The Issue The issue in this case is whether the Respondent, the Department of Administration, Division of State Employees' Insurance, administrator of the State of Florida group health insurance policy, should pay all covered medical expenses incurred by the Petitioners for non-PPC providers on behalf of their dependent daughter that exceed $3,000 1/ maximum out-of-pocket expense stop loss provision of the policy, despite the part of the stop loss provision that subjects it to maximum payments for room and board (and some other services) supplied by non-PPC providers.
Findings Of Fact Pertinent History of the Insurance Plan. The State of Florida offers group health insurance to its employees, including employees of the State University System, as an optional fringe benefit. Since 1978, the State has self-insured this coverage. The group health insurance coverage is administered by the Respondent, the Department of Administration, Division of State Employees' Insurance. The Respondent contracts with Blue Cross Blue Shield of Florida as a third party administrator of the insurance coverage. The State pays part of the premium required for the coverage; the balance of the premium is paid by the employee. Depending on their county of residence, state employees can choose membership in one of several approved health maintenance organizations (HMOs) in lieu of coverage under the State's health insurance plan. When an employee joins an approved health maintenance organization in lieu of the state health insurance plan, the State contributes to the cost of membership to the same extent that it contributes to an employee's insurance premium under its group health insurance plan. Since the State began to self-insure in 1978, coverage under the state group health insurance contained limits on the maximum amount the plan would pay for hospital room and board. The plan also differentiated between the amounts that would be paid under the plan for services rendered by pre-approved "preferred providers" (PPCs). From time to time through the years, the Florida Legislature changed the maximum amounts the plan would pay for various services, and the plan was changed accordingly. But in each version of the plan, there was a distinction made between services rendered by a PPC versus services rendered by a non-PPC. When the State began to self-insure its employee group health insurance benefit on May 1, 1978, it mailed a new, 25-page certificate of insurance to each employee covered by the plan. Whenever a change in the coverage under the state group health insurance plan was occasioned by new legislation, a revised certificate of insurance was mailed to each employee covered by the plan. This occurred in July, 1982, (a 40-page booklet), in August, 1983, (an eight-page addendum), in August, 1985, (a 13-page booklet), and in July, 1988 (a 13-page booklet). Consistent with the master group health insurance policy to which they refer, each of these certificates of insurance are clear that the maximum out- of-pocket "stop loss" feature is subject to certain limitations. In particular, all make clear that the feature is subject to a maximum payment for room and board. Each of these certificates of insurance contains language cautioning the employee that the certificate is not a contract of insurance, that the purpose of the certificate is only to summarize the insurance plan, and that the certificate does not include all covered and non-covered benefits. Each also advises that a copy of the complete contract (the master policy), and the administrative rules under which the plan is administered, could be inspected in the office of the Respondent, as well as in the employee's personnel office. Each advises employees to present questions to their agency personel office or to the Office of State Employee's Insurance. The August, 1985, certificate of insurance reflects a change in the policy to differentiate between PPC and non-PPC providers. It also clearly states that the maximum out-of-pocket stop loss feature of the policy is subject to maximum payments for room and board (and some other services) supplied by non-PPC providers. The July, 1988, certificate also clearly provides that the maximum out-of-pocket stop loss feature of the policy is subject to maximum payments for room and board (and some other services) supplied by non-PPC providers. Both of these certificates were entitled the "State of Florida Employees Group Health Self Insurance Plan Brochure." In addition to the certificates of insurance, Blue Cross Blue Shield also printed an abbreviated version of the July, 1988, insurance certificate called the "State of Florida Employees Group Health Self Insurance Plan Benefits." It is a seven-page document intended for distribution, along with information concerning the various available state-approved HMOs, to all new state employees, who have the opportunity to choose to enroll in the state group health plan, in one of the HMOs, or neither. It also was intended for distribution to all employees during open enrollment periods, when employees have the opportunity to change from an HMO to the state group health insurance, or vice versa, or to drop the benefit. The purpose of the "benefits" document was to give employees information on which to make that choice. Since it was anticipated that it would be mailed to many state employees who ultimately would choose against the state group health insurance plan, the information was condensed to shorten the document to save mailing costs. Only if a new employee (or an old employee during the open enrollment period) chose the insurance would the employee get mailed a certificate of insurance in the mail. Among the information contained in the July, 1988, "benefits" document was an item entitled "Maximum Out of Pocket Expense" that simply listed: "$1500 individual coverage" and "$3000 family coverage." Omitted from the "benefits" document were the limitations on the maximum out-of-pocket stop loss feature (Finding 7, above) and the language cautioning that it was not a contract (Finding 6, above). Under the heading "Exclusions and Limitations," it states: "Complete list in employee brochure." The last two pages of the document contains two lists, one entitled "Limitations," and the other entitled "Exclusions." Neither list specifies the limitations on the maximum out-of- pocket stop loss feature (Finding 7, above). On the cover of the document, it states: "This brochure replaces any other brochure or booklet printed prior to July 1, 1988, relative to the Plan and shall remain in effect until further notice." The Saffs' Insurance Decision. Edward B. Saff has been a mathematics professor at the University of South Florida (USF) in Tampa, Florida, for 22 years. The Saffs did not prove that they did not receive copies of the May 1978, July, 1982, August, 1983, August, 1985, and July, 1988, certificates of insurance. The Saffs' daughter Lisa, who was born on April 24, 1970, had been diagnosed in June, 1985, as having acute lymphoblastic leukemia. She was treated at the University of South Florida through June, 1988, and seemed to have been cured. During the summer of 1988, the Saffs had occasion to consider the question whether they should obtain health insurance other than, and in addition to, their family coverage under the State employees' group health insurance. Although the Saffs did not prove that they had not received their copies of the May 1978, July, 1982, August, 1983, August, 1985, and July, 1988, certificates of insurance, they apparently did not retain them or at least did not have them readily available to consult. As a result, Dr. Saff asked his secretary to get information on the state employees' group health insurance coverage from the USF personnel office. The evidence was that the Department of Administration has made a copy of the master group health self-insurance policy, and copies of the certificate of insurance, available in all state agency personnel offices, including in the USF personnel offices, for inspection by state employees. The July, 1988, certificate of insurance states: "The agency personnel office will provide needed assistance to State officers and employees enrolling in the Plan; however, such officers or employees should take care to assure that they receive the coverage applied for and that proper deductions are made." But there was no evidence specifically what Dr. Saff told his secretary to ask of his USF personnel office. Dr. Saff's secretary did not testify, and there was no evidence from which a finding can be made as to what the secretary asked for or what the secretary was told by the USF personnel office. But the secretary returned with a copy of the abbreviated version of the July, 1988, insurance certificate (the "State of Florida Employees Group Health Self Insurance Plan Benefits.") Cf. Findings 8 and 9, above. Based exclusively on the information relayed by Dr. Saff's secretary, i.e., on the abbreviated version of the July, 1988, insurance certificate (the "State of Florida Employees Group Health Self Insurance Plan Benefits"), with its incomplete information under the heading entitled "Maximum Out of Pocket Expense," the Saffs decided that they did not need any additional health insurance coverage for their daughter Lisa. They reasoned that they could afford the maximum out of pocket expense referenced in the document. They did not seek any further information about the policy before making this decision. The Saffs' Insurance Claim. In August, 1990, Lisa Saff underwent a routine gynecological examination, and a pelvic mass was discovered. The mass was removed surgically at Humana Women's Hospital in Tampa. Cancer of the ovaries was diagnosed, but at first the type of cancer was not identified. After more tests, it was determined that Lisa had suffered a recurrence of her previous cancer, but it was highly unusual for that type of cancer to recur in the ovaries. Since the physicians at Humana Women's and at USF were unfamiliar with the recurrence of the cancer in the ovaries, they recommended that Saffs seek medical care at Sloan-Kettering Hospital in New York City, where Lisa began treatment in the early part of September, 1990. Since starting treatment at Sloan-Kettering, Lisa has been under the care of Dr. Timothy Gee. She was hospitalized at Sloan-Kettering three times in 1990 and approximately twice in 1991. Fortunately, she has responded to treatment and is now on the maintenance portion of her protocol, receiving treatment as an outpatient of the hospital. Sloan-Kettering charges $700 a day for a hospital room and also charges for some other medical services in excess of the PPC fee and charge schedule under the State of Florida Group Health Self Insurance policy. In all, the Saffs have incurred $46,870 for medical treatment for Lisa for 1990. As of the date of the final hearing, they incurred $14,439 for medical treatment for Lisa for 1991. They continue to incur medical expenses for Lisa under her maintenance protocol. They have submitted claims for payment under the state group health insurance policy, including all medical expenses during both 1990 and 1991 by which their out-of-pocket expense exceeded $3000 per calendar year. 2/ The Respondent's Position. In response to the Saffs' claims, the Respondent has taken the position that, in accordance with the master policy and the certificate of insurance, the maximum out-of-pocket stop loss feature of the policy is subject to maximum payments for room and board (and some other services) supplied by non-PPC providers. Cf. Finding 7, above. In accordance with that position, the Respondent has paid $18,554 of the Saffs' 1990 claims and $2,162 of the Saffs' 1991 claims. (The Saffs have paid $14,089 of the balance of their 1990 claims and $9,250 of the balance of their 1991 claims.)
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent, the Department of Administration, Division of State Employees' Insurance, enter a final order (1) giving effect to the provision of the group health self-insurance plan that subjects the maximum out- of-pocket stop loss feature of the policy to maximum payments for room and board (and some other services) supplied by non-PPC providers and (2) paying $18,554 of the Saffs' 1990 claims and $2,162 of the Saffs' 1991 claims. RECOMMENDED this 19th day of September, 1991, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 19th day of September, 1991.
The Issue At issue in this proceeding is whether the son of Floyd Goins, an enrollee of the State of Florida Employees Group Health Self Insurance Plan, is an eligible dependent under the provisions of such plan, and therefore eligible for insurance benefits.
Findings Of Fact Background Floyd Goins (the "Insured") has been employed by the State of Florida, Dade County State Attorney's Office, for approximately 11 years, and was, at all times material hereto, a participant in the State of Florida Employees' Group Health Self Insurance Plan (the "Plan"), with family coverage. On January 17, 1988, the Insured's son, Ronald Goins (Ronald), date of birth March 7, 1965, was involved in an automobile accident in which he sustained serious injury. As a consequence, Ronald was admitted to Jackson Memorial Hospital, where he apparently underwent extensive treatment. As a result of the accident, Ronald suffered severe physical handicap, in that he cannot walk or talk, and is not capable of self sustaining employment. Currently, Ronald resides with his parents, and is wholly dependent upon them for support. As a consequence of the medical expenses incurred on behalf of Ronald, a request for reimbursement was made to respondent, Department of Administration, Division of State Employees' Insurance (Department), under the Plan. Upon review, the Department, relying upon the provisions of Rule 22K- 1.103, Florida Administrative Code, concluded that Ronald, since he was over the age of 19 at the time of the accident and was not enrolled in and attending a school, college or university as a full-time student at the time of the accident, was ineligible for coverage as a dependent under the Plan. Accordingly, the Department denied the request for reimbursement. Thereafter, the Insured assigned to petitioner, The Public Health Trust of Dade County, Florida d/b/a Jackson Memorial Hospital, his interest in any benefits payable for services rendered by such facility as a consequence of Ronald's admission, and further authorized Jackson Memorial to take whatever legal action might be necessary to collect such benefits. As a consequence, petitioner filed a request for formal hearing to contest the Department's conclusion that Ronald was ineligible for coverage under the Plan. 1/ The issue of coverage. Under the provisions of the Plan, an employee's "eligible children" are included within the definition of "eligible dependents" who are eligible to participate in the Plan, provided family coverage has been selected. Rules 22K- 1.103(5) and 22K-1.201(2), Florida Administrative Code. "Eligible children" are defined by Rule 22K-1.103(4), Florida Administrative Code, as follows: "Eligible children" shall mean the employee's . . . own children . . . Such children are eligible for coverage as follows: From their date of birth to the end of the month in which their nineteenth (19th) birthday occurs; From their nineteenth (19th) birthday to the end of the month in which their twenty-third (23rd) birthday occurs, if they are enrolled in and regularly attending on a full-time basis any school, college or university which provides training or educational activities, and which is certified or licensed by a state or foreign country. Such children who are mentally or physically handicapped shall be eligible to continue coverage after attainment of the above age limits and while the employee's or retiree's family coverage is in effect provided such children are incapable of self- sustaining employment by reason of such mental or physical handicap and chiefly dependent upon the employee, retiree or supervising spouse for support and maintenance. (Emphasis added) And, Rule 22K-1.103(9), Florida Administrative Code, defines "full-time basis", as follows: (9) "Full-time basis" shall mean the number of hours required by the school, college or university to qualify an eligible child as a full-time student. In no case shall an eligible child be considered attending on a full-time basis unless such child is currently enrolled and attending, or has, during the previous twelve (12) month period, attended as a full-time student, two (2) semesters, three (3) quarters or eight (8) months at such school, college or university. (Emphasis added) Here, petitioner contends that Ronald was an eligible dependent of the Insured, and therefore covered by the Plan because he was "enrolled in and regularly attending on a full-time basis" Bauder College, an institution licensed by the State of Florida, at the time of his accident or, alternatively, because such accident rendered him "physically handicapped." The proof fails, however, to support the conclusion that Ronald was an eligible dependent of the Insured, at the time of the accident, on either basis. Ronald's educational pursuits. Regarding Ronald's educational pursuits, the proof demonstrates that his public education was interrupted in or about 1984 when he was incarcerated in the State prison system, and that he remained so incarcerated until the later part of 1987. While incarcerated, Ronald apparently pursued some educational program, although no specifics were offered at hearing from which any conclusion could be drawn regarding its "full-time" nature, since the Department of Education awarded to him a high school diploma on December 12, 1984. Ronald apparently also pursued, while incarcerated, a course of study in electronic repair through Sumter Vocational School, during the period of November 1, 1985 to September 20, 1986. [Petitioner's Exhibit 1]. Again, no specifics were offered at hearing from which any conclusion could be drawn regarding the "full- time" nature of this program, but Ronald was awarded a certificate upon its completion. In sum, the proof fails to support the conclusion that Ronald, while incarcerated, was enrolled in and regularly attending any school on a "full-time basis", as that term is defined by Rule 22K-1.103(9), Florida Administrative Code. Moreover, there is no proof of record that Ronald pursued any educational program after September 20, 1986, a date in excess of 12 months prior to his automobile accident, excepting his enrollment at Bauder College. Regarding Ronald's enrollment at Bauder College, the proof demonstrates that on November 3, 1987, Ronald executed an enrollment agreement with Bauder College whereby he elected to pursue an educational program in electronic engineering technology. According to the enrollment agreement, the program was to start January 19, 1988, and the school calendar [Respondent's Exhibit 1] confirms that January 19, 1988, was "ORIENTATION/REGISTRATION - FIRST DAY" of the 1988 Winter Quarter. Ronald was, however, hospitalized on January 17, 1988 as a consequence of his automobile accident, and never started his course of training. 2/ Therefore, Ronald, although enrolled, was not yet "regularly attending" school when injured and, therefore, was not at the time of his accident an eligible dependent of the Insured. 3/ Ronald's handicapped status. Here, petitioner also contends that, as a consequence of his handicap, Ronald was an eligible dependent under the Plan. Such contention is rejected as contrary to the provisions of Rule 22K-1.103(4), Florida Administrative Code. Handicap, under the facts of this case, is not a factor which renders a person eligible for coverage. Rather, handicap is a factor which permits the child of the insured "to continue coverage" after attainment of the age limits for coverage. Rule 22K-1.103(4)c), Florida Administrative Code. Ronald, not having been a covered dependent at the time he suffered his handicap, had no coverage to continue. Estoppel Notwithstanding the rules which govern eligibility to participate in the Plan, petitioner contends that the Department should be estopped to apply such rules in the instant case. 4/ The predicate for petitioner's argument lies in a brochure [Petitioner's Exhibit 7] that was provided the Insured, and which defines eligible dependents as follows: Your own children . . . ; if they are under the age of 19, if they are full-time students under the age of 23, or if they are determined by the administrator to be mentally or physically handicapped, incapable of self- sustaining employment, chiefly dependent upon your support, and otherwise insurable. Petitioner's claim of estoppel is unpersuasive for a number of reasons. First, the brochure does not purport to replicate the Plan, but to summarize it, and advises all recipients that it "is not a contract since it does not include all of the provisions, definitions, benefits, exclusions and limitations" of the Plan. Under such circumstances, it would not be reasonable to rely solely on the brochure for any definition of coverage. Second, and perhaps most importantly, the proof is not persuasive that the Insured relied upon the referenced provision of the brochure or that he made any change in position as a consequence of such provision.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered which finds that Ronald Goins is not covered by the Plan, and which dismisses the petition with prejudice. DONE and ENTERED this 6th day of December 1991, at Tallahassee, Florida. WILLIAM J. KENDRICK 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 6th day of December 1991.
Findings Of Fact The Respondent has been licensed by the Department of Insurance as an insurance agent since 1966. Prior to the initiation of this proceeding, he has not been the subject of any disciplinary action by the Department. The Respondent has had a successful career as an insurance agent, and has been an active member of his community. During 1977 the Respondent actively marketed membership in a program known as the National Business Conference Employee Benefit Association (NBCEBA). The program offered by NBCEBA constituted a health insurance plan, and as such was subject to regulation under the Florida Insurance Code. The NBCEBA program operated as if it were exempt from state regulation under the Federal Employee Retirement Income Security Act (ERISA), Chapter 18, United States Code, Sections 1001, et seq. Qualified plans under ERISA were not subject to regulation under state insurance codes. The plan offered by NBCEBA did not qualify as an ERISA plan. Such plans could only be offered by employee organizations. NBCEBA solicited members who were employed by diverse employers, and who participated in diverse occupations. Membership in NBCEBA thus lacked the commonality of employment status among members required of employee organizations under ERISA. Since the plan offered by NBCEBA did not qualify as an ERISA plan, it was subject to regulation by the State of Florida as a program of insurance. Indeed, the essence of the NBCEBA plan was to offer a program of insurance to its "members." NBCEBA has never held a certificate of authority to transact an insurance business in the State of Florida. The Department of Insurance became aware of the plan being offered by NBCEBA to Florida citizens. The Department came to the conclusion that the plan constituted Insurance program not subject to exemption from state regulation under ERISA. By letter dated September 26, 1977, the Department advised Florida agents who were selling memberships in the NBCEBA program of its opinion that the program did not qualify for exemption from state regulation under ERISA, and that NBCEBA was acting as an unauthorized insurer in Florida. The letter requested that the agents cease and desist from further solicitation of prospective members of the plan. This letter was sent to the Respondent. The Respondent received it in the ordinary course of the mail. Shortly after sending this letter, the Department requested an opinion from the United States Department of Labor as to whether the NBCEBA program was exempt from state regulation. During March, 1978, the Department received a response in which the United States Department of Labor advised that in its opinion, NBCEBA was not a qualified program under Chapter 18, United States Code, and that the NBCEBA plan was subject to regulation by the State of Florida. After receiving the letter from the Department advising him of its opinion that the NBCEBA plan was not a qualified insurance program, the Respondent discussed the letter with Mr. Robert Klein, the owner of Planned Marketing Systems. Planned Marketing Systems was the general agent for the NBCEBA program in Florida. Mr. Klein advised the Respondent that the plan would eventually be approved in Florida. The Respondent did not cease marketing the NBCEBA plan. On or about October 31, 1977, he completed an application and accepted a premium payment for membership in the plan on behalf of Mr. Rafael Sanchez. Sanchez had been a friend of the Respondent and had used the Respondent as his insurance agent. The premiums on Sanchez's health insurance policy had increased dramatically during 1977. Membership in the NBCEBA plan was considerably cheaper than premiums that Sanchez needed to pay for other health insurance programs. Sanchez did not appear as a witness at the hearing, and the evidence would not support a finding as to what, if any, representations were made by the Respondent to Sanchez respecting the failure of NBCEBA to qualify as an insurance plan under the laws of the State of Florida. The evidence would not support a finding as to whether Respondent advised Sanchez as to his correspondence from the Department relating to NBCEBA. During May, 1978, Sanchez made an application to NBCEBA for benefits. NBCEBA did not honor the claim, and has since filed for bankruptcy in the United States District Court for the District of Oregon. Sanchez has thus been left liable to pay medical expenses that should have been covered under the NBCEBA plan.
Findings Of Fact The parties have stipulated to the following facts: The petitioner received payment of $1,920 from Blue Cross/Blue Shield for the purchase of an EBI bone healing system. Blue Cross/Blue Shield also paid $2,000 to EBI Medical Systems, Inc., the provider, for the purchase of the same equipment. The petitioner was not covered by his state health insurance plan at the time of the purchase of the equipment, because he had failed to pay his premiums while he was on leave without pay from his state employment position. The petitioner has not remitted payment for the purchase of the EBI equipment to the respondent agency. The petitioner owes the State of Florida the sum of $1,920.
Recommendation In consideration of the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered by the Department of Administration requiring that the petitioner, Gregory Chrishon, pay the Department of Administration, Office of State Employees' Insurance, the sum of $1,920 in accordance with a payment schedule to be agreed upon by the respondent and the petitioner, and to provide that such payment will constitute the total amount due to the respondent from the petitioner arising out of the claim for reimbursement for services received related to the purchase of the subject equipment. DONE and ENTERED this 23rd day of December, 1987, in Tallahassee, Leon County, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of December, 1987. COPIES FURNISHED: T. Patterson Maney, Esquire, P.A. 123 Staff Drive Post Office Drawer 1628 Fort Walton Beach, Florida 32549 Andrea R. Bateman, Esquire Assistant General Counsel Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 Adis M. Vila, Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
The Issue Does the Prescription Drug Services Plan administered by the Division of State Group Insurance provide coverage for the drug Xenical as prescribed to the Petitioner?
Findings Of Fact The Plan The Division of State Group Insurance is authorized to provide health insurance coverage to employees of the State of Florida through a fully insured plan or a self-insured plan. The decision to offer a self-insured plan is explained in the State of Florida Employees Group Health Self Insurance Plan Booklet and Benefits Document (the "Plan Booklet and Benefits Document"): As is the case with many major employers, the State of Florida determined that a self- insured plan would result in significant savings to the participating members, and, therefore, implemented the current self- insured program in 1978. Being self-insured means that Claims are paid directly from funds belonging to the State of Florida, with the State earning interest on all fund balances. In addition, the Plan avoids charges normally charged by insurance companies such as retentions, reinsurance, risk factors, and other insurance related charges. (Petitioner's Ex. 7, p. 2.) Denominated the State of Florida Employees' Group Health Insurance Plan, the Plan has both a Servicing Agent and a Prescription Drug Program Administrator. At the time the events leading to this case arose, the Servicing Agent was Blue Cross/ Blue Shield of Florida, Inc., and the Prescription Drug Program Administrator was Eckerd Health Services ("EHS"). By designation of the Florida Legislature, however, the Division is responsible for the administration of the Plan. In the capacity of Plan Administrator, "the Division . . . has full and final decision-making authority concerning eligibility, coverage, benefits, claims, or interpretation of the Benefit Document." (Id.) Mr. Magee, Diabetes and Hypercholesteremia Dennis J. Magee is an employee of the Department of Corrections. He has been covered by State Health Insurance since he commenced his employment with the state in 1971. Mr. Magee has participated in numerous health insurance plans over the course of his employment. For the past three or four years, at least, he has participated in the State of Florida Group Health Self-Insurance Plan administered by the Division. Approximately twelve years ago, Mr. Magee was diagnosed with diabetes. Since the initial diagnosis, his diabetes mellitus type 2 has become complicated by microangiopathy, nephropathy, retinopathy, hypercholesterolemia (elevated serum cholesterol) and obesity. With regard to obesity, Mr. Magee was determined near the time of hearing to have a body mass index of 32.25, an index beyond the threshold for obesity. Dr. Croom and Xenical Mr. Magee's physician is William P. Croom, M.D. Dr. Croom is an endocrinologist specializing in the treatment of types 1 and 2 diabetes mellitus. On July 22, 1999, Dr. Croom prescribed Xenical, a drug used in the control of obesity, at a dosage of 150 milligrams for Mr. Magee. The prescription was medically necessary in Dr. Croom's view because Mr. Magee "has been unsuccessful in managing his obesity with diet and exercise" (Petitioner's Ex. 2) and because "his diabetes and hyperlipidemia [elevated cholesterol] are driven by his obesity . . . ." (Petitioner's Ex. 3). Attempt to Fill the Prescription Mr. Magee presented the prescription to Express Pharmacy Services. It was not honored. On August 3, 1999, Express Pharmacy Services wrote to Mr. Magee that "[t]his item is not covered by your insurance. Please contact your benefits rep. if you have questions." Petitioner's Ex. 4. Appeal to the Division Eckerd Health Services, the Prescription Drug Program Administrator, affirmed the denial of the prescription. Mr. Magee appealed the decision to the Division. The Department of Management Services has an appeals committee, which reviews all denials of coverage by EHS. The appeals committee is composed of three members within the Division: the director, the assistant director and the Policy and Development Bureau Chief. The Director, at the time Mr. Magee's appeal was considered, Mr. Slavin, is a diabetic. The appeals committee looked into Xenical as a treatment for diabetes. It obtained information through literature and internet research and from consultation with physicians at Blue Cross/Blue Shield. On the basis of the research, the committee concluded that Xenical is used only for the treatment of obesity and not for the treatment of diabetes. The appeal resulted in the letter from Director Slavin (referenced in the Preliminary Statement of this order) in which the Director wrote, "I am writing in response to your appeal of the decision by Eckerd Health Services (EHS) to deny coverage for Xenical [and] [r]egrettably, we must concur with EHS' determination." The Plan Booklet and Benefits Document Basis for the Denial The Division's concurrence with EHS that coverage for Xenical should be denied was based on the Prescription Drug Program Section of the Plan Booklet and Benefits Document. The program is described in Part XXVIII, Section W. Subsection 1., Covered Drugs, on p. 57 lists "(a) [f]ederal legend drugs" and "(b) [s]tate restricted drugs" as among those drugs covered. Among the list under Subsection 5., entitled "Exclusions," however, is "(c) [a]nti-obesity drugs." The listing of anti- obesity drugs under Part XXVIII, Section W., Subsection 5, the "Exclusions" subsection, ultimately, is the basis for the Division's denial of coverage of Xenical as prescribed for Mr. Magee. The Plan Booklet and Benefits Document is prepared on an annual basis by the Division. Typically, the Plan Booklet and Benefits Document is "enacted by the Legislature every year through the appropriation[] process of Section 8 of the Appropriations Act." (Tr. 54). For example, the Conference Report on Senate Bill 2500, General Appropriations for 1999- 2000, under Specific Appropriation states: 9) All State Group Health Insurance Plan benefits as provided in the State of Florida Employees Group Health Insurance Plan Booklet and Benefit Document effective January 1, 1998, . . . shall remain in effect. Changes to the benefits provided by the Plan Booklet and Benefits Document are normally initiated by submission of the Governor in his Legislative Budget Request. Benefit changes must be approved by the Legislature. The Plan Booklet and Benefit Document provides, among many, the following definitions: "Covered Services and Supplies" shall mean those health care services, treatments, therapies, devices, procedures, techniques, equipment, supplies, products, remedies, vaccines, biological products, drugs, pharmaceutical and chemical compounds which expenses are covered under the terms of the Benefit Document. The Administrator has final authority to determine if a service or supply is covered or limited by the Plan. * * * "Medical Supplies or Equipment" means supplies or equipment that must be: ordered by a Physician; of no further use when medical need ends; usable only by the Participant patient; not primarily for the Participant patient's comfort or hygiene; not for environmental control; not for exercise; manufactured specifically for medical use. (Petitioner's Ex. 7, Definitions 21 and 50, pgs. 17 and 23, respectively.) Drugs are services as defined by the Plan Booklet and Benefits Documents. But drugs that are excluded from coverage, such as anti-obesity drugs, are not "covered services" as defined by the Plan Booklet and Benefits Document since by definition, an exclusion prevents them from being "covered." As a "service," moreover, Xenical is not covered by virtue of Section G. of the Benefits Document, also entitled "Exclusions." Petitioner's Ex. 7., p. 38. With regard to services "related to obesity and weight reduction," the Benefits Document states the following: G. EXCLUSIONS The following are not Covered Services and Supplies under the Plan. * * * All services and supplies related to obesity or weight reduction except: Medically Necessary intestinal or stomach by-pass surgery; or medically related services provided as part of a weight loss program when weight loss of a Participant is required by the surgeon prior to performing a Medically Necessary surgical procedure. (Petitioner's Ex. 7, pgs. 38, 41.) Xenical and Section 627.65745, Florida Statutes Subsection 627.65745(1), Florida Statutes, states: A health insurance policy or group health insurance policy sold in this state, including a health benefit plan issued pursuant to 727.6699, must provide coverage for all medically appropriate and necessary equipment, supplies and diabetes outpatient self management training and educational services used to treat diabetes, if the patient's treating physician or a physician who specializes in the treatment of diabetes certifies such services are necessary. Xenical, a drug, is obviously not "equipment." Nor would it fall under the category of "self management training and educational services used to treat diabetes." It does not fall under the category of "supplies" either. Under the coding system developed by the Health Care Financing Administration of the United States Department of Health and Human Services, the standard coding system for the payment of health claims, drugs are not supplies. Examples of supplies include prosthetics, testing supplies, artificial limbs, ventilators, needles, and insulin pumps. Update of the Basis for the Prescription In a letter dated June 13, 2000, Dr. Croom more fully explained the basis for the prescription. Xenical is medically necessary for the treatment of diabetes and is not for cosmetic purposes. Xenical is a part of Mr. Magee's outpatient management program which consists of other medications and education. Despite these medications, his most recent hemoglobin A1C is 9.1 significantly higher than the recommended target of 7.0. The use of Xenical would be instrumental in reducing this parameter. In my opinion, Xenical is medically appropriate and necessary. (Petitioner's Ex. 3). The appeals committee did not have the benefit of Dr. Croom's June 13, 2000, letter in which Dr. Croom opined that in the case of Mr. Magee, "Xenical is medically necessary for the treatment of diabetes and is not being used for cosmetic purposes." Other Purpose for the Prescription That a drug's effectiveness is primarily for the treatment of an excluded purpose may not necessarily exclude it from coverage if it were prescribed for some other purpose. This point was elicited during testimony of the Division's witness, C. Merrill Moody, the Division's Assistant Director: (Tr. 81). MR. MOODY: If [Xenical] was being prescribed for obesity, it would be excluded; if it was not, it would not. And I'll give you an example. We have a direct exclusion for contraceptives for contraceptive use . . . [b]ut contraceptives can be used for other purposes. . . . [P]articipants are required to provide us with a letter from the doctor describing what the contraceptive is being used for. We then cover that contraceptive. Mr. Moody went on to explain that oral contraceptives, because of certain properties, are used also in the management of conditions not related to prevention of contraception. For example, oral contraceptives are prescribed in the treatment of menopause because of their ability to maintain the levels of certain hormones. If prescribed for that purpose, then, despite the fact that they are oral contraceptives and normally excluded from coverage, they are covered because of the non-contraceptive basis for the prescription. The Division's position with regard to oral contraceptives is consistent with the exclusion contained in Section W.5. of the Plan Booklet and Benefits Document. There the "Exclusions List" states "(a) Oral contraceptives for contraception." Petitioner's Ex. 6, p. 59. In other words, it is not some policy of the Division that provides coverage for oral contraceptives when the prescription is for a purpose other than contraception. The coverage is provided by the Plan Booklet and Benefits Document, itself. If oral contraceptives are prescribed "for contraception" then they are excluded from coverage. If prescribed for some other medical purpose, then the exclusion contained in Section W, 5(a) does not prevent coverage of oral contraceptives.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is recommended that: the Division of State Group Insurance in the Department of Management Services enter a final order denying coverage of Dennis J. Magee's prescription for Xenical; and, the Division present to the Legislature the Plan Booklet and Benefits Document amended so as to allow coverage of anti-obesity drugs for diabetics if such drugs are prescribed as medically necessary for management of the subscriber's diabetes. DONE AND ENTERED this 28th day of July, 2000, in Tallahassee, Leon County, Florida. DAVID M. MALONEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of July, 2000. COPIES FURNISHED: Dennis J. Magee Post Office Box 636 Safety Harbor, Florida 34695 Cindy Horne, Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Thomas D. McGurk, Secretary Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 J. Bruce Hoffmann, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
The Issue The basic issue in this case concerns the scope of the coverage provided by the State of Florida Employees Group Health Self Insurance Plan ("State Plan"). The Petitioner incurred extensive expenses for medical treatment, some of which have been paid by the State Plan. The Petitioner contends that under the State Plan, specifically under the "extended coverage" portion of the State Plan, she is entitled to more than has already been paid. The Respondent contends that the correct amount has already been paid.
Findings Of Fact The State of Florida makes available to its officers and employees several group insurance programs. With regard to group health insurance, the available programs include the State of Florida Employees Group Health Self Insurance Plan ("State Plan") and a number of different HMO's, depending upon the county in which an employee resides. Upon commencement of employment, State employees may elect to participate in the State Plan, may elect to join one of the HMO's in their geographical region, or may elect not to participate in any of the voluntary group insurance programs offered by the State. Employees who choose to participate in the State Plan are charged a premium which is normally deducted from their paychecks. The State also contributes regular amounts to pay a portion of the premium for each participating employee. Roberta Rubin has been an employee of the State of Florida for twelve years. She is currently employed as a judicial assistant to Circuit Court Judge George Orr. Roberta Rubin is an insured under the State of Florida Employees Group Health Self Insurance Plan ("State Plan"). The basic terms and conditions of the State Plan are set forth in a document titled State of Florida Employees Group Health Self Insurance Plan Benefit Document ("Benefit Document"). The version of the Benefit Document applicable to this case is the version amended effective July 1, 1988. The Department of Administration, Division of State Employees' Insurance, distributes a brochure titled Group Health Self Insurance Plan Benefits which describes the benefits under the State Plan and is intended to assist State employees in deciding which health insurance plan to select. The Department of Administration, Division of State Employees' Insurance, also distributes a brochure titled Group Health Self Insurance Plan Brochure ("Plan Brochure") to individuals enrolled for coverage under the State Plan. At page 1, the Plan Brochure describes the State Plan as follows: "This is a self-insured group health insurance program belonging to those State officers, employees, retirees, and their eligible dependents who elect to participate in the Plan." At the first unnumbered page inside the front cover of the Plan Brochure is a statement of the brochure's purpose, which includes the following: This brochure is not a contract since it does not include all of the provisions, definitions, benefits, exclusions and limitations of the State Self Insured Health Plan's Benefit Document, a copy of which is on file in your agency's personnel office. The purpose of this brochure is to furnish State officers and employees with a summary of the benefits available under the State Self Insured Health Plan. It is hoped that this brochure will answer any questions that might arise about the Plan. The State of Florida Employees Group Health Self Insurance Plan is administered by Blue Cross Blue Shield of Florida, Inc. In December of 1990, the Petitioner, Roberta Rubin, was diagnosed as having cervical cancer. The prognosis and recommended treatment provided by her treating physicians in Miami were not acceptable to Petitioner and she sought another opinion. Petitioner was referred to and ultimately treated by Dr. Neil Rosenshein, a gynecological oncologist at Johns Hopkins Hospital in Baltimore, Maryland. Dr. Rosenshein and Johns Hopkins Hospital are both "non-preferred patient care providers" within the meaning of the definitions in the Benefit Document. Dr. Rosenshein performed the following surgical procedures: radical abdominal hysterectomy; radical pelvic node dissection; bilateral commoniliac node dissection; and periaortic node dissection. The Physician's Procedural Terminology published by the American Medical Association ("PPT Code Book") assigns procedure codes to various surgical procedures that are utilized by billing physicians and various insurers. The PPT Code Book does not contain procedure codes that accurately reflect the latest technology or the complexity, intricacy, or radical nature of the procedures being performed in gynecological cancer surgery. Since no single or multiple procedure codes accurately characterized the surgical procedures performed by Dr. Rosenshein, his bill was submitted to Blue Cross Blue Shield of Florida, Inc., reflecting only one procedure code, 58210, with amodifier, "-22." The modifier "-22" is described in the 1986 version of the Approved Fee Schedule, of the State Plan, as follows: -22 UNUSUAL SERVICES: WHEN THE SERVICES PROVIDED ARE GREATER THAN THOSE USUALLY REQUIRED FOR THE LISTED PROCEDURE, IDENTIFY BY ADDING THIS MODIFIER -22 TO THE USUAL PROCEDURE NUMBER. LIST MODIFIED VALUE. REPORT MAY BE REQUIRED. However, the Benefit Document, as amended effective July 1, 1988, does not provide for or allow the use of the modifier "-22" in determining the amount of payment due on a claim even when the services provided are greater than those usually required for the listed procedure. The modifier "-22" is used by Blue Cross Blue Shield in the administration of other group health insurance plans. The claim form submitted by Dr. Rosenshein went through a level three review by Blue Cross Blue Shield of Florida, Inc., and in response to a request for additional information, Dr. Rosenshein submitted a letter explaining the nature of the procedures performed and a copy of the operative report. Following its review, Blue Cross Blue Shield of Florida, Inc., allowed payment only for the approved fee schedule amount for a single procedure code 58210, or $3,726.00. Dr. Rosenshein's uncontradicted testimony established that the most accurate representation of the procedures he performed would require the following three procedure codes: Code # Description 58210 limited periaortic lymphadenectomy 49201 extensive excision or destruction by any method of intra-abdominal retroperitoneal tumors or cysts or endometriomas 38780 retroperitoneal transabdominal lymphade- nectomy, extensive, including pelvic, aortic and renal nodes. The approved fee schedule for these procedure codes allows the following amounts: Code # Amounts 58210 $3,726.00 49201 2,683.00 38780 2,764.00 Petitioner has incurred the following bills in 1991 which are in excess of the applicable deductible and $1,500.00 out-of-pocket amount provided for under the Extended Coverage provisions of the benefit Document: Provider Amount JHU Department of Radiology $ 159.30 JHU Pain Management Anesthesia 698.10 JHU Anesthesiology 507.70 John Hopkins Hospital Outpatient 50.00 JHU Department of Oncology 503.50 JHU Cardiology 90.00 JHU Pathology 230.00 Dr. Neil Rosenshein 9,904.50 Total $12,143.10 The amounts reflected above are exclusive of benefits already paid by Blue Cross Blue Shield of Florida, Inc., and other insurers and do not include any charges for room and board services or ambulance services. Section I of the Benefit Document contains definitions of numerous terms, including the following: D. "AFS" means the "Approved Fee Schedule," as approved or amended by the Department of Administration. "Covered provider" shall mean a person, institution, or facility as defined herein and who furnishes a covered service or supply. "Covered service or supply" shall mean a medically necessary service or supply furnished by a covered provider and which is covered by the Plan. Q. "Deductible" shall mean the dollar amount of covered services and supplies which each insured is required to pay before benefits are payable by the Plan. BA. "Preferred Patient Care Fee Schedule" or "PPC Fee Schedule" means a list of allowances for each service which has been set and agreed to by the preferred patient care providers. BB. "Preferred Patient Care Provider" or "PPC Provider" means a physician or hospital which has an agreement with the Administrator to provide health care services at set fees to individuals insured under the Plan. A non-preferred patient care provider does not have such an agreement. BJ. "Reasonable Charge" shall mean the following: an average of the amounts charged by the non-preferred patient care hospital, skilled nursing facility, hospice facility or birth center facility for services to individuals using such hospital or facility, as determined by the Administrator; or the charge set forth in the AFS for covered medical-surgical services. BS. "Usual, Customary and Reasonable" or "UCR" means a schedule of fees for covered services in a geographical area which is determined by the Administrator based upon the normal amount charged by the provider in his/her practice, (b) the range of fees for most providers in an area for the same service, and (c) any unusual circumstances or complications requiring additional time, skills and experience by the provider which can be documented. Section II of the Benefit Document contains the provisions regarding coverage for hospital and other facility services. That section reads as follows, in pertinent part: The following services shall be covered when ordered by a physician a nd are medically necessary for the treatment of an insured as a result of a covered accident or illness. Non-Preferred Patient Care Hospital Inpatient Room and Board Services: 1. When confined to a semi-private or private room or ward, 80% of the hospital's average semi-private room rate shall be paid but not to exceed an actual payment of one- hundred and fifty-two ($152.00) per day. Other Covered Non-Preferred Patient Care Inpatient Services: 80% of the actual charge for the following services will be paid by the Plan: Use of operating room, labor room, delivery room and recovery room; All drugs and medicines used by the patient while confined in the hospital, provided such drugs and medicines are listed in "New and Non-Official Remedies" or the "United States Pharmacopoeia"; Solutions (including glucose); Dressings; Anesthesia and related supplies; Oxygen therapy; Transfusion supplies and services including blood, blood plasma and serum albumin, if not replaced; Laboratory services; Electrocardiograms; Basal metabolism examinations; X-ray, including therapy; Electroencephalograms; Diathermy and physical therapy. Covered Outpatient Hospital, Ambulatory Surgical Center or Outpatient Health Care Facility Services: Ninety percent (90%) of the reasonable charge shall be paid for covered outpatient services provided by a Non-PPC provider. When such services are provided by a PPC provider, the plan shall pay ninety percent (90%) of the charge subject to the PPC fee schedule limits. Covered Clinical Laboratory Services: Ninety percent (90%) of the charge for covered clinical laboratory services shall be paid by the Plan not to exceed the maximum amount permitted under the AFS. Section III of the Benefit Document contains the provisions regarding coverage for medical-surgical services. That section reads as follows, in pertinent part: A. Ninety percent (90%) of the charge for medically necessary inpatient/outpatient services provided to an insured by a non- preferred patient care physician, physical therapist or nurse anesthetist for the treatment of the insured as a result of a covered accident or illness shall be paid by the Plan, subject to the provisions of Section VI and Section XXIII; however, such payment shall not exceed the maximum amount permitted under the AFS. C. If a covered procedure does not have a specified fee listed in the AFS, pricing will be performed by the Administrator in accordance with its normal procedures. Section V of the Benefit Document, titled "Extended Coverage," contains the provisions regarding what is commonly known as the "stop loss" feature of the plan. That section reads as follows, in pertinent part: If under individual or family coverage, the out-of-pocket expenses of an insured for covered services under Section II., Section III., Section IV and Section XXV amount to one thousand five hundred dollars ($1500.00) during a calendar year, all further covered charges for such services incurred by the insured during the remainder of the calendar year shall be paid by the Plan at one hundred percent (100%), subject to the lifetime maximum and the maximum payments listed in paragraph C. below. If under family coverage, the out-of- pocket expenses of two or more insureds for covered services under Section II., Section III., Section IV. and Section XXV. amount to three thousand dollars ($3000.00) during a calendar year, all further covered charges for such services incurred by any insured during the remainder of the calendar year shall be paid at one hundred percent (100%), subject to the lifetime maximum and the maximum payments listed in paragraph C. below. Maximum payments subject to Subsections A. and B. above shall apply only to room and board services under Subsection II A., Subsection II E., Subsection II G., and ambulance services under Section IV, as follows: One hundred and ninety dollars ($190.00) per day for hospital room and board; Ninety-five dollars ($95.00) per day for room and board in a skilled nursing facility; Three hundred and eighty dollars ($380.00) per day for an intensive care unit; Two hundred and eighty-five dollars ($285.00) per day for a progressive care unit; One hundred and twenty-five dollars ($125.00) per use for ambulance service; One thousand dollars ($1000.00) for ambulance transportation of a newborn child; One hundred and ninety dollars ($190) per day for room and board in a specialty institution or residential facility. Charges for covered services and supplies applicable to the deductible(s) under the Plan shall not be considered an out-of-pocket expense under the provisions of Section V. The brochure titled Group Health Self Insurance Plan Brochure contains the following language at page seven regarding the stop loss feature of the plan: Maximum Out-Of-Pocket Expense If, during a calendar year, the out-of-pocket expenses for one person insured under individual or family coverage amount to $1,500, or $3,000 for two or more persons insured under family coverage, all further charges will be paid at 100%, subject to the lifetime maximum, any allowance limits for room and board while confined to Non-PPC facilities, and ambulance transportation allowance limits for newborn children. This provision applies to all covered services except Hospice services; however, charges applicable to the deductible shall not be considered an out-of-pocket expense. The language of Section V of the Benefit Document regarding "Extended Coverage" is ambiguous with regard to the scope of the coverage provided by that section of the benefit document. The language of Section V of the Benefit Document regarding "Extended Coverage" also conflicts with the language at page seven of the Plan Brochure regarding "Maximum Out-Of-Pocket Expense. /1
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the Department of Administration issue a Final Order to the following effect: (a) concluding that the "Extended Coverage" language of Section V of the Benefit Document is ambiguous; (b) concluding that the "Extended Coverage" language of Section V of the Benefit Document is in conflict with the language at page 7 of the Plan Brochure under the caption "Maximum Out-Of-Pocket Expense;" (c) concluding that after the Petitioner's out-of- pocket expenses for covered services reached $1,500, she was entitled to have "all further charges" for covered services paid at 100% of the amount of the charges except as specifically limited in paragraph C. of Section V of the Benefit Document; and (d) providing for payment in the total amount of $12,143.10 to the Petitioner or to the providers listed in paragraph 15 of the Findings of Fact. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 22 of May 1992. MICHAEL M. PARRISH, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SC 278-9675 Filed with the Clerk of the Division of Administrative Hearings this 22 day of May 1992.
