The Issue Whether Department of Health and Rehabilitative Services ("HRS") Rules 10- and 10-17.005 (originally published as 10-16.001, 10-16.005), Florida Administrative Code, constitute an invalid exercise of delegated legislative authority.
Findings Of Fact Standing Humana is a corporation engaged in the business of constructing and operating hospitals in Florida. It has applied to HRS for a certificate of need to construct and operate a 100-bed acute care hospital to be located south of the St. Johns River in the area known as Mandarin, in Duval County, Florida. The challenged Subdistrict Rule places this area in Subdistrict 3 of HRS District IV. Humana's (Mandarin) application for a certificate of need (CON) was denied by HRS on February 23, 1983, and Humana requested a formal Section 120.57(1), hearing. The case was then transferred to the Division of Administrative Hearings and assigned Case Number 83-934. The final hearing in that CON case began on September 6, 1983, and recessed on September 7, 1983. In the instant case--on Humana's request, and without objection by HRS--official recognition was given to the transcript of that hearing, as filed with the Division of Administrative Hearings. Prior to the CON hearing in Case Number 83-934, on August 12, 1983, HRS published proposed Rules 10-16.001 and 10-16.005 ("Subdistrict Rule") at Volume 9, Number 32, pages 1952 through 1957, Florida Administrative Weekly. (Petitioner's Exhibit No. 1) After the CON hearing recessed, and after a public hearing on the proposed Subdistrict Rule, HRS published changes to the rule on September 23, 1983, at Volume 9, No. 38, page 2475-2476, Florida Administrative Weekly. These changes were made in response to comments which HRS received at a public hearing held on the proposed rule. (Petitioner's Exhibit No. 2) On September 26, 1983, HRS filed the Subdistrict Rule with the Department of State for adoption, effective October 16, 1983. (Petitioner's Exhibit No. 3) Thereafter, the Bureau of Administrative Code, Department of State, informed HRS that since other rules were already numbered in Chapter 10-16, Florida Administrative Code, the Subdistrict Rule would be published in Chapter 10-17, Florida Administrative Code. (Petitioner'S Exhibit No. 28) At the CON hearing, Humana attempted to introduce evidence which HRS challenged as inconsistent with Rule 10-5.11(23) the state-wide acute care bed- need rule, and the Subdistrict Rule--then a proposed rule not yet adopted by HRS. The presiding hearing officer, acknowledging the "proposed rule" status of the Subdistrict Rule, sustained HRS objections to the admission of evidence proposing a methodology, or subdistrict bed-need allocations, inconsistent with those contained in the (proposed) Subdistrict Rule. He did, however, rule that the two non-agency parties could offer evidence for the purpose of showing that HRS, or the local health council in conjunction with HRS, had developed bed-need formula or techniques for subdistricts beyond, or inconsistent with, the proposed Subdistrict Rule and the underlying local health council's district plan. (DOAH Case No. 83-934, pp. 220-221, Transcript of Hearing). II. The Rule Adoption Process In response to Section 381.494(7)(b), Florida Statutes (1983), requiring local health councils to develop district plans using a "uniform methodology," HRS transmitted to the councils written guidelines for designating and allocating bed-need among various subdistricts. (Petitioner's Exhibit Dos. 9 and 10) The statute does not express or imply that the word, "methodology" should be given a meaning other than that assigned by ordinary and common usage. Webster's Seventh New Collegiate Dictionary defines the term as: "a body of methods, rules and postulates; a particular procedure or set of procedures." A methodology is not necessarily a mathematical formula. These guidelines, transmitted to the local health councils in early 1983, describe the relationship between HRS and the councils, the format and content elements of district health plans, and the requirements for stating district health care policies and priorities. Examples are provided. The guidelines require that local plans contain a district health profile--an overview of the area's population characteristics, community health status and prevailing health related attitudes and behaviors. Components are also required, including detailed information on the district's health care resource inventories, costs and utilization patterns, analysis of local services as well as recommendations and priorities for future health systems development. For at least three types of existing health care facilities--acute care hospitals, nursing homes, and psychiatric specialty hospitals information must be provided on current capacity, physical status, service areas, and recommendations for future developments. A time frame is imposed for accomplishing each phase of the plan development, with the final phase adoption of the local health plan--to be accomplished by December, 1983. Finally, the guidelines, at page 15, point out the statutory requirement that HRS adopt, by rule, those elements of the approved district plans necessary for review of applications for certificates of need: Adoption Into Rules Section 7(b) of Chapter 381.493 states that "Elements of an approved district plan necessary to the review of any certificate of need application shall be adopted by the Department as a part of its rules." This should be kept in mind through- out the plan development process. Local policies and priorities are the items most pertinent to certificate of need review since information on bed need and capacity are either determined at the state level or must be updated to the time of certificate of need application, review and appeal. There- fore, the local health council will be ex- pected to develop a separate submission of their policies and priorities in the proper format for rule promulgation within thirty days of the adoption of the local health plan. State agency staff will assist in the development and refinement of these documents. (Petitioner'S Exhibit No. 9) HRS interpreted its responsibility under Section 381.494, as one of assuring that district health plans were consistent with the state-wide uniform bed-need methodology prescribed in Rule 10-5.11(23). Under subparagraph "d" of that rule, local health plans must designate subdistricts according to HRS guidelines. Subparagraph "e" requires that beds be allocated to designated subdistricts consistent with the total number of beds allocated to the district under the rule, and consistent with subparagraph "i," which contains geographic accessibility standards. Rule 10-5.11(23) * * * * * Acute Care Service Subdistrict Designation. Acute care service sub- district designations shall be adopted, as necessary, by each Local Health Council as an element of its local health plan according to guidelines developed by the State Health Planning Agency. Designations will become effective for the purposes of this rule upon the filing of the adopted local health plan acute care subdistricting elements with the Secretary of State. Subdistrict Bed Allocations. Subdistrict bed allocations by type of service shall be made by the Local Health Councils consistent with the district total acute care bed allocation as determined by the methodology contained in paragraph (f) below, as well as any adjustments to the allocation as determined by the provisions of paragraphs and (h) below. Such allocations shall also be consistent with the provisions 9f paragraph (i) and the requirements of Section 381.494(7)(b) , Florida Statutes. * * * * * Geographic Accessibility Considerations. Acute care hospital beds should be available and accessible within an automobile travel time of 30 minutes under average travel conditions to at least 90 percent of the population residing in an urban area subdistrict. Acute care hospital beds should be available and accessible within a maximum automobile travel time of 45 minutes under average travel conditions to at least 90 percent of the population residing in a rural area sub- district. The elements of the District IV health plan contained in the Sub- district Rule are consistent with the uniform methodology prescribed in Rule 10-5.11(23) and HRS guidelines. In response to these guidelines, the District IV health council adopted and transmitted to HRS, on July 7, 1983, the acute care component of the district health plan. After the district council approved this component and allocated beds to the various subdistricts, HRS supplied updated population figures resulting in an increase in the total number of beds allocated to the district. The council's staff then adjusted the number of beds allocated to the subdistricts on a pro rata basis. These adjustments were consistent with the council's policy, as reflected by its approval of the acute care component. No evidence has been presented to show that the council's staff lacked authority to make these adjustments. (Petitioner's Exhibit No. 7) In addition to allocating district wide bed-need among the subdistricts of District IV, the acute care component contains detailed information and analysis concerning acute care bed-need. This information is pertinent but not necessary to the review of CON applications in District IV. (Petitioner's Exhibit No 7) The challenged Subdistrict Rule simply designates subdistricts and allocates bed-need among them; other data and analysis contained in the acute care component are not included. HRS, however, is now drafting an addition to the Subdistrict Rule (Section 10-17.005), titled "subsection (3), Acute Care Policies and Priorities," which incorporates additional portions of the district plan for use in reviewing CON applications in District IV. This draft rule allows exceptions based on local conditions: When there are more than one widely separated hospital service areas located within a single subdistrict, such as St. Augustine in South Duval Subdistrict 3, Bunnell and Daytona Beach in Subdistrict 4, and unforeseen growth, change and makeup of population, or other circumstances cause a significant increase in the demand for inpatient care within one of the service areas, the State should make exception to the District Health Plan when it is reasonable and logical to do so. (Petitioner'S Exhibit No. 34) This provision was contained in the district plan at the time HRS adopted the Subdistrict Rule. (Petitioner'S Exhibit No. 7) The Subdistrict Rule, with the exception of St. Lukes' Hospital, allocates beds among the subdistricts on the basis of the number of patient-days currently utilized by the hospitals in each subdistrict, projected for 1988. St. Lukes' Hospital, now located on the north side of the St. John's River in Subdistrict 1, will move to the south side of the St. John's River in Subdistrict 3, the subdistrict where Humana seeks to build its Mandarin hospital. This move from north to south is accounted in the subdistrict allocation by assuming that 34 percent of the current (north) St. Lukes' Hospital patient-days will come with the hospital when it moves from Subdistrict 1 to Subdistrict 3, and that the remainder will come from Subdistrict 3 (south) patients. With 66 percent of St. Lukes' bed capacity allocated for Subdistrict 3, there will be no additional bed-need in that subdistrict for years. HRS prepared an economic impact statement (EIS) in connection with its adoption of the subdistrict rules, including the Subdistrict Rule under challenge. The EIS addresses the agency's cost to implement the proposed rules, the cost or economic benefit to persons directly affected, and the affect on competition. The data and methods used in preparing the EIS are also briefly summarized.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The petitioner Brookwood Medical Center of Lake City, Inc., d/b/a Lake City Medical Center (hereinafter referred to as LCMC) is a 75-bed acute care hospital, which presently has 65 medical/surgical beds and 10 alcohol treatment beds. Plans are under way to convert 10 of the medical/surgical beds to a psychiatric unit with 10 beds. LCMC primarily serves Columbia County, a primarily rural community with a population of 34,625, and derives 74 percent of its patients therefrom. The remaining 261 of its admissions come from the surrounding counties of Hamilton, Lafayette and Suwannee. Approximately 60 percent of its patients are sixty years of age or older. The source of reimbursement for the year 1980 was 40 percent Medicare, 8 percent Medicaid, 8 percent indigent or bad debt, and the remaining portion from other third-party payors. The current occupancy rate at LCMC is approximately 502 or 37.5 patients per day. Seasonal trends cause this figure to vary between 32 and 37.5. The daily census is expected to increase over the next year due to the planned addition of four new programs. These include the ten-bed psychiatric unit for which a Certificate of Need application is pending, an industrial medical and occupational health program which would provide on-site care to employees and their family members, the recruitment of an internist/cardiologist and the recruitment of an ophthalmologist. It is projected that the proposed new psychiatric unit will add eight patients to LCMC's daily census, the industrial health program will add 2.5 patients per day as well as outpatients, and that the internist/cardiologist will generate five patients per day. Psychiatric beds are less likely to generate intensive care patients than medical/surgical beds. It is expected that LCMC's program of expansion will change the mix of the primary and secondary service areas and will increase the average daily census to 42.5 by the end of 1981. Petitioner presently has a nursing staff of 48 and a medical staff of Of its medical staff, 13 are listed as active, 4 as courtesy, 4 as consulting and one with temporary privileges. LCMC has one operating room, no emergency room, and no intensive care/cardiac care unit (also referred to as IC/CCU). On an average basis, it is estimated that from ten to twelve surgical procedures per week are performed at LCMC. In 1980, 468 surgical procedures were performed. For the first quarter of 1981, the busiest time of the year, 156 surgical procedures were performed. Petitioner does have a step-down unit or a progressive care unit (also referred to as PCU) with four beds. The current utilization of the PCU is 2.7 patients per day, with a 50 percent medical component and a 50 percent surgical component. If petitioner's application for a Certificate of Need were granted, LCMC's PCU would be converted to an IC/CCU with invasive monitoring capabilities and patients who currently receive treatment in the PCU would be treated in the new IC/CCU. The current patient charge for the PCU is $111.00 per day. LCMC proposes an IC/CCU charge of $250.00 per day. Petitioner estimates that 8 percent of its patients would need and use an IC/CCU, and that, for the first year of operation, the IC/CCU would have a daily census of 3.5 patients. For the second year of operation, a daily patient census of 4.5 is projected. The projected daily utilization of over 50 percent is not consistent with actual utilization achieved in the IC/CCUs of other hospitals in the area. The prime concept of an IC/CCU is to provide more intensive nursing care and monitoring capabilities for unstable medical and surgical patients. The majority of admissions to an IC/CCU come from the emergency room and the second largest source is from the operating room after surgery. While some physicians feel that no physician or acute care facility should be without an IC/CCU, that all post-operative patients should be monitored in an ICU and that it is not good practice to transport an unstable patient under any circumstances, others disagree. These physicians, while agreeing that all hospitals need some form of life support capability, feel that for general routine surgery, only a very small percentage of patients are in need of an intensive care unit. It is possible to reduce the need for an intensive care unit by screening patients prior to surgery. A recovery room and/or a progressive care unit can provide the routine noninvasive monitoring and more intensive nursing care and observation needed by many medical and surgical patients. The use of a recovery room for critical care patients does pose serious problems due to the exposure to additional commotion and the potential mixing of well surgical patients with septic unstable patients. It is better medical practice to have separate personnel for infectious and noninfectious patients. The transfer of an unstable patient to another facility can pose serious risk to the patient. The intervenor Lake Shore Hospital (also referred to as LSH) is located approximately 1.5 miles from the petitioner. Lake Shore Hospital is a full- service, acute care, public hospital with 128 beds, an emergency room and a 9- bed IC/CCU. LSH has had an IC/CCU since 1970 or 1971. More than 50 percent of its intensive care patients come from its emergency room. Approximately 1600 surgical operations per year are performed at LSH. The IC/CCU at LSH provides basic noninvasive monitoring equipment connected to the patient's bedside and the nurses' stations. It does not presently have Swans-Ganz monitoring equipment, an invasive device which measures a patient's hemodynamics. The wiring and other equipment for two such monitoring capabilities are in place and, with the addition of a module and transducer for each unit, two units can be installed for a cost of approximately $4,400.00. At the present time, no one in Lake City has the extensive training required to utilize the Swans-Ganz monitoring equipment. LSH is in the recruitment process and plans to purchase and install this equipment when a cardiologist or other trained specialist is recruited. The IC/CCU at LSH experiences an occupancy rate of 3.5 patients per day, or 35 percent of its capacity. It has only achieved full capacity on two occasions in the ten years of its existence. Lake Shore Hospital presently charges $275.00 per day for the use of its IC/CCU. If it were to lose one patient per day, LSH would lose approximately $100,000.00 per year in revenue. Such a loss could result in either increased taxes or increased patient charges. In spite of the fact that several major admittors to LCMC and LSH have their offices at LCMC, It was their testimony that were a Certificate of Need granted to LCMC for an IC/CCU, they would continue to admit and refer patients to both facilities. Lake Shore Hospital has a medical staff of 22 or 23 specialists and nonspecialists. Of this number, all but one are also on the staff of Lake City Medical Center. The PCU at LCMC and the IC/CCU at LSH are presently comparable. While the nursing staff at Lake Shore's IC/CCU is better trained, at least one physician who practices at both hospitals felt that the same level of care could presently be obtained at LCMC's PCU as at LSH's IC/CCU. This is due to the fact that LSH does not now have the invasive monitoring capabilities felt to be essential to an IC/CCU. The traditional difference between a PCU and an IC/CCU is the degree of training of the nursing staff and the sophistication of the equipment. Underutilization of an IC/CCU can have an adverse effect upon the quality of care provided. One of the most important aspects of an intensive care unit is superior trained personnel. A reduction in patient use obviously reduces the personnel's exposure to complications and skills become dull. Thus, a reduction in patients reduces the quality of care. There is presently a shortage of nurses in the Lake City area. Lake Shore Hospital presently has 8 nursing vacancies and has been actively recruiting to fill those vacancies. In order to operate its proposed IC/CCU, LCMC would have to employ two full-time equivalent nurses with training in that area. The petitioner projects the cost of its requested IC/CCU to be $240,000.00. In 1979, LCMC ran a deficit of $1 million, the sixth largest loss in the State. In 1980, the deficit was $390,000.00. LCMC is presently experiencing a positive cash flow for 1981. It appears that LCMC anticipates the proposed IC/CCU to be a profit-making venture and projects that, if its presumptions are true with respect to patient use, the project will be financially feasible. At the time of the hearing, negotiations were under way for the sale of petitioner to another entity. The reviewing Health Systems Agency, the North Central Florida Health Planning Council, Inc. (NCFHPC), unanimously denied the petitioner's request for an IC/CCU at every level of the review process. The 1981-1985 Health Systems Plan for the NCFHPC contains certain criteria and standards for intensive and coronary care units which should he met within five years of operation. Two of the criteria are that an IC/CCU should have an average annual occupancy rate of 80 percent and that an IC/CCU should be available within one hour's (one-way) travel time of 95 percent of the region's residents. As noted above, LSH is approximately 1.5 miles away from LCMC. Lake City is 45 miles from Gainesville and 65 miles from Jacksonville with interstate highways connecting these cities. With an optimal utilization rate of 80 percent, it is projected that 8.5 IC/CCU beds are needed in the planning area in 1980, and, by 1985, there will be a need for 9 beds. There are presently 15 IC/CCU beds in the Level 2 planning area, which includes Lafayette, Suwannee, Hamilton and Columbia Counties. Of the licensed 212 acute care medical/surgical hospitals in Florida, 22 or 10 percent do not have intensive or coronary care units. The approximate bed size of most of these facilities is 50.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that petitioner's application for a Certificate of Need to construct and operate an intensive care/coronary care unit at Lake City Medical Center be DENIED. Respectfully submitted and entered this 7th day of August, 1981, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of August, 1981. COPIES FURNISHED: John H. French, Jr. Messer, Rhodes and Vickers Post Office Box 1876 Tallahassee, Florida 32301 Donna H. Stinson General Counsel Department of HRS 1323 Winewood Boulevard Tallahassee, Florida 32301 Jon Moyle and Thomas Sheehan, III Moyle, Jones and Flannagan, P.A. 707 North Flagler Drive Post Office Box 3888 West Palm Beach, Florida 33402 Honorable Alvin J. Taylor Secretary, Department of HRS 1323 Winewood Boulevard Tallahassee, Florida 32301
The Issue The issues to be resolved in this proceeding concern whether the Respondent, Department of Health and Rehabilitative Services (HRS), acted pursuant to proper legal authority in terminating the Petitioner's certification as an "independent support coordinator" (ISC) under the program known as the Developmental Services Home and Community-Based Services Waiver (Medicaid Waiver Program).
Findings Of Fact The Petitioner was a resident of Havana, Florida, and maintained her office at her home at times pertinent hereto. She has a degree from Florida A&M University and a number of years of occupational experience in developmental and social services. After receiving the required training, she was certified as an ISC under contract with HRS in the Medicaid Waiver Program. HRS is an agency of the State of Florida. It is charged, as pertinent hereto, with administering and regulating the delivery of services to developmentally-disabled persons through the Medicaid Waiver Program, including the contracting with ISC's, such as the Petitioner, who provide such services to developmentally-disabled clients under this program. ISC's are independent contractors who are certified by HRS on an annual basis to provide coordination services for developmentally-disabled clients, which means that they insure that appropriate medical and social services are located, obtained and delivered to such clients. The ISC's have access to HRS computer terminals at their work sites so that they can record the number of time units (quarter hours, etc.) for which they serve clients and the amount of monies due for the services and time units provided to clients. They directly bill HRS for these services, simply by entering the billing information into the HRS medicaid computer system. Thus, great reliance is placed by HRS on the honesty and accuracy of the ISC's billings, subject to HRS' authority to audit billings and obtain recoupment for excessive billing. HRS administers the Medicaid Waiver Program for clients who are qualified for medicaid benefits and properly enrolled. Under this program, they are permitted to live at home or in some other community/residential facility and are provided social services through a network of care providers. This is done pursuant to a "support plan" which is developed and implemented according to the clients' psychological, emotional, medical and social needs. It is the function of an ISC to manage and coordinate the delivery of services to the client. In doing so, the ISC interacts with and communicates with the client's family, social worker, and care providers to determine the appropriate network of services that would best serve him. The ISC assists the client in securing the needed services, sees that those services are properly and satisfactorily delivered and that they conform to the support plan. Each ISC is required to maintain contemporaneous case notes, which reflect the actual date, time and description of all services performed for a client. An integral part of the support plan is the "cost plan" which contains a budget allocated to each client for the purpose of needed services. All services must be provided for in that cost plan. Any services not provided for in the cost plan are not normally permitted, although they may be if an amendment to the cost plan is approved by HRS. Each cost plan contains an allocation of 240 "quarter hours" budgeted annually for the services of an ISC for clients. Each ISC bills time based upon quarter hour increments. Time is billed by the ISC based upon the daily accrual of quarter hours. For instance, if an ISC provides ten minutes of service during a particular day for a given client, the ISC is permitted to bill one quarter hour of time to the client's account. If an ISC provides services at three different times during the same day, for five minutes each time, the daily accrual is one quarter hour. If an ISC provides services at two different times during the day, for ten minutes each time, the daily accrual of time billable is two quarter hours. Every ISC is responsible for billing his or her time and any charges for vendor services directly into the medicaid computer billing system. Each ISC receives a security clearance for access to the client accounts. Persons without a clearance are prevented from entering time or charges to the client account. Only services which have been approved in the support plan may be billed. The ISC's time involved in administrative duties, such as preparing case notes and billing information, undergoing computer training or conducting meetings with supervisors concerning administrative matters and training is not billable to the client's medicaid account. "Double billing" is not permitted. That is to say that different clients may not be billed for services for the same time period. For instance, if an ISC makes a single house call to interview a client and briefly speaks with another client at the same residence during the course of that interview, the ISC is not permitted to bill one quarter hour to each client during the time period involved. Neither is "multiple billing" permitted. That is, different clients may not be billed for a single service, even during different time periods. This would occur, for instance, if an ISC contacts a transportation service vendor to obtain transportation for one client for a quarter hour period and the same vendor for the following quarter hour on behalf of another client and bills a separate quarter hour and the cost of the service also to the second client. In reality, one transportation trip and service was involved with the same vendor during a one-half hour period in this example. Each ISC is required to maintain case notes of all activities performed. No activity may be billed to the Medicaid Waiver Program which is not supported by case notes which show the identify of the client, the date of the service, the time of the service, and the description of the service. Billing without this supporting documentation, contemporaneously recorded, is not permitted. Case notes must reflect truly contemporaneous time and activity. It is not permissible, for instance, to "make up" time spent, but unbilled, for whatever reason, during a prior billing cycle by entering that time hypothetically during a subsequent billing cycle. If such is done, it amounts to falsification of the ISC's case notes, and, of course, it is not appropriate to bill for activities which did not occur. The policy of the Medicaid Waiver Program, as shown by witness Trejo, who helped formulate the policy over the last two and one-half years, and witness Brown, is to promote a client's free and unfettered choice of an ISC. This is done by providing each client with certain information and promotional materials about all of the ISC's available. The ISC is required by HRS to provide HRS with the written materials containing information about that ISC. HRS then insures that these materials are delivered to clients by mail. Each client is provided with a designation form for the written selection of an ISC. HRS undertakes no solicitation or promotion on behalf of particular ISC's and does not try to influence client choices of ISC's. Certification Training ISC's must successfully complete certain training before they are certified and allowed to perform services. They are required to complete 34 hours of Statewide training known as "living everyday lives". They must also complete 24 hours of district-specific training, called simply "ISC training", which covers many topics, including Medicaid Waiver administration, values defining proper roles, planning, plan implementation, resource development, client eligibility, care providers, services provided, billing, client satisfaction, client rights issues, and residential placement. They are also required to be trained in HRS rules and policies concerning the Medicaid Waiver Program, the maintaining of records, relevant law, the documentation of their services, coordination with sub-district contracts, the confidentiality requirements, billing requirements, training in the use of the ABC computer system, and proper invoicing. During the course of the ISC training, the Petitioner was provided with a copy of proposed Rule 10F-13, Florida Administrative Code, and the related policy clarifications of the policy expressed in that rule. That rule, while not yet adopted, constitutes the agency policy for the conduct and administration of the Medicaid Waiver Program, as established by the HRS witnesses, particularly witness Trejo, who was the key person in developing that policy. (See Respondent's Exhibit 36 in evidence). The Petitioner made an application to be certified as an ISC on December 27, 1994. As a part of that application, the Petitioner executed certain "assurances", as part of a medicaid provider agreement. The Petitioner then attended and completed the above-referenced ISC training. In addition, the Petitioner received additional individual training from Ms. Hall and Ms. Brown of HRS, as well as numerous consultations with Ms. Brown concerning various administrative matters and the proper use and operation of the computer record and billing system. The Petitioner was then certified as an ISC for District 2, effective July 1, 1994. That certification lasted until the subject termination on January 4, 1995. During the time of her service as an ISC contractor, the Petitioner provided services to 15 clients, including J.S., M.E., A.W., S.E.Jr., W.M., W.R., G.T., J.R., R.S., H.M., R.M., W.O., M.C., and M.C. In cases where an ISC has deviated from a client's support or cost plan, the ISC is permitted an opportunity to propose a "corrective action plan". The corrective action plan provides a guide for how the ISC can remedy identified problems, within an acceptable time period, concerning the ISC's performance or billing operations. Failure to undertake and satisfy a corrective action plan is a basis for termination under HRS' regularly-followed policy. In the past, ISC's with identified billing problems have undertaken corrective action plans, and as part of those plans, among other requirements, have immediately reimbursed the amounts improperly billed. In one case, an ISC was required to terminate an employee, who was the source of many billing and documentation problems. In one case, an ISC was placed on a conditional, probationary certification status due to billing and documentation problems. Within 90 days after an ISC is certified, each ISC undergoes a monitoring review, in which district developmental services personnel audit the ISC's client records to determine compliance with program requirements. If the review is successful, ISC's are thereafter monitored annually for compliance. Should problems be detected in the initial monitoring review, or otherwise come to the attention of HRS through client or care provider information, additional reviews or audits may be undertaken as necessary to insure that the ISC is in compliance with the Medicaid Waiver Program policy requirements. After the Petitioner was certified, HRS, through Ms. Mary Brown circulated the written promotional materials and information provided to her concerning the services offered by the Petitioner as an ISC, in accordance with HRS policy. Ms. Brown delayed her normal mailing date in order to accommodate the late receipt of the Petitioner's promotional materials. Soon thereafter, Ms. Brown received a complaint from another ISC and calls from certain clients concerning solicitation of clients by the Petitioner, which is contrary to HRS policy. ISC's are not allowed to solicit clients. In order to address the complaint and obviate the effects of any improper solicitation of clients, Ms. Brown accompanied the Petitioner and the complaining ISC to the homes of various clients in order to conduct interviews with them. Ms. Brown provided the clients with designation forms to be completed at that time; and several clients then chose the Petitioner as their ISC. Several clients did not choose the Petitioner. Ms. Brown, however, made no attempt to influence a client concerning which ISC the client chose. Billing and Record Irregularities Beginning in September of 1994, while reviewing certain records concerning the Petitioner's ISC operations, Mr. Trejo, the Management Review Specialist for the District 2 Developmental Services Program Office, in charge of management review of the Medicaid Waiver Program, discovered certain billing irregularities. Particularly, he discovered that the Petitioner had entered excessive billing requests for certain clients. Because of this initial inquiry and the results of it, he decided to conduct a more in-depth audit of the Petitioner's ISC operations, billings, and other records. During the next few weeks, he undertook a complete review of the billing and client records of the Petitioner. Additionally, the customary 90-day monitor review of the Petitioner's client files was conducted on December 6, 1994. Mr. Trejo's review revealed the following problems with the Petitioner's billing and records concerning her clients and their services. These were described in Mr. Trejo's testimony, corroborated by other HRS witnesses. That version of events is accepted as credible and reliable: Alteration of Case Notes to Increase Time Billed. R.Exhs. 6 and 7. Unauthorized Expenditures: Exceeding Cost Plan: ME: 332 quarter hours billed in 3 months; $782 overpayment as of 11/94. R.Exh. 8. JS: 185 quarter hours billed in 2 months; projected budget depletion in one month. R.Exh. 9. JR: 176 quarter hours billed in 3 months; projected budget depletion in 2 months. R.Exh. 10. MC: 131 quarter hours billed in 2 months; projected budget depletion in 3 months. R.Exh. 11. MC: 134 quarter hours billed in 2 months; projected budget depletion in 2 months. R.Exh. 12. RS: 177 quarter hours billed in 3 months; projected budget depletion in 1 month. R.Exh. 13. Non-Billable Services: JS: date 9/10/94; 12 units billed for training. R.Exhs. 31 and 39. c. Double Billing: JS/SR: date 11/01/94. R.Exh. 14. ME/MC: date 11/15/94. R.Exh. 15. ME/WO: date 10/12/94. R.Exh. 16. ME/JS: date 10/19/94. R.Exh. 17. AW/RM: date 10/12/94. R.Exh. 18. AW/HM: date 10/03/94. R.Exh. 19. AW/ME: date 09/14/94. R.Exh. 20. JS/JR: date 09/15/94. R.Exh. 21. d. Undocumented Billing: SR: date 11/1/94; 18 units worked, 30 units billed. R.Exh. 22. JR: date 8/30/94; 5 units worked, 15 units billed. R.Exh. 23. HM: date 9/8/94; 3 units worked, 4 units billed. R.Exh. 24. HM: date 9/28/94; 1 unit worked, 2 units billed. R.Exh. 24. HM: date 9/19/94; 0 units worked, 3 units billed. R.Exh. 25. HM: date 9/28/94; 1 unit worked, 2 units billed. R.Exh. 25. MC: date 10/17/94; 0 units worked, 4 units billed. R.Exh. 26. JR: date 9/17/94; 0 units worked, 3 units billed. R.Exh. 27. MC: date 10/6/94; 0 units worked, 4 units billed. R.Exh. 28. RJ: date 9/30/94; 0 units worked, 3 units billed. R.Exh. 29. RM: date 9/28/94; 1 unit worked, 2 units billed. R.Exh. 30. WO: date 11/6/94; 2 units worked, 3 units billed. R.Exh. 31. Multiple Billing: HM/RM: date 9/30/94. SM/HM: date 10/3/94. HM/HM: date 11/25/94. HM/HM/SM/RM: dates 10/1/94 and 10/2/94. SM: dates 9/14/94 and 10/3/94. SM: dates 9/14/94, 9/15/94 and 9/16/94. R.Exh. 34. Falsification of Case Notes: MC: date 11/2/94; 24 units, including meeting with Lynn Daw that did not occur. R.Exh. 32; Tmny. Daw JR: date 9/2/94; 23 units, including meeting with Arlene Walker that did not occur because Ms. Walker was out of town. R.Exh. 33; Tmny. Walker. Because of the problems found by Mr. Trejo, a meeting was called between the Petitioner and Mr. Trejo and others of HRS to discuss these problems and the need for correction. On December 2, 1994, Mr. Trejo wrote to the Petitioner, confirming the November 22, 1994 meeting, its subject matter and advising her that a corrective action plan concerning the over-expenditure of funds allocated to her clients needed to be submitted no later than December 19, 1994. No formal plan of corrective measures or actions was submitted by the Petitioner, although on December 15, 1994, she submitted a memorandum to Ms. Mary Brown of the District 2 Developmental Services Community Services Office (agency liaison for the Medicaid Waiver Program), concerning the over- expenditures, which simply listed the total amount of support coordination units (quarter hours) that were used to provide support to each client since November 30, 1994 and showed that there were insufficient hours available to transfer from the seven clients which the Petitioner showed as having some possibly transferable quarter hour units left at the time. Therefore, the Petitioner simply requested that additional units be approved. Only one of the four performance and billing problems discussed at the earlier meeting between the Petitioner and Mr. Trejo and other HRS personnel was addressed. (Respondent's Exhibit 4 in evidence, the Petitioner's memorandum of December 15, 1994). The Petitioner merely advised Ms. Brown in that memorandum of the lack of availability of funds within her overall budget to adjust for the over-expenditures already made, which HRS already knew. She did not actually submit a plan for corrective action to alleviate the over-expenditure mode of operation she had engaged in. No plan of action of any sort was proposed to HRS to correct the other billing and documentation problems identified by HRS, through Mr. Trejo. These include the potential conflict-of-interest posed by the Petitioner's son, working as a vendor provider, authorized by the Petitioner as the ISC. This situation includes the problem that Mr. Richardson, her son, was providing services to at least one client which were not authorized as part of that client's services plan (transportation to the movies and other destinations being provided, when dental hygiene training was the service authorized in the support plan). Through the certification process and upon certification, the Petitioner had been provided complete notice of the HRS Medicaid Waiver policy concerning billing and documentation requirements. This was part of the "assurances" on the application form and in the agreement entered into between the Petitioner and HRS. That application, the assurances contained therein, and the provisions of the agreement constituted notice to the Petitioner that failure to comply with the Medicaid Waiver policy embodied in the proposed rule and Policy Clarifications 1-8, as described in detail in Mr. Trejo's testimony, were grounds for termination, as was the fraudulent billing and documentation of records concerning clients. HRS, at no time, treated the Petitioner differently from any other ISC similarly situated, with respect to the Medicaid Waiver Program and policy. In fact, Ms. Brown and Ms. Hall spent a disportionate amount of time instructing and attempting to assist and support the Petitioner in the performance of her services, in proper record-keeping and computer billing methods. In view of the Petitioner's failure to conform to the policies described above, in terms of the billing and documentation violations referenced in the above Findings of Fact, and her failure to propose a meaningful plan of corrective action with regard thereto, HRS terminated her certification as an ISC on or about January 4, 1995.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is RECOMMENDED that a Final Order be entered by the Department of Health and Rehabilitative Services revoking the certification of Brenda J. Ogden as an Independent Support Coordinator, effective January 4, 1995. DONE AND ENTERED this 23rd day of January, 1996, in Tallahassee, Florida. P. MICHAEL RUFF, 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 23rd day of January, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-1284 Petitioner's Proposed Findings of Fact 1-4. Accepted. 5. Accepted, but not itself materially dispositive of the issues presented. 6-10. Accepted. Accepted, but immaterial. Accepted. Rejected, as contrary to the greater weight of the competent, credible testimony and evidence. Accepted, in a general sense, but not materially dispositive. These reasons were not the reasons for the Petitioner's violations of policies and her agreement. Rejected, as contrary to the weight of the evidence based upon the Hearing Officer's determinations of the candor and credibility of witnesses. Even though the Petitioner had some difficulties learning to use the relevant computer system, these were not shown to be the reasons for the improprieties in billing and record-keeping. Accepted. Accepted, except as to the date, but not materially dispositive. Accepted, but not materially dispositive. The referenced date should be November 22, 1994. Accepted. 20-21. Accepted, but not materially dispositive. Accepted, only in terms of the dates she made the written response referenced. It is not found to be a detailed plan of corrective action/support coordination, and this context of the proposed finding is rejected as subordinate to the Hearing Officer's findings of fact on this subject matter. Accepted, but not itself materially dispositive. Accepted, but not materially dispositive, and subordinate to the Hearing Officer's findings of fact on this subject matter. Accepted, but not materially dispositive, and subordinate to the Hearing Officer's findings of fact on this subject matter. Rejected, as constituting a conclusion of law and not a proposed finding of fact and as legally incorrect. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter and as not materially dispositive. Even if she never altered client records, that does not obviate the violations found. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter. Accepted, but not itself materially dispositive. Accepted, in part, but only as to the date the formal written notification of the overpayment was accorded the Petitioner. She had earlier been informed verbally of the problem. Even if she were terminated 28 days instead of 30 days after notification of the overpayment, the Petitioner never before then or since has made any effort of record in this proceeding to make reimbursement for the overpayments. The other reasons referenced and found above are adequate cause for termination, in any event. 31-32. Rejected, as immaterial. The other ISC's referenced in these proposed findings of fact were in different circumstances and differently situated in terms of overpayment/overbilling problems involved (for instance, repayments were made). 33. Rejected, as not in accord with the competent, credible evidence. The fact was that Mr. Sutton determined that there was insufficient evidence to go forward with prosecution in his opinion; however, the matter was referred to the Office of the State Attorney, who, in fact, elected not to institute prosecution for unknown, discretionary reasons. 34-35. Accepted, but immaterial. Respondent's Proposed Findings of Fact 1-28. Accepted, but subordinate to the Hearing Officer's findings of fact on this subject matter. COPIES FURNISHED: Anthony L. Bajoczky, Esquire Scott A. Snavely, Esquire BAJOCZKY & FOURNIER 125 North Franklin Boulevard Tallahassee, FL 32301 Tommy E. Roberts, Jr., Esquire Charles A. Finkel, Esquire Department of Health and Rehabilitative Services 2639 North Monroe Street, Suite 252-A Tallahassee, FL 32399-2949 Robert L. Powell, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Kim Tucker General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
Findings Of Fact Rule 10-17.008(1)(a)1., Florida Administrative Code, as adopted by HRS, defines Brevard County as a single subdistrict for purposes of certificate of need review for acute health care hospitals. Brevard County is located in HRS District VII. Petitioner has applied for a certificate of need to build a hospital in Brevard County. Proceedings concerning this certificate of need are currently pending before the Division of Administrative Hearings. The challenged rule will be applied by HRS in determining whether to grant or deny Petitioner's application for a certificate of need. Petitioner is, therefore, substantially affected by Rule 10-17.008. Rule 10-5.11(23), Florida Administrative Code, which is not challenged in this proceeding, established a "uniform bed need methodology" for establishing the need for hospital beds in Florida. By application of this rule, HRS derives a total number of beds needed for each of 11 HRS districts statewide. HRS is required by Section 381.494(6)(c)1., Florida Statutes, to review certificate of need applications based on applicable district plans developed by local health councils pursuant to Section 381.494(7)(b)1., Florida Statutes. HRS is required to develop as its only rule the elements of any approved district plan which HRS considers necessary to the review of certificate of need applications. It is this statutory requirement which led HRS to adopt Rule 10- 17.008(1)(a)1., Florida Administrative Code, which is challenged in this proceeding. Rule 10-5.11(23)(d), Florida Administrative Code, requires local health councils, as necessary, to adopt acute care service subdistrict designations according to guidelines developed by HRS. These guidelines were developed by HRS and were sent to local health councils in April, 1983. These guidelines provided as follows: Local Health Council District should be divided into subdistricts for purposes of planning acute care general hospital services. Rural subdistricts (i.e., those outside SMSAs) shall be county or multi- county areas. Urban subdistricts (i.e., those including all or part of an SMSA) may be multicounty, county or subcounty areas. As appropriate, an urban subdistrict may include part of an urban county and all of an adjoining rural county. All subdistrict designations shall conform to population base zone boundaries. Each urban subdistrict shall contain within it a sufficient number of population base zones to meet the following size criteria: Minimum 150,000 to 200,000 population in base year 1980 unless the SMSA population is less than 150,000, in which case SMSA = subdistrict. Maximum geographic area 25 miles diameter along longest axis. Rural subdistricts shall be limited in size such that no area is greater than 60 miles in diameter along its longest axis, or 45 minutes driving time to a general hospital for 90 percent of the population. To the extent possible, subdistrict designations shall take into account existing patient flow patterns, and specialized services. In dividing the total number of beds allocated to the district among subdistricts and in specifying bed distribution by service category, the Local Health Council shall take into account the level of care offered by existing facilities, net flow to facilities, the age characteristics of the population as these relate to service needs and the potential degree of seasonal peak demand (as per the proposed acute care rule). Since the HRS "uniform bed need methodology" establishes only the total number of beds needed districtwide, this number must be allocated districtwide by bed type and location by the local health councils through designation of subdistricts in their local plans. In August, 1983, the local health council for District VII submitted to HRS its local health plan, entitled "Policies and Priorities for Community Medical Facilities Component." The plan identified 23 policies, one of which was the designation of subdistricts along county lines. Of the 23 policies enumerated by the local health council for District VII, HRS adopted in Rule 10-17.008 only the policy designating subdistricts along county lines. The HRS guidelines were intended to acquaint local health councils with the types of factors to be considered in setting subdistrict lines. None of these factors were strictly binding, and the councils were intended to balance the various criteria according to local consideration such as geography, population dynamics, and availability of and access to existing services. For example, Brevard County had a population in 1980 of 273,000, and is approximately 78 miles long. It was, therefore, impossible to strictly adhere to the population and geographic criteria contained in the HRS guidelines. The local health council resolved this conflict by determining, based upon its data and experience, that residents of Brevard County had experienced no problems with access to availability of hospital services. Hospital facilities in Brevard County are well distributed. While Brevard County is 78 miles long, a large portion of its area in both the northern and southern parts of the county are sparsely populated, consisting of marshland, the government space center, and a military base. Neither HRS nor local health councils were required to further subdivide a county unit. County units generally accepted as reasonable subdivisions for health planning purposes. Many populous counties throughout Florida were designated by their respective local health councils as subdistricts. These include Broward, Hillsborough, Escambia, Polk, Manatee, and Sarasota counties. At the time the challenged rule was adopted, there existed no reliable subcounty population projection by age and sex cohorts. Use of historical data for health planning assumes a constant growth pattern, which is not the case in a rapid growth area such as Brevard County. In rapid growth areas, historical projections are more likely to prove unreliable. Because of its continuing transition from a rural to an urban area, there have been difficulties encountered in projecting Brevard County population by age cohorts. Accordingly, the local health council, in determining to designate Brevard County as a subdistrict, determined that there were no satisfactory data available from which to accurately subdistrict a subcounty basis. Allocation of bed need in District VII has been historically accomplished by county units, even when previously existing health system agencies were in effect. Subdivisions below the county level were considered only for the purpose of evaluating utilization or occupancy thresholds. The local health council for District VII consulted with a task force of local health care providers in the process of formulating the subdistricting component of its local health plan. A representative for Petitioner served on the task force. The issue of subdistricting was discussed at three task force meetings, at three meetings of the local health council's Committee on Planning and Development, and at three Board meetings during July through October, 1983. As a result of these deliberations, it was determined that the historical county unit would be used for subdistricting purposes, until more accurate data became available to further subdivide the county's District VII.
The Issue Whether Certificate of Need Application No. 8614, filed by Vencor Hospitals South, Inc., meets, on balance, the applicable statutory and rule criteria. Whether the Agency for Health Care Administration relied upon an unpromulgated and invalid rule in preliminarily denying CON Application No. 8614.
Findings Of Fact Vencor Hospital South, Inc. (Vencor), is the applicant for certificate of need (CON) No. 8614 to establish a 60-bed long term care hospital in Fort Myers, Lee County, Florida. The Agency for Health Care Administration (AHCA), the state agency authorized to administer the CON program in Florida, preliminarily denied Vencor's CON application. On January 10, 1997, AHCA issued its decision in the form of a State Agency Action Report (SAAR) indicating, as it also did in its Proposed Recommended Order, that the Vencor application was denied primarily due to a lack of need for a long term care hospital in District 8, which includes Lee County. Vencor is a wholly-owned subsidiary of Vencor, Inc., a publicly traded corporation, founded in 1985 by a respiratory/physical therapist to provide care to catastrophically ill, ventilator-dependent patients. Initially, the corporation served patients in acute care hospitals, but subsequently purchased and converted free-standing facilities. In 1995, Vencor merged with Hillhaven, which operated 311 nursing homes. Currently, Vencor, its parent, and related corporations operate 60 long term care hospitals, 311 nursing homes, and 40 assisted living facilities in approximately 46 states. In Florida, Vencor operates five long term care hospitals, located in Tampa, St. Petersburg, North Florida (Green Cove Springs), Coral Gables, and Fort Lauderdale. Pursuant to the Joint Prehearing Stipulation, filed on October 2, 1997, the parties agreed that: On August 26, 1996, Vencor submitted to AHCA a letter of intent to file a Certificate of Need Application seeking approval for the construction of a 60-bed long term care hospital to be located in Fort Myers, AHCA Health Planning District 8; Vencor's letter of intent and board resolution meet requirements of Sections 408.037(4) and 408.039(2)(c), Florida Statutes, and Rule 59C-1.008(1), Florida Administrative Code, and were timely filed with both AHCA and the local health council, and notice was properly published; Vencor submitted to AHCA its initial Certificate of Need Application (CON Action No. 8614) for the proposed project on September 25, 1996, and submitted its Omissions Response on November 11, 1996; Vencor's Certificate of Need Application contains all of the minimum content items required in Section 408.037, Florida Statutes; Both Vencor's initial CON Application and its Omissions Response were timely filed with AHCA and the local health council. During the hearing, the parties also stipulated that Vencor's Schedule 2 is complete and accurate. In 1994, AHCA adopted rules defining long term care and long term care hospitals. Rule 59C-1.002(29), Florida Administrative Code, provides that: "Long term care hospital" means a hospital licensed under Chapter 395, Part 1, F.S., which meets the requirements of Part 412, Subpart B, paragraph 412.23(e), [C]ode of Federal Regulations (1994), and seeks exclusion from the Medicare prospective payment system for inpatient hospital services. Other rules distinguishing long term care include those related to conversions of beds and facilities from one type of health care to another. AHCA, the parties stipulated, has no rule establishing a uniform numeric need methodology for long term care beds and, therefore, no fixed need pool applicable to the review of Vencor's CON application. Numeric Need In the absence of any AHCA methodology or need publication, Vencor is required to devise its own methodology to demonstrate need. Rule 59C-1.008(e) provides in pertinent part: If no agency policy exists, the applicant will be responsible for demonstrating need through a needs assessment methodology which must include, at a minimum, consideration of the following topics, except where they are inconsistent with the applicable statutory or rule criteria: Population demographics and dynamics; Availability, utilization and quality of like services in the district, subdistrict, or both; Medical treatment trends; and Market conditions. Vencor used a numeric need analysis which is identical to that prepared by the same health planner, in 1995, for St. Petersburg Health Care Management, Inc. (St. Petersburg). The St. Petersburg project proposed that Vencor would manage the facility. Unlike the current proposal for new construction, St. Petersburg was a conversion of an existing but closed facility. AHCA accepted that analysis and issued CON 8213 to St. Petersburg. The methodology constitutes a use rate analysis, which calculates the use rate of a health service among the general population and applies that to the projected future population of the district. The use rate analysis is the methodology adopted in most of AHCA's numeric need rules. W. Eugene Nelson, the consultant health planner for Vencor, derived a historic utilization rate from the four districts in Florida in which Vencor operates long term care hospitals. That rate, 19.7 patient days per 1000 population, when applied to the projected population of District 8 in the year 2000, yields an average daily census of 64 patients. Mr. Nelson also compared the demographics of the seven counties of District 8 to the rest of the state, noting in particular the sizable, coastal population centers and the significant concentration of elderly, the population group which is disproportionately served in long term care hospitals. The proposed service area is all of District 8. By demonstrating the numeric need for 64 beds and the absence of any existing long term care beds in District 8, Vencor established the numeric need for its proposed 60-bed long term care hospital. See Final Order in DOAH Case No. 97-4419RU. Statutory Review Criteria Additional criteria for evaluating CON applications are listed in Subsections 408.035(1) and (2), Florida Statutes, and the rules which implement that statute. (1)(a) need in relation to state and district health plans. The 1993 State Health Plan, which predates the establishment of long term care rules, contains no specific preferences for evaluating CON applications for long term care hospitals. The applicable local plan is the District 8 1996-1997 Certificate of Need Allocation Factors Report, approved on September 9, 1996. The District 8 plan, like the State Health Plan, contains no mention of long term care hospitals. In the SAAR, AHCA applied the District 8 and state health plan criteria for acute care hospital beds to the review of Vencor's application for long term care beds, although agency rules define the two as different. The acute care hospital criteria are inapplicable to the review of this application for CON 8614 and, therefore, there are no applicable state or district health plan criteria for long term care. (1)(b) availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of like and existing services in the district; and (1)(d) availability and adequacy of alternative health care facilities in the district. Currently, there are no long term care hospitals in District 8. The closest long term care hospitals are in Tampa, St. Petersburg, and Fort Lauderdale, all over 100 miles from Fort Myers. In the SAAR, approving the St. Petersburg facility, two long term care hospitals in Tampa were discussed as alternatives. By contract, the SAAR preliminarily denying Vencor's application lists as alternatives CMR facilities, nursing homes which accept Medicare patients, and hospital based skilled nursing units. AHCA examined the quantity of beds available in other health care categories in reliance on certain findings in the publication titled Subacute Care: Policy Synthesis And Market Area Analysis, a report submitted to the Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, on November 1, 1995, by Levin-VHI, Inc. ("the Lewin Report"). The Lewin Report notes the similarities between the type of care provided in long term care, CMR and acute care hospitals, and in hospital-based subacute care units, and subacute care beds in community nursing homes. The Lewin Report also acknowledges that "subacute care" is not well-defined. AHCA has not adopted the Lewin Report by rule, nor has it repealed its rules defining long term care as a separate and district health care category. For the reasons set forth in the Final Order issued simultaneously with this Recommended Order, AHCA may not rely on the Lewin Report to create a presumption that other categories are "like and existing" alternatives to long term care, or to consider services outside District 8 as available alternatives. Additionally, Vencor presented substantial evidence to distinguish its patients from those served in other types of beds. The narrow range of diagnostic related groups or DRGs served at Vencor includes patients with more medically complex multiple system failures than those in CMR beds. With an average length of stay of 60 beds, Vencor's patients are typically too sick to withstand three hours of therapy a day, which AHCA acknowledged as the federal criteria for CMR admissions. Vencor also distinguished its patients, who require 7 1/2 to 8 hours of nursing care a day, as compared to 2 1/2 to 3 hours a day in nursing homes. Similarly, the average length of stay in nursing home subacute units is less than 41 days. The DRG classifications which account for 80 percent of Vencor's admissions represent only 7 percent of admissions to hospital based skilled nursing units, and 10 to 11 percent of admissions to nursing home subacute care units. Vencor also presented the uncontroverted testimony of Katherine Nixon, a clinical case manager whose duties include discharge planning for open heart surgery for patients at Columbia-Southwest Regional Medical Center (Columbia-Southwest), an acute care hospital in Fort Myers. Ms. Nixon's experience is that 80 percent of open heart surgery patients are discharged home, while 20 percent require additional inpatient care. Although Columbia-Southwest has a twenty-bed skilled nursing unit with two beds for ventilator-dependent patients, those beds are limited to patients expected to be weaned within a week. Finally, Vencor presented results which are preliminary and subject to peer review from its APACHE (Acute Physiology, Age, and Chronic Health Evaluation) Study. Ultimately, Vencor expects the study to more clearly distinguish its patient population. In summary, Vencor demonstrated that a substantial majority of patients it proposes to serve are not served in alternative facilities, including CMR hospitals, hospital-based skilled nursing units, or subacute units in community nursing homes. Expert medical testimony established the inappropriateness of keeping patients who require long term care in intensive or other acute care beds, although that occurs in District 8 when patients refuse to agree to admissions too distant from their homes. (1)(c) ability and record of providing quality of care. The parties stipulated that Vencor's application complies with the requirement of Subsection 408.035(1)(c). (1)(e) probable economics of joint or shared resources; (1)(g) need for research and educational facilities; and (1)(j) needs of health maintenance organizations. The parties stipulated that the review criteria in Subsection 408.035(1)(e), (g) and (j) are not at issue. (f) need in the district for special equipment and services not reasonably and economically accessible in adjoining areas. Based on the experiences of Katherine Nixon, it is not reasonable for long term care patients to access services outside District 8. Ms. Nixon also testified that patients are financially at a disadvantage if placed in a hospital skilled nursing unit rather than a long term care hospital. If a patient is not weaned as quickly as expected, Medicare reimbursement after twenty days decreases to 80 percent. In addition, the days in the hospital skilled nursing unit are included in the 100 day Medicare limit for post-acute hospitalization rehabilitation. By contrast, long term care hospitalization preserves the patient's ability under Medicare to have further rehabilitation services if needed after a subsequent transfer to a nursing home. (h) resources and funds, including personnel to accomplish project. Prior to the hearing, the parties stipulated that Vencor has sufficient funds to accomplish the project, and properly documented its source of funds in Schedule 3 of the CON application. Vencor has a commitment for $10 million to fund this project of approximately $8.5 million. At the hearing, AHCA also agreed with Vencor that the staffing and salary schedule, Schedule 6, is reasonable. (i) immediate and long term financial feasibility of the proposal. Vencor has the resources to establish the project and to fund short term operating losses. Vencor also reasonably projected that revenues will exceed expenses in the second year of operation. Therefore, Vencor demonstrated the short and long term financial feasibility of its proposal. needs of entities serving residents outside the district. Vencor is not proposing that any substantial portion of it services will benefit anyone outside District 8. probable impact on costs of providing health services; effects of competition. There is no evidence of an adverse impact on health care costs. There is preliminary data from the APACHE study which tends to indicate the long term care costs are lower than acute care costs. No adverse effects of competition are shown and AHCA did not dispute the fact that Vencor's proposal is supported by acute care hospitals in District 8. costs and methods of proposed construction; and (2)((a)-(c) less costly alternatives to proposed capital expenditure. The prehearing stipulation includes agreement that the design is reasonable, and that proposed construction costs are below the median in that area. past and proposed service to Medicaid patients and the medically indigent. Vencor has a history of providing Medicaid and indigent care in the absence of any legal requirements to do so. The conditions proposed of 3 percent of total patient days Medicaid and 2 percent for indigent/charity patients proposed by Vencor are identical to those AHCA accepted in issuing CON 8213 to St. Petersburg Health Care Management, Inc. Vencor's proposed commitment is reasonable and appropriate, considering AHCA's past acceptance and the fact that the vast majority of long term care patients are older and covered by Medicare. services which promote a continuum of care in a multilevel health care system. While Vencor's services are needed due to a gap in the continuum of care which exists in the district, it has not shown that it will be a part of a multilevel system in District 8. (2)(d) that patients will experience serious problems obtaining the inpatient care proposed. Patients experience and will continue to experience serious problems in obtaining long term care in District 8 in the absence of the project proposed by Vencor. Based on the overwhelming evidence of need, and the ability of the applicant to establish and operate a high quality program with no adverse impacts on other health care providers, Vencor meets the criteria for issuance of CON 8614.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration issue CON 8614 to Vencor Hospitals South, Inc., to construct a 60-bed long term care hospital in Fort Myers, Lee County, District 8. DONE AND ENTERED this 3rd day of March, 1998, in Tallahassee, Leon County, Florida. ELEANOR M. HUNTER 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 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of March, 1998. COPIES FURNISHED: Sam Power, Agency Clerk Agency for Health Care Administration Fort Knox Building 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308-5403 Paul J. Martin, General Counsel Agency for Health Care Administration Fort Knox Building 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308-5403 Kim A. Kellum, Esquire Agency for Health Care Administration Fort Knox Building 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308-5403 R. Terry Rigsby, Esquire Geoffrey D. Smith, Esquire Blank, Rigsby & Meenan, P.A. 204 South Monroe Street Tallahassee, Florida 32301
The Issue Whether the Petitioner is required to repay $2,269.00 to the Respondent?
Findings Of Fact The Petitioner entered into a "Noninstitutional Professional and Technical Medicaid Provider Agreement" (hereinafter referred to as the "Medicaid Provider Agreement") with the Respondent. Pursuant to the Medicaid Provider Agreement, the Petitioner agreed to participate in the Florida Medicaid Program. Pursuant to paragraph 2 of the Medicaid Provider Agreement, the Petitioner agreed to the following: The provider agrees to keep such records as are necessary to fully disclose the extent of services provided to individuals receiving assistance under the State Plan and agrees to furnish the State agency upon request such information regarding any payments claimed for providing these services. Access to these pertinent records and facilities by authorized Medicaid Program representatives will be permitted upon a reasonable request. The Petitioner also agreed in the Medicaid Provider Agreement to submit claims under the Medicaid Provider Agreement in accordance with the Florida Medicaid Program and applicable "Florida Administrative Rules, Florida Statutes, policies, procedures, manuals of the Florida Medicaid Program and Federal laws and regulations." Paragraphs 3 and 7 of the Medicaid Provider Agreement. Medicaid is essentially a mechanism by which the federal government provides funds for the payment of a part of certain medical service costs to the State of Florida. It is a federal grant under Title XIX of the Social Security Act. In Florida, community mental health services provided to persons eligible for Medicaid coverage can be paid for under the Medicaid program. Generally, the federal government provides 56 percent of the costs of Medicaid services and the State is responsible for 44 percent. As eligible services are rendered federal Medicaid funds are received and deposited in the Medical Care Trust Fund. In order for services to constitute "eligible services" they must have been rendered in compliance with Chapter 10C-7, Florida Administrative Code. If services are not "eligible services" (they do not comply with Chapter 10C-7), the State is not entitled to receive federal Medicaid funds. In order to insure that providers of Medicaid services are providing "eligible services" the Respondent conducts compliance audits. The purpose of compliance audits is to determine if federal Medicaid funds have been properly received. On June 27, 1985, the Respondent's Medicaid Program auditors conducted a compliance audit of the records of the Petitioner pertaining to Medicaid clients of the Petitioner's Bristol office. As a result of the June 27, 1985 audit, the Respondent determined that the Petitioner had improperly submitted claims for Medicaid care and that such claims had been improperly paid by the Respondent. The parties stipulated that the Petitioner was paid $2,269.00 for claims for which there was insufficient documentation to warrant payment under Chapter 10C-7, Florida Administrative Code. Petitioner claimed $2,269.00 as an amount due for Medicaid "eligible services" and was so paid by the Respondent. In fact, however, the services were not Medicaid "eligible services." The State was not entitled to federal Medicaid funds for these services. The Petitioner improperly received the amount in controversy because the Petitioner did not comply with Chapter 10C-7, Florida Administrative Code, as it was required to do pursuant to the Medicaid Provider Agreement. On May 21, 1985, the Petitioner executed an "Alcohol, Drug Abuse and Mental Health Services Contract Between State of Florida Department of Health and Rehabilitative Services and Apalachee Community Mental Health Services, Inc." (hereinafter referred to as the "Provider Contract"). The Provider Contract was executed by the Respondent on June 11, 1985. Pursuant to the Provider Contract, the Petitioner agreed to provide alcohol, drug abuse and mental health services in eight designated counties. In paragraph IC4 of the Provider Contract, the Petitioner was required to comply with Chapters 394, 396 and 397, Florida Statutes, and Chapters 10E-13 and 10E-14, Florida Administrative Code, "as appropriate." 15. Paragraph IC5 of the Provider Contract also required the Petitioner to "comply with all other applicable state standards, provided they are specified in Florida Statutes or Administrative Rules established by the department or made known in writing to the contractor." Paragraph IE1 and 2 of the Provider Contract required that the Petitioner "participate in the Community Mental Health/Alcohol Services Program as defined in Section 10C-7.525, F.A.C." and that the Petitioner "pursue and submit vouchers on all Medicaid eligible clients for Medicaid eligible services." [Emphasis added]. Paragraph IG1 of the Provider Contract required the Petitioner to provide an annual audit report by an independent certified public accountant to the Respondent. Paragraph IH of the Provider Contract required the Petitioner to permit monitoring for compliance with state and federal rules and regulations. Paragraph IIA1 of the Provider Contract provided that the Respondent will pay up to 75 percent of approved costs as determined under Chapters 394 and 397, Florida Statutes, and Chapter 10E-14, Florida Administrative Code, in an amount not to exceed $4,096,175.00. Paragraph IO of the Provider Contract required that the Petitioner secure "local match." Pursuant to the Provider Contract the Petitioner is entitled to receive payment for eligible expenditures" up to the amount of the Provider Contract and subject to the availability of funds. Services to be paid for pursuant to the Provider Contract include Medicaid eligible services and non-Medicaid services. Even though the Petitioner did not provide "eligible services" the amount in controversy may have been an "eligible expenditure" for which it may receive payment at a later date. Whether the Petitioner is entitled to payment of the amount in controversy will be determined at a later date as a result of the financial audit required by paragraph IGI of the Provider Agreement and will depend on the availability of funds and whether the Petitioner has already received the maximum amount specified in the Provider Contract. Whether the Petitioner is entitled to ultimate payment of the amount in controversy at a later date is governed by Chapters 394 and 397, Florida Statutes, and Chapters 10E-13 and 10E-14, Florida Administrative Code. A dispute arose between certain medical health providers and the Respondent over whether Medicaid funds are considered "state funds" for which local match is required pursuant to Chapter 394, Florida Statutes. The Department took the position that Medicaid funds are considered state funds and thus require local match and are subject to audit pursuant to Chapter 10E-13, Florida Administrative Code. When the dispute arose, the Respondent developed an "Issue Paper" (Petitioner's exhibit 2). The Respondent adopted one of the alternatives recommended in the Issue Paper to treat Medicaid funds as state funds for which local match is required. The Respondent also took the position that Medicaid eligible services were subject to the provisions of Chapter 394, Florida Statutes, and Chapter 10E, Florida Administrative Code. The Respondent's decision to treat Medicaid funds as state funds subject to local match was challenged by the Florida Council for Community Mental Health, Inc. Florida Council for Community Mental Health, Inc. v. Department of Health and Rehabilitative Services, 8 FALR 756 (Feb. 6, 1986). The issue in that case was whether the position of the Respondent taken in the Issue Paper was a rule.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner repay the Respondent $2,269.00 for services improperly billed. DONE and ENTERED this 17th day of March, 1987, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1500 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of March, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-1381 The parties have submitted proposed findings of fact. It has been generally 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. Paragraph numbers in the Recommended Order are referred to as "RO ." Petitioner's Proposed Findings of Fact: Proposed Finding RO Number of Acceptance of Fact Number or Reason for Rejection 1 RO 15-16. RO 17-19. The first and second sentences incorrectly refer to Paragraph I(C)(6) of the Medicaid Provider Agreement. The correct paragraphs are 1(0)4 (first sentence) and 1(0)5 (second sentence). The following portion of the second sentence is not supported by the weight of the evidence: "or incorporated as part of the contract. The following portion of the third sentence is not supported by the weight of the evidence: "and HRS Manual 230-31. The first sentence is accepted in RO 28. The rest of this proposed finding of fact is generally accepted in RO 28. 4-5 These proposed findings of fact are too broad and are not supported by the weight of the evidence. Irrelevant and not supported by the weight of the evidence. Too broad and not supported by the weight of the evidence. See RO 28. Too broad and not supported by the weight of the evidence. See RO 30. 9-17 These proposed findings of fact are irrelevant. Additionally, the third and fourth sentences of paragraph 16 are not supported by the weight of the evidence. RO 6. RO 9. The last sentence is irrelevant. Not supported by the weight of the evidence. Irrelevant. Respondent's Proposed Findings of Fact: 1 RO 1-3. 2 RO 10. 3 RO 11. 4 RO 12-13 5 Hereby accepted. COPIES FURNISHED: Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Theodore E. Mack, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building 1, Room 407 Tallahassee, Florida 32399-0700 Ronald W. Brooks, Esquire Brooks, LeBoeuf & LeBoeuf 863 East Park Avenue Tallahassee, Florida 32301
The Issue Does Petitioner, AHF MCO of Florida, Inc., d/b/a PHC Florida HIV/AIDS Specialty Plan (Positive), have standing to contest the intended award to Simply for Regions 10 and 11 or to seek rejection of all proposals? (Case No. 18-3507 and 18-3508) Should the intended decision of Respondent, Agency for Health Care Administration (Agency), to contract with Simply Healthcare Plans, Inc. (Simply), for Medicaid managed care plans for HIV/AIDS patients in Regions 10 (Broward County) and Region 11 (Miami-Dade and Collier Counties) be invalidated and all proposals rejected? (Case Nos. 18-3507 and 18-3508) Must the Agency negotiate with Petitioner, South Florida Community Care Network, LLC, d/b/a Community Care Plan (Community), about a plan to provide HIV/AIDS Medicaid managed care services in Region 10 because it was the only responsive proposer of services that was a Provider Service Network (PSN)? (Case No. 18-3512) Must the Agency negotiate with Community to provide Medicaid managed care services in Region 10 for people with Serious Mental Illnesses because Community is a PSN? (Case No. 18-3511) Must the Agency contract with Community to provide Medicaid managed care services for Children with Special Needs in Region 10 because Community is a PSN? (Case No. 18-3513) Must the Agency negotiate with Community to provide Medicaid managed care services for Child Welfare patients in Region 10 because Community is a PSN? (Case No. 18-3514)
Findings Of Fact THE PARTIES Agency: Section 20.42, Florida Statutes, establishes the Agency as Florida’s chief health policy and planning agency. The Agency is the single state agency authorized to select eligible plans to participate in the Medicaid program. Positive: Positive is a Florida not-for-profit corporation operating a Medicaid health plan dedicated to serving people with HIV/AIDS. Positive serves about 2,000 patients in Florida. Positive’s health plan is accredited by the Accreditation Association for Ambulatory Healthcare. Its disease management program is accredited by the National Committee for Quality Assurance. Currently, the Agency contracts with Positive for a SMMC HIV/AIDS Specialty Plan serving Regions 10 and 11. Simply: Simply is a Florida for-profit corporation operating a Medicaid health plan dedicated to serving people with HIV/AIDS. Currently, the Agency contracts with Simply to provide a SMMC HIV/AIDS Specialty Plan for Regions 1 through 3 and 5 through 11. Simply has maintained the largest patient enrollment of all HIV/AIDs plans in Florida since Florida started its statewide Medicaid managed care program. Community Care: Community is a Florida limited liability company. It is a PSN as defined in sections 409.912(1)(b) and 409.962(14), Florida Statutes. Staywell: Staywell is the fictitious name for WellCare of Florida, Inc., serving Florida’s Medicaid population. Sunshine: Sunshine State Health Plan (Sunshine) is a Florida corporation. It offers managed care plans to Florida Medicaid recipients. THE INVITATION TO NEGOTIATE TIMELINE On July 14, 2017, the Agency released 11 ITNs plans for Florida’s Medicaid managed care program in 11 statutorily defined regions. Region 10, Broward County, and Region 11, Miami-Dade and Collier Counties, are the regions relevant to this proceeding. Part IV of chapter 409, creates a statewide, integrated managed care program for Medicaid services. This program called Statewide Medicaid Managed Care includes two programs, Managed Medical Assistance and Long-term Care. Section 409.966(2), directs the Agency to conduct separate and simultaneous procurements to select eligible plans for each region using the ITN procurement process created by section 287.057(1)(c). The ITNs released July 14, 2017, fulfilled that command. The Agency issued 11 identical ITNs of 624 pages, one for each region, in omnibus form. They provided elements for four types of plans. Some elements were common to all types. Others were restricted to a specific plan type defined by intended patient population. The plan types are comprehensive plans, long-term care plus plans, managed medical assistance plans, and specialty plans. Section 409.962(16) defines “Specialty Plan” as a “managed care plan that serves Medicaid recipients who meet specified criteria based on age, medical condition, or diagnosis.” Responding vendors identified the plan type or types that they were proposing. The Agency issued Addendum No. 1 to the ITNs on September 14, 2017. On October 2, 2017, the Agency issued Addendum No. 2 to the ITNs. Addendum 2 included 628 questions about the ITNs and the Agency’s responses to the questions. Florida law permits potential responders to an ITN to challenge the specifications of an ITN, including the addendums. § 120.57(3)(b), Fla. Stat. Nobody challenged the specifications of the ITNs. As contemplated by section 287.057(c)(2), the Agency conducted “a conference or written question and answer period for purposes of assuring the vendors’ full understanding of the solicitation requirements.” Positive, Community, and Simply, along with United Healthcare of Florida, Inc., HIV/AIDS Specialty Plan (United), submitted responses to the ITN in Region 10 proposing HIV/AIDS Specialty Plans. Community was the only PSN to propose an HIV/AIDS plan for Region 10. Positive, Simply, and United submitted replies to the ITN for Region 11, proposing HIV/AIDS Specialty Plans. Community, United, Staywell, and one other provider submitted proposals to provide SMI Specialty Plan services in Region 10. Community was the only responding PSN. Community, Sunshine, and Staywell submitted proposals to provide Child Welfare Specialty Plans (CW) in Region 10. Community was the only PSN. Community, Staywell, and two others submitted proposals to offer Specialty Plans for Children with Special Needs (CSN) in Region 10. Community was one of two responding PSNs. Proposal scoring began November 6, 2017, and ended January 16, 2018. The Agency announced its intended awards on April 24, 2018. On April 24, 2018, the Agency issued its notices of intent to award specialty contracts in Regions 10 and 11. The following charts summarize the Agency’s ranking of the proposals and its intended awards. The two highest ranked plans, which the Agency selected for negotiations, are identified in bold. Region 10 – Children with Special Needs Respondent Intended Award Ranking Staywell No 1 Community No 2 Miami Children’s Health Plan, LLC No 3 Our Children PSN of Florida, LLC No 4 Region 10 – Child Welfare Respondent Intended Award Ranking Staywell No 1 Sunshine Yes 2 Molina Healthcare of Florida, Inc. No 3 Community No 4 Region 10 – HIV/AIDS Respondent Intended Award Ranking Simply Yes 1 United No 2 Community No 3 Positive No 4 Region 10 – Serious Mental Illness Respondent Intended Award Ranking Staywell Yes 1 United No 2 Florida MHS, Inc. No 3 Community No 4 Region 11 – HIV/AIDS Respondent Intended Award Ranking Simply Yes 1 United No 2 Positive No 3 All of the Specialty Plan awards noticed by the Agency went to bidders who also proposed, and received, comprehensive plan awards. The protests, referrals, and proceedings before the Division summarized in the Preliminary Statement followed the Agency’s announcement of its intended awards. TERMS The voluminous ITN consisted of a two-page transmittal letter and three Attachments (A, B, and C), with a total of 34 exhibits to them. They are: Attachment A, Exhibits A-1 through A-8, Attachment B, Exhibits B-1 through B-3, and Attachment C, Exhibits C-1 through C-8. The ITN establishes a two-step process for selecting: an evaluation phase and a negotiation phase. In the evaluation phase, each respondent was required to submit a proposal responding to criteria of the ITN. Proposals were to be evaluated, scored, and ranked. The goal of the evaluation phase was to determine which respondents would move to negotiations, not which would be awarded a contract. The top two ranking Specialty Plans per specialty population would be invited to negotiations. In the negotiation phase, the Agency would negotiate with each invited respondent. After that, the Agency would announce its intended award of a contract to the plan or plans that the Agency determined would provide the best value. Together, the attachments and exhibits combined instructions, criteria, forms, certifications, and data into a “one size fits all” document that described the information required for four categories of managed care plans to serve Medicaid patients. The ITN also provided data to consider in preparing responses. The transmittal letter emphasized, “Your response must comply fully with the instructions that stipulate what is to be included in the response.” The ITNs identified Jennifer Barrett as the procurement officer and sole point of contact with the Agency for vendors. The transmittal letter is reproduced here. This solicitation is being issued by the State of Florida, Agency for Health Care Administration, hereinafter referred to as “AHCA” or “Agency”, to select a vendor to provide Statewide Medicaid Managed Care Program services. The solicitation package consists of this transmittal letter and the following attachments and exhibits: Attachment A Instructions and Special ConditionsExhibit A-1 Questions TemplateExhibit A-2-a Qualification of Plan Eligibility Exhibit A-2-b Provider Service Network Certification of Ownership and Controlling InterestExhibit A-2-c Additional Required Certifications and StatementsExhibit A-3-a Milliman Organizational Conflict of Interest Mitigation Plan Exhibit A-3-b Milliman Employee Organizational Conflict of Interest AffidavitExhibit A-4 Submission Requirements and Evaluation Criteria InstructionsExhibit A-4-a General Submission Requirements and Evaluation Criteria Exhibit A-4-a-1 SRC# 6 - General Performance Measurement ToolExhibit A-4-a-2 SRC# 9 - Expanded Benefits Tool (Regional) Exhibit A-4-a-3 SRC# 10 - Additional Expanded Benefits Template (Regional)Exhibit A-4-a-4 SRC# 14 - Standard CAHPS Measurement Tool Exhibit A-4-b MMA Submission Requirements and Evaluation Criteria Exhibit A-4-b-1 MMA SRC# 6 - Provider Network Agreements/Contracts (Regional)Exhibit A-4-b-2 MMA SRC# 14 - MMA Performance Measurement Tool Exhibit A-4-b-3 MMA SRC# 21 - Provider Network Agreements/Contracts Statewide Essential Providers Exhibit A-4-c LTC Submission Requirements and Evaluation CriteriaExhibit A-4-c-1 LTC SRC# 4 - Provider Network Agreements/Contracts (Regional) Exhibit A-4-d Specialty Submission Requirements and Evaluation CriteriaExhibit A-5 Summary of Respondent CommitmentsExhibit A-6 Summary of Managed Care Savings Exhibit A-7 Certification of Drug-Free Workplace ProgramExhibit A-8 Standard Contract Attachment B Scope of Service - Core Provisions Exhibit B-1 Managed Medical Assistance (MMA) ProgramExhibit B-2 Long-Term Care (LTC) ProgramExhibit B-3 Specialty Plan Attachment C Cost Proposal Instructions and Rate Methodology NarrativeExhibit C-1 Capitated Plan Cost Proposal TemplateExhibit C-2 FFS PSN Cost Proposal Template Exhibit C-3 Preliminary Managed Medical Assistance (MMA) Program Rate Cell Factors Exhibit C-4 Managed Medical Assistance (MMA) Program Expanded Benefit Adjustment Factors Exhibit C-5 Managed Medical Assistance (MMA) Program IBNR Adjustment Factors Exhibit C-6 Managed Medical Assistance (MMA) Program Historical Capitated Plan Provider Contracting Levels During SFY 15/16 Time Period Exhibit C-7 Statewide Medicaid Managed Care Data BookExhibit C-8 Statewide Medicaid Managed Care Data Book Questions and Answers Your response must comply fully with the instructions that stipulate what is to be included in the response. Respondents submitting a response to this solicitation shall identify the solicitation number, date and time of opening on the envelope transmitting their response. This information is used only to put the Agency mailroom on notice that the package received is a response to an Agency solicitation and therefore should not be opened, but delivered directly to the Procurement Officer. The ITN describes the plans as follows: Comprehensive Long-term Care Plan (herein referred to as a “Comprehensive Plan”) – A Managed Care Plan that is eligible to provide Managed Medical Assistance services and Long-term Care services to eligible recipients. Long-term Care Plus Plan – A Managed Care Plan that is eligible to provide Managed Medical Assistance services and Long-term Care services to eligible recipients enrolled in the Long-term Care program. This plan type is not eligible to provide services to recipients who are only eligible for MMA services. Managed Medical Assistance (MMA) Plan – A Managed Care Plan that is eligible to provide Managed Medical Assistance services to eligible recipients. This plan type is not eligible to provide services to recipients who are eligible for Long-term Care services. Specialty Plan – A Managed Care Plan that is eligible to provide Managed Medical Assistance services to eligible recipients who are defined as a specialty population in the resulting Contract. Specialty Plans are at issue. The ITN did not define, describe, or specify specialty populations to be served. It left that to the responding vendors. Beyond that, the ITN left the ultimate definition of the specialty population for negotiation, saying in Section II(B)(1)(a) of Attachment B, Exhibit B-3, “[t]he Agency shall identify the specialty population eligible for enrollment in the Specialty Plan based on eligibility criteria based upon negotiations.” Some respondents directly identified the specialty population. Simply’s transmittal letter stated that it proposed “a Specialty plan for individuals with HIV/AIDS.” Positive’s response to Exhibit A-4-d Specialty SRC 4, eligibility and enrollment, stated, “the specialty population for the PHC [Positive] plan will be Medicaid eligible, male and female individuals from all age groups who are HIV positive with or without symptoms and those individuals who have progressed in their HIV disease to meet the CDC definition of AIDS.” Some others left definition of the specialty population to be inferred from the ITN response. The result is that the ITN left definition of the specialty populations initially to the respondents and ultimately to negotiations between the Agency and successful respondents. Petitioners and Intervenors describe the populations that they propose serving as HIV/AIDS patients, patients with SMI, CSN, and child welfare populations. ITN respondents could have proposed serving only cancer patients, serving only obstetric patients, or serving only patients with hemophilia. The part of the ITN requiring a respondent to identify the plan type for which it was responding offered only four alternative blocks to check. They were: “Comprehensive Plan,” Long-Term Care Plus Plan,” “Managed Medical Assistance Plan,” or “Specialty Plan.” Attachment A to the ITN, labeled “Instructions and Special Conditions,” provides an overview of the solicitation process; instructions for response preparation and content; information regarding response submission requirements; information regarding response evaluation, negotiations, and contract awards; and information regarding contract implementation. Exhibits A-1 to A-3 and A-5 to A-7 of the ITN contain various certifications and attestations that respondents had to prepare and verify. Exhibit A-4 contains submission requirement components (SRCs) to which respondents had to prepare written responses. Exhibit A-8 contains the state’s standard SMMC contract. ITN Exhibit A-4-a contains 36 general submission requirements and evaluation criteria (General SRCs). ITN Exhibit A-4-b contains 21 MMA submission requirements and evaluation criteria (MMA SRCs). ITN Exhibit A-4-c contains 13 LTC submission requirements and evaluation criteria (LTC SRCs). ITN Exhibit A-4-d contains five specialty submission requirements and evaluation criteria (Specialty SRCs). The responses that the 36 SRCs require vary greatly. Some are as simple as providing documents or listing items. Others require completing tables or spreadsheets with data. Consequently, responses to some SRCS apparently could be reviewed in very little time, even a minute or less. Others requiring narrative responses might take longer. Examples follow. General SRC 1 required a list of the respondent’s contracts for managed care services and 12 information items about them including things such as whether they were capitated, a narrative describing the scope of work; the number of enrollees; and accomplishments and achievement. General SRC 2 asked for documentation of experience operating a Medicaid health plan in Florida. General SRC 3 asked for information confirming the location of facilities and employees in Florida. General SRC 12 requested a flowchart and written description of how the respondent would execute its grievance and appeal system. It listed six evaluation criteria. MMA SRC 2 asks for a description of the respondent’s organizational commitment to quality improvement “as it relates to pregnancy and birth outcomes.” It lists seven evaluation criteria. MMA SRC 10 asks for a description of the respondent’s plan for transition of care between service settings. It lists six evaluation criteria including the respondent’s process for collaboration with providers. Specialty SRC 1 asks for detailed information about respondent’s managed care experience with the specialty population. Specialty SRC 5 asks for detailed information about the respondent’s provider network standards and provides five evaluation criteria for evaluating the answers. Exhibit A-8 of the ITN contains the standard SMMC contract. Attachment B and Exhibits B-1 to B-3 of the ITN contain information about the scope of service and core provisions for plans under the SMMC program. Attachment C and Exhibits C-1 to C-8 of the ITN contain information related to the cost proposals and rate methodologies for plans under the SMMC program. The ITN permitted potential respondents to submit written questions about the solicitation to the Agency by August 14, 2017. Some did. On September 14, 2017, the Agency issued Addendum No. 1 to the ITN. Among other things, Addendum No. 1 changed the anticipated date for the Agency’s responses to respondents’ written questions from September 15 to October 2, 2017. The Agency issued Addendum No. 2 to the ITN on October 2, 2017. Addendum No. 2 included a chart with 628 written questions from potential respondents and the Agency’s answers. Attachment A at A 10-(d) makes it clear that the answers are part of the addendum. Both Addendums to the ITN cautioned that any protest of the terms, conditions, or specifications of the Addendums to the ITN had to be filed with the Agency within 72 hours of their posting. No respondent protested. Instructions for the A-4 Exhibits included these requirements: Each SRC contains form fields. Population of the form fields with text will allow the form field to expand and cross pages. There is no character limit. All SRCs, marked as “(Statewide)” must be identical for each region in which the respondent submits a reply. For timeliness of response evaluation, the Agency will evaluate each “(Statewide)” SRC once and transfer the score to each applicable region’s evaluation score sheet(s). The SRCs marked as “(Regional)” will be specific and only apply to the region identified in the solicitation and the evaluation score will not be transferred to any other region. The instructions continue: Agency evaluators will be instructed to evaluate the responses based on the narrative contained in the SRC form fields and the associated attachment(s), if applicable. Each response will be independently evaluated and awarded points based on the criteria and points scale using the Standard Evaluation Criteria Scale below unless otherwise identified in each SRC contained within Exhibit A-4. This is the scale: STANDARD EVALUATION CRITERIA SCALE Point Score Evaluation 0 The component was not addressed. 1 The component contained significant deficiencies. 2 The component is below average. 3 The component is average. 4 The component is above average. 5 The component is excellent. The ITN further explained that different SRCs would be worth different “weights,” based on the subject matter of the SRC and on whether they were General, MMA, LTC, or Specialty SRCs. It assigned weights by establishing different “weight factors” applied as multipliers to the score a respondent received on a criteria. For example, “Respondent Background/Experience” could generate a raw score of 90. Application of a weight factor of three made 270 the maximum possible score for this criteria. “Oversight and Accountability” could generate a raw score of 275. A weight factor of one, however, made the maximum score available 275. General SRC 6 solicits HEDIS data. HEDIS is a tool that consists of 92 measures across six domains of care that make it possible to compare the performance of health plans on an “apples-to-apples” basis. SRC 6 states: The respondent shall describe its experience in achieving quality standards with populations similar to the target population described in this solicitation. The respondent shall include, in table format, the target population (TANF, ABD, dual eligible), the respondent’s results for the HEDIS measures specified below for each of the last two (2) years (CY 2015/ HEDIS 2016 and CY 2016/ HEDIS 2017) for the respondent’s three (3) largest Medicaid Contracts (measured by number of enrollees). If the respondent does not have HEDIS results for at least three (3) Medicaid Contracts, the respondent shall provide commercial HEDIS measures for the respondent’s largest Contracts. If the Respondent has Florida Medicaid HEDIS results, it shall include the Florida Medicaid experience as one (1) of three (3) states for the last two (2) years. The respondent shall provide the data requested in Exhibit A-4-a-1, General Performance Measurement Tool[.] x x x Score: This section is worth a maximum of 160 raw points x x x For each of the measure rates, a total of 10 points is available per state reported (for a total of 360 points available). The respondent will be awarded 2 points if their reported plan rate exceeded the national Medicaid mean and 2 points if their reported plan rate exceeded the applicable regional Medicaid mean, for each available year, for each available state. The respondent will be awarded an additional 2 points for each measure rate where the second year’s rate is an improvement over the first year’s rate, for each available state. An aggregate score will be calculated and respondents will receive a final score of 0 through 150 corresponding to the number and percentage of points received out of the total available points. For example, if a respondent receives 100% of the available 360 points, the final score will be 150 points (100%). If a respondent receives 324 (90%) of the available 360 points, the final score will be 135 points (90%). If a respondent receives 36 (10%) of the available 360 points, the final score will be 15 points (10%). The SRC is plainly referring to the broad Medicaid- eligible population when it says “the target population (TANF, ABD, dual eligible).” “Dual eligible” populations are persons eligible for Medicaid and Medicare. There, as throughout the ITN, the ITN delineates between a target population of all Medicaid-eligible patients and a specialty population as described in a respondent’s ITN proposal. The clear instructions for SRC 6 require, “Use the drop-down box to select the state for which you are reporting and enter the performance measure rates (to the hundredths place, or XX.XX) for that state's Medicaid population for the appropriate calendar year.” Community did not comply. General SRC 14 solicits similar data, in similar form using a similar tool, about a respondent’s Consumer Assessment of Healthcare Providers and Systems (CAHPS). CAHPS data is basically a satisfaction survey. It asks respondents to provide “in table format the target population (TANF, ABD, dual eligible) and the respondent’s results for the Consumer Assessment of Healthcare Providers and Systems (CAHPS) items/composites specified below for the 2017 survey for its adult and child populations for the respondent’s three (3) largest Medicaid Contracts (as measured by number of enrollees).” Just like General SRC 6 did with HEDIS data, General SRC 14 ITN instructed bidders to put their CAHPS data for the “target population (TANF, ABD, dual eligible)” “for the respondent’s three (3) largest Medicaid Contracts (measured by number of enrollees)” for multiple states into an excel spreadsheet “to the hundredths place[.]” Also, like General SRC 6, General SRC 14 includes an objective formula described in the ITN for scoring bidders’ CAHPS data. RANKING PROVISIONS Attachment A at (D)(4)(c)(2) stated: Each response will be individually scored by at least three (3) evaluators, who collectively have experience and knowledge in the program areas and service requirements for which contractual services are sought by this solicitation. The Agency reserves the right to have specific sections of the response evaluated by less than three (3) individuals. The ITN’s example of how total point scores would be calculated, discussed below, also indicated that some sections may be scored by less than three evaluators. The explanatory chart had a column for “[o]ther Sections evaluated by less than three (3) evaluators. ” The Agency’s policy, however, has been to assign at least three evaluators to score program specific SRCs. Attachment A at (D)(4)(e)(2) advised respondents how the agency will rank the competing responses. It was clear and specific, even providing an example of the process showing how the scores “will” be calculated. Step one of the explanatory chart stated that the Agency would calculate a total point score for each response. Step two stated that “[t]he total point scores will be used to rank the responses by an evaluator. . . .” Next, the rankings by the evaluator are averaged to determine the average rank for each respondent. This average ranking is critical because ranking is how the ITN said the Agency would select respondents for negotiation and how the Agency did select respondents for negotiation. The step two and step three charts, reproduced below, demonstrate that the ITN contemplated an evaluation process in which each response was to be evaluated in its entirety by three different evaluators, or maybe less than three, but indisputably in its entirety by those who evaluated it. This did not happen. Step 2 The total point scores will be used to rank the responses by evaluator (Response with the highest number of points = 1, second highest = 2, etc.). POINTS SUMMARY Evaluator A Evaluator B Evaluator C Evaluator D Respondent 446 Respondent 396 Respondent 311 Respondent 413 Respondent 425 Respondent 390 Respondent 443 Respondent 449 Respondent 397 Respondent 419 Respondent 389 Respondent 435 Respondent 410 Respondent 388 Respondent 459 Respondent 325 RANKING SUMMARY Evaluator A Evaluator B Evaluator C Evaluator D Respondent 1 1 Respondent 1 2 Respondent 1 4 Respondent 3 Respondent 2 2 Respondent 2 3 Respondent 2 2 Respondent 1 Respondent 3 4 Respondent 3 1 Respondent 3 3 Respondent 2 Respondent 4 3 Respondent 4 4 Respondent 4 1 Respondent 4 c) Step 3 An average rank will be calculated for each response for all the evaluators. Respondent 1 1+2+4+3=10÷4=2.5 Respondent 2 2+3+2+1=8÷4=2.0 Respondent 3 4+1+3+2=10÷4=2.5 Respondent 4 3+4+1+4=12÷4=3.0 PROVIDER SERVICE NETWORK PROVISIONS Florida law permits a PSN to limit services provided to a target population “based on age, chronic disease state, or medical condition of the enrollee.” This allows a PSN to offer a specialty plan. For each region, the eligible plan requirements of section 409.974(1) state, “At least one plan must be a provider service network if any provider service networks submit a responsive bid.” Section 409.974(3) says: “Participation by specialty plans shall be subject to the procurement requirements of this section. The aggregate enrollment of all specialty plans in a region may not exceed 10 percent of the total enrollees of that region.” The ITN addressed those requirements. The Negotiation Process section of Attachment A, Instructions and Special Conditions, says: The Agency intends to invite the following number of respondents to negotiation: Comprehensive Plans The top four (4) ranking Comprehensive Plans. Long-term Care Plus Plans The top two (2) ranking Long-term Care Plus Plans Managed Medical Assistance Plans The top two (2) ranking Managed Medical Assistance Plans Specialty Managed Medical Assistance Plans The top two (2) ranking Specialty Managed Medical Assistance Plans per specialty population. If there are no provider service networks included in the top ranked respondents listed above, the Agency will invite the highest ranked PSN(s) to negotiations in order to fulfill the requirements of Section 409.974(1), Florida Statutes and Section 409.981(1), Florida Statutes. Emphasis supplied. The ITN specifications in Section D.7, titled Number of Awards, state as follows about Specialty Plan awards: 7. Number of Awards In accordance with Sections 409.966, 409.974, and 409.981, Florida Statutes, the Agency intends to select a limited number of eligible Managed Care Plans to provide services under the SMMC program in Region 10. The Agency anticipates issuing the number of Contract awards for Region 10 as described in Table 5, SMMC Region, below, excluding awards to Specialty MMA Plans. Table 5 SMMC Region Region Total Anticipated Contract Awards Region 10 4 If a respondent is awarded a Contract for multiple regions, the Agency will issue one (1) Contract to include all awarded regions. The Agency will award at least one (1) Contract to a PSN provided a PSN submits a responsive reply and negotiates a rate acceptable to the Agency. The Agency, at its sole discretion, shall make this determination. A respondent that is awarded a Contract as a Comprehensive Plan is determined to satisfy the requirements in Section 409.974, Florida Statutes and Section 409.981, Florida Statutes and shall be considered an awardee of an MMA Contract and a LTC Contract. The Agency will issue one (1) Contract to reflect all awarded populations in all awarded regions. In addition to the number of Contracts awarded in this region, additional Contracts may be awarded to Specialty Plans that negotiate terms and conditions determined to be the best value to the State and negotiate a rate acceptable to the Agency. The Agency, at its sole discretion, shall make this determination. The Agency reserves the right to make adjustments to the enrollee eligibility and identification criteria proposed by a Specialty Plan prior to Contract award in order to ensure that the aggregate enrollment of all awarded Specialty Plans in a region will not exceed ten percent (10%) of the total enrollees in that region, in compliance with Section 409.974(3), Florida Statutes. If a respondent is awarded a Contract as a Specialty Plan and another plan type, the Agency will issue one (1) Contract to include all awarded populations in all awarded regions. A prospective vendor asked about the interplay of Specialty Plan options and the PSN requirements. The question and the answer provided in Addendum 2 follow: Q. Please clarify the number of PSN awards per region and how PSN awards will be determined based on the PSN's plan type (e.g., Comprehensive, LTC Plus, MMA, Specialty). As you know, Sections 409.974 and 409.981, Florida Statutes require one MMA PSN and one LTC PSN award per region (assuming a PSN is responsive) and the Agency has stated that an award to a Comprehensive Plan PSN will meet the requirements of both statutes. However, can the Agency further clarify whether other types of PSNs would meet the statutory requirements? Specifically, would a PSN LTC Plus award meet the requirements of Section 409.981, Florida Statutes? Similarly, would an award to a Specialty Plan PSN meet the requirements of Section 409.974, Florida Statutes? A. See Attachment A Instructions and Special Conditions, Section D Response Evaluations, and Contract Award, Sub-Section 7 Number of Awards. Yes, a PSN LTC Plus award would meet the requirements of Section 409.981(2). A Specialty Plan PSN would not meet the requirements of Section 409.974(1). The only reasonable interpretation of this answer is that Specialty Plan PSNs do not satisfy the requirement to contract with a responsive PSN imposed by section 409.974. None of the prospective vendors, including Community, challenged this clarification. EVALUATION PROCESS THE EVALUATORS The Agency selected 11 people to evaluate the proposals. The Agency assigned each person a number used to identify who was assigned to which task and to track performance of evaluation tasks. The procurement officer sent the evaluators a brief memo of instructions. It provided dates; described logistics of evaluation; emphasized the importance of independent evaluation; and prohibited communicating about the ITN and the proposals with anyone other than the procurement office. The Agency also conducted an instructional session for evaluators. Evaluator 1, Marie Donnelly: During the procurement, Ms. Donnelly was the Agency’s Chief of the Bureau of Medicaid Quality. She held this position for five years before resigning. This bureau bore responsibility for ensuring that the current SMMC plans met their contract requirements for quality and quality improvement measures. Her role specifically included oversight of Specialty Plans. Evaluator 2, Erica Floyd Thomas: Ms. Thomas is the chief of the Bureau of Medicaid Policy. She has worked for the Agency since 2001. Her Medicaid experience includes developing policies for hospitals, community behavioral health, residential treatment, and contract oversight. Before serving as bureau chief, she served as an Agency administrator from 2014 through 2017. Ms. Thomas oversaw the policy research and development process for all Medicaid medical, behavioral, dental, facility, and clinic coverage policies to ensure they were consistent with the state Plan and federal Medicaid requirements. Evaluator 3, Rachel LaCroix, Ph.D.: Dr. LaCroix is an administrator in the Agency’s Performance Evaluation and Research Unit. She has worked for the Agency since 2003. All her positions have been in the Medicaid program. Dr. LaCroix has served in her current position since 2011. She works with the performance measures and surveys that the current SMMC providers report to the Agency. Dr. LaCroix is a nationally recognized expert on healthcare quality metrics like HEDIS. She is also an appointee on the National Association of Medicaid Directors’ task force for national performance measures. Evaluator 4, Damon Rich: Mr. Rich has worked for the Agency since April 2009. He is the chief of the Agency’s Bureau of Recipient and Provider Assistance. This bureau interacts directly with AHCA’s current SMMC care providers about any issues they have, and with Medicaid recipients, usually about their eligibility or plan enrollment. Before Mr. Rich was a bureau chief, he worked as a field office manager for the Agency. Mr. Rich’s experience as bureau chief and field office manager includes oversight of the current SMMC Specialty Plans. Evaluator 5. Eunice Medina: Ms. Medina is the chief of the Agency’s Bureau of Medicaid Plan Management, which includes a staff of over 60 individuals, who manage the current SMMC contracts. Her experience and duties essentially encompass all aspects of the current SMMC plans. Ms. Medina started working with the Agency in 2014. Evaluator 6, Devona “DD” Pickle: Ms. Pickle most recently joined the Agency in 2011. She also worked for the Agency from November 2008 through November 2010. Ms. Pickle’s Agency experience all relates in some way to the Medicaid program. Since March 2013, Ms. Pickle has served as an administrator over managed care policy and contract development in the Bureau of Medicaid Policy. Her job duties include working with the current SMMC contractors. Ms. Pickle is also a Florida licensed mental health counselor. Evaluator 7, Tracy Hurd-Alvarez: Ms. Hurd-Alvarez has worked for the Agency’s Medicaid program since 1997. Since 2014, she has been a field office manager, overseeing compliance monitoring for all the current SMMC contractors. Before assuming her current position, Ms. Hurd-Alvarez implemented the LTC SMMC program. Evaluator 8, Gay Munyon: Ms. Munyon is currently the Chief of the Bureau of Medicaid Fiscal Agent Operations. Ms. Munyon began working with the Agency in April 2013. Ms. Munyon’s bureau oversees fulfillment of the Agency’s contract with the current SMMC fiscal agent. Her unit’s responsibilities include systems maintenance and modifications and overseeing the fiscal agent, which answers phone calls, processes claims, and processes applications. Ms. Munyon has 25 years of experience working with the Medicaid program. Evaluator 9, Laura Noyes: Ms. Noyes started working for the Agency in April 2011. Her years of Agency experience all relate to the Medicaid program, including overseeing six current comprehensive managed care plans by identifying trends in contractual non-compliance. Evaluator 10, Brian Meyer: Mr. Meyer is a CPA, who has worked for the Agency in the Medicaid program since 2011. He is currently chief of the Bureau of Medicaid Data Analytics. Mr. Meyer’s primary responsibility is overseeing the capitation rates for the current SMMC contractors. His experience includes Medicaid plan financial statement analysis, surplus requirement calculation analysis and, in general, all types of financial analysis necessary to understand financial performance of the state’s Medicaid plans. Evaluator 11, Ann Kaperak: Since April 2015, Ms. Kaperak has served as an administrator in the Agency’s Bureau of Medicaid Program Integrity. Ms. Kaperak’s unit oversees the fraud and abuse efforts of the current SMMC plans. She also worked for the Medicaid program from November 2012 through May 2014. Ms. Kaperak worked as a regulatory compliance manager for Anthem/Amerigroup’s Florida Medicaid program between May 2014 and April 2015. Positive and Community challenge the Agency’s plan selections by questioning the qualifications of the evaluators. The first part of their argument is that the evaluators did not have sufficient knowledge about HIV/AIDS and its treatment. The evidence does not prove the theory. For instance, Positive’s argument relies upon criticizing the amount of clinical experience evaluators had managing patients with HIV/AIDS. That approach minimizes the fact that the managed care plan characteristics involve so much more than disease- specific considerations. For instance, many of the components require determining if the respondent provided required documents, verifying conflict of interest documents, management structure, quality control measures, and the like. General SRCs asked for things like dispute resolution models (SRC 16), claims processing information (SRC 17), and fraud and abuse compliance plans (SRC 31). MMA SRCs included criteria, like telemedicine (SRC 4), demonstrated progress obtaining executed provider agreements (SRC 6), and a credentialing process (SRC 12). Specialty SRCs included criteria like copies of contracts for managed care for the proposed specialty population (SRC 1), specific and detailed criteria defining the proposed specialty population (SRC 4), and the like. The evidence does not prove that disease-specific experience is necessary to evaluate responses to these and other SRCs. SRC 6 involving HEDIS data and SRC 14 involving CAHPS data are two good examples. They required respondents to input data into a spreadsheet. All the evaluators had to do was determine what those numbers showed. Evaluation did not require any understanding of disease or how the measures were created. All the evaluator had to know was the number in the spreadsheet. The second part of the evaluator qualification criticisms is that the evaluators did not give adequate weight to some responses. Positive and Community just disagree with the measures requested and the evaluation of them. They conclude from that disagreement that the evaluators’ qualifications were deficient. The argument is not persuasive. The last sentence of paragraph 69 of Positive’s proposed recommended order exemplifies the criticisms of Positive and Community of the evaluators’ qualifications. It states, “The fact that PHC [Positive] was ranked last among competing HIV plans shows that the SRC evaluators did not understand enough about managing individuals with HIV/AIDs to score its proposal competently.” The argument is circular and “ipse dixit”. It does not carry the day. The collective knowledge and experience of the evaluators, with a total of 128 years of Medicaid experience, made them capable of reasonably evaluating the managed care plan proposals, including the Specialty plan proposals. The record certainly does not prove otherwise. EVALUATION PROCESS The Agency assigned the evaluators to the SRCs that it determined they were qualified to evaluate and score. The Agency did not assign entire responses to an evaluator for review. Instead it elected a piecemeal review process assigning various evaluators to various sections, the SRCs of each response. Paragraph 30 of the Agency’s proposed recommended order describes this decision as follows: Although the ITN had contemplated ranking each vendor by evaluator, based on an example in the ITN, such ranking presumed a process where all evaluators scored all or nearly all of the responses to the ITN, which had occurred in the procurement five years ago. In this procurement, each evaluator reviewed only a subset of SRCs based on their knowledge, and experience; therefore, ranking by evaluator was not logical because each had a different maximum point score. The initial SRC scoring assignments were: General SRCs 1 through 4, LTC SRCs 1 and 2, and Specialty SRC 1: Marie Donnelly, Laura Noyes, and Brian Meyer. General SRCs 5 through 8, MMA SRCs 1 through 7, LTC SRCs 3 and 4, and Specialty SRCs 1 and 2: Marie Donnelly, Erica Floyd- Thomas, and Rachel LaCroix. General SRCs 9 through 14, MMA SRCs 8 through 11, LTC SRCs 5 through 7, and Specialty SRC 4: Damon Rich, Eunice Medina, and DD Pickle. General SRCs 15 through 17, MMA SRCs 12 and 13, and LTC SRCs 8 through 10: Damon Rich, Tracy Hurd-Alvarez, Gay Munyon. General SRCs 18 through 25, MMA SRCs 14 through 20, LTC SRCs 11 and 12, and Specialty SRC 5: Erica Floyd-Thomas, Eunice Medina, and DD Pickle. General SRCs 26 through 33 and LTC SRC 13: Gay Munyon, Ann Kaperak, and Brian Meyer. General SRCs 34 through 36 and MMA SRC 21: Marie Donnelly, Rachel LaCroix, and Tracy Hurd-Alvarez. The ranking process presented in the ITN and described in paragraphs 62-64, contemplated ranking each respondent by evaluator. The Agency carried this process over from an earlier procurement. In this procurement, despite what the ITN said, the Agency assigned responsibilities so that each evaluator reviewed only a subset of SRCs. Therefore, the ranking of responses by evaluator presented in the ITN could not work. It was not even possible because no one evaluator reviewed a complete response and because each SRC had a different maximum point score. Instead, the Agency, contrary to the terms of the ITN, ranked proposals by averaging the “total point scores” assigned by all of the evaluators. The Agency considered issuing an addendum advising the parties of the change. The addendum would have informed the respondents and provided them an opportunity to challenge the change. The Agency elected not to issue an addendum. EVALUATION AND SCORING The evaluators began scoring on November 6, 2017, with a completion deadline of December 29, 2017. The 11 evaluators had to score approximately 230 separate responses to the ITNs. The evaluators had to score 67,175 separate items to complete the scoring for all responses for all regions for all types of plans. No one at the Agency evaluated how much time it should take to score a particular item. None of the parties to this proceeding offered persuasive evidence to support a finding that scoring any particular item would or should take a specific length of time or that scoring all of the responses would or should take a specific length of time. Evaluators scored the responses in conference room F at the Agency’s headquarters. This secure room was the exclusive location for evaluation and scoring. Each evaluator had a dedicated workspace equipped with all tools and resources necessary for the task. The workspaces included a computer terminal for each evaluator. The system allowed evaluators to review digital copies of the ITN and proposals and to enter evaluation points in spreadsheets created for the purpose of recording scores. Evaluators also had access to hard copies of the proposals and the ITN. The Agency required evaluators to sign in and to sign out. The sign-in and sign-out sheets record the significant amount of time the evaluators spent evaluating proposals. Evaluators were not permitted to communicate with each other about the responses. To minimize distractions, the Agency prohibited cell phones, tablets and other connected devices in the room. The Agency also authorized and encouraged the evaluators to delegate their usual responsibilities. Agency proctors observed the room and evaluators throughout the scoring process. They were available to answer general and procedural questions and to ensure that the evaluators signed in and signed out. A log sheet documented how much time each evaluator spent in the scoring conference room. Some evaluators took extensive notes. For example, Ms. Median took over 200 pages of notes. Similarly, Ms. Munyon took nearly 400 pages of typewritten notes. The evaluators worked hard. None, other than Dr. LaCroix, testified that they did not have enough time to do their job. The computer system also automatically tracked the evaluators’ progress. Tracking reports showed the number of items assigned to each evaluator and the number of scoring items completed. The first status report was generated on December 8, 2017, approximately halfway through the scheduled scoring. At that time, only 28 percent of the scoring items were complete. Ms. Barrett usually ran the status reports in the morning. She made them available to the evaluators to review. The pace of evaluation caused concern about timely completion and prompted discussions of ways to accelerate scoring. Because it was clear that the majority of the evaluators would not complete scoring their SRCs by December 29, 2017, the Agency extended the scoring deadline to January 12, 2018. It also extended the hours for conference room use. Most respondents filed proposals for more than one type of plan and more than one region. This fact combined with the provision in the instructions saying that all statewide SRC responses must be identical for each region and that scores would transfer to each applicable region’s score sheets, enabled evaluators to score many SRCs just once. The system would then auto-populate the scores to the same SRC for all proposals by that respondent. This time saving measure permitted scoring on many of the items to be almost instantaneous after review of the first response to an SRC. The fact that so many respondents submitted proposals for so many regions and types of plans provided the Agency another opportunity for time-saving. The Agency loaded Adobe Pro on the evaluators’ computers as a timesaving measure. This program allowed the evaluators to compare a bidder’s Comprehensive Plan Proposal to the same company’s regional and Specialty Plan proposals. If the Adobe Pro comparison feature showed that the proposal response was the same for each plan, the Agency permitted evaluators to score the response once and assign the same score for each item where the respondent provided the same proposal. This speeded scoring. It, however, meant that for SRCs where evaluators did this, that they were not reviewing the SRC response in the specific context of the specialty plan population, each of which had specific and limited characteristics that made them different from the broader General and MMA plan populations. This is significant because so many SRCs required narrative responses where context would matter. There is no Specialty SRCs A-4 instruction requirement for specialty plans analogous to the requirement that responses for statewide SRCs must be identical for each region. In other words, the instructions do not say all SRCs marked as statewide must be identical for each specialty plan proposal and that the Agency will evaluate each Statewide SRC once and transfer the score to each applicable Specialty Plan score. In fact, according to the procurement officer, the Agency expected that evaluators would separately evaluate and score the statewide SRCs for Comprehensive Plans and for Specialty Plans, even if the same bidder submitted them. Despite the Agency’s expectation and the absence of an authorizing provision in the ITN, many evaluators, relying on the Adobe Pro tool, copied the SRC scores they gave to a respondent’s comprehensive plan proposal to its specialty plan proposal if the respondent submitted the same response to an SRC for a Comprehensive Plan and a Specialty Plan. For instance, Ms. Thomas (Evaluator 2) and Ms. Munyon (Evaluator 8) did this to save time. Ms. Donnelly (Evaluator 1) did this even when the comprehensive and specialty responses were not identical. This does not amount to the independent evaluation of the responses pledged by the ITN. On separate days, Evaluator 1 scored 1,315 items, 954 items, 779 items and 727 items. On separate days, Evaluator 2 scored 613 items, 606 items, 720 items, 554 items and 738 items. Evaluator 4 scored 874 items on one day. Evaluator 5 scored 813 items in one day. Evaluator 6 scored 1,001 items in one day. Evaluator 8 scored 635 items in one day. The record does not identify the items scored. It also does not permit determining how many of the item scores resulted from auto-population or assignment of scores based upon previous scoring of an identical response. It bears repeating, however, that the record does not support any finding on how long scoring the response to one SRC or an entire response could reasonably be expected to take. Even with the extended scoring period and time-saving measures, the Agency concluded that Evaluator 3 would not be able to finish all of the SRCs assigned to her. Rather than extend the deadline for scoring a second time, the Agency decided to reassign the nine of Evaluator 3’s SRCs that she had not begun scoring to two other evaluators. The Agency did not include scores of other SRCs for which Evaluator 3 had not completed scoring. The Agency only counted Evaluator 3’s scores for an SRC if she scored the SRC for everyone. The result was that only two people scored nine of the Specialty Plan SRCs. The Agency did not reassign all of Evaluator 3’s SRCs’. It only reassigned the SRCs to evaluators who were qualified to evaluate the items, who were not already assigned those items to score, and who had already finished or substantially completed their own evaluations. The decision to reassign the SRCs was not based on any scoring that had already been completed. The Agency did not allow changes to data submitted by any of the vendors. It allowed vendors to exchange corrupted electronic files for ones which could be opened and allowed vendors to exchange electronic files to match up with the paper copies that had been submitted. The Agency allowed Community to correct its submission where it lacked a signature on its transmittal letter and allowed Community to exchange an electronic document that would not open. It did not allow Community to change its reported HEDIS scores, which were submitted in the decimal form required by the instructions. Community erred in the numbers that it reported. There is no evidence showing that other vendors received a competitive or unfair advantage over Community in the Agency’s review of the SMI Specialty Plan submission for Region 10. There was no evidence that the Agency allowed any other vendors to change any substantive information in their submittals for that proposed specialty in that region. HEIDIS ISSUES Positive asserts that Simply’s proposal is non- responsive because Simply submitted HEDIS data from the general Medicaid population in response to SRC 6 and MMA SRC 14. Positive contends that Simply obtained a competitive advantage by supplying non-HIV/AIDS HEDIS data in response to SRC 6 and MMA SRC 14 because HIV/AIDS patients are generally a sicker group and require more care and because some HEDIS measures cannot be reported for an HIV/AIDS population. HEDIS stands for Healthcare Effectiveness and Data Information Set and is a set of standardized performance measures widely used in the healthcare industry. The instructions for both SRC 6 and MMA SRC 14 provide, in relevant part: The respondent shall describe its experience in achieving quality standards with populations similar to the target population described in this solicitation. The respondent shall include in table format, the target population (TANF, ABD, dual eligible), the respondent’s results for the HEDIS measures specified below for each of the last two (2) years (CY 2015/HEDIS 2016 and CY 2016/HEDIS 2017) for the respondent’s three (3) largest Medicaid Contracts (measured by number of enrollees). If the respondent does not have HEDIS results for at least three (3) Medicaid Contracts, the respondent shall provide commercial HEDIS measures for the respondent’s largest Contracts. If the Respondent has Florida Medicaid HEDIS results, it shall include the Florida Medicaid experience as one (1) of three (3) states for the last two (2) years. (JE 1 at 75 (SRC 6); JE 1 at 158 (MMA SRC 14)). SRC 6 and MMA SRC 14 instruct respondents to provide HEDIS measures for “the target population (TANF, ABD, dual eligible).” Id.. TANF, ABD, and dual eligible are eligibility classifications for the Medicaid population. The Agency sought information regarding the target Medicaid-eligible population, even from respondents proposing a Specialty Plan, because Specialty Plans are required to serve all of the healthcare needs of their recipients, not just the needs related to the criteria making those recipients eligible for the Specialty Plan. Following the instructions in SRC 6 and MMA SRC 14, Simply provided HEDIS data from the Medicaid-eligible population for its three largest Medicaid contracts as measured by the total number of enrollees. For the requested Florida HEDIS data, Simply utilized legacy HEDIS data from Amerigroup Florida, Inc., a Comprehensive Plan. Amerigroup and Simply had merged in October of 2017. Therefore, at the time of submission of Simply’s proposal, the HEDIS data from Amerigroup Florida was the data from Simply’s largest Medicaid contract in Florida for the period requested by the SRCs. Positive asserts that the Agency impermissibly altered scoring criteria after the proposals were submitted when the Agency corrected technical issues within a HEDIS Measurement Tool spreadsheet. SRC 6 and MMA SRC 14 required the submission of numeric data for the requested HEDIS performance measures. To simplify submission of the numeric data for the requested HEDIS performance measures, the Agency required respondents to utilize a HEDIS Measurement Tool spreadsheet. The evaluation criteria for SRC 6 and MMA SRC 14 provided that respondents will be awarded points if the reported HEDIS measures exceed the national or regional mean for such performance measures. Some respondents, including Positive, entered “N/A,” “small denominator,” or other text inputs into the HEDIS Measurement Tool. During the evaluation and scoring process, the Agency discovered that if a respondent input any text into the HEDIS Measurement Tool, the tool would assign random amounts of points, even though respondents had not input measureable, numeric data. The Agency reasonably resolved the problem by removing any text and inserting a zero in place of the text. The correction of the error in the HEDIS Measurement Tool prevented random points from being awarded to respondents and did not alter scores in any way contrary to the ITN. It was reasonable and fair to all respondents.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order rejecting all r esponses to the ITNs to provide a Medicaid Managed Care plan for patients with HIV/AIDS in Regions 10 and 11. Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order inviting Community to negotiate to provide Medicaid Managed Care plan in Region 10 for patients with serious mental illness. Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order inviting Community to negotiate to provide a Medicaid Managed Care plan in Region 10 for patients with serious mental illness. Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order inviting Community to negotiate to provide a Medicaid Managed Care plan in Region 10 for c hild w elfare specialty services. Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order awarding Wellcare of Florida, Inc., d/b/a Staywell Health Plan of Florida, a contract for a specialty Medicaid Managed Care plan for patients with Serious Mental Illness in Region 10. Based on the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that the Agency for Health Care Administration enter a final order dismissing the Petition in Case No. 18-3513. DONE AND ENTERED this day of , , in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II 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 day of , .
