The Issue Whether Petitioner's claim for medical expenses from August 6, 1982 through February 27, 1983 should be approved, pursuant to the State of Florida Employees Group Health Self Insurance Plan. Petitioner appeared at the hearing accompanied by legal counsel. The Hearing Officer thereupon explained his rights and procedures to be followed in the administrative hearing. Petitioner acknowledged that he understood his rights and elected to represent himself. Petitioner testified in his own behalf at the hearing and the parties stipulated to the introduction of Respondent's Exhibits 1 and 2. A late filed exhibit, Respondent's Exhibit 3, was also admitted in evidence. Respondent presented the testimony of one witness, William R. Seaton, Benefit Analyst for the Respondent's Bureau of Insurance.
Findings Of Fact Petitioner Thomas J. Appleyard, III, is a former state employee who retired with disability in 1976 as a result of cardiac disease. At the time Petitioner retired, he maintained coverage in the state Employees Group Health Self Insurance Plan under which the Blue Cross/Blue Shield of Florida, Inc. serves as the administrator of the plan for the state. Petitioner also receives disability benefits under the Medicare program for medical expenses. (Testimony of Petitioner) The State Group Health Self Insurance Plan provides in Section X, COORDINATION OF BENEFITS, that if an insured has coverage under Medicare, the benefits payable under the state plan will be coordinated with similar benefits paid under the other coverage to the extent that the combination of benefits will not exceed 100 percent of the costs of services and supplies to the insured. Paragraph D of Section X provides that the state plan will be the secondary coverage in such situations and will pay benefits only to the extent that an insured's existing insurance coverage does not entitle him to receive benefits equal to 100 percent of the allowable covered expenses. This provision applies when the claim is on any insured person covered by Medicare. (Testimony of Seaton, Respondent's Exhibit 3) Petitioner was hospitalized at the Tallahassee Memorial Regional Medical Center on three occasions in 1982-33. His Medicare coverage paid all but $261.75 of the hospital expenses. In February 1983, Petitioner also incurred medical expenses to his cardiologist, Dr. J. Galt Allee, in the amount of $248.33. Petitioner was originally denied his remaining hospital expenses by the administrator of the state plan under the erroneous belief that he was receiving regular Medicare benefits for persons over the age of 65. In addition, Dr. Allee's bill was only partially paid by Medicare, subject to the receipt of additional information from the physician. Payment under the state plan was limited to an amount sufficient to reimburse petitioner 100 percent of the amount originally allowed by Medicare. (Testimony of Seaton, petitioner, Respondent's Exhibit 1, 3) Respondent does not receive information on claims filed under the state plan until contacted by an employee. In February 1984, Petitioner requested assistance from William R. Seaton, Benefit Analyst, of Respondent's Bureau of Insurance, regarding his difficulties in receiving proper claims payments. Seaton investigated the matter with the Insurance administrator for the state, Blue Cross/Blue Shield of Florida, and discovered that the latter had not coordinated the hospital expense balance with Medicare. They thereafter did so and as of the date of hearing, there was no longer a balance due to Tallahassee Memorial Regional Medical Center. Seaton also gave written instructions to Blue Cross to review all of Petitioner's claims and make sure that they were paid properly, and to install controls on his and his wife's records. (Testimony of Petitioner, Seaton, Respondent's Exhibit 1-2) The full claim of Dr. Allee had not been paid by Medicare since it had been awaiting requested additional in formation from the physician. Such information was provided after a personal visit had been made to Dr. Allee by Seaton and Medicare then recognized additional eligible expenses. However, a balance of $36.00 is still owed to the physician due to the fact that Blue Cross/Blue Shield had not received the necessary payment information from Medicare as of the day before the hearing. (Testimony of Seaton, Respondent's Exhibit 1) Section XVII of the state's Group Health Self Insurance Plan benefit document provides that an employee who wishes to contest decisions of the state administrator considering the employee's coverage under the plan may submit a petition for a hearing for consideration by the Secretary of Administration. (Respondent's Exhibit 3)
The Issue The issue is whether petitioners' request to terminate, without penalty, their participation in the state group health insurance plan should be granted.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Petitioners, Terri K. Cassano (Cassano) and Edward M. McDonald (McDonald), are employees of the Office of State Attorney, Tenth Judicial Circuit, in Bartow, Florida. As such, they are eligible to participate in the State Group Health Insurance Program (program) administered by respondent, Department of Administration, Division of State Employees' Insurance (Division). At issue in this case is approximately $1,500 paid by petitioners and their employer for health insurance coverage under the program during the period October through December 1989. Effective July 1, 1989 the State of Florida implemented the first phase of a two-phase Flexible Benefits Plan (plan) which allowed, among other things, for employees who participate in the program to make their required monthly insurance premium contribution through a salary reduction agreement which has the effect of reducing the employee's taxable income by the amount of such contribution. Although not made clear in the record, it may be inferred that the plan is embodied in Chapters 22FB-1, 2 and 3, Florida Administrative Code (1987), which rules became effective on August 3, 1989. In federal bureaucratic parlance, the plan is known as a ``cafeteria'' plan /1 and was implemented after approval was obtained from the Internal Revenue Service (IRS). All state employees were automatically enrolled in the plan unless they signed a waiver form. Cassano and McDonald chose to participate in the plan, and they acknowledge that they received a Division brochure describing the plan prior to their enrollment. Under the rules of the plan, a participant was required to remain in the plan for the entire plan year, which in this case ended on November 30, 1989, unless a so-called "qualifying status change" occurred. Rule 22BF-1.008(13) cites a number of events as constituting a "qualifying status change". However, the event defined in subparagraph (13)(b) as a "change in a participant's health insurance coverage resulting in cessation of coverage" is the event upon which petitioners rely. The manner in which that rule should be interpreted is the source of controversy in this proceeding. In July 1989 petitioners were utilizing as their health insurer Health Alliance Plan (HAP), a health maintenance organization (HMO) serving Polk County. HAP was designated as a qualifying HMO under the program. In late July petitioners learned that HAP would cease doing business in Polk County effective September 30, 1989. Because of this, it was necessary that they consider other insurance alternatives to replace their existing coverage. After considering enrollment in Blue Cross Blue Shield (BCBS), which was the only other health alternative offered by the Division,/2 Cassano decided to enroll as a dependent in her husband's health insurance program because of the lower monthly premiums and she would not have to meet a new deductible as she would with BCBS. As for McDonald, who is also a military retiree, he considered BCBS but opted instead for Medicare because he was being treated for an existing ailment and his physicians were not listed as primary providers with BCBS. Consequently, it would cost him approximately $200 per visit with those doctors if he elected to use BCBS. Under these circumstances, petitioners' health coverage under the program ended since their HMO was no longer in business and their only other option, BCBS, would result in petitioners paying significantly higher costs. Cassano was able to immediately obtain coverage with her husband's health plan effective on July 28, 1989 while McDonald's coverage with Medicare became effective on October 1, 1989, the day after his HAP coverage ended. When the Division learned that HAP was ceasing doing business in Polk County, it mailed to petitioners a "health care provider selection form" which offered them a special enrollment period from August 15 through 31, 1989. The form offered the choice of enrolling in HOPC, BCBS or to cancel their health insurance coverage. However, respondent contends that even though the form offered petitioners the option of cancelling their insurance, it did not apply and that petitioners' only choice was to transfer coverage to one of the two remaining state insurers. The form also noted that if petitioners had any questions they should contact their personnel office or the Division by telephone. Although their personnel office later informed them that respondent might not agree they could do so, Cassano and McDonald executed the form on August 23 and 28, 1989, respectively, and elected to cancel their coverage. They also executed a "qualifying status change form" so that they could cease participation in the plan even though the plan year did not end until November 30, 1989. In so doing, they noted on the form that the qualifying status change event was "cessation of coverage by Health Alliance Plan" and relied in part upon a Division document sent to them which outlined the plan and listed a qualifying status change event as being a "change in participant's health coverage: resulting in cessation of coverage". That same document noted that in order to prove that such an event had occurred, the employee had to furnish a "letter from carrier stating that coverage has ceased due to change in insurance plan". In addition, explanatory literature concerning the plan previously disseminated: by the Division reflected that "a cafeteria plan may also allow for revocation of health plan elections of all affected participants in the event coverage is significantly curtailed or completely terminated in connection with a health plan, if the coverage is provided by an independent third party." Thus, petitioners reasonably assumed that a qualifying status change had occurred by virtue of the cessation of coverage by HAP. After informal efforts to resolve the matter were unsuccessful, on September 28, 1989 Cassano and McDonald formally requested by letter the right to discontinue their participation, without penalty, in the state program. Their requests were essentially denied by letters dated October 5, 1989 from the Division director. In the proposed agency action, the Division stated that it would be happy to comply with their requests but "since the premiums you pay for such coverage have been pretaxed for the five month period ending December 1, 1989, we will continue to deduct these premiums through October 1989 payroll pursuant to rule 22FB-2.005 F.A.C." /3 As a consequence, petitioners were involuntarily required to pay for coverage in BCBS during the months of October through December 1989 even though they were enrolled in other health insurance plans, and their employer (the office of state attorney) was forced to make its required contribution. Through testimony of the state benefits administrator, William R. Seaton, it was established that the Division interprets the term "cessation of (insurance) coverage" as the cessation of all health insurance coverage by the state, including BCBS, an event unlikely to ever occur. Indeed, the administrator acknowledged that such an event would not occur unless the state no longer functioned as a viable entity. Because the state offered petitioners the option of enrolling in BCBS, Seaton contended there was no cessation of insurance coverage, even if petitioners' former HMO in Polk County went out of business. Seaton also opined that petitioners' request was prohibited by IRS regulations and, if approved, would subject the Division to a possible fine if audited by IRS. However, he could not identify a regulation that prohibited approval of their request. Further, there is no evidence that the Division has received specific advice from the IRS on the subject or made inquiry as to whether or not petitioners' request is permissible under federal regulations. Petitioners construe the termination of coverage by their HMO to be a qualifying status change since they no longer could be covered by that HMO. Relying on the plain language in the rule and Division explanatory literature, they did not telephone the Division to ascertain whether they could discontinue state coverage since they had no reason to do so. Through a proffer of agency counsel at hearing, it was pointed out that the federal regulation that allegedly prohibits petitioners from obtaining relief is found on page 14,847-6 of the Standard Federal Tax Reports published by Commerce Clearing House and received in evidence as a part of respondent's composite exhibit 1. 4/ It reads as follows: (2) Coverage changes. If the coverage under a health plan provided by an independent, third-party provider is significantly curtailed or ceases during a period of coverage, a cafeteria plan may permit all affected participants to revoke their election of the health plan and, in lieu thereof, to receive on a prospective basis coverage under another health plan with similar coverage.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the requests of Terri K. Cassano and Edward M. McDonald to discontinue participation in the state health program be granted and that appropriate refunds be given to petitioners and their employer. DONE and ORDERED this 9 day of February, 1990 in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9 day of February, 1990.
The Issue The issue is whether respondent's license as a health insurance agent should be disciplined for the reasons stated in the administrative complaint.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all times relevant hereto, respondent, Michael Halloran, was licensed and eligible for licensure as a health insurance agent by petitioner, Department of Insurance and Treasurer (Department). When the events herein occurred, respondent was licensed to solicit health insurance on behalf of National States Life Insurance Company (NSLIC) and Transport Life Insurance Company (TLIC). He was also under contract with Diversified Health Services of St. Petersburg, Florida until that firm terminated his agency appointment on May 5, 1989. This proceeding involves the sale by respondent of various health insurance policies to four customers in January and February 1989. In 1987, Raymond H. Koester, a Largo resident, purchased from respondent a supplemental Medicare policy for both him and his wife. Their first policy was issued by American Integrity. A year later, respondent persuaded the Koesters to replace that policy with one issued by Garden State Insurance Company on the ground the latter policy represented an "improvement" over their existing policy. On January 10, 1989 respondent met with the Koesters for the purpose of selling them new health insurance coverage. During their meeting, respondent advised the Koesters that a new NSLIC policy would provide unlimited custodial and home health care, a type of coverage desired by the Koesters. Relying upon respondent's representation, the Koesters agreed to purchase two new policies. They filled out an application and paid Halloran $2,628 which was the premium for the first year. When the application was completed, respondent answered "no" to the question of whether the new policies were intended to replace existing coverage. This was a false representation. In June 1989 the Koesters learned that they had a problem with their new policies. This advice was conveyed to them by petitioner's investigator who advised them that the policies sold by Halloran loran did not provide any custodial or home health care benefits. Had the Koesters known this, they would not have purchased the insurance. On January 18, 1989 respondent visited Grace Miller, an elderly resident of Venice, Florida, for the purpose of selling her a health insurance policy. At that time Miller had an existing policy in force since 1983 which provided supplemental Medicare coverage. Respondent advised Miller that her existing coverage was inadequate and that more coverage was needed. More specifically, Halloran represented that a new NSLIC policy would supplement her basic Medicare coverage and increase her overall health insurance coverage. Based on that representation, Miller agreed to purchase a replacement policy issued by NSLIC. As it turned out, the policy sold to Miller was of little or no value to a Medicare recipient, such as Miller, and simply filled in the gaps on a major medical policy. Had Miller known this to begin with, she would not have purchased the policy. Respondent also persuaded Miller to purchase a long-term care policy from TLIC. She allowed respondent to fill out the application using information from her old policy. Without telling Miller, respondent misrepresented on the application her date of birth as December 2, 1921 when in fact she was born on December 2, 1911, or ten years earlier. By doing this, Halloran was able to reduce Miller's premium from $1,159.92 to $441.72. Had Miller known that she was responsible for paying a much higher premium, she would not have purchased the policy. On February 25, 1989 respondent accepted another check from Miller in the amount of $773.00 for an unknown reason. At about the same time, respondent submitted to NSLIC an application for a medical-surgical expense policy dated the same date purportedly executed by Miller In fact, Miller had not executed the policy and her signature was forged. NSLIC declined to issue a new policy to Miller since she already had a policy of that type in effect. On January 20, 1989 respondent visited Gertrude Simms, an elderly resident of Fort Myers. Simms desired to purchase a hospital expense insurance policy with a provision for dental insurance coverage. Simms desired such coverage because she had a medical condition that required her to have her teeth cleaned frequently to avoid an infection. Respondent was aware of this condition. Nonetheless, Halloran prepared an application with NSLIC for a limited medical-surgical expense insurance policy which did not provide any dental coverage. Respondent accepted a $1,100 check from Simms which he represented to her was the first year's premium. In fact, the first year's premium was only $506. Although respondent was supposed to return to Simms' home to explain the policy provisions, he never returned. At about this same time, TLIC received an application on behalf of Simms for a long-term care insurance policy bearing the signature of respondent as agent. However, Simms had no knowledge of the application and did not wish to purchase such a policy. The information contained in the TLIC application misrepresented Simms' age so that the premium was lower than it should have been. Although TLIC issued a policy and sent it to respondent, Halloran never delivered it to Simms. On February 1, 1989 respondent visited Velma Sonderman, who resided in Venice, Florida, for the purpose of selling her a health insurance policy. She had become acquainted with respondent through Grace Miller, who is referred to in finding of fact 4. Sonderman was then covered by a supplemental medicare insurance policy issued by United American Medicare. According to Sonderman, respondent gave a "snow job" and represented he could sell her better coverage through NSLIC. Sonderman agreed to purchase a new policy for supplemental medicare coverage to replace her existing policy and signed an application filled in by respondent. However, the application submitted by respondent was for a NSLIC limited benefit health insurance policy rather than the medicare supplement insurance policy Sonderman believed she was purchasing. Respondent also convinced Sonderman to purchase a long-term nursing home care policy issued by TLIC. When filling out the application on her behalf, but without telling Sonderman, respondent misrepresented Sonderman's birth date as July 11, 1915 instead of the correct date of July 11, 1911. By doing this, Sonderman's premium was reduced from $999.36 to $599.04 per year.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent's license as a health insurance agent be REVOKED. DONE and ENTERED this 4 day of April, 1990, in Tallahassee, Florida. DONALD ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4 day of April, 1990. APPENDIX Petitioner: 1-3. Substantially used in finding of fact 1. 4-17. Substantially used in findings of fact 4, 5 and 6. 18-29. Substantially used in findings of fact 9 and 10. 30-33. Substantially used in findings of fact 2 and 3. 34-45. Substantially used in findings of fact 7 and 8. 46. Substantially adopted in finding of fact l. Copies furnished to: Honorable Tom Gallagher Insurance Commissioner Plaza Level, The Capitol Tallahassee, FL 32399-0300 James A. Bossart, Jr., Esquire 412 Larson Building Tallahassee, FL 32399-0300 Mr. Michael Halloran 2519 McMullen Booth Road Clearwater, FL 34621 Donald A. Dowdell, Esquire Department of Insurance Plaza Level, The Capitol Tallahassee, FL 32399-0300
The Issue Whether the Dynamic Orthotic Cranioplasty band prescribed to treat Petitioner Anna Leigh Miller's deformational plagiocephaly in 2004 was a covered benefit under the 2004 State Employees' PPO Plan.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement and clarify the factual stipulations set forth in the parties' August 23, 2005, Pre-Hearing Stipulation3: At all times material to the instant case, Petitioner Leigh Lassiter Miller has been employed by the State Attorney's Office in Palm Beach County. As a benefit of her employment, she has received group health insurance under the State Employees' PPO Plan (Plan). Respondent administers the Plan. It does so with the assistance of Blue Cross and Blue Shield of Florida, Inc. (BCBSF). BCBSF was hired by Respondent to provide medical claim processing services under the Plan. The terms and conditions of the Plan that were in effect during the time period at issue in the instant case are set forth in the 2004 Plan Booklet and Benefits Document (Plan Document). According to the Plan Document's "Introduction," the "PPO plan is designed to cover most major medical expenses for a covered illness or injury, including hospital and physician services." The Plan Document's "Summary of Plan Benefits, Covered Services" advises that the Plan "pays a percentage of the cost of covered care and medical supplies as long as the care or supplies are ordered by a covered provider and are considered medically necessary as a result of a covered accident, illness, condition or mental or nervous disorder." For covered "durable medical equipment" obtained from a "non-network" provider, the percentage paid by the Plan is 60 percent. The "Limitations and Exclusions" portion of the Plan Document contains a listing of "Services Not Covered By The Plan." This listing reads, in pertinent part, as follows: The following services and supplies are excluded from coverage under this health insurance plan unless a specific exception is noted. Exceptions may be subject to certain coverage limitations. Cosmetic surgery or treatment, unless it is: a result of a covered accident and the surgery or treatment is performed while the person is covered by this health insurance plan for correction of a congenital anomaly for an eligible dependent and performed while the dependent is covered by this health insurance plan a medically necessary procedure to correct an abnormal bodily function for reconstruction to an area of the body that has been altered by the treatment of a disease * * * 4. Any services or supplies which are not medically necessary, as determined by BCBSF clinical staff and DSGI. * * * 17. Any services provided for preventative care - except those services provided as part of the well-child health supervision services or those services obtained through the $100 Health Screening benefit (see page 22). * * * 45. Services and procedures considered by BCBSF to be experimental or investigational, or services and procedures not in accordance with generally accepted professional medical standards, including complications resulting from these non-covered services. The Plan Document contains the following description of the process involved in "Appealing A Denied Claim": If your benefit claim is totally or partially denied, BCBSF or Caremark, Inc. will send you a written notice on an Explanation of Benefits (EOB) statement stating the specific reason(s) for the denial within 30 days of receiving your claim. The notice will include a list of any additional information needed to appeal the denial to BCBSF or Caremark, Inc. Appealing To The Third Party Administrator- A Level I Appeal Within 90 days of the date of the EOB denial notice you or your authorized representative can appeal a claim that is denied. Your appeal must be in writing and should include any information, questions or comments you think are appropriate. Mail your written appeal to the third party administrator- BCBSF for medical claims or Caremark, Inc. for prescription drug claims - at the address shown on the inside cover of this booklet. The third party administrator will review your claim and provide you with a written notice of the review decision. On the notice, you will also receive information about appealing the decision to DSGI. Appealing To DSGI - A Level II Appeal If you are not satisfied with the first appeal decision given by the third party administrator, you may make a second appeal through DSGI. After you have asked the third party administrator to review your claim and you have received their written notification, you may submit a second appeal to DSGI. Your Level II Appeal must be in writing and must be received by DSGI not later than 60 days after the date of the written notice of the third party administrator decision regarding your Level I Appeal and must include: a copy of the EOB a copy of your letter requesting the third party administrator to review the claim a copy of the third party administrator's written notice of their review decision a letter to DSGI appealing the decision, and any other information or documentation you think is appropriate. Mail your written DSGI at the address shown on page 1. Send your appeal to the attention of the "Appeals Coordinator." Requesting An Administrative Hearing If you want to contest the second appeal decision, you must submit a petition for an administrative proceeding that complies with section 28-106.301, Florida Administrative Code. DSGI must receive your petition within 21 days after you received the written decision on your second appeal. "Definitions Of Selected Terms Used By The Plan" are found on pages 49 through 55 of the Plan Document. These definitions include the following: Accident [means] an accidental bodily injury that is not related to any illness. * * * Condition [means] any disease, illness, injury, accident, bodily dysfunction, pregnancy, drug addiction, alcoholism or mental or nervous disorder. * * * Covered services and supplies [mean] healthcare services and supplies, including pharmaceuticals and chemical compounds, for which reimbursement is covered under this health insurance plan. The Division of State Group Health Insurance has final authority to determine if a service or supply is covered by the plan. * * * Experimental or investigational services [mean] any evaluation, treatment, therapy or device that meets any one of the following criteria: cannot be lawfully marketed without approval of the US Food and Drug Administration or the Florida Department of Health if approval for marketing has not been given at the time the service is provided to the covered person [hereinafter referred to "Experimental/Investigational Criterion No. 1"]; or is the subject of ongoing Phase I or II clinical investigation, or the experimental or research arm of a Phase III clinical investigation - or is under study to determine the maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition [hereinafter referred to as "Experimental/Investigational Criterion No. 2"]; or is generally regarded by experts as requiring more study to determine maximum dosage, toxicity, safety or efficacy, or to determine the efficacy compared to standard treatment for the condition [hereinafter referred to as "Experimental/Investigational Criterion No. 3]; or has not been proven safe and effective for treatment of the condition based on the most recently published medical literature of the U.S., Canada or Great Britain using generally accepted scientific, medical or public health methodologies or statistical practices [hereinafter referred to as "Experimental/Investigational Criterion No. 4"]; or is not accepted in consensus by practicing doctors as safe and effective for the condition [hereinafter referred to as "Experimental/Investigational Criterion No. 5"]; or is not regularly used by practicing doctors to treat patients with the same or a similar condition [hereinafter referred to as "Experimental/Investigational Criterion No. 6]. BCBSF and DSGI determine whether a service or supply is experimental or investigational. * * * Illness [means] physical sickness or disease, pregnancy, bodily injury or congenital anomaly. For this plan, illness includes any medically necessary services related to non-emergency surgical procedures performed by a doctor for sterilization. Medically necessary [means] services required to identify or treat the illness, injury, condition, or mental and nervous disorder a doctor has diagnosed or reasonably suspects. The service must be: consistent with the symptoms, diagnosis and treatment of the patient's condition in accordance with standards of good medical practice required for reasons other than the convenience of the patient or the doctor approved by the appropriate medical body or board for the illness or injury in question at the most appropriate level of medical supply, service, or care that can be safely provided. The fact that a service is prescribed by a doctor does not necessarily mean that the service is medically necessary. Medical supplies or equipment [mean] supplies or equipment that are: ordered by a physician of no further use when medical need ends usable only by the particular patient not primarily for the patient's comfort or hygiene not for environmental control not for exercise, and specifically manufactured for medical use. * * * Among the terms not defined in this or any other portion of the Plan Document are "cosmetic," "disease," and "consensus." Petitioner Anna Leigh Miller (Anna) was born two weeks before she was due. Her delivery was normal. Her parents began to notice, immediately following her birth, that her "head tilt[ed]" to the left. Initially, they were not concerned, thinking that this "tilt" was just "temporary." At all times material to the instant case, Anna's primary pediatrician was Ronald Romear, M.D., of Infants and Children, P.A., in West Palm, Florida. When Dr. Romear was unavailable, Anna was seen by other pediatricians in Dr. Romear's practice, including James Beattie, M.D. Anna saw Dr. Romear for her two-week check-up on January 21, 2004. Dr. Romear's physical examination of Anna on this date revealed that her general appearance and head were "normal." In March of 2004, or perhaps somewhat earlier, Anna's parents first noticed that Anna had developed a "flat head." (Anna's "head shape [was] normal at birth.") Anna made a "sick visit" to Infants and Children, P.A., on April 28, 2004, and was seen by Dr. Beattie. She returned, accompanied by her mother, on May 12, 2004, for a "well child visit," and was again seen by Dr. Beattie. During this May 12, 2004, visit, Mrs. Miller shared with Dr. Beattie that, from the time of Anna's birth, Anna was "inclined to do things facing to the left." After examining Anna, Dr. Beattie determined that Anna had torticollis. Torticollis literally means "twisted neck" in Latin. It is a condition characterized by a tightening or foreshortening of the sternocleidomastoid muscle on one side of the neck, resulting in an inability to straighten or turn the head. Anna's torticollis was congenital (that is, present at birth). Dr. Beattie prescribed physical therapy for Anna. Physical therapy is the standard treatment for torticollis. Anna's parents took Anna to the physical therapist twice a week. BCBSF deemed these services to be "covered" under the Plan and authorized payment accordingly. In addition to taking Anna to the physical therapist, Anna's parents, in accordance with instructions they had received, did neck "stretching" exercises with Anna at home five to six times a day. The physical therapist did her "initial evaluation" of Anna on May 20, 2004. During this "initial evaluation," Anna's parents expressed concern about, and the physical therapist observed, "significant flattening of the left posterior aspect of [Anna's] skull resulting in moderated plagiocephalic appearance." The physical therapist told Anna's parents about a cranial orthotic device that was available to treat this "plagiocephalic appearance." Anna's parents knew that this device might not be covered by the Plan. Nonetheless, during a "sick visit" Anna made to Dr. Romear's office on May 26, 2004, Mrs. Miller asked Dr. Romear what his opinion was of the device. Dr. Romear expressed his concurrence with the physical therapist's assessment that Anna was suffering from plagiocephaly, and he referred Anna to Eric Stelnicki, M.D., a craniofacial and pediatric specialist. He also recommended that, before Anna saw Dr. Stelnicki, Anna's parents provide her with repositioning therapy at home. Repositioning therapy involves supervised "tummy time," as well as placement of the child on the side and the use of a strategically placed rolled- up towel or similar item to prevent the child from rolling over on the back and putting pressure on the flattened part of the head. It is the usual first-line treatment for plagiocephaly in those cases where the child is not "able to move readily out of placed positions." Anna's parents followed Dr. Romear's recommendation and attempted repositioning therapy at home. They abandoned their efforts without any success after less than a month because Anna kept moving out of her "placed positions." Instead of seeing Dr. Stelnicki, Anna saw another craniofacial and pediatric specialist in Dr. Stelnicki's practice, Drew Schnitt, M.D. Anna's first visit with Dr. Schnitt was on June 14, 2004. That same day, after the visit, Dr. Schnitt wrote the following letter to Dr. Romear, which accurately related what had occurred during the visit and what Dr. Schnitt had found and recommended: I am seeing Anna in my pediatric cleft and craniofacial office today. She is a 5½ month-old young lady who has been referred to me for an abnormal head shape. She received a full review of systems, history, physical examination, and a set of anthropometric measurements in the office today. Focally, on physical examination, she has a significant amount of left deformational plagiocephaly, with left anterior ear shift, left frontal bossing, fronto-orbital complex shift, and left temporomandibular joint shift. The anterior fontanelle is open. The neck reveals right neck torticollis. The remainder of her physical appearance is within normal limits. Due to the severity of her problem and her age, I am recommending an orthotic cranioplasty device. The preferred device is the DOC band by Cranial Technologies, Inc. I have given them an instruction sheet for range of motion exercises for the neck torticollis and we have demonstrated to them how to do these exercises. I will see them back in one month's time for a re-evaluation. Please do not hesitate to call or contact me with any questions or concerns. Deformational plagiocephaly (which is also known as nonsynostotic positional plagiocephaly) is plagiocephaly (that is, asymmetric or abnormal head shape) caused by external deforming forces. It may be congenital, but, more commonly (as in Anna's case), it occurs postnatally, as a result of, for example, torticollis or forced sleeping position. Deformational plagiocephaly is to be distinguished from another type of skull deformity, craniosynostosis (also referred to as cranial stenostosis), which, unlike deformational plagiocephaly, involves the premature fusion of skull sutures. These sutures need to stay unfused for an infant's head to grow properly and for the infant's brain to expand within the cranial skull. Their fusing prematurely can lead not only to a misshapen skull, but to other problems as well, including vision loss, developmental delay, learning difficulties, increased intracranial pressure and perhaps even herniation of the brain and death. Unlike deformational plagiocephaly, craniosynostosis "typically is a surgical problem, not a problem to try to treat with non-surgical means." Anna was diagnosed as having deformational plagiocephaly, not craniosynostosis. The "DOC band by Cranial Technologies, Inc.," that Dr. Schnitt prescribed for Anna to treat her deformational plagiocephaly4 is a lightweight, custom-fitted skull-molding device consisting of a semi-rigid shell bonded to a foam lining. Worn around the head 23-hours a day, it applies mild dynamic pressure to the prominent areas of the child's skull (while leaving room for growth in the flattened areas) to produce a more symmetrical head shape. Cranial orthotic devices, such as the DOC band, are commonly used to treat children with moderate to severe deformational plagiocephaly for whom repositioning therapy has not worked or for whom repositioning therapy is not a viable option because of their ability "to move readily out of placed positions" or because of the severity of their condition. (These devices are not, however, a treatment for torticollis.) Surgery is performed in "multiple places around the world" to treat deformational plagiocephaly. Cranial orthotic devices, though, are more cost-effective and have fewer complications than surgical intervention. At the time he prescribed the DOC band for Anna, Dr. Schnitt believed that this product was the "best [cranial orthotic device] on the market." Since 1998, the DOC band has been approved by the U.S. Food and Drug Administration (FDA) as safe and effective for the treatment of deformational plagiocephaly. The FDA's approval was announced in the Federal Register, 63 FR 40650-01 (July 30, 1998). The FDA's announcement read, in pertinent part, as follows: ACTION: Final rule. SUMMARY: The Food and Drug Administration (FDA) is classifying the cranial orthosis into class II (special controls). The special controls that will apply to the cranial orthosis are restriction to prescription use, biocompatibility testing, and certain labeling requirements. The agency is taking this action in response to a petition submitted under the Federal, Food, Drug, and Cosmetic Act (the act) as amended by the Medical Device Amendments of 1976, the Safe Medical Devices Act of 1990, and the Food and Drug Administration Modernization Act of 1997. The agency is classifying cranial orthosis into class II (special controls) in order to provide a reasonable assurance of safety and effectiveness of the device. EFFECTIVE DATE: August 31, 1998. * * * SUPPLEMENTARY INFORMATION: I. Background In accordance with section 513(f)(1) of the act (21 U.S.C. 360c(f)(1)), devices that were not in commercial distribution before May 28, 1976, the date of enactment of the Medical Device Amendments of 1976 (the amendments), generally referred to as postamendments devices, are classified automatically by statute into class III without any FDA rulemaking process. These devices remain in class III and require premarket approval, unless and until the device is classified or reclassified into class I or II or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the act, to a predicate device that does not require premarket approval. The agency determines whether new devices are substantially equivalent to previously marketed devices by means of premarket notification procedures in section 510(k) of the act (21 U.S.C. 360(k)) and part 807 of the FDA regulations (21 CFR part 807). -Section 513(f)(2) of the act provides that any person who submits a premarket notification under section 510(k) of the act for a device that has not previously been classified may, within 30 days after receiving an order classifying the device in class III under section 513(f)(1), request FDA to classify the device under the criteria set forth in section 513(a)(1). FDA shall, within 60 days of receiving such a request, classify the device by written order. This classification shall be the initial classification of the device. Within 30 days after the issuance of an order classifying the device, FDA must publish a notice in the Federal Register announcing such classification. -In accordance with section 513(f)(1) of the act, FDA issued an order on March 12, 1998, classifying the Dynamic Orthotic Cranioplasty (DOCTM Band) in class III, because it was not substantially equivalent to a device that was introduced or delivered for introduction into interstate commerce for commercial distribution before May 28, 1976, or a device which was subsequently reclassified into class I or class II. On March 31, 1998, Cranial Technologies, Inc., submitted a petition requesting classification of the DOCTM Band under section 513(f)(2) of the act. The manufacturer recommended that the device be classified into class II. In accordance with 513(f)(2) of the act, FDA reviewed the petition in order to classify the device under the criteria for classification set forth in 513(a)(1) of the act. Devices are to be classified into class II if general controls, by themselves, are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls to provide reasonable assurance of the safety and effectiveness of the device for its intended use. After review of the information submitted in the petition and the medical literature, FDA determined that the DOCTM Band can be classified in class II with the establishment of special controls. FDA believes these special controls will provide reasonable assurance of safety and effectiveness of the device. -The device is assigned the generic name "cranial orthosis," and it is identified as a device intended for use on infants from 3 to 18 months of age with moderate to severe nonsynostotic positional plagiocephaly, including infants with plagiocephalic-, brachycephalic-, and scaphocephalic-shaped heads. The device is intended for medical purposes to apply pressure to prominent regions of an infant's cranium in order to improve cranial symmetry and/or shape. -FDA identified the following risks to health associated with this type of device: (1) Skin irritation, skin breakdown and subsequent infection due to excessive pressure on the skin; (2) head and neck trauma due to alteration of the functional center of mass of the head and the additional weight of the device especially with an infant who is still developing the ability to control his/her head and neck movements; (3) impairment of brain growth and development from mechanical restriction of cranial growth; (4) asphyxiation due to mechanical failure, poor fit, and/or excessive weight that alters the infant's ability to lift the head; (5) eye trauma due to mechanical failure, poor construction and/or inappropriate fit; and (6) contact dermatitis due to the materials used in the construction of the device. -FDA believes that the special controls described below address these risks and provide reasonable assurance of the safety and effectiveness of the device. Therefore, on May 29, 1998, FDA issued an order to the petitioner classifying the cranial orthosis as described previously into class II subject to the special controls described below. Additionally, FDA is codifying the classification of this device by adding new §882.5970. -In addition to the general controls of the act, the cranial orthosis is subject to the following special controls in order to provide reasonable assurance of the safety and effectiveness of the device: (1) The sale, distribution, and use of this device are restricted to prescription use in accordance with 21 CFR 801.109; (2) the labeling of the device must include: (a) Contraindications for the use of the device on infants with synostosis or with hydrocephalus; (b) warnings indicating the need to: (i) Evaluate head circumference measurements and neurological status at intervals appropriate to the infant's age and rate of head growth and to describe steps that should be taken in order to reduce the potential for restriction of cranial growth and possible impairment of brain growth and development and (ii) evaluate the skin at frequent intervals, e.g., every 3 to 4 hours, and to describe steps that should be taken if skin irritation or breakdown occurs; (c) precautions indicating the need to: (i) Additionally treat torticollis, if the positional plagiocephaly is associated with torticollis; (ii) evaluate device fit and to describe the steps that should be taken in order to reduce the potential for restriction of cranial growth, the possible impairment of brain growth and development and skin irritation and/or breakdown; and (iii) evaluate the structural integrity of the device and to describe the steps that should be taken to reduce the potential for the device to slip out of place and cause asphyxiation or trauma to the eyes or skin; (d) adverse events, i.e., skin irritation and breakdown that have occurred with the use of the device; (e) clinician's instructions for casting the infant, for fitting the device, and for care; and (f) parent's instructions for care and use of the device; (3) the materials must be tested for biocompatibility with testing appropriate for long term direct skin contact. * * * V. References -The following references have been placed on display in the Dockets Management Branch (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday. Petition from Cranial Technologies, Inc., dated March 31, 1998. Hellbusch, J. L., L. C. Hellbusch, and R. J. Bruneteau, "Active Counter-Positioning Treatment of Deformational Plagiocephaly," Nebraska Medical Journal, vol. 80, pp. 344 to 349, 1995. Moss, S. D. et. al., "Diagnosis and Management of the Misshapen Head in the Neonate," Pediatric Review, vol. 4, pp. 4 to 8, 1993. -Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 882 is amended as follows: List of Subjects in 21 CFR Part 882 Medical devices. PART 882--NEUROLOGICAL DEVICES * * * 2. Section 882.5970 is added to subpart F to read as follows: §882.5970 Cranial orthosis. -(a) Identification. A cranial orthosis is a device that is intended for medical purposes to apply pressure to prominent regions of an infant's cranium in order to improve cranial symmetry and/or shape in infants from 3 to 18 months of age, with moderate to severe nonsynostotic positional plagiocephaly, including infants with plagiocephalic-, brachycephalic-, and scaphocephalic-shaped heads. -(b) Classification. Class II (special controls) (prescription use in accordance with §801.109 of this chapter, biocompatibility testing, and labeling (contraindications, warnings, precautions, adverse events, instructions for physicians and parents)). Dated: July 21, 1998. A year earlier, in 1997, a "consensus statement" was issued "jointly by several pediatrics organizations (including the Section of Plastic Surgery of the American Academy of Pediatrics and the American Cleft Palate/Craniofacial Society)," in which it was asserted that "deformational plagiocephaly . . . usually responds to conservative measures [such as] the use of skull molding caps." In July of 2003, the American Academy of Pediatrics published a "clinical report" designed to provide "guidance for the clinician in rendering pediatric care" concerning the "[p]revention and [m]anagement of [p]osition [s]kull [d]eformities in [i]nfants."5 The report contained the following observations regarding "skull-molding helmets": Skull-Molding Helmets Several ancient civilization have used head- molding devices in infants to reshape a typically shaped skull into a different but desired skull form. Conversely, skull- molding helmets can be used to correct atypical skull shapes, and similar devices are now proposed for this purpose. However, results from 1 study suggest that repositioning infants may produce improvement in mild to moderate cases similar to that reported with external orthotic devices. Another study has linked the use or helmets with an improvement over that achieved by repositioning alone. The best response for helmets occurs in the age range of 4 to 12 months because of the greater malleability of the young infant skull bone and the normalizing effect of the rapid growth of the brain. There is less modification of the cranial configuration when used after 12 months of age. The use of helmets and other related devices seems to be beneficial primarily when there has been a lack of response to mechanical adjustments and exercises. In most situations, an improvement to repositioning and neck exercise is seen over a 2- to 3- month period if these measures are instituted as soon as the condition is recognized. Because use of skull-molding helmets incurs significant cost, further studies are needed to identify outcomes with and without them. At the end of the report was the following "summary": Summary In most cases, the diagnosis and successful management of deformational plagiocephaly can be assumed by the pediatrician or other primary care clinician. This includes examination for and counseling regarding deformational plagiocephaly in the newborn period and at health supervision visits during infancy, as well as monitoring for improvement or progression. Mechanical methods, if performed early in life, may be effective in preventing further skull deformity and may reverse existing deformity. Referral to a pediatric neurosurgeon with expertise in pediatrics or a craniofacial surgeon should be considered if there is progression or lack of improvement following a trial of mechanical adjustments. BCBSF has a written policy stating that, "[a]s a nonsurgical treatment of plagiocephaly . . . without synostosis, [the DOC band] is considered not medically necessary." This policy statement indicates that it is based on the "lack of [as of February 2004] documented functional impairment" associated with "plagiocephaly . . . without synostosis." The statement, however, does contain an acknowledgement that the "available data [as of February 2004, reveals] that the [DOC band] therapy can indeed reshape the cranium to a more normal contour." Further support for the notion that the DOC band and similar cranial orthotic devices are effective in "reshap[ing] the cranium to a more normal contour" is found in the "most recently published [of the] medical literature" received into evidence at hearing in the instant case: an article entitled, "Management of Deformational Plagiocephaly: Repositioning Versus Orthotic Therapy," authored by John Graham, M.D. and others. This article was published in the February 2005 edition of the Journal of Pediatrics, a "respected [peer-reviewed] journal." Based on their evaluation of the data they examined, the authors of the article concluded that, "[w]hen physical therapy and repositioning fail to treat or prevent plagiocephaly and there is more than 1 cm difference between the two cranial diagonal differences at age 6 months, orthotic therapy is effective in correcting such asymmetry," and they further concluded that "[d]elays in initiating corrective treatment until later infancy may lead to incomplete or ineffective correction even if orthotic therapy is initiated . . ."6 Anna was "cast for the DOC band" at Cranial Technologies, Inc., on June 23, 2004. She returned with her parents to Cranial Technologies, Inc., on July 1, 2003, to try on the DOC band that had been fabricated for her. Only some "trimming adjustments" had to be made. Anna started wearing the band that day. Anna continued wearing the DOC band (23 hours a day) until October 18, 2004. On that date (October 18, 204), the Cranial Technologies, Inc., clinician who had been working with Anna sent Dr. Schnitt a letter advising him that Anna's DOC band treatment had been successfully completed. Anna had obtained a "good result" from the DOC band treatment. Her cranial asymmetry had "markedly improved." Anna's last visit to Dr. Schnitt was on November 29, 2004. That day, after the visit, Dr. Schnitt wrote the following letter to Dr. Romear, which accurately related what had occurred during the visit and what Dr. Schnitt had found and recommended: I am seeing Anna back in my pediatric cleft and craniofacial office today. She is a young lady with left deformational plagiocephaly and right torticollis, who is here again for follow up. She is now 11 months old and was treated in the DOC band cranial molding device for four months and has been out of this since October. She received a full review of systems, history, physical examination, and a set of anthropometric measurements in the office today. Focally on physical examination, she has a mild to moderate amount of residual left deformational plagiocephaly with left anterior ear shift, left frontal bossing, and fronto-orbital complex shift. Her anterior fontanelle remains open. Examination of her neck reveals a minimal amount of residual right neck torticollis. The remainder of the physical examination is within normal limits. I have had a long discussion with mom about the treatment of deformational plagiocephaly. She has made a marked improvement since the beginning of her treatment, and mom is, overall, satisfied, but was asking about going into another helmet to try to improve things further. I have given her this option, but she has decided not to proceed with a second band. I have also advised her of the need to continue with neck range of motion exercises at least until Anna is two years old. Mom would like to continue to follow with me until she is satisfied with the torticollis outcome. I will see her back in two to three months' time. Mom also knows to make an appointment in a more timely manner if she notices any abnormal head growth or regression. Please do not hesitate to call or contact me with any questions or concerns. The Millers were billed $3,000.00 by Cranial Technologies, Inc., for the DOC band and related costs. They filed a claim requesting that the bill be treated as being for services and/or supplies "covered" by the Plan. The request was denied by BCBSF, which issued a Non- Payment Notice. The Millers filed an unsuccessful Level I appeal with BCBSF (as provided for in the Plan Document). They then filed a Level II appeal with Respondent (as provided for in the Plan Document). As noted above, Respondent rejected the Millers' Level II appeal, finding that Anna's DOC band treatment was "cosmetic" and "experimental and investigational" and not "medically necessary," as those terms are used in Plan Document. Thereafter, at the Millers' request, an administrative hearing on their claim was held. The preponderance of the evidence adduced at the administrative hearing establishes that Anna's DOC band treatment was "medically necessary," as that term is defined in the Plan Document, in that the evidence demonstrates the treatment was: "consistent with the symptoms, diagnosis and treatment of [her] condition" (moderate to severe deformational plagiocephaly7 that had not responded to repositioning therapy due, at least in part, to her moving out of her "placed positions"); "in accordance with standards of good medical practice"; "required for reasons other than the convenience of [Anna] or [her] doctor"; "approved by the appropriate medical body or board for the illness or injury in question" in that "pediatrics organizations" have documented their recognition of the beneficial effects devices such as the DOC band have in treating deformational plagiocephaly; and "at the most appropriate level of medical supply, service, or care that [could] be safely provided" in that repositioning therapy had already been attempted without success. The preponderance of the evidence adduced at the administrative hearing fails to establish that Anna's DOC band treatment was " experimental and investigational," as those terms are defined in the Plan Document. Respondent concedes (in its Proposed Recommended Order) the inapplicability of Experimental/Investigational Criterion No. 1 and Experimental/Investigational Criterion No. 2. With respect to the remaining Experimental/Investigational Criteria set forth in Plan Document's definition of "experimental or investigational services": regarding Experimental/Investigational Criterion No. 3, while it has been shown that some "experts" believe more study of DOC band treatment is needed "to determine maximum dosage, toxicity, safety or efficacy," the record evidence is insufficient to demonstrate that DOC band treatment "is generally regarded by experts as requiring [such additional] study"; regarding Experimental/Investigational Criterion No. 4, the record evidence is insufficient to demonstrate that, according to the "most recently published medical literature of the U.S., Canada or Great Britain using generally accepted scientific, medical or public health methodologies or statistical practices," the use of a DOC band to treat a child almost six months of age (Anna's age when she first started wearing the band) with moderate to severe deformational plagiocephaly that has not responded to repositioning therapy is not a "safe and effective . . . treatment of th[is] condition"; regarding Experimental/Investigational Criterion No. 5, while it has been shown that "practicing doctors" do not unanimously accept the DOC band as "safe and effective" for treating deformational plagiocephaly that has not responded to repositioning therapy, the record evidence is insufficient to demonstrate that there is not a consensus or majority8 of "practicing doctors" who are of this opinion9; and regarding Experimental/Investigational Criterion No. 6, the record evidence is insufficient to demonstrate that "practicing doctors" as a group do not "regularly" (meaning typically, but not necessarily in each and every instance, without exception10) use a DOC band or like device to treat deformational plagiocephaly that has not responded to repositioning therapy. The preponderance of the evidence adduced at the administrative hearing establishes that Anna's DOC band treatment was "cosmetic," as that term is used in the Plan Document,11 in that it was prescribed to improve her appearance by ameliorating her deformational plagiocephaly and giving her a more natural-looking, symmetrical head shape, and it had no purpose or effect beyond changing the asymmetrical appearance of her head. The preponderance of the evidence adduced at the administrative hearing fails to establish that this "cosmetic" treatment was the "result of a covered accident." The preponderance of the evidence adduced at the administrative hearing fails to establish that this "cosmetic" treatment was "for correction of a congenital anomaly." While Anna's torticollis was a "congenital anomaly," her deformational plagiocephaly was not, and her DOC band treatment addressed her deformational plagiocephaly, not her torticollis. The preponderance of the evidence adduced at the administrative hearing fails to establish that this "cosmetic" treatment was a "medically necessary procedure to correct an abnormal bodily function." While the treatment was "medically necessary" and undertaken to "correct" an abnormality, the abnormality (the asymmetrical shape of Anna's head) was structural, not functional, in nature. The preponderance of the evidence adduced at the administrative hearing fails to establish that this "cosmetic" treatment was "for reconstruction to an area of the body that has been altered by the treatment of a disease." Inasmuch as Anna's DOC band treatment was "cosmetic" in nature and not within any of the "specific exceptions" noted in the Plan Document, such treatment was excluded from coverage under the Plan.12
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order sustaining the denial of the claim at issue in the instant case. DONE AND ENTERED this 9th day of November, 2005, in Tallahassee, Leon County, Florida. S STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 9th day of November, 2005.
The Issue The issue for consideration in this hearing was whether Petitioner was entitled to insurance coverage reimbursement for items claimed as a result of his son's hospitalization at a specialty hospital in April, 1989.
Findings Of Fact At all times pertinent to the issues herein, Petitioner, Claud E. Leiby, was employed by the State of Florida and was a member of the State Group Health Self Insurance Plan. The State of Florida, Department of Administration, Division of State Employees' Insurance, is the state agency responsible for administering the Group Health Self Insurance Plan in Florida. On April 5, 1989, Petitioner's son, Floyd (Chris), attempted to take his own life. Chris is hearing impaired. He is a 22 year old who was, at the time, six months away from earning his Bachelor of Science degree in Computer Engineering Technology at Tampa Technical Institute. Prior to this suicide attempt in April, 1989, Chris had been seen by a psychologist who referred him to a psychiatrist. Chris had previously been seen by a psychiatrist for a drug abuse problem several years before. Approximately two years ago, Chris was admitted to Palms Hospital in Sarasota, an institution covered by the insurance plan in issue. At that time, the hospital represented it would provide an interpreter for the deaf and those other specialized personnel necessary for appropriate treatment of a hearing impaired individual. However, after several days of treatment which were singularly non-beneficial because of the fact that no interpreter was provided and Chris could not lip read, the treatment was terminated and Chris was discharged. The Leibys felt, based on that experience, that appropriate service could or would not be provided at a facility covered by the plan, and as a result, when Chris attempted to take his life on April 5, 1989, did not even attempt to hospitalize him in either of the covered facilities in Sarasota County, Sarasota Palms Hospital or Sarasota Memorial Hospital. Instead, they had him admitted to Horizon Hospital in Sarasota, a psychiatric specialty hospital which is the only hospital in the area providing a program for the psychiatric treatment of the hearing impaired even though they had been advised such treatment would not be covered. Their conclusion as to the lack of availability of other qualified treatment may not have been accurate, however. Dr. Curran, director of mental health services at Memorial indicated that facility could and would provide adequate treatment for the hearing impaired. This is inconsistent with the Petitioner's prior experience. The Leibys felt that due to the suicidal attempt, the situation constituted an immediate crisis. However, after several days of Chris' hospitalization at Horizon, they were advised that their coverage under the state plan would not cover the incurred expenses at that facility. The Plan administrator indicated the Petitioners were not covered because of the terms of the plan which exclude services and supplies provided by a specialty institution. Further, the Division took the position that since Chris attempted to take his own life, and since the plan excludes coverage for services and supplies resulting from an intentional self-inflicted injury, it was "unlikely" reimbursement would be made even if Chris had been admitted to one of the eligible hospitals. Petitioner claims that the Division's interpretation of the rule and the plan provisions constitutes a form of discrimination against the handicapped which is prohibited by federal and state law. After Chris was discharged from Horizon Hospital, he had another episode while at work and was taken to a medical facility in St. Petersburg. After four days, he was released and taken to see Dr. Douglas R. Elliott, a psychiatrist, who was unable to treat him successfully without the services of an interpreter. Dr. Elliott indicated that Ms. Leiby, who acted as an interpreter on the first session, could not continue to act in that capacity, considering the issues that needed to be addressed. In the doctor's opinion, the treatment Chris received at Horizon was both necessary and beneficial. The Plan brochure provided to state employees contains numerous provisions pertinent to this hearing. On Page 3, the definition of a hospital specifically includes a "specialty institution" and at page 9, the section on Limitations (on coverage) indicates, "Payment for inpatient services rendered by a hospital and/or specialty institution while confined for alcoholism or drug addiction, and/or rendered by a hospital while confined for alcohol or drug addiction or mental or nervous conditions, shall be made for not more than thirty-one (31) days of confinement during a calendar year. Specialty institutions are, in the Summary of Benefits section found on Page 6, identified as being permitted for alcohol/drug impaired employees only. In the Exclusions portion, found on pages 11 and 12, services and supplies provided by a specialty institution or residential facility (with the exception of the alcohol/drug treatment for employees) are excluded as are services and supplies provided by a skilled nursing facility for the treatment of an insured for alcoholism, drug addiction, (other than for employees), or mental or nervous conditions. The Plan Benefit Document itself, which was not previously provided to Petitioner, at page 24, defines a "specialty institution" as a "licensed facility providing an inpatient rehabilitation program for the treatment of persons suffering from alcohol or drug abuse or mental or nervous conditions." At Section VII L, dealing with Exclusions, "...services and supplies provided by a specialty institution, except as provided under Section II G, (treatment relating to alcoholism or drug addiction for the employee only), are excluded from coverage." The Division has defined these terms as meaning, in substance, that a specialty institution is specifically excluded except when a covered employee asks approval for entry into such an institution for alcohol or drug addiction. Otherwise, they have been excluded since implementation of the plan in 1972, because of cost. If these institutions were to be included, the additional costs would, according to Mr. Seaton, mean premium rates to the participants would have to be increased. The benefit document, as it exists, was constructed with the assistance of Blue Cross/Blue Shield and other consultants. It was the intent of the Department to provide services that a majority of the employees and their families need. To change the benefit document requires legislative approval. The plan is not intended to deny coverage to the handicapped. An "appropriate" service was available to Chris at the time of his admission to Horizon Hospital in April, 1989 under the state plan. Further, in Mr. Seaton's opinion, since the injury was self-inflicted, even if Chris had been admitted to an eligible hospital, coverage would not have been available. This latter position is unsupportable as an improper interpretation of the relevant provision. To insure cost reimbursement, Petitioner would have had to have a physician admit Chris to an acute care hospital such as Palms or Memorial, and in that case, according to Seaton, the state would have allowed up to 31 days of inpatient service. Seaton indicates that Section 504 of The Rehabilitation Act of 1973, was not considered in determining benefits to be covered. In his opinion, the "majority of employee needs" were covered and handicapped employees are covered to the same degree as non-handicapped employees. Family coverage for an employee does not include provisions to cover special needs of family members. Since treatment for handicapped is covered as a matter of course, no need was seen to make specific provision for handicapped individuals. The limitations, exclusions, or benefits provided are the same for all members and are provided to the handicapped to the same extent as to the non-handicapped. When asked if the patient had been initially admitted to a general hospital and thereafter referred to a specialty hospital as a matter of appropriate medical treatment by a covered provider, would that specialty admission be covered, Mr. Seaton replied, "absolutely not."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the Petition for reimbursement for Chris' hospitalization at Horizon Hospital be denied. RECOMMENDED this 24th day of October, 1989, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 24th day of October, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-4186 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes on all of the Proposed Findings of Fact submitted by the parties to this case. None submitted by Petitioner: For the Respondent: 1.-5. Accepted and incorporated herein. 6.-7. Accepted and incorporated herein. Accepted. Accepted. Petitioner submitted the hospital bill subsequent to the hearing and after both parties had rested. Respondent moved to strike this evidence but the motion was denied. The amount of the hospital bill is now known, but in light of the Findings and Conclusions is not relevant. Accepted and incorporated herein. Accepted and incorporated herein. Accepted except for last sentence. Petitioner's opinion is based on prior experience. Accepted. This is opinion only. Not a Finding of Fact but a restatement of testimony. The substance of the testimony is accepted, however. Accepted and incorporated herein. 16.-18. Accepted and incorporated herein. 19. Accepted as to lack of discrimination. COPIES FURNISHED: Claude E. Leiby 321 East Lake Drive Sarasota, Florida 34232 Augustus D. Aikens, Jr., Esquire Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550 A. J. McMullian, III Interim Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32399-1550
The Issue This is a proceeding under Section 408.7056, Florida Statutes, in which the basic issue is whether the Petitioner's denial of a request that it cover certain speech therapy treatments for an insured was appropriate or inappropriate. The Respondent contends that the subject speech therapy was covered under the subject plan, and should be provided to the insured.
Findings Of Fact The Petitioner, Neighborhood Health Plan, is a health maintenance organization which has been granted a certificate by the Respondent. In the fall of 1995, the Petitioner issued a policy of health insurance to a small business corporation owned by Mr. F. S. The policy covered Mr. F. S. and his dependents, including his wife and children. The family's membership in the Petitioner's plan began on or about October 1, 1995. The subject health insurance policy has been in effect without interruption since its inception. At all material times, F. S., Jr., the minor son of Mr. and Mrs. F. S., has been a covered dependent under the subject health insurance policy. In the normal course of events, when the Petitioner issues a new health insurance policy, it also delivers to the insurance business a Group Service Agreement and a Member Handbook. Mr. and Mrs. F. S. received a copy of the Member Handbook on or near the date on which the policy was issued. Mr. and Mrs. F. S. did not receive a copy of the Group Service Agreement until sometime in early 1998 after they had filed a grievance regarding coverage denial. Shortly after the inception of the health insurance policy, Mrs. F. S. took her children for an introductory meeting with the pediatrician who was their new primary care physician under the terms of the health insurance policy. That pediatrician referred F. S., Jr., to Dr. Carlos Gadia, a pediatric neurologist. Following a neurological evaluation of F. S., Jr., Dr. Gadia concluded that F. S., Jr., had the following medical problems: expressive language disorder, dyspraxia, and dysgraphia. Expressive language disorder is an impairment of the ability to communicate one's experiences, ideas, or feelings to others. Dyspraxia is an impairment of the ability to coordinate movement, or to perform coordinated acts. Dysgraphia is the impairment of the ability to perform the movements required for writing, such as holding and moving a pencil across paper. Dr. Gadia recommended an electroencephalogram and other specific follow-up testing. Dr. Gadia also concluded that F. S., Jr., ". . . should be started on physical and occupational therapy. He should also benefit from more intensive speech therapy. " Beginning on or about November 1, 1995, the Petitioner pre-authorized speech therapy and occupational therapy for F. S., Jr. The Petitioner required the treatment providers to submit treatment plans and progress reports every two months to justify the authorization of further treatment sessions. Using this procedure, the Petitioner continued to authorize speech therapy and occupational therapy for F. S., Jr., without interruption through the end of 1997. In the fall of 1997, the Petitioner's medical department concluded that it had been administering the benefits for speech therapy and some other forms of therapy more generously than was provided for in the Group Service Agreement. The Petitioner then began the process of reviewing the records of each patient who was receiving therapy, in order to determine whether the therapy being provided to each patient was covered by the provisions of the Group Service Agreement. During the course of such review, the Petitioner concluded that F. S., Jr., should not have received speech therapy benefits because his disability appeared to be "developmental" or congenital, rather than "acquired." In late 1997, F. S., Jr.'s, primary care physician requested authorization from the Petitioner for additional speech therapy services for F. S., Jr., to be provided in 1998. By letter dated January 8, 1998, the Petitioner advised the primary care physician that the request was denied. A copy of the letter was sent to Mr. and Mrs. F. S. The letter of January 8, 1998, stated, in pertinent part: You have requested the above referenced member to receive Speech Therapy. This request has been reviewed by a physician through the Medical Management Program and has been denied. The service requested does not meet medical criteria for coverage. Therefore this service cannot be authorized for payment. Mr. and Mrs. F. S. promptly initiated the grievance procedure provided for by the Petitioner. During the course of the grievance process, a representative of the Petitioner explained that the coverage for speech therapy had been denied because, in the opinion of the Petitioner's medical department, F. S., Jr.'s, need for speech therapy was occasioned by a learning disability or a developmental disability, and not by an "acquired disability." Representatives of the Petitioner also explained that they would provide coverage for the speech therapy, if it could be established that F. S., Jr., had an "acquired disability." Mrs. F. S. contacted Dr. Gadia, the neurologist, and asked whether he could determine whether her son's condition resulted from a congenital cause or from an acquired cause. Dr. Gadia was unable to make the requested determination due to insufficient information. By letter dated March 27, 1998, the Petitioner resolved the grievance by denying coverage for the requested speech therapy. The letter stated, in pertinent part: On March 23, 1998 the Grievance Committee of Neighborhood Health Partnership met to review your grievance. After thorough review and discussion, the Grievance Committee decided to uphold its original decision and voted to deny payment for services rendered to your son, F. S., for Speech Therapy. The decision to uphold the denial was based on the Group Service Agreement, Article VII, Exclusions and Limitations, which indicate that treatment of learning disabilities, mental retardation and other developmental disorders, including, but not limited to, learning disorders, motor skills disorders, communication disorders and autistic disorders, are not covered. There is anecdotal evidence which suggests the possibility that F. S., Jr.'s, speech disabilities are inherited. There is anecdotal evidence which suggests the possibility that F. S., Jr.'s, speech disabilities are the results of injury during the course of his being delivered by the use of forceps following a difficult period of labor. None of the anecdotal evidence is sufficient to establish one cause or to rule out the other. Similarly, none of the medical records contain sufficient information for a physician to express an expert opinion as to whether F. S., Jr.'s, speech disabilities are the result of one cause or the other. There is a high probability that one cause or the other could be ruled out by an MRI examination. Like most group health insurance policies, the contract in this case was expressed in two documents, a Group Service Agreement and a Member Handbook. The Group Service Agreement, which is typically furnished to the employer, but not to the individual insureds, is the basic insurance agreement. It sets forth the terms and conditions of the insurance agreement and specifically includes statements describing what is covered, describing any limitations on coverage, and describing what is excluded from coverage. The Member Handbook, which is typically the only document furnished to the individual insureds, is a summary of the benefits available under the insurance agreement. In this case the Member Handbook, in effect from October 1996 to the present, specifically stated on the inside front cover: "The following information constitutes a summary of the benefits available under the Group Service Agreement. You must refer to the Group Service Agreement for a detailed explanation of available benefits." The Group Service Agreement in effect from October 1996 to the present contains the following coverage provision: Outpatient Therapies. Physical, respiratory, speech, or occupational therapies for purposes of rehabilitation of an acquired disability, when, in the opinion of the Plan Physician, such therapy will result in optimal improvement in the patient's condition within two (2) months. In no event will the maximum benefit exceed 60 visits per Calendar Year for all services combined. The Member Handbook in effect from October 1996 to the present contains the following coverage provision: Therapy Services Physical, respiratory, speech and occupational therapy. Such coverage will only be provided for rehabilitation of a disability if in the opinion of your PCP, such therapy will result in optimal improvement in your condition within two (2) months. Limited to sixty (60) visits per Calendar Year for all services combined. The Group Service Agreement in effect from October 1996 to the present contains the following exclusions: 11. Treatment of learning disabilities, mental retardation, and other developmental disorders including, but not limited to, learning disorders, motor skills disorders, communication disorders, and autistic disorders; * * * 19. Physical, respiratory, occupational, or speech therapy in excess of 60 visits per Calendar Year; The Member Handbook in effect from October 1996 to the present contains the following exclusions: Physical, respiratory, occupational, or speech therapy in excess of 60 visits per Calendar Year for all services combined. * * * Treatment of learning disabilities, mental retardation and developmental disorders, including but not limited to, learning disorders, motor skills disorders, communication disorders, and autistic disorders.
The Issue This case involves a dispute as to whether the Petitioner underpaid the premiums due on his health insurance coverage and, if so, what action should be taken by the Department of Administration as a result of any premium underpayments. By notice dated March 18, 1988, the Department of Administration notified the Petitioner that the Department records "show a total underpayment of $1,117.81 for the coverage periods 9/86 through 9/87." At the formal hearing, over the objection of the Petitioner, the Department was permitted to offer evidence regarding the Petitioner's premium history (both the amounts due and the amounts actually paid) for the entire period of the Petitioner's employment with the State of Florida, a period which runs from May 1978 until October 1988. At the formal hearing the Department of Administration presented the testimony of one witness and offered several exhibits, all of which were received. The Petitioner did not present any evidence, but did present oral argument on his own behalf. The parties were allowed 10 days from November 3, 1988, within which to file their post-hearing submissions with the Hearing Officer. The Department of Administration timely filed Proposed Findings Of Fact. Those findings are specifically addressed in the appendix to this recommended order. The Petitioner did not file any post-hearing submission.
Findings Of Fact Based on the evidence received at the formal hearing, I make the following findings of fact. From May 1, 1978, until August 1, 1978, the Petitioner requested and received family coverage under the State Group Health Self-insurance Plan. From November 1, 1978, until November 1, 1985, the Petitioner requested and received individual coverage under the State Group Health Self-Insurance Plan. From November 1, 1985, until the date of the hearing, the Petitioner requested and received family coverage under the State Group Health Self-Insurance Plan. From May 1, 198, until July 1, 1984, the Petitioner was a part-time employee of the State of Florida, working .25 of a full-time equivalent position. Accordingly, his premiums for health insurance coverage under the State Group Health Self-Insurance Plan during this period should have been paid on the basis of employment in a .25 full-time equivalent position. From July 1, 1984, until at least the date of the hearing, the Petitioner has been a part-time employee of the State of Florida, working .20 of a full-time equivalent position. Accordingly, his premiums for health insurance coverage under the State Group Self-Insurance Plan during this period should have been paid on the basis of employment in a .20 full-time equivalent position. During the period beginning May 1, 1988, and continuing through October of 1988, the amount by which the Petitioner underpaid his health insurance coverage premiums totals S1,116.36. 1/ During the period beginning March 1, 1986, and continuing through October of 1988, the amount by which the Petitioner underpaid his health insurance coverage premiums totals $861.74. During the thirteen-month period beginning with September 1986 and ending with (but including) September 1987, the amount by which the Petitioner underpaid his health insurance coverage premiums totals $258.36.
Recommendation Based on all of the foregoing, I recommend the entry of a Final Order to the following effect: Finding the Petitioner to be in debt to the State of Florida in the amount of $258.36 by reason of underpayment of premiums during the period of September 1986 through September 1987. Providing that the Petitioner's health insurance coverage under the State Group Health Self-Insurance Plan will be cancelled unless within thirty (30) days following the entry of the final order the Petitioner either pays the full amount of $258.36 or enters into an installment payment program consistent with Rule 22K-1.049(1)(a)2., Florida Administrative Code. DONE AND ENTERED this 23rd day of November, 1988, at Tallahassee, Florida. MICHAEL M. PARRISH, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of November, 1988.
The Issue The issue to be resolved in this proceeding concerns whether the Petitioner, as beneficiary of her deceased father's State of Florida life insurance policy, is entitled to a benefit of $10,000 or $2,500, and is related to how notice of a change in coverage amount and premium was provided to the decedent.
Findings Of Fact At the time of his death on November 29, 2008, Maurice Adkins was covered by the state life insurance plan, as a retired employee of the State of Florida. The Petitioner, Justina Mullennix, is the daughter of Mr. Adkins and is the beneficiary of any life insurance benefits paid or payable from the state life insurance plan on account of the death of her father. Effective January 1, 2000, the coverage for retirees was increased to $10,000.00. The premium for this coverage was $4.20 per month. The DSGI prepared a letter dated July 31, 2006, to notify the retirees that effective January 1, 2007, the life insurance benefit options provided to retirees would change. The changes allowed retirees to elect one of the following options: $2,500 benefit for a monthly premium of $ 4.20. $10,000 benefit for a monthly premium of $35.79. Termination of coverage. The letter dated July 31, 2006, informed retirees that their life insurance premium would remain the same, but that their coverage would be reduced to $2,500, unless they elected coverage in the amount of $10,000 and elected to pay the higher premium. The letter advised the retirees they could change their election up to and including January 19, 2007. Mike Waller, an employee of the DSGI, maintains benefits data for the People First/Division of State Group Insurance. In July 2006, Mr. Waller was asked to prepare a file containing the names and mailing addresses of all retirees who were covered by life insurance. Mr. Waller created the file, prepared in July 2006, to use in a "mail merge," to send all retirees a copy of the letter dated July 31, 2006. In preparing the file containing the mailing addresses of retirees covered by life insurance, Mr. Waller used the addresses of record that he maintained. In July 2006, the address of record for Mr. Adkins was 2877 Belair Road E., Jacksonville, Florida 32207, and was included in the file. Mr. Waller prepared the file and on July 3, 2006, delivered it to Dick Barnum and Thomas Lockeridge. Thomas Lockeridge delivered the file to Laura Cutchen, another employee of the DSGI. The DSGI contracted with Pitney Bowes to mail the letter of July 31, 2006, to all retirees. After obtaining copies of the letter from the print shop of the DSGI, Ms. Cutchen delivered the letters and the file containing names and addresses of retirees to Pitney Bowes to assemble. The letters dated July 31, 2006, in envelopes addressed to each retiree who carried life insurance at the time, were delivered to the U.S. Post Office, accompanied by Ms. Cutchen. The State of Florida first class mailing permit had been applied to each envelope. The letter dated July 31, 2006, was mailed to Mr. Adkins at the Belair address. The return address on the envelope containing the letter was the Division of State Group Insurance, 4050 Esplanade Way, Ste. 215, Tallahassee, Florida, 32399-0949. The letter was not returned to the Division. The letters that were returned to the DSGI were processed by Janice Lowe, an employee of the DSGI. Each letter that was returned to the Division of State Group Insurance was handled in one of two ways: a) if the envelope showed a different address on a yellow sticker applied by the US Postal Service (USPS), the letter was re-mailed to that address; b) if the returned envelope did not provide a different address, a manual search of the database of the Division of Retirement was made, a copy of the print screen showing the address in the Retirement database was made, if different from that on the database of the Division of State Group Insurance, and the original envelope and letter were placed in another envelope and mailed to the address from the Division of Retirement database. A copy of each Retirement screen that was accessed by Ms. Lowe was printed and inserted in alphabetical order in a binder. For every person whose letter was returned, and for which there was not another address, there would have been a Retirement print screen. The absence of a Retirement print screen indicates that the initial letter was not returned. There is no retirement print screen for Mr. Adkins, indicating that the letter to him dated July 31, 2006, was not returned to the DSGI. DMS has contracted with Convergys, Inc., to provide human resources management services, including assisting in the administration of employee benefits. Convergys primarily performs these tasks through an on-line system known as “People First.” Prior to Convergys assuming responsibility for the administration of benefits, DSGI maintained benefits information in the Cooperative Personnel Employment System (COPES). When Convergys assumed responsibility for the management of benefits, the benefits information from COPES was imported into the Convergys People First System. People First became the system of record for the DSGI beginning January 1, 2005. People First and the Division of Retirement do not share databases and each maintains its own database of names and addresses. Once a year the DSGI must hold Open Enrollment for the health program. § 110.123(3)(h)5, Fla. Stat.; Fla. Admin. Code R. 60P-1.003(16). Open Enrollment is the period designated by the DMS during which time eligible persons may enroll or change coverage in any state insurance program. Prior to Open Enrollment each year, the DSGI provides employees and retirees a package that explains the benefits and options that are available for the next plan year. The 2006 Open Enrollment period, for the 2007 Plan Year, ran from September 19, 2006, through October 18, 2006. During open enrollment for Plan Year 2007, the People First Service Center was charged with the responsibility of sending open enrollment packages to State of Florida retirees and other employees. People First mailed Mr. Adkins’s Open Enrollment Package to the 2877 Belair Road E., Jacksonville, Florida 32207 address, on September 3, 2006. The Open Enrollment Package for Plan Year 2007 was mailed by People First through the U.S. Post Office, first class postage paid. The Open Enrollment Package mailed to Mr. Adkins, for 2006 Open Enrollment, was not returned to People First. The Open Enrollment Package mailed to Mr. Adkins on September 3, 2006, contained Mr. Adkins’s 2007 Benefits Statement; a letter from John Mathews, former Director of the DSGI; "Information of Note"; a Privacy Notice; Notice Regarding Prescription Coverage; and a 2007 Benefits Guide. The Information of Note included the following statement: Retiree Life Insurance For Plan Year 2007, those currently enrolled with retiree life insurance may elect to retain the current $4.20 premium for a benefit of $2,500, retain the current benefit of $10,000 for a premium of $35.79, or cancel coverage. If no change is made during open enrollment, participation will continue at the $4.20 premium level. Neither Mr. Adkins nor anyone on his behalf affirmatively elected to continue $10,000.00 in life insurance coverage during the enrollment period in 2006 and 2007. Because the election was not made, at the death of Mr. Adkins, the benefit paid to the Petitioner was $2,500.00. Prior to January 1, 2007, the Life Insurance Trust Fund was used to augment the premiums paid by retirees for life insurance. The premium paid by the retirees did not support a $10,000 coverage level. In year 2006, the DSGI determined that the money in the life insurance trust fund, used to augment the retiree’s benefits from years 2000 through 2007, would not be available after 2007. Beginning January 1, 2007, the change in life insurance coverage was made because the funds in the Life Insurance Trust Fund were no longer available to augment the premium payment required to maintain a benefit level of $10,000.00, for a payment of $4.20 per month by the retirees. In 2006, the DSGI determined that the then-current life insurance premium of $4.20 would support a benefit of $2,500, and that the $10,000 benefits would cost $35.79. The notices provided by the July 31, 2006, letter and the 2006 Open Enrollment Package were sufficient notices of the increase in premium in that they provided a reasonable opportunity within which to make a selection of the level of coverage. On December 30, 1997, the Division of Retirement received a written notice of change of address for Mr. Adkins. The new address was 217 Skye Dr. W, Jacksonville, Florida 32221. Although Mr. Adkins had changed his address with the Division of Retirement, he did not notify the DSGI. A change of address with one division does not automatically change addresses in the other. The two divisions have different databases. During no time relevant to these proceedings have the two divisions shared databases. The DSGI, through People First, used the database of the Division of Retirement to send the 2004 Benefits Statement as an experiment to determine whether DSGI undeliverable returns would decrease. The same database was also used for the mailing of the letter dated September 2, 2003. However, neither DSGI nor People First changed its database after the 2004 Benefits Statement was sent and subsequent information was mailed to the DSGI address of record, based upon the COPES system. Therefore, the letter dated July 31, 2006, and the 2006 Open Enrollment Package for the Plan Year 2007, were mailed to the same Belair address, the address of record. A change of address for Mr. Adkins was not made in the database of the DSGI until December 1, 2008, when People First was provided a change of address. The only change of address that the Petitioner has alleged, was the one provided by Mr. Adkins to the Division of Retirement (only) in 1997.
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 of the parties, it is RECOMMENDED that a Final Order be entered by the Department of Management Services, Division of State Group Insurance, dismissing the petition in its entirety. DONE AND ENTERED this 22nd day of January, 2010, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 22nd day of January, 2010. COPIES FURNISHED: Sonja P. Mathews, Esquire Department of Management Services Office of the General Counsel 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399 Justina Mullennix 1217 Skye Drive West Jacksonville, Florida 32221 John Brenneis, General Counsel Division of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
Findings Of Fact The Petitioner, at all times pertinent hereto was an employee of the Department of Health and Rehabilitative Services. The Respondent is an agency of the State of Florida charged with administering the group self-insurance health insurance program and other insurance programs such as life insurance and is the agency charged with accepting or rejecting applications for coverage under those programs, such as the application at issue. On January 11, 1980 the Petitioner commenced employment with the State of Florida, Department of Health and Rehabilitative Services as a District Intake Counselor in District eleven of the Department. Shortly after commencing employment the Petitioner attended an orientation meeting during which all insurance benefits and other benefits available for state employees were explained. Ernestine Thurston, the HRS employee who conducted the orientation session on January 11, 1980 informed all employees present at that orientation meeting, including the Petitioner, of the available benefits and the means by which they were to avail themselves by proper application, of those benefits, including the fact that the Petitioner had thirty days to enroll in the State Group Health Insurance Program without the necessity of obtaining medical approval for insurability. A second orientation meeting was held during which insurance benefits were explained for a second time to the employees whose names were depicted on the recruitment log, which names include the Petitioner 's. The Petitioner was present at both orientation sessions. At the first orientation session on January 11, 1980 the Petitioner received an HRS Employee Handbook which included the following language concerning insurance benefits: "Employees may enroll within 30 days of date of employment without evidence of insurability. "Application at a later date requires proof of insurability. Consult your supervisor, personnel manager, or district/central personnel office for additional information." The Petitioner admitted that she signed a receipt on January 11, 1980 acknowledging receipt of a complete copy of that Employee Handbook and which receipt included the following language: "I understand that it is my responsibility to review the pamphlet in detail and request any clarification needed from my supervisor or personnel office." Petitioner conceded that she did not read the pamphlet or handbook, but instead put it in her desk drawer at her office. On January 14, 1980, knowing of the need to apply for insurance benefits within 30 or 31 days of her employment during the open enrollment period, the Petitioner applied for various insurance -overages and submitted the pertinent enrollment forms through her District 11 personnel office. She applied for and received State Supplemental Health Insurance coverage through the Gulf Life Insurance Company (then called the "20/20" plan). This supplemental health insurance coverage was designed to complement the overall state group health insurance program or plan. The Petitioner at that time was covered under the overall state group health insurance plan (The Plan) through her husband's family coverage since he was an employee covered under that plan at the time. The Petitioner also timely applied for and received coverage under the state life insurance program as well. The Petitioner did not submit a new enrollee form requesting to participate in the State of Florida Employee's Group Health Self Insurance Plan within 31 calendar days of January 11, 1980. The Hearing Officer has considered the Petitioner's testimony as well as that of Ms. Thurston and the other evidence surrounding the circumstances of her initial employment, the explanation of insurance coverage benefits, including the time limit for the open enrollment without medical approval which the Petitioner did not avail herself of insofar as the group health self-insurance plan is concerned. The Petitioner did not apply for the overall group health self-insurance plan because she was already covered under that plan through her husband's coverage and not because, as Petitioner maintains, that it was never explained that she had 30, or actually 31, calendar days from January 11, 1980 to apply for that plan. Indeed it was explained to her as Ms. Thurston established and Respondent admits receiving the handbook further explaining the time limit to apply for that coverage without medical approval. She signed a receipt acknowledging her responsibility to read that pamphlet or manual and ask for clarification, if needed, concerning coverage benefits and she admitted that she did not read it. Thus it is found that at the time of her initial employment all pertinent insurance benefits and entitlements were explained to the Petitioner both verbally and in writing and she failed to avail herself of the automatic coverage provision referenced above in a timely way, for the reason stated above. In any event, on July 28, 1980 the Petitioner elected to submit a new enrollee form which was submitted with a medical statement form requesting participation in the State Plan. After correspondence with the State Plan administrator requesting additional medical information, on October 22, 1980 the Department of Administration, by letter, advised the Petitioner that she had not been approved by the plan administrator and she was denied coverage for medical reasons. Accordingly, on October 24, 1980 the Petitioner enrolled in the South Florida Group Health, Inc. Plan which is a health maintenance organization plan (HMO) and she was allowed enrollment in that plan without regard to her current medical condition. The Petitioner remained enrolled in the HMO and requested and was granted leave of absence without pay from her employment position commencing May 29, 1981. Her employing agency advised her that it was her individual responsibility to forward premium payments for the HMO health insurance premiums as well as the state life insurance coverage herself. In other words, she was to pay by cash or her own personal check for this coverage during the time she was not being paid by the state, that is, the premiums for that coverage were not being payroll deducted because she was temporarily off the payroll. Her employment with the State did not lapse during this period commencing May 29, 1981, rather she remained employed, but was on leave without- pay status. The Petitioner knew of her responsibility to pay the premiums for the HMO coverage and the state life insurance coverage itself during the period she was on leave of absence without pay as evidenced by the check she and her husband submitted in June 1981 to pay the premiums on her state life insurance coverage. The Petitioner and her husband moved from Miami to Fort Myers during early June 1981 and the Petitioner remained on leave of absence without pay. When her husband changed employment and moved to the Fort Myers area in June 1981 the Petitioner was a covered dependent under the health insurance coverage available to her husband through his new employment. I n August 1981 the South Florida Group Health, Inc., the HMO in the Miami are of which Petitioner was a member, terminated the Petitioner's health insurance coverage effective August 1, 1981 due to the Petitioner's failure to pay the premiums for that coverage. Shortly thereafter the Petitioner interviewed with personnel officials of HRS in District 8 in Fort Myers and obtained an employment position as a district intake counselor for District 8. She became an active payroll employee of HRS in District 8 by transfer in August 1981. Before the effective date of her transfer the Petitioner was interviewed by Judy Graham, an HRS employee assigned to process her transfer from her former active employment in District 11 in Miami. The Petitioner failed to advise Judy Graham at the time of the interview of her HMO coverage, merely inquiring of Ms. Graham concerning the details of continuation of her state life insurance coverage and concerning her credit union membership. Thereafter, more than 31 calendar days after the effective date of her transfer, (August 24, 1981), indeed, in excess of two years later, the Petitioner completed a new enrollee form again and applied for the state employee's group self- insurance plan benefits. The Department of Administration denied the Petitioner participation upon the determination that she was not medically approvable for insurability by the Plan's claims administrator, Blue Cross and Blue Shield of Florida, Inc. In any event, the Petitioner's continuous employment with the state and with HRS had never lapsed since she was initially hired January 11, 1980. She was merely on inactive/leave-without-pay status as a state employee from May 29, 1981 until August 24, 1981, as that relates to any right to a second 31-day open enrollment period.
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, therefore, RECOMMENDED that a final order be entered by the Department of Administration denying the Petitioner's requested enrollment in the State Group Health Insurance Plan without medical approval. DONE AND ORDERED this 31st day of December, 1985, in Tallahassee, Florida. P. MICHAEL RUFF 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 31st day of December, 1985. APPENDIX The following specific rulings are made on the Proposed Findings of Facts submitted by the parties: Petitioner's Proposed Findings of Fact Accepted. Accepted, but subordinate and not material to disposition of the issues at bar. Accepted, but subordinate and not material to disposition of the issues at bar. Accepted, but subordinate and not material to disposition of the material issues at bar. Rejected as not being in accordance with the competent, substantial, credible testimony and evidence adduced. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected as not being in accordance with the competent, substantial, credible testimony and evidence adduced. Accepted, but this Proposed Finding of Fact in itself is not dispositive of the material issues of fact and law resolved herein. Accepted. Rejected as not in accordance with the competent, substantial, credible evidence and testimony adduced. Accepted. Accepted. Respondent's Proposed Findings of Facts The Respondent failed to number its Proposed Findings of. Fact, therefore its Proposed-Findings of Fact will be specifically ruled upon in the order the various paragraphs containing its Proposed Findings of Fact were presented. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. COPIES FURNISHED: Gilda Lambert Secretary Department of Administration 435 Carlton Building Tallahassee, Florida 32301 Curtright C. Truitt, Esq. Post Office Box 2706 Ft. Myers, Florida 33902 Richard L. Kopel, Esq. Department of Administration 435 Carlton Building Tallahassee, Florida 32301
The Issue Whether Petitioner is entitled to a refund from the State of Florida Group Health Self Insurance Plan of pre-tax supplemental insurance premiums in the amount of $47.46 or $47.45 a month that were deducted from his pay for the 2007 and 2008 insurance plan years.
Findings Of Fact Petitioner, Detrick Murray ("Petitioner" or "Mr. Murray") was, at all times relevant to this proceeding, employed by the Florida Department of Corrections. As a state employee, he was given the option to participate in a pre-tax supplemental accident/disability insurance plan. Benefits, including insurance plans, are administered by a private contractor, Convergys, through a project called "People First," operated on behalf of Respondent, Department of Management Services, Division of State Group Insurance ("Respondent or the Division"). During the 2005 open enrollment period for the 2006 plan year, Mr. Murray elected to participate in a state- sponsored supplemental/accidental policy offered by Colonial Insurance Company ("Colonial"). The reverse side of the enrollment provided the following information and instructions: The enrollment form must be used to enroll in or change coverages. No changes will be accepted by e-mail or letter. Enrolling in a supplemental insurance plan, or changing options, does not automatically stop other coverages you currently have. To stop an existing coverage, you must place an "S" in the box provided for that Plan on the front of this form (Part 1). Only complete Part 2 on the front of this form if you wish to stop plans currently not offered. The Supplemental Enrollment Form must be submitted to the People First Service Center. Enrollment changes will not occur if forms and/or applications and the Supplemental Company Application are submitted directly to the supplemental insurance company. If you cancel or do not enroll in supplemental insurance, you will not be able to enroll again until the next annual open enrollment period, unless you experience a Qualifying Status Change. Supplemental premiums are deducted on a pre- tax basis. It is your responsibility to ensure that your enrollment selections are in effect. Check your payroll warrants to ensure that your deductions properly reflect your selections. Contact the People First Service Center immediately if these deductions are not correct. I understand my enrollment and/or changes will be effective the first of the month following a full payroll deduction. I also understand my elections are IRREVOCABLE until the next annual open enrollment period, unless I have a Qualifying Status Change as defined by the Federal Internal Revenue Code and/or the Florida Administrative Code. I understand that I must request such changes within thirty-one (31) calendar days of the Qualifying Status Change. The open enrollment period for the next year, the 2007 plan year, began on September 19, 2006, and ended on October 18, 2006. On October 14, 2006, Mr. Murray notified Colonial that he wanted to cancel the supplemental insurance for the 2007 plan year. He used a Colonial Request for Services form and sent it to the Colonial Processing Center in Columbia, South Carolina. In a letter dated February 14, 2007, Colonial acknowledged receiving Mr. Murray's request to cancel the insurance during the 2006 enrollment period, and informed him of its receipt of an "overpayment" of $47.46 monthly beginning January 1, 2007. Colonial directed Mr. Murray to contact his personnel officer "which will then work through the Division to issue your refund." After the open enrollment period ended, Mr. Murray had also contacted People First on November 14, 2006, and gave notice of his attempt to cancel with Colonial. He was informed that Colonial had not informed People First of the cancellation. Mr. Murray contacted People First again on January 29, 2007, questioning the continued payroll deductions and requesting a refund, as Colonial had suggested. He was told that he would have to cancel with People First during the open enrollment period, but he could send a letter of appeal to try to get a refund of premiums and try to cancel sooner. Despite repeated contacts, requests for refunds, and appeals to People First during 2007, Mr. Murray continued to have premiums for supplemental insurance deducted from his pay check. Ultimately, the Division denied his appeal. Although Mr. Murray was trying to get a refund for 2007 payroll deductions, he again failed to notify People First to cancel the insurance during the open enrollment period between September 17, 2007, and October 19, 2007, for the 2008 plan year. There is no evidence that Mr. Murray had a qualifying status change, as required by federal and state law, that would have permitted him to cancel the insurance at any time other than during open enrollment periods for the 2007 and 2008 plan years. The enrollment period for the 2009 plan year began on September 22, 2008, and ended on October 17, 2008. On September 24, 2008, Mr. Murray cancelled the supplemental insurance for the 2009 plan year by making a telephone call to a People First representative. In a late-filed exhibit produced by a manager for Convergys at the request of Petitioner, the Division showed that payments were made to Colonial to insure Mr. Murray through November 24, 2008. Sandi Wade, the Division's benefits administrator, noted that Colonial should not have canceled Mr. Murray's insurance policy. Colonial had no authority to send the letter of February 14, 2007, incorrectly telling Mr. Murray he was entitled to a refund. Ms. Wade's observations prompted Mr. Murray to question what, if any, remedies he might have with regard to Colonial's error. That issue is not and cannot be considered in this proceeding. In the absence of evidence that the Division or its agents were notified to cancel the supplemental insurance during open enrollment periods for 2007 and 2008, or based on a qualifying status change, Petitioner's request for a refund of premiums must be denied.
Recommendation Based on the foregoing, it is recommended that the Department of Management Services, Division of State Group Insurnace, enter a final order denying Petitioner, Detrick Murray, a refund of his accident/disability insurance coverage premiums paid in 2007 and 2008. DONE AND ENTERED this 12th day of May, 2010, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER 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 12th day of May, 2010. COPIES FURNISHED: Sonja P. Mathews, Esquire Department of Management Services Office of the General Counsel 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399 Detrick Murray 4370 Northwest 187th Street Miami, Florida 33055 John Brenneis, General Counsel Division of State Group Insurance Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
