S. ("the Insureds")1 sought relief before the Statewide Provider and Subscriber Assistance Panel ("the Panel"). A hearing was held before the Panel on September 29, 1998. On December 3, 1998, the Agency for Health Care Administration ("AHCA") issued its decision ordering the Petitioner to reinstate coverage of the disputed speech therapy treatments for F. S., Jr., based upon the following three findings: (1) that the Group Service Agreement and the Member Handbook are in conflict and should be interpreted in the subscriber's favor; (2) that the denial of treatments required by the subscriber's son was not based upon sound medical criteria; and (3) that the Petitioner failed to document its notification to the subscriber of the termination of coverage. The Petitioner timely contested these findings and requested an administrative hearing on December 23, 1998.
On January 6, 1999, this matter was referred to the Division of Administrative Hearings for a summary proceeding pursuant to Section 120.574, Florida Statutes. A final hearing was scheduled for January 28, 1999. At the final hearing the Petitioner
presented the testimony of two witnesses, Ms. Vivian Lindsay and Dr. Carolina G. Sierra. The Petitioner also offered Exhibits 1 through 7, all of which were received without objection. The Respondent presented the testimony of two witnesses, Mr. and Mrs. F. S. The Respondent also offered Exhibits A through U, all of which were received without objection.
At the conclusion of the final hearing, the parties agreed that the transcript would be ordered and that proposed final orders would be submitted within ten days after the filing of the transcript. The transcript was filed with the Division of Administrative Hearings on February 23, 1999. On that same day a status conference was conducted, during which all parties agreed to a deadline of March 2, 1999, for the filing of their respective proposed final orders. All parties filed timely proposed final orders containing proposed findings of fact and conclusions of law. The parties' proposals have been carefully considered during the preparation of this Final Order.
The Petitioner, Neighborhood Health Plan, is a health maintenance organization which has been granted a certificate by the Respondent.
In the fall of 1995, the Petitioner issued a policy of health insurance to a small business corporation owned by
Mr. F. S. The policy covered Mr. F. S. and his dependents, including his wife and children. The family's membership in the
Petitioner's plan began on or about October 1, 1995. The subject health insurance policy has been in effect without interruption since its inception.
At all material times, F. S., Jr., the minor son of Mr. and Mrs. F. S., has been a covered dependent under the subject health insurance policy.
In the normal course of events, when the Petitioner issues a new health insurance policy, it also delivers to the insurance business a Group Service Agreement and a Member Handbook. Mr. and Mrs. F. S. received a copy of the Member Handbook on or near the date on which the policy was issued. Mr. and Mrs. F. S. did not receive a copy of the Group Service Agreement until sometime in early 1998 after they had filed a grievance regarding coverage denial.
Shortly after the inception of the health insurance policy, Mrs. F. S. took her children for an introductory meeting with the pediatrician who was their new primary care physician under the terms of the health insurance policy. That pediatrician referred F. S., Jr., to Dr. Carlos Gadia, a pediatric neurologist. Following a neurological evaluation of
F. S., Jr., Dr. Gadia concluded that F. S., Jr., had the following medical problems: expressive language disorder, dyspraxia, and dysgraphia. Expressive language disorder is an impairment of the ability to communicate one's experiences, ideas, or feelings to others. Dyspraxia is an impairment of the
ability to coordinate movement, or to perform coordinated acts. Dysgraphia is the impairment of the ability to perform the movements required for writing, such as holding and moving a pencil across paper. Dr. Gadia recommended an electroencephalogram and other specific follow-up testing.
Dr. Gadia also concluded that F. S., Jr., ". . . should be started on physical and occupational therapy. He should also benefit from more intensive speech therapy. "
Beginning on or about November 1, 1995, the Petitioner pre-authorized speech therapy and occupational therapy for
F. S., Jr. The Petitioner required the treatment providers to submit treatment plans and progress reports every two months to justify the authorization of further treatment sessions. Using this procedure, the Petitioner continued to authorize speech therapy and occupational therapy for F. S., Jr., without interruption through the end of 1997.
In the fall of 1997, the Petitioner's medical department concluded that it had been administering the benefits for speech therapy and some other forms of therapy more generously than was provided for in the Group Service Agreement. The Petitioner then began the process of reviewing the records of each patient who was receiving therapy, in order to determine whether the therapy being provided to each patient was covered by the provisions of the Group Service Agreement. During the course of such review, the Petitioner concluded that F. S., Jr., should not have
received speech therapy benefits because his disability appeared to be "developmental" or congenital, rather than "acquired."
In late 1997, F. S., Jr.'s, primary care physician requested authorization from the Petitioner for additional speech therapy services for F. S., Jr., to be provided in 1998. By letter dated January 8, 1998, the Petitioner advised the primary care physician that the request was denied. A copy of the letter was sent to Mr. and Mrs. F. S. The letter of January 8, 1998, stated, in pertinent part:
You have requested the above referenced member to receive Speech Therapy. This request has been reviewed by a physician through the Medical Management Program and has been denied.
The service requested does not meet medical criteria for coverage. Therefore this service cannot be authorized for payment.
Mr. and Mrs. F. S. promptly initiated the grievance procedure provided for by the Petitioner. During the course of the grievance process, a representative of the Petitioner explained that the coverage for speech therapy had been denied because, in the opinion of the Petitioner's medical department,
F. S., Jr.'s, need for speech therapy was occasioned by a learning disability or a developmental disability, and not by an "acquired disability." Representatives of the Petitioner also explained that they would provide coverage for the speech therapy, if it could be established that F. S., Jr., had an "acquired disability."
Mrs. F. S. contacted Dr. Gadia, the neurologist, and asked whether he could determine whether her son's condition resulted from a congenital cause or from an acquired cause. Dr. Gadia was unable to make the requested determination due to insufficient information.
By letter dated March 27, 1998, the Petitioner resolved the grievance by denying coverage for the requested speech therapy. The letter stated, in pertinent part:
On March 23, 1998 the Grievance Committee of Neighborhood Health Partnership met to review your grievance. After thorough review and discussion, the Grievance Committee decided to uphold its original decision and voted to deny payment for services rendered to your son, F. S., for Speech Therapy.
The decision to uphold the denial was based on the Group Service Agreement, Article VII, Exclusions and Limitations, which indicate that treatment of learning disabilities, mental retardation and other developmental disorders, including, but not limited to, learning disorders, motor skills disorders, communication disorders and autistic disorders, are not covered.
There is anecdotal evidence which suggests the possibility that F. S., Jr.'s, speech disabilities are inherited. There is anecdotal evidence which suggests the possibility that
F. S., Jr.'s, speech disabilities are the results of injury during the course of his being delivered by the use of forceps following a difficult period of labor. None of the anecdotal evidence is sufficient to establish one cause or to rule out the other. Similarly, none of the medical records contain sufficient
information for a physician to express an expert opinion as to whether F. S., Jr.'s, speech disabilities are the result of one cause or the other. There is a high probability that one cause or the other could be ruled out by an MRI examination.
Like most group health insurance policies, the contract in this case was expressed in two documents, a Group Service Agreement and a Member Handbook. The Group Service Agreement, which is typically furnished to the employer, but not to the individual insureds, is the basic insurance agreement. It sets forth the terms and conditions of the insurance agreement and specifically includes statements describing what is covered, describing any limitations on coverage, and describing what is excluded from coverage. The Member Handbook, which is typically the only document furnished to the individual insureds, is a summary of the benefits available under the insurance agreement. In this case the Member Handbook, in effect from October 1996 to the present, specifically stated on the inside front cover: "The following information constitutes a summary of the benefits available under the Group Service Agreement. You must refer to the Group Service Agreement for a detailed explanation of available benefits."
The Group Service Agreement in effect from October 1996 to the present contains the following coverage provision:
Outpatient Therapies. Physical, respiratory, speech, or occupational therapies for purposes of rehabilitation of an acquired disability, when, in the opinion of the Plan
Physician, such therapy will result in optimal improvement in the patient's condition within two (2) months. In no event will the maximum benefit exceed 60 visits per Calendar Year for all services combined.
The Member Handbook in effect from October 1996 to the present contains the following coverage provision:
Therapy Services
Physical, respiratory, speech and occupational therapy. Such coverage will only be provided for rehabilitation of a disability if in the opinion of your PCP, such therapy will result in optimal improvement in your condition within two (2) months. Limited to sixty (60) visits per Calendar Year for all services combined.
The Group Service Agreement in effect from October 1996 to the present contains the following exclusions:
11. Treatment of learning disabilities, mental retardation, and other developmental disorders including, but not limited to, learning disorders, motor skills disorders, communication disorders, and autistic disorders;
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19. Physical, respiratory, occupational, or speech therapy in excess of 60 visits per Calendar Year;
The Member Handbook in effect from October 1996 to the present contains the following exclusions:
Physical, respiratory, occupational, or speech therapy in excess of 60 visits per Calendar Year for all services combined.
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Treatment of learning disabilities, mental retardation and developmental disorders,
including but not limited to, learning disorders, motor skills disorders, communication disorders, and autistic disorders.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Sections 120.57, 120.574, and 408.7056(14), Florida Statutes.
Section 408.7056, Florida Statutes, provides for the establishment of a program to resolve disputes between "managed care entities,"2 and subscribers who receive health care from such entities, as well as to resolve disputes between such entities and the providers of health care services. Pertinent provisions of Section 408.7056, Florida Statutes, include the following:
(3) The agency shall review all grievances within 60 days after receipt and make a determination whether the grievance shall be heard. Once the agency notifies the panel, the subscriber or provider, and the managed care entity that a grievance will be heard by the panel, the panel shall hear the grievance either in the network area or by teleconference no later than 120 days after the date the grievance was filed. The agency shall notify the parties, in writing, by facsimile transmission, or by phone, of the time and place of the hearing. The panel may take testimony under oath, request certified copies of documents, and take similar actions to collect information and documentation that will assist the panel in making findings of fact and a recommendation. The panel shall issue a written recommendation, supported by findings of fact, to the provider or subscriber, to the managed care entity, and
to the agency or the department no later than
15 working days after hearing the grievance. If at the hearing the panel requests additional documentation or additional records, the time for issuing a recommendation is tolled until the information or documentation requested has been provided to the panel. The proceedings of the panel are not subject to chapter 120.
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After hearing a grievance, the panel shall make a recommendation to the agency or the department which may include specific actions the managed care entity must take to comply with state laws or rules regulating managed care entities.
A managed care entity, subscriber, or provider that is affected by a panel recommendation may within 10 days after receipt of the panel's recommendation, or 72 hours after receipt of a recommendation in an expedited grievance, furnish to the agency or department written evidence in opposition to the recommendation or findings of fact of the panel.
No later than 30 days after the issuance of the panel's recommendation and, for an expedited grievance, no later than 10 days after the issuance of the panel's recommendation, the agency or the department may adopt the panel's recommendation or findings of fact in a proposed order or an emergency order, as provided in chapter 120, which it shall issue to the managed care entity. The agency or department may issue a proposed order or an emergency order, as provided in chapter 120, imposing fines or sanctions, including those contained in ss.
641.25 and 641.52. The agency or the
department may reject all or part of the panel's recommendation. All fines collected under this subsection must be deposited into the Health Care Trust Fund.
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Any information which would identify a subscriber or the spouse, relative, or
guardian of a subscriber and which is contained in a report obtained by the Department of Insurance pursuant to this section is confidential and exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I of the State Constitution.
A proposed order issued by the agency or department which only requires the managed care entity to take a specific action under subsection (7) is subject to a summary hearing in accordance with s. 120.574, unless all of the parties agree otherwise. If the managed care entity does not prevail at the hearing, the managed care entity must pay reasonable costs and attorney's fees of the agency or the department incurred in that proceeding.
(15)(a) Any information which would identify a subscriber or the spouse, relative, or guardian of a subscriber which is contained in a document, report, or record prepared or reviewed by the panel or obtained by the agency pursuant to this section is confidential and exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I of the State Constitution.
The principal disputed issue in this case centers on the significance of certain differences in language in the Group Service Agreement and the Member Handbook. Such differences in language were discussed as follows in Roberta Rubin v. Department of Administration, Division of State Employees' Insurance, DOAH Case No. 91-5643 (Recommended Order issued May 22, 1992):
Although the Department argues that the State Plan should be treated otherwise, the courts have already concluded that the State Plan is the functional equivalent of an "insurance contract." See Ganson v. State, Department of Administration, 554 So.2d 516 (Fla. 1st DCA 1989), at page 521. Such being the case, it follows naturally that the provisions of the State Plan should be construed in the same manner as the provisions of other insurance contracts. See
Ganson, supra, at page 521, footnote 1. And the type of insurance contract that most resembles the State Plan, is, of course, a group insurance contract.
With regard to group insurance policies, it was noted in Equitable Life Assurance Society of the United States v. Wagoner, 269 So.2d 747 (Fla. 4th DCA 1972), that:
As a practical matter, the certificate is the only document which the insured under a group life insurance policy ever sees. When the terms of the Certificate are in conflict with the provisions of the master policy a problem arises as to which should prevail. While the authorities are divided on the question, we believe the better view to be the one which holds that under group life insurance policies there is a contract between the insurer and the individual insured, that the contract consists of both the master policy and the certificate of insurance construed together, and that ambiguities or conflicts between the two must be resolved so as to provide the broadest coverage.
In Rucks v. Old Republic Life Insurance Company, 345 So.2d 795 (Fla. 4th DCA 1977), the court quoted and followed the language from Wagoner, supra, quoted immediately above. The Rucks court also quoted with approval the following language from Evans v. Holly Corporation, 15 Cal. App.3d 1020, 93 Cal.Rptr 712 (Ct. of App. 2nd Dist. 1971):
Where the representations in an insurance certificate indicate broader coverage than that provided by the master policy, the insurer is bound by the terms of the certificate.
More recent cases have held that the conclusions reached in Wagoner, supra, and Rucks, supra, also apply to other types of insurance policies. See Autorico, Inc. v.
Travelers Indemnity Company, 400 So.2d 164 (Fla. 3d DCA 1981); American States Insurance Company v. Dick's Crane Service, Inc., 399 So.2d 442 (Fla. 5th DCA 1981); Government Employees Insurance Company v. Burak, 373 So.2d 89 (Fla. 3d DCA 1979).
The conclusions reached in Wagoner and Rucks were also followed in Davis v. Crown Life Insurance Company, 696 F.2d 1343 (11th Cir. 1983), in which the court was faced with a master policy that included a provision precluding coverage, and a certificate of insurance which did not mention the precluding provision. Following Wagoner, the Davis court held, at 1346:
If the certificate of insurance had contained a provision regarding the effective date of dependent disability coverage different from that in the master policy, Wagoner would require that the ambiguity be resolved to provide the broadest coverage for the insured. We are therefore faced with the question of whether an ambiguity is created when a controlling feature of coverage in the master policy is not recited in the certificate of insurance. The failure to state a controlling provision in a certificate of insurance is equally as egregious as stating conflicting dates in the master policy and the certificate of insurance. Where the certificate of insurance is silent on a controlling provision, the certificate does not merely mislead and confuse; it does not inform at all. Thus, the insured is never alerted to the omitted subject matter. Following Wagoner, we treat this ambiguity resulting from silence in the certificate of insurance the same as an express ambiguity between policy and certificate. In this case, the certificate indicated that dependent coverage deductions were to be made from Norma Davis's weekly salary, thereby giving the impression that Grover Davis was covered as a dependent. We hold that the failure to include the controlling provision regarding dependent
disability coverage in the certificate of insurance, combined with the deductions for what reasonably appeared to be dependent disability coverage, created an ambiguity which must be resolved in the manner that provides the broadest coverage. To hold otherwise would encourage insurers to withhold the master policy and include few important provisions in the certificate of insurance. (Emphasis added.)
Further, it is well-established in Florida that "[o]nce the insured establishes a loss that appears to be within the terms of the all-risk policy, the burden is on the insurer to prove that the loss was caused by an excluded risk." Hudson v. Prudential Property & Casualty Ins. Co., 450 So. 2d 565 (Fla. 2d DCA 1984); Wallach v. Rosenberg, 527 So. 2d 1386 (Fla. 3d DCA 1988).3 This principle was recently restated in State Comprehensive Health Association v. Carmichael, 706 So. 2d 319 (Fla. 4th DCA 1997) where the court wrote, at 320:
The medical expenses would be covered by the State Comprehensive policy, but for the asserted exclusion. Once Carmichael [the insured] established that the medical expenses qualified for coverage under the policy, the burden shifted to defendants to prove that the expenses were not covered by virtue of a policy exclusion. See B & S Assocs., Inc. v. Indemnity Cas. & Property, Ltd., 641 So.2d 436, 437 (Fla. 4th DCA 1994).
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In determining whether defendants met this burden, the trial court properly applied the principle, governing construction of insurance contracts, that ambiguities in policies are to be strictly construed against the insurer. See Berkshire Life Ins. Co. v. Adelberg, 698 So.2d 828 (Fla. 1997); Prudential Prop. & Cas. Ins. Co. v. Swindal,
622 So.2d 467 (Fla. 1993). In addition, exclusionary clauses are to be construed even more strictly than coverage clauses. See Purrelli v. State Farm Fire & Cas., 698 So.2d 618, 620 (Fla. 2d DCA 1997); Triano v. State
Farm Mut. Auto. Ins. Co., 565 So.2d 748, 749 (Fla. 3d DCA 1990); Allstate Ins. Co. v.
Shofner, 573 So.2d 47, 49 (Fla. 1st DCA 1990); see also State Farm v. Pridgen, 498 So.2d 1245, 1248 (Fla. 1986).
And in Deni Associates of Florida, Inc. v. State Farm Fire & Casualty Insurance Company, 711 So. 2d 1135 (Fla. 1998), the Florida Supreme Court reiterated:
In State Farm Mutual Automobile Insurance Co. v. Pridgen, 498 So.2d 1245 (Fla. 1986), this Court announced the rule to be followed in the interpretation of exclusionary clauses in insurance policies:
[E]xclusionary provisions which are ambiguous or otherwise susceptible to more than one meaning must be construed in favor of the insured, since it is the insurer who usually drafts the policy.
See Excelsior Insurance Co. v. Pomona Park Bar & Package Store, 369 So.2d 938, 942 (Fla. 1979).
Applying the foregoing legal principles to the facts of this case, attention is directed first to the fact that the most significant difference between the Group Service Agreement and the Member Handbook is the omission of the word "acquired" from the handbook description of disabilities for which coverage for therapy services is provided. As noted in Davis v. Crown Live Insurance Company, supra, this omission creates an "ambiguity resulting from silence in the certificate of insurance the same as an express ambiguity between policy and certificate."4 And
all such ambiguities must be resolved "in the manner that provides the broadest coverage." Equitable Life Assurance Society of the United States v. Wagoner, supra. In this case, the broadest coverage is achieved by applying the coverage for "Outpatient Therapies" described in the Group Service Agreement without the limiting word "acquired," which was omitted from the handbook. Applied in this manner, the insured is entitled to outpatient therapies (including speech therapy) "for purposes of rehabilitation of a disability, when, in the opinion of the Plan Physician, such therapy will result in optimal improvement in the patient's condition within two (2) months." The Plan Physician expressed the required opinion when he requested authorization to provide speech therapy in 1998. Such being the case, the insured, F. S., Jr., was entitled to coverage for the speech therapy for which his physician requested authorization.
The Petitioner argues that, even if the coverage language in question were to be construed to cover disabilities other than "acquired" disabilities, the insured is still not entitled to benefits because of the exclusion language in both the Group Service Agreement and the Member Handbook that excludes benefits for the treatment of "learning disabilities, mental retardation, and other developmental disorders." In this regard, the Petitioner argues that the evidence in this case is sufficient to prove that F. S., Jr., suffers from a learning disability and/or a developmental disorder. The Petitioner also
argues that there is no evidence that F. S., Jr., suffers from an "acquired" disability. The Petitioner's argument in this regard fails because the record in this case is insufficient to prove the facts upon which the argument is based. As noted in paragraph 12 of the findings of fact, the evidence on this issue is essentially in equipose. The Petitioner's own medical director concedes that the issue cannot be resolved with the information that is presently available. And in its proposed final order, the Petitioner concedes:
33. To recover under an insurance policy, the insured must prove that the loss did occur and that it was within the coverage provisions of the policy. The burden of proof is then upon the insurer to show that the loss was subject to an exclusion of the policy. The Exhibitor, Inc. v. Nationwide Mutual Fire Insurance Company, 494 So.2d 288 (Fla. 1st DCA 1986), Steil v. Florida Physicians' Insurance Reciprocal, 448 So.2d
589 (Fla. 2nd DCA 1984), B & S Associates, Inc. v. Indemnity Casualty and Property, Ltd., 641 So.2d 436 (Fla. 4th DCA 1994) , Shankle v. VIP Lounge, Inc., 468 So.2d 548 (Fla. 5th DCA 1985). (Emphasis in original.)
Applying the above-quoted legal principles to the facts in this case, the evidence shows that the insured is entitled to the coverage he seeks. The evidence fails to show that the insured is subject to the exclusion in the policy. The burden of such failure falls on the insurer.
With regard to the issue of whether the Petitioner gave sufficient notification to Mr. and Mrs. F. S. of the denial of coverage, the evidence shows that the insureds received prompt
notice of that decision and were able to preserve and exercise all of their rights to contest the decision. There is no evidence of any legal insufficiency in the denial of coverage notice provided to the insureds.
With regard to the issue of whether the Petitioner's decision to deny coverage was based on sound medical criteria, that issue is subsumed in the disposition of the first issue and requires no further discussion.
Section 408.7056(14), Florida Statutes, concludes with the following provision: "If the managed care entity does not prevail at the hearing, the managed care entity must pay reasonable costs and attorney's fees of the agency or the department incurred in that proceeding." Inasmuch as the Petitioner has not prevailed, it must pay such costs and fees.
