The Issue Whether Petitioner is entitled to change from individual to family coverage under the State of Florida Employees' Group Insurance Plan more that thirty-one calendar days after the birth of her son and outside the open enrollment period.
Findings Of Fact Petitioner was employed by Department of Health and Rehabilitative Services (HRS) District IV in 1986. For the past 18 months she has worked in her present position with HRS District IV in Deland, Florida. She presently resides with her husband in Deltona, Florida. HRS District IV personnel office is located at 5920 Arlington Expressway in Jacksonville, Florida. Linda Boutwell is employed as the Insurance Coordinator for HRS District IV. Petitioner gave birth to a son on January 6, 1990. On January 8, 1990, Petitioner called Linda Boutwell concerning the addition of her son to her State Health Insurance which would require a change from individual to family coverage. Mrs. Boutwell advised Petitioner that she could change from individual coverage to family coverage, but that the child would not be covered until the form was returned and approved. Boutwell indicated she would send her the necessary paperwork to add her son as a dependent. Mrs. Boutwell prepared and mailed the paperwork on January 8, 1990. It was received by Petitioner on January 10, 1990. Although Petitioner received the required enrollment papers on January 10, 1990, she did not return them to her personnel office. Petitioner states she did not return the papers to her personnel office because she understood from conversation with Linda Boutwell that her son's hospital bills would not be paid by the State Plan, since the child was not enrolled in the State Plan prior to that date. Instead, Petitioner elected to enroll in family coverage under her husband's employer's carrier. On March 15, 1990, Petitioner again called Linda Boutwell to request her son to be added to her insurance. Boutwell explained that Petitioner's request could not be honored since the request was beyond 31 days of the birth of the child. Therefore, Petitioner had to wait until the annual open enrollment period to obtain insurance coverage for the child. Petitioner's March 15, 1990 request was prompted by her discovery that the hospital bill related to the birth of her son was covered under the State Plan, even though she had not yet converted to the family coverage provision of the State Plan. Petitioner never asked Boutwell whether her individual hospital bill was covered or not. Petitioner's conclusion that her son's hospital birth would not be covered was based partly on the statement of a close friend who called Petitioner on January 7, 1990, to warn her to "expect problems" with her State Plan coverage. Petitioner has received a copy of the Amended State of Florida Employees Group Health Self Insurance Plan, Benefit Document, dated July 1, 1988. However, she did not examine it during the period January-March, 1990. Section II of the Employees Group Health Self Insurance Plan states in pertinent part: II. Covered Hospital and Other Facility Services: The following services shall be covered when ordered by a physician and are medically necessary for the treatment of an insured as a result of a covered accident or illness. Inpatient hospital services under Subsections A., B., and H., are in connection with the pregnancy of only the employee . . . shall also include nursery charges of the child during the hospital stay of the mother. Petitioner does not offer any credible explanation why she did not convert to family coverage prior to or at the time of the birth of her son or during the 1989 open enrollment period which occurred during Petitioner's seventh month of pregnancy.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the petition be DENIED. DONE AND ENTERED this 26th day of October, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE 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 26th day of October, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner did not file proposed findings of fact. Respondent's proposed findings of fact. Accepted in substance: paragraphs 1 through 11. COPIES FURNISHED: Susan Millard, pro se 2391 Montano Street Deltona, FL 32725 Augustus D. Aikens, Jr., Esquire General Counsel Department of Administration 435 Carlton Building Tallahassee, FL 32399-1550 Aletta Shutes Secretary Department of Administration 435 Carlton Building Tallahassee, FL 32399-1550
Conclusions THE PARTIES resolved all disputed issues and executed a Settlement Agreement. The parties are directed to comply with the terms of the attached Settlement Agreement (Attachment A). Based on the foregoing, this file is CLOSED. DONE AND ORDERED on this 4 Any of (flay, , 2014, in Tallahassee, Florida. Agency for HealthCare Administration Filed February 14, 2014 11:45 AM Division of Administrative Hearings
Findings Of Fact In April, 1987, DOA submitted recommendations to the Florida Legislature which included proposed changes in the state employees' group insurance program. Among the recommendations was a proposal that would require the Department to competitively bid HMO contracts in the state health program on the basis of cost, service area, plan benefits, and accessibility. The stated objective of the recommendation was to: encourage HMOs in a geographic location to structure their premiums to reflect actual cost experience and to provide the lowest possible cost for the state and state employees, while at the same time changing the current concept of the state's contributions to HMOs..." At the time of the DOA legislative recommendation, existing state law provided that persons eligible to participate in the state group health insurance program had the option to elect membership in any qualified HMO engaged in providing basic health services in the HMO service area where the employee resided in lieu of participating in the state self-insurance plan. Section 110.123(3)(d), Florida Statutes, Rule 22K-1.1003(21), F.A.C. A "qualified" HMO was defined as an entity qualified under the federal Public Health Service Act, 42 U.S.C. 300e-9, or certified under Part II of Chapter 641, Florida Statutes, which had entered into a contract with the State, and had achieved a designated level of participation by state employees. Rule 22K- 1.1003(21), F.A.C. Effective October 1, 1987, Chapter 87-156, Laws of Florida (now codified as Section 110.123(3)(d), Fla. Stat.) was amended to add the following: (3) STATE GROUP INSURANCE PROGRAM. -- * * * (d) * * * 2. Effective January 1, 1988, the Department of Administration shall, by rule, contract with health maintenance organizations to participate in the state group health insurance plan through the competitive bid process based on cost, service area, plan benefits, and accessibility. Effective January 1, 1988, all employees participating in the state group health insurance plan, irrespective of whether or not the member participates in a health maintenance organization, shall be subject to the same total premium, regardless of the state or employee's share. THE REQUEST FOR PROPOSALS Dennis Nye, then the DOA Director of the Office of State Employees Insurance and administrator of the state health insurance program, was directly responsible for implementing the new legislation regarding the HMO contracts. He initially determined that procurement of HMO contractual services was governed by Section 287.057, Florida Statutes. The Request For Proposals For Health Maintenance Organization Coverage was issued on July 31, 1987, as "Bid No. 88-05." It scheduled a presubmission conference on August 12, 1987, and established the deadline for receipt of proposals of August 28, 1987, with a contemplated date of award of contract on September 14, 1987, and an effective contract date of January 1, 1988. The Department clearly set forth the general purpose of the RFP in Section II as requiring each proposal to meet the benefit objectives and to provide high quality benefits and services to state employees. More specific objectives were as follows: A proactive approach to cost containment, including an emphasis on aggressive claims management, utilization review and superior statistical reporting Quality medical care which encourages health promotion, disease prevention, early diagnosis and treatment. Stability in the financial structure of offered health plans. Professional, high quality service in all administrative areas including claims processing, enrollment, membership services, grievances, and communications. Competitive premium rates which take into account the demographics and, if appropriate, the claims experience of State employees. DOA stated other objectives to be as follows: Have each county or contiguous group of counties be considered one service area. Award no more than two contracts per service area; however, the awards will be based on the HMO's ability to respond to the needs of employees and on accessibility by employees. Have reciprocal agreements between locations, if an HMO has multiple service areas. For example, an employee covered in Miami with a covered dependent living in Gainesville, should be provided similar services. Enter into a two year, non-experience rated contract. A provision will be included tying renewal action at each of the two renewals to the Consumer Price Index (CPI) for Medical Care Services. This will become part of the contract. Section III of the RFP stated that to be considered as a "qualified" HMO, the proposer must be licensed by the Department of Insurance pursuant to Part II of Chapter 641, Florida Statutes. Each proposer was required to submit the following: Form PUR 7033, properly completed and signed. The completed Questionnaires Requirements Section (Please answer questions in the same order as they appear in that Section; do not reformat). The completed Cost Proposal forms (Please use the enclosed form on page 43 and 44; do not reformat). The completed Statement of Compliance on page 47. Documentation in support of the above. Section III further provided in part as follows: Proposals are to be submitted only on the forms and formats provided in this RFP. All exhibits requested must be submitted with your proposal along with answers to all questions contained in this RFP. Section IV of the RFP provided that each contract would be for a 24 month term, beginning January 1, 1988. The Department reserved the right to renew the contracts on the same terms and conditions of the initial contract for two additional one-year periods. Section VI of the RFP, concerning "Required Benefits and Services," listed the minimum benefits that must be provided, and also required that a complete list of all other intended services for each service area be provided. Section IX specified the following criteria for evacuation of the proposals: Premium Cost Extensiveness of Service Areas by County and/or contiguous Counties. Note: The State's objective is to award no more than two contracts per services (sic) area; however, the awards will be based on the HMO's ability to respond to the needs of employees and on accessibility by employees. Plan Benefits as follows: Covered services Limitations and exclusions Co-payments, deductibles and co-insurance features Range of providers including specialists and number of hospitals Out of service area coverage Grievance procedures Acessibility as follows: Reciprocal agreements Provider locations Number of primary care physicians and specialists, in relation to membership Completeness of proposals The RFP did not provide information on DOA's evaluation of the legislatively required criteria concerning the importance of price and other evaluation criteria. The Department weighed cost equal to benefits plus accessibility and determined accessibility was a part of the plan benefits. Section X was a questionnaire with forty-nine questions for the proposers to answer including questions regarding the proposer's license status, corporate structure, reserving practices, reinsurance contracts, service area, employee membership and staff, hospitals and other care facilities, participating physicians, utilization review, and other information regarding the proposer's case management, control mechanisms, statistical reporting, and the like. Each proposer was directed to submit audited financial statements for the last two fiscal years, together with financial statements for the first quarter of 1987. Section XI dealt with cost proposals and provided a form for completion as to proposed premium rates. In an undated addendum to the RFP, the Department added Question 50 to the RFP to provide information for use in a brochure which would allow state employees to compare the benefits offered by the various HMOs. In the pre-submission conference held on August 12, 1987, and attended by representatives of the HMOs, the participants were informed by Mr. Nye that the two criteria of cost and benefits would be weighted on an equal basis. He also advised that the State would enter into a two year, non-experience rated contract, subject to renewal which would tie rate increases to the Consumer Price Index for Medical Care Services. Proposers were told to quote a specific rate for the first year of the contract, and a percentage increase or decrease for each of the following three years. However, he noted that the State would evaluate cost solely on the basis of the premium for the first year. He indicated that two HMOs per service area would be awarded contracts based on the highest number of points received in the bid evaluation process, and not based upon the type of HMO, such as an individual practice association (IPA) or staff model. Then asked whether some factors would be weighted higher than others, Mr. Nye responded that benefits and cost would be weighted higher. THE PROPOSERS 15. Twelve HMOs submitted proposals to the Department for the South Florida area (Dade, Broward, and Palm Beach Counties) in response to the RFP by the deadline, and several of those submitted more than one proposal. There was, however, no prohibition on submitting multiple proposals, and prospective bidders were told that they had that option. In this proceeding, proposals were received from Health Options, Heritage, and Humana to serve Dade, Broward, and Palm Beach Counties, and a proposal from Gulfstream to serve Palm Beach County. Health Options is a for profit subsidiary of Blue Cross and Blue Shield of Florida, and is an individual practice association (IPA) model HMO. Health Options offers HMO services in Dade, Broward, and Palm Beach Counties. It has a total membership of 23,074 members, of which 517 are state employees and dependents. Heritage is a subsidiary of Heritage Health System, Inc., for profit Delaware Corporation, and is an IPA model HMO. Heritage offers HMO services in Dade, Broward, and Palm Beach Counties, and has a total membership of 12,500 members, including 10 state employees and dependents. Humana is a for profit subsidiary of Humana, Inc., and is a combination staff/IPA model HMO. Humana offers HMO services in Dade, Broward, and Palm Beach Counties, and has a total membership of 91,217 members, including 3,273 state employees and dependents. Gulfstream, at the time its proposal was filed, was a limited partnership whose general partner was Equicor Holding Company and whose limited partner was H.C.A. Care of Florida, Inc. The limited and general partners were wholly owned subsidiaries of Equicor, Equitable H.C.A. Corporation, which is owned by Hospital Corporation of America and the Equitable Life Assurance Society of the United States. On January 1, 1988, Gulfstream converted to corporate form, and is now known as Equicor Health Plan of Florida. Gulfstream offers services in Palm Beach County and has a total membership of 12,335 members, including 933 state employees and dependents. THE EVALUATION PROCESS The evaluation of the proposals submitted by HMOs throughout the state for the seven service areas was initially accomplished by employee evaluation teams made up of employees in Dennis Nye's office. He was assisted in his selection by Marie Walker, a benefits analyst in his office. Dennis Nye and Ms. Walker decided which employees could best evaluate the proposals based on the criteria established in the law, including familiarity with benefits and the request for proposal process. The employees selected for these duties had varying degrees of knowledge concerning health plan benefits, HMOs, and bid evaluations. After the initial evaluation was completed, the Department determined that inconsistent methods had been used to score the proposals and further directed Dennis Nye to continue the evaluation process based upon an objective scoring system which limited subjectivity to the maximum extent possible. As Secretary, I was concerned with the financial soundness of each bidder and instructed Dennis Nye to keep that aspect in mind when making his final recommendation. The second or "final evaluation" of the proposals was solely based on the five criteria contained in the RFP, i.e., premium cost, extensiveness of service area, plan benefits, accessibility, and completeness of proposals. In his memorandum of October 6, 1987, Mr. Nye initially recommended that contracts be awarded in the Jacksonville, Pensacola, and Gainesville Service Areas to the two HMOs in each area that had received the top rankings. 1/ However, in the South Florida Service Area, he recommended awarding four contracts based on the need to provide one staff model and one IPA model HMO in each county in the service area. It was Mr. Nye's belief that federal law required that one HMO of each type be offered in each service area, if available. I was concerned about this issue and asked DOA's General Counsel, Augustus Aikens, to review it. He informed me that the federal requirement was not applicable because a state was not included within the definition of "employer" under the applicable federal law. On the bass of this legal advice, directed Mr. Nye to review his previous recommendations as they related to the need to retain one IPA model and one staff model HMO in each service area. In his memorandum of October 26, 1987, Mr. Nye recommended that contracts be awarded to Health Options and to Heritage on the bases that they were "the lowest, best bids for (the) service area." In his memorandum of October 30, 1987, he again recommended that contracts be awarded to Health Options and Heritage. Throughout the entire bidding process, it was my desire to avoid awarding a contract to an HMO which was not in compliance with state law or the rules of the Department of Insurance. I had written to the Department of Insurance seeking its assistance to determine the ability of each bidder to comply with the state law and to meet the needs of the state employees. By letter of October 23, 1987, the Department of Insurance informed DOA that it had approved the rates of Health Options and Heritage. EVALUATION OF THE PROPOSALS Premium Costs The Department specifically designed the RFP to require each proposer to list separate costs in categories of "employee only" and "family" for active employees and retired employees under sixty-five. Required rates for Medicare recipients were to be shown separately listing rates for retirees, retiree and spouse (both on Medicare), and retiree and spouse (one with Medicare, with or without other eligible dependents). A fixed premium cost was required for calendar year 1988 and a percentage of that rate was to be shown for the successive three years. Rates for those last three years were to be "established as a percentage of the first year's premiums" with the maximum increase "limited to the increase, if any, in the overall medical portion of the Consumer Price index." (RFP, Section XI) The rates bid by each HMO were as follows: 2/ A. Heritage (low bid): Employee Only Family Dade, Broward, 66.46 166.15 and Palm Beach B. Health Options (low bid) Dade and Broward: 78.00 195.00 Palm Beach: 75.00 185.00 C. Humana, Dade: 85.02 206.01 Broward: 83.01 199.22 Palm Beach: 77.44 185.86 D. Gulfstream, Palm Beach: 78.92 197.28 (The instructions provided that the total cost of the "family plan" shall not be greater than 2.5 times the total cost of the "employee only" plan.) DOA evaluators computed a "mean" premium cost by adding the premiums for all bidders, dividing by three, and comparing each premium to the "mean," which was then given five points. A premium above the mean gave a bidder less than five points while a premium below the mean gave the bidder more than five points. The same method was used for the "employee only" plan, the "family" plan and the three Medicare retiree groups. Based on the Department's estimate that active employees constituted 90 percent and retirees 10 percent of an HMO membership, the final point calculations were: A. Heritage (low bid): Combined (Dade, Broward and Palm Beach) 9.35 B. Health Options (low bid) Dade and Broward: 7.75 Palm Beach: 9.1 Combined (Dade, Broward and Palm Beach) 8.17 C. Humana Dade: 5.72 Broward: 6.26 Palm Beach: 8.65 Combined: 6.57 D. Gulfstream Palm Beach: 6.61 The Hearing Officer evaluated the above process and found that the Department's action was reasonable even though "the cost proposals were evaluated solely on the basis of premium for 1988." He based his conclusion on: First, Nye announced at the pre-bid conference that proposals would be evaluated solely on that basis. Second, premium costs in succeeding years were limited to the lower of the cost proposed or the future and presently unknown Consumer Price index for Medical Care Services. Accordingly, no meaningful evaluation could have resulted from a consideration of premium costs for succeeding years. (R.O., page 17) Extensiveness of Service Area At the pre-submission conference, proposers were told that they should designate their service areas and that bids would be awarded on the basis of the entire service area. DOA's evaluators awarded two points for each full county and one-half point for each partial county and proposers received 2, 4, or 6 base points depending on whether their proposal was being evaluated on one, two, or three county service area. Heritage submitted one proposal, and designated its service area as Dade, Broward, and Palm Beach Counties. Its proposal was evaluated on a composite or combined basis. Health Options submitted one proposal and designated its service area as Dade, Broward, and Palm Beach Counties. Its proposal contained two separate premium costs: one for Dade and Broward Counties, and one for Palm Beach County. The Department evaluated Health Options' proposal as it related to the individual counties of Dade, Broward, and Palm Beach County, and on a combined basis (Dade, Broward, and Palm Beach Counties). Humana submitted three separate proposals, which designated three separate service areas: Dade, Broward, and Palm Beach Counties. The Department evaluated Humana's proposal for each county and on a combined basis. Gulfstream submitted one proposal, and designated its service area as Palm Beach County. The Department evaluated Gulfstream's proposal for Palm Beach County. The Hearing Officer found that the above evaluation procedure "was reasonable and a valid exercise of the agency's discretion." (R.O., page 35) ACCESSIBILITY The Department evaluated accessibility criterion on the basis of ten points each for reciprocal agreements provided statewide and national services, ten points for each county of the service area in which a hospital was located, two points for each specialty provider in each county, and one point for each provider physician and specialist. These raw scores were then evaluated further to obtain a "mean" score for each proposer as follows A. Heritage (low bid), Combined: 5.8 B. Health Options (low bid), Dade and Broward: 8.71 Palm Beach: 1.1 Combined: 9.51 C. Humana, Dade: 4.16 Broward: 3.32 Palm Beach: 1.31 Combined: 8.79 D. Gulfstream Palm Beach: 1.18 The Hearing Officer found that the above evaluation procedure "was reasonable and a valid exercise of the agency's discretion." (R.O., page 36) COMPLETENESS OF PROPOSALS The original statutory criteria contained in Chapter 87-156, Laws of Florida, included the areas of "cost, service area, plan benefits, and accessibility." To these criteria, DOA added the fifth criterion of completeness of proposals." The Hearing Officer ruled that "(t)he Department's inclusion of this criterion was reasonable." (R.O., page 22) TOTAL POINTS Total points were calculated by adding the base points to a weighted score. In deriving the weighted score, the criteria were weighted as follows: premium costs at 3.5 times, plan benefits at 2.5 times, accessibility at 1 time, extensiveness of service area at 1 time, and completeness of proposal at 1 time. In evaluating the proposals, the Department first evaluated bids solely against other bids for the same service area. For example, Gulfstream's bid was first evaluated against only those other bids that proposed to provide services in that county. In this manner, Gulfstream ranked fourth out of the five bidders in Palm Beach County, and thirteenth overall. The points and ranking assigned by the Department to the top six proposers and to Gulfstream were as follows: HMO Base Points Weights Total Points Rank Heritage (low bid): 35.34 34.15 70.5 1 Health Options Combined (low bid) 38.59 30.79 59.48 2 Av Med 38.95 24.875 63.825 3 Health Options Dade & Broward (low bid) 34.03 27.73 51.76 4 Heritage (high bid) 34.17 25.925 60.095 5 Humana Combined: 35.05 23.46 58.51 6 Gulfstream Palm Beach: 22.46 22.03 44.49 13 A review of this table shows that the weights altered the relative positions of each of the top six proposers. Mr. Nye testified that the weighting utilized did not affect the ranking of the bids of the proposers and only affected the ranking of one bidder, AV-Med. As the Hearing Officer concluded, the proof was contrary to Mr. Nye's testimony. His finding on this point is supported by competent substantial evidence and is hereby adopted. Based on the results of its evaluation the Department proposed to award the contracts to Heritage (low) and to Health Options (combined-low). HUMANA'S COST/BENEFIT ANALYSIS Humana introduced expert testimony to demonstrate that, benefits and cost were weighted equally, its cost-to-benefits ratio would be comparable to or better than the successful proposers. Two analyses were presented. One actuarial expert adjusted the different benefit patterns of Heritage and Health Options up to the Human a benefit level and adjusted their price according to actuarial information filed with the Department of Insurance. The testimony sought to place the proposers on the same co-payment/benefit level to compare premium costs. The result was that Humana's premium cost was the second lowest for the South Florida Service Area. The second analysis adjusted Humana's benefit pattern down to the benefit/co-payment levels of Heritage and Health Options, and adjusted Humana's premium cost down accordingly based on Humana's filed actuarials. This testimony sought to place the proposers on the same co- payment/benefit level to compare premium costs, and Humana' premium cost was comparable to or lower than the second lowest bidder. The Hearing Officer found that the analyses by the expert witness were not persuasive in demonstrating that Humana was the second lowest proposer in this case, or that its cost/benefits were the second lowest. (R.O., page 26) For example, the fitness did not evaluate the bids based on the five criteria contained in the RFP, nor did he include in the cost/benefit analysis all of the criteria utilized by the Department to evaluate benefits. The findings of the Hearing Officer on this point are supported by competent substantial evidence and are therefore adopted. Plan Benefits The criteria for the evaluation of all proposals was set out in Section IX of the RFP as follows: Covered services; Limitations and exclusions; Co-payments, deductibles and co-insurance features; Range of providers including specialists and number of hospitals Out of service area coverage Grievance procedures Three sections in the RFP requested information which was relevant to the plan benefits. Section VI listed the required minimum benefits and requested a complete list of all other services. Each provider was directed to specify co-insurance, deductible, co-payment and other features for all benefits and services for each service area, and to list all limitations and exclusions for all benefits and services for each service area. Section X was a questionnaire which required each propose to list information concerning hospital, ambulatory care facilities services, available physician specialties, programs for health status evaluation, screening and health promotion, limitations or restrictions relative to organ transplants, range of providers and number of hospitals, availability of skilled nursing benefits, a list of the proposer's physician panel, and out-of-service area coverage. Under the Department's Scoring system, each propose received the following scores: A. Heritage 398 B. Health Options Dade & Broward 308 Palm Beach 165 C. Humana Dade 210.5 Broward 161.5 Palm Beach 184.5 D. Gulfstream Palm Beach 203 Using a similar method to calculate a "mean" score as was needed in the premium cost criteria, the base points were as follows: A. Heritage (low bid), Combined: 7.19 B. Health Options (low), Dade and Broward: 5.57 Palm Beach: 2.28 Combined: 5.91 C. Humana, Dade: 3.38 Broward: 2.92 Palm Beach: 3.34 Combined: 4.59 D. Gulfstream, Palm Beach: 3.57 Limitation to Two Successful Bidders Humana and Gulfstream argued that they should not be excluded from being awarded a contract because there was no foundation which required the limitation of the contracts to two or to any number of HMOs. The Department had considered awarding contracts to more than two proposers but rejected doing so because such action best effectuated the general objectives of the RFP, including that of promoting competitive rates. The Hearing Officer agreed with the Department and correctly found that "there was no showing that the selected HMOs could not adequately satisfy the needs of the state employees." (R.O., page 35). He concluded: "While the statute did not specify a number, it did specify that the Department contract through the competitive bid process. If the contracts are not limited in number, there is no competitive bidding process. Accordingly, it is concluded the Department acted reasonably in limiting the award to two HMOs." (R.O., page 35) Employee Evaluation Teams Yet another contention of the Petitioners was that the DOA employee evaluation teams lacked the experience and knowledge in the health care services field and should have been disqualified as not meeting the requirements of Section 287.057(16), Fla. Stat., which states as follows "A selection team of at least three employees who have experience and knowledge in the program areas and service requirements for which contractual serviced are sought shall be appointed by the agency head to aid in the selection of contractors for contracts of more than the threshold amount provided in s. 287.017 for CATEGORY FOUR." After full consideration of the above provision, the Hearing Officer agreed with the Department and found that the employees met the minimum statutory criteria (R.O., page 35) and had sufficient experience and knowledge in the area to properly evaluate the proposals (R.O., pages 13, 14). Departure From RFP At the pre-submission conference, Mr. Nye announced that cost and benefits would be weighted equally. In its final evaluation, the Department weighted cost at 3.5 and benefits at 2.5. The remaining criteria, accessibility, extensiveness of service area, and completeness of proposal , were weighted at I each. The Hearing Officer found that the Department's final evaluation failed to conform to the weighting factors announced at the pre- submission conference. 45. He further stated that: 43. The Department's failure to accord equal weight to cost and benefits was arbitrary and capricious. Such failure was a material departure from the RFP, as supplemented by the pre-bid conference, and adversely impacted the bid procurement process. ... Plan benefits and accessibility under Section 110.123(3)(d), Florida Statutes, and the RFP were distinct criteria upon which proposers formulated their responses. They were also distinct criteria when the Department told proposers that cost and benefits would be weighted equally, were distinct criteria when evaluated by the Departmen, and had a distinct impact upon the ranking of proposers. Under the circumstances, the Department's failure to accord them equal weight was arbitrary and capricious. Rather than acknowledge the disparity that existed between cost and benefits, the Department contended at hearing that accessibility was a part of benefits, and therefore cost and benefits were weighted equally. The Department's contention, and proof, was not persuasive and is rejected as not credible. (R.O., pages 24, 25) The Department finds that the above findings of fact are supported by competent, substantial evidence and adopts them in this final order. INTERVENORS' EXCEPTIONS TO RECOMMENDED ORDER Exceptions of Heritage Heritage filed six exceptions to the Recommended Order and each exception will be considered separately. Exception Number 1: Heritage argued that the Hearing Officer erred when he found that the Department's failure to accord equal weight to cost and benefits was arbitrary and capricious. While the Department agrees with the cases cited by Heritage which hold that administrative agencies have broad discretion in evaluating contracts for personal services such as health services, the Department is aware of its statutory responsibility to adhere to the bidding requirements of Section 287.057, Fla. Stat., and does not believe that it has the discretion to enter into contracts absent the competitive process. As to the testimony of Mr. Burbank, the Hearing Officer, as the trier of fact, was in the best position to assess his credibility and determine the weight to be accorded to his testimony. Koltay vs. Department of General Services, 374 So.2d 1386 (Fla. 2nd DCA 1979). The Department is unable to reject the Hearing Officer's findings in an area clearly within his responsibility. Exception Number 1 is rejected. Exception Number 2: Heritage next argues that the Hearing Officer erred in applying the arbitrary and capricious standard to the Department's actions relating to the weights given to various factors. The evidence shows that at the presubmission conference, Mr. Nye informed all proposers that the weights to be assigned to premium costs and to plan benefits would be equal. That information was clearly erroneous because, in the actual evaluations, the evaluators used a different weighting system, one that gave premium costs 40 percent greater weight than plan benefits. It is not the weights given to each category that makes the Department's actions arbitrary and capricious but its failure to adhere to and apply its announced weighting factors. On this basis, Exception Number 2 is rejected. Exception Number 3: Heritage urges that the Hearing Officer erred in concluding that the Department's failure to comply with the provisions of Section 287.012(11), Fla. Stat., was fundamental error. The above statute by its terms provides that "(r)equests for proposals shall state the relative importance of price and any other evaluation criteria." (emphasis added). According to the common usage of the term "shall", this language is mandatory (Fla. Tallow Corporation vs. Bryan, 237 So.2d 308 (Fla. 4th DCA 1970); S.R. vs. State, 345 So.2d 1018 (Fla. 1977) and requires that the weight of the criteria must be included in the RFP. Therefore, Exception Number 3 is rejected. Exception Number 4: Heritage argues that the Hearing Officer erred in granting standing to Gulfstream. In Preston Carroll vs. Fla. Keys Aqueduct Authority, 400 So.2d 524 (Fla. 3rd DCA 1981), an unsuccessful bidder who was third low bidder, attempted to overturn the award of the contract to the low bidder. The district court held that while a second low bidder to the award of a contract had the necessary "substantial interest" to contest the award. However, a third low bidder was unable to demonstrate that it was "substantially affected" and therefore lacked standing to protest the award of the contract to another bidder. Under the holding in this case, the Department concludes that Gulfstream did not have standing in this case since it ranked 13th in the ranking of low bidders. According, Exception Number 4 is accepted and included in the Conclusions of Law of this Order. Exception Number 5: Heritage argues that the Hearing Officer erred in concluding that Humana had standing to protest the Department's failure to state the relative importance of price and any other evaluation criteria in the RFP because Humana did not raise this point as an issue in its formal protest. If Humana did not have standing, then it was improperly permitted to protest the award of one of the contracts to Heritage. A review of Humana's protest shows that in Item 9, it argued that: "That the rejection of Humana's response to RFP #88-05, HMO coverage for State employees in Clay, Dade, Broward and Palm Beach Counties was not in accordance with all applicable rules, regulations, procedures, precedents and bid criteria." The rules of the Division of Administrative Hearings (Rule 22I-6.004(3), F.A.C.) provide for the minimum filing requirements in initial pleadings and state as follows: "(3) All petitions should contain: The name and address of each agency affected and each agency's file or identification number, if known; The name and address of the petitioner or petitioners, and an explanation of how his/her substantial interests will be affected by the agency determinations; A statement of when and how petitioner received notice of the agency decision or intent to render a decision; A statement of all disputed issues of material fact. If there are none, the petition must so indicate; A concise statement of the ultimate facts alleged, as well as the rules and statutes which entitle the petitioner to relief; A demand for relief to which the petitioner deems himself entitled; and Other information which the petitioner contends is material." (emphasis added) The requirements of this rule are directory only and not mandatory and are not designed to deny petitioners a hearing in which their "substantial interests" are affected. Section 120.57, Fla. Stat., see Seminole County Board of County Commissioners vs. Long, 422 So.2d 938, 940 (Fla. 5th DCA 1982). The initial protest of Humana complied with the minimum filing requirements of Rule 22I-6.004(3), F.A.C., above, and was sufficient to place Heritage on notice of deficiencies alleged to be in the RFP. Exception Number 5 is rejected. Exception Number 6: Heritage argues that "(t)he Hearing Officer erred in concluding that the Department should invoke its right to reject all proposals." Contrary to Heritage's argument, the Department did not communicate how the criteria would be weighed in accordance with Section 287.012(11), Fla. Stat. It is not possible to cure the deficiency in the RFP by recalculating the proposals. The deficiency can be corrected by re-bidding for proposals for HMO medical services. On this basis, Exception Number 6 is rejected. HEALTH OPTIONS' EXCEPTION TO RECOMMENDED ORDER Health Options as one of the successful bidders filed an exception to the Hearing Officer's finding which stated that DOA had failed to state the relative importance of price and other criteria in the RFP. It argued that this issue was not presented by Humana or Gulfstream in the formal protests and thus could not be considered in the Recommended Order. Therefore, Health Options urged that the Department's award of the two HMO contracts was proper and should be upheld. As previously stated, Humana's protest argued that the rejection of its bid "was not in accordance with all applicable rules, regulations, procedures, precedents, and bid criteria." (Item 9 of Protest). Humana's protest complied with the minimum filing requirements of the Department of Administrative Hearings (Rule 22I-6.004(3), F.A.C.) which provide that petitions should contain: A statement of all disputed issues of material fact. If there are none, the petition must so indicate; A concise statement of the ultimate facts alleged, as well as the rules and statutes which entitle the petitioner to relief; A demand for relief to which the petitioner deems himself entitled; While Gulfstream's formal protest did not state that its protest was founded on the Department's failure to state the relative importance of price and other evaluation criteria in the RFP, all that was necessary for the Hearing Officer to rule on this issue was for one of the petitioner's to raise the issue in its initial protest. Since the issue was raised by Humana, the Exception of Health Options is rejected. DEPARTMENT'S EXCEPTIONS TO RECOMMENDED ORDER The Department also filed timely exceptions to the Recommended Order. After reviewing those exceptions, I find that to the extent they are not adopted and accepted herein, they are inappropriate findings of fact and have not been considered further in this Order.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department enter a final order rejecting all proposals submitted for the South Florida service area. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 22nd day of March, 1988. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1050 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of March, 1988.
The Issue The issue is whether Respondent failed to maintain a service plan for each of four residents, in violation of the Florida Medicaid Assistive Care Services Coverage and Limitations Handbook. If so, an additional issue is the sanctions that should be imposed.
Findings Of Fact Respondent owns and operates an assisted living facility known as Izquierdo Home Care I. At all material times, Respondent was enrolled in the Medicaid program as a provider authorized to supply assistive living services to Medicaid recipients at Izquierdo Home Care I. At all material times, Respondent was subject to the Florida Medicaid Assistive Care Services Coverage and Limitations Handbook. The handbook imposed upon Respondent the duty to develop a service plan for each Medicaid recipient not less often than annually. On March 27, 2012, Petitioner's inspector conducted a site visit of Izquierdo Home Care I. At the time of the site visit, the facility had six beds, but only four residents. According to a letter from Petitioner dated March 27, 2012, and delivered to Respondent's representative at the time of the inspection, the following four residents were Medicaid recipients: E. C., R. R., J. H., and A. R. However, according to the questionnaire completed by Respondent's representative at the time of the inspection, only two of the four current residents were Medicaid recipients, although the questionnaire does not identify these residents. In fact, A. R. had been discharged from Izquierdo Home Care I in September 2011. At the hearing, Petitioner's inspector confirmed that Respondent had not billed Medicaid for services for A. R. after the date of discharge. The second resident whose Medicaid status is in question was identified, in Respondent's proposed recommended order, as E. C. Respondent contends in its proposed recommended order that E. C. was not receiving Medicaid at the time of the inspection. If the Proposed Recommended Order were the only notice to Petitioner of Respondent's claim that a second resident was not a Medicaid recipient, the Administrative Law Judge would ignore this assertion because it is not evidence, and, as a defense, it was raised too late. However, the questionnaire, which was admitted as one of Petitioner's exhibits, is evidence that two of the four residents were not receiving Medicaid at the time of the inspection. In assessing the evidentiary record in terms of whether it establishes a third Medicaid recipient, the Administrative Law Judge notes: a) Petitioner has alleged a violation concerning A. R., even though A. R. was no longer a Medicaid recipient at the time of the inspection; b) at hearing, Petitioner's inspector was readily able to read the "query" to confirm that Respondent had not submitted a Medicaid billing on account of A. R. after September 2011 (Transcript 49); and c) as discussed in the Conclusions of Law, Petitioner bears the burden of proof by clear and convincing evidence. Under these circumstances, Petitioner has proved only that two residents of the facility were Medicaid recipients at the time of the inspection. There is no dispute that current service plans for two Medicaid recipients did not exist at the time of the March 2012 inspection.
Recommendation It is RECOMMENDED that the Agency for Health Care Administration enter a final order imposing a fine of $2000 against Respondent. DONE AND ENTERED this 26th day of October, 2012, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of October, 2012. COPIES FURNISHED: Jeffries H. Duvall, Esquire Office of the General Counsel Agency for Health Care Administration Fort Knox Executive Center, Building 3 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308-5403 Julia Arrendell, Qualified Representative 13899 Biscayne Boulevard North Miami Beach, Florida 33181 Elizabeth Dudek, Secretary Office of the General Counsel Agency for Health Care Administration Fort Knox Executive Center, Building 3 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308-5403 Stuart Williams, General Counsel Office of the General Counsel Agency for Health Care Administration Fort Knox Executive Center, Building 3 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308-5403 Richard J. Shoop, Agency Clerk Office of the General Counsel Agency for Health Care Administration Fort Knox Executive Center, Building 3 2727 Mahan Drive, Mail Station 3 Tallahassee, Florida 32308-5403
The Issue Whether J. Glenn Brown, Jr., was an "employee" of Northwest Florida Community Hospital for purposes of the State of Florida retirement system?
Findings Of Fact The Parties. Petitioner, Board of Trustees of the Northwest Florida Community Hospital (hereinafter referred to as the "Board of Trustees"), is the governing body of the Northwest Florida Community Hospital. Petitioner, Board of County Commissioners of Washington County, Florida (hereinafter referred to as the "County Commissioners"), is the governing body of Washington County, Florida, and the owner of the Northwest Florida Community Hospital. The Respondent, the Department of Management Services, Division of Retirement (hereinafter referred to as the "Division"), is the agency charged with responsibility for administering the Florida retirement system established by Chapter 121, Florida Statutes. Operation of Northwest Florida Community Hospital Prior to February of 1988. The Northwest Florida Community Hospital (hereinafter referred to as the "Hospital"), is a small, rural acute-care hospital located in Chipley, Washington County, Florida. During the mid-1980's, the Hospital suffered from a financial crisis that threatened its continued existence. As a consequence thereof, it was concluded that the Hospital should be sold. A contract was negotiated and entered into for the sale of the Hospital to National Healthcare, Inc. (hereinafter referred to as "NHI"). As a part of the contract entered into with NHI, NHI was to operate the Hospital before the contract for sale was completed. J. Glenn Brown was an employee of NHI. NHI assigned Mr. Brown to the Hospital to act as the administrator of the Hospital. As administrator of the Hospital, Mr. Brown was the top manager of the Hospital. Mr. Brown, while employed by NHI, acted as the administrator of the Hospital from September 1986, until approximately September or October of 1987. At some time prior to February 1988, the contract for sale of the Hospital to NHI was cancelled and the Board of Trustees began to operate the Hospital. The Consulting Contracts. On or about February 1, 1988 the Hospital and Mr. Brown entered into a Consulting Contract (hereinafter referred to as the "First Contract"). Petitioner's exhibit 1. Mr. Brown agreed in the First Contract to operate the Hospital. Mr. Brown operated the Hospital pursuant to the First Contract until its expiration. Although the term of the First Contract ended January 31, 1991, Mr. Brown continued to operate the Hospital. A second Consulting Contract (hereinafter referred to as the "Second Contract"), was entered into on or about May 29, 1992 between Mr. Brown and the Hospital. The Second Contract applied to the period February 1, 1992, through February 1, 1993. Mr. Brown continued to perform services for the Hospital between the end of the First Contract and the beginning of the Second Contract. The differences between the First Contract and the Second Contract (hereinafter referred to jointly as the "Consulting Contracts"), were not substantial other than the amount of the annual fee to be paid to Mr. Brown. The Treatment of Mr. Brown for Purposes of the Florida Retirement System. During the period of time that Mr. Brown operated the Hospital from February 1, 1988 until he departed in the fall of 1992, the Hospital treated Mr. Brown as an "independent contractor" and not an "employee" for purposes of the Florida retirement system. Although the Hospital could have requested a determination of Mr. Brown's status for purposes of the Florida retirement system, the Hospital was not required to do so. The Hospital, as it was authorized to do pursuant to Chapter 121, Florida Statutes, made the initial decision to treat Mr. Brown as an independent contractor. After Mr. Brown had left the Hospital, an audit of the Hospital was conducted by the management review section of the Division. As a result of the audit, the Division raised a question about the status of Mr. Brown for purposes of the Florida retirement system. As a result of the audit of the Hospital, the Division required the Hospital to submit a Florida Retirement System Employment Relationship Questionnaire form requesting a determination of Mr. Brown's status as an employee or independent contractor. The Hospital did so. See Respondent's exhibit 2. The Division reviewed the Questionnaire and determined that Mr. Brown was an "employee" for purposes of the Florida retirement system, and so notified the Hospital. The Hospital filed a request for a formal administrative hearing to contest the Division's determination that Mr. Brown was an employee. Based upon the foregoing, it is the Division that is attempting to change the status quo in this matter. But for the Division's audit and requirement that the Hospital file a Questionnaire, the Hospital's treatment of Mr. Brown as an independent contractor for purposes of the Florida retirement system would have been final. Services to be Provided by Mr. Brown Pursuant to the Consulting Contracts and Mr. Brown's Relationship with the Board of Trustees. Mr. Brown, referred to as the "consultant" in the Consulting Contracts, agreed to provide the following services: 1:1 The Hospital hereby contracts with Consultant to provide services to the Hospital to perform such services as may be necessary to properly and efficiently run the Hospital for the purpose of providing quality healthcare to the citizens of Washington County and a more productive business operation. 1:2 Consultant hereby contracts with the Hospital to perform such services as may be necessary to provide the Hospital advice, expertise and a more efficient and productive business operation. The Consulting Contracts also contained the following provision pertaining to Mr. Brown's operation of the Hospital: 2:1 Consultant agrees to devote such of his time and efforts to the performance of such services as are necessary to perform and achieve the objectives set forth in Article I above. Consultant agrees that he will not directly or indirectly render any service of a business, commercial or professional nature to any other Hospital in Northwest Florida, whether for compensation or otherwise, during the term of this Agreement without the prior written consent of the Board of Trustees of the Hospital. Consultant agrees to comply with the Hospital's policies, rules and regulations as determined from time to time by the Board of Trustees of the Hospital. It was the intent of the Hospital and Mr. Brown that he would act as an independent contractor, and not an employee, in performing the services contemplated by the Consulting Contracts. Mr. Brown was to, and did, provide his services personally. Mr. Brown did not operate through a corporation or other business entity. Between February 1988 and the Fall of 1992, Mr. Brown administered the Hospital in essentially the same manner that he had prior to 1988 while employed by NHI. The Board of Trustees established policies for the operation of the Hospital during the term of the Consulting Contracts. Mr. Brown carried out policies adopted by the Board of Trustees. Mr. Brown was involved in the formulation of policies by the Board of Trustees and he advised the Board of Trustees concerning policies it adopted. The Board of Trustees had little experience in operating the Hospital. The day- to-day operations of the Hospital had been handled by NHI prior to entering into the First Contract. Prior to NHI's operation of the Hospital, the Hospital was administered by Hospital Corporation of America (hereinafter referred to as "HCA"). HCA had operated the Hospital through an employee, Buel Sapp. The Board of Trustees, therefore, relied heavily on Mr. Brown and his expertise in developing polices and for his efficient operation of the Hospital. The manner in which Mr. Brown administered the Hospital was also largely the same as the manner in which the Hospital has been administered by the person who replaced by Mr. Brown. The new administrator has been treated as an "employee" by the Hospital. Training. Mr. Brown was a professional hospital administrator with a number of years of experience operating hospitals, including the Hospital. In light of Mr. Brown's experience, especially at the Hospital, training was not required when Mr. Brown undertook the services contemplated by the First Contract. Integration. The services to be performed pursuant to the Consulting Contacts were integral to the operation of the Hospital. Mr. Brown performed services normally performed by an "administrator" or top manager of any hospital. Manner In Which Mr. Brown Performed Services. Mr. Brown did not hire any assistants or employees to assist him in the performance of the services required by the Consulting Contracts. The Consulting Contracts did not prevent Mr. Brown from using the services of others to carry out the services to be provided. Although Mr. Brown was ultimately obligated to insure that the services contemplated by the Consulting Contracts were provided, the manner in which services required by the Consulting Contracts were to be carried out was not specified. Continuing Relationship. Mr. Brown was required, as a condition of the Hospital entering into the First Contract, to move to Washington County. Pursuant to the First Contract, Mr. Brown was obligated to perform services for the Hospital for a period of four years. The First Contract expired February 1, 1991. The Second Contract obligated Mr. Brown to perform services for the Hospital for a period of one year. The Second Contract was effective February 1, 1992. Mr. Brown continued to perform services for the Hospital between February 1, 1991 and February 1, 1992, although the First Contract had expired and the Second Contract had not yet been entered into. The evidence failed to prove why Mr. Brown continued to perform services for the Hospital between February 1, 1991, and February 1, 1992. Mr. Brown performed services for the Hospital after he left NHI for between 3 and 4 years. Mr. Brown's Working Hours. Mr. Brown's working hours were not specified in the Consulting Contracts. Mr. Brown, therefore, was not legally required to perform services during any set period of time. Mr. Brown generally performed services for the Hospital from the early morning until the early evening. Mr. Brown's hours were consistent with the hours worked by employees of the Hospital. Mr. Brown did not keep time-sheets indicating the hours he worked. Nor did Mr. Brown use, or "punch," a time-clock which employees of the Hospital used. Full-Time or Part-Time Work. Mr. Brown was not required to work any set amount of hours pursuant to the Consulting Contracts. The services expected of Mr. Brown pursuant to the Consulting Contracts reasonably contemplated that Mr. Brown would perform services full- time, only if necessary. The Consulting Contracts also provided that Mr. Brown was not required to perform services on days he attended seminars or meetings to improve his position. The Consulting Contracts also required that Mr. Brown make himself available "for all reasonable meetings, engagements, and any and all other reasonable attempts by the Hospital to promote the Hospital." Mr. Brown did not receive annual or sick leave. Mr. Brown did not work at the Hospital every day of the week. During some weeks, he only worked three or four days. Where Mr. Brown Performed Services. Although not specifically required to do so, Mr. Brown performed the services contemplated by the Consulting Contracts essentially on the premises of the Hospital. In order to effectively administer the Hospital, it was necessary that Mr. Brown be available at the Hospital. Reports from Mr. Brown to the Hospital. Mr. Brown regularly reported to the Board of Trustees and kept the Board informed of his actions. Compensation for Mr. Brown's Services. Pursuant to the First Contract, Mr. Brown was paid an annual fee of $70,555.00. The annual fee was paid biweekly in twenty-six equal installments. Payments were made on the last day of every other week. The annual fee to be paid to Mr. Brown pursuant to the First Contract was agreed upon during negotiations based upon the average salary paid to administrators of similarly sized hospitals who were serving as employees, and adding thereto the amount of withholding tax, retirement contributions and other amounts which would be paid on behalf of an "employee." Had Mr. Brown been hired as an "employee", presumably he would have only been paid an amount based upon the average salary of other employee/administrators. Pursuant to the Second Contract Mr. Brown was paid an annual fee of $98,770.00. The annual fee was paid monthly on the first day of each month and upon the submission of an invoice from Mr. Brown. The Consulting Contracts also provided the following: Consultant hereby acknowledges and agrees that he is an independent contractor individually liable for self employment and all other taxes of any nature due on the fees paid by the Hospital to Consultant. Payments of Mr. Brown's annual fee were made to him by the Hospital out of a separate account and not the Hospital's "payroll" account from which Hospital employees were paid. Payments were made at the same time that Hospital employees were paid. The Hospital also paid for group health insurance for Mr. Brown. Health insurance benefits provided to Mr. Brown were the same benefits provided to Hospital employees. The Hospital also paid for disability insurance for Mr. Brown and a life insurance policy larger than provided to Hospital employees. Mr. Brown's Expenses; Tools and Materials; Investment. Pursuant to the Consulting Contracts, the Hospital paid dues Mr. Brown was required to pay to maintain "membership in applicable organizations or associations deemed necessary for promotion of the Hospital " The Hospital paid expenses incurred by Mr. Brown to attend meetings and seminars on new federal and state health care regulations which impacted the operation of the Hospital. The Hospital paid Mr. Brown a vehicle allowance of $250.00. The Hospital also provided Mr. Brown with an office, furniture, office supplies, a secretary (who was an employee of the Hospital) and with telephone and other services necessary to operate as the administrator of the Hospital. The office provided to Mr. Brown was the office used by the Hospital administrator. Other then Mr. Brown's education, Mr. Brown did not have any substantial investment in his position with the Hospital. Capital investment necessary for Mr. Brown to carry out his duties was provided by the Hospital. Profit and Loss Potential. In light of the fact that Mr. Brown was guaranteed payment for his services and the lack of investment and expenses Mr. Brown was required to provide, there was no reasonable potential Mr. Brown would incur a loss. Mr. Brown operated as an individual. Offer of Services to the General Public. The Consulting Contracts prohibited Mr. Brown from providing his services to others in "Northwest Florida." Mr. Brown was, therefore, free to perform services elsewhere. During the term of the Consulting Contracts, Mr. Brown did perform services for other companies located outside of Florida. Article X of the Consulting Contracts provided, in pertinent part, the following: . . . . Consultant further agrees that he shall not participate, directly or indirectly, individually or as a partner, shareholder, employee, agent, consultant, officer, director or otherwise, in any other business where such participation will in any manner interfere (as reasonably determined by the Board of Trustees and Consultant) with the business of the Hospital or which ultimately, in the final opinion of the Board of Trustees, could result in the integrity of the Hospital being subject to doubt. Right to Terminate Mr. Brown and Mr. Brown's Right to Quit. Pursuant to the Consulting Contracts, the Hospital had the right to terminate Mr. Brown's services for "good cause" as determined by majority vote of the Board of Trustees and "upon sixty (60) calendar days written notice of termination to the Consultant." The Hospital was required, however, to pay Mr. Brown for four months of service. The Hospital also had the right to terminate Mr. Brown's services if he were convicted of a felony, required to take treatment for drug or alcohol abuse, engaged in activity harmful to the reputation of the Hospital or failed to comply with the terms of the Consulting Contract. Mr. Brown was authorized by the Consulting Contracts to terminate his services upon sixty days written notice. The Consulting Contracts provide that the agreement terminated upon the death of Mr. Brown. Weighted Consideration of the Facts. Several of the facts in this case indicate that Mr. Brown was an independent contractor of the Hospital and several of the facts indicate that he was an employee. Based upon a weighted consideration of the facts in this case, it is concluded that Mr. Brown operated as an independent contractor, and not an employee, for the Hospital.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services, Division of Retirement, enter a Final Order concluding that J. Glenn Brown, Jr., was not a compulsory member of the Florida retirement system pursuant to Section 121.051, Florida Statutes. DONE AND ENTERED this 18th day of November, 1993, in Tallahassee, Florida. LARRY J. SARTIN 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 18th day of November, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-1635 The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Hospital's Proposed Findings of Fact Accepted in 1. Accepted in 2 and hereby accepted. Accepted in 7-8. Accepted in 28. Accepted in 10. See 11-13 and 38-39. The First Contract expired January 31, 1991, and not January 31, 1992. Accepted in 16 and 24. Accepted in 35. Accepted in 54 and hereby accepted. The last sentence is not relevant. 9 Accepted in 26, 42-43, 52, 57 and 63. Hereby accepted. Accepted in 68. Accepted in 48. Accepted in 50. Accepted in 30-31. Accepted in 3. The Division's Proposed Findings of Fact Accepted in 4-6. Accepted in 7. Accepted in 9 and hereby accepted. 4 Accepted in 10,53-54, 58-59 and 62. Accepted in 28. Accepted in 23. Accepted in 23 and 69. The first sentence is not relevant. 8 Accepted in 41-42, 44, 47, 52-53 and 63. See 41-43 and hereby accepted. Although Ms. Ward did testify consistent with this finding of fact, the testimony was not sufficiently detailed to conclude that Mr. Brown and Mr. Mason provided services in exactly the same manner. Accepted in 61. 12 Accepted in 11-14, 38-39 and 55. Accepted in 14, 25 and 66. Accepted in 23. Accepted in 60-61. See 73. See 53-62. The conclusion on page 10 is not supported by the weight of the evidence. COPIES FURNISHED: Gerald Holley, Esquire Post Office Box 268 Chipley, Florida 32428 William S. Howell, Jr., Esquire Post Office Box 187 Chipley, Florida 32428 Stanley M. Danek, Esquire Division of Retirement Department of Management Services 2639 North Monroe Street, Building C Tallahassee, Florida 32399-1560 A. J. McMullian, III, Director Division of Retirement Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560 Sylvan Strickland, Esquire Department of Management Services Knight Building, Suite 309 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
The Issue The issues in the case are whether certain provisions of the Florida Medicaid Hospital Services Coverage and Limitations Handbook (Handbook) that exclude non-emergent services rendered in the emergency room from covered Medicaid outpatient services and require revenue Code 451 to be billed with CPT Code 99281 constitute an invalid exercise of delegated legislative authority within the meaning of Subsection 120.56(3), Florida Statutes (2010).1
Findings Of Fact AHCA is the Medicaid agency for the State of Florida as provided under federal law. § 409.901(2), Fla. Stat. “'Medicaid agency' . . . means the single state agency that administers or supervises the administration of the state Medicaid plan under federal law." § 409.901(15), Fla. Stat. AHCA must administer the Medicaid program pursuant to a state plan that is approved by the Center for Medicare and Medicaid Services (CMS). 42 U.S.C. §§ 1396 and 1396a(a). AHCA reimburses Medicaid providers in accordance with state and federal law, according to methodologies set forth in rules promulgated by AHCA and in policy manuals and handbooks incorporated by reference in the rules. AHCA has adopted Florida Administrative Code Rule 59G-6.030, which incorporates by reference the Florida Title XIX Outpatient Hospital Reimbursement Plan, Version XIX (the Outpatient Plan), with an effective date of July 1, 2009. Reimbursement to participating outpatient hospitals, such as Petitioners, is to be provided in accordance with the Outpatient Plan. AHCA has issued the Florida Medicaid Hospital Services Coverage and Limitations Handbook. The Handbook is incorporated by reference in Florida Administrative Code Rule 59G-4.160. The Outpatient Plan and the Handbook identify those outpatient hospital services that are covered by the Medicaid program by revenue code. Only those revenue codes listed in Appendix A of the Outpatient Plan (Appendix A) and Appendix B of the Handbook (Appendix B) are covered outpatient services. Petitioners have challenged the following provisions of the Handbook: Handbook at page 2-7: EMTALA Medical Screening Exam The federal Emergency Medical Treatment and Labor Act (EMTALA) requires emergency rooms to conduct a medical screening exam on any patient presenting to the emergency room for medical services . . . . If the medical screening exam determines that no emergency medical condition exists, Florida Medicaid reimburses only for the screening and the ancillary services required to make the determination (e.g., lab work or x-rays). Medicaid policy does not provide for reimbursement of non-emergency services beyond the medical screening exam required by EMTALA. Handbook at page 2-40: Non-Emergency Care in the Emergency Room Medicaid policy does not provide for reimbursement of non-emergency services beyond the medical screening exam required by Emergency Medical Treatment and Labor Act (EMTALA). EMTALA requires emergency rooms to conduct a medical screening exam on any patient presenting to the emergency room for medical services. The purpose of the medical screening exam is to determine if an emergency medical condition exists. If the screening determines that an emergency medical condition exists, the provider must either stabilize the condition or appropriately transfer the patient to a facility that can stabilize the condition. If the medical screening determines that no emergency medical condition exists, Florida Medicaid reimburses only for the screening and the ancillary services required to make the determination (e.g., lab work or x-rays). Recipients are responsible for a coinsurance on such claims. Handbook, Appendix B at pages B-6 and B-7: EMERGENCY ROOM 0450 General Classification Use General Classification code 0450 when recipients require emergency room care beyond the EMTALA emergency medical screening services. Code 0450 cannot be used in conjunction with 0451 (99281). All other appropriate and covered outpatient revenue codes can be billed with 0450 to reflect services rendered to the patient during the course of emergency room treatment. No MediPass authorization is required when billing 0450, if the type of admission in Form Locator 19 on the claims is "1" (Emergency). MediPass authorization is required when the condition of the patient is not an emergency. 0451(99281) EMTALA Emergency Medical Screening Services (Effective 7/1/96) Report the EMTALA Medical Screening code 0451 (99281) when, following the screening and exam, no further emergency room care or treatment is necessary. If ancillary services are not necessary to determine whether or not emergency or further treatment is required, report the ancillary charges using the appropriate revenue center codes in conjunction with code 0451 (99281). Note that 0451 (99281) cannot be used in conjunction with 0450. Effective 10/16/03, HCPCs code 99281 replaces code W1700, used prior to 10/16/03, when billing revenue code 0451. Florida Administrative Code Rule 59G-4.160 provides that the specific authority for the promulgation of the rule is Section 409.919, Florida Statutes, and the law implemented is Sections 409.905, 409.908, and 409.9081, Florida Statutes. Petitioners are acute care hospitals that are and were enrolled as Medicaid providers of outpatient service in Florida at all times material to this proceeding.
