent of other evaluators. Evaluators should work carefully to be as thorough as possible in order to ensure a fair and open process. No attempt by Department personnel or other, evaluators or other persons to influence an evaluator’s scoring shall be tolerated.
* * *
Evaluations will be conducted by an external team. The team will be directed to evaluate and rank applications submitted by county within a defined evaluation period. Once the evaluation period has concluded the external team will send completed and scored evaluation forms to the Department. A list of applicants, by ranking and county, will be published on the department’s website. Applicants with the highest-ranking scores will be invited to initiate the licensure application process. (emphasis added).
LifeStream argues that the rule states that a team of evaluators, entirely independent of the Department, will rate the applications, and that
the applicants awarded the highest scores by the team of evaluators “shall be awarded the opportunity to apply for licensure.” The rule does not give the Department authority to intervene in the scoring process or to substitute its judgment for that of the evaluation team. LifeStream argues that the Scoring Form itself supports its contention that Department personnel are to maintain a hands-off role in the evaluation process. Under the rule and the Scoring Form, the Department’s role is purely administrative, not evaluative. Therefore, Lifestream asserts that the Department violated its own rule by changing the score on Metro’s Lake County application.
As the Court recognized in Goodman v. Department of Law Enforcement, 203 So. 3d 909, 915 (Fla. 4th DCA 2016), an agency’s attempt to regulate for every possible contingency “would swiftly devolve into a hopeless endeavor.” The rule and Scoring Form are the Department’s effort to regulate the scoring process in anticipation of reasonably foreseeable events. In this instance, one occurrence the Department’s rule failed to anticipate was a renegade evaluator. LifeStream argues that, having failed to spell out by rule the actions it could take to correct the errors of such an evaluator, the Department is now helpless to act.
Taken to its logical conclusion, LifeStream’s argument is that by failing to adopt a rule explicitly anticipating that an independent evaluator might choose to award points arbitrarily in disregard of the Scoring Form’s instructions, the Department has handcuffed itself and can do nothing to correct the deviation from the requirements of the Scoring Form. Thus phrased, it becomes apparent that LifeStream’s proposition is that the Department’s rule prohibits the Department from enforcing its rule. The absurdity of that proposition is self-evident.
The facts found above establish that the Department followed its promulgated process. It hired outside evaluators and allowed them to submit their scores without interference. When the Department reviewed those scores and found ones that facially violated the promulgated instructions in
the Scoring Form, it took the only reasonable step and overrode those scores. It was more than reasonable for the Department to conclude that this was the most equitable and legally appropriate action.
A more reasonable question for LifeStream to ask is whether there was justification for changing Metro’s scores of zero, meaning the applicant did not address the criterion at all, to the maximum score of five, meaning that the applicant made a “superior” response. The Department indicated that it based its decision on the scores awarded by Ms. Saucier for Criterion Five in all five of Metro’s other applications. The undersigned concludes that the Department’s action was reasonable and declines to disturb it or engage in a rescoring of Metro’s application.
Even if the undersigned were to independently review Metro’s responses to Criterion Five and recommend a score, the result would be the same. Subsection one of Criterion Five was to be scored objectively. The Scoring Form instructed the evaluator to award one point for each of the five accepted forms of payment addressed by the applicant, up to the maximum of five points. There is no reasonable reading of Metro’s response to subsection one that yields any score other than five. Metro addressed each of the five forms of payment in detail. Given the weighting factor of two, Metro’s score for subsection one could only be ten points.
With ten points in hand from subsection one, Metro would need only six points (meaning, a score of three or higher multiplied by two) from its response to subsection two to surpass LifeStream’s point total. A score of three indicates an “adequate” response, described in the Scoring Form’s instructions as “fundamental competency, adequate capability, a basic approach to the subject area, apparently feasible but somewhat unclear solutions, partial responsiveness to the question, a fair understanding of the requirements and a lack of staff experience and skills in some areas.” A score of four indicates a “good” response: “clear competency, consistent capability, a reasoned approach to the subject area, feasible solutions, extensive but
incomplete responsiveness to the question, and a sound understanding of the
requirements.”
Metro’s response showed, at the very least, fundamental competency meriting a score of three points. It would be more accurate to state that Metro’s response showed extensive but incomplete responsiveness and consistent capability in the area of pricing, enough to earn a score of four points. Thus, even if the undersigned were inclined to engage in rescoring Metro’s response to Criterion Five, the ultimate result of the award to Metro would be the same.
An agency action is capricious if the agency takes the action without thought or reason or irrationally. An agency action is arbitrary if it is not supported by facts or logic. See Agrico Chem. Co. v. Dep’t of Envtl. Reg., 365 So. 2d 759, 763 (Fla. 1st DCA 1978).
To determine whether an agency acted in an arbitrary or capricious manner, it must be determined “whether the agency: (1) has considered all relevant factors; (2) has given actual, good faith consideration to those factors; and (3) has used reason rather than whim to progress from consideration of these factors to its final decision.” Adam Smith Enter. v. Dep’t of Envtl. Reg., 553 So. 2d 1260, 1273 (Fla. 1st DCA 1989).
However, if a decision is justifiable under any analysis that a reasonable person would use to reach a decision of similar importance, the decision is neither arbitrary nor capricious. Dravo Basic Materials Co. v. Dep’t of Transp., 602 So. 2d 632 n.3 (Fla. 2d DCA 1992).
The Department’s actions were not in any way illogical or unreasonable. Ms. Saucier, the Team Two medical evaluator, deemed two of Metro’s responses to be completely non-responsive to the questions posed. The evidence demonstrated that Ms. Saucier’s actions had no factual or legal support and constituted a clear deviation from the instructions provided in the Scoring Form, which was adopted by reference by rule 65D-30.0141. Further, Ms. Saucier also deemed identical responses from Metro to be
“superior” in the five other counties she reviewed. Ms. Saucier’s actions could not be rationalized. Her response did not even attempt a logical explanation. The Department’s decision to rescore Metro’s response to Criterion Five in its Lake County application was necessary and proper.
LifeStream has failed to carry its burden of showing that the Department’s actions were arbitrary, capricious, or contrary to rule or statute.
Based on the foregoing Findings of Fact and Conclusions of Law, the undersigned hereby RECOMMENDS that the Department of Children and Families enter a final order awarding the right to proceed to licensure for a methadone MAT facility in Lake County to Metro Treatment of Florida, L.P., and dismissing the Petition for Administrative Hearing filed by LifeStream Behavioral Center, Inc.
DONE AND ENTERED this 1st day of February, 2021, in Tallahassee, Leon County, Florida.
S
LAWRENCE P. STEVENSON
Administrative Law Judge 1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675
Filed with the Clerk of the
Division of Administrative Hearings this 1st day of February, 2021.
COPIES FURNISHED:
Daniel Ryan Russell, Esquire Dean Mead and Hall
Suite 1200
106 East College Avenue Tallahassee, Florida 32301
Mia L. McKown, Esquire Holland & Knight, LLP Suite 600
315 South Calhoun Street Tallahassee, Florida 32301
William D. Hall, Esquire Dean Mead and Dunbar Suite 1200
106 East College Avenue Tallahassee, Florida 32301
Chad Poppell, Secretary
Department of Children and Families Building 1, Room 202
1317 Winewood Boulevard
Tallahassee, Florida 32399-0700
Javier Enriquez, General Counsel Department of Children and Families Building 2, Room 204F
1317 Winewood Boulevard
Tallahassee, Florida 32399-0700
Brittany Adams Long, Esquire Radey Law Firm, P.A.
Suite 200
301 South Bronough Street Tallahassee, Florida 32301
John L. Wharton, Esquire Dean Mead and Dunbar Suite 1200
106 East College Avenue Tallahassee, Florida 32301
Eddie Williams, III, Esquire Holland & Knight, LLP Suite 600
315 South Calhoun Street Tallahassee, Florida 32301
Lacey Kantor, Agency Clerk Department of Children and Families Building 2, Room 204Z
1317 Winewood Boulevard
Tallahassee, Florida 32399-0700
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.
| Issue Date | Document | Summary |
|---|---|---|
| Mar. 03, 2021 | Agency Final Order | |
| Feb. 01, 2021 | Recommended Order | Petitioner failed to demonstrate that the Department's action in correcting scores on a competitive application for methadone MAT services was arbitrary, capricious, or contrary to law. |
