STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JOHN M. COMPTON, )

)

Petitioner, )

)

vs. ) CASE NO. 95-1487

) DEPARTMENT OF MANAGEMENT SERVICES, ) DIVISION OF STATE EMPLOYEES' INSURANCE, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held pursuant to notice on March 30, 1995, before Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Robert D. Newell, Jr., Esquire

817 North Gadsden Street Tallahassee, Florida 32303

For Respondent: Augustus D. Aikens, Jr., Chief

Benefit Programs and Legal Services Division of State Employees' Insurance 2002 Old St. Augustine Road, B-12 Tallahassee, Florida 32301-4876

STATEMENT OF THE ISSUE

Whether the medical services prescribed for the Petitioner are experimental or investigative under terms of the state insurance contract, and excluded from coverage.

PRELIMINARY STATEMENT

The Petitioner in this cause has been diagnosed with multiple myeloma, a form of cancer which attacks the blood. In the course of treating Petitioner's disease, he was referred to Dr. Robert Joyce who is establishing a treatment center for treatment of various diseases using chemotherapy and bone marrow transplants at Baptist Hospital (Baptist) in Jacksonville, Florida.

The Petitioner was determined to be a good subject for high dose chemotherapy with subsequent bone marrow transplants to treat his condition which can be treated, but not cured. Dr. Joyce requested a predetermination of coverage from the State's insurance system which is administered by Blue Cross Blue Shield (BCBS). BCBS recommended excluding the requested treatment, and the systems Administrator denied the requested treatment because it was an experimental and investigative procedure.

The Petitioner requested a hearing, and an expedited hearing was held on March 30, 1995. Proposed findings were filed on April 7 and April 10, 1995 by the Petitioner and Respondent, respectively. These findings were read and considered. The Appendix to this Recommended Order states which of those findings were adopted, and which were rejected and why.

FINDINGS OF FACT

1. The Petitioner, John M. Compton, is 55 years of age, and has been an employee of the State of Florida for 21 years and 2 months. Mr. Compton is a participant in the State of Florida Employees' Group Health Self Insurance Plan (Group Plan), and entitled to coverage in accordance with the provisions of the Group Plan.

   
   

2. The Respondent is the Division of State Employees' Insurance, Department of Management Services (Department) which is charged with the administration of the Group Plan. BCBS is the contract administrative agency for the Group Plan, and makes recommendations to the Administrator regarding covered procedures.

   
   

3. In February 1992, the Petitioner was diagnosed by Dr. Mark Currie, a physician who specializes in treatment of diseases of the blood and cancer, with multiple myeloma, a form of cancer which attacks the blood and bone marrow.

   
   

4. Dr. Currie treated the Petitioner using chemotherapy with good results; however, recognizing that the prescribed chemotherapy would be effective for a finite, but unknown period of time, Dr. Currie suggested intensive chemotherapy treatment with stem cell support upon relapse.

   
   

5. Stem cell support is another term for bone marrow transplants which today includes withdrawing the blood from the donor, extracting the stem cells which form bone marrow cells, freezing these cells, and reintroducing them into the donor. This would be done after the Petitioner had had high dose chemotherapy which would kill his existing bone marrow.

   
   

6. Chemotherapy utilizing the drugs which would be used in this procedure has been conducted for many years and the maximum dosages, maximum toxicity, and similar information have been investigated and studied in trials which have been concluded. This therapy is standardized treatment of the type administered by Dr. Currie and presumably covered by the plan.

   
   

7. Bone marrow transplants using the procedure described above is a relatively new procedure, compared with the chemotherapy, but has been performed for four to five years and has been accepted as a standard treatment.

   
   

8. Dr. Currie referred the Petitioner to Dr. Robert Joyce at Baptist for assessment as a subject for treatment upon relapse using a combination of the two procedures described in paragraphs 5, 6, and 7, above. Dr. Joyce is a physician experienced in bone marrow research and the treatment of diseases of the blood and bone marrow using chemotherapy and bond marrow transplants. Dr. Joyce was the principal investigator and primary physician in the program to which the Petitioner was referred.

   
   

9. After examination, testing and an initial series of chemotherapy using the drugs used in the high dose therapy, Dr. Joyce determined that the Petitioner is an excellent candidate for this procedure because he does not have

   many of the diseased cells in his system and they are destroyed by the drugs used in the chemotherapy. For the maximum benefit, the procedure must be undertaken before the number of diseased cells increase in the Petitioner's system. This is what creates the urgency in these proceedings.

   
   

10. Dr. Joyce requested a predetermination of coverage for the proposed procedure from the Group Plan's administration, BCBS, which recommended to the Group Plan's Administrator that the coverage was excluded as investigative or experimental. See Subsection G.28 of the Insurance Plan Benefit Document, Respondent's Exhibit 3. By letter dated March 15, 1995, the administrator denied coverage.

    
    

11. The denial letter states erroneously that the proposed procedure is a Phase II investigation, which gave rise to efforts at hearing to show that the proposed procedure was not a Phase I, II or III investigation or experiment.

    
    

12. The benefit document, Respondent's Exhibit 3, defines "Experimental or Investigative" as meaning:

    
    

    . . . any evaluation, treatment, therapy, or device which involves the application, admin- istration or use, of procedures, techniques, equipment, supplies, products, remedies, vaccines, biological products, drugs, pharmaceuticals, or chemical compounds if,

    as recommended by the Servicing Agent and determined by the Administrator:

    1. such evaluation, treatment, therapy, or device cannot be lawfully marketed without approval of the United States Food and Drug Administration or the Florida Department of Health and Rehabi- litative Services and approval for marketing has not, in fact, been given at the time such is furnished to the Insured;

    2. such evaluation, treatment, therapy, or device is the subject of an ongoing Phase I, II, or III clinical investigation or under study to determine: maximum tolerated dosage(s), toxicity, safety, efficacy, or efficacy as compared with the standard means for treatment or diagnosis of the condition in question;

    3. that the consensus of opinion among experts is that further studies, research, or clinical investigations are necessary to determine: maximum tolerated dosage(s), toxicity, safety, efficacy, or efficacy as compared with the standard means for

       treatment or diagnosis of the Condition in question;

    4. that such evaluation, treatment, therapy, or device has not been proven safe and effective for treatment of the condition in question, as evidenced in the most recently published medical literature in the United States, Canada, or Great Britain, using generally accepted scientific, medical, or public health methodologies or statistical practices;

    5. there is no consensus among practicing Physicians that the treatment, therapy, or device

       is safe and effective for the condition in question; or

    6. such evaluation, treatment, therapy, or device is not the standard treatment, therapy or device utilized by practicing Physicians in treating other patients with the same or similar condition.

       
       

13. The testimony of Dr. Currie and of Dr. Joyce established that this procedure was not a Phase I, II, or III investigation; that this procedure is safe and effective within the acceptable limits of such therapies; and that there is a consensus that the procedure is safe and effective for the condition.

    
    

14. The testimony of Dr. Joyce established that under the protocols under which the Petitioner would received the proposed treatment, information would be gathered on toxicity and on the efficacy of this treatment compared with current treatments. Deposition of Dr. Joyce, Page 113, line 9. The evidence also establishes that the treatment proposed is not the "standard" treatment for this disease. See Petitioner's Exhibit 8, Letter of September 28, 1994, Dr. Joyce to Dr. McLear attached to letter dated October 13, 1994, Dr. McLear to Dr. Joyce. Although these conditions do not define the treatment as even a Phase IV investigation, it does place the treatment within the exclusions (b) and (c) cited in Paragraph 11, above.

    
    

    CONCLUSIONS OF LAW

    
    

15. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter presented herein, pursuant to Section 120.57(1), Florida Statutes.

    
    

16. The narrow issue is whether the procedure proposed is excludable under the provisions of the Group Plan's benefits contract. The plan covers all medically necessary medical services except those specifically excluded. The exclusion provision excludes therapies and procedures which are investigative or experimental. "Experimental and investigative" are specifically defined in the Group Plan's benefit book and are quoted in the Findings of Fact, paragraph 11.

    
    

17. The evidence showed that the procedure is not excluded by the provisions of (a), (d), (e) or (f), of the quoted exclusions. The testimony dwelled at length on toxicity studies, and whether the toxicity studies pertaining to the proposed procedure placed it within the definitions of a Phase I, II or III investigation. The toxicity studies did not place it within a Phase I, II or III investigation. However, the exclusions go beyond those limitations including toxicity studies which compare the proposed procedure with the standard means of treatment and comparing the efficacy of the proposed procedure with standard means of treatment.

    
    

18. The material cited in paragraph 14, above, shows that the toxicity studies were to compare this treatment with standard treatments and its efficacy with standard treatments. Further, although the proposed treatment may become rapidly the accepted and preferred treatment of this disease, it is not the standard treatment at this time.

    
    

19. The arguments presented regarding the impact of Section 627.424, Florida Statutes, were not considered because existing contracts are not subject to the rules. The blue ribbon panel's recommendations were considered regarding

its classification of the proposed procedure as a "standard", "non-experimental" therapy. It was determined that it was not a standard treatment because it was included in the second tier of procedures and it was not experimental under the proposed scheme of regulation only when conducted within the context of clinical treatment trials. Although the proposed treatment is within the guidelines for clinical treatment trials set by the panel, the proposed treatment is not currently a standard treatment and would be declared "non-experimental" only upon adoption of the rules by the Department of Health and Rehabilitative Services.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is,

RECOMMENDED:

That the proposed procedure be excluded under the terms of the State Group Plan.

DONE and ENTERED this 13th day of April, 1995, in Tallahassee, Florida.

STEPHEN F. DEAN, 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 13th day of April, 1995.

APPENDIX TO RECOMMENDED ORDER

Petitioner's Proposed Findings

Paragraphs 1-9 Adopted and subsumed in paragraphs 1-8. Paragraphs 10-15 Adopted and subsumed in paragraphs 9-11.

Paragraph 16 True, the plan does not name any specific procedure.

Paragraph 17,18 There is no presumption regarding the proposed procedure as experimental.

Paragraph 19,20 True, but unnecessary to resolve the legal and factual dispute.

Paragraph 21-37 Subsumed in paragraph 12.

Paragraph 38 Subsumed in paragraph 8.

Paragraph 39 The study shows that the treatment is accepted as safe and effective, but does not address the issue of whether it is experimental.

Further, the exclusion is not based upon the experimental nature of the procedure, but upon the fact that it would be excluded under specific language of the benefit plan.

Paragraph 40,41 See comments to Paragraph 21. Paragraph 42-43 See comments to Paragraph 39. Paragraph 44 Subsumed in paragraphs 6,7.

Paragraph 45-49 True, but not required for a determination of the issue. Paragraph 50 Subsumed in paragraph 8.

Paragraph 51 Rejected as contrary to best evidence. Paragraph 52 Subsumed in paragraph 12.

Paragraph 53-55 Rejected as argument.

Paragraph 56 0True, but not required for a determination of the issue.

Respondent's Proposed Findings Paragraphs 1-5 Paragraphs 1-4.

Paragraphs 6,7 Not necessary for determination of the issue. Paragraphs 8-13 Paragraphs 3-8.

Paragraphs 12 Deleted by Respondent. Paragraphs 14,15,16 Paragraphs 9-11.

Paragraph 17 Paragraph 8.

Paragraph 18 True, but not necessary for determination of the issue. The evidence tends to show that, notwithstanding the newness of the procedure, it is rapidly being accepted as the procedure of choice in treatment of this type of disease.

Paragraph 19-23 Irrelevant.

Paragraph 24 The information quoted is quoted from another source attributable to Dr. Joyce.

Paragraph 25 Supports finding that the treatment is not standard, but is rejected for the purpose that it was apparently offered.

Paragraph 26-29 Irrelevant. Paragraph 30,31 Conclusion of Law.

Paragraph 32 Subsumed in findings that proposed procedure in not the standard treatment.

Paragraph 33-39 Irrelevant.

Paragraph 40 See comments to paragraph 32. Paragraph 41,42 Irrelevant.

COPIES FURNISHED:

Robert D. Newell, Jr., Esquire 817 North Gadsden Street Tallahassee, FL 32303

Augustus D. Aikens, Jr., Chief Benefit Programs and Legal Services

Division of State Employees' Insurance 2002 Old St. Augustine Road, B-12 Tallahassee, FL 32301-4876

William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307

Koger Executive Center 2737 Centerview Drive

Tallahassee, FL 32399-0950

Paul A. Rowell, General Counsel Department of Management Services Knight Building, Suite 312

Koger Executive Center 2737 Centerview Drive

Tallahassee, FL 32399-0950

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

ALL PARTIES HAVE THE RIGHT TO SUBMIT WRITTEN EXCEPTIONS TO THIS RECOMMENDED ORDER. ALL AGENCIES ALLOW EACH PARTY AT LEAST 10 DAYS IN WHICH TO SUBMIT WRITTEN EXCEPTIONS. YOU SHOULD CONTACT THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE CONCERNING AGENCY RULES ON THE DEADLINE FOR FILING EXCEPTIONS TO THIS RECOMMENDED ORDER. ANY EXCEPTIONS TO THIS RECOMMENDED ORDER SHOULD BE FILED WITH THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE.

================================================================= AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF MANAGEMENT SERVICES

JOHN COMPTON,

Petitioner,

vs. CASE NO. 95-1487

DEPARTMENT OF MANAGEMENT SERVICES, DIVISION OF STATE EMPLOYEES' INSURANCE,

Respondent.

/

FINAL ORDER

This matter is before me for the entry of a Final Order. A Recommended Order was rendered on April 13, 1995 by Stephen F. Dean, a duly appointed Hearing Officer with the Division of Administrative Hearings. The Petitioner filed exceptions to the Recommended Order with the Department of Management Services (DMS) on April 18, 1995. The Respondent filed responses to the Petitioner's exceptions on April 20, 1995. Upon review of the complete record in this matter,

IT IS ORDERED THAT:

1. The findings of fact in paragraphs 1 - 14 with the exception of the last sentence of paragraph 14 of the Recommended Order are hereby adopted as the findings of fact of the agency. The last sentence of paragraph 14 is rejected

   because interpretation of the plan contract is an issue of law. See DEC Electric, Inc. v. Raphael Construction Corporation, 558 So.2d 427 (Fla. 1990), citing Peacock Construction Co. v. Modern Air Conditioning, Inc., 353 So.2d 840 (Fla. 1977), and Aetna Casualty & Surety Co. v. Warren Brothers Co., 355 So.2d 785 (Fla. 1978).

   
   

2. The conclusions of law in paragraphs 15-17 with the exception of the last sentence of paragraph 17 of the Recommended Order are hereby adopted, in part, as the conclusions of law of this agency. The last sentence of paragraph

   17 is rejected because it is based on an incorrect interpretation of the plan contract. Paragraph 18 is rejected as a finding of fact. Paragraph 19 is rejected as set forth hereafter.

   
   

3. In 1992 the Legislature created section 627.4236, F.S., to restrict the use of experimental treatment exclusions with respect to bone marrow transplants. Under the statute the Bone Marrow Transplant Advisory Panel created by this section was charged by the Legislature to consider which bone marrow transplant procedures are accepted within the appropriate oncological specialty and are not experimental. The Panel made the determination and listed "approved" procedures which included the bone marrow transplant procedure referred to as stem cell support for multiple myeloma, as not experimental under the rules. Based on this recommendation and pursuant to section 627.4236, F.S., on February 23, 1995 the Secretary of the Florida Department of Health and Rehabilitative Services recommended that administrative rules be promulgated to include stem cell support for multiple myeloma as a covered service under health insurance or health maintenance organization contractual provisions. The rules have not been promulgated. An agency may exercise discretion and change its policy before amendment of a rule. Agency for Health Care Administration v. Orlando Regional Healthcare System, Inc., 617 So.2d 385, 388 (Fla. 1st DCA 1993); C. H. Barco Contracting Company v. State of Florida Department of Transportation, 483 So.2d 796 (Fla. 1st DCA 1986).

   
   

4. In testimony the Director of the Division of State Employees' Insurance stated that a reserve amount exists within the State Employee Health Insurance Trust Fund which would enable coverage of bone marrow transplants without risking the actuarial soundness of the Fund which would enable immediate coverage. I adopt the Director's decision that coverage of the subject bone marrow transplant will cause no substantial negative impact on the Fund this year.

   
   

5. Further, in this matter I wish to assume the responsibility and elevate the substance of the final action of this Department over strict compliance with procedural form. But for the lack of promulgation of the relevant administrative rules, Mr. Compton would have ready financial access to the recommended treatment for his condition to prolong his life. I am of the opinion that such basic consideration should be available to state employees.

   
   

6. The exceptions to the Recommended Order are granted in part and denied in part for the reasons set forth herein.

   
   

7. Exception 1 is granted.

   
   

8. Exception 2 is granted to the extent that it is consistent with paragraph 1 above.

   
   

9. John M. Compton's proposed bone marrow transplant procedure is not excluded under the terms of the State Group Self-Insurance Plan.

DONE AND ENTERED this 26 day of April, 1995 in Tallahassee, Florida.

Don Mills, Deputy Secretary Department of Management Services

2737 Centerview Drive, Knight Building Suite 307 Tallahassee, Florida 32399-0950

NOTICE OF RIGHT TO APPEAL

This order constitutes final agency action. Judicial review of this proceeding may be instituted by filing a notice of appeal with the filing fee prescribed by law in the District Court of Appeal, pursuant to Section 120.68, Florida Statutes, and a copy with the clerk of the Department of Management Services. Such notice must be filed within thirty (30) calendar days of the date this order is filed in the official records of the Department of Management Services, as indicated in the Certificate of Clerk. Review proceedings shall be conducted in accordance with the Florida Rules of Appellate Procedure.

Certificate of Clerk:

Filed in the office of the Clerk of the Department of Management Services on this 26th day of April, 1995.

Clerk

COPIES FURNISHED:

Robert D. Newell, Jr., Esquire 817 North Gadsden Street Tallahassee, Florida 32303

Augustus D. Aikens, Jr., Chief Benefit Programs and Legal Services

Division of State Employees' Insurance 2002 Old St. Augustine Road, B-12 Tallahassee, Florida 32301-4876

Stephen F. Dean, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1500

Paul A. Rowell, General Counsel Department of Management Services Office of General Counsel

2737 Centerview Drive Knight Building, Suite 312

Tallahassee, Florida 32399-0950

Docket for Case No: 95-001487

Orders for Case No: 95-001487